Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Tony Cristello from BB&T Capital Markets.
Tony Cristello – BB&T Capital Markets
The first question I want to ask is when you look at the 6-8% organic growth, which I guess is a function of both the aftermarket and the recycled, what are the underlying assumptions there from an organic standpoint? Is it fair to say that recycled might be positive low double and aftermarket might be low single?
Joe Holsten
Maybe not quite to that extreme, Tony, but you’re right. The budgets we put together would show slightly stronger organic growth for the recycled parts as compared to the aftermarket products.
Tony Cristello – BB&T Capital Markets
If you look at the mix of business, the aftermarket obviously is going to be a bigger contributor of the organic on a mix proportion, so you’re saying that what we saw here the last few quarters on organic for recycled is that level or better, whereas aftermarket you’re down 2, so am I still thinking flat to down? Is that sort of where we need to be on aftermarket?
Joe Holsten
No, absolutely not. I think the recycled parts business is getting a little more strength on organic growth due to the fact that there is a mechanical component that is not present in the aftermarket product line. The assumption on our aftermarket products quite frankly is that we think we’ve slugged through a year of integration work. Certainly our comps are going to become easier as the year progresses, but I think most importantly as I indicated I think the integration work is largely behind us. There was significant amount of training of LKQ sales reps on new systems that’s very disruptive as well as the price list integration work we did as well as the synchronization of customer discounts. We know that we lost jobbers throughout 2008 as a result of some of that work, but that is all behind us at this point, so it’s our anticipation that with the integration frustrations buried at this point, we should see the company growth start to accelerate a little bit.
Tony Cristello – BB&T Capital Markets
So, two months into the first quarter, are you seeing better aftermarket trends than what resulted in the fourth quarter?
Joe Holsten
Yes, we are. We’re six weeks into the year, and the performance in both our aftermarket parts business as well as the recycled parts business we’re very pleased with the results we see. They’re running the through six weeks at or over our plan in both segments.
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