EXHIBIT 99.1
LITHIA MOTORS REPORTS ADJUSTED SECOND QUARTER 2010 EARNINGS OF $0.27
PER SHARE; 19% INCREASE IN SAME STORE SALES
Medford, Oregon, JULY 29, 2010 (1:05 p.m. PT) –Lithia Motors, Inc. (NYSE: LAD) today reported 2010 adjusted second quarter net income from continuing operations of $0.27 per diluted share. This compares to a 2009 adjusted second quarter net income from continuing operations of $0.22 per diluted share. The results include approximately 4.9 million additional shares in 2010 compared to 2009 primarily due to the equity offering at the end of 2009.
Second quarter 2010 revenue from continuing operations totaled $534 million, compared to $444 million in the year-ago period, mainly driven by improved vehicle sales. Total same store sales increased 19% when compared to the same quarter last year. Same store retail new vehicle sales increased 26% while same store retail used vehicle sales increased 15% when compared to the same quarter last year. Service, body and parts same store sales were essentially flat compared to the same quarter of last year.
Sid DeBoer, Lithia’s Chairman and CEO, commented, “Our operational results exceeded our expectations due to a strong April and May. We have focused on maintaining our service, body and parts sales volumes despite fewer units in operation and lower warranty revenues.”
As shown in the attached reconciliation table, the 2010 second quarter adjusted results exclude non-core charges of $(0.33) per share on asset impairments and expenses related to reserves offset by gains on disposal of assets, while the 2009 second quarter adjusted results from continuing operations exclude non-core charges of $(0.10) per share on asset impairments, offset by a one-time gain related to debt extinguishment. Unadjusted, net loss from continuing operations was $(1.5) million, or $(0.06) per diluted share, for the quarter ended June 30, 2010, compared to net income from continuing operations of $2.5 million, or $0.12 per diluted share for the second quarter of 2009.
In the second quarter of 2010, Lithia recorded an after-tax charge of approximately $(8.0) million, or $(0.31) per share related to real estate held for future development, reflecting continued weakness in local market conditions, increasing vacancy rates, and challenges in obtaining lender financing. This real estate incurs annual holding costs of approximately $0.12 to $0.15 per share.
Commenting on the impairment charges, Bryan DeBoer, Lithia’s President and COO, said, “Selling our remaining non-operating real estate allows us to mitigate risk and re-deploy the capital generated. We are acting aggressively to price these assets to sell considering updated market conditions. While it is difficult to sell these assets in the current environment, we believe that it is an attractive time for other investment opportunities.”
For the six-month period ended June 30, 2010, total revenues increased 17% to $993 million as compared to $849 million in the same period last year. Same store new vehicle sales increased 19%, retail used vehicle sales increased 18% and service, body and parts sales decreased 3%. For the first six months, Lithia’s adjusted income from continuing operations, net of tax, and excluding non-core charges and gains was $0.37 per share as compared to $0.20 per share in 2009. Unadjusted, net loss from continuing operations for the first six months was $(0.00) per diluted share, compared to net income from continuing operations of $0.08 per diluted share for the same period last year.
Selection of Chief Financial Officer
Lithia is pleased to announce that Chris Holzshu will be promoted to Senior Vice President and Chief Financial Officer upon the departure of Jeff DeBoer at the end of October. Chris has held a number of positions with increasing responsibility at Lithia over the past eight years, most recently as Vice President of Financial Planning and Analysis.
Commenting on the selection, Sid DeBoer stated, “For the last two years, Chris has been responsible for our budgeting and performance monitoring. In this role, he has been focused on identifying opportunities to improve store operations. I am pleased that Chris will continue this focus as our new CFO. Our top priority is improving store profitability, and Chris will deliver on this objective.”
Chris joined the Company in 2003 to manage the corporate accounting department, and was subsequently promoted to leadership roles in internal audit / compliance and business development. Prior to Lithia, Chris spent several years working at KPMG LLP, an independent public accounting firm. Chris is a licensed CPA.
Balance Sheet Update
Lithia ended the period with $118.2 million in immediately available funds, including $15.4 million in cash, $71.2 million in availability on its revolving credit facility, and $31.6 million in unfinanced new vehicle inventory. At June 30, 2010, Lithia was in compliance with all debt covenants. Lithia recently announced the extension of its revolving credit facility through June 2013 and has no mortgage maturities until November 2011.
