Auto Recycling eNewsletter
For immediate release –March 2007
Written and published by Mike Gibson and Ron Sturgeon, autosalvageconsultant.com, email to mikeg@autosalvageconsultant.com. To register for future free issues, visit http://www.autosalvageconsultant.com. Don’t forget to watch for our management articles monthly in Recyclers Power Source Magazine, or posted at our web site.
IPO Analysis: U.S. Auto Parts Network Gains Traction
Posted on Feb 20th, 2007 with stocks: PRTS, Seeking Alpha
On February 1, Bill Simpson wrote an analysis of U.S. Auto Parts Network (PRTS). The IPO began trading on Feb. 9. The company raised $100 million, with 10 million shares that sold for $10 each, the bottom of a $10 to $12 forecast range. The text of Mr. Simpson's original writeup follows: U.S. Auto Parts Network plans on offering 11.5 million shares (assuming over-allotment is exercised) at a range of $10-$12. Insiders are selling 3.5 million shares in the offering. RBC Capital and Weisel are lead managing the deal, Piper Jaffrey and JMP are co-managing.Post-offering PRTS will have 29.8 million shares outstanding for a market cap of $328 million on an $11 pricing. Approximately 40% of ipo proceeds will be utilized to repay all outstanding debt, the rest for working capital and general corporate purposes.
Salvage business' second try a go Pull-A-Part auto parts operation finds good fit with East Knox site, By ROGER HARRIS, harrisr@knews.com February 20, 2007
Atlanta-based Pull-A-Part Inc. plans to invest about $4 million in a do-it-yourself auto parts salvage yard in East Knox County - their second attempt to locate in Knoxville in two years. Site preparation has begun on the 21-acre property on Old Rutledge Pike east of the intersection of Interstates 40 and 640. The facility will be the company's second location in Tennessee - it has an operation in Nashville - and eighth overall. The Knoxville location will employ 15 to 20 workers and should be open by early July, weather permitting, said Ross Kogon, Pull-A-Part's chief of staff.
Parts Analysis from Volume Seven Number One, Winter 2007 Industry Trends Report, Published by Mitchell International, Inc.
As a general observation, recent data show that parts make up 44.9% of the average value per repairable vehicle appraisal, about (.63) points more than the average allocation of labor dollars. In addition, the overall trend now reflects a stabilized level of OEM parts use, an increasing volume of Aftermarket and Remanufactured parts dollars used by Mitchell equipped estimators, and declining LKQ (recycled) parts use. In Q4-2006, OEM parts represented 72.8% of all parts dollars specified by Mitchell equipped estimators. These data reflect a .56 point and (-1%) relative decrease from Q4-2005. Likely influences may include an actual increase in alternative parts use, as well as OEM price reductions to enhance competitiveness within the channel. In the larger picture, however, QEM use appears to have stabilized near 73% of the average appraisal value, as reflected since about the first quarter of 2004.In Q4-2006, 11.01% of all parts dollars recorded on Mitchell appraisals were attributed to Aftermarket sources, up approximately .25 points and 2% from Q4-2005. As stated in previous reports, increased Aftermarket parts use reflects the continuation of a trend dating back to the beginning of our Trends reporting in 2001.Currently listed as “Non-New” parts in our estimating platform and reporting products, Remanufactured parts currently represent 4.83% of the average gross parts dollars used in Mitchell appraisals during Q4-2006. This reflects a 0.21 point and 5.0% relative increase over this same period in 2005, and also supports a trend of increased use since 2001.Like Kind and Quality Parts Use in Dollars
LKQ parts constituted 11.32% of the average parts dollars used per appraisal during Q4-2006, reflecting a 0.1-point and 1.0%) relative increase from this same period last year. While a portion of this decline could theoretically be attributed to availability and pricing influences during the period, the stabilization may also indicate that the use of LKQ parts has reached a plateau in use in the market.
LKQ buys capability to refurbish headlamps, Body Shop, March 2, 2007
LKQ Corporation today announced results for its fourth quarter ended December 31, 2006, with revenue of US$204.5 million, net income of $10.2 million. For the full year ended December 31, 2006, revenue was $789.4 million, net income was $44.4 million. Organic revenue growth for the quarter was 11.2%, and 11.6% for the year. “We are particularly pleased to announce several acquisitions that have been completed since our last earnings call, including a recycled parts operation with facilities in Maryland and Florida, an aftermarket business based in Denver, and finally, a business that refurbishes recycled OE headlights which will allow us to obtain value from lights we formerly would have discarded," said Joe Holsten, president and Chief Executive Officer.
How’s Business?
“The bad news is time flies. The good news is you're the pilot.” Michael Althsuler
AutoSalvageconsultant.com was formed in 2001 to help recyclers improve their businesses. With over 50 years of experience in 3 staff members, the group is THE definitive source for recyclers’ management and training needs. Mike Gibson and Tammy Sturgeon joined the team in 2003, and bring a wealth of experience to the team, plus more resources, as there have been more requests for help than Ron could meet. The founder, Ron Sturgeon is past owner of AAA Small Car World. In 1999, he sold his six Texas locations, with 140 employees, to Greenleaf. In 2001, he founded North Texas Insurance Auction, which he sold to Copart in 2002. In 2002, his book “Salvaging Millions” was published to help small business owners achieve significant success, and was recently reprinted and published in Chinese. In June 2003, he joined the new ownership and management team of GreenLeaf. He also manages his real estate holdings and investments. You can learn more about how to help your business at www.autosalvageconsultant.com. Mike can be reached at 628 SW Rand Drive, Burleson, TX 76028, (preferably) email Mike, or 817-925-8430.