LKQ (LKQ) 27 Apr 232023 Q1 Earnings call transcript

Good morning. My name is Rob and I'll be your conference operator today. At this time, I would like to welcome everyone to the LKQ Corporation's First Quarter 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Instructions] [Operator

Boutross, Investor Joe begin you President conference. your Vice you. Relations, of may Thank

Good and Financial today morning first operator. Vice Executive you Thank everyone Galloway, Rick earnings LKQ's and Senior call. Officer; Zarcone, and quarter and welcome conference With Nick us Chief are President President Chief Officer. XXXX LKQ's to

accompanying earnings morning as this Please the website LKQ issued call. refer this at as release slide the to for lkqcorp.com for our presentation well

quickly me the cover Harbor. let Now, Safe

that statements These our beliefs, the Some today forward-looking. hopes, make strategies. of be considered we include may or statements expectations, regarding intentions,

or differ as or a events update assume from statements implied various of those to factors. We Actual expressed results may result no forward-looking statements. in forward-looking the obligation materially any

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

slide GAAP SEC During non-GAAP press non-GAAP is present we included and in GAAP the our filed had X-K, look financial which at morning. measures. and Hopefully, this will earnings to call reconciliation of a chance measures presentation. with we today's to this everyone has both A release

we file are planning in XX-Qs coming normal, our days. As the to

that CEO, turn to to And Nick am the over Zarcone. call I with happy our

into closing This a good financial everybody with morning dive Thank comments you, Joe details and will back on morning the before come few provide to performance the to then in will and Rick call. our I I related high-level some remarks. the quarter

XX-year customers, energizing team celebration employees, the our bell celebration we our opening our that is on February The company On further a history, future. our about and anniversary XXth at XXth, the our ringing by global communities off our of the serve, kicked NASDAQ. year-long focused

educate of future what share we past hosted celebrate operating holds North conferences a our collaborate leaders excitement Following segments, each across America of on the and the this LKQ. chance successes both we to where and Europe and had our for key all initial in for celebration, leadership

had will a run XXXX, great I XX confident since even years am be we've highly next While better. that the

held values life, set we that as and years. of As organization forward is Like has it's of to an the aspects inevitable created values we us for have always organization our XX an and we advance helped next a success all the change LKQ are achieve core the today. that lay our foundation critical

Keeping for I quarter, we Values we that us a had cohesive future. pleasure and on as value-added, ensure during guide resourceful, and values updated trust, LKQ change, moving the integrity global as announce and promises our values for serve single unite hold to the One the our The deliver enterprise are a the to forward, that excellence, embracing sustainability. will true all development, and constituents. focused leadership,

DELIVERS the spells outstanding XXXX. start the word on it delivered performance solid put, quarter first the globe to LKQ Expanding across team DELIVERS. a Simply One and an

During embraced our exceeded North the America operational teams as our expectations and excellence quarter, two our segments initiatives. our largest Europe

of as left in started uncontrollable shortages, resilience disruptions, through supply chain our spikes, headwinds of The shine of the Europe. myriad year quarter from war XXXX a inflation, business off a cost XXXX first softness, and ranging economic where energy the labor

segments. portfolio revenue segments exceptional of by continuation growth strong in The American our the the European organic and both quarter geography experienced impact North diversification our of specialty the headwinds performance to variance and The our respect than validates segments of speaks strategy product margins organization with and and our long-term of true our more this businesses. self-service operating offset in our and across strength to and

on on in a a quarter organic and per billion and increased comparisons. was basis. and XXXX. revenue quarter $X.X first for services the both results Now Parts X.X% year-over-year XXXX Revenue on day X.X% and XXXX the first reported to basis

services The and of X% for decreased revenue prices the parts decreased in net X.X% by foreign due precious primarily X.X%. and rates by revenue Other of quarter XXXX to weaker the exchange total a further impact increase of fell in metal to XXXX. revenue XX.X% same relative first acquisitions divestitures period and revenue