Outlook for 2010
Lithia is providing 2010 third quarter earnings guidance within a range of $0.27 to $0.29 per diluted share. Full-year 2010 adjusted earnings guidance has been increased for the effect of announced acquisitions and dispositions and is projected within a range of $0.72 to $0.77 per diluted share. Both projections are based on the following revised assumptions:
· Total revenues in range of $1.95 to $2.0 billion
· New vehicle same store sales increasing 12.4%
· New vehicle gross margin ranging from 8.0% to 8.3%
· Used vehicle same store sales increasing 14.1%
· Used vehicle gross margin ranging from 14.2% to 14.5%
· Service body and parts same store sales decreasing 2.0%
· Service body and parts gross margin ranging from 48.1% to 48.7%
· Finance and insurance gross profit of $955 per unit
· Tax rate of 38.5%
· Estimated average diluted shares outstanding of 26.2 million
· Capital expenditures of approximately $3.5 million
· Chrysler market share consistent with full year 2009 levels
· Guidance excludes the impact of future acquisitions, dispositions, and any potential non-core items
Second Quarter Earnings Conference Call and Updated Presentation
The second quarter conference call may be accessed at 2:00 p.m. PT today by telephone at (877) 407-8029 (Conference ID: 352738). An updated presentation highlighting the second quarter results has been added to Investor Relations on www.lithia.com.
To listen live on our website or for replay, visit Investor Relations on www.lithia.com and click on the conference call icon. A playback of the conference call will be available after 5:00 p.m. PT on July 29, 2010 through August 5, 2010 by calling 877-660-6853 (Conference ID: 352738 Account: 305).
About Lithia
Lithia Motors, Inc. is the ninth largest automotive retailer in the United States and a Fortune 800 company. Lithia sells 26 brands of new and all brands of used vehicles at 84 stores, which are located in 12 states. 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.
For additional information on Lithia Motors, contact the Investor Relations Department at (541) 776-6591 or visit www.lithia.com and click on “Investor Relations.”
Sites
www.lithia.com
www.lithiacares.com
www.lithiajobs.com
Lithia Motors on Facebook
http://www.facebook.com/profile.php?id=1270221622&ref=ts
Lithia Life on Facebook
http://www.facebook.com/pages/Lithia-Lifecom/34360183908?ref=ts
Lithia Life on YouTube
http://www.youtube.com/user/LithiaLife
Lithia Life on Twitter
http://twitter.com/LithiaLife
Forward-Looking Statements
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. Forward-looking statements in this press release include our guidance regarding third quarter and full year 2010 results, including the effect of announced acquisitions, the timely sale of real estate held for future development, and our belief we can find accretive diversifying acquisition opportunities. Forward looking statements include statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential future acquisitions and business strategy, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks" or "will." These statements are necessarily subject to risk and uncertainty and actual results could differ materially due to certain risk factors, including without limitation, future economic conditions and others set forth from time to time in the company's filings with the SEC. We urge you to carefully consider this information. We undertake no duty to update our forward-looking statements, including our earnings outlook.
Non-GAAP Financial Measures
This press release and the attached financial tables contain certain non-GAAP financial measures as defined under SEC rules, such as adjusted net income and diluted earnings per share from continuing operations, adjusted SG&A as a percentage of revenues and gross profit, adjusted operating margin and adjusted pre-tax margin adjusted to exclude certain items disclosed in the attached financial tables. Cash flows from operations were adjusted to include the change in non-trade floorplan debt to improve the visibility of cash flows related to vehicle financing. As required by SEC rules, the Company has provided reconciliations of these measures to the most directly comparable GAAP measures, which are set forth in the attachments to this release. The Company believes that each of the foregoing non-GAAP financial measures improves the transparency of the Company's disclosure, provides a meaningful presentation of the Company's results from its core business operations excluding adjustments for items not related to the Company's ongoing core business operations or othernon-cash adjustments, and improves the period-to-period comparability of the Company's results from its core business operations.
Source: Lithia Motors, Inc.
Lithia Motors, Inc.
Consolidated Statement of Operations (Unaudited)
(In thousands except per share data)
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| Three Months Ended |
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| ||||
| June 30, |
| Increase |
| % Increase |
| ||||
| 2010 |
| 2009 |
| (Decrease) |
| (Decrease) |
| ||
Revenues: |
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|
| ||
New vehicle sales | $ | 268,721 | $ | 211,760 | $ | 56,961 |
| 26.9 | % | |
Used vehicle sales | 172,406 |
| 144,007 |
| 28,399 |
| 19.7 |
| ||
Finance and insurance | 16,274 |
| 14,857 |
| 1,417 |
| 9.5 |
| ||
Service, body and parts | 71,996 |
| 72,312 |
| (316) |
| (0.4) |
| ||
Fleet and other | 4,704 |
| 625 |
| 4,079 |
