Good morning. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the LKQ Corporation's Q1 2022 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you'd like to ask a question during this time, simply press Star followed by the number one on your telephone keypad. If you'd like to withdraw your question, again, press Star one. Thank you. Joe Boutross, VP of Investor Relations for LKQ Corporation, you may begin your conference. Thank you, operator. Good morning, everyone, and welcome to LKQ's first quarter 2022 earnings conference call. With us today are Nick Zarcone, LKQ's President and CEO, and Varun Laroyia, EVP and CFO. Please refer to the LKQ website at lkqcorp.com for our earnings release issued this morning, as well as the accompanying slide presentation for this call. Now, let me quickly cover the safe harbor. Some of the statements that we make today may be considered forward-looking. These include statements regarding our expectations, beliefs, hopes, intentions, or strategies. Actual events or results may differ materially from those expressed or implied in the forward-looking statements as a result of various factors. We assume no obligation to update any forward-looking statements. For more information, please refer to the risk factors discussed in our Form 10-K and subsequent reports filed with the SEC. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release and slide presentation. Hopefully, everyone has had a chance to look at our 8-K, which we filed with the SEC earlier today. As normal, we are planning to file our 10-Q in the coming days. With that, I am happy to turn the call over to our CEO, Nick Zarcone. Thank you, Joe Boutross, and good morning to everyone. I will provide some high-level comments on what was a robust quarter for LKQ from many different perspectives before Varun walks you through some of the financial details in our increased financial guidance. I will then close with a few observations before opening the call to your questions. As we enter 2022, who would have thought the world would experience events more traumatic than the pandemic we all have been living through? Just when everyone thought we had turned the corner and were headed toward the new normal, in late February, Russian tanks rolled into Ukraine and everything changed overnight. In retrospect, issues related to tight labor markets, supply chain challenges, and inflationary pressures pale in comparison to the needless loss of human lives. Yet out of the ashes, we are all able to watch the evening news and see true leadership and courage in action and incredible solidarity in a time of crisis. Yes, I'm talking about the Ukrainian people. The same is true for the 950 people in Ukraine who are LKQ associates. These employees are truly remarkable. Their colleagues in Poland, Hungary, Slovakia, and Romania welcomed hundreds of family members of our Ukrainian employees at the border to provide food, housing, medical assistance, and schooling to those fleeing the country. They are all defining what it means to be LKQ proud. As to the business, we exceeded our expectations for Q1 in terms of both revenue and profitability, and this gives us confidence to increase our financial guidance for the year. The keyword in the economy the past several quarters has been inflation. During periods like this, companies have a choice, wait and see the impact and play defense, or anticipate the impact and play offense. LKQ chose to play offense, and the benefits of doing so can be found in our results. This is particularly true with respect to the exceptional organic revenue growth achieved in our North American wholesale and European segments, both of which benefited from strong demand for automotive products as mobility and claims volumes increased while pushing prices in an attempt to offset most of the inflationary pressures. Managing through this environment is hard, and I am extremely thankful for the efforts of the global LKQ leadership team, which is doing a terrific job of balancing the best interest of our customers, suppliers, employees, and shareholders. Now on to the quarter. Revenue for the first quarter of 2022 was $3.3 billion, an increase of 5.6% as compared to $3.2 billion in the first quarter of 2021. Total parts and services revenue increased 5.9% in Q1, comprised of organic revenue increases of 6.9%, plus the net impact of acquisitions and divestitures of 1.7%, offset by foreign exchange rates, which decreased revenue by 2.7%. Net income for the first quarter of 2022 was $269 million as compared to $266 million for the same period of 2021, an increase of 1.1%. Diluted earnings per share for the quarter was $0.94 as compared to $0.88 for the same period last year, an increase of 6.8%. On an adjusted basis. Net income in the first quarter of 2022 was $287 million compared to $286 million in the same period of 2021. Adjusted diluted earnings per share for the first quarter was $1 as compared to $0.94 for the same period of 2021, a 6.4% increase driven by a reduction in the average share count. Let's turn to some of the quarterly segment highlights, and please note this is the first quarter of separating the self-service business from the core North American wholesale business. Turning to North America from slide 6, you will note that organic revenue for parts and services in our North American wholesale segment increased 13.6% in the quarter on a reported basis, and 11.8% on a per-day basis. During the first quarter, industry-wide overall claim counts increased 12.2% versus Q1 of 2021. According to the U.S. Department of Energy, during the first quarter of 2022, U.S. weekly supplied motor gasoline volume was approximately 4.9% above last year, but still 4.7% below the first quarter of 2019 pre-pandemic. According to the Department of Transportation, highway miles driven during Q1 increased 4.9% above last year, but lagged 2019 levels by approximately 2.2%. From a product line perspective, recycled and remanufactured parts demonstrated higher growth, including gains in both volumes and price relative to last year. On the aftermarket front, we have been successful in passing through inflationary cost increases despite the supply chain challenges which are causing volumes to be down relative both to last year and 2019. April has started off on a positive note following the pattern established in Q1. We don't anticipate achieving double-digit revenue growth in our North America wholesale operation for the rest of the year, but we expect it to be in the mid- to high-single-digits. In part due to headwinds from parts availability and more so due to labor constraints, during Q1, the national average scheduling backlog at collision repair shops reached 4.5 weeks, 2.5× the length of the typical first quarter backlog. Additionally, since 2016, average vehicle repair costs have risen steadily every year, with the largest