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Exhibit 99.1
LKQ Corporation Announces Third Quarter 2003 Results
Chicago, IL—October 28, 2003—LKQ Corporation (NASDAQ: LKQX) today reported results for its third quarter ended September 30, 2003, with revenue of $83.5 million and net income of $3.5 million, representing growth over the third quarter of 2002 of 16.2% and 49.1%, respectively.
"We reported another quarter of year over year double digit revenue and earnings growth," said Joe Holsten, President and Chief Executive Officer.
2003 Reported Results
For the third quarter of 2003, revenue increased 16.2% to $83.5 million compared with $71.9 million for the third quarter of 2002. For the third quarter of 2003, net income increased 49.1% to $3.5 million compared with $2.4 million for the third quarter of 2002. Diluted earnings per share was $0.22 for the third quarter of 2003 compared with $0.12 for the third quarter of 2002.
For the nine months ended September 30, 2003, revenue increased 12.9% to $243.7 million compared with $216.0 million for the same period in 2002. For the nine months ended September 30, 2003, net income before cumulative effect of a change in accounting principle increased 32.7% to $11.6 million compared with $8.7 million for the same period in 2002. Diluted earnings per share before cumulative effect of a change in accounting principle was $0.68 for the nine months ended September 30, 2003 compared with $0.45 for the same period a year ago.
For the nine months ended September 30, 2003, net income increased by $52.8 million to $11.6 million compared with a $41.2 million net loss for the same period in 2002. Diluted earnings per share was $0.68 for the nine months ended September 30, 2003 compared with diluted loss per share of $2.12 for the same period in 2002. The 2002 net loss reflects the $49.9 million cumulative effect of change in accounting principle, net of tax in the first quarter of 2002 related to implementation of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets."
The number of outstanding shares of common stock in the first nine months of 2003 has declined significantly from the same period in 2002 due to shares repurchased in the first half of 2003. The number of outstanding shares in the fourth quarter of 2003 will be further affected by the 5,000,000 shares sold by LKQ Corporation in its initial public offering as discussed below.
Company Outlook
We expect full year 2003 revenue to be within a range of $323 million to $326 million, net income to be within a range between $14.2 million and $14.6 million and diluted earnings per share to be between $0.78 and $0.80.
Quarterly Conference Call
We will host an audio webcast to discuss our third quarter results along with 2003 earnings guidance on Tuesday October 28, 2003 at 10:30 am Eastern Time. The live audio webcast can be accessed on the internet atwww.lkqcorp.com in the Investor Relations section. An online replay of the webcast will be available on the website approximately two hours after the live presentation and will remain on the site until November 28, 2003.
About LKQ Corporation
LKQ Corporation is the largest nationwide provider of recycled OEM automotive replacement parts and related services, with 38 sales and processing facilities and 12 redistribution centers that reach most major markets in the United States.
On October 2, 2003, LKQ Corporation's S-1 Registration Statement became effective and subsequently an initial public offering was consummated for 8,050,000 shares of its common stock, including the over-allotment option. The offering was priced at $13.00 per share with 5,000,000 shares sold by LKQ Corporation and 3,050,000 shares sold by certain selling stockholders.
Forward Looking Statements
The statements in this press release that are not historical are forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our expectations, beliefs, hopes, intentions or strategies. Forward looking statements involve risks and uncertainties, some of which are not currently known to us. Actual events or results may differ materially from those expressed or implied in the forward looking statements as a result of various factors. These factors include the risk factors and other risks that are described in our Registration Statement on Form S-1 as declared effective on October 2, 2003 and in other reports filed by us from time to time with the Securities and Exchange Commission. We assume no obligation to update any forward looking statement to reflect events or circumstances arising after the date on which it was made.
Financial Tables To Follow
LKQ CORPORATION AND SUBSIDIARIES
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2003 | 2002 | 2003 | 2002 | ||||||||||
Revenue | $ | 83,472 | $ | 71,860 | $ | 243,746 | $ | 215,961 | ||||||
Cost of goods sold | 44,431 | 38,715 | 128,907 | 116,158 | ||||||||||
Gross margin | 39,041 | 33,145 | 114,839 | 99,803 | ||||||||||
Facility and warehouse expenses | 9,973 | 9,279 | 29,154 | 27,062 | ||||||||||
Distribution expenses | 8,893 | 7,272 | 25,675 | 20,798 | ||||||||||
Selling, general and administrative expenses | 12,288 | 10,683 | 35,015 | 31,449 | ||||||||||
Depreciation and amortization | 1,325 | 1,229 | 4,070 | 3,638 | ||||||||||
Operating income | 6,562 | 4,682 | 20,925 | 16,856 | ||||||||||
Other (income) expense | ||||||||||||||
Interest expense | 644 | 652 | 1,846 | 2,323 | ||||||||||