| 652.6 |
| ||
Total revenues | 534,101 |
| 443,561 |
| 90,540 |
| 20.4 |
| ||
Cost of sales: |
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|
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|
|
| ||
New vehicle sales | 246,626 |
| 194,373 |
| 52,253 |
| 26.9 |
| ||
Used vehicle sales | 150,858 |
| 125,633 |
| 25,225 |
| 20.1 |
| ||
Service, body and parts | 36,617 |
| 36,999 |
| (382) |
| (1.0) |
| ||
Fleet and other | 4,257 |
| 267 |
| 3,990 |
| 1,494.4 |
| ||
Total cost of sales | 438,358 |
| 357,272 |
| 81,086 |
| 22.7 |
| ||
Gross profit | 95,743 |
| 86,289 |
| 9,454 |
| 11.0 |
| ||
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|
|
|
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| ||
Asset impairment charges | 13,260 |
| 3,520 |
| 9,740 |
| 276.7 |
| ||
SG&A expense | 74,813 |
| 68,854 |
| 5,959 |
| 8.7 |
| ||
Depreciation and amortization | 4,402 |
| 3,969 |
| 433 |
| 10.9 |
| ||
Income from operations | 3,268 |
| 9,946 |
| (6,678) |
| (67.1) |
| ||
|
|
|
|
|
|
|
|
| ||
Floorplan interest expense | (2,567) |
| (2,664) |
| (97) |
| (3.6) |
| ||
Other interest expense | (3,529) |
| (3,367) |
| 162 |
| 4.8 |
| ||
Other income, net | 215 |
| 258 |
| (43) |
| (16.7) |
| ||
Income (loss) from continuing operations before income taxes | (2,613) |
| 4,173 |
| (6,786) |
| NM |
| ||
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|
| ||
Income tax expense (benefit) | (1,099) |
| 1,634 |
| (2,733) |
| NM |
| ||
Income tax rate | 42.1% |
| 39.2% |
|
|
|
|
| ||
Income (loss) from continuing operations | (1,514) |
| 2,539 |
| (4,053) |
| NM |
| ||
|
|
|
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|
|
|
|
| ||
Income (loss) from discontinued operations, net of income tax | (205) |
| 1,124 |
| (1,329) |
| NM |
| ||
Net income (loss) | (1,719) |
| 3,663 |
| (5,382) |
| NM |
| ||
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Diluted net income (loss) per share: |
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Continuing operations | $ | (0.06) | $ | 0.12 | $ | (0.18) |
| NM |
| |
Discontinued operations | (0.01) |
| 0.05 |
| (0.06) |
| NM |
| ||
Net income (loss) per share | $ | (0.07) | $ | 0.17 | $ | (0.24) |
| NM |
| |
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Diluted shares outstanding | 26,014 |
| 21,096 |
| 4,918 |
| 23.3 | % | ||
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NM – not meaningful
Lithia Motors, Inc.
Key Performance Metrics (Unaudited)
| Three Months Ended |
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| June 30, |
| Increase |
| % Increase |
| |||||
| 2010 |
| 2009 |
| (Decrease) |
| (Decrease) |
| |||
Gross margin |
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| |||
New vehicle retail | 8.2 | % | 8.2 | % | - bps |
|
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| |||
Used vehicle retail | 14.5 |
| 14.5 |
| - bps |
|
|
| |||
Used vehicle wholesale | 1.2 |
| 0.2 |
| 100 bps |
|
|
| |||
Finance & insurance | 100.0 |
| 100.0 |
| - bps |
|
|
| |||
Service, body & parts | 49.1 |
| 48.8 |
| 30 bps |
|
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| |||
Gross profit margin | 17.9 |
| 19.5 |
| (160) bps |
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Unit sales |
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New vehicle retail | 8,678 |
| 7,110 |
| 1,568 |
| 22.1 | % | |||
Used vehicle retail | 8,667 |
| 7,761 |
| 906 |
| 11.7 |
| |||
Used vehicle wholesale | 3,305 |
| 3,107 |
| 198 |
| 6.4 |
| |||
Total units sold | 20,650 |
| 17,978 |
| 2,672 |
| 14.9 |
| |||
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Average selling price |
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New vehicle retail | $ | 30,966 | $ | 29,783 | $ | 1,183 |
| 4.0 | % | ||
Used vehicle retail | 16,942 |
| 16,268 |
| 674 |
| 4.1 |
| |||
Used vehicle wholesale | 7,737 |
| 5,713 |
| 2,024 |
| 35.4 |
| |||
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Average gross profit per unit |
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New vehicle retail | $ | 2,546 | $ | 2,445 | $ | 101 |
| 4.1 | % | ||
Used vehicle retail | 2,452 |
| 2,362 |
| 90 |
| 3.8 |
| |||
Used vehicle wholesale | 91 |
| 14 |
| 77 |
| 550.0 |
| |||
Finance & insurance | 938 |
| 999 |
| (61) |
| (6.1) |
| |||
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Revenue mix |
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New vehicle retail | 50.3 | % | 47.7 | % |
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Used vehicle retail | 27.5 |
| 28.5 |
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Used vehicle wholesale | 4.8 |
| 4.1 |
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Finance & insurance, net | 3.0 |
| 3.3 |
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Service, body & parts | 13.5 |
| 16.3 |
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Fleet and other | 0.9 |
| 0.1 |
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| Adjusted |
| As reported |
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| Three Months Ended |
| Three Months Ended |
| |||||||
| June 30, |
| June 30 |
| |||||||
Other metrics | 2010 |
| 2009 |
| 2010 |
| 2009 |
| |||
SG&A as a % of revenue | 13.8 | % | 15.5 | % | 14.0 | % | 15.5 | % | |||
SG&A as a % of gross profit | 77.0 |
| 79.8 |
| 78.1 |
| 79.8 |
| |||
Operating profit as a % of revenue | 3.3 |
| 3.1 |
| 0.6 |
| 2.2 |
| |||
Operating profit as a % of gross profit | 18.4 |
| 15.8 |
| 3.4 |
| 11.5 |
| |||
Pretax margin | 2.2 |
| 1.7 |
| (0.5) |
| 0.9 |
| |||
Lithia Motors, Inc.
