EXHIBIT 99.1
LITHIA MOTORS REPORTS ADJUSTED CONTINUING OPERATIONS EPS OF $0.49 FOR FOURTH QUARTER AND $1.97 FOR FULL YEAR 2011; INCREASES 2012 OUTLOOK
__________________________________________________
LITHIA MOTORS ANNOUNCES SID DEBOER WILL ASSUME THE ROLE OF EXECUTIVE CHAIRMAN; BRYAN DEBOER APPOINTED CEO EFFECTIVE MAY 1, 2012
Medford, Oregon, February 22, 2012 (7:30 a.m. ET) – Lithia Motors, Inc. (NYSE: LAD) today reported the highest fourth quarter net income in company history, and more than doubled earnings for the fourth quarter and full year 2011 over the prior year periods.
2011 fourth quarter adjusted income from continuing operations was $13.0 million, or $0.49 per diluted share. This compares to a 2010 fourth quarter adjusted income from continuing operations of $5.4 million, or $0.20 per diluted share. 2011 full year adjusted income from continuing operations was $1.97 per diluted share as compared to $0.93 per diluted share in 2010.
Unadjusted net income from continuing operations for the fourth quarter of 2011 was $16.4 million or $0.62 per diluted share, compared to $4.2 million or $0.16 per diluted share for 2010. Unadjusted 2011 full year income from continuing operations was $2.09 per diluted share, compared to $0.51 per diluted share for 2010.
As shown in the attached non-GAAP reconciliation table, the 2011 fourth quarter adjusted income from continuing operations is reduced to exclude a benefit of $0.15 per share gain on the sale of real estate offset by a non-core reserve adjustment charge of $0.02 per share. The 2010 fourth quarter adjusted results from continuing operations exclude a non-core charge of $0.04 per share on asset impairments and reserve adjustments.
Fourth quarter 2011 revenue from continuing operations increased $179.4 million, or 33% to $717.5 million, compared to $538.1 million in the fourth quarter of 2010.
Fourth Quarter Year-over-Year Operating Highlights:
· New vehicle same store sales increased 29%
· Used vehicle retail same store sales increased 21%
· Service, body and parts same store sales increased 3%
· Adjusted SG&A expense as a percentage of gross profit reduced 610 basis points, to 74.6%
For the full year of 2011, revenue from continuing operations increased 30% to $2.7 billion as compared to $2.1 billion in 2010. New vehicle same store sales increased 29%, used vehicle retail same store sales increased 17% and service, body and parts same store sales increased 5%.
“We increased both fourth quarter and full year total same store sales 23%,” said Bryan DeBoer, President and COO of Lithia. “New vehicle same store sales increased 29% in both the fourth quarter and full year 2011.”
Mr. DeBoer continued, “Our team is aligned and focused on continuous improvement. Although we had a successful 2011, we still have opportunities to increase new and used vehicles sales in our markets. Improving customer satisfaction in both our sales and service offerings will be a key objective in 2012.”
Chris Holzshu, SVP and Chief Financial Officer, commented, “We continue our focus on leveraging our expense structure as sales volumes increase. Adjusted SG&A as a percentage of gross profit was 72.9% for the full year, an improvement of 530 basis points over our 2010 results. Our team has remained vigilant to ensure the fixed expenses we took out of the business do not return as sales volumes recover. We believe we can continue to improve our leverage and have a goal to lower full year SG&A to gross profit into the 70% range.”
CEO Succession
Effective May 1, 2012, Bryan DeBoer, President and COO, will be promoted to Chief Executive Officer. Sid DeBoer, Founder, Chairman and CEO, will assume the role of Executive Chairman and remain Chairman of the Board.
Bryan DeBoer has served as President and COO since 2007, and has been directly responsible for Lithia’s operational performance. Bryan has been a Lithia employee for over 26 years, starting in retail sales and moving into corporate development roles. With the promotion to CEO, Bryan will expand his responsibilities to include strategy and vision for the organization. Sid DeBoer will continue to serve Lithia in an executive capacity, including strategic oversight, manufacturer relations, governmental relations and business development.
Commenting on the changes, Tom Becker, Lead Independent Director stated, “This transition is part of our plan to position the next generation of Lithia’s leaders for success. Under Bryan’s direction as COO, the team has outperformed the overall automotive retail sector. The Board of Directors believes the time is right for this change. We look forward to continued success in the future and feel that Lithia has never been better positioned to prosper under the leadership of Bryan as CEO and Sid as Founder and Executive Chairman.”
Corporate Development
Lithia is pleased to announce the addition of a Scion franchise to our existing Toyota store in Billings, Montana. Additionally, Lithia has relocated MINI of Portland from our BMW store in Portland, Oregon to a stand-alone location in Beaverton, Oregon and relocated Subaru of Spokane from our BMW store to a stand-alone location in Spokane, Washington.
