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LKQ Corporation Announces Results for Second Quarter 2022

  • Revenue of $3.3 billion; revenue on a continuing currency basis[2] of $3.5 billion
  • Parts and services organic revenue growth of 3.8% (4.2% on a each day basis)
  • Diluted EPS[1] of $1.49 (up 47.5%); adjusted diluted EPS[1][2] of $1.09 (down 3.5%)
  • Second quarter operating cashflow of $328 million; free cash flow[2] of $288 million
  • Repurchased 8.1 million shares for $404 million in the quarter
  • Dividend of $0.25 per share approved to be paid in the 3rd quarter of 2022
  • Full year 2022 guidance range updated

CHICAGO, IL, July 28, 2022 — LKQ Corporation (Nasdaq:LKQ) today reported second quarter 2022 financial results.

We’d a good second quarter delivering strong organic growth, and I’m extremely pleased with the outcomes the LKQ team achieved in a challenging operating environment, including significant inflationary pressures, supply chain disruptions, and volatile commodity and foreign currency markets. Despite these challenges, we continued to operate a vehicle our strategic initiatives forward, noted Dominick Zarcone, President and CEO. Once we enter the trunk half of the entire year, we have been well positioned with this market leading businesses, experienced management teams, strong balance sheet, and balanced capital allocation strategy, giving us the confidence to keep our full year 2022 guidance.

LKQ Headquarter North America

LKQ Headquarter THE UNITED STATES

Second Quarter 2022 Financial Results

Revenue for the next quarter of 2022 was $3.3 billion, a loss of 2.7% when compared with $3.4 billion in the next quarter of 2021. On a continuing currency basis[2], second quarter revenue grew by 2.5% to $3.5 billion. Parts and services organic revenue increased 3.8%, as the net impact of acquisitions and divestitures decreased revenue by 1.0% and forex rates decreased revenue by 5.6%, for a complete parts and services revenue loss of 2.7%. Other revenue fell 2.9% due to changes in commodity prices in accordance with exactly the same period in 2021.

Net income[1] for the quarter was $420 million in comparison with $305 million for exactly the same period in 2021. Diluted earnings per share[1] for the quarter was $1.49 when compared with $1.01 for exactly the same amount of 2021, a rise of 47.5%. On April 18, 2022, the business completed the sale of PGW Auto Glass, which generated a pretax gain of $155 million ($127 million after tax), or $0.45 per share.

On an adjusted basis, net income[1][2] in the quarter was $307 million when compared with $340 million for exactly the same amount of 2021, a loss of 9.6%. Adjusted diluted earnings per share[1][2] for the quarter was $1.09 when compared with $1.13 for exactly the same amount of 2021, a loss of 3.5%.

CASHFLOW and Balance Sheet

For the next quarter, cashflow from operations and free cash flow[2] were $328 million and $288 million, respectively. Cashflow from operations and free cash flow[2] were $737 million and $638 million, respectively, for the half a year ended June 30, 2022. By June 30, 2022, the total amount sheet reflected total debt of $2.4 billion and net debt[2] of $2.1 billion. Net leverage, as defined in the credit facility, was 1.2x EBITDA.

Stock Repurchase and Dividend Programs

Through the second quarter of 2022, the business deployed $404 million to repurchase 8.1 million shares of its common stock. For the half a year ended June 30, 2022, the business has repurchased 10.8 million shares for $548 million, and since initiating the stock repurchase program in late October 2018, the business has repurchased approximately 45 million shares for a complete of $1.9 billion. IN-MAY 2022, the Board of Directors increased the full total share repurchase authorization to $2.5 billion, effective through October 2024.

On July 26, 2022, our Board of Directors declared a quarterly cash dividend of $0.25 per share of common stock, payable on September 1, 2022, to stockholders of record at the close of business on August 11, 2022.

Other Events

ON, MAY 23, 2022, the business published its 2021 Corporate Sustainability Report.

On June 3, 2022, the business announced that Moodys Investors Service assigned a Baa3 Issuer Rating to LKQ with a well balanced outlook.

2022 Outlook

Varun Laroyia, Executive Vice President and Chief Financial Officer commented: By concentrating on our operational excellence initiatives, the business enterprise continues to provide profitable growth and solid free cashflow. Notwithstanding the significant headwinds from forex exchange rates and commodity price fluctuations, we have been holding the midpoint of our adjusted diluted EPS range and our free cashflow guidance for the entire year.