$XXX Net income was foreign to million as $XXX negative of $XXX than operating a expense last million million compared of interest as effective million higher X.X%. XXXX decrease in income compared to $XXX year and last higher net year impacts in a related was QX better rates, the more as QX results soft this Adjusted offset year tax of currency rate. exchange to

compared per this share of as an increase share an net to of earnings last was year in Adjusted the to share QX in of year per $X.XX the QX last earnings year was X.X%. $X positive in compared increase share relative $X.XX Diluted $X.XX illustrate year to earnings The of diluted per impact historical income X%. increases in even repurchase our activity. changes this

highlights. segment some to turn Let's the quarterly of

and will revenue quarter also its segment in details margin shortly. North increased parts the note reported margin quarterly first America you a record highest slide EBITDA services segment record. level on a on X cover organic North will basis, from for As XX.X% reported performance. America Rick

auto We were year-over-year you in quarter. continue first North to when America perform collision in consider down that well to liability-related the according claims CCC especially X.X%

was rates. inventory industry first, volume in improvements line the aftermarket was proper which particularly was having the historical through of of levels to the largely result latter us supply get having to evident balanced chain issues between and growth worked and two Our the enabled of our which product back price of fulfillment factors: level

basis the in trend of Farm State increase category improvement aftermarket aftermarket in I headlights, XXX uptick quarter points bumper parts XXX point sales a and consistent have aftermarket am nicely pleased APU Second, recycled say upward rise parts witnessed nearly taillights the approached in impact which since is APU in in and first for unfolding basis included with a APU year-over-year. the volumes XXXX. This also that levels the general covers. the quarter. to our and demand increasing in program an Combined is pre-pandemic building recycled first of the

OEs is economy. catastrophic The value insurance up midst proposition face losses the of activity and in as carriers from storm from premium of quarter their tightening an ongoing are alternative both spending soft the share policyholders in all the gaining as pressures parts

prices loss industry XX% year little Total research, as expect organic on increased first Based about absorbs on slightly in appears the the total range recent car the our you rates of rates no we've entered the the to quarter to we XXXX. as end total used in increase it as in to had XX% market loss see impact growth. can But losses XX%. that to

day operating on were revenue increased which in best smaller and parts reported European X.X% organic Europe a our today. on to per and moving segment. X.X% a countries quarter Now first services European day as the when a organization XX revenue much six per on for over and represents we growth in organic XXXX the basis, basis to only since quarter compared

margin to also the Europe's XXXX. level segment since quarter first EBITDA highlight I'd highest was like that

price a Eastern in During the operating double-digit combination volume. particular saw In low well. both The growth movements first reflected of German growth quarter, revenue Benelux, more exceptionally are we our geographies. projects. agile high is operations rationalizing and of positive each performed in European and cost laser headcount list to and in reported and key our a structure narrow we single-digit highly focused take a team focusing to believe including continuing European share of and on create to nimble fragmented on and these The key the large actionable team We markets. organic

first quarter the operational lowest focus, delivered inflationary European challenging a notwithstanding, SG&A team the that With XXXX, since level environment.

the of the salvage began Additionally, and last call. integration announced the European that team we remanufacturing acquisition Rhenoy the earnings during

up of month, distribution count in bringing location in in our total earlier to this count Marseille In with addition, we the are ramping opening France seven. center our a France location

let's on Now specialty our segment. move to

was decrease XX.X% first of through quarter was are the organic of our RVs, The the in down portion business down unit RV which a and our retail specialty XX.X% specialty by respectively. below expectations. which wholesale During sales February of shipment impacted revenue and reported year-to-date XX%,

that recent the wholesale year down XX% industry to reports market project be see We in will further about expect year-over-year. XXXX declines as full RV shipments

our XXXX. So specialty we segment that will the challenges for believe continue throughout

will through off-road by sector. we what rates building the performance parts growth this a repair Truck in remain and the are light right usage revenue as than efforts and RV ongoing year-over-year the the sales also vehicle on and we RV focused strong the inventory on balance service down space. of in RV As year, market to the our less work be service but are basis seeing

there quarter Notably a and of team this headwinds of RV no in growth space this business industry-wide specialties XX.X% to we market. gaining the or and posted SEMA down is capabilities and marine Despite such manage talented effectively and the Sigma Lean nature cycle. segment in in organic distribution share has one that the cyclical attractive through the a experience the Six has are

of significant in Now persist on for self-service revenue particularly pricing the for metals, the believe self-service segment. that the it for parts challenges recycled to precious in our received a drop will Self-service segment X.X% to the was soft in self-service balance which as itself value increased commodity for quarter. catalytic services for challenged our as manifested first and by again We Organic the related year well. converters.

