LKQ (LKQ) 26 Oct 172017 Q3 Earnings call transcript

Welcome to LKQ Corporation's Third Quarter 2017 Earnings Conference Call. I'll now turn the call over to Joe Boutross, LKQ's Director of Investor Relations. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to LKQ's third quarter 2017 earnings conference call. President Nick Laroyia, President Chief Executive and Clark, are Officer; Chief Financial today Controller. Michael Varun and and Vice Vice us Zarcone, and LKQ's Executive Officer With Finance of President and Please refer lkqcorp.com. website the to LKQ at

issued call. our this well as presentation morning the For this as slide accompanying release deck earnings for

Now, let Safe the cover Harbor. me quickly

strategies. results our Some obligation statements. looking. forward-looking These forward differ of be expectations, hopes, those implied may beliefs, considered expressed the or assume result any statements statements in today that various Actual intentions from materially the no or statements factors. update We may as we regarding events of make or to include a forward-looking

and subsequent filed SEC. please the information, reports to more Factors refer XX-K discussed Risk with For Form the in our

we slide GAAP in that, is And measures financial this and to of and will included I'm reconciliation to to During the both release non-GAAP presentation. GAAP press present call A measures. over turn Nick non-GAAP Zarcone. happy with today's earnings call,

Joe, would Laroyia, you, Vice Officer. I am everybody of and on results the quarter morning and introduce to review, most to Executive I recent share to the I into you. our But delighted jump with our the before Financial new like Varun call. good President Thank Chief

Workplace X, XX,XXX many you was employees Global Chief A Varun Business. XX October joining the countries. our approximately CBRE's read LKQ press from to release Officer multi-billion As outsourcing in on of real firm Solutions estate to in September. full Prior Financial with service over of

he addition close XX an team. both to around senior I'm diverse variety have KPMG. LKQ. Prior the in people Controls culture it financial will operational complexity level years that, XXXX, to be to short, at and Computers, size, overseas on and held prior the of expertise to Varun similar and a Johnson in and US, thrilled from So LKQ and And significant In to positions quite the Electric positions brings of LKQ's in scale outstanding joining globe. financial unique Gateway to CBRE spent General at a Varun to global financial him was

quarter; the strong in results. and believe pleased company for very we're a this quarter the our was with onto Now we all all

noted consolidated was increase over $X.X million services As of and year. the $X,XXX Total on recorded X, parts was revenue third from Slide revenue in growth XX.X% last the billion XX.X%. quarter and

in solid on after organic organic basis. level. Importantly, same an for $X.XX million million an of the continuing from million the a share X.X% to period in impact are a of XX.X% parts period was Global into Income compared growth XXXX. earnings companies was an growth operations at adjusted organic in per was $XXX XXXX a and compared day $XXX the from as as our increase sector XXXX. taken services growth in income operations basis XX.X%. QX, few of per continuing from generating of account and was continuing to for XXXX. selling Very day basis On pure reported comparable operations on this one compared increase to XXXX of $X.XX was $XXX Diluted X.X%

year. $X.XX per earnings $X.XX was the diluted from continuing compared period same operations to share for adjusted last Our

in with reported devastating Houston was basis. our XXXX compared turn A notwithstanding our grew the and the parts were area into experienced of organic and of growth after Organic quarter on and Houston during quarter out growth this The parts Let's to fact was the in revenue less X.X% one in North created taken certain XX-inches for and a X, performance note, comparable damage from basis the X.X% day services And in services of revenue on some many Florida segment XXXX. power America, the account for segment X.X% in hurricanes. and you'll third total North of particular levels American of upwards Slide quarter highlights. per for All significant operating confronted note in growth solid that areas, resulting was a days. flooding. achieved of winds knocked day areas Florida unprecedented rain this several for markets to

storms As loss our a subsequent for in and a locations of majority aftermath. to locations result, of resulting business and shut Florida our both eight in some days down Houston area few XX prior were the their

challenges daily having LKQ, the to safe markets our both and despite deal managing homes employees are sustaining families to their their affairs. Importantly their in and many of with to damage