For 2022, management updated the outlook as established below:

2022 Previous Full Year Outlook

2022 Updated Full Year Outlook

Organic revenue growth for parts and services

4.5% to 6.5%

4.5% to 6.5%

Diluted EPS[1]

$3.57 to $3.87

$4.09 to $4.29

Adjusted diluted EPS[1][2]

$3.80 to $4.10

$3.85 to $4.05

Operating cashflow

$1.3 billion

$1.3 billion

Free cash flow[2] (at the very least)

$1.0 billion

$1.0 billion

Free cashflow conversion of EBITDA[2]

55 – 60 %

55 – 60 %

Our outlook for the entire year 2022 is founded on current conditions and recent trends, and assumes current U.S. federal tax legislation remains unchanged, the costs of scrap and gold and silver coins hold close to the June average, no further deterioration because of the Ukraine/Russia conflict. We’ve applied exchange rates near July spot levels, including $1.02 and $1.20 for the euro and pound sterling, respectively, for the total amount of the entire year. Our outlook can be predicated on managements current expectations concerning the recovery from the COVID-19 pandemic. Changes in these conditions may impact our capability to achieve the estimates. Adjusted figures exclude (to the extent applicable) the impact of restructuring and transaction related expenses; amortization expense linked to acquired intangibles; excess tax benefits and deficiencies from stock-based payments; losses on debt extinguishment; impairment charges; direct impacts of the Ukraine/Russia conflict (including provisions for and subsequent adjustments to reserves for asset recoverability and expenditures to aid our employees and their own families) and gains and losses linked to acquisitions or divestitures (including changes in the fair value of contingent consideration liabilities and the gain on the PGW Auto Glass sale).

[1] References in this release to Net gain and Diluted earnings per share, and the corresponding adjusted figures, reflect amounts from continuing operations due to LKQ stockholders.

[2] Non-GAAP measure. Start to see the table on the LKQ website that reconciles the specific or forecasted U.S. GAAP measure to the specific or forecasted adjusted measure, that is non-GAAP.

LKQ Corporation Announces Results for Second Quarter 2022

Non-GAAP Financial Measures

This release contains and managements presentation on the related conference call will make reference to non-GAAP financial measures within this is of Regulation G promulgated by the Securities and Exchange Commission. Incorporated with this release are reconciliations of every non-GAAP financial measure with directly comparable financial measure calculated relative to GAAP. Start to see the link above.

Webcast and Presentation Details

The audio webcast and accompanying slide presentation could be accessed at (www.lkqcorp.com) in the Investor Relations section.

A replay of the conference call will undoubtedly be available by telephone at +1 647 362-9199 for international calls. Calling replay will demand one to enter conference ID: 5232422#. An online replay of the audio webcast will undoubtedly be available on the business’s website. Both formats of replay will undoubtedly be available through August 12, 2022.

LKQ Corporation Announces Results for Second Quarter 2022

About LKQ Corporation

LKQ Corporation (www.lkqcorp.com) is really a leading provider of alternative and specialty parts to correct and accessorize automobiles along with other vehicles. LKQ has operations in THE UNITED STATES, Europe and Taiwan. LKQ offers its customers an easy selection of OEM recycled and aftermarket parts, replacement systems, components, equipment, and services to correct and accessorize automobiles, trucks, and recreational and performance vehicles.

About LKQ Europe

LKQ Europe, a subsidiary of LKQ Corporation, using its hq in Zug, Switzerland, may be the leading distributor of automotive aftermarket parts for cars, commercial vans, and industrial vehicles in Europe. It currently employs approximately 26,000 people who have a network greater than 1,000 branches and approximately $6.1 billion in revenue in 2021. The business supplies a lot more than 100,000 independent workshops in over 20 Europe.

The group includes Euro Car Parts, LKQ Fource, RHIAG Group, Elit, LKQ CZ, and STAHLGRUBER Group, and also recycling specialist, Atracco. LKQ also holds a minority fascination with MEKO Group.

Investor Relations Contact

Joseph P. Boutross

Vice President, Investor Relations

CONTACT

LKQ Corporation

T +1 312 621-2793

E jpboutross@lkqcorp.com

Media Contact Europe

Dr. Christiane Lesmeister

Director of Communications

CONTACT

LKQ Europe

T +41 41 884 84 41

E christiane.lesmeister@lkqeurope.com

LKQ Europe GmbH

Zhlerweg 10

6300 Zug

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