continues to down globe, our of the inflation is While of inflation coming rate across the businesses. all impact

using productivity of job where improvements relief the offset impact the getting effective are an of doing are to teams cost. and price increased possible Our negative

the still the but also levels In wages retain not market America Regarding wage our with and tightness is selected North turnover we labor, to in first issue. XX% we and challenges are overheated in dropped combat since the by pushing maintained our labor Europe, are turnover abated. with low have to year-end in and increases labor open America benefits the quarter. employees we countering North The positions have

of we XX issued development as to know, approximately agreement a value entered corporate we announced a billion. the of enterprise definitive you of outstanding February shares acquire per CAD representing that share US$X.X for total all XXth On front, and Uni-Select's on cash into in most

in a automotive segment its aftermarket the Parts In Group Canadian GSF related the FinishMaster and distribution Automotive automotive up in the in Car leader segment. of in America through Uni-Select through through business U.K. its coatings its refinish parts Uni-Select and is industrial products and Canada operates North segment

the transaction. Uni-Select's Meeting is shareholders the and Today votes its their on final may Shareholder that cast day Special

both transaction yet report. that entered that we of of approve signing have the Considering shareholders approximately Lewis transaction agreement the So reports a published the in to voting and Glass acquisition into part supporting February. agreements back Uni-Select don't as and XX% ISS final of

are transaction. Uni-Select shareholders that confident highly approve We will the

Canada the all regulatory the time at submitted reviews to regulatory and have this proceeding the approvals United to United States, in various the are applications plan. We authorities Kingdom. And according for

until business. have sell for Canada in the determine GSF address XX, commenced a FTC a May and the we the Competitive in any second Both the States U.K., Uni-Select information. issue Car in to concerns Parts process request to XXXX United To to Bureau have whether regulatory

Our hope asset. Ultimately, required this started receive complete buyer has with while process. adviser time, approvals the in the acquisition can't level initial the and the the at second say interest pleased we are much outreach half in to of we year. And the Uni-Select we to this

ESG. to turn let's Now

we cost two employees. first During the we of efforts they quarter on importantly to enhanced available their increasing our our employees both the for and social particular educational various Recently families focused LKQ in initiatives as programs and education. education existing people face

with of entire Holsten only the to a our team, but our The established Prior children available high the global American Fund school the to post provides decade our educational fund program include XXXX grants assist was over Scholarship Joseph employees expenses. North organization. expanded to ago to we to

$X million scholarships goal of least Our XXXX. distribute is in to at

QX of year North employee Additionally, XXX%. tuition program reimbursement increased this in we American by our

turn asset the engagement and continued I are people employee success critical the mentioned the Our like of in biggest to at supports two are just enhancing programs our business. LKQ which

will personal our to CSR are development enterprise. honored of and of growth of that the XXXX disclosures second our we end their forward issuing before report families. our global quarter, educational look aspects many Importantly, to a be and across sustainability of the expand part our proud We and the employees

for Lastly, before May that Xst of XXXX share over to of June segment the I turn to Rick, Directors of record results pleased $X.XXX cash common our the on who the payable our am at April outlook XXth. quarterly will I XXth, of announce and on dividend declared through details of discussion stockholders the run on of Board XXXX stock per XXXX to close business discuss a

revenue as good our Thank joining growth you, start us highlight and We're pleased to Nick the and first year results morning with profitability. to strong quarter the very today. everyone

the benefits. both Our as excellence as continued growth yield two revenue to and underperformed in market The largest segments Europe Self-service generated initiatives operational segments Specialty continue businesses. to and North margins above-expectation produce for America our conditions and headwinds quarter

to pleased Overall, to year are with and are guidance. we deliver the on track on our the good start full year

prior competitive loan discussed and feel billion $XXX on rate We about the replaced February next and our $X.X years As which needs facility, new our operating revolver including with credit our a new $X.XX QX, the facility million to term structure. we included good call a facility a five unsecured at a revolver. billion our over fund ability in

the the past generation pandemic flow phasing quarterly noting couple balance solid cash remains chain seen years phasing disruptions. more the and than will in the of when Free to by weighted was the of that be supply impacted year we've

a due update was first activity and Nick provided financing status, transaction the quarter negotiations on source significant the financials. post-announcement our deal highlight Uni-Select impacts Uni-Select acquisition quarter The diligence, of during an I'll and with on the activities. pending

to starting now results Turning with quarter first performance. segment

freight PGW to saw XXX point sale basis America Going favorable X. driven business We of the improvement improvement and basis year. lower-margin margin slide over XXXX segment by a gross its effect, and a continued the from benefits in lower record quarter first XXX performance XX.X%, productivity EBITDA posting mix of margin of points pricing strong a with last initiatives. North costs,

in XX income, expenses mostly domain charitable of matter. were flat point segment improvement to offset lower with eminent a by reported mostly The fuel and freight a settlement other basis vehicle non-recurring related higher also Overhead an contributions. expenses

