At the third quarter At the LKQ Corporation (LKQ) Q3 2021 earnings call at the end of last month, Dominick Zarcone – LKQ’s President and Chief Executive Officer said, the Corporation’s Third Quarter 2021 earnings was “another quarter of significant operating progress.” adding “all while navigating the challenges with the supply chain.”
Participants of the webcast, included Joseph P. Boutross – Vice President (VP), Investor Relations, Dominick Zarcone – LKQ’s President and Chief Executive Officer (CEO), and Varun Laroyia, Executive Vice President and Chief Financial Officer.
After the introduction by Joseph P. Boutross, VP, Dominick Zarcone, CEO said:
“This was another quarter of significant operating progress at LKQ, driven by excellent execution in delivering solid financial performance, all while navigating the challenges with the supply chain and the current cost environment. We were able to produce yet another record quarter, and this represents the fifth consecutive quarter with the highest EPS reported in their respective quarters. The third quarter also reflects the second time we’ve been able to achieve more than $1 of earnings per share on an adjusted basis and reflects the highest third-quarter segment EBITDA margin in the history of the company.”
As well as discussing the company’s financial performance, LKQ responded to a number of questions from analysts. Brian Butler from Stifel, asked about collision repair, and whether there had been a greater demand for recycled parts with the supply chain disruption. He also asked what trends the company are seeing from this.
Dominick Zarcone replied:
“The aftermarket part availability is constrained a bit because of all the supply chain challenges we’ve already talked about. Salvage parts come from the local markets, right? We buy total loss vehicles locally, we dismantle them locally and then we can distribute on a local basis. And there absolutely has been a bit of a shift. And I would say this primarily benefits us relative to anybody else because we are the only company that can offer both salvaged and recycled products and aftermarket collision parts.”
He continued: “And so we are absolutely seeing the growth in our salvage business in the quarter, and actually for the last few quarters has been well above the growth and the revenue trends in the aftermarket product.” He added: “part of that is due to the strong mechanical business, engines and transmissions, that we talked about in our formal comments. And part of it is this ability to, in certain times, shift the customer from an aftermarket product that we may not have an inventory to a salvage product that we can get to them same day or next day.”
So the salvage business has been very good. And again, we’re the only company in this country that offers both product lines.”
To see more go to investor.lkqcorp.com/financial-information