LKQ Corp., the parent company of Keystone Automotive Operations and NTP-STAG, on Thursday announced results for its fourth quarter and full year ended Dec. 31, 2017. For the fourth quarter of 2017, revenue was $2.47 billion compared with $2.15 billion for the fourth quarter of 2016, an increase of nearly 15 percent. For the fourth quarter, parts and services organic revenue growth was 4.8 percent and acquisition revenue growth was 6.1 percent, while the impact of exchange rates was 3.3 percent, for total parts and services revenue growth of 14.3 percent.
Net income from continuing operations attributable to LKQ stockholders for the fourth quarter of 2017 was $126 million, an increase of 31.2 percent as compared to $96 million for the same period of 2016. On an adjusted basis, net income from continuing operations attributable to LKQ stockholders was $126 million, an increase of 17 percent as compared to the $108 million for the same period of 2016.
Diluted earnings per share from continuing operations attributable to LKQ stockholders for the fourth quarter of 2017 was $0.41, an increase of 32.3 percent as compared to the $0.31 for the same period of 2016. On an adjusted basis, diluted earnings per share from continuing operations attributable to LKQ stockholders for the fourth quarter of 2017 was $0.41, an increase of 17 percent as compared to the $0.35 for the same period of 2016.
Dominick Zarcone, president and CEO of LKQ Corp., stated, “I am particularly pleased with the 5 percent organic revenue growth for parts and services achieved by our North America segment during the fourth quarter.”
The Tax Cuts and Jobs Act, enacted in December 2017, made significant changes to federal income tax laws, including lowering the U.S. corporate income tax rate effective Jan. 1, 2018. In the fourth quarter of 2017, the company recorded a net benefit of $22 million to its income tax provision related to the net impact of revaluing deferred tax balances at the new rate and recording an estimated provision for the repatriation tax. These tax impacts have been excluded from the measurement of adjusted diluted earnings per share.
Full Year 2017 Reported Results
For the full year of 2017, revenue was $9.74 billion, an increase of 13.4 percent from $8.58 billion for 2016. For the full year of 2017, parts and services organic revenue growth was 4.1 percent, acquisition revenue growth was 9.1 percent and total parts and services revenue growth was 13.1 percent. On a per day basis, parts and services organic revenue growth was 4.5 percent. Diluted earnings per share from continuing operations attributable to LKQ stockholders for the full year 2017 was $1.74, an increase of 18.4 percent as compared to the $1.47 for the full year 2016. On an adjusted basis, diluted earnings per share from continuing operations attributable to LKQ stockholders for the full year 2017 was $1.88, an increase of 11.2 percent as compared to the $1.69 for the full year 2016.
“Our 2017 results reflect the underlying strength of our business and our ability to grow, both organically and through acquisitions, despite headwinds we faced earlier in the year, Zarcone said. “Additionally, during 2017 our North America and Specialty segments reported their highest annual EBITDA margins in the past five years. I believe we entered 2018 with strong operating momentum, a clear strategy across all of our segments, and an industry leading team of over 43,000 employees dedicated to delivering on our mission.”
Corporate Development
On Nov. 1, 2017, the company acquired the aftermarket business of Warn Industries, a leading designer, manufacturer and marketer of high performance vehicle equipment and accessories.
On Dec. 11, 2017, the Company announced that it had signed a definitive agreement to acquire Stahlgruber GmbH (“Stahlgruber”) for an enterprise value of approximately 1.5 billion Euros. Headquartered in Germany, Stahlgruber is a leading European wholesale distributor of aftermarket spare parts for passenger cars, tools, capital equipment and accessories with operations in Germany, Austria, Czech Republic, Italy, Slovenia, and Croatia with further sales to Switzerland. The Stahlgruber transaction is expected to be completed in the first half of 2018 and is subject to regulatory approvals.
In addition to the Warn Industries and pending Stahlgruber acquisitions, during the fourth quarter of 2017 LKQ acquired four businesses, including an aftermarket parts distributor in Bosnia and Herzegovina, an automotive glass distributor in Kansas, an aftermarket parts distributor in the Netherlands, and an automotive glass distributor in New Jersey. Also, in the fourth quarter, LKQ’s European operations opened six new branches in Western Europe and nine new branches in Eastern Europe.