year. fall While there in as be XXXX XXs start margin quarters the segment EBITDA in we away be our to to benefits of believe will outlook increases strong the improved the moderation has XXXX some in upcoming for the price the margin

a prior XX EBITDA Europe also from margin points delivered with basis up a result segment X.X% strong of year. the

overhead As an emphasis points our about points by seen productivity for of the gross of organic slide XX optimistic We improved previously on expenses basis in XX, expansion on decreased remain due to flat year and effects XXXX. personnel leverage basis disclosed full margin while the day per growth XX margin to was X.X% with on costs. expectation revenue initiatives XX

to points margin is Moving price points margin slide competition year. of X.X unfavorable auto product continues discounting affected to XXX down to and improve margin to low such declined marine as inventory pressure Specialty's basis volumes, our availability under prior was increased by XX. competitors mix revenue XXX lines less Gross for and sales increased compared basis EBITDA the as year-over-year from reductions. have been as

margin resulting a ongoing dollars effects The segment are costs. as a day per forecasting the coming and decline be headwinds points, leverage on an distribution decrease we're and macroeconomic primarily to basis percentage. in an EBITDA with revenue decrease and of expenses organic and revenue up personnel by demand both in for full RV expected driven specialty, the percentage facility year challenge XXX were impacts XX.X% Overhead of on from

XX, Metals see sequentially to Self-Service As in XXX QX this benefits price the results sequential X.X% slide with precious prices net profitability XX.X% points steel on quarter but negative by lag basis offsetting improved scrap on lower effect to decreased increases. quarter, than metals compared had more from prices you fourth from can a XXXX.

operating in basis leverage XX.X% decreased a points. revenue of by total to reduction in contributing Metal XXX

QX in headwind prices in prices costs car as tandem persist typically future which declined a While that could created changes in experienced metal a in commodity in margin move cost with gross precious car stickiness have have quarters. we

latter diluted per of $X.XX last increase QX consolidated adjusted share and to the per is $X.XX reported which relative diluted results, $X.XX of of year. to earnings earnings share we the On

and year-over-year Our operational our improvement slightly ahead America market Europe Specialty offset and Self-service underperformance performance as showed of reflecting and was conditions. in North challenging strong expectations strength in

share to The resulted rate $X.XX offset from basis. interest of dollar count of foreign the $X.XX more operating in effective to XXXX. the rate. tax metals the $X.XX factors per an QX than benefited of $X.XX PGW of our on $X.XX adjusted caused XX impacts These year-over-year in unfavorable due prices improvements resulting share share increase higher repurchases Uni-Select by $X.XX effects from Slide resulting an lower in on effects from in the a excluding due and divestiture by shown XXXX the from expense as stronger currency costs resulting from increases higher $X.XX We

income. in basis Uni-Select On the prior rate is than which costs the rate, XX rate effective of the is points XX.X%, and geographic attributable XX.X% to we tax nondeductible applied a of distribution an The annual guidance. rate transaction shift change estimate in our higher

affected As available and first fees was We loan the transaction upfront quarter shown facility Slide on $X of bridge into financing the financials. committed a XX, Uni-Select of entered ensure Uni-Select parts transaction incurred million. the various to for

is closing value to expense contracts $X separate remainder as we These of FX on specified of eligible amortization related the be dollar are entered exchange March likely $XX income risk not the will amortization rate. adjusted into includes in To between over diluted forward line signing, expected statement excluded these had dollars Canadian that a and the the XX. a before for amortized term accounting these quarter for from facility we contracts hedge the year-end. reflected a million at we as Interest movements on the the first And item. Note fair of rate Canadian of mark-to-market EPS. million of purchase the fees. to gain contracts as hedge The

related transaction excluded from costs these expenses. incurred from also with the gain EPS. restructuring diluted practice EPS. presented diluted which historical M&A costs in million adjusted adjusted this -- advisory $XX of our quarter costs and excluded Consistent We are that Note in is are related

permanent hedge for there mark-to-market CAD XXX was in and risk the the the activity qualify accounting. of a was delayed had adjustment swaps fair bond quarter. loan in in day million to of The term swaps draw fair did the value interest prior negative prior a closing. fund secured We rate also financing of We sheet and for recorded -- balance market. million movement that market These the to rates issuance hedged income interest no these $XX to statement will the value on three-year

and line million $XXX is approximately of Shifting for sheet. We produced the $XXX quarter to estimate our full with cash expectations million. flow the our cash in flow remain free and year during on balance of which track we

