EXHIBIT 99.1
LITHIA MOTORS REPORTS THIRD QUARTER 2011 EARNINGS OF $0.61 PER SHARE; INTRODUCES 2012 OUTLOOK RANGE OF $1.95 TO $2.05 PER SHARE
__________________________________________________
LITHIA MOTORS DECLARES $0.07 PER SHARE DIVIDEND FOR THIRD QUARTER 2011
Medford, Oregon, October 26, 2011 (7:30 a.m. ET) – Lithia Motors, Inc. (NYSE: LAD) today reported 2011 third quarter income from continuing operations of $16.3 million, or $0.61 per diluted share. This compares to a 2010 third quarter income from continuing operations of $9.6 million, or $0.36 per diluted share. Third quarter 2011 revenue from continuing operations increased $164.9 million, or 29% to $737.9 million, compared to $573.0 million in the third quarter of 2010.
Third Quarter Year-over-Year Operating Highlights:
· New vehicle same store sales increased 28%
· Used vehicle retail same store sales increased 14%
· Service, body and parts same store sales increased 3%
· SG&A expense as a percentage of gross profit reduced 310 basis points, to 70.8%
“Our team continued to execute in the third quarter,” said Sid DeBoer, Chairman and CEO of Lithia. “We increased quarterly revenue 29 percent, and grew diluted earnings per share 69 percent. As we remain disciplined on controlling costs, incremental operating leverage demonstrates the earnings power of our company.”
For the first nine months of 2011, revenue from continuing operations increased 30% to $2.0 billion as compared to $1.6 billion in 2010. Same store new vehicle sales increased 31%, used vehicle retail same store sales increased 16% and service, body and parts same store sales increased 5%. For the first nine months of 2011 adjusted income from continuing operations was $1.48 per diluted share as compared to $0.72 per diluted share in 2010. Unadjusted, for the first nine months of 2011, income from continuing operations was $1.47 per diluted share, compared to $0.35 per diluted share for 2010.
“We grew new vehicle same store sales 28 percent, well above the national average,” said Bryan DeBoer, President and COO. “Our import stores grew new unit sales volume two percent, despite shortage of import brand new vehicle inventory. However, we still have opportunity to increase our market share in both new and used vehicle sales.”
Corporate Development
On October 6, 2011, Lithia purchased a Subaru and Mitsubishi store in Fresno, California, with estimated annual revenues of $25.0 million. Including this acquisition, Lithia has purchased six stores in 2011. On October 19, 2011, Lithia sold a Volkswagen store in Thornton, Colorado, a suburb of Denver.
Commenting on the acquisition and divestiture activity, Bryan DeBoer said, “Lithia Subaru Mitsubishi of Fresno complements our existing Ford Mazda and Nissan Hyundai stores in the Fresno market. We continue to pursue exclusive franchises in the markets we operate in, and have strategically purchased and sold stores this year to further that strategy.”
Share Repurchases
During the third quarter, Lithia repurchased 650,809 shares of its Class A common stock. Under the 1.0 million share repurchase program authorized in 2000, 416,776 shares were repurchased. Under a new 2.0 million authorization approved by the Board of Directors in August 2011, an additional 234,033 shares were repurchased. At the end of the third quarter, authority to purchase 1.77 million shares remained under this authorization.
Chris Holzshu, SVP and Chief Financial Officer, commented, “We remain focused on the prudent allocation of capital. While our first choice remains acquisitions and internal investment, we are pleased to provide a dividend and opportunistically repurchase shares to return value to our shareholders.”
Balance Sheet Update
On September 30, 2011, Lithia entered into a new three-year $200 million credit facility with US Bank, N.A. and JPMorgan Chase Bank, N.A. The revolving facility will provide $100 million for new vehicle inventory floor plan financing and $100 million for general corporate purposes including working capital and acquisitions.
Lithia ended the period with $16 million in cash and $49 million in unfinanced new vehicle inventory. The new credit facility provides available funds of approximately $29 million. In total, this represents approximately $94 million in available liquidity.
Dividend Payment
Lithia announced that the Board of Directors has approved a dividend of $0.07 per share for the third quarter 2011. Lithia will pay the dividend November 25, 2011 to shareholders of record on November 11, 2011.