Key Performance Metrics (Unaudited)
| Three Months Ended |
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| June 30, |
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| 2010 |
| 2009 |
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New vehicle unit sales brand mix |
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Chrysler | 28.8 | % | 30.3 | % |
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General Motors | 17.6 |
| 17.3 |
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Toyota | 12.8 |
| 14.2 |
|
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Honda | 8.9 |
| 9.3 |
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Ford | 5.7 |
| 4.9 |
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Hyundai | 5.6 |
| 4.6 |
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BMW | 5.4 |
| 5.1 |
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Subaru | 4.9 |
| 4.6 |
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| |
Volkswagen, Audi | 3.5 |
| 3.2 |
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Nissan | 3.2 |
| 4.0 |
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Kia | 1.8 |
| 0.5 |
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Mercedes | 1.1 |
| 1.0 |
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Other | 0.7 |
| 1.0 |
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Same store revenue changes |
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New vehicle retail | 26.3 | % | (35.9) | % |
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| |
Used vehicle retail | 15.0 |
| 2.7 |
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Used vehicle wholesale | 42.1 |
| (30.6) |
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Finance & insurance | 15.2 |
| (33.6) |
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Service, body & parts | (0.2) |
| (4.5) |
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Total sales (excluding fleet) | 19.1 |
| (23.2) |
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Same store gross profit changes |
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New vehicle retail | 25.2 | % | (32.0) | % |
|
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Used vehicle retail | 18.7 |
| 27.9 |
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Used vehicle wholesale | 259.5 |
| (114.5) |
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Service, body & parts | 0.4 |
| (2.7) |
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Total gross profit (excluding fleet) | 12.1 |
| (11.7) |
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Current store count | # of stores |
| % of total |
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Chrysler | 23 |
| 27.4 | % |
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General Motors | 12 |
| 14.3 |
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| |
Honda | 8 |
| 9.5 |
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| |
Toyota | 7 |
| 8.3 |
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Hyundai | 6 |
| 7.1 |
|
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BMW | 6 |
| 7.1 |
|
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Ford | 4 |
| 4.8 |
|
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| |
Volkswagen, Audi | 4 |
| 4.8 |
|
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Nissan | 4 |
| 4.8 |
|
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| |
Subaru | 2 |
| 2.4 |
|
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| |
Kia | 2 |
| 2.4 |
|
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Mercedes | 1 |
| 1.2 |
|
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Other | 5 |
| 5.9 |
|
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| 84 |
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Lithia Motors, Inc.
Consolidated Statement of Operations (Unaudited)
(In thousands except per share data)
|
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|
|
|
| ||||
| Six Months Ended |
|
|
|
|
| ||||
| June 30, |
| Increase |
| % Increase |
| ||||
| 2010 |
| 2009 |
| (Decrease) |
| (Decrease) |
| ||
Revenues: |
|
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|
|
|
|
| ||
New vehicle sales | $ | 484,338 | $ | 404,066 | $ | 80,272 |
| 19.9 | % | |
Used vehicle sales | 331,770 |
| 269,609 |
| 62,161 |
| 23.1 |
| ||
Finance and insurance | 30,912 |
| 28,394 |
| 2,518 |
| 8.9 |
| ||
Service, body and parts | 140,793 |
| 145,269 |
| (4,476) |
| (3.1) |
| ||
Fleet and other | 5,507 |
| 1,195 |
| 4,312 |
| 360.8 |
| ||
Total revenues | 993,320 |
| 848,533 |
| 144,787 |
| 17.1 |
| ||
Cost of sales: |
|
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|
|
|
|
| ||
New vehicle sales | 443,839 |
| 369,979 |
| 73,860 |
| 20.0 |
| ||