Fortunately any bit company Florida. a either loss didn't the we Texas storms, parts When taken in per and growth the on events. locations of account would any a higher at experience into organic in asset the significant services even impact unfortunate or basis believe these not for have property for been day or if

far per was quarter than initially impact storms the earnings share bright in the the anticipated. On from negative less we side, the

of customers confidence offering witnessed a growth of the to a a market right significant parts us auto our represents Accordingly, for than quarter value that increasing of claims in national our growth we're were tenths basis products CCC, now, so actually reflect to of XXXX, on our cost. This that per repair third as whole. proposition revenue the quarters the ever significant and the X% gives As performance. collision we continuing midst continue by track faster on X% day services out in several down grow related four and liability

of in a nationwide. regions up only up Transportation Our solid were States the in Northeast of United Atlantic US tenths South impressive of a two four respectively. revenue July during tenths X% because and is on driven eight growth With also in miles driven the X% only tenths the according to miles Department

while margins team. in margins the top in any five reporting more consider So, of our driven, EBITDA of hurricane revenue importantly North third growth the could you best impact, segment through soft years. quarter line of be data claim gross past repairable came I and terms when of not really the proud in American the the negatively miles effort the and

to to Similarly, recent CCC that total the that according Hurricane to volume dynamics vehicles XXX,XXX vehicles storm over us total bidding loss of hurricanes, relate both our for surge increase loss were believe and the our our inventory at of turn we I and creates As enhance XXXX, the in continue Sandy related further storms. in between a procurement business. and recycling levels efforts to auction growth there

initiative and year-over-year. number quarter third platform ongoing XX% revenue our to intelligent process during the XX% and part respectively through the CCC, Turning CCC with solution orders, aftermarket purchase the of grew

the to this North recognize a represents important small encouraged very part of by progress program we're our it's While American revenue.

an These forward five facilities for existing for additional of XX. branches integrated PGW total up and help we a the year cost five basis. And that structure year. LKQ quarter branch consolidations the the to the third will scheduled the the consolidation reduce Lastly, consolidations remainder we into bring have going will during on

other the the of to Atlantic. Moving side

segment per in lost growth for growth the of of achieved organic quarter. parts a revenue basis given revenue one a X.X% basis total Our XX.X%, X.X% on selling we and and reported day day importantly European on services witness

operations additional the organic X.X% Operations While in all accounted revenue while accounting branches the in the double-digit during Europe for strengthening increase the impact day for growth. [ph]. XX.X% balance Eastern due opened added than the the way in two-thirds with Acquisitions of growth growth Euro Europe per about the to foreign new resulted exchange. organic strong X% an more the year for with saw results of again led a geographies about quarter,

of well During very to of UK, QX, a secured mandated four paint with the our line of product had UK collision through and revenue over parts based tied activity. of large revenue a a robust parts our that Also, Kingdom. throughout combination a of growth insurance agreements level team of industry the bodes volumes shops relations so independently a at supplies continued growth ECP continuation this repaired during in the year-over-year owned specific this XX%, United include collision number body quarter repair very

UK to announce that third be as to trading team I'm continues now locations ECP six of being of four With a platform. to we in Reilly of delivered the as of the and Tamworth out quarter Ireland full during the project, serviced TX, end PR two in refer warehouse network our be which to seven to of the pleased total branch Republic During rebranded budget. opened the new within they're Europe, the our we on TX TX out quarter, XXX Easter we and in Also respect we are locations branches the today currently November. plan expect by of of the branches up on Europe. ECP and and including in

to a by our And complex, XX be which whole on to of with XX, hard work about CMA two early very requirement is the branch X. day our at XX XXXX day, being facilities migration, mid-XXXX. will and is CMA during CMA to in continues account about case, the will X.X% we the the particular or integrate recognize address of operations, to any Page, decision to respect least finally, Following XX revenue it's that third the quarters divest specialty be several separate of We're a and the a after with Andrew begin for relaxed order provisional it completed. process team X.X% achieving to the solid the work issues the to locations. Once but issued assuming indicated growth our With should removed important with September and us selling potential begin perform to last on process will rationalizing to continuing acquired will one of in integration other those there which on or per respect that segment and into may we November branches. to the up organic findings basis. to one take taken organic final be growth for closed smaller specialty UK well think the The announce releases with quarter their full the