increases occurring in the past two years, reaching an all-time high in 2021. Our parts provide a strong solution for shops and insurance carriers to manage costs. As we inevitably begin to witness some relief in the supply chain and a steadier flow of aftermarket product, the value proposition of our parts becomes even more attractive as shops continue to face headwinds related to labor costs and overall inflation. As we indicated in our last call, this quarter we began reporting self-service as a separate segment. This new segment provides investors with greater transparency into the commodities dynamic of our business. Given the majority of our other revenue category, which primarily consists of scrap and precious metals, comes from our self-service operations. Varun will cover more details on the margins of this segment shortly. During the Q1, total revenue for self-service was flat compared to last year, reflecting the relative softness in metals pricing. Organic revenue for parts and services for this segment increased 14.6%, largely driven by price. Also, the average revenue per admission, a key productivity metric, rose during the Q1 of 2022 relative to 2021. Moving to our European segment, organic revenue for parts and services in the Q1 increased 6.9% on a reported basis and 6% on a per-day basis. As the largest pure-play distributor of automotive aftermarket parts in Europe, this is a tremendous start to 2022, even in the face of an extremely challenging geopolitical environment on the continent. We are quite pleased with the organic growth in Europe. While different by market, overall consolidated organic growth was split evenly between volume and price. According to the Apple Mobility Index, the trends in driving trips in our European markets was down earlier in the year due to normal seasonal patterns. As we progressed through Q1, the index rebounded. Encouragingly, despite all the fear of a dramatic drop-off in demand due to global macro headlines, at this point, we have not seen any noticeable shift in European mobility as we've entered the Q2. Our regional operations experienced varying revenue performance in the quarter, but all posted positive growth with very solid year-over-year performance. The U.K. and Benelux operations were particularly strong with high single-digit organic growth, while Germany and Central Europe, excluding Ukraine, posted mid-single digit organic growth. Italy also demonstrated progress, posting positive organic growth for the first time in several quarters. The Russian invasion of Ukraine had a direct impact on our revenue in late February and all of March due to having to close certain branches that we operate in Ukraine. Those that remained open, as you would assume, saw a significant drop in demand. Also, immediately following the invasion, we ceased all sales to Russian-based parts distributors. We estimate the impact of the war on European organic revenue growth during the quarter was approximately 60 basis points. As these conditions continue, we anticipate the impact on our full year European growth to be about 120 basis points. We continue to pay our Ukrainian employees regardless of whether they are working, and we are supporting their families who have fled to neighboring countries. As I've always said, our people are our most important assets. In Ukraine, the well-being of our people is our primary focus today. Varun will provide some additional financial related details to this unfortunate situation shortly. Now let's move on to our specialty segment. Organic revenue for parts and services for our specialty segment declined 8.3% in the quarter on a reported basis and 9.8% on a per-day basis, largely due to a very tough year-over-year comp. You may recall this segment reported 33% organic growth in Q1 of last year. On a two-year stack, the annual revenue growth is still well into double digits. We anticipate another tough comparison in Q2 against the 30% growth recorded in the Q2 of last year, with a positive recovery and a return to year-over-year organic growth in the back half of this year. A few other key highlights for specialty during the quarter. In the Q1, Specialty hosted our annual BIG Show, a customer event which is focused on SEMA-related parts, and also hosted our annual RV Expo for our RV-focused customers. Both events booked solid year-over-year increases in attendance and sales, suggesting good demand in the future. Also, in March, our specialty team opened a 210,000 sq ft distribution center in Orlando, Florida. While it will create a very slight drag on near-term margins while it ramps up, this new distribution facility will help create higher revenue as it will service Florida and Georgia, both of which are very attractive markets for our RV and marine-related product lines. The supply chain continues to provide challenges, and we're doing our best to get the inventory needed to service customer demand. During the quarter, key port cities in China were shut down for a while. This shifted container capacity to other countries like Taiwan, giving our North American team an opportunity to get some incremental inventory on the water. March was the second-best container volume that we've witnessed in 24 months. We expect some of this benefit to continue into April and likely May, and this inventory should be at our warehouses by mid to late summer. Once the China lockdowns reopen, we will likely see a regression back to the lane bottlenecks that we've endured over the past 12 months as the pent-up demand from China comes through. In Europe, product availability remained challenging through Q1, with backorders still running high, but we are witnessing some signs of improvement as we enter Q2. Turning to ESG, during the first quarter, we continued our environmental stewardship efforts by processing 193,000 vehicles, resulting in, among other things, the recycling of approximately 970,000 gallons of fuel, 562,000 gallons of waste oil, 501,000 tires, and 178,000 batteries. During Q1, we also processed approximately 260,000 tons of scrap steel. On the social front, during the quarter, we focused on some key initiatives around the financial and mental health well-being of our employees. As an example, in North America, we implemented a profit-sharing plan where we made a special contribution of $1,000 to the 401K accounts of all eligible team members. Alongside this contribution, we provided services to educate our team on how to think about and plan for retirement. From this initiative alone, we witnessed over 4,000 new 401K account openings. We want all employees to benefit from our success, and this plan allows us to reward and thank them for their relentless focus on results, which made a huge impact on our 2021 performance. In Europe, we launched a program called Inspired to Thrive that lets our team know that their mental well-being matters. The goal