expect and terms cash of came normal to pandemic-driven levels than in we phasing past market levels as was 'XX higher and mentioned, XXXX QX. to of in QX comparison million, the were As back weighting cash in high flow built cash to delivery the was secure years XXXX By XXXX up where $XXX with particularly response the result early to supply inventory be we XXXX then disruptions. to Recent flow toward volatile different in inventories which chain in conditions as of timing. a timing towards were indicated pay few in QX we suppliers free elected operating years during

up began projected chain prior supply forward. continue flow will going we the commissions timing over which the and the cash in rates capital should optimistic of smooth year-over-year We're interest comparison XXXX $XX in million help higher Further to were to see some impacting XXXX million expenditures $XX the stabilize increase to year. QX in which volatility

larger $X beginning uptick increased federal when million payments two we quarterly anticipate QX the tax we first estimated and in U.S. have a payments. Income quarter

EBITDA, below we is X.X leverage of times. which range of with target a our of had billion debt XX inside March $X.X ratio comfortably times two total of As total

rate and X.X% hikes for Our the to the effective the rate to due rose Europe. quarter in U.S. market borrowing

a been roughly rate years three over million. shares In $XX million in repurchased debt for $X.X rate of X.X% which totaling the interest and we two X.X% $XXX variable have billion first quarterly next dividend the of We million $X swaps fixed with has and to respectively. paid quarter XXX,XXX

share our to will in repurchases projected As date. the discussed emphasize will to on prior total with current Uni-Select repayments I the thoughts leverage conclude ratio over call, reduce we results. XXXX closing debt

current market miles on prices impact major hold based and recent trends further additional and on assumes scrap prices European conflict that precious the the economy and is metals escalation driven. and near conditions or guidance Our without and continues March Ukraine-Russia

European for rates the On with foreign our at of rates exchange, recent and includes of year the sterling balance pound the $X.XX. guidance euro $X.XX

results will business Uni-Select any for closing until not include the the date. We

in organic range guidance We America day the we revenue slide QX day give parts year full metrics one X% of the earnings X.X% still call. QX which selling the QX. will to Our and in addition in up X on service selling reported from extra to the in in X%, balance an unchanged of remain growth organic year Specialty North includes Europe, fewer in of and expect in

of figure The diluted X.X% near $X.XX. expect first the midpoint in of the quarter We to range. of EPS per still adjusted $X.XX range day is the

mentioned, including I in rate. As prices self-service are North higher tax and performing ahead of America Specialty the and softness the offsetting and precious expectations effective Europe metal

expectation of to remain in flow and flow portion $XXX million conversion Uni-Select onetime have that The and annual a the noting headwind. transaction of place a create impact will fees XX% EBITDA cash a free free cash approximately

on transaction We the a update full once closes. metrics guidance will Uni-Select provide all

that, turn Nick I'll his for closing Thanks to your With morning. time call back the this for comments.

In to people. that business Thanks, and validated again strategy, great that model first the our overview. was our closing, the Rick for a of start quarter importantly XXXX strength our financial most

me As to be key our restate continue our strategic which our progress continue to let and XXXX, pillars, culture to through objectives. we central

will continue and integrate to our businesses operating simplify First, our we model.

turn in us continue our in profitable continue to balanced margin focus maintain growth to a we And And strategy. flexibility fourth, on to gives sustainable drive and capital allocation will to expansion. cash flow, we revenue levels will continue future. high of invest the We which will

delivers the day regardless all and of challenges. driving to mission people work at LKQ want over our they forward XX,XXX thank the for do and our to I for business always, our values As each who advance

now call to that questions. open are ready with we for And the operator,

question comes from line Your Imbro Stephens. from Instructions] of the Daniel [Operator

open. is line Your

taking guys. morning, Good questions. Hey, Yes. Thanks my

morning, Good Daniel.

to it availability expected? organic Nick, part headline were you Yes. in really that North want drove was whether about I side. strong any changes the there Obviously to noticeable faster there Farm turn that I'm American growth curious basis. usage the than a demand industry from the alternative that filled auction slides. talked Was got in a State by step-up improved on pent-up

Just quarter? on reconcile step-up two organic three basis the and for the year growth trying to both big in year a the a tax

question. the vehicles. is Great parts ultimately to both America demand collision-damaged North Obviously, recycled in aftermarket driven parts by the and repair that parts. need with do for We

we are As bit a took the last actions year. price disclosed, from benefiting that we

well. And up but over so bit, XXXX a average are selling as prices XXXX, little up volumes are

And in to we is that inventories remarks One really our a prepared be. as finally I couple we where have of driven by it's them indicated need my items.