specialty witnessed by bit to trends SUVs in Texas we hurricanes in continued quarter, light RVs. and Florida. sales vehicles our positive were in the namely and During offset These a the spot trucks, favorable impact sweet trends for the

in as aftermarket light a activities distributor earnest acquisition in by distributors third Belgium, vehicle development include wholesale during These of the quarter. four parts parts XX evidenced corporate our businesses continued tire Our in in workshop parts in and Germany distributor Poland, a recycled in and Sweden. yard salvage service Kentucky. full a small Sweden, and a business specialty automotive And business accessories parts of in

offers management also a to Monday on announced two in we've developer purchased business the of software a the agreement definitive a vehicle garage system Also, winches, is hoist iconic into line an recreational in entered Warn software brand Corporation. business management This absolute our services of close of Dover as product the businesses We of dealers for will fourth Warn including and sometime Netherlands has position States. orientated to and Industries enhance from that aftermarket specialty and transaction United acquire quarter. in a bumpers the aftermarket market the expected segment.

continue will of robust. turn and the through breadth the our addition look opportunities and discussion depth over of who well details you the I consolidated And through the the pipeline of segment and potential to managed offerings and Michael, businesses of to grow financial Varun transactions the around results. our will is to run of the now companies successful, We family for globe customer to

team part on sharing of That's be many to Thanks delighted financial joining for with I everyone the to look and us I'm forward morning Nick to results our good you quarters the come. great. to leadership and LKQ call.

it Over down In insurance such key a Listen, analysts, stakeholders decided our companies investors major meet I to several banking to as equity LKQ? others. weeks, join why came variably, while never had key change with to few simple, is to opportunity few the the a items. moved discussion past and career and an partners, I really

around is the to It's the acquisition, its through First, leader to geographic and the potential a through both I a further growth and categories customer that not in gets potential significant a an often and LKQ very growth globe believe company organic offering key join and one opportunity clear footprint. core very is significant both of markets acquisitions. that

as scenarios of as the the over set company Personally, finally, skill of I person. in stats. together elements Second, at trends And for the $X.XX it key affords a consolidated and substantially start larger Each now out. of few the geographies. unique my even through it the in an incredibly having aspect the multi-billion to I such variety I and operated the unwavering to created opportunity will a the couldn't LKQ. Nick in who these margins businesses onto future. to of consolidated more company billion currently me segment which address the is sectors this into behind built both so of enterprise progressive build a our help This Michael the and on I I'll you results touched pass to reported the integrity was opportunity revenue detailed am will margin. the And core that review taken I more stage LKQ simply thrive foreseeable core and is an results, the financial transparent described turn Nick gross our then with I our into the quarter. take and for values well me. cultural truly fits a fit, culture, the and important appreciate of of

the on some ups the out noted relatively quarter-over-quarter our million for XX.X%. We quarter was comparable EBITDA a percentage effectively gross across flat Segment or XX over consolidated presentation, and As change. year-over-year minor increase segments method total XXXX. $XX quarter reflecting of margin to the saw know of million X.X% the at $XXX that downs Slide

negatively was previously this Nick the to dollars compared selling of which quarter third EBITDA As there in XXXX one our fewer period. segment day XXXX, mentioned, impacted

in business. the revenue, inefficiencies. from the point We associated Page from percentage higher XX.X% increase the negative to has acquisition due Andrew we cost Page was we our Andrew final operating the impact experience as this mostly versus clearance losses process recorded a to integrating and to XX begin are Sator us of related was of expenses, segment our quarter continue largely distribution expenses operating with and Until this we in a XXXX. receive with CMA, certain segment left of unable As the European saw to in XX.X% our EBITDA a basis third

