The ratings on Chicago-based replacement auto parts provider LKQ Corp. reflect the company's "intermediate" financial risk profile, characterized by consistent positive free operating cash flow, "strong" liquidity, and falling leverage. Standard&Poor's Ratings Services' ratings also reflect the company's "fair" business risk profile that incorporates its ability to consistently earn double-digit EBITDA margins. The business profile also reflects the company's strategy of growth through acquisitions--which entails certain risks--including those overseas. LKQ reports it is the largest nationwide provider of aftermarket collision replacement products and refurbished bumper covers and wheels. The company is also the nation's largest provider in a very fragmented market for recycled light-vehicle original equipment manufacturer (OEM) products. The company's revenues and profits depend heavily on auto
