LKQ Corporation's acquisition of Keystone Automotive Industries, Inc. has turned out to be a very savvy, and lucrative, business move. The company — a nationwide provider of aftermarket collision replacement products, recycled OEM products and refurbished OEM collision replacement products — recently announced record first quarter results that included revenue growth at 109 percent and net income growth at just over 95 percent. In commenting on the recent business acquisitions that have boosted his LKQ's bottom line, Joe Holsten, the company' president and CEO says: "We continue to be pleased with our progress to date related to combining our aftermarket businesses with Keystone Automotive Industries, Inc. In addition, we have acquired a heavy truck recycling business in Houston, Texas, that gives us a solid platform from which to expand into a new type of product line." For the first quarter of 2008, revenue increased 109.0 percent to $491.9 million compared with $235.3 million for the first quarter of 2007. The company's organic revenue growth for the quarter was 9.0 percent and was calculated assuming that it owned Keystone for the first quarter of 2007. Net income for the quarter increased 95.5 percent to $30.9 million compared with $15.8 million for the first quarter of 2007. Diluted earnings per share was $0.22 for the quarter compared with $0.14 for the first quarter of 2007. Revenue from aftermarket collision replacement parts, paint, shop supplies, refurbished bumpers, refurbished wheels and refurbished lighting for the first quarter was $272.3 million. During the quarter, LKQ recorded $1.2 million of restructuring expenses which were included in operating expenses and are all related to its Keystone acquisition in Oct. 2007. On Feb. 15, the company acquired a retail-oriented recycled parts business located in Orlando, Fla., that operates on 3.5 acres of property adjoining its existing retail-oriented recycled parts business. On March 4, LKQ acquired Texas Best Diesel, a heavy duty truck recycled parts business in Houston, Texas, that operates on an approximately 18 acre facility. These two businesses reported approximately $10.6 million in trailing annual revenue just prior to the company's acquisition of them. According to the company, its 2008 organic revenue growth will be approximately 10 percent , with the balance of revenue growth being the full year impact of 2007 and 2008 business acquisitions. Excluding the effect of any 2008 restructuring expenses that may be related to the Keystone acquisition, LKQ expects full year 2008 net income to be within a range of $106.0 million to $111.0 million and diluted earnings per share to be between $0.75 and $0.79. The company also anticipates that net cash provided by operating activities for 2008 will be over $85.0 million. LKQ estimates that its full year 2008 capital expenditures related to property and equipment, excluding expenditures for acquiring businesses, will be between $65.0 million to $75.0 million. This includes approximately $10.0 million related to capital expenditures planned for late 2007 on projects that were delayed and approximately $4.8 million related to restructuring its aftermarket business as a result of the Keystone acquisition. For more information about the LKQ Corporation, visit the company's Web site. |