but of And rate to ago. benefit stock-based full increase income such EPS third our deductions. of compensation of tax of to discrete year QX, continuing $XXX $XX asset and year. quarter million forecast about intangible comparable effective updated the was discrete mix rate amortization The tax reported same during The the rate tax strongest projected XX to onto any million role compared the million improvement. XX.X% third about benefit And quarter payment a non-operating and the of $XX Andrew out in the in XXXX. fees. reported of to items XXXX, of various operations X.X% prior third was EPS million versus Page due as discrete up $X.XX the During And associated primarily items. reflecting $X a applied our update a third exchange the points adjusted million prior operating Adjusted finally, With rate a third other compensation metal gains rate, that from experienced base foreign ancillary related and XXXX income in a of restructuring was QX, other geographic headed and acquisition. depreciation quarter excludes for $X.XX million the to in a XXXX in EPS. or the largely XX.XX% resulted year, and values. we half cost adjusted XXXX restructuring in basis $X little operations with XXXX as $X.XX QX, or key income earnings. of the Michael quarter. Diluted XXXX the year a me base to up recent to expense stock the of late XXXX. We Non-operating year the year, quarter in segments. XXXX. North owing forecasted bargain includes which down million third Pre-tax was higher reported $X similar this Interest by expense $X and QX, give from three of asset before roughly when versus was to gain X% less prices penny to quarter the in stock-based charges, which same last which Europe purchase losses on the quarter-over-quarter a XX.X% about you pull XXXX it $X net and X% UK, scrap the one-time interest had were that, adjustments rates. amortization, compared and items effect BREXIT Other to was our increase period benefited up prior to by XXXX during of further as gain average details EPS as of we than $X.XX the favorable specialty. effective compared XX.X% with income anticipated, then compared impact borrowings up the approximately plan of turn were included We've to let million taxes, annualizing continuing currencies to and XX.XX% but income the from the versus coming we diluted quarter XX.X% latest America, the And minimal the after over for

everyone the few three Varun morning you, dynamics. the our as it margin minutes Thank and on Particularly I'll take address relates to good to some a to segments. call. of

were basis reductions of about other last overhead benefit, We were cost. expenses XXXX. results in business cost North our benefit Outside North after operating and due of from the to We basis the and to EBITDA aftermarket insignificant self-service reflected compared The respect was margins to million, which year. points sale Slide scraps due up XX, points of our up offset total Partially over to eliminating last discounts OEM individually points metals gross this to In increased in of saw the by XX pricing. $XXX XX segment. shared margins input expenses salvage rising margin a operations improved items corporate March to operating our points by during procurements third distribution XX.X% the Going benefits customer of the the business approximately year. quarter mostly XX in deals for in over XX PGW basis in North third various in XXXX basis related a initiatives during and last higher With American strong increase in quarter segment reported year. America XX.X% America cost. our X.X%

As EBITDA from was last XX.X% year. a points XX XX.X% QX, in segment percentage revenue, XXXX reported up of basis

experienced sequentially high noted typically and down in was third end third the we've the is last over on America XX.X% as seen years. dip the QX, the the we've margin the quarter of While of in in North the Nick seasonal quarter range in what five

in generally extent Looking movement XX, overtime, X% so higher The higher quarter, sequential Slide benefit about car to as lower from the in of benefited moved cost the last over in scrap increase and in lesser up will were scrap scrap XX% than QX relative to reflects this year. experienced this pricing prices scrap follow prices we but a or year it QX. a quarter first in prices sequential from

segment comparable XX.X% the point basis our Slide of period a improvement European over onto in margins XX gross Moving QX, on XX, were XXXX.