of this program is multifaceted, including creating a supportive culture, addressing factors that may negatively affect mental well-being, addressing negative perceptions of mental well-being issues, providing support to colleagues suffering from mental health issues, and developing management skills to address issues when they arise. Operationally, we believe this program will have many benefits, such as higher retention, reductions in sick leave, and enhanced productivity. More importantly, however, it's simply the right thing to do for our team in helping them maximize their overall well-being. Lastly, from a corporate development perspective, during the quarter, we entered into a transaction to sell our PGW glass business. While we fundamentally sold an operation, we had come to the conclusion that LKQ was not the best owner of this business, and the margins were always going to be dilutive to the overall North American segment margins. This transaction closed last week, and we are extremely pleased with the outcome. As we enter Q2, we are witnessing a healthy pipeline of potential tuck-in acquisitions, and since April first, we have closed on two small European transactions. I will now turn the discussion over to Varun, who will run you through the details of the strong first quarter financial performance and our increased guidance. Thank you, Nick, and good morning to everyone joining us today. While I'm excited to be able to present another strong set of financial results, and I'll cover the details on the quarter shortly, I want to begin with comments on a very eventful start to 2022. As you know, LKQ entered the year with momentum coming off record revenue and profitability in 2021. Also anticipating challenges from the Omicron surge, supply chain constraints, inflationary pressures, and volatile commodity prices. These factors created headwinds in the quarter, and we've had to react quickly to counteract the effects. While there is more work to be done to improve our inventory availability and manage the cost pressures, we are comfortable with the direction we are headed, and importantly, our position relative to the competition. The Ukraine-Russia conflict has been a further source of volatility, both with its direct impact on our business and the indirect effects on currencies and commodity prices. As Nick mentioned, our revenue at risk owing to the conflict isn't material, but we experienced a negative effect of about $0.01 in Q1 and expect a further $0.05 headwind relative to our original EPS guidance over the balance of the year due to the ongoing conflict. Please note that the impacts associated with lost revenue and other indirect effects of the conflict are not being considered for adjustment in our calculations of segment EBITDA and adjusted diluted EPS. Direct impacts related to asset write-downs and/or reserves are being excluded from the calculations of these metrics. The Q1 exclusion totaled roughly $6 million. As expected, scrap steel and precious metal prices were a drag on results year-over-year. The prices were better than projected in the quarter, and thus the negative impact was less severe than anticipated. Compared to Q1 of 2021, metals prices generated a $32 million negative effect on segment EBITDA and an 8-cent impact on adjusted EPS. As discussed on the fourth quarter call, we are now presenting the self-service operating unit as a reportable segment to provide investors with greater visibility into our operating results. I hope that you have had an opportunity to review our Form 8-K filed with the SEC on Monday, the twenty-fifth of April, which shows the segment financial information recast under the new presentation. As noted on prior calls, self-service generates a large portion of its revenue from scrap steel and the precious metals in catalytic converters, which makes its results more volatile than the wholesale North America segment. Of the $0.08 negative year-over-year impact from metals, approximately two-thirds is derived from the self-service segment. Last week, we completed the sale of our PGW aftermarket glass distribution business for gross proceeds of $362 million. PGW generated almost $400 million of revenue, and its EBITDA margin was approximately 10% in 2021. By divesting PGW, we'll see an improvement in EBITDA margin as the business generated a lower margin than the wholesale North America segment. We intend to use excess cash to repurchase shares in the coming months, though given the timing of the transaction will be dilutive to full-year 2022 EPS by approximately $0.04, which is built into our updated guidance. The full-year share count reduction benefit in 2023 will further mitigate the lost PGW earnings. While we expect to report a gain on sale, our US GAAP EPS outlook does not include a gain as the amount has not been finalized. Any gain would be deducted from US GAAP EPS in the calculation of adjusted diluted EPS. Finally, S&P upgraded LKQ to BBB- with a stable outlook last week. Achieving an investment-grade rating from S&P, in addition to the same from Fitch Ratings a year ago, is a tremendous accomplishment for the organization and is a testament to our operational excellence program launched in 2019. This program has supported the consistent operating performance, robust cash flows, and resilient business model that S&P cited as reasons for the upgrade. The immediate implication of the upgrade is that collateral requirements fall off our senior secured revolving credit facility. Over time, we expect the added flexibility to allow the company to drive even higher levels of free cash flow to invest in growing our business and returning capital to stockholders. Specifically, there will be opportunities to extend vendor payment terms and increase payables, and we expect this benefit to come through over the next few years. I'll now shift to the quarterly results. Our first quarter results reflect a solid start to the year with improving revenue, net income, and EPS year-on-year, despite the negative impact of metals, challenges related to inflation and the global supply chain, the Omicron variant, the ongoing conflict in Ukraine, and foreign exchange volatility owing to a stronger U.S. dollar. Gross margin decreased by 30 basis points compared to the first quarter from 2021, with 40 basis points negative effect coming from the self-service margin, which declined owing to metals. Overhead expenses as a percentage of revenue rose 80 basis points year-over-year, with higher bad debt expense and inflationary increases in vehicle, freight, and fuel expenses. Income taxes in the first quarter of 2022 were booked at 25.1%, consistent with our prior guidance. Finally, as Nick mentioned, diluted EPS was $0.94 for the quarter, and adjusted diluted EPS was $1.00. I'll now turn to the segment operating results. Starting on slide nine, Wholesale North America produced