in. so product to And in terrific. is kick And starting XX% of north are rates fulfillment State back program Farm which on the the aftermarket is

the on. built QX million our was in which turning year. back and build was that reality the the and building. we a to XXXX. of We take in was QX industry XXXX talked $XXX bit height levels – aftermarket and where terrific. going expectations the that for supply it time obviously call to but for We're quarter for to for what the in million State pandemic thought is to I the good APU for That's that. It mean that lights the about XXXX is dipped first in to shortage we're during APU, was of the the knew of It be terrific. hit like which be is right back we Farm, going LKQ. it's track not quite into And switch on the we about to would $XX somewhere benefit

And We share. increased bode in of are believe parts parts APUs of cost needed by up. continue take The built State being are are the to about going more of our those complex last has And favor. particularly five gone average to there cars a manner. metrics continuing years. The the to average over number X.X Farm. in repair think The again with term we that north benefit drive has a vehicle we're there are to parts longer other

is largest collision nobody America. than the because to And aftermarket parts of in trends on North distributor better positioned we're those LKQ, capitalize

the We the of player mechanical just were actually are collision largest -- the -- -- first recycled side salvage collision bit. quarter, off parts And that volumes a but the the the salvage the distributor in little America, volumes that aftermarket has off to or bit recycled inventory, of over parts. aftermarket salvage do constraints with a a in bit on on the we to little parts the to of were the within North and the the we side pandemic height able our requests were that where during were shift fact were only those in market we of little

is believe in you bit we future can that our going share swinging about North quarter, that the is our operation. growth And in got in to very a as as feel past that other way. American go the But continue to good. little back We positioned good And And talked this of The much about calls. we're how we're get. we take we bright.

America that all Nick. appreciate color on And I'll maybe I little with stay North the margin.

clarifier, margin see. I to the XX% was Just good over think North American

assume got would a the of tailwind locked you those. quarter. of from I some freight guys a You have bps in XX in

kind that of would tailwind continue? So

is American to given strong. than be maybe higher we And growth about coming faster North growth expected? on for expectations a talked just this in margins then you similarly about Would talked ago so with follow-up your than what staying just year to few months

Yeah. Daniel. appreciate I the question

So good question.

on. spot You're

talked I of results North just will year for our remarks, the EBITDA about XX.X% the prepared fantastic team. that be the the part expectations operations elevated during they delivered So our with American from for

out will we're as out were XXs if of we the year, through little saying comfortable but as you couple a bit finish we finish be that now. recall months we'll a pricing come than about, within as the that. near the ago going back that we'll talked of Some low don't think year we lower as to we And were guiding

it's significant you last looked in there that a when -- pretty thinking -- increase starting really freight we QX about And year. as in freight away was at start that and freight went that QX year-over-year that in

a And goes had into deliveries look what it almost and QX. freight nice freight we ocean we away is benefit. got when excess here at this so rates there's there That when QX excess in locked benefit on wasn't already we year-over-year as we the there mitigated some call was that pretty really

good results. will continue, Daniel. but as see a not I of much still expect bit a So to tightening but near we little those

congrats to on good Well, going team Justin and forward. luck a and everyone Great. the

Thank you.

comes next question Jordan from from Your Bret Jefferies. of the line

open. line Your is

guys. Hey, good morning

Good morning Bret.

Europe to a Switch growth breaking you as UK Could saw And Could as out out cadence price it units? the it about day, the now. and X.X% And about Benelux, Germany give in on very you maybe Italian progressed? called Eastern and quarter that then and strong. to per that follow-up some as us the talk performance spread Europe you over the to you business? talk

Sure.

basis day a of business the per We X%, over performance again are reported on European thrilled our a X% basis. on with

like every comments, single-digits prepared my that in or quite scenario we haven't seen mentioned in high either double-digits. geography some low I As a And for time. was

underperformed. Europe. a the high called of we Benelux, being that they was out it that and Again the doesn't Germany, that mix Indeed price the a single-digit And and Central higher But performers team area. were of and couple mean in rest volume. Eastern of

continue that. was good of was a wasn't ahead the don't, inside make your hard the the we had quarter by And get to comparisons. hit years we couple we to were efforts the good the pretty of last so I'm Again ahead our teams XXXX results. good Europe proud optimistic when some But if And of comparison so look curve to could and off charts the you solid that after. we're sure eat volumes over life to produce of go inflation the that because get there did best will will out. from first to of quarter, inflation good we a able but

growth X% the year entire anticipating the not team. we're European for for Again

the the little half year. So, move it we may back come bit momentum picked some up next last towards few as the really through in as organization of quarters a

decent we and is The the XX quarter particularly cadence pleased is results, the monthly was into got to but margins. a and business there to Bret I go. a way don't we're quarter off albeit the European our start days give What was second long some the through still quarter we're solid with mean it we