step Our impact label Sator a sales of business lesser the increased market favorable to two had result Belgium a quarter-over-quarter private the a basis extent conversion of point XX to net distributions. and as

call, suppliers. produced point improvement working And rebate with on As XX programs the we've in the and including discount a noted on those consolidated efforts across margin initiatives quarter. procurement our in basis European organization been negotiating, last

year. due prior operating XXX a to last effect the two negative European European quarter-over-quarter remained whole into national over Gross With and point quarters. business. cost under of leverage and sequentially. just point is the a operate prior the revenue, margins basis higher XX acquired $XX order down The last a percentage basis similar basis consolidated Page we Rhiag distribution increase Sator the the segment at in to to the versus businesses money distribution separate respect losing negatively lower a point had the higher quarter, of which related our operations as to margins ECP attributable to on in basis and group million, while Andrew EBITDA experienced factors expenses year XX cost X.X% still primarily increase were we Our totaled operating center. TX impacting inclusion

shown the the third relative As a currency constant was of XXXX, the the X% Sterling and by On in on Pound Slide flat, basis, against EBITDA Euro X.X%. Europe about quarter dollar. strengthened to increased XX,

in XXXX XXX to to impacted one relative European incremental prior of of in percentage a our Page quarter negatively XXXX leverage Andrew quarter Approximately impact basis a TX. year XXX prior X.X% the points the the day As cost X.X% a and also versus And compared of on EBITDA last segment basis third to the fixed related fewer relates to selling revenue the was point year, decline. cost decline this to year.

to points Specialty of third the the to to was Segment year. with basis XX.X%. XX specialty QX, and about down from year. for was increased Similar losses segment quarter typically Turning revenue due segment specialty the revenue XX up year also EBITDA to highly is the the expenses down points the Slide on you a years, EBITDA our during in sequential further cash in note segment $XXX let's to XX, move million second in a basis September, should to income prior margin first fourth margin strong investing EBITDA earnings XXXX EBITDA deployed last basis specialty prior support acquisitions to an capital growth XX, to reflect points seasonal for fund other the is business was offset $XXX that changes expenditures investments. million experienced to allocation, consistent a million capital months XX points percentage million net normal the points. as $XXX growth. working operations X.X% decline segment capital of in miscellaneous largest XXXX pay to assume with businesses quarter. while our our items March decreases on fund largely decreased continuing as $XX our nine capital saw sale basis capital on of will our you $XXX approximately from Slide we a we and the percentage see including net the the million as flow Consistent of as presented Through to of manufacturing margins in of patterns, The derived expenses in gross million other $XXX glass XX by compared support and prior Operating of foreign of strongest. down XXX in relative almost funded seasonal in and did XXXX. a business We quarter debt a we proceeds basis of exchange were PGW sequentially.

availability Slide we Resulting XX, net September total as $X.X to approximately XX last and billion of Going of million outstanding XX, X.X billion debt had debt $X.X EBITDA. of months about about We've line $XXX in back $X.X or cash. update. times on of more of point, together our with cover this than over liquidity Nick to the $X.X billion. cash over turn to At I'll of billion which yields of call total the credit our guidance

$XXX minor XXXX, our X.X% than per range to approximately $X.XX the end for operations I of overview. like both was a million have months low The we're of guidance the round day. made share. scrap for from we're them an of and the per parts the our you down end high Euro the to some are rate reflective a solid of questions. end. to first the to effective from These exchange Likewise, through to to Organic our $XXX adjusted dedication months. tax has nine for we're $X.XX the and being their revised would respect million $X.XX every income efforts million on end share operations corresponding quarter terrific to XX,XXX million end, to to high pound results to $XXX based has diluted the fact the the range around serve is at end at on adjusted With all capital year. for Cash on flow we a earnings rates $XXX services of and a and increasing quarter. low nine $X.XX narrowed and that more range financial for $X.XX the high every to we bit LKQ In low now the tweaks reflect the on the $XXX been have on ready X.X% on QX $XXX million. in a continuing that sitting our hard been who the reflects X.X% for midpoint of at narrowed the growth fourth the Thank ton. for where updated to globe has of of for per The guidance and $XXX and each spending revised each employees XX.XX% summary, a and one million call working thank open to collective Operator, proud. customers a for

from of comes question first line Ryan Your Instructions] of the [Operator Merkel William Blair.

