LKQ Revamps 2016 Financial Guidance Based on PGW, Rhiag Acquisitions

Glass globe with dollar signs on background with money symbol.Thanks to the acquisitions of Pittsburgh Glass Works (PGW) and Rhiag, a Pan-European business-to-business distributor of aftermarket spare vehicle parts, LKQ Corp. has pushed its 2016 guidance to higher figures for three out of four financial metrics. This is according to the company’s first-quarter financial report released today.

The company has revamped its guidance on 2016 adjusted net income, cash flow from operations, capital expenditures and adjusted diluted earnings per share. The only financial metric remaining the same is organic revenue growth, which covers same-store financial results.

The company reported its revised 2016 guidance as:

Financial MetricsUpdated GuidancePrior Guidance
Adjusted Net Income$545 to $575 million$490 to $520 million
Adjusted Diluted Earnings Per Share$1.76 to $1.86$1.59 to $1.69
Cash Flow from Operations$575 to $625 million$520 to $550 million
Capital Expenditures$200 to $225 million$170 to $180 million
Organic Revenue Growth (Parts and Services)6 to 8 percent6 to 8 percent


“The acquisition [of PGW] will expand our addressable market in North America and globally,” according to the company’s report.

LKQ reported record revenue for the first quarter of $1.92 billion, an increase of 8.3 percent as compared to $1.77 billion in the first quarter of 2015. Net income for the period was $107.7 million, an increase of 0.6 percent as compared to $107.1 million for the same period of 2015.

“Our first quarter results were impressive and I believe that our recently completed strategic acquisitions, credit facility amendment and European bond offering position us to continue delivery of organic and acquisition-related revenue growth,” said Robert Wagman, president and CEO of LKQ.

The deal to acquire PGW from private equity firm Kohlberg & Co. LLC and PPG Industries Inc. for an enterprise value of $635 million closed on April 21.

“With the acquisition of PGW and our entrance into the sizable automotive glass market, we continue to grow our industry-leading position and product offerings to further serve the needs of our professional repairer customer,” Wagman said at the time.

LKQ Corp. is a provider of alternative specialty parts to repair and accessorize automobiles and other vehicles. The company has operations in North America, the United Kingdom, the Netherlands, Belgium, France, Scandinavia and Taiwan. It offers customers a broad range of replacement systems, components, equipment and parts to repair and accessorize automobiles, trucks, and recreational and performance vehicles.

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