LKQX Lkq Corp. (MM)

• Revenue growth of 29% to $784 million
• Organic revenue growth of 11%
• Diluted EPS increases 32%
• Increases outlook for income and EPS

LKQ Corporation (Nasdaq:LKQX) today reported revenue for the third quarter of 2011 of $783.9 million, an increase of 29.0% as compared to $607.6 million in the third quarter of 2010. Income from continuing operations for the third quarter of 2011 was $49.2 million, an increase of 37.1% as compared to $35.9 million for the same period of 2010. Diluted earnings per share from continuing operations of $0.33 for the third quarter ended September 30, 2011 increased 32.0% from $0.25 for the third quarter of 2010. The Company noted that the third quarter 2011 diluted earnings per share results included a charge equal to $0.01 for restructuring and acquisition costs.

"We are very pleased with the strength of the quarter," stated Robert Wagman, President and Co-Chief Executive Officer of LKQ Corporation. "The Company delivered total organic revenue growth of 11.1% in the quarter, including 7.6% for parts and services. We are particularly pleased with the organic growth of our recycled, remanufactured and related services business. In the first nine months of 2011, that business grew organically 10.1% compared to the same period in 2010."

Joseph Holsten, Acting Chairman of the Board and Co-Chief Executive Officer added, "Acquisitions in the U.S. continue to be a key growth strategy for us to build out our domestic footprint. In addition, we continue to seek additional growth markets for the Company as witnessed by our recent acquisition of Euro Car Parts, the largest distributor of automotive aftermarket parts in the United Kingdom."

On a nine month year-to-date basis, revenue was $2.33 billion, an increase of 29.8% from $1.80 billion for the same nine month period of 2010. Income from continuing operations for the first nine months of 2011 was $154.1 million, as compared to $125.8 million for the nine months of 2010. Diluted earnings per share from continuing operations was $1.04 for the first nine months of 2011, as compared to $0.86 for the same nine month period of 2010.

Organic revenue growth on a nine month year-to-date basis was 12.3%. Parts and services revenue grew organically by 8.8%. Acquisition revenue growth on a nine month year-to-date basis was 17.2%.

Balance Sheet and Liquidity

As of September 30, 2011, LKQ's balance sheet reflected cash and equivalents of $45.1 million, and the outstanding obligations under the Company's credit facilities were $618.4 million ($243.8 million of term loans and $374.6 million of revolver borrowings). Total availability under the credit agreement at September 30, 2011 was $740.0 million, composed of $540.0 million on the revolver and $200.0 million on the delayed draw term loan. After giving effect to the October borrowing to finance the Euro Car Parts acquisition, total availability was $414.4 million.

Other Events

During the third quarter, LKQ acquired ten businesses that included three heavy duty truck businesses with locations in California, Washington, Montana and Oregon, three wholesale salvage businesses in California, Idaho and Minnesota, one automotive cooling parts distribution business in North Carolina, two self service businesses in Texas and California, and one engine remanufacturing business in Washington.

On September 30, 2011, the Company amended its March 25, 2011 credit agreement to increase the credit facility to $1.4 billion from $1.0 billion.

On October 3, 2011, the Company announced the acquisition of Euro Car Parts, the largest distributor of automotive aftermarket parts in the United Kingdom.

The Company noted that on October 10, 2011 Donald F. Flynn, Founder and Chairman of the Board of Directors, passed away. Joe Holsten has been appointed to the position of Acting Chairman.

Company Outlook

The Company also announced that it is raising guidance for income from continuing operations to $204 - $212 million from $201 - $211 million, diluted earnings per share from continuing operations to $1.38 - $1.43 from $1.36 - $1.42 and organic growth to 7 - 8% from 6 - 8% for parts and services revenue. Mr. Wagman commented that "the revised guidance reflects our strong third quarter results." Full year earnings guidance includes the projected income of Euro Car Parts from the acquisition date to year-end.

The Company left unchanged its previous guidance of approximately $195 million for cash flows from continuing operations and $85 - $95 million in capital expenditures. The Company noted that it does not include sale of scrap or cores in its definition of parts and services revenue. Additionally, the guidance provided excludes restructuring and acquisition related expenses and any gains or losses or capital expenditures related to acquisitions or divestitures (other than capital expenditures related to the Euro Car Parts acquisition).

Quarterly Conference Call

LKQ will host a conference call and Webcast on October 27, 2011 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) with members of senior management to discuss the Company's results.

To access the investor conference call, please dial (877) 407-0315. International access to the call may be obtained by dialing (201) 689-8501. The audio webcast can be accessed via the Company's website at www.lkqcorp.com in the Investor Relations section.

A replay of the conference call will be available by telephone at (877) 660-6853 or (201) 612-7415 for international calls. The telephone replay will require you to enter account: 286 #, conference ID: 379562 #. An online replay of the audio webcast will be available on the Company's website. Both formats of replay will be available through November 25, 2011. Please allow approximately two hours after the live presentation before attempting to access the replay.

About LKQ Corporation

LKQ Corporation is the largest nationwide provider of aftermarket and recycled collision replacement parts and refurbished collision replacement products such as wheels, bumper covers and lights, and a leading provider of mechanical replacement parts including remanufactured engines, all in connection with the repair of automobiles and other vehicles. LKQ also has operations in the United Kingdom, Canada, Mexico and Central America. LKQ operates more than 430 facilities, offering its customers a broad range of replacement systems, components and parts to repair automobiles and light, medium and heavy-duty trucks.

Forward Looking Statements

The statements in this press release that are not historical in nature are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements regarding our expectations, beliefs, hopes, intentions or strategies. Forward-looking statements involve risks and uncertainties, some of which are not currently known to us. Actual events or results may differ materially from those expressed or implied in the forward looking statements as a result of various factors.

These factors include:

• uncertainty as to changes in U.S. and U.K. general economic activity and the impact of these changes on the demand for our products and our ability to obtain financing for operations;
• fluctuations in the pricing of new original equipment manufacturer ("OEM") replacement parts;
• the availability and cost of our inventory;
• variations in vehicle accident rates or miles driven;
• changes in state or federal laws or regulations affecting our business;
• changes in the types of replacement parts that insurance carriers will accept in the repair process;
• changes in the demand for our products and the supply of our inventory due to severity of weather and seasonality of weather patterns;
• increasing competition in the automotive parts industry;
• uncertainty as to the impact on our industry of any terrorist attacks or responses to terrorist attacks;
• our ability to operate within the limitations imposed by financing agreements;
• our ability to obtain financing on acceptable terms to finance our growth;
• declines in the values of our assets;
• fluctuations in fuel and other commodity prices;
• fluctuations in the prices of scrap metal and other metals;
• our ability to develop and implement the operational and financial systems needed to manage our operations;
• our ability to integrate and successfully operate acquired companies and any companies acquired in the future and the risks associated with these companies;
• claims by OEMs or others that attempt to restrict or eliminate the sale of aftermarket products:
• termination of business relationships with insurance companies that promote the use of our products;
• 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;
• currency fluctuations in the U.S. dollar versus the pound Sterling, the Canadian dollar, the Mexican peso and the Taiwan dollar;
• periodic adjustments to estimated contingent purchase price amounts may be charged to our income;
• instability in regions in which we operate, such as Mexico, that can affect our supply of certain products; and
• other risks that are described in our Form 10-K filed February 25, 2011 and in other reports filed by us from time to time with the Securities and Exchange Commission.

You should not place undue reliance on these forward-looking statements. All of these forward-looking statements are based on our expectations as of the date of this press release. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

CONTACT:  Joseph P. Boutross
          Director, Investor Relations
          (312) 621-2793

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