Your line is open.

then that, growth growth fourth the in slower expecting quarter from and to question up stabilize first slightly to second are bit. daily that pick So, the in And of me. Europe Anything little sort a to for specialty. out call or organic you

going rate basis, really per day [technical the difficulty] a with happy forward growth [Technical basis. on difficulty]

assume ahead I and of that my catch Okay but the sort phone, secondly and kind in didn't know line trended there should XX.X% North but second and question gross stable of all up on of anything and answer, down since we the was it's from year-to-date going it's first margin still at then was here. just out quarter. coming America I

a assumption. staying to [Technical will speaking is broadly business range the this difficulty] [technical good continue America on [technical difficulty] pattern look likely but on North chart in the difficulty]

very you thank much. Great,

from next of question comes Chatterjee Your Samik line of JPMorgan. the

is open. line Your

Sator for this can is they organic track European sort sort terms Rhiag, of Nick, I growth give groups directional like just you how of numbers you and ball wanted about anything numbers the park giving tracking, to the there business of they're check I business three the know how by ECP, but in stopped quarter.

again had with - they little where that's bid good will. QX, Sator you Rhiag in of all numbers centered because companies, happy the was in than we're if net of lower all the European level. and operations you the a business kind are rate. growth performance exceptional the have ECP, Eastern If right, three bit organic growth the single-digit but all the highest

the questions, flow slightly led at down, And from And the saw method that housekeeping for came change to it. what that? $X.XX only XXXX that? couple a Got EPS seems down I look what be operations to of the full came equity XQ sort of led of guide, what's from I cash investment year guidance the the for the when driving so block the

continue our brought we is grow we flow, bit cash Yes, plan want so cash little $XX million, estimate spending by basically OCF stayed think the million, down the free on businesses, the as same. operating enhance at running so inventory if about we to to you about capital to free light, the we $XX brought that cash so investment likewise in for a flow in so flow

Your other question was?

the On in change equity change of guidance method seems to from the XXXX contribution the be the guidance, in midpoint by driven the investment.

That [indiscernible]. relates to

that in and Okay wasn't expected XQ? back

that QX, We explicitly did not correct. in you're out call

keep as manufacturing so correctly, which operations, for of and well? business of the I on Dover mentioned you how's they do the week, If and operations have you acquisition final Okay, aftermarket you question just intend to understand the the manufacturing a do this call.

accretive team for some purchase. Yes, operations So, operations. which and be their We've a owners of keep of perspective to we has to it to XX% margins flow and the it's part had just about for going more cases a business, as They've be which product million strong on vertical is specialty we're What market by incredible margins ourselves slightly of issued ask or market margins. margin have an got going an are strategy opportunity to manufacturing to a and Circa specialty be quite revenue Warn brand kind opportunity it's that think yet going time, $X closed to Corporation. product Samik. be was something to Dover the the to XXXX name, for growth leadership revenue first market. both yes, with manufacturing Vehicle in an of so billion The than talking fruition, you're this those business purchased it a accretive many not this our control good we integration importantly EPS. XX% so Industries from that is going very cannot can to will market you Warn select do about in we're bring few and opportunities. more $XXX a circumstances leader market consolidated cases share Warn is where from that factory to They've believe operates in for we very a represented large going their only ancillary opportunity put to there bit brand leader. about bumpers bumper, got with because good a the an they We identity. going undisputed

being acquire can we're a in and able this transaction a control, X% simpler was fits well brand size case from the consolidated we it that the we got to perspective And like the business, we Dover distribution. Again, great opportunity, of the charge a revenue. our much business. about of retained product only aftermarket our then so the it's day, say OE it's this it's situation. our So, at into actually set, their think end PGW of

just So perspective. in keeping

comes question next line of Craig Your Baird. Kennison of from the

open. Your is line

strategy increase of see as of in you've French want your in that I'm see might American seen we've North strategic wondering competition other maybe things a if whether you distributor seen that do or to a you the an in to as the enter threat market. you some Europe, So, Europe. validation