Updated Outlook for 2011
Lithia projects its 2011 fourth quarter earnings guidance within a range of $0.37 to $0.39 per diluted share. Full-year 2011 earnings guidance is projected within a range of $1.86 to $1.88 per diluted share. Both projections are based on the following annual assumptions:
· Total revenues in range of $2.6 to $2.7 billion
· New vehicle same store sales increasing 26%
· New vehicle gross margin ranging from 7.5% to 7.7%
· Used vehicle same store sales increasing 16%
· Used vehicle gross margin ranging from 14.5% to 14.7%
· Service body and parts same store sales increasing 3.6%
· Service body and parts gross margin ranging from 48.4% to 48.7%
· Finance and insurance gross profit of $1,000 per unit
· Tax rate of 40%
· Average diluted shares outstanding of 26.7 million
· Capital expenditures of $35 million
· Guidance excludes the impact of future acquisitions, dispositions, and any potential non-core items
Outlook for 2012
Lithia projects its 2012 first quarter earnings guidance within a range of $0.37 to $0.39 per diluted share. Full-year 2012 earnings guidance is projected within a range of $1.95 to $2.05 per diluted share. Both projections are based on the following annual assumptions:
· Total revenues in range of $2.9 to $3.0 billion
· New vehicle same store sales increasing 9.0%
· New vehicle gross margin ranging from 7.5% to 7.7%
· Used vehicle same store sales increasing 8.5%
· Used vehicle gross margin ranging from 14.5% to 14.7%
· Service body and parts same store sales increasing 2.0%
· Service body and parts gross margin ranging from 48.4% to 48.7%
· Finance and insurance gross profit of $980 per unit
· Tax rate of 40%
· Average diluted shares outstanding of 26.8 million
· Capital expenditures of $38 million
· Guidance excludes the impact of future acquisitions, dispositions, and any potential non-core items
Third Quarter Earnings Conference Call and Updated Presentation
The third quarter conference call may be accessed at 10:00 a.m. ET today by telephone at 877-407-8029. An updated presentation highlighting the third 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 webcasts. A playback of the conference call will be available after 1:00 p.m. ET on October 26, 2011through November 2, 2011by calling 877-660-6853 (Conference ID: 379757).
About Lithia
Lithia Motors, Inc. is the ninth largest automotive retailer in the United States. Lithia sells 28 brands of new and all brands of used vehicles at 86 stores, which are located in 11 states. Lithia also 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 John North, VP Finance and Controller at (541) 618-5748.
Sites
www.lithia.com
www.lithiacareers.com
www.assuredservice.com
Lithia Motors on Facebook
http://www.facebook.com/LithiaMotors
Lithia Motors on Twitter
http://twitter.com/lithiamotors
Source: Lithia Motors, Inc.
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 fourth quarter and full year 2011 results, first quarter and full year 2012 results, the effect of acquisitions on annual revenues, estimated new vehicle inventory and sales levels and the sustainability of future incremental operating leverage. 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, adjusted operating profit as a percentage of gross profit, and adjusted pre-tax margin. These measures exclude certain items disclosed in the attached financial tables. Cash flows from operations were adjusted to include the change in non-trade floor plan 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 other non-cash adjustments, and improves the period-to-period comparability of the Company's results from its core business operations. These presentations are not intended to provide net income, cash flows from operations, operating income or selling, general and administrative costs in accordance with GAAP and should not be considered an alternative to GAAP measures.
Lithia Motors, Inc.