Balance Sheet Update
Lithia ended the period with $21 million in cash, $10 million in available credit on our credit facility and $66 million in unfinanced new vehicle inventory. In total, this represents approximately $97 million in available liquidity.
Dividend Payment
Lithia announced that the Board of Directors has approved a dividend of $0.07 per share for the fourth quarter 2011. Lithia will pay the dividend March 23, 2012 to shareholders of record on March 9, 2012.
Updated Outlook for 2012
Commenting on Lithia’s outlook for the future, Sid DeBoer, Chairman and CEO, stated, “We expect that 2012 will be another year of increased vehicle sales due to several factors. As consumer credit availability for auto loans increases, the population of vehicles in operation continues to age, and the number of vehicles being scrapped each year is at or above current new vehicle sales levels, a multi-year expansion of vehicle sales lies ahead. Additionally, new and innovative products with improved safety and fuel efficiency features are an additional catalyst to increased sales.”
Lithia projects its 2012 first quarter earnings within a range of $0.41 to $0.43 per diluted share. Full-year 2012 earnings are projected within a range of $2.06 to $2.16 per diluted share. Both projections are based on the following annual assumptions:
- Total revenues in range of $2.9 to $3.1 billion
- New vehicle same store sales increasing 10.8%
- New vehicle gross margin ranging from 7.4% to 7.6%
- Used vehicle same store sales increasing 10.5%
- Used vehicle gross margin ranging from 14.3% to 14.5%
- Service body and parts same store sales increasing 2.0%
- Service body and parts gross margin ranging from 48.3% to 48.5%
- Finance and insurance gross profit of $1,000 per unit
- Tax rate of 40%
- Average diluted shares outstanding of 26.6 million
- Capital expenditures of $44 million
- Guidance excludes the impact of future acquisitions, dispositions, and any potential non-core items
Fourth Quarter Earnings Conference Call and Updated Presentation
The fourth quarter conference call may be accessed at 10:00 a.m. ET today by telephone at 877-407-8029. An updated presentation highlighting the fourth 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 February 22, 2012 through March 7, 2012 by calling 877-660-6853 (Conference ID: 387816, Account: 305).
About Lithia
Lithia Motors, Inc. is the ninth largest automotive retailer in the United States. Lithia sells 25 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 first quarter and full year 2012 results, 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, which are made as of the date of this release.
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 service, body and parts margin, adjusted gross margin, 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, selling, general and administrative costs, or cost of sales 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 | % | |||||||
December 31, | Increase | Increase | ||||||
2011 | 2010 | (Decrease) | (Decrease) | |||||
Revenues: | ||||||||
New vehicle retail | $ 394,570 | $ 280,467 | $ 114,103 | 40.7 | % | |||
Used vehicle retail | 175,284 | 136,008 | 39,276 | 28.9 | ||||
Used vehicle wholesale | 35,925 | 27,562 | 8,363 | 30.3 | ||||
Finance and insurance | 22,920 | 16,776 | 6,144 | 36.6 | ||||
Service, body and parts | 84,799 | 74,184 | 10,615 | 14.3 | ||||
Fleet and other | 3,980 | 3,087 | 893 | 28.9 | ||||
Total revenues | 717,478 | 538,084 | 179,394 | 33.3 | ||||
Cost of sales: | ||||||||
New vehicle retail | 364,535 | 258,472 | 106,063 | 41.0 | ||||
Used vehicle retail | 151,799 | 117,553 | 34,246 | 29.1 | ||||
Used vehicle wholesale | 35,957 | 27,618 | 8,339 | 30.2 | ||||
Service, body and parts | 45,009 | 40,035 | 4,974 | 12.4 | ||||
Fleet and other | 3,581 | 2,623 | 958 | 36.5 | ||||
Total cost of sales | 600,881 | 446,301 | 154,580 | 34.6 | ||||
Gross profit | 116,597 | 91,783 | 24,814 | 27.0 | ||||
Other Asset Impairments | 504 | 550 | (46) | (8.4) | ||||
SG&A expense | 81,396 | 74,751 | 6,645 | 8.9 | ||||
Depreciation and amortization | 4,156 | 4,109 | 47 | 1.1 | ||||
Income from operations | 30,541 | 12,373 | 18,168 | 146.8 | ||||
Floor plan interest expense | (2,753) | (2,117) | 636 | 30.0 | ||||
Other interest expense | (3,550) | (3,719) | (169) | (4.5) | ||||
Other income, net | 233 | 65 | 168 | 258.5 | ||||
Income from continuing operations before income taxes | 24,471 | 6,602 | 17,869 | 270.7 | ||||
Income tax expense | (8,108) | (2,363) | 5,745 | 243.1 | ||||
Income tax rate | 33.1% | 35.8% | ||||||