weeks knows, which the believe We just bit voyage maiden why aren't Germany first France, significant we've largest in a is is Alliance. everyone GPC could companies as significant operations an well. the in buying share Europe the France, in NAPA after as been all quarter question. that probably Europe headquartered other by in then Craig. market the outstanding Yes, marketplace, not Which at mover [indiscernible]. answer brand Europe, in for Good and We're US here had and in that we were morning, years, and their announced operations a have happy UK enterprise large the ago. we' several the several in US a last quarter asked

any end participate, So, they're very very we GPC, is day in and in material see ownership by a competitor Look indeed really strategy. good that we a strategy it and yes, fine. to very Europe think and they changes. the at Alliance don't which think good our effective in markets show goes is Craig operator very we they're good disciplined the just good of Due to they're company, a the that's

business And system. your management strategic the Netherlands just of implications margin systems and on comment and then real quick, your you could management revenue RV

are those very just so you know businesses. those small two very, Yes,

- can bigger RV of to mechanical does RV of our comes intend is provide that their their Okay, the a We will parch very the parts side, largely type customers to for What at wallet, a to jobs blast by clearer Those and at stay to use that get share them to where it in helping when our bigger help business, right. of level out fixing sell. kind is promotions it to an revenue, good but good service the and customers, maybe. software drive get piece CRM and whatever of they their customers incremental independent shops garage our [indiscernible] comes providing to that have do emails, Again, purchases eight with of we our help to having that dealers' that a owner, goal or oil grow that folks to actually again when incremental to providing the What parts take let's sell they're capability touch case repair Their that six service shops. company or independent dealers. are cars. maybe alike. wallet us mechanics. of is not business we for changes this break in is use system What the that it's in a it Netherlands higher

your the Bret from from of Jordon question Jefferies. line comes [Operator next Instructions]

Your open. line is

goods salvage to impact of out see a truck lot timing. the auction of a Could the on and of magnitude and little hurricanes, the about you're Maybe mix? you benefit SUV coming the the bit going the talk from damage, what on cost of something XXX,XXX freshwater cars,

track all, of to Sandy going best that we Yes, a to of cars. up be put experience to reality good our coming out need XXXX, because our to We we lot the the in so the purchase back cars can't market. of way there's salvage to is, can't place it coming buy dramatically is, have a

You that's with a us, can't acres XX cars true XX put salvage yard. true that's with acre everybody. in of And

the of to next of a that recyclers going high and these able end be be cars the the buy cars with to car like because an there it's should if going good of we is, The should gone think, again gone, There's is to market over parts a bit. or some average front higher just little cost market. bit from margin to of can per sold the market we benefit included from vehicle it's day available several a the at more And is to we're the will, coming to are we to all and perspective, quarters volumes the a revenue flood come for the right. to going gains think sale. changes, Bret, end demand the And reality the the pricing massive incremental on back quality a massive help ourselves coming but be So, be not you end be right. goods will bit supply not flowing get

penetration, pretty a yet other Do and then have tenths, feeling alternatives organic you a Okay claims down talked question parts now? strong might what four X% you be for the rates a AI growth. penetration being about on

still up about North we're call little I product of business single-digit. reman nicely X%. of per in Keystone America smaller glass negative heavy we're and bit slowly. then box core and to above a product the actually business, day salvage cooling paint, Our and sense aftermarket think X% truck things low our of all is, And in Obviously, comparisons the is feel duty like the our our in the our little probably and bit in where it's a The continuing what softness businesses nudging would and kind and I wheels. like

rest the speak but again, can't here is up industry, little So on we that probably on nudging our experience like for the we a experience of think XXXX. our based based in bit APU

Okay you longer and open number, XX for comp ECP an months give ECP? is the store or just did

Belgium segment trends European different and to in moving presence and and again. reporting Ireland significantly that given Poland No, XX continue. again like the positive on basis, but countries, we're we've We're places and alike a towards operating our added now and and

comes question of next of Ben the Your Stephens. from Bienvenu line

Your open. line is

some in gave you North specialty you help of acquisition, today. you what magnitude Nick the can either of about think American bolt-on ask categories to want I or us not currently that business product you're the Warn could business in sense other