Consolidated Statements of Operations (Unaudited)
(In thousands except per share data)
Three Months Ended | ||||||||
September 30, | Increase | Increase | ||||||
2011 | 2010 | (Decrease) | (Decrease) | |||||
Revenues: | ||||||||
New vehicle retail | $ 391,120 | $ 288,125 | $ 102,995 | 35.7 | % | |||
Used vehicle retail | 189,338 | 156,539 | 32,799 | 21.0 | ||||
Used vehicle wholesale | 36,612 | 30,414 | 6,198 | 20.4 | ||||
Finance and insurance | 23,029 | 18,629 | 4,400 | 23.6 | ||||
Service, body and parts | 87,669 | 76,169 | 11,500 | 15.1 | ||||
Fleet and other | 10,133 | 3,121 | 7,012 | 224.7 | ||||
Total revenues | 737,901 | 572,997 | 164,904 | 28.8 | ||||
Cost of sales: | ||||||||
New vehicle retail | 361,175 | 264,286 | 96,889 | 36.7 | ||||
Used vehicle retail | 161,881 | 133,602 | 28,279 | 21.2 | ||||
Used vehicle wholesale | 36,697 | 30,386 | 6,311 | 20.8 | ||||
Service, body and parts | 45,034 | 38,850 | 6,184 | 15.9 | ||||
Fleet and other | 9,443 | 2,684 | 6,759 | 251.8 | ||||
Total cost of sales | 614,230 | 469,808 | 144,422 | 30.7 | ||||
Gross profit | 123,671 | 103,189 | 20,482 | 19.8 | ||||
SG &A expense | 87,595 | 76,211 | 11,384 | 14.9 | ||||
Depreciation and amortization | 4,201 | 4,182 | 19 | 0.5 | ||||
Income from operations | 31,875 | 22,796 | 9,079 | 39.8 | ||||
Floor plan interest expense | (2,066) | (3,047) | (981) | (32.2) | ||||
Other interest expense | (3,082) | (3,718) | (636) | (17.1) | ||||
Other income, net | 216 | 73 | 143 | 195.9 | ||||
Income from continuing operations before income taxes | 26,943 | 16,104 | 10,839 | 67.3 | ||||
Income tax expense | 10,604 | 6,545 | 4,059 | 62.0 | ||||
Income tax rate | 39.4% | 40.6% | ||||||
Income from continuing operations | $ 16,339 | $ 9,559 | $ 6,780 | 70.9 | % | |||
Discontinued operations | 224 | 233 | (9) | (3.9) | ||||
Net income | $ 16,563 | $ 9,792 | $ 6,771 | 69.1 | % | |||
Diluted net income per share: | ||||||||
Continuing operations | $ 0.61 | $ 0.36 | $ 0.25 | 69.4 | % | |||
Discontinued operations | 0.01 | 0.01 | - | - | ||||
Net income per share | $ 0.62 | $ 0.37 | $ 0.25 | 67.6 | % | |||
Diluted shares outstanding | 26,654 | 26,328 | 326 | 1.2 | % |
Lithia Motors, Inc.
Key Performance Metrics (Unaudited)
Three Months Ended | ||||||||
September 30, | Increase | Increase | ||||||
2011 | 2010 | (Decrease) | (Decrease) | |||||
Gross margin | ||||||||
New vehicle retail | 7.7 | % | 8.3 | % | (60) bps | |||
Used vehicle retail | 14.5 | 14.7 | (20) bps | |||||
Used vehicle wholesale | (0.2) | 0.1 | (30) bps | |||||
Finance and insurance | 100.0 | 100.0 | - bps | |||||
Service, body and parts | 48.6 | 49.0 | (40) bps | |||||
Fleet and Other | 6.8 | 14.0 | (720) bps | |||||
Gross profit margin | 16.8 | 18.0 | (120) bps | |||||
Unit sales | ||||||||
New vehicle retail | 11,729 | 9,045 | 2,684 | 29.7 | % | |||
Used vehicle retail | 10,912 | 9,547 | 1,365 | 14.3 | ||||
Used vehicle wholesale | 4,618 | 3,984 | 634 | 15.9 | ||||
Total units sold | 27,259 | 22,576 | 4,683 | 20.7 | ||||
Average selling price | ||||||||
New vehicle retail | $ 33,346 | $ 31,855 | $ 1,491 | 4.7 | % | |||
Used vehicle retail | 17,351 | 16,397 | 954 | 5.8 | ||||
Used vehicle wholesale | 7,928 | 7,634 | 294 | 3.9 | ||||
Average gross profit per unit | ||||||||
New vehicle retail | $ 2,553 | $ 2,636 | $ (83) | (3.1) | % | |||
Used vehicle retail | 2,516 | 2,403 | 113 | 4.7 | ||||
Used vehicle wholesale | (18) | 7 | (25) | NM | ||||
Finance and insurance | 1,017 | 1,002 | 15 | 1.5 | ||||
Revenue mix | ||||||||
New vehicle retail | 53.0 | % | 50.3 | % | ||||
Used vehicle retail | 25.7 | 27.3 | ||||||
Used vehicle wholesale | 4.9 | 5.3 | ||||||
Finance and insurance, net | 3.1 | 3.3 | ||||||
Service, body and parts | 11.9 | 13.3 | ||||||
Fleet and other | 1.4 | 0.5 | ||||||
Three Months Ended | ||||||||
September 30, | ||||||||
Other metrics | 2011 | 2010 | ||||||
SG &A as a % of revenue | 11.9 | % | 13.3 | % | ||||
SG &A as a % of gross profit | 70.8 | 73.9 | ||||||
Operating profit as a % of revenue | 4.3 | 4.0 | ||||||
Operating profit as a % of gross profit | 25.8 | 22.1 | ||||||
Pretax margin | 3.7 | 2.8 |
NM – not meaningful
Lithia Motors, Inc.