EBITDA bring they for of to up the points where year. because the And revenue do on is our in apples-to-apples an the reality of level has doesn't European want great. got to the basis very down GAAP we've are US organization. We you nobody to growth revenue XX Margins margins is the from in [Indiscernible] it anything that theater. bottom-line of at an margins that. we're last GAAP look and When best were QX And US basis proud

see similar through of specialty the U.S. Great. one Yes Obviously to the cadence sort business Could you that trajectory about question looking the business. the some good. then softening quarter? last maybe in it's consumer. talk And but of question starting on

We're started it expecting the and off original in set that's the mean been quarter year particular the our very same. year and back we first soft below I and We guidance for any the catalyst. that with not great the turnarounds come and Yes, February in going original the it's don't of any call. in what ended to upfront back why we've soft our expectations see was

are equal. part all not again And types

softer their the a if get about a product to a it's pun car, new like think somebody RV what's hitches brand to goes lines on time attached and volumes no RV the RV but need towable towing product they because hitch every mentioned their truck we is intended, the As right? include what's or

so goes down. And unit go new product down when demand for sales towing

up those so softest. fact down traditional performance product We products XXXX, product set. the as our again that as are as down that's is bit which and but the just much that Rick XXXX And not so categories is are SEMA little terrific. indicated, in nearly a The two then RV Marine And they are product and year-over-year. a actually bit were high think

footprint into California our what a sitting on of operation They've They tech already -- team programs their Important not that fab focused down. taking South footprint adjusting particularly they lot all it our is the consolidated Fab They're Carolina got of specialty productivity. do. is X operation. the we've

money to So, there. some we're save going

going some we're certain and long competitive the a And is probably working We moat our market geographic align this to to or to markets. that in us to the of business, small business, former current helping have Specialty in go the acquisitions, will dramatically reduced really anticipated small and that inventory that. a advantage product a to owner. of very time, the way in take capital along opportunity broaden make to same tuck-in couple with But We revenue trends. at provide going sold underperforming create

Thank Great. you.

next line of Brian Your Stifel. from comes the from question Butler

is open. Your line

questions. Hi, morning. good my for Thank you taking

Good morning, Brian.

just of kind of America, on Europe the trends color going driving North some of kind to Just activity. larger maybe and there. back Maybe too,

on benefit as through as the was from meaning the a so headwind was even kind it results mild? a winter that there weather, playing volumes, any of that's how well maybe Just or on the was

mean is growth I no driven no along. declines. -- basically, There's just material No. of moderating material miles kind

the in than the said we've has first statistics on the mobility halt. is on when the got back grinding quarter. to changed We when But US And pinched a the Europe. in basis, better do the the reality a literally in is in not we past, in have pandemic mobility, we As year-over-year came obviously, that's globe really overall around dramatically that hit, fine. XXXX

fuel basis. using global Europe. down fuel the down They're our to a And and of from vehicles road on in not we're work, way where think going the flattish a lead good. and perhaps, we're bit get year moderated are generally they mobility from a the vehicles their were that rest prices as tend demand people particularly miles to to pre we the to all perspective. as that driven on bit, creates an pandemic, and little have long to come a overall and prices are they've But to Again, parts. assuming that's for more of environment always that Lower be kind

color can seeing bit Europe, my And Okay. kind on more provide and there and helpful. what just matches you're That's that inventory in with you the payables little then a maybe trends expectations? the how and follow-up, of

Yes, for I'll question. the one. Thanks take that

payables. we're with just transition room pleased talking particular, So, had And days Europe real improvement in we finance we see financing the payables, with but XX% sure we the able and still were really program, year-over-year about is, We activity vendor vendor that started operations away European talk the to in And overall over go. what to making about from payable, also in that there's the right? as overall our a that. on we've extend in

We years. would next expect couple probably and this similar-type the year, for improvement of

You the a and in We're in going our in a train got to year dash and here. to It's over extension improvement a XXX-meter we race. continuous terms. of deal be every think them really again, over of not it We're not as marathon. vendors with as the

We cash to has got done see to the in free flow. job. the a great it. team We got so, And see it

we've it's So, be both we where well. QX to from it this from for again exactly right? and improvement continue years. wanting seen And see to as year will next that there, another even QX it's what of improve the to and pieces, on We expect we're continually couple