Used vehicle sales | 291,257 |
| 237,214 |
| 54,043 |
| 22.8 |
| ||
Service, body and parts | 71,868 |
| 75,289 |
| (3,421) |
| (4.5) |
| ||
Fleet and other | 4,708 |
| 481 |
| 4,227 |
| 878.8 |
| ||
Total cost of sales | 811,672 |
| 682,963 |
| 128,709 |
| 18.8 |
| ||
Gross profit | 181,648 |
| 165,570 |
| 16,078 |
| 9.7 |
| ||
|
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Asset impairment charges | 14,751 |
| 5,197 |
| 9,554 |
| 183.8 |
| ||
SG&A expense | 145,852 |
| 137,912 |
| 7,940 |
| 5.8 |
| ||
Depreciation and amortization | 9,151 |
| 8,060 |
| 1,091 |
| 13.5 |
| ||
Income from operations | 11,894 |
| 14,401 |
| (2,507) |
| 17.4 |
| ||
|
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| ||
Floorplan interest expense | (5,318) |
| (5,575) |
| (257) |
| (4.6) |
| ||
Other interest expense | (7,117) |
| (7,348) |
| (231) |
| (3.1) |
| ||
Other income, net | 283 |
| 1,422 |
| (1,139) |
| (80.1) |
| ||
Income (loss) from continuing operations before income taxes | (258) |
| 2,900 |
| (3,158) |
| NM |
| ||
|
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|
|
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|
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| ||
Income tax expense (benefit) | (187) |
| 1,145 |
| (1,332) |
| NM |
| ||
Income tax rate | 72.5 | % | 39.5 | % |
|
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| ||
Income (loss) from continuing operations | (71) |
| 1,755 |
| (1,826) |
| NM |
| ||
|
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|
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|
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| ||
Income (loss) from discontinued operations, net of income tax | (381) |
| 3,237 |
| (3,618) |
| NM |
| ||
Net income (loss) | (452) |
| 4,992 |
| (5,444) |
| NM |
| ||
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|
|
| ||
Diluted net income (loss) per share: |
|
|
|
|
|
|
|
| ||
Continuing operations | $ | (0.00) | $ | 0.08 | $ | (0.08) |
| NM |
| |
Discontinued operations | (0.02) |
| 0.16 |
| (0.18) |
| NM |
| ||
Net income (loss) per share | $ | (0.02) | $ | 0.24 | $ | (0.26) |
| NM |
| |
|
|
|
|
|
|
|
|
| ||
Diluted shares outstanding | 25,955 |
| 20,960 |
| 4,995 |
| 23.8 | % | ||
NM – not meaningful
Lithia Motors, Inc.
Key Performance Metrics (Unaudited)
| Six Months Ended |
|
|
|
|
| |||||
| June 30, |
| Increase |
| % Increase |
| |||||
| 2010 |
| 2009 |
| (Decrease) |
| (Decrease) |
| |||
Gross margin |
|
|
|
|
|
|
|
| |||
New vehicle retail | 8.4 | % | 8.4 | % | - bps |
|
|
| |||
Used vehicle retail | 14.1 |
| 13.6 |
| 50 bps |
|
|
| |||
Used vehicle wholesale | 1.4 |
| 1.2 |
| 20 bps |
|
|
| |||
Finance & insurance | 100.0 |
| 100.0 |
| - bps |
|
|
| |||
Service, body & parts | 49.0 |
| 48.2 |
| 80 bps |
|
|
| |||
Gross profit margin | 18.3 |
| 19.5 |
| (120) bps |
|
|
| |||
|
|
|
|
|
|
|
|
| |||
Unit sales |
|
|
|
|
|
|
|
| |||
New vehicle retail | 15,562 |
| 13,501 |
| 2,061 |
| 15.3 | % | |||
Used vehicle retail | 16,878 |
| 14,879 |
| 1,999 |
| 13.4 |
| |||
Used vehicle wholesale | 6,591 |
| 6,279 |
| 312 |
| 5.0 |
| |||
Total units sold | 39,031 |
| 34,659 |
| 4,372 |
| 12.6 |
| |||
|
|
|
|
|
|
|
|
| |||
Average selling price |
|
|
|
|
|
|
|
| |||
New vehicle retail | $ | 31,123 | $ | 29,929 | $ | 1,194 |
| 4.0 | % | ||
Used vehicle retail | 16,752 |
| 15,817 |
| 935 |
| 5.9 |
| |||
Used vehicle wholesale | 7,440 |
| 5,457 |
| 1,983 |
| 36.3 |
| |||
|
|
|
|
|
|
|
|
| |||
Average gross profit per unit |
|
|
|
|
|
|
|
| |||
New vehicle retail | $ | 2,602 | $ | 2,525 | $ | 77 |
| 3.0 | % | ||
Used vehicle retail | 2,361 |
| 2,150 |
| 211 |
| 9.8 |
| |||
Used vehicle wholesale | 102 |
| 64 |
| 38 |
| 59.4 |
| |||
Finance & insurance | 953 |
| 1,000 |
| (47) |
| (4.7) |
| |||
|
|
|
|
|
|
|
|
| |||
Revenue mix |
|
|
|
|
|
|
|
| |||
New vehicle retail | 48.8 | % | 47.6 | % |
|
|
|
| |||
Used vehicle retail | 28.5 |
| 27.7 |
|
|
|
|
| |||
Used vehicle wholesale | 4.8 |
| 4.2 |
|
|
|
|
| |||
Finance & insurance, net | 3.1 |
| 3.3 |
|
|
|
|
| |||
Service, body & parts | 14.2 |
| 17.1 |
|
|
|
|
| |||
Fleet and other | 0.6 |
| 0.1 |
|
|
|
|
| |||
|
|
|
|
|
|
|
|
| |||
| Adjusted |
| As reported |
| |||||||
| Six Months Ended |
| Six Months Ended |
| |||||||
| June 30, |
| June 30 |
| |||||||
Other metrics | 2010 |
| 2009 |
| 2010 |
| 2009 |
| |||
SG&A as a % of revenue | 14.5 | % | 16.3 | % | 14.7 | % | 16.3 | % | |||
SG&A as a % of gross profit | 79.6 |
| 83.3 |
| 80.3 |
| 83.3 |
| |||
Operating profit as a % of revenue | 2.8 |
| 2.4 |
| 1.2 |
| 1.7 |
| |||
Operating profit as a % of gross profit | 15.2 |
| 12.1 |
| 6.5 |
| 8.7 |
| |||
Pretax margin | 1.6 |
| 0.9 |
| - |
| 0.3 |
| |||
|
|
|
|
|
|
|
|
| |||
Lithia Motors, Inc.