an EBITDA margin of 18.1% for the quarter, down 30 basis points from the prior year period. Gross margin was roughly flat as pricing improvements were offset by unfavorable impacts from metals, which had a negative 70 basis point effect in the Q1. Segment overhead expenses increased by 50 basis points, with the negative effects from inflation on personnel and freight costs. We've previously communicated our expectation for the North America margin to run in the mid- to high-16% without the metals effects. With the new segment breakout and the sale of the glass business, we now believe that Wholesale North America EBITDA margin should run approximately 70 basis points higher after normalizing for metals effects. Europe reported an 8.8% EBITDA margin for the quarter, down 80 basis points from the prior year period. As you can see on slide 10, the margin decrease was attributable to movements in both gross margin and overhead expenses, with negative effects from inflation, higher bad debt expense, and effects from the Ukraine-Russia conflict. As mentioned, we anticipate a negative impact on Europe from lost revenue related to the conflict, though the team believes they can deliver a double-digit margin for the full year. Moving to slide 11. Specialty gross margin grew 110 basis points with benefits from net pricing and mix more than offsetting a 90 basis points negative effect from acquisitions, primarily SeaWide. Overhead expenses increased by 190 basis points, driven by personnel cost inflation and higher vehicle, fuel, and freight costs. The overhead expense increases were partially offset by 60 basis points of benefits from operating expense synergies and leverage mostly generated from the SeaWide acquisition. While the specialty EBITDA margin of 12.6% is down relative to the prior year, it's important to acknowledge the progress the business has made over the last three years. Pre-pandemic in Q1 2019, Specialty reported a segment EBITDA margin of 10.7%. The team has done a fine job rationalizing the cost structure and protecting its product margin, resulting in a 190 basis point improvement from Q1 of 2019 through to Q1 of 2022. Self-service reported an EBITDA margin of 20% for Q1 2022. A strong result for the segment, but below the record margin achieved last year. As you saw in the Form 8-K with the recast historical segment results, self-service's margins can vary significantly depending on metals prices. Since the beginning of 2019, we've seen a low point for the margin at 6.3% in the third quarter of 2019 and a high point of 27.9% in Q1 of 2021. While there are performance elements that we control, for example, car buying, product pricing, and labor efficiency, the self-service business results are driven by trends in scrap steel and precious metals prices. When prices are moving higher, especially when it occurs rapidly, we'll see strong margins in this business, and we'll see the downside when prices go the other direction. We believe that breaking up self-service will provide greater clarity to investors. With that background, the decrease in self-service's margins in Q1 of 2022 is driven by movements in metals prices and car costs, estimated at an 1,100 basis points negative effect, partially offset by improved pricing. Shifting to liquidity and capital allocation. We sustained the positive momentum we built in recent years around cash flow generation with free cash flow of approximately $350 million in the first quarter. At a conversion ratio of almost 80% of EBITDA, we are delivering free cash flow above our long-term expectation. For sure, there are some timing elements that will reverse over the course of the year, and we are confident in our ability to generate significant and sustainable free cash flow in line with expectations of converting EBITDA to free cash flow in the 55%-60% range for the full year. We are cautiously optimistic about the progress we have made with inventory procurement. Access to aftermarket products and cars at auction improved relative to the same period in 2021, and we were able to deploy more cash to build inventory. As shown on slide 24, we increased our inventory spend and purchased more salvaged vehicles than we did in the Q1 of 2021. As you can see on slides 25 and 26, our inventory levels have increased in all four segments relative to December, excluding the impacts of the held for sale reclassification and foreign currency translation. As of the 31st of March, the wholesale North America inventory excludes approximately $100 million of glass inventory, which is presented in the held for sale asset line on the balance sheet. We remain confident that our inventory position will enable each segment to continue to offer best in class availability and service relative to our competitors despite the ongoing supply chain challenges. Our capital spending for the quarter of $59 million was in line with our expectation. Following our balanced capital allocation philosophy, we repurchased 2.7 million shares in the quarter for $144 million and issued our quarterly dividend with a $71 million payment in the month of March. We also paid down our debt balance by approximately $53 million in the quarter. Our net leverage ratio came in at 1.3 times EBITDA, and interest coverage exceeds 30 times compared to the credit facility requirements of 4 times and 3 times, respectively. In short, we are very comfortable with our credit metrics which support our investment-grade rating. As our earnings release of this morning indicated, the board has approved a quarterly cash dividend of $0.25 per share, which will be paid in June to stockholders on record as of May 19. Finally, I will wrap up my prepared comments with our updated thoughts on 2022. Our guidance assumes that there are no significant negative developments related to COVID-19 in our major markets. Scrap and precious metal prices hold near the average for the first quarter, and the Ukraine-Russia conflict continues without further escalation. On foreign exchange, rates have been moving rapidly in recent days with the euro hitting a five-year low on Wednesday. Our guidance includes weakening European rates in the Q2, followed by a recovery in the second half of the year. We've dialed in a full year average rate for the euro at $1.09 and the pound sterling at $1.30. Since current rates are below these figures, we have about $0.03 of risk over the balance of the year if rates hold at their current levels. Having said that, with the strong start to the year, we are increasing our organic parts and services revenue growth expectation to between 4.5% and 6.5%. We are projecting full-year adjusted diluted EPS in the range of $3.80-$4.10, with a midpoint of $3.95. This is an increase of 8 cents compared to the prior midpoint. The raise is primarily attributable to our first quarter performance as the balance of year has mostly offsetting