Parts supplier LKQ Corporation has reported a 20% increase in year over year revenues, and an even bigger boost in net results, the product of organic growth and expansion activities.
LKQ Corporation revenue for the second quarter was $584.7 million, an increase of 20.2% as compared to $486.4 million for the same period of 2009. Income from continuing operations for the second quarter of 2010 was $37.9 million, an increase of 33.2% as compared to $28.5 million for the same period of 2009. Diluted earnings per share from continuing operations of $0.26 for the second quarter ended June 30, 2010, an increase of 30.0% from $0.20 for the second quarter of 2009.
All figures in U.S. dollars.
"The second quarter of 2010 is the sixth quarter in a row that LKQ has outpaced the prior year's results and set new earnings records. Our ability to deliver both revenue and earnings growth through the most recent recession reflects the benefits of LKQ's business model and scope across all three of the alternative collision replacement parts categories -- aftermarket, recycled and refurbished," stated Joseph Holsten, president and chief executive officer of LKQ Corporation. He continued, "In the second quarter, we continued to profit from the trend of growing alternative collision parts usage and realized solid organic growth of parts and service revenue, driven largely by an 8.7% increase in organic revenue of our aftermarket and refurbished parts."
Overall organic revenue growth for the second quarter was 12.2% as a result of strong aftermarket and refurbished parts sales and higher commodity prices as compared to last year. Parts and services revenue, excluding the impact of acquisitions, grew organically by 5.5%. Acquisitions made over the previous twelve months contributed 7.6% of incremental revenue for the quarter.
On a six month year to date basis, revenue was $1.2 billion, an increase of 19.2% from $997.2 million for the same six month period of 2009. Income from continuing operations for the first six months of 2010 was $89.9 million, as compared to $60.5 million for the first half of 2009. Diluted earnings per share from continuing operations was $0.62 for the first six months of 2010, as compared to $0.42 for the same six month period of 2009.
Acquisitions, New Locations
During the second quarter of 2010, LKQ continued its expansion through strategic acquisitions that support the company's efforts to expand its North American footprint.
It acquired wholesale recycling operations in the Winnipeg, Man., and Seattle, Wash. markets. Collectively, the two businesses had annual revenue of approximately $7 million in 2009. LKQ also purchased two heavy-duty truck operations in West Monroe, Louisiana and Jackson, Mississippi. Annual revenue for the acquired truck operations was $7 million in 2009. Additionally during the second quarter, LKQ re-opened a wholesale recycling operation, formerly a Greenleaf location, in Monroe, Ga., specializing in high-end and European brand vehicles.
Since the start of the third quarter, LKQ acquired an automotive paint distribution business serving the Boston, Mass. area, a wholesale recycling operation that will operate in the northern Alabama and Nashville, Tenn., markets and a wholesale recycling operation in Philadelphia, Penn.. The company also opened a heavy-duty truck operation in Wilson, N.C. at a former Greenleaf location.
Holsten commented, "We are really pleased with the company's ability to rapidly execute and integrate acquisitions as we continue to build out our footprint in the US and Canada and expand our product offerings."
Balance Sheet and Liquidity
As of June 30, 2010, LKQ's balance sheet reflected cash and equivalents of $190.5 million and long-term debt, including the current portion, of $594.4 million. Availability on the Company's $100.0 million revolving credit facility was $79.9 million.
Company Outlook
LKQ provided updated earnings guidance for 2010. Income from continuing operations and diluted earnings per share from continuing operations are anticipated to be within the range of $158 million to $167 million and $1.08 to $1.14, respectively. The previous guidance for income from continuing operations and diluted earnings per share from continuing operations was a range of $154 million to $163 million and $1.06 to $1.12, respectively.
Net cash provided by operating activities for 2010 is projected to be in excess of $160 million. LKQ's capital expenditures related to property and equipment are expected to be within a range of $85 million to $95 million.
The guidance reflects an organic revenue growth rate from parts and services of 6% to 8%. The organic growth rate excludes the impact of organic revenue growth of other revenue. Additionally, all of the guidance provided excludes restructuring expenses and any gains or losses related to acquisitions or divestitures.
Click on www.bodyshopbiz.com for more news.