Stockholder loan guarantee fee | — | 23 | — | 160 | ||||||||||
Interest income | (3 | ) | (13 | ) | (14 | ) | (158 | ) | ||||||
Other (income) expense, net | 50 | (55 | ) | (111 | ) | (150 | ) | |||||||
Total other expense | 691 | 607 | 1,721 | 2,175 | ||||||||||
Income before provision for income taxes and cumulative effect of change in accounting principle | 5,871 | 4,075 | 19,204 | 14,681 | ||||||||||
Provision for income taxes | 2,352 | 1,715 | 7,626 | 5,955 | ||||||||||
Income before cumulative effect of change in accounting principle | 3,519 | 2,360 | 11,578 | 8,726 | ||||||||||
Cumulative effect of change in accounting principle, net of tax | — | — | — | (49,899 | ) | |||||||||
Net income (loss) | $ | 3,519 | $ | 2,360 | $ | 11,578 | $ | (41,173 | ) | |||||
Basic earnings (loss) per share: | ||||||||||||||
Income before cumulative effect of change in accounting principle | $ | 0.25 | $ | 0.13 | $ | 0.76 | $ | 0.49 | ||||||
Cumulative effect of change in accounting principle, net of tax | — | — | — | (2.82 | ) | |||||||||
Net income (loss) | $ | 0.25 | $ | 0.13 | $ | 0.76 | $ | (2.33 | ) | |||||
Diluted earnings (loss) per share: | ||||||||||||||
Income before cumulative effect of change in accounting principle | $ | 0.22 | $ | 0.12 | $ | 0.68 | $ | 0.45 | ||||||
Cumulative effect of change in accounting principle, net of tax | — | — | — | (2.57 | ) | |||||||||
Net income (loss) | $ | 0.22 | $ | 0.12 | $ | 0.68 | $ | (2.12 | ) | |||||
Weighted average common shares outstanding: | ||||||||||||||
Basic | 14,205 | 17,645 | 15,326 | 17,655 | ||||||||||
Diluted | 16,178 | 19,405 | 17,135 | 19,416 | ||||||||||
LKQ CORPORATION AND SUBSIDIARIES
Unaudited Consolidated Condensed Statements of Cash Flows
(In thousands)
| Nine Months Ended September 30, | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
| 2003 | 2002 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net income (loss) | $ | 11,578 | $ | (41,173 | ) | ||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 4,070 | 3,638 | |||||||||
Deferred income taxes | 1,356 | 1,462 | |||||||||
Other adjustments | (31 | ) | 176 | ||||||||
Cumulative effect of change in accounting principle | — | 49,899 | |||||||||
Changes in operating assets and liabilities, net of effects from purchase transactions: | |||||||||||
Receivables | (2,368 | ) | (1,478 | ) | |||||||
Inventory | 1,066 | (655 | ) | ||||||||
Other operating assets and liabilities | 1,355 | 2,590 | |||||||||
Net cash provided by operating activities | 17,026 | 14,459 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Purchases of property and equipment, net | (5,339 | ) | (3,939 | ) | |||||||
Cash used in acquisitions | (3,285 | ) | — | ||||||||
Net cash used in investing activities | (8,624 | ) | (3,939 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Proceeds from the sale of common stock and warrant exercises | 625 | 30 | |||||||||
Debt issuance costs | (131 | ) | (621 | ) | |||||||
Net borrowings (repayments) of long-term debt | 14,943 | (8,900 | ) | ||||||||
Repurchase of common stock | (22,903 | ) | — | ||||||||
Net cash used in financing activities | (7,466 | ) | (9,491 | ) | |||||||
Net increase in cash and equivalents | 936 | 1,029 | |||||||||
Cash and equivalents, beginning of period | 584 | 1,587 | |||||||||
Cash and equivalents, end of period | $ | 1,520 | $ | 2,616 | |||||||
LKQ CORPORATION AND SUBSIDIARIES
Unaudited Consolidated Condensed Balance Sheets
(In thousands, except share data)
| September 30, 2003 | December 31, 2002 | |||||||
---|---|---|---|---|---|---|---|---|---|
Assets | |||||||||
Current Assets: | |||||||||
Cash and equivalents | $ | 1,520 | $ | 584 | |||||
Receivables, net | 21,036 | 18,592 | |||||||
Inventory | 53,681 | 53,779 | |||||||
Prepaid expenses and other current assets | 3,983 | 1,448 | |||||||
Total Current Assets | 80,220 | 74,403 | |||||||
Property and Equipment, net | 41,666 | 39,861 | |||||||
Intangibles, net | 50,814 | 49,328 | |||||||
Deferred Income Taxes | 10,307 | 11,713 | |||||||
Other Assets | 2,041 | 1,442 | |||||||
Total Assets | $ | 185,048 | $ | 176,747 | |||||
Liabilities and Stockholders' Equity | |||||||||
Current Liabilities: | |||||||||
Accounts payable | $ | 5,515 | $ | 4,536 | |||||
Accrued expenses and other current liabilities | 15,113 | 12,749 | |||||||
Current portion of long-term obligations | 17,810 | 6,449 | |||||||
Total Current Liabilities | 38,438 | 23,734 | |||||||
Long-Term Obligations, Excluding Current Portion | 31,301 | 27,756 | |||||||
Other Noncurrent Liabilities | 4,392 | 4,128 | |||||||
Redeemable Common Stock, $0.01 par value, 50,000 shares issued at September 30, 2003 | 617 | — | |||||||
Commitments and Contingencies | |||||||||
Stockholders' Equity: | |||||||||
Common stock, $0.01 par value, 100,000,000 shares authorized, 14,230,287 and 17,644,885 shares issued at September 30, 2003 and December 31, 2002, respectively | 142 | 176 | |||||||
Additional paid-in capital | 132,053 | 154,492 | |||||||
Warrants | 543 | 543 | |||||||
Deferred compensation expense | (7 | ) | (73 | ) | |||||
Retained earnings (Accumulated deficit) | (22,431 | ) | (34,009 | ) | |||||
Total Stockholders' Equity | 110,300 | 121,129 | |||||||
Total Liabilities and Stockholders' Equity | $ | 185,048 | $ | 176,747 | |||||
CONTACT: | LKQ Corporation Mark T. Spears, Senior Vice President and Chief Financial Officer 312-621-2730 irinfo@lkqcorp.com |
LKQ Corporation Announces Third Quarter 2003 Results