NTP-STAG Parent Co. Announces Results for Q3 2022
CHICAGO – LKQ Corporation (Nasdaq:LKQ), a leading provider of alternative and specialty parts to repair and accessorize automobiles and other vehicles and the parent company of Keystone Automotive and its NTP-STAG RV aftermarket distribution division, today (Oct. 27) reported third quarter 2022 financial results.
Highlights included:
- Revenue of $3.1 billion; revenue on a constant currency basis 1 of $3.3 billion
- Parts and services organic revenue growth of 4.8% ( 5.3% on a per day basis)
- Diluted EPS 2 of $0.95 (down 1.0% ); adjusted diluted EPS 1,2 of $0.97 (down 4.9% )
- Third quarter operating cash flow of $273 million ; free cash flow 1 of $224 million
- Deployed $343 million in the quarter to repurchase 6.8 million shares
- Stock repurchase program expanded by a further $1 billion through October 2025
- Dividend increased by 10%; $0.275 per share approved to be paid in the fourth quarter of 2022
Dominick Zarcone
“We are pleased with our third quarter results as they once again highlight our ongoing ability to combine best-in-class customer service with operational excellence. Our strong same day organic revenue growth and segment EBITDA margins in Wholesale – North America and Europe demonstrate our ability to serve our stakeholders in any environment,” noted Dominick Zarcone, President and Chief Executive Officer. “I want to thank our global teams for delivering another quarter of strong performance in a challenging macro environment, including commodities and foreign exchange volatility as well as other inflationary pressures that impacted our reported earnings. Additionally, we remain committed to returning capital to our stockholders, as evidenced by the 10% increase of the quarterly dividend and the expansion of our stock repurchase program.”
Third Quarter 2022 Financial Results
Revenue for the third quarter of 2022 was $3.1 billion, a decrease of 5.9% as compared to $3.3 billion in the third quarter of 2021. On a constant currency basis (1) , third quarter revenue grew by 1.0% to $3.3 billion. Parts and services organic revenue increased 4.8% on a reported basis (5.3% on a per day basis), while the net impact of acquisitions and divestitures decreased revenue by 2.3% and foreign exchange rates decreased revenue by 7.4%, for a total parts and services revenue decrease of 5.0%. Other revenue fell 17.4% primarily due to weaker commodity prices relative to the same period in 2021.
Net income (2) for the quarter was $261 million as compared to $284 million for the same period in 2021. Diluted earnings per share (2) for the quarter was $0.95 as compared to $0.96 for the same period of 2021, a decrease of 1.0%.
On an adjusted basis, net income (1,2) in the quarter was $266 million as compared to $300 million for the same period of 2021, a decrease of 11.4%. Adjusted diluted earnings per share (1,2) for the quarter was $0.97 as compared to $1.02 for the same period of 2021, a decrease of 4.9%.
(1) Non-GAAP measure. See the table accompanying this release that reconciles the actual or forecasted U.S. GAAP measure to the actual or forecasted adjusted measure, which is non-GAAP.
(2) References in this release to Net income and Diluted earnings per share, and the corresponding adjusted figures, reflect amounts from continuing operations attributable to LKQ stockholders.
Cash Flow and Balance Sheet
For the third quarter, cash flow from operations and free cash flow (1) were $273 million and $224 million, respectively. Cash flow from operations and free cash flow (1) were $1.01 billion and $862 million, respectively, for the nine months ended September 30, 2022. As of September 30, 2022, the balance sheet reflected total debt of $2.4 billion and net debt1 of $2.2 billion. Net leverage, as defined in the credit facility, was 1.3x EBITDA.
Stock Repurchase and Dividend Programs
During the third quarter of 2022, the Company invested $343 million to repurchase 6.8 million shares of its common stock. For the nine months ended September 30, 2022, the Company has deployed $891 million to repurchase 17.6 million shares. Since initiating the stock repurchase program in late October 2018, the Company has repurchased approximately 52 million shares for a total of $2.2 billion through September 30, 2022. On October 25, 2022, the Board of Directors authorized a $1 billion increase to the existing share repurchase program and extended the duration through October 25, 2025.
On October 25, 2022, the Board of Directors declared a quarterly cash dividend of $0.275 per share of common stock, payable on December 1, 2022, to stockholders of record at the close of business on November 17, 2022. This reflects a 10% increase over the prior quarterly dividend of $0.25 per share.
Other Events
On September 19, 2022, the Company announced new leadership appointments, effective immediately. Varun Laroyia, Executive Vice President and Chief Financial Officer, was appointed as Chief Executive Officer and Managing Director of LKQ Europe. Rick Galloway, Chief Financial Officer of LKQ’s Wholesale – North America and Self Service segments, was appointed as LKQ’s Senior Vice President and Chief Financial Officer.
2022 Outlook
Rick Galloway, Senior Vice President and Chief Financial Officer, commented: “The business continues to produce strong financial results in a difficult macro-economic environment. We anticipate the benefits associated with our operational excellence programs and capital allocation activities will be more than offset by the weak foreign exchange rates relative to the US dollar along with soft metals prices. Therefore, we have updated our guidance metrics to reflect these current market conditions, and also narrowed our guidance range for the balance of the year.”
Source: https://rvbusiness.com/ntp-stag-parent-co-announces-results-for-q3-2022/