Key Performance Metrics (Unaudited)
| Six Months Ended |
|
|
|
|
| |||
| June 30, |
|
|
|
|
| |||
| 2010 |
| 2009 |
|
|
|
|
| |
New vehicle unit sales brand mix |
|
|
|
|
|
|
|
| |
Chrysler | 27.5 | % | 32.5 | % |
|
|
|
| |
General Motors | 17.0 |
| 16.5 |
|
|
|
|
| |
Toyota | 13.7 |
| 14.2 |
|
|
|
|
| |
Honda | 8.7 |
| 8.6 |
|
|
|
|
| |
Hyundai | 5.9 |
| 4.5 |
|
|
|
|
| |
Ford | 5.6 |
| 4.8 |
|
|
|
|
| |
BMW | 5.5 |
| 5.0 |
|
|
|
|
| |
Subaru | 5.4 |
| 4.6 |
|
|
|
|
| |
Nissan | 3.5 |
| 3.6 |
|
|
|
|
| |
Volkswagen, Audi | 3.4 |
| 3.2 |
|
|
|
|
| |
Kia | 1.9 |
| - |
|
|
|
|
| |
Mercedes | 1.1 |
| 1.0 |
|
|
|
|
| |
Other | 0.8 |
| 1.5 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
Same store revenue changes |
|
|
|
|
|
|
|
| |
New vehicle retail | 19.3 | % | (37.4) | % |
|
|
|
| |
Used vehicle retail | 18.3 |
| (4.9) |
|
|
|
|
| |
Used vehicle wholesale | 41.6 |
| (40.1) |
|
|
|
|
| |
Finance & insurance | 7.5 |
| (33.1) |
|
|
|
|
| |
Service, body & parts | (3.1) |
| (4.8) |
|
|
|
|
| |
Total sales (excluding fleet) | 15.7 |
| (26.0) |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
Same store gross profit changes |
|
|
|
|
|
|
|
| |
New vehicle retail | 17.7 | % | (31.7) | % |
|
|
|
| |
Used vehicle retail | 29.0 |
| 8.0 |
|
|
|
|
| |
Used vehicle wholesale | 30.6 |
| (148.6) |
|
|
|
|
| |
Service, body & parts | (1.8) |
| (3.1) |
|
|
|
|
| |
Total gross profit (excluding fleet) | 9.7 |
| (14.2) |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
Geographic revenue mix |
|
|
|
|
|
|
|
| |
Texas | 24.7 | % | 24.2 | % |
|
|
|
| |
Oregon | 15.0 |
| 16.4 |
|
|
|
|
| |
California | 11.4 |
| 11.5 |
|
|
|
|
| |
Alaska | 10.8 |
| 9.6 |
|
|
|
|
| |
Washington | 10.0 |
| 9.9 |
|
|
|
|
| |
Montana | 6.8 |
| 6.9 |
|
|
|
|
| |
Iowa | 7.0 |
| 7.3 |
|
|
|
|
| |
Idaho | 6.4 |
| 6.6 |
|
|
|
|
| |
Nevada | 4.1 |
| 3.9 |
|
|
|
|
| |
North Dakota | 2.0 |
| 1.6 |
|
|
|
|
| |
New Mexico | 1.0 |
| 1.2 |
|
|
|
|
| |
Colorado | 0.8 |
| 0.9 |
|
|
|
|
| |
Lithia Motors, Inc.