Same Store Operating Highlights(Unaudited)
(In thousands except per unit data)
Three Months Ended | ||||||||
September 30, | Increase | Increase | ||||||
2011 | 2010 | (Decrease) | (Decrease) | |||||
Revenues | ||||||||
New vehicle retail | $ 369,518 | $ 287,821 | $ 81,697 | 28.4 | % | |||
Used vehicle retail | 177,737 | 155,620 | 22,117 | 14.2 | ||||
Used vehicle wholesale | 34,841 | 30,158 | 4,683 | 15.5 | ||||
Finance and insurance | 21,741 | 18,032 | 3,709 | 20.6 | ||||
Service, body and parts | 78,225 | 75,920 | 2,305 | 3.0 | ||||
Fleet and Other | 9,615 | 2,985 | 6,630 | 222.1 | ||||
Gross profit (loss) | ||||||||
New vehicle retail | $ 27,933 | $ 23,789 | $ 4,144 | 17.4 | % | |||
Used vehicle retail | 26,263 | 22,770 | 3,493 | 15.3 | ||||
Used vehicle wholesale | (128) | 58 | (186) | NM | ||||
Finance and insurance | 21,741 | 18,032 | 3,709 | 20.6 | ||||
Service, body and parts | 37,203 | 36,533 | 670 | 1.8 | ||||
Fleet and Other | 231 | 73 | 158 | 216.4 | ||||
Unit sales | ||||||||
New vehicle retail | 11,213 | 9,030 | 2,183 | 24.2 | % | |||
Used vehicle retail | 10,395 | 9,480 | 915 | 9.7 | ||||
Used vehicle wholesale | 4,477 | 3,959 | 518 | 13.1 | ||||
Total units sold | 26,085 | 22,469 | 3,616 | 16.1 | ||||
Average selling price | ||||||||
New vehicle retail | $ 32,954 | $ 31,874 | $ 1,080 | 3.4 | % | |||
Used vehicle retail | 17,098 | 16,416 | 682 | 4.2 | ||||
Used vehicle wholesale | 7,782 | 7,618 | 164 | 2.2 | ||||
Average gross profit (loss) per unit | ||||||||
New vehicle retail | $ 2,491 | $ 2,634 | $ (143) | (5.4) | % | |||
Used vehicle retail | 2,527 | 2,402 | 125 | 5.2 | ||||
Used vehicle wholesale | (29) | 15 | (44) | NM | ||||
Finance and insurance | 1,006 | 974 | 32 | 3.3 | ||||
NM – not meaningful
Lithia Motors, Inc.
Consolidated Statements of Operations (Unaudited)
(In thousands except per share data)
Nine Months Ended | ||||||||
September 30, | Increase | Increase | ||||||
2011 | 2010 | (Decrease) | (Decrease) | |||||
Revenues: | ||||||||
New vehicle retail | $ 1,052,252 | $ 765,009 | $ 287,243 | 37.5 | % | |||
Used vehicle retail | 525,919 | 435,186 | 90,733 | 20.8 | ||||
Used vehicle wholesale | 95,882 | 78,895 | 16,987 | 21.5 | ||||
Finance and insurance | 63,815 | 49,096 | 14,719 | 30.0 | ||||
Service, body and parts | 245,148 | 213,926 | 31,222 | 14.6 | ||||
Fleet and other | 30,467 | 8,620 | 21,847 | 253.4 | ||||
Total revenues | 2,013,483 | 1,550,732 | 462,751 | 29.8 | ||||
Cost of sales: | ||||||||
New vehicle retail | 971,246 | 701,298 | 269,948 | 38.5 | ||||
Used vehicle retail | 447,850 | 372,862 | 74,988 | 20.1 | ||||
Used vehicle wholesale | 95,289 | 78,199 | 17,090 | 21.9 | ||||
Service, body and parts | 125,725 | 109,113 | 16,612 | 15.2 | ||||
Fleet and other | 27,945 | 7,392 | 20,553 | 278.0 | ||||
Total cost of sales | 1,668,055 | 1,268,864 | 399,191 | 31.5 | ||||
Gross profit | 345,428 | 281,868 | 63,560 | 22.5 | ||||
Asset impairment charges | 872 | 14,751 | (13,879) | (94.1) | ||||
SG &A expense | 250,264 | 219,622 | 30,642 | 14.0 | ||||
Depreciation and amortization | 12,593 | 13,221 | (628) | (4.8) | ||||
