LKQ (US:LKQ)2025-10-30 19:14Revenue Performance - Total revenue for the three months ended September 30, 2025, was $3,499 million, an increase of $46 million or 1.3% compared to $3,453 million in the same period of 2024[98] - Total revenue for the nine months ended September 30, 2025, decreased by $258 million, or 2.4%, to $10,339 million compared to $10,597 million in 2024[106] - Revenue for the nine months ended September 30, 2025, was $4,832 million, compared to $6,436 million for the fiscal year ended December 31, 2024[146] Parts and Services Revenue - Parts and services revenue increased by $39 million, or 1.1%, driven by a $39 million increase in Specialty (9.3%) and a $6 million increase in Europe (0.4%), partially offset by a $6 million decrease in Wholesale - North America (0.5%)[100] - Parts and services revenue declined by $268 million, or 2.6%, driven by decreases of $148 million in Europe and $128 million in Wholesale - North America[106] - Parts and services revenue in the Specialty segment increased by $39 million, or 9.3%, to $456 million for the three months ended September 30, 2025, driven by volume growth in automotive and marine product lines[117] - Parts and services revenue in the Wholesale - North America segment decreased by $128 million, or 3.1%, to $4,041 million for the nine months ended September 30, 2025, primarily due to lower volumes and one fewer selling day[118] - Parts and services revenue in the Europe segment decreased by $148 million, or 3.0%, to $4,731 million for the nine months ended September 30, 2025, driven by decreased volumes due to economic conditions and competition[121] Cost and Expenses - Cost of goods sold increased by $43 million, or 2.0%, to $2,158 million, with the cost as a percentage of revenue rising to 61.7% from 61.3% year-over-year[101] - Cost of goods sold decreased by $153 million, or 2.4%, to $6,329 million, maintaining a flat percentage of revenue at 61.2%[107] - Selling, general and administrative expenses rose by $27 million, or 3.0%, to $958 million, with SG&A as a percentage of revenue increasing to 27.4% from 27.0% year-over-year[102] - SG&A expenses decreased by $8 million, or 0.2%, to $2,865 million, with SG&A as a percentage of revenue increasing to 27.7% from 27.1%[108] Tax and Income - The effective income tax rate decreased to 20.0% for the three months ended September 30, 2025, compared to 25.0% in the same period of 2024, primarily due to discrete tax benefits[104] - The effective income tax rate decreased to 24.8% for the nine months ended September 30, 2025, down from 29.0% in 2024, primarily due to discrete tax benefits[110] Liquidity and Cash Flow - Total liquidity as of September 30, 2025, was $1,677 million, an increase of $221 million from December 31, 2024, primarily due to a reduction in revolving credit facility borrowings[126] - The company had $1,388 million available under revolving credit facilities as of September 30, 2025[126] - For the nine months ended September 30, 2025, net cash provided by operating activities was $733 million, down from $886 million in the same period of 2024[140] - Free cash flow for the nine months ended September 30, 2025 was $573 million, compared to $661 million for the same period in 2024[142] - The company reported net cash used in investing activities of $144 million for the nine months ended September 30, 2025, significantly lower than $300 million for the same period in 2024[141] Debt and Interest - Total debt as of September 30, 2025, was $4,181 million, with scheduled maturities including $532 million in 2026 and $1,606 million in 2028[137] - The company’s overall weighted average interest rate on borrowings was 5.3% as of September 30, 2025, with a rate of 6.1% on borrowings under the Senior Unsecured Credit Agreement[135] Strategic Initiatives - The company’s acquisition strategy focuses on highly accretive tuck-in acquisitions with significant synergies, with no large platform acquisitions expected[90] - The company intends to evaluate markets for potential growth through internal development and selected business acquisitions[143] Segment Performance - The company operates in three segments: Wholesale - North America, Europe, and Specialty, with each segment contributing to overall revenue fluctuations[87][88] - Segment EBITDA and free cash flow are key performance indicators, with free cash flow providing insight into liquidity and cash flow available for strategic initiatives[99] - Segment EBITDA for Wholesale - North America decreased by $25 million, or 11.2%, to $199 million for the three months ended September 30, 2025[114] - Segment EBITDA in the Specialty segment decreased by $5 million, or 5.1%, to $94 million for the nine months ended September 30, 2025[123] - Total segment revenue in the Wholesale - North America segment decreased by $120 million, or 2.7%, to $4,277 million for the nine months ended September 30, 2025[118] - Total segment revenue in the Europe segment decreased by $147 million, or 3.0%, to $4,749 million for the nine months ended September 30, 2025[119] Foreign Currency Impact - Foreign currency fluctuations had a net positive effect of $0.02 on diluted earnings per share from continuing operations compared to the prior year period[105] - The company experienced a net positive effect of $0.04 on diluted earnings per share from continuing operations due to foreign currency fluctuations[111] Dividend Declaration - The company declared a quarterly cash dividend of $0.30 per share of common stock on October 28, 2025, payable on December 4, 2025[129]