LKQ (US:LKQ)2024-04-23 11:28Financial Performance - Revenue for Q1 2024 was $3.7 billion, a 10.6% increase from $3.3 billion in Q1 2023[3] - Net income for Q1 2024 was $158 million, down 41.6% from $270 million in Q1 2023; diluted EPS decreased to $0.59 from $1.01[4] - Adjusted net income for Q1 2024 was $220 million, a decrease of 21.1% year-over-year; adjusted diluted EPS was $0.82 compared to $1.04[4] - Operating income fell to $289 million, down 20.8% from $365 million in the same period last year[25] - Net income decreased by 41.5% to $158 million compared to $270 million in Q1 2023[25] - Basic and diluted earnings per share were both $0.59, down 41.6% from $1.01 in Q1 2023[25] - Organic revenue growth for total revenue was reported at (1.1)% for Q1 2024, with total revenue growth from acquisitions at 10.9%[30] - Segment EBITDA for the total was $430 million, which is 11.6% of total revenue, down from 13.6% in the previous year[32] - Adjusted net income for the same period was $220 million, compared to $279 million in the previous year[36] - Forecasted net income for fiscal year 2024 is between $889 million and $969 million, with adjusted net income forecasted between $1,045 million and $1,125 million[37] - Diluted earnings per share for the forecasted period are expected to be between $3.32 and $3.62 reported, and $3.90 to $4.20 adjusted[37] Cash Flow and Guidance - Free cash flow for Q1 2024 was $187 million, with operating cash flow at $253 million[5] - The company maintained its adjusted EPS and free cash flow guidance despite revenue headwinds[2] - Forecasted net cash provided by operating activities for Fiscal Year 2024 is $1,350 million[41] - Forecasted free cash flow for Fiscal Year 2024 is projected to be $1,000 million[41] - Free cash flow for the three months ended March 31, 2024, was $187 million, an increase from $153 million in the previous year[38] Debt and Assets - Total debt as of March 31, 2024, was $4.3 billion, with total leverage at 2.3x EBITDA[5] - The company completed a €750 million offering of 4.125% senior notes to pay down existing debt[10] - Cash and cash equivalents increased to $344 million as of March 31, 2024, from $299 million at the end of 2023[27] - Total assets rose to $15,270 million from $15,079 million at the end of 2023[27] - Accounts payable increased to $1,840 million from $1,648 million at the end of 2023[27] Revenue Breakdown - Wholesale revenue in North America grew by 23.8% to $1,422 million, while European wholesale revenue increased by 5.7% to $1,637 million[30] - Reported revenue for Parts & Services was $3,535 million, with a revenue growth of 12.1% as reported and 11.3% at constant currency[31] - Total revenue reported was $3,703 million, reflecting a growth of 10.6% as reported and 9.8% at constant currency[31] - Gross margin decreased to 39.2% in Q1 2024 from 41.0% in Q1 2023, with gross profit increasing by $80 million[25] - The company experienced a currency impact of $27 million on reported revenue for the three months ended March 31, 2024[31] Operational Changes - The company consolidated 65 branches in Q1 2024, totaling 99 branches consolidated, leading to increased synergies from $55 million to $65 million[9] - A quarterly cash dividend of $0.30 per share was declared, payable on May 30, 2024[8] Depreciation and Adjusted Metrics - The company reported a depreciation and amortization expense of $100 million for the three months ended March 31, 2024, compared to $65 million in the previous year[33] - Adjusted EBITDA is calculated by excluding various items such as depreciation, amortization, and unusual income and expense items[40] - The conversion of Adjusted EBITDA into free cash flow is a key performance metric for the company[40] - The calculation of Adjusted EBITDA may differ from other companies, making comparisons potentially misleading[40] Guidance Adjustments - Organic revenue growth guidance for 2024 was lowered to 2.5% to 4.5% from a previous range of 3.5% to 5.5%[12]