effects as shown on slide 19 of the earnings deck related to benefits due to organic growth and related operating performance. Metals prices above our original forecast and share repurchases, offset by headwinds from lost earnings tied to the glass disposal in April, weakening FX rates, and the impact of the Ukraine-Russia conflict. Please note that the share repurchase benefit is attributable both to the shares that we purchased in the first quarter, which will give us a benefit of roughly $0.03 on a full year basis, and the anticipated repurchases from the proceeds of the glass sale of approximately $0.05. While there are lots of puts and takes in the forecasted numbers, I want to specifically highlight the operating performance component. As I previously stated, our operational excellence initiatives have created a significantly stronger and more resilient business, which is helping us to improve operating results despite the current inflationary environment and supply chain challenges. Finally, we remain on track to deliver at least $1 billion of free cash flow for the year, achieving strong free cash conversion in line with our expectations for the business. Thank you once again for your time this morning. With that, I'll turn the call back to Nick for his closing comments. Thank you, Varun, for that financial overview. We believe our unique competitive position across all of our operating segments continues to translate into strong results for our company during difficult conditions. I am extremely proud of how our team of 46,000 employees tackled the headwinds we faced over the past two years, which subsequently positioned us well as we entered 2022. Our strong Q1 performance and raising our guidance for 2022 is a true validation of our confidence and commitment to creating long-term value for our stockholders. Again, I would like to acknowledge the bravery and courage of our Ukrainian team as they operate in an unthinkable environment. Our thoughts and hearts are with you all. With that, operator, we are now ready to open the call for questions. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. Your first question comes from the line of Bret Jordan from Jefferies. Your line is open. Hey, good morning, guys. Good morning, Brett. Good morning, Bret. Varun, now that you've got the investment grade rating and you called out the opportunity to extend payment terms, do you have any better visibility as to how far you might be able to extend them here? I mean, obviously, you have the rating now, so you had conversations around those terms. Yes, absolutely. Bret, thank you for raising that piece and acknowledging LKQ is now an investment grade company. It's taken a lot of time, and the overall pivot to operational excellence has certainly been looking at every aspect of our business income statement functions and also the overall balance sheet. Yes, we do anticipate $several hundred million upside related to getting the investment grade. However, it will not happen overnight. If you think about our European vendor financing program, which is coming along incredibly well, we still have a gap. Really what we do is we benchmark ourselves, given the product assortment with, say what the folks here in the U.S. are doing, right? In terms of even being able to get to a one-to-one with regards to AP offset by inventory or inventory offset by AP, we have a gap, a significant gap, and that runs into, you know, a fair bit. Again, it won't happen overnight. We obviously do have these contractual negotiations with our vendors on an annual basis. The team is moving in the right direction. We really don't see it in the short term, i.e., within 2022, but I think from 2023 onwards, we certainly will see that piece continue to climb further. Okay. A quick question. I think you said March was one of the best shipping volume months in the last couple of years. Is there a way to quantify your North American aftermarket in-stock levels, you know, where you are on inventory fill versus target? Bret, this is Nick. Thanks for the question. Our fill rates are not where we would like them to be. We tend to run well into the 90s. We are not in the 90s today. We're probably in the mid- to high 80s. So, there's progress to be made. It all relates to the supply chain challenges. Again, it has nothing to do with our suppliers being able to produce the product. It all has to do with transporting the product from Taiwan into the U.S. and Canada. Again, we've got some incremental containers on the water in March. We're hoping for a few incremental containers in April and May as well. With the port congestion and transportation issues here in the U.S., we won't see any of that inventory until mid- to late summer. When that hits, it should help a little bit from a fulfillment perspective. We do not believe it's gonna take us back to our historical levels, but it will help. What we do feel very confident about is our fulfillment levels are the best in the industry, even with the challenges that we are facing. The reality is our smaller competitors are struggling to get product. From an overall perspective, from a competitive perspective, we think we're still leading the pack. Your next question comes from the line of Michael Hoffman from Stifel. Your line is open. Hey, thank you very much, and great opening round here. Thanks. I appreciate it. On the wholesale side, just to dig a little deeper, total volumes weren't down, just the mix inside, whether it was a new aftermarket versus a recycled remanufactured. Is that correct? That's correct. We had good volume growth in our salvage products, our recycled products, particularly as it relates to mechanical parts. Transmissions were particularly strong. We had great growth from a volume perspective in our remanufactured products, again, largely engines and transmissions. It was the aftermarket collision parts where we saw volumes down. Of course, that's the largest share of our North American revenue. Okay. The good news is you're able to shift Even as fulfillment came down, that's part of your competitive advantage is you're able to shift around to support volume. We're the only folks who have the ability to sell recycled product if we don't have the aftermarket product in-house. Got it. Varun, on the guidance, so everything goes up except the free cash flow, I'm assuming versus February, you're planning on spending more on inventory, and that's the difference? Uh- What is that delta? Inventory certainly, as we've said, you know, we're trying to build that piece up, and we're making some good progress. In Q1, Michael, every segment of ours, so all four segments, were actually able to generate more inventory and secure more inventory. I think when you look at the numbers specifically, North America was up, specialty was up, self-service was up, as was Europe. In the case of Europe, obviously, the