LKQ Corp. recently reported fourth quarter and full year 2022 financial results.
“The fourth quarter was a solid operational finish to 2022. Our Wholesale – North America and Europe segments again delivered outstanding organic revenue growth and solid margins, exceeding our expectations for the quarter and year,” said Dominick Zarcone, president and chief executive officer. “Importantly, our global teams delivered these results in the midst of rampant inflation, supply chain disruptions, a tight labor market, lower commodity prices, and volatile exchange rates. The execution of our strategy, the resiliency of our business model, and the strength of our balance sheet have the Company well positioned to continue its success and performance in 2023.”
Revenue for the fourth quarter of 2022 was $3.0 billion, a decrease of 5.8% as compared to $3.2 billion in the fourth quarter of 2021. On a constant currency basis1, fourth quarter revenue decreased by 0.1%. For the fourth quarter of 2022, parts and services organic revenue increased 4.5% (5.9% on a per day basis), while the net impact of acquisitions and divestitures decreased revenue by 3.1% and foreign exchange rates decreased revenue by 6.1%, for a total parts and services revenue decrease of 4.8%. Other revenue fell 20.1% in the fourth quarter of 2022 primarily due to weaker commodity prices relative to the same period in 2021.
Net income2 for the fourth quarter of 2022 was $193 million as compared to $235 million for the same period in 2021. Diluted earnings per share2 for the quarter was $0.72 as compared to $0.81 for the same period of 2021, a decrease of 11.1%.
On an adjusted basis, net income1,2 in the fourth quarter of 2022 was $209 million as compared to $254 million for the same period of 2021, a decrease of 17.5%. Adjusted diluted earnings per share1,2 for the fourth quarter of 2022 was $0.78 as compared to $0.87 for the same period of 2021, a decrease of 10.3%.
The effective tax rate for the fourth quarter of 2022 was 29.7%, which reflected adjustments to true-up the calculated full year effective rate as well as discrete tax expenses.
Full Year 2022 Financial Results
Revenue for the full year of 2022 was $12.8 billion, a decrease of 2.3% as compared to $13.1 billion for the full year of 2021. On a constant currency basis1, full year 2022 revenue increased by 2.8% to $13.5 billion. For the full year of 2022, parts and services organic revenue increased 5.0% on a reported basis (5.2% on a per day basis), while the net impact of acquisitions and divestitures decreased revenue by 1.2% and foreign exchange rates decreased revenue by 5.5%, for a total parts and services revenue decrease of 1.7%. Other revenue for the full year of 2022 fell 9.2% primarily due to weaker commodity prices relative to 2021.
Net income2 for the full year of 2022 was $1.14 billion as compared to $1.09 billion for the same period in 2021. Diluted earnings per share2 for the full year of 2022 was $4.11 as compared to $3.66 for the same period of 2021, an increase of 12.3%.
On an adjusted basis, net income1,2 for the full year of 2022 was $1.07 billion as compared to $1.18 billion for the same period of 2021, a decrease of 9.4%. Adjusted diluted earnings per share1,2 for the full year of 2022 was $3.85 as compared to $3.96 for the same period of 2021, a decrease of 2.8%.
2023 Outlook
“Our 2023 annual guidance reflects our ongoing commitment of creating long-term value for our stockholders through our operational excellence initiatives of driving profitable growth, implementing ongoing margin enhancement programs, and generating robust levels of free cash flow through disciplined capital spending and active working capital management,” said Rick Galloway, senior vice president and chief financial officer. “As we navigate this period of macro uncertainty and non-operational headwinds, we expect healthy demand for our products and services, solid organic growth and sustained operating momentum across our industry leading business segments.”
| 2023 Full Year Outlook | |
| Organic revenue growth for parts and services | 6.0% to 8.0% |
| Diluted EPS2 | $3.68 to $3.98 |
| Adjusted diluted EPS1,2 | $3.90 to $4.20 |
| Operating cash flow | approx. $1.275 billion |
| Free cash flow1 | approx. $975 million |
| Free cash flow conversion of EBITDA1 | 55% to 60% |
Non-GAAP measure. See the table accompanying this release that reconciles the actual or forecasted U.S. GAAP measure to the actual or forecasted adjusted measure, which is non-GAAP.
(2)
References in this release to Net income and Diluted earnings per share, and the corresponding adjusted figures, reflect amounts from continuing operations attributable to LKQ stockholders.
For more information, visit www.lkqcorp.com.
