EXHIBIT 99
LITHIA MOTORS EXCEEDS CONSENSUS ESTIMATES BY 4 CENTS; EARNS 37 CENTS PER SHARE ON RECORD SECOND QUARTER SALES
MEDFORD, OREGON, JULY 25, 2001 (5:00 a.m. PDT) – Lithia Motors, Inc. (NYSE: LAD) today announced that total sales increased 10.6% to $462.1 million in the second quarter of 2001 from $417.9 million in the second quarter of 2000. For the first six months of 2001, total revenues increased 8.5% to $882.2 million from $813.5 million in the first six months of 2000.
For the second quarter, new vehicle sales increased 7.5%, used retail vehicle sales increased 19.2%, parts and service sales increased 12.4%, and finance and insurance sales increased 24.7%. Lithia retailed 9,119 used units and 9,772 new units, for a total of 18,891 new and used retail units this quarter, an 11.4% increase over the same period last year. Finance and Insurance sales increased 12.0% to $945 per unit, a record level for Lithia and tops among the publicly traded auto-retailers.
For the first six months, new vehicle sales increased 3.1%, used retail vehicle sales increased 18.5%, parts and service sales increased 14.9%, and finance and insurance sales increased 19.2%. Lithia retailed 17,973 used units and 18,504 new units, for a total of 36,477 new and used retail units this quarter, a 9.0% increase over the same period last year. Finance and Insurance sales increased 9.4% to $908 per unit.
For the quarter, net income was $5.1 million, or $0.37 per diluted share on 13.8 million diluted shares outstanding. This compares to net income in the second quarter of 2000 of $6.2 million or $0.45 per share on 13.8 million diluted shares. Cash flow per share (net income plus depreciation and amortization) was $0.53 per share in the second quarter of 2001 as compared to $0.58 in the same period last year. Cash flow per share was 43.2% higher than EPS for the quarter.
Chairman and Chief Executive Officer, Sidney B. DeBoer, stated, “We are pleased to report another quarter with both sales and earnings above forecast levels. Earnings were $0.37 per share this quarter, exceeding by 4 cents the First Call consensus estimate of $0.33 per share.”
“Despite a slowdown in the economy, we saw an increase in new vehicle sales from the second quarter of last year, and the counter-cyclical used vehicle and parts and service businesses continued to demonstrate exceptional strength. The finance and insurance business was very robust this quarter, growing 25% year over year. For the rest of the year we expect these positive trends to continue. In 2002 we are looking for double-digit sales and earnings growth.”
“The shift in the revenue mix continued to favor our higher margin used vehicle and parts and service business lines. As a result, the gross margin improved this quarter by 20 basis points to 16.3% of sales compared to the same period last year.”
“Our gross margin came in at the upper-end of our forecast range and Sales General and Administrative Expense (SG&A) hit the favorable end of the forecast range helping us to exceed the estimates for the quarter. SG&A as a percentage of revenues increased to 12.7% year over year, but improved 40 basis points sequentially. The net result at the operating income line was an operating margin of 3.1%, which was above forecast ranges and a 30 basis point sequential improvement.”
“Same-store retail sales were essentially flat at -0.3% for the quarter, much better than the forecast of a 6 to 8% decline. New vehicle same-store sales showed a slight single digit decline, with all other business lines demonstrating positive same-store growth for the quarter.”
“While we remain cautious due to the uncertain and difficult economic environment, we are confident that we will be able to grow our business through good acquisitions and continuing operational improvements. Our guidance for the next two quarters is unchanged,” concluded Sidney B. DeBoer.
Jeffrey B. DeBoer, Senior Vice President and CFO added, “For the remainder of 2001, we expect a number of acquisitions which should contribute approximately $100 to $150 million in revenues throughout the rest of 2001. These acquisitions will be paid for with internal cash flow from operations and our untapped acquisition facility of $130 million from Ford Credit. For the first half of the year, we have been able to add to our cash position, while reducing debt levels. Net cash provided by operating activities was $20.7 million as compared to $18.9 million in the same period last year. Our balance sheet remains very strong, and we are well positioned to continue our growth strategy in the second half of the year.”
"We are providing guidance for the third quarter and full year 2001. "
FORWARD ESTIMATES
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3Q 2001 2001
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Revenue $470 - 490M $1.75 - 1.85B
Diluted EPS $0.42 - 0.44 $1.30 - 1.33
Gross Margin 15.9 - 16.2% 16.1 - 16.4%
SG&A 12.4 - 12.8% 12.5 - 12.8%
Operating Margin 3.3 - 3.5% 3.1 - 3.3%
Flooring Interest Expense 0.9 - 1.1% 0.9 - 1.1%
Same Store Sales -3 to -5% -3 to -6%
Tax Rate 38 - 39% 38 - 39%
An additional 25 basis point reduction in interest rates has been factored into these estimates.
The quarterly breakout for the remainder of 2001 is estimated as follows for Diluted EPS:Q3; $0.42 - - $0.44; andQ4; $0.31 - $0.33.
Management makes the above estimates based upon information available to it at this time. The company in making these estimates assumes no burden to update these estimates during the quarter or year even if it appears actual results will differ materially from these estimates.