stronger dollar clipped the translation piece of it. Also in North America, you know, with the held-for-sale classification for PGW, it seems as if it did not grow, but that also grew. But with regards to free cash specifically, any inventory increase, we see ourselves being able to offset with our payables program. Really, if you think about why has free cash not kind of gone up despite all of the 8% raise on a full year basis, from a cash perspective, it really is from a receivables perspective, you know. With the strong organic growth that we are now forecasting, you know, from a midpoint of between 3%-5% previously and now taking that up by 150 basis points at both the bottom end and the top end, receivables. That's a good problem to have because, you know, with higher economic activity, we see higher receivables coming through. We saw that come through in Q1 also. It'll just be a cycle more than anything else, that economic activity will raise receivables. In terms of inventory, you know, yes, it will go up, but we believe we can offset that with payables. Your next question comes from the line of Daniel Imbro from Stephens. Your line is open. Yeah. Hey, congratulations, guys, on the quarter, and thanks for taking our questions. Thanks, Daniel. Nick, I wanted to ask, you mentioned it during your prepared remarks, but given the inflationary environment, are you seeing insurance companies opt more often for alternative parts? I mean, are we seeing or do you expect to see APU finally take a meaningful step higher? And I guess while we're on that topic, you know, how is State Farm progressing? Are they still increasing their alternative part usage, and what does that mean for your North American wholesale growth? Yeah. At this point in time, based on the backlog that I mentioned in the repair shops, the insurance companies just wanna get parts on the car. Whether it's an aftermarket part, a recycled part, or quite frankly, an OEM part, because every day that that car is in the shop, they're generally paying a rental car fee, and which greatly increases their prices. It's not that they're trying to aggressively move to a higher APU given the inflationary environment. It's because, you know, it's whatever part is available. We do believe, as I mentioned in my formal comments, that once the supply chain kind of works its way through and some of the challenges we have from a fulfillment perspective begin to normalize, that our product set provides a great opportunity for shops and for insurance carriers to lower their overall cost. They can use the price benefit that we have relative to OEM pricing to help offset some of their other inflationary costs. Got it. That's helpful. I guess I also wanted to just follow up on the competition side. You just mentioned the smaller guys are struggling with inventory. Do you expect? I mean, how does that play out? Are they just gonna not be able to compete longer term? Do they start using price to try to gain share back? Just kind of trying to think through what the derivative impacts are of these smaller guys continuing to struggle to keep up with you. You know, our sense is that at some point in time, and we can't put a time frame on it, Daniel. At some point in time, the supply chain will balance itself out, and that will obviously help us, and it will help the smaller folks as well. Nobody is trying to buy volume these days because there's a shortage of product, and so pricing is strong. We don't anticipate anybody, not us, not our, even our smaller competitors, are trying to buy volume through price because, when there's not enough inventory to go around to begin with, that would not be a smart move, right? You know, they will continue to compete. We will continue to compete. We think we've got significant advantages from a product breadth perspective, from a product depth perspective, and from a service capability, and that's how we're gonna continue to compete and grow our market share in the months and quarters to come. Your next question comes from the line of Stephanie Moore from Truist. Your line is open. Good morning, Stephanie. Hi. Good morning. Congrats on a great start to the year. Thank you. I wanted to touch on the European margin expectations for the year. Clearly, some headwinds that I think were not originally expected but still looks like we'll continue to move forward with, you know, nice double-digit margins. Maybe just talk through levers that you've been able to pull on your end to offset some of these headwinds as well as, you know, maybe give us an update on where we stand on the One LKQ program. Stephanie, let me start off with the European margin piece of it, and then, Nick will pick up on, you know, where we are with the One LKQ Europe program. Yes. Listen, in terms of, where European margins came in, slightly softer, but I think it's fair to, know the fact that, you know, the Ukraine-Russia conflict was not anticipated. That certainly has clipped the margin trajectory of the business in Q1. There was the odd customer bankruptcy also. Really on a full year basis for balance of year, the team, all of us, we are very confident of being able to hit what we have put out there from a public commitment perspective of, hitting our sustainable double-digit margins. While Q1 kinda clipped it for about just over $0.01 with the Ukraine-Russia conflict, on a full year basis, we think it'll kind of clip us for about $0.06. So there's another $0.05 yet to go, and that's really what you see in the earnings deck, where we've given a walk from the prior original guidance to what we're now suggesting. In terms of you know how the business is progressing, the organic growth is coming through strongly, and we expect the operational side of things with the higher organic revenue growth that Europe has put up and really what it continues to forecast, which again is not all price. It's actually a good mix of volume and price, and which is actually incredibly heartening. The same thing as Nick mentioned about North America. They are the ones that do have good product availability. We would like to have some more. In terms of our investments that we have been making, those are certainly beginning to bear fruit and really shows the resiliency of the business that we've built up on both sides of the pond. Again, Nick, if anything else you'd like to add from a One LKQ Europe perspective. Yeah. The One LKQ Europe program is right on track. You know, organizationally, we've gotten that behind us now for several quarters. Arnd has his full team in place. Wonderful set of management talent. The individual platforms are working together much more on a day in, day out basis. We're getting the benefits that we were hoping to achieve from a procurement perspective. There's still room to go there. We're not remotely done. There is still room to go. The focus in the future is getting a