Income from operations | 81,699 | 34,274 | 47,425 | 138.4 | ||||
Floor plan interest expense | (8,018) | (8,276) | (258) | (3.1) | ||||
Other interest expense | (9,395) | (10,832) | (1,437) | (13.3) | ||||
Other income, net | 463 | 354 | 109 | 30.8 | ||||
Income from continuing operations before income taxes | 64,749 | 15,520 | 49,229 | 317.2 | ||||
Income tax expense | 25,317 | 6,228 | 19,089 | 306.5 | ||||
Income tax rate | 39.1 | % | 40.1 | % | ||||
Income from continuing operations | $ 39,432 | $ 9,292 | $ 30,140 | 324.4 | % | |||
Discontinued operations | 662 | 48 | 614 | 1,279.2 | ||||
Net income | $ 40,094 | $ 9,340 | $ 30,754 | 329.3 | % | |||
Diluted net income per share: | ||||||||
Continuing operations | $ 1.47 | $ 0.35 | $ 1.12 | 320.0 | % | |||
Discontinued operations | 0.03 | 0.01 | 0.02 | 200.0 | ||||
Net income per share | $ 1.50 | $ 0.36 | $ 1.14 | 316.7 | % | |||
Diluted shares outstanding | 26,738 | 26,191 | 547 | 2.1 | % | |||
Lithia Motors, Inc.
Key Performance Metrics (Unaudited)
Nine Months Ended | % | |||||||
September 30, | Increase | Increase | ||||||
2011 | 2010 | (Decrease) | (Decrease) | |||||
Gross margin | ||||||||
New vehicle retail | 7.7 | % | 8.3 | % | (60) bps | |||
Used vehicle retail | 14.8 | 14.3 | 50 bps | |||||
Used vehicle wholesale | 0.6 | 0.9 | (30) bps | |||||
Finance and insurance | 100.0 | 100.0 | - bps | |||||
Service, body and parts | 48.7 | 49.0 | (30) bps | |||||
Fleet and Other | 8.3 | 14.2 | (590) bps | |||||
Gross profit margin | 17.2 | 18.2 | (100) bps | |||||
Unit sales | ||||||||
New vehicle retail | 32,386 | 24,345 | 8,041 | 33.0 | % | |||
Used vehicle retail | 30,758 | 26,133 | 4,625 | 17.7 | ||||
Used vehicle wholesale | 12,246 | 10,476 | 1,770 | 16.9 | ||||
Total units sold | 75,390 | 60,954 | 14,436 | 23.7 | ||||
Average selling price | ||||||||
New vehicle retail | $ 32,491 | $ 31,424 | $ 1,067 | 3.4 | % | |||
Used vehicle retail | 17,099 | 16,653 | 446 | 2.7 | ||||
Used vehicle wholesale | 7,830 | 7,531 | 299 | 4.0 | ||||
Average gross profit per unit | ||||||||
New vehicle retail | $ 2,501 | $ 2,617 | $ (116) | (4.4) | % | |||
Used vehicle retail | 2,538 | 2,385 | 153 | 6.4 | ||||
Used vehicle wholesale | 48 | 66 | (18) | (27.3) | ||||
Finance and insurance | 1,011 | 973 | 38 | 3.9 | ||||
Revenue mix | ||||||||
New vehicle retail | 52.3 | % | 49.3 | % | ||||
Used vehicle retail | 26.1 | 28.1 | ||||||
Used vehicle wholesale | 4.7 | 5.1 | ||||||
Finance and insurance, net | 3.2 | 3.2 | ||||||
Service, body and parts | 12.2 | 13.8 | ||||||
Fleet and other | 1.5 | 0.5 | ||||||
Adjusted | As reported | |||||||
Nine Months Ended | Nine Months Ended | |||||||
September 30, | September 30, | |||||||
2011 | 2010 | 2011 | 2010 | |||||
Other metrics | ||||||||
SG &A as a % of revenue | 12.5 | % | 14.1 | % | 12.4 | % | 14.2 | % |
SG &A as a % of gross profit | 72.6 | 77.6 | 72.5 | 77.9 | ||||
Operating profit as a % of revenue | 4.1 | 3.2 | 4.1 | 2.2 | ||||
Operating profit as a % of gross profit | 23.7 | 17.8 | 23.7 | 12.2 | ||||
Pretax margin | 3.2 | 2.0 | 3.2 | 1.0 |
Lithia Motors, Inc.
