Justin Jude
President & CEO at LKQ
Thank you, Joe, and good morning to everyone joining us on the call. I want to start by saying that our thoughts and prayers are with all of those that have been affected by the Hurricanes Helene. And Milton. The Southeast, in particular, is one of LKQ's strongest regions, which is a testament to our many dedicated employees and longstanding relationships with our customers in the region. We are grateful to report no fatalities among our LKQ team members, but property damage and disruptions to daily life have affected many. At LKQ, we pride ourselves on being a good corporate citizen and partnering with the communities in which we operate.
In response to the hurricanes, we have earmarked funds to cover requests into our Employee Assistance Fund for financial relief and reached out to our employees for recommendations of local causes that could use our help. We also have made donations to charitable organizations involved with the disaster response efforts. I would also like to thank the LKQ team members who jumped into action to aid their colleagues and communities while there are too many individuals to name, I am truly inspired by their efforts to gather and deliver supplies to those in need and assist in the cleanup.
As the region begins its recovery period, LKQ stands ready to continue to provide support. Shifting now to the quarter, last month we held an Investor Day where I laid out my management style and priorities. As a reminder, I stated that my priorities would focus on operational excellence and maximizing total shareholder return. In the third quarter, we evidenced this focus by taking action to simplify, integrate, and rationalize the business while returning value to our stakeholders. Let's start with the capital allocation and shareholder returns.
At recent trading levels, we believe the best use of our capital is repurchasing our shares. We were active in the quarter, repurchasing 3 million shares for approximately $125 million. With $800 million left on our authorization and plans to remain active in the market in the coming years, I am pleased to announce our Board of Directors approved a resolution to increase the authorization amount under our share repurchase program by an additional $1 billion with an extension through October 2026.
Management's recommendation to increase and extend the authorization and the board's approval thereof is evidence of our confidence in LKQ's future and our ability to generate robust free cash flow. In August, we paid a quarterly dividend totaling $79 million and our board approved a quarterly cash dividend of $0.30 per share to be paid in November. Moving to our operational excellence initiatives, the simplification of our portfolio and operations is a key pillar to drive better returns.
As part of our portfolio review, we completed the sale of our Poland operation to Mekonomen in July and recently finalized the sale of our Bosnia business. Additionally, we have another small transaction nearing completion in the coming weeks. While this transaction is a very small component of our North American operation, the sale will eliminate a loss-making business while freeing up management's time.
On the integration front, we continue to work on merging our recent acquisitions into existing LKQ operations. While most of the heavy lifting is done on Uni-Select's footprint rationalization, the teams are identifying additional efficiencies and have selected seven more locations for closure. Andy Hamilton talked about the SKU rationalization effort in Europe, and I am pleased to report the team pushed this project forward in the quarter and have now reviewed over 25 product groups representing 425,000 SKUs for more than 50% of our project scope.
Also in Europe, we are working on restructuring activities to reduce costs and increase efficiencies related to our logistics network. We will have more details on these efforts in 2025. And lastly, our specialty business recently completed the combining of two warehouses near Dallas, a legacy facility, and a facility we acquired as part of a 2023 transaction into a new more efficient single location.
Our commitment to lean operating culture is critically important, especially in a period when the top line is facing headwinds. In addition to the substantial cost actions we have already taken this year, all of our businesses are undertaking another review of the cost structures as part of our annual budget process. Additionally, we are conducting a benchmark study on our overhead costs to determine where we have opportunities to be more productive and cost effective.
Growth is our final operational excellence pillar, and we strive to grow organic revenue and increase operating margins. We were not wholly successful in this regard during the third quarter, as many of the economic and industry headwinds we faced in the first half of 2024 continued to have a negative impact on our results. While Barkson Services' revenue was down roughly 4% organically on a per day basis, there were some positives to take away.
North America declined 7.5% on a per day basis, with aftermarket down to a greater extent than salvage. Q3 extended the trend of year-over-year repairable claims decreases, with claims falling 9.5% following a 7.0% drop in the second quarter. Our collision volumes were down only 6%, showing that despite the drop in claims, we did not lose share.
We believe the decrease in claims are still tied to the economic factors we discussed last quarter, such as the rising insurance premiums and the decrease in used car pricing. While we anticipated claims volumes would not rebound quickly in the second half, the Q3 decrease was higher than we projected, and it contributed to an underperformance of revenue relative to guidance. The Q3 claims figure suggests the possibility of a longer recovery period than we previously thought, and we are working through this evaluation with our strategy and operations teams as part of our 2025 budget process.
Europe's revenue was flat on a per day basis, but was an improvement from the 1.3% decrease we reported in the second quarter. Certain markets showed single-digit growth, while others declined at a similar range. Economic conditions remained challenging across most markets in Europe, notably in Germany and the U.K. Competition is also contributing to the challenging condition, as consistent with last quarter, some of the smaller players are aggressively pushing price.
The North American revenue decline of 7.5% per day was larger than what we reported in the first two quarters. The sequential change is attributable to recoverable claims in Q3 and the mixed impact of incremental paint revenue in the organic calculation. We passed a one-year mark since the Uni-Select acquisition on August 1st, 2024, and as a result, the finished master revenue became part of the organic calculation for part of Q3.
Organic paint revenue was down by a greater percentage than the segment as a whole, resulting from softness in finished masters direct sales. There was some revenue loss post-acquisition as customers re-evaluated their supplier situation, and sales reps left to join competitors. As we integrated the business and aligned our sales teams, we believe the situation has stabilized, and the team is working to win back business with LKQ's combination of superior availability and service.
Specialty took a step backward in the third quarter, with organic revenue down 10% on a per-day basis, compared to 2% in the first half. Economic conditions, including higher interest rates and relatively low consumer confidence, have contributed to lower vehicle and RV sales, thus creating a significant headwind for our part sales. We expect the challenging conditions to continue through the fourth quarter.
Shifting to our profitability measures, adjusted diluted earnings per share increased by 2% compared to Q3 last year, and the segment EBITDA margin improved by 30 basis points. Rick will provide further details on these numbers in his remarks. Before turning the call to Rick, I want to mention a few noteworthy items for the quarter.
Hurricanes Helene and Milton have affected our operations in North America, as some of our locations and many of our customers were shut down as a result of the storms and the after effects. To give an idea of the impact on LKQ's operations, Helene forced four closures of nearly 25% of our locations in the southeast, and these locations were down between one and six days. Milton forced closures of nearly 75% of our quarter locations for between one and four days.
Thankfully, we didn't incur any significant property damage, so the impact will be mostly related to lost revenue. Earlier this month, dock workers on the east and gulf coast went to strike for three days. A tentative agreement got them back to work as negotiations continue on a final contract. We expect the strike dates to have an impact on our inventory, as each day off was estimated to require a week to catch up.
We were already experiencing delays for shipments brought into the east coast, and while we believe our current inventory levels are adequate to support the business, there could be some minor impacts to our fill rates over the coming months. We are also contingency planning in case a final contract isn't agreed to by January.
Last quarter, we reported that we reached an agreement with a trade union representing a number of our employees in Germany, and we are pleased with the progress in restoring normal operating performance and branch availability improved in the quarter, rising to nearly 95%. I'll now turn the call to Rick for a review of the financials and guidance.