little bit better labor efficiency by consolidating some of the roles in our shared service centers, whether that's in southern Poland or in Bangalore. We think there's some further opportunity there. The IT rollout, that's gonna be, like we said originally, that was gonna be a kind of a four-year journey. We're a couple of years into it, but it's right on track and just about on budget, so we're really pleased there. Great. Thank you. That's very helpful. Maybe, lastly for me, if you wanted to just touch on kind of the longer term view as the vehicle dynamics, you know, changes across the globe, you know, changing from ICE to EVs and how you think you're positioned with some just recent investments that you've made. There is no doubt that there are changes to the car park, both in North America and in Europe, but they are evolutionary, very evolutionary. They are not revolutionary. The reality is the impact of EVs probably won't be felt until well into the 2030s. Our goal, and if you were to, you know, read some of the materials we put out there for our European business, the goal is to be first as it relates to being able to supply repair shops with parts for electric vehicles. You know, EV first. Arnd and the team are putting plans in place to do that. We suspect that most everybody in Europe, folks like us, is trying to figure out a way to support electric vehicles because they will grow from being, you know, 2% or 3% of the car parc to maybe 10% of the car parc over the next 10 years. You know, it's going to be a real opportunity. We don't view it as a huge threat. We view it more as an opportunity to expand the product set and to, you know, provide our customers with even a broader array of products. Same in North America, though I think the EV shift is gonna be a little bit slower here in North America. Just like we've made the acquisition of a battery remanufacturing business, we're in the process of buying a second battery technology related business. Again, these are small, nascent operations, but they will give us key technology that we will need as we move forward to provide a good set of products and services to our customers. Your next question comes from the line of Craig Kennison from Baird. Your line is open. Hey, good morning. Thanks for taking my questions as well. I wanted to follow up, Nick, on One LKQ Europe. Could you just shed a little more light on progress you are making on your private label program in Europe? Sure. The first thing we did, Craig, on our private label front is we had to rationalize and consolidate all the various brands because when you take a look at all the companies we had acquired in Europe. Essentially, we had 90 different private label brands that we had bought along the way, and there's no need for us to have 90 different brands. We have rationalized that out significantly. We have put all of our private label product activity and the growth of that business under the leadership of a single person on a pan-European basis. We refer to it as our components business. We have an individual who came out of the Stahlgruber organization that is focused on growing that business across the European platform. Some countries are ahead, like the UK, we have the highest penetration of owned brand or private label products. In other countries, like in Germany, it's significantly lower. Our goal is to raise the total, so they have a higher penetration in each of the countries in which we operate. You know, it's not gonna happen overnight. Part of it is making sure that the private label product that we put out there is extremely high quality, because ultimately, the customers will not react well with low-quality products. We're working with all of our vendors to make sure we have great quality product. Then the goal is in each of the countries where we operate to get the percentage of private label revenue up. When we do that, okay, private label is less expensive, and very price competitive for the customer. That will have a little bit of an impact on revenue, but the margins are significantly better. That's all part of the thought process. Just as a follow-up, first, are you willing to share, like, the percentage of private label today and what that margin differential looks like? Second, do you need to make investments in a single unified European private label brand, or will they be multiple brands in multiple countries? We'll probably have multiple brands, but we are consolidating it down significantly from what we started with. We do have a brand called the Emotive that we have in the very early stages, maybe kind of batting practice warm-ups, where we're starting to roll that brand out across the European platform. We have not disclosed our private label penetration in Europe. Again, we are the highest in the U.K. and probably the lowest in Germany, and all the other countries are somewhere in between. You know, yeah, in total today, it's probably around 10%. Your next question comes from the line of Gary Prestopino from Barrington Research. Your line is open. Good morning, Gary. Good morning, all. Good morning, all. Hey, now that you've got this investment grade on your debt, I mean, would you say that your priorities could shift to more aggressive share repurchases overall? I mean, is there a real need to, you know, continue to pay down debt as you have done? Great question, Gary, and good morning. No, I don't think anything really changes on a day-to-day basis. If you think as to we've been operating with investment-grade credit metrics now for probably, you know, six quarters, right? From that perspective, debt is well kind of arguably underleveraged at this point of time. Kind of following our capital allocation policy, we've been kind of talking about the fact that we're not prioritizing debt pay downs at this point in time. You know, with the investment grade rating that comes through, I think there was a previous question on the call also, over time, doesn't happen overnight, but as we go renegotiate customer, client, vendor partner contracts, that higher level of trade payable days certainly lifts, and that certainly will release a few hundred million dollars of incremental free cash flow over the next few years. With debt levels, you know, arguably, you know, below where they need to be, you know, we are happy with what the overall debt leverage is. Nothing really changes because we've been operating at those metrics for quite some time. The key piece really is that we continue to look for opportunities to grow our business. Organic is obviously that much better. Seeing the level of organic revenue growth coming through our businesses is incredibly heartening. That really is the key focus, making sure that we provide all the capital required to continue to stretch out our lead from an organic perspective. As and when opportunities come up to do some corp dev