LKQ Corp. Revenue Increases 16 Percent

LKQ Corp., parent company of PGW Auto Glass, reports that revenue grew 16.1 percent to 2.72 billion in the first quarter of 2018. For the first quarter, parts and services organic revenue growth was 3.7% and acquisition revenue growth was 6.6%, according to the company’s financial results. Net income from continuing operations attributable to LKQ stockholders for the first quarter of 2018 was $153 million, an increase of 9% as compared to $141 million for the same period of 2017.

“I am very pleased with the 6.5% organic parts and services growth in our North America segment,” said Dominick Zarcone, president and CEO. “Although we faced a few revenue headwinds in Europe and our Specialty business and experienced certain near-term cost pressures in the quarter, we are actively addressing the issues and I am confident that we have solid plans to quickly return to our historical levels of growth and profitability.”

Some of those challenges the company outlined in its financial results included the following:

  • Changes in economic and political activity in the U.S. and other countries in which we are located or do business, including the U.K. withdrawal from the European Union, and the impact of these changes on our businesses;
  • The demand for our products and our ability to obtain financing for operations;
  • Increasing competition in the automotive parts industry (including the potential competitive advantage of OEMs with “connected car” technology);
  • Fluctuations in the pricing of new OEM replacement products;
  • Changes in the level of acceptance and promotion of alternative automotive parts by insurance companies and auto repairers;
  • Changes to our business relationships with insurance companies or changes by insurance companies to their business practices relating to the use of our products;
  • Our ability to identify sufficient acquisition candidates at reasonable prices to maintain our growth objectives;
  • Our ability to integrate, realize expected synergies, and successfully operate acquired companies and any companies acquired in the future, and the risks associated with these companies;
  • The implementation of a border tax or tariff on imports and the negative impact on our business due to the amount of inventory we import;
  • Restrictions or prohibitions on selling certain aftermarket products to the extent OEMs seek and obtain more design patents than they have in the past and are successful in asserting infringement of these patents and defending their validity;
  • The increase of accident avoidance systems being installed in vehicles;
  • Higher costs and the resulting potential inability to service our customers to the extent that our suppliers decide to discontinue business relationships with us;
  • Changes in the demand for our products and the supply of our inventory due to severity of weather and seasonality of weather patterns;
  • The risks associated with operating in foreign jurisdictions, including foreign laws and economic and political instabilities;
  • Additional unionization efforts, new collective bargaining agreements, and work stoppages;
  • Product liability claims by the end users of our products or claims by other parties who we have promised to indemnify for product liability matters;
  • Inaccuracies in the data relating to our industry published by independent sources upon which we rely;
  • Our ability to obtain financing on acceptable terms to finance our growth;
  • Our ability to satisfy our debt obligations and to operate within the limitations imposed by financing arrangements; and
  • Changes to applicable U.S. and foreign tax laws, changes to interpretations of tax laws, and changes of our mix of earnings among the jurisdictions in which we operate.
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