LKQ Corp. Announces Q4, Full Year 2023 Results

LKQ Corp. Announces Q4, Full Year 2023 Results

President and CEO Dominick Zarcone expressed satisfaction with the company's results amid macroeconomic challenges.

LKQ Corporation released its fourth-quarter and full-year 2023 financial results today, showcasing a robust finish to the year despite challenging economic conditions, the company said. President and CEO Dominick Zarcone expressed satisfaction with the company’s performance amidst macroeconomic challenges such as inflation and fluctuating commodity prices. Zarcone also welcomed Justin Jude, who succeeds him as CEO, expressing confidence in the ongoing progress of LKQ’s operations.

Revenue for the fourth quarter of 2023 reached $3.5 billion, marking a 16.6% increase compared to the same period in 2022. Parts and services organic revenue saw a 2.8% rise, driven by a 3.4% increase on a per-day basis. Net income for the fourth quarter was reported at $184 million, slightly down from $193 million in the fourth quarter of 2022.

For the full year of 2023, LKQ reported revenue of $13.9 billion, an 8.4% increase compared to 2022. Parts and services organic revenue grew by 4.7%, contributing to a total increase of 10.4% in this segment. However, net income for the full year decreased to $0.94 billion compared to $1.14 billion in 2022, LKQ reported.

Cash flow from operations and free cash flow for the full year of 2023 were reported at $1.4 billion and $1 billion, respectively. LKQ’s balance sheet showed a total debt of $4.3 billion as of Dec. 31, 2023, with a total leverage ratio of 2.3 times EBITDA.

During the fourth quarter of 2023, the company repurchased $30 million worth of its common stock, totaling $35 million for the year. Additionally, its board of directors declared a quarterly cash dividend of $0.30 per share of common stock, payable on Mar. 28.

The integration of Uni-Select remains in progress, with approximately half of the company’s FinishMaster locations already converted or consolidated into LKQ locations. The company expects to complete the remainder by the end of the first quarter of 2024, ahead of schedule, according to LKQ’s financial reports.

Looking ahead to 2024, LKQ anticipates organic revenue growth ranging from 3.5% to 5.5%, with diluted EPS projected between $3.43 and $3.73. Adjusted diluted EPS is forecasted to be between $3.90 and $4.20, with operating cash flow expected to reach $1.35 billion and free cash flow targeting $1 billion.

The company’s outlook for 2024 is contingent on various factors including global economic conditions, tax rates and currency exchange rates, with adjustments made for potential impacts such as the Ukraine/Russia conflict, the company reported. Adjusted figures exclude certain expenses and gains, ensuring a clearer representation of the company’s operational performance.

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