activities, we'll certainly do that. Again, we're not going out there whale fishing or elephant hunting. It's basically high synergy tuck-ins, building up incremental adjacencies, critical capabilities. Then whatever is the excess free cash, yes, having a share repurchase program is incredibly helpful. Okay. Thank you. Last question. Nick, you mentioned that, you know, because of supply chain issues, some aftermarket parts, particularly on collision repair, are in short supply. Are you starting to see, or because of this, a shift where salvage parts are being substituted for what could have been a, you know, more of an aftermarket part usage just because of this issue with supply chains? Yes, totally. Yes, absolutely. I mean, every time we have a customer on the phone, if we do not have the aftermarket part in stock, but we do have a recycled part in stock, we try and cross-sell. Again, we're the only company that can do that because we're the only company that offers both recycled and aftermarket parts. Our salespeople have the inventory screens for both product sets right in front of them when they're talking to their customers. We try and cross-sell every opportunity we have. Gary, also, I think it is fair to say it really shows the power of what we've built up out here. You know, no one at this level of size and scale has the dual sourcing strategy of kinda aftermarkets and recycled parts. That really is where we've been investing a lot. Our salvage recycled business has been doing an outstanding job. As you kind of saw from the slides in the earnings deck, we're certainly investing more, whether it be buying dirt to kind of set up our salvage yards, or for that matter, making sure that we continue to be a very active player in the salvage market with regards to the number of total loss vehicles that we're purchasing. That business is rock solid. Your final question comes from the line of Ryan Brinkman from JP Morgan. Your line is open. Hi, thanks for taking my questions. Good morning, Ryan. Good morning. You mentioned getting ahead of inflation as opposed to, you know, waiting to see what the impact might be. I'm just curious what measures you may have taken, whether it's primarily passing along higher costs or maybe proactively taking price in anticipation of higher future costs. Maybe it's a combination of pricing and cost containment efforts. As you are taking price, presumably, you know, you're testing the elasticity of demand for various different products in different markets. I'd be interested what you might be learning in terms of the customer's ability or willingness to pay higher prices for the various different products that you distribute. For example, are you seeing greater ability to pass along price for more non-discretionary products relative to discretionary products? Are you better able to raise price for higher end products versus lower end products? Is it the other way around? Or just whatever insights you might be gleaning as you go through this process. Yeah. A lot of questions there, Ryan. The reality is, again, I wouldn't say that we took prices up in anticipation of higher cost later. Not that we were ahead of it, but we didn't wait to see our costs go up and then do prices. I'd say we, I think we timed it pretty well. Again, it's a very competitive market out there and, you know, at the end of the day, your ability to push price ultimately is dependent upon overall market pricing. Like I said, supply is short. That's true with all different types of parts. Nobody out there is leading with price as a way to buy volume, right? Everyone, I think, is trying to hold their prices tight. Again, we knew inflation was coming. It was no surprise. And so we weren't shy. The reality is no customer likes prices to go up, just like nobody listening to this call likes to pay more for anything, right? But the reality is, governments around the world have put $32 trillion of capital into the marketplace as a result of the pandemic. When you have more units of currency chasing a fixed basket of goods and services, prices go up. There's probably not a country in the world that hasn't seen the negative impact of inflation. If you don't stay on top of it, you fall behind, and you never catch up. We made a conscious decision not to come out of the box behind the curve. I don't want to imply that we're leading the curve, but we're staying constant. I think we're doing a good job of matching the ability to push prices along with the higher cost. Look, everyone knows that shipping containers from the Far East into North America is up five-six fold from where it was a couple of years ago. That's not 6% or 7% inflation, right? That's significantly more. You know, labor is up more along the lines of normal inflationary statistics that you've read. You know, we have moved prices up and, you know, we've had customers who haven't been happy, but they understand it, right? Because they know what's going on in their own businesses as well. There is no free lunch. You know, we're a humble distributor, and we have no intention of getting caught holding the inflation bag, if you will. It's not our job to fund, you know, the parts and services industry in the automotive repair marketplace. We're gonna do what we can to protect ourselves from inflationary pressures. There haven't been huge differences between kind of the type of parts that we've been able to move price along. Again, we've done our best to move it along on all types of parts. Again, every market's a little bit different, every country's a little bit different, depending on overall competitive dynamics and the like. The inflationary pressures in the U.S. are higher than in Europe. That doesn't mean that Europe doesn't have inflationary pressures. They absolutely do. We see it a little bit more intense here in the U.S. than overseas. There are no further questions. Mr. Nick Zarcone, I turn the call back over to you for some closing remarks. Well, I wanna thank everyone for your time and attention this morning, and we certainly look forward to continuing the discussion with you. I think as everyone knows, we're hosting our Investor Day on June first. We would hope to be able to see most of you there in Nashville. We're hosting at our North American headquarters. It will be a live event. We understand that some of you may not be able to find your way to Nashville. For those, the event will also be virtual in nature. It will be telecast, and you'll have the ability to come in via the internet. Again, that's June first in Nashville. Then again, obviously, we'll be speaking with everyone in late July when we report second quarter results. With that, I'd like to bring this call to a close. Again, we thank you for your time and attention, and we hope you have a great day. This concludes today's conference call. Thank you for your participation. You may now disconnect.