LKQ Corp. Reports Growth in Fiscal Year ‘05

LKQ Corp., Chicago, has announced results for its fourth quarter and year ended Dec. 31, 2005, that show net income growth of nearly 50 percent over 2004.

LKQ reported revenue of $143.9 million for the fourth quarter and $547.4 million for the fiscal year. Net income was $8.3 million for the quarter and $30.9 million for the year, representing growth over 2004 of approximately 64 percent and 50 percent, respectively.

"We had a record level of revenue in the fourth quarter and exceeded our

previously issued earnings estimates,” Joe Holsten, LKQ president and CEO, says. “We had revenue growth of approximately 27 percent for the quarter and 29 percent for the year. This included solid organic revenue growth of approximately 12 percent for the quarter and the year.”

Holsten says LKQ’s diluted earnings per share increased 37 percent.

“We were particularly pleased with the expansion of our 2005 annual operating income margin to 9.7 percent compared to 8.2 percent in 2004, which was primarily attributable to improved operating cost leverage,” he adds. “We made eight excellent business acquisitions in 2005 and intend to continue to pursue acquisition candidates that will provide long-term value to our stockholders.”

For the fourth quarter of 2005, revenue increased 26.5 percent to $143.9 million, compared with $113.8 million for the fourth quarter of 2004. Net income for the quarter increased 64.0 percent to $8.3 million, compared with  $5 million for the fourth quarter of

2004. Diluted earnings per share were 15 cents for the quarter, compared with 11 cents for the fourth quarter of 2004.

For the year ended Dec. 31, 2005, revenue increased 28.9 percent to $547.4 million, compared with $424.8 million in 2004. Net income increased 50.1 percent to $30.9 million, compared with $20.6 million for the same period in 2004. Diluted earnings per share were 63 cents for the year, compared with 46 cents for 2004.

During 2005, LKQ acquired eight businesses for approximately $112 million in cash, notes and assumed liabilities, and up to $9 million in contingent payments. They consisted of four recycling businesses with approximately $48 million in trailing annualized revenue and four aftermarket businesses with approximately $84 million in trailing annualized revenue.

Jan. 31, 2006, LKQ acquired Transwheel Corp., an aluminum alloy wheel refurbishing and distribution business. Transwheel currently operates refurbishing and distribution facilities in Huntington, Ind.; Manchester, Conn.; Williamsport, Md.; and Tampa, Fla. and distribution locations in Ferndale, Mich., and Bensenville, Ill. Transwheel's third party revenue for 2005 was approximately $28.5 million from the sale or restoration of wheels.

LKQ also acquired three recycling businesses in February of 2006. Michael Auto Parts is in the Orlando area and primarily serves the professional repair market. The business generated approximately $12 million in revenue in 2005, according to LKQ. The company also acquired a retail business near Charleston, S.C., and Port Allen, La. These two businesses had less than $3 million of combined revenue in 2005, LKQ says. “Our objective during 2006 is to grow and improve these two businesses and to build their facilities into modern self-service retail facilities,” according to a release from LKQ. “We expect the effect of these three transactions on our 2006 diluted earnings per share to be insignificant, as the two retail businesses will be undergoing significant start-up activities. We would, however, expect these three businesses to provide between 1 to 2 cents of diluted earnings per share in 2007.