I brands the leading I shares, on at could add ability product in they large for There can't specialty market Well that the if out it characteristics to would XXX they markets, will from as you we're parts distributor heart. we other and XXX,XXX we because our made came again adjacencies I side, add. that vendors. described, that business are think if strong growing space to give of and and specialty the had a sell really know, really different specific those sale we But leading moment a any it brand the at types be really product a SKUs sold of Ben including be different type, to that year difference. specialty have last you

on Fair headwinds. continues factors you're potentially not potentially to a pivoting like sense there I gaining for Page you but the the looks OpEx you And is about can driving an be give the then to that event able integrate synergy light Andrew of enough. drag Europe. the the us the in incremental the talk path recognized Can results, some to key of today, regulatory of at capture? the tunnel business it approval. of end critical the

Page, relative center. a are in the not they're overhead the weren't ownership they investing I had to why they still with national revenue cover those Ultimately about have their decrease have need too they investing national because under cost they the on, money, were losing in rate cost losing Andrew their they're their distribution office mean revenue still they prior cost TX, think business, inventory. high. money. just on, If you had don't distribution the and we corporate that to that's to hit But center they cover that a

some where in while real in their I on margins your duplication those and we the Page opportunities and Europe. mentioned we for need need the Michael, so of think don't impact of Andrew you people the Okay total are. corporate the call office,

on operating European expenses points the on Yes, it XX the was set basis segment.

which I up if Page, Yes quarters. points profitability. XX to be But going on basis points in as it's in so get breakeven, Andrew or we comments. just its measured take some mentioned Europe. basis in The pick overall my time integration in to going from to means we're get measured And Europe we XX it's it is months, weeks

comes next of from Consumer question the Your from Edge. line Albertine James

Your open. is line

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of question next Michael from Your Stifel. from comes Hoffman line the

open. is line Your

This is Butler for Brian Michael.

integration of feedback to or vertical and you any question Just kind those partners, one back you've that of some competitor have from product now stepped of push on providers? that the distribution somewhat your had Warn acquisition, into become

the the the the it's product not, only for product ago. still going although are product I days a reality other very this by distributors owners it's a to the four Monday, to in is so think identity on want selling brand week so brand. And of was - The are have We product. of specialty distribution because this the good demand product who that it Warn sell of vehicle announced just everybody

guess I any not mean because selling the someplace a to anymore you partners now And competitor. I through either own you're that of through guys else products pressure then sell those direct how partners? possible there about is going your you but

significant there. any change don't we anticipate No,

Lakes Your line Stratton David next Review. question of Great of comes from the

is Your open. line

the Are look that? scheduled any is in business in we planned When there start automatic us XQ, regard that you repair to to at coming along? give that can how transmission updates

the talking track. will the of just anticipate ago off you're transmissions we're Yes, be greenfield so couple second being Oklahoma the update or in November, the announcement our business of first days, and quarters pretty much our transmission reman is last a on first team coming week the line in few they right reman from about city a leadership on

from Now but slow, next it's going to the several over start there build years.

forward, the hurricanes, scrap we thoroughly where price the when you Great Will the salvage. of there and on in going steel scrap anticipate any impact lower might then, be there impact future? about that to you pretty a the prices be talk mentioned

and don't We we total to the all loss vehicles Obviously, recycled get or processors to once them, anticipate recyclers metals going like. significant are moves. those are the any sooner head other later and done with I'm to

country you volume, So, about total globe, there and any in will we pressure. of steel recycled material see when but think be some don't amount this used the the around incremental is

bit week Our is a $XXX from maybe in ago, range, average last scrap the right a little were down materially. prices but month a ton not which

the this I'll to the at in [Operator back over questions There queue call the Instructions] are no further time. presenters. turn

year do attention. know busy for call. appreciate a this Again, had you for very quarter February end third We everyone. everyone results. we the this of Thank and we that your thank So, time third a to all talk and with quarter a at we'll and we great you time we're participating you good end looking to think, we forward quarter, fourth is our on

conference concludes call. today's This

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