MKM from Scott Stember question ROTH comes And the of Partners. next line your from

line Your is open.

strong on the morning, Good guys. very results Congrats

Thanks, Scott.

just as there panels? it's Farm things to door three two or SKUs. that State cranking or Are over any it's SKU increase, that are signs whether count nicely expected, fenders and Going on will up or radiators obviously

Yes.

decision flipping we I on over So, the not on are additional our parts. switch wall discussions aftermarket indicated been the turn It volumes was lights, no the like evolutionary, to about not that to And right? going by was be Farm the to up a begin expectations. State have on knew be adding products to ramping turn to going revolutionary. to There

parts Farm, add not of the about them every talk existing and expanding both State the any any with out we continuing program. our parts To the accelerate to anything be are done time made we to Farm to sure, program. to State folks statements encourage has put rollout the at publicly new comments

answer your Illinois material is the direct there no, part broadening respect question But out to types. has coming with to of been Bloomington the movement

then Got over question last it. just to specialty. back going And

demand the for expect the side. I know to the you types that about OEMs with their business. you increased just and RV that how would of you entrenched in And well wear to warranty the guys talked Are offset You repair handle softness tariff general are segment? pretty items? seeing

Yeah.

warranty most which terrific. parts for We of do correct. the most OE -- OEs every but You're distribution the is not of of

the of appreciate respect can year the of the high you their February. with utilization people and campers line is to not January are using RVs, a outside. little As north a first chilly because quarter point a in of not Mason-Dixon, lot It's

we're OE service We're that that all regard. standing of parts. to think we're begin gets to as get And We customers for incredibly warmer support units. And making types be their sure to that we ramp, will to out and to the those requests camp to really that the well going of utilize to do whether inventory right got we've people warranty our grounds activity ready expect positioned. in

then, North And back it. Got to America. just last over question one

about as hitting through bottom an repairable up? rates were higher-priced You way could Are used these Can a work Are inflection auction we loss point loss you talking be? about the expect I we where where process. rates units to talk actual going and here? guess hitting their in we claims a you see

like, total industry the for range. data will the our the have In our the settle loss to in XX% and industry out rates rates and who folks XX% with discussions loss and expectation and all on total collision the XXXX their the groups is expectation Yeah. somewhere

little prices And on as in no fluctuate to that's car in the in growth. again, somewhere QX year the our expectation and moderate XX% their bit a last from But were is our pilot was They used car little we'll going bit XX% XXXX. for that. impact QX -- up a around. XXs it And had prices expectation

total to no it drive lived relates and loss And every intended we've that. as almost through we right rates. over cycle we pun said over through we've just As

All right have. lot. That's all a I guys. Thanks

Thanks Scott.

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

open. line is Your

taking questions. follow Rick fulfillment your wanted commentary. up Thanks I my on for to

above you back similar each fulfillment I Can of give does And last rates fade a expect or quarter benefit year the in from lift you for a XX%. as XXXX feel do year? unfolds? to think us you said benefit that fulfillment, the rate in in were QX

question. the appreciate I Craig, Yeah,

year look year for in up rates finished through first the year. versus at well. the better quarter getting XXs. and the progress and As as We're the better upper year the we as in off it then XX, we better. still kept gradually last And the really We last fulfillment upper-XXs. number we were started around We QX's

is So will we the throughout improvement. that bit finished just that a in expectation a little the our to up continue low-XXs, year. but And slight etch

So we're pleased with availability. the inventory really

If think available very not last you about in for year inventory particularly was QX us.

And share then some and in come in OEs we think the QX. we And with on APU. back out missed drop that's

team happy operations. And doing inventory North so with well the is we're and the American very our in position

given fulfillment you could rates? that dynamic? there European you comment in share, there same Are cases some similar on then, And trends

Yeah. that It's one like we here in America. saw drop in over I North the didn't mean, XXs.

in there. still and the So pleased really delivery with XXs our performance out

Thank you. Perfect.

Yeah. Thanks Craig.

remarks. I Zarcone, to period. And Nick some for final this call concludes turn over Mr. you our closing back the question-and-answer

always here We're as first spending everyone not quarter with results. second the Well but the very forward And proud just to and years, with about announce for hour XXXX celebrate attention chatting next the we greatly about days XX XX. time the to continue the first to LKQ. we we as XX appreciate in quarter. look in of optimistic your in We're future,

thank you. So,

call. for Thank today's participation. you This conference concludes your

may disconnect. now You