LKQ Corporation (LKQ) has reported 9.18 percent fall in profit for the quarter ended Dec. 31, 2016. The company has earned $86.33 million, or $0.28 a share in the quarter, compared with $95.06 million, or $0.31 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $119.95 million, or $0.39 a share compared with $105.59 million or $0.34 a share, a year ago.

Revenue during the quarter grew 22.96 percent to $2,150.41 million from $1,748.92 million in the previous year period. Gross margin for the quarter contracted 127 basis points over the previous year period to 38.60 percent. Total expenses were 92.47 percent of quarterly revenues, up from 91.33 percent for the same period last year. That has resulted in a contraction of 114 basis points in operating margin to 7.53 percent.

Operating income for the quarter was $161.88 million, compared with $151.67 million in the previous year period.

"In 2016, the Company achieved some major milestones, including surpassing $8 billion in annual revenue, achieving over $1 billion in annual Segment EBITDA for the first time, and expanding our global footprint, that today stands at 26 countries. I am particularly pleased that, despite the headwinds of a mild winter and its subsequent impact on organic growth, Wholesale-North America achieved its highest annual margin levels in the last five years. These results are a testament to the hard work and dedication of our 40,000 plus employees," stated Robert Wagman, president and chief executive officer of LKQ Corporation.

For fiscal year 2017, Lkq Corp forecasts net income from continuing operations  to be in the range of $505 million to $535 million. The company projects adjusted net income from continuing operations to be in the range of $560 million to $590 million. The company projects diluted earnings per share to be in the range of $1.63 to $1.72. The company projects diluted earnings per share to be in the range of $1.80 to $1.90 on adjusted basis.

The company has spent $1,709.93 million cash to meet investing activities during the year as against cash outgo of $329.99 million in the last year.

Cash flow from financing activities was $1,225.74 million for the year as against cash outgo of $238.54 million in the last year period.

Cash and cash equivalents stood at $227.40 million as on Dec. 31, 2016, up 160.19 percent or $140 million from $87.40 million on Dec. 31, 2015.

Working capital increases sharply
LKQ Corporation has recorded an increase in the working capital over the last year. It stood at $2,356.81 million as at Dec. 31, 2016, up 48.34 percent or $768.07 million from $1,588.74 million on Dec. 31, 2015. Current ratio was at 2.95 as on Dec. 31, 2016, down from 3.11 on Dec. 31, 2015.

Cash conversion cycle (CCC) has decreased to 64 days for the quarter from 65 days for the last year period. Days sales outstanding went up to 18 days for the quarter compared with 16 days for the same period last year.

Days inventory outstanding was almost stable at 67 days for the quarter, when compared with the last year period. At the same time, days payable outstanding went up to 22 days for the quarter from 18 for the same period last year.

Debt increases substantially
LKQ Corporation has witnessed an increase in total debt over the last one year. It stood at $3,341.77 million as on Dec. 31, 2016, up 110.88 percent or $1,757.07 million from $1,584.70 million on Dec. 31, 2015. Total debt was 40.25 percent of total assets as on Dec. 31, 2016, compared with 28.06 percent on Dec. 31, 2015. Debt to equity ratio was at 0.97 as on Dec. 31, 2016, up from 0.51 as on Dec. 31, 2015. Interest coverage ratio deteriorated to 6.79 for the quarter from 11.44 for the same period last year.