Same Store Operating Highlights(Unaudited)
(In thousands except per unit data)
Nine Months Ended | % | ||||||||||
September 30, | Increase | Increase | |||||||||
2011 | 2010 | (Decrease) | (Decrease) | ||||||||
Revenues | |||||||||||
New vehicle retail | $ 999,136 | $ 765,861 | $ 233,275 | 30.5 | % | ||||||
Used vehicle retail | 499,349 | 432,154 | 67,195 | 15.5 | |||||||
Used vehicle wholesale | 92,445 | 77,487 | 14,958 | 19.3 | |||||||
Finance and insurance | 60,474 | 47,264 | 13,210 | 27.9 | |||||||
Service, body and parts | 224,779 | 213,391 | 11,388 | 5.3 | |||||||
Fleet and Other | 22,633 | 8,202 | 14,431 | 175.9 | |||||||
Gross profit | |||||||||||
New vehicle retail | $ 76,202 | $ 63,639 | $ 12,563 | 19.7 | % | ||||||
Used vehicle retail | 74,579 | 61,661 | 12,918 | 21.0 | |||||||
Used vehicle wholesale | 500 | 838 | (338) | (40.3) | |||||||
Finance and insurance | 60,474 | 47,264 | 13,210 | 27.9 | |||||||
Service, body and parts | 106,711 | 102,328 | 4,383 | 4.3 | |||||||
Fleet and Other | 654 | 145 | 509 | 351.0 | |||||||
Unit sales | |||||||||||
New vehicle retail | 31,011 | 24,364 | 6,647 | 27.3 | % | ||||||
Used vehicle retail | 29,496 | 25,927 | 3,569 | 13.8 | |||||||
Used vehicle wholesale | 11,912 | 10,344 | 1,568 | 15.2 | |||||||
Total units sold | 72,419 | 60,635 | 11,784 | 19.4 | |||||||
Average selling price | |||||||||||
New vehicle retail | $ 32,219 | $ 31,434 | $ 785 | 2.5 | % | ||||||
Used vehicle retail | 16,929 | 16,668 | 261 | 1.6 | |||||||
Used vehicle wholesale | 7,761 | 7,491 | 270 | 3.6 | |||||||
Average gross profit per unit | |||||||||||
New vehicle retail | $ 2,457 | $ 2,612 | $ (155) | (5.9) | % | ||||||
Used vehicle retail | 2,528 | 2,378 | 150 | 6.3 | |||||||
Used vehicle wholesale | 42 | 81 | (39) | (48.1) | |||||||
Finance and insurance | 999 | 940 | 59 | 6.3 | |||||||
Lithia Motors, Inc.
Revenue Mix(Unaudited)
Three months ended | Nine months ended | ||||||||
September 30, | September 30, | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
New vehicle unit sales brand mix | |||||||||
Chrysler | 33.7 | % | 28.7 | % | 30.8 | % | 27.7 | % | |
General Motors | 17.5 | 16.0 | 17.6 | 16.8 | |||||
Toyota | 10.4 | 13.2 | 11.8 | 13.6 | |||||
BMW, Mini | 6.7 | 5.2 | 6.3 | 5.4 | |||||
Ford | 5.9 | 6.2 | 5.8 | 5.9 | |||||
Hyundai | 5.5 | 6.0 | 5.6 | 6.0 | |||||
Honda, Acura | 5.3 | 8.3 | 6.9 | 8.7 | |||||
Subaru | 4.6 | 5.9 | 5.0 | 5.6 | |||||
Nissan | 3.4 | 3.5 | 3.6 | 3.5 | |||||
Volkswagen, Audi | 2.3 | 3.1 | 2.3 | 2.7 | |||||
Mercedes Kia | 2.1 1.7 | 1.3 2.0 | 1.7 1.8 | 1.2 2.0 | |||||
Other | 0.9 | 0.6 | 0.8 | 0.9 | |||||
Three months ended | Nine months ended | ||||||||
September 30, | September 30, | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
Revenue geographic mix | |||||||||
Texas | 23.7 | % | 24.9 | % | 24.1 | % | 25.3 | % | |
Oregon | 20.3 | 15.5 | 19.2 | 15.1 | |||||
California | 9.6 | 10.4 | 9.8 | 10.7 | |||||
Alaska | 9.5 | 9.9 | 9.3 | 10.5 | |||||
Washington | 9.0 | 10.2 | 9.5 | 10.2 | |||||
Montana | 8.4 | 8.1 | 8.2 | 7.3 | |||||
Iowa | 6.3 | 7.2 | 6.6 | 7.1 | |||||
Idaho | 5.7 | 6.5 | 5.8 | 6.5 | |||||
Nevada | 4.1 | 4.2 | 4.3 | 4.2 | |||||
North Dakota | 2.2 | 2.3 | 2.1 | 2.1 | |||||
New Mexico | 1.2 | 0.8 | 1.1 | 1.0 | |||||