Consolidated Balance Sheet(Unaudited)
(In thousands except per share data)
| June 30, 2010 |
| December 31, 2009 | |
Cash and cash equivalents | $ | 15,379 | $ | 12,776 |
Contracts in transit | 25,373 |
| 21,940 | |
Trade receivables, net | 36,187 |
| 30,157 | |
Inventory, net | 361,063 |
| 328,726 | |
Vehicles leased to others | 7,940 |
| 7,384 | |
Prepaid expenses and other | 3,443 |
| 5,387 | |
Assets held for sale | - |
| 11,693 | |
Total current assets | $ | 449,385 | $ | 418,063 |
|
|
|
| |
Land and building, net | 308,389 |
| 326,625 | |
Equipment and other, net | 54,868 |
| 59,429 | |
Intangible assets, net | 42,935 |
| 42,496 | |
Other non-current assets | 8,484 |
| 7,752 | |
Deferred income taxes | 45,231 |
| 40,735 | |
Total assets | $ | 909,292 | $ | 895,100 |
|
|
|
| |
Flooring notes payable | 234,878 |
| 210,488 | |
Current maturities of line of credit | - |
| 24,000 | |
Current maturities of other debt | 23,248 |
| 14,303 | |
Trade payables | 26,437 |
| 18,782 | |
Accrued liabilities | 50,540 |
| 47,518 | |
Deferred income taxes | 122 |
| 1,036 | |
Liabilities related to assets held for sale | - |
| 5,050 | |
Total current liabilities | $ | 335,225 | $ | 321,177 |
|
|
|
| |
Real estate debt | 229,947 |
| 230,265 | |
Other long-term debt | 2,725 |
| 2,800 | |
Deferred revenue | 19,043 |
| 17,981 | |
Other long-term liabilities | 16,879 |
| 15,839 | |
Total liabilities | $ | 603,819 | $ | 588,062 |
|
|
|
| |
Class A common stock | 282,764 |
| 280,880 | |
Class B common stock | 468 |
| 468 | |
Additional paid-in capital | 10,358 |
| 10,501 | |
Other comprehensive income | (5,404) |
| (3,850) | |
Retained earnings | 17,287 |
| 19,039 | |
Total liabilities & shareholders' equity | $ | 909,292 | $ | 895,100 |
Lithia Motors, Inc.
Summarized Cash Flow from Operations(Unaudited)
(In thousands)
| Six Months Ended |
| ||
| June 30, |
| ||
| 2010 |
| 2009 |
|
Net income (loss) | $(452) |
| $4,992 |
|
|
|
|
|
|
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: |
|
|
|
|
Asset impairments | 14,751 |
| 5,197 |
|
Depreciation and amortization | 9,159 |
| 8,449 |
|
Amortization of debt discount | - |
| 48 |
|
Stock-based compensation | 948 |
| 1,122 |
|
Gain on early extinguishment of debt | - |
| (1,317) |
|
(Gain) loss on disposal of assets | 93 |
| (9,196) |
|
Deferred income taxes | (4,784) |
| 2,208 |
|
Excess tax deficit from share-based | - |
| 46 |
|
(Increase) decrease, net of effect of acquisitions and divestitures |
|
|
|
|
Trade receivables, net | (5,997) |
| 8,631 |
|
Contracts in transit | (3,433) |
| 5,013 |
|
Inventories | (28,996) |
| 114,084 |
|
Vehicles leased to others | (1,210) |
| 737 |
|
Prepaid expenses and other | 1,350 |
| 19,028 |
|
Other non-current assets | (768) |
| 523 |
|
Increase (decrease), net of effect of acquisitions and divestitures |
|
|
|
|
Floorplan notes payable | 2,770 |
| (94,523) |
|
Trade payables | 7,655 |
| 958 |
|
Accrued liabilities | 2,106 |
| (2,357) |
|
Other long-term liabilities and | 50 |
| 10,673 |
|
Net cash provided by (used in) | $(6,758) |
| $74,316 |
|
|
|
|
|
|
|
|
|
|
|
Lithia Motors, Inc.
Reconciliation of Non-GAAP Cash Flow from Operations(Unaudited)
(In thousands)
| Six Months Ended |
| ||
| June 30, |
| ||
Net cash provided by (used in) operating activities | 2010 |
| 2009 |
|
As reported | $(6,758) |
| $74,316 |
|
Floorplan notes payable, non-trade | 23,854 |
| (25,502) |
|
Adjusted | $17,096 |
| $48,814 |
|
Lithia Motors, Inc.
Other Highlights(Unaudited)
(In thousands except per share data)
| June 30, 2010 |
| December 31, 2009 |
|
|
|
|
| |
Other information |
|
|
|
|
|
|
|
| |
Lt debt/total cap | 43.2 | % | 43.2 | % |
|
|
|
| |
Adjusted Lt debt/total cap | 0.9 | % | 0.9 | % |
|
|
|
| |
Book value per outstanding share | $11.75 |
| $11.90 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
Debt covenant ratios |
|
|
|
|
|
|
|
| |
| Requirement |
| As of June 30, 2010 |
| |||||
Minimum tangible net worth | Not less than $200 million |
| $261.3 million |
| |||||
Vehicle equity | Not less than $65 million |
| $148.1 million |
| |||||
Fixed charge coverage ratio | Not less than 1.15 to 1 |
| 1.52 to 1 |
| |||||
Liabilities to tangible net worth ratio | Not more than 4.00 to 1 |
| 2.31 to 1 |
| |||||
Lithia Motors, Inc.