Lithia Motors will be providing more detailed information on the results for the second quarter 2001 in its conference call scheduled for 8 a.m. PDT today. The live conference call can be accessed by calling 973-872-3100. To listen to a live webcast or hear a replay, log-on to:www.lithia.com – go toAbout Lithia –Investor Relations – and click on theLive Conference Callicon.
Lithia Motors, Inc., a Fortune 1000 Company, operates 114 franchises in California, Oregon, Washington, Nevada, Colorado, Idaho, South Dakota and Alaska. Lithia sells 26 brands of new vehicles at 56 stores and over the Internet through “Lithia.com—America’s Car & Truck Store.” Lithia also sells used vehicles; arranges finance, warranty, and credit insurance contracts; and provides vehicle parts, maintenance, and repair services at all of its locations. Lithia retailed 68,126 new and used vehicles and had $1.66 billion in total revenue in 2000.
This press release includes forward looking statements within the meaning of the “Safe-Harbor” provisions of the Private Securities Litigation Reform Act of 1995, which management believes are a benefit to shareholders. These statements are necessarily subject to risk and uncertainty and actual results could differ materially due to certain risk factors, including without limitation economic conditions, acquisition risk factors and others set forth from time to time in the company’s filings with the SEC. Specific risks in this press release include company performance, sales, stated forward estimates and acquisition assumptions.
For additional information on Lithia Motors, contact: Jeff DeBoer, Senior VP and Chief Financial Officer (541) 776-6868 (E-mail: INVEST@LITHIA.COM) or Dan Retzlaff, Investor Relations at (541) 776-6819 or log-on to: WWW.LITHIA.COM - go to About Lithia - Investor Relations
LITHIA MOTORS, INC.
(In Thousands except per share and unit data)
Unaudited Three Months Ended Six Months Ended
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June 30, June 30,
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2001 2000 2001 2000
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New Vehicle Sales $238,651 $222,039 $453,608 $440,048
Used Vehicle Sales 142,043 119,277 278,982 235,975
Service, Body & Parts Sales 45,511 40,476 90,656 78,933
Other Revenues 35,845 36,059 58,955 58,498
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Total Revenues 462,050 417,851 882,201 813,454
Cost of Sales 386,840 350,667 738,094 683,406
Gross Profit 75,210 67,184 144,107 130,048
SG&A Expense 58,783 48,528 113,821 95,729
Depreciation 1,275 1,092 2,567 2,105
Amortization 951 795 1,874 1,502
Income from Operations 14,201 16,769 25,845 30,712
Flooring Interest Expense 3,832 4,712 8,487 8,573
Other Interest Expense 2,078 1,862 4,345 3,657
Other Income (Expense), net (45) 305 (124) 433
---- --- ----- ---
Pre-Tax Profit 8,246 10,500 12,889 18,915
Income Tax 3,175 4,306 4,963 7,757
Income Tax Rate 38.5% 41.0% 38.5% 41.0%
Net Profit $5,071 $6,194 $7,926 $11,158
Shares Outstanding 13,762 13,819 13,710 13,801
Diluted EPS $0.37 $0.45 $0.58 $0.81
Unit Sales:
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New 9,772 9,303 18,504 18,333
Used - Retail 9,119 7,660 17,973 15,133
Used - Wholesale 4,723 3,991 9,048 8,031
Total Units Sold 23,614 20,954 45,525 41,497
Average Selling Price:
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New $24,422 $23,867 $24,514 $24,003
Used - Retail $13,270 $13,249 $13,181 $13,213
Used - Wholesale $4,454 $4,457 $4,652 $4,486
Key Financial Data:
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EBITDA $16,382 $18,961 $30,162 $34,752
Gross Profit Margin 16.3% 16.1% 16.3% 16.0%
SG&A as a % of Sales 12.7% 11.6% 12.9% 11.8%
Operating Margin 3.1% 4.0% 2.9% 3.8%
Pre-Tax Margin 1.8% 2.5% 1.5% 2.3%
Same-store sales (0.3%) (1.2%) (3.6%) 1.7%
LITHIA MOTORS, INC.
Balance Sheet Highlights (Dollars in Thousands)
Unaudited
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June 30, 2001 December 31, 2000
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Cash & Cash Equivalents $40,646 $38,789
Inventory 315,078 314,290
Other Current Assets 42,084 43,443
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Total Current Assets 397,808 396,522
Real Estate - Net 66,484 60,788
Equipment & Leases - net 30,620 29,452
Goodwill, net 137,776 133,871
Other Assets 7,041 7,370
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Total Assets $639,729 $628,003
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Floorplan Notes Payable $251,830 $255,137
Other Current Liabilities 49,288 42,468
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Total Current Liabilities 301,118 297,605
Used Vehicle Flooring 56,000 59,000
Real Estate Debt 28,211 28,898
Other Long-Term Debt 44,101 43,566
Other Liabilities 20,896 17,159
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Total Liabilities $450,326 $446,228
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Shareholders Equity 189,403 181,775
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TOTAL LIABILITIES &
SHAREHOLDERS' EQUITY $639,729 $628,003
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Other Balance Sheet Data
(Dollars in Thousands)
Current Ratio 1.3x 1.3x
LT Debt/Total Cap. 28% 29%
[Excludes Used Vehicle Flooring]
Working Capital $96,690 $98,917