As of October 26, 2011 | |||||||||
Current store count mix | # of stores | % of total | |||||||
Chrysler | 22 | 25.6 | % | ||||||
General Motors | 12 | 14.0 | |||||||
Honda, Acura | 9 | 10.5 | |||||||
Toyota | 8 | 9.3 | |||||||
BMW, MINI | 7 | 8.1 | |||||||
Hyundai | 6 | 7.0 | |||||||
Ford | 5 | 5.8 | |||||||
Nissan | 4 | 4.6 | |||||||
Mercedes | 3 | 3.5 | |||||||
Subaru | 3 | 3.5 | |||||||
Volkswagen, Audi | 3 | 3.5 | |||||||
Kia | 2 | 2.3 | |||||||
Other | 2 | 2.3 | |||||||
Lithia Motors, Inc.
Consolidated Balance Sheets(Unaudited)
(In thousands except per share data)
September 30, 2011 | December 31, 2010 | ||
Cash and cash equivalents | $ 15,936 | $ 9,306 | |
Trade receivables, net | 84,247 | 75,011 | |
Inventories, net | 489,217 | 415,228 | |
Deferred income taxes | 4,554 | 2,937 | |
Other current assets | 5,298 | 6,062 | |
Assets held for sale | 4,912 | - | |
Total current assets | $ 604,164 | $ 508,544 | |
Property and equipment, net | 379,515 | 362,433 | |
Goodwill | 18,191 | 6,186 | |
Franchise value | 58,400 | 45,193 | |
Deferred income taxes | 34,776 | 39,524 | |
Other non-current assets | 20,169 | 9,796 | |
Total assets | $ 1,115,215 | $ 971,676 | |
Floor plan notes payable | $ 324,307 | $ 251,257 | |
Current maturities of long-term debt | 11,633 | 12,081 | |
Trade payables | 28,575 | 23,747 | |
Accrued liabilities | 71,102 | 58,784 | |
Liabilities related to assets held for sale | 866 | - | |
Total current liabilities | $ 436,483 | $ 345,869 | |
Long-term debt | 285,954 | 268,693 | |
Deferred revenue | 23,774 | 20,158 | |
Other long-term liabilities | 20,621 | 16,739 | |
Total liabilities | $ 766,832 | $ 651,459 | |
Class A common stock | 277,803 | 284,807 | |
Class B common stock | 468 | 468 | |
Additional paid-in capital | 11,171 | 10,972 | |
Accumulated other comprehensive loss | (4,986) | (4,869) | |
Retained earnings | 63,927 | 28,839 | |
Total liabilities & stockholders' equity | $ 1,115,215 | $ 971,676 | |
Lithia Motors, Inc.
Summarized Cash Flow from Operations(Unaudited)
(In thousands)
Nine Months Ended | ||||
September 30, | ||||
2011 | 2010 | |||
Net income | $ 40,094 | $ 9,340 | ||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||
Asset impairments | 872 | 14,751 | ||
Depreciation and amortization | 12,593 | 13,221 | ||
Depreciation and amortization | ||||
within discontinued operations | 160 | 176 | ||
Stock-based compensation | 1,686 | 1,450 | ||
Gain on disposal of assets | (134) | (59) | ||
(Gain) loss from disposal activities within discontinued operations Deferred income taxes | (116) 3,325 | 294 (2,610) | ||
Excess tax benefit from share-based payment arrangements | ( 360) | (89) | ||
(Increase) decrease: | ||||
Trade receivables, net | ( 7,177) | (17,754) | ||
Inventories | ( 53,389) | (57,040) | ||
Other current assets | (1,078) | 2,564 | ||
Other non-current assets | ( 4,079) | (1,313) | ||
Increase (decrease): | ||||
Floor plan notes payable | (10,637) | 3,111 | ||
Trade payables | 3,759 | 6,167 | ||
Accrued liabilities | 9,890 | 11,181 | ||
Other long-term liabilities and deferred revenue | 8,018 | 623 | ||
Net cash provided by (used in) operating activities | $ 3,427 | $ (15,987) | ||
Lithia Motors, Inc.