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)
(In thousands)
| Three months ended |
| Six months ended |
| |||||
| 2010 |
| 2009 |
| 2010 |
| 2009 |
| |
Selling, general & administrative |
|
|
|
|
|
|
|
| |
As reported | $74,813 |
| $68,854 |
| $145,852 |
| $137,912 |
| |
Disposal gain (loss) | (2) |
| - |
| 365 |
| - |
| |
Lease termination and severance reserve | (1,076) |
| - |
| (1,334) |
| - |
| |
Adjusted | $73,735 |
| $68,854 |
| $144,883 |
| $137,912 |
| |
|
|
|
|
|
|
|
|
| |
Income from operations |
|
|
|
|
|
|
|
| |
As reported | $3,268 |
| $9,946 |
| $11,894 |
| $14,401 |
| |
Impairments and disposal gain | 13,262 |
| 3,680 |
| 14,451 |
| 5,760 |
| |
Lease termination and severance reserve | 1,076 |
| - |
| 1,334 |
| - |
| |
Adjusted | $17,606 |
| $13,626 |
| $27,679 |
| $20,161 |
| |
|
|
|
|
|
|
|
|
| |
Income (loss) from continuing operations before income taxes |
|
|
|
|
|
|
|
| |
As reported | $(2,613) |
| $4,173 |
| $(258) |
| $2,900 |
| |
Impairments and disposal gain | 13,262 |
| 3,680 |
| 14,451 |
| 5,760 |
| |
Lease termination and severance reserve | 1,076 |
| - |
| 1,334 |
| - |
| |
Gain on extinguishment of debt | - |
| (231) |
| - |
| (1,317) |
| |
Adjusted | $11,725 |
| $7,622 |
| $15,527 |
| $7,343 |
| |
Lithia Motors, Inc.
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)
(In thousands except per share data)
Adjusted net income/(loss) and diluted earnings per share |
| ||||||||
|
|
| |||||||
| Three Months Ended June 30, |
| |||||||
| Net income/(loss) |
| Diluted earnings per share |
| |||||
| 2010 |
| 2009 |
| 2010 |
| 2009 |
| |
Continuing Operations |
|
|
|
|
|
|
|
| |
As reported | $(1,514) |
| $2,539 |
| $(0.06) |
| $0.12 |
| |
Impairments and disposal gain | 8,046 |
| 2,057 |
| 0.31 |
| 0.10 |
| |
Lease termination and severance reserve | 561 |
| - |
| 0.02 |
| - |
| |
Gain on extinguishment of debt | - |
| (38) |
| - |
| - |
| |
Adjusted | $7,093 |
| $4,558 |
| $0.27 |
| $0.22 |
| |
|
|
|
|
|
|
|
|
| |
Discontinued Operations |
|
|
|
|
|
|
|
| |
As reported | $(205) |
| $1,124 |
| $(0.01) |
| $0.05 |
| |
Impairments and disposal (gain) | 163 |
| (1,869) |
| 0.01 |
| (0.09) |
| |
Adjusted | $(42) |
| $(745) |
| - |
| (0.04) |
| |
|
|
|
|
|
|
|
|
| |
Consolidated Operations |
|
|
|
|
|
|
|
| |
As reported | $(1,719) |
| $3,663 |
| $(0.07) |
| $0.17 |
| |
Adjusted | 7,051 |
| 3,813 |
| 0.27 |
| 0.18 |
| |
|
|
|
|
|
|
|
|
| |
| Six Months Ended June 30, |
| |||||||
| Net income/(loss) |
| Diluted earnings per share |
| |||||
| 2010 |
| 2009 |
| 2010 |
| 2009 |
| |
Continuing Operations |
|
|
|
|
|
|
|
| |
As reported | $(71) |
| $1,755 |
| - |
| $0.08 |
| |
Impairments and disposal gain | 8,777 |
| 3,431 |
| 0.34 |
| 0.16 |
| |
Lease termination and severance reserve | 725 |
| - |
| 0.03 |
| - |
| |
Gain on extinguishment of debt | - |
| (812) |
| - |
| (0.04) |
| |
Adjusted | $9,431 |
| $4,374 |
| $0.37 |
| $0.20 |
| |
|
|
|
|
|
|
|
|
| |
Discontinued Operations |
|
|
|
|
|
|
|
| |
As reported | $(381) |
| $3,237 |
| $(0.02) |
| $0.16 |
| |
Impairments and disposal (gain) | 173 |
| (5,421) |
| 0.01 |
| (0.26) |
| |
Adjusted | $(208) |
| $(2,184) |
| $(0.01) |
| (0.10) |
| |
|
|
|
|
|
|
|
|
| |
Consolidated Operations |
|
|
|
|
|
|
|
| |
As reported | $(452) |
| $4,992 |
| $(0.02) |
| $0.24 |
| |
Adjusted | 9,223 |
| 2,190 |
| 0.36 |
| 0.10 |
| |
|
|
|
|
|
|
|
|
| |