Reconciliation of Non-GAAP Cash Flow from Operations(Unaudited)
(In thousands)
Nine Months Ended | ||||
September 30, | ||||
Net cash provided by (used in) operating activities | 2011 | 2010 | ||
As reported | $ 3,427 | $ (15,987) | ||
Floor plan notes payable, non-trade | 67,402 | 13,807 | ||
Adjusted | $ 70,829 | $ (2,180) |
Lithia Motors, Inc.
Other Highlights(Unaudited)
(In thousands except per share data)
September 30, 2011 | December 31, 2010 | September 30, 2010 | ||||||||||||||||||
Days Supply(1) | ||||||||||||||||||||
New vehicle inventory | 66 | 75 | 73 | |||||||||||||||||
Used vehicle inventory | 53 | 53 | 49 | |||||||||||||||||
(1)Days supply calculated based on current inventory levels, excluding in-transit vehicles, and a 30-day historical cost of sales level.
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September 30, 2011 | December 31, 2010 | |||||||||||||||||||
Other information | ||||||||||||||||||||
Long-term debt/total capitalization(2) | 45.1 | % | 45.6 | % | ||||||||||||||||
(2)Total capitalization is comprised of long-term debt and total stockholder’s equity.
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Financial covenants | ||||||||||||||||||||
Requirement | As of September 30, 2011 | |||||||||||||||||||
Current ratio | Not less than 1.20 to 1 | 1.45 to 1 | ||||||||||||||||||
Fixed charge coverage ratio | Not less than 1.20 to 1 | 1.69 to 1 | ||||||||||||||||||
Liabilities to tangible net worth ratio | Not more than 4.00 to 1 | 2. 87 to 1 | ||||||||||||||||||
Funded debt restriction | Not more than $310 million | $228.6 million | ||||||||||||||||||
Lithia Motors, Inc.
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)
(In thousands)
Nine months ended, September 30 | |||||
2011 | 2010 | ||||
Selling, general & administrative | |||||
As reported | $250,264 | $219,622 | |||
Disposal gain | 580 | 365 | |||
Reserve adjustments | - | (1,334) | |||
Adjusted | $ 250,844 | $ 218,653 | |||
Income from operations | |||||
As reported | $ 81,699 | $ 34,274 | |||
Impairments and disposal gain | 292 | 14,452 | |||
Reserve adjustments | - | 1,334 | |||
Adjusted | $ 81,991 | $ 50,060 | |||
Income from continuing operations before income taxes | |||||
As reported | $ 64,749 | $ 15,520 | |||
Impairments and disposal gain | 292 | 14,452 | |||
Reserve adjustments | - | 1,334 | |||
Adjusted | $ 65,041 | $ 31,306 |
Lithia Motors, Inc.
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)
(In thousands except per share data)
Adjusted net income and diluted earnings per share | ||||||||
Nine Months Ended September 30, | ||||||||
Net income | Diluted earnings per share | |||||||
2011 | 2010 | 2011 | 2010 | |||||
Continuing Operations | ||||||||
As reported | $ 39,432 | $ 9,292 | $ 1.47 | $ 0.35 | ||||
Impairments and disposal gain | 176 | 8,776 | 0.01 | 0.34 | ||||
Reserve adjustments | - | 722 | - | 0.03 | ||||
Adjusted | $ 39,608 | $ 18,790 | $ 1.48 | $ 0.72 | ||||
Discontinued Operations | ||||||||
As reported | $ 662 | $ 48 | $ 0.03 | $ 0.01 | ||||
Impairments and disposal loss | (61) | 178 | (0.01) | - | ||||
Adjusted | $ 601 | $ 226 | $ 0.02 | $ 0.01 | ||||
Consolidated Operations | ||||||||
As reported | $ 40,094 | $ 9,340 | $ 1.50 | $ 0.36 | ||||
Adjusted | 40,209 | 19,016 | 1.50 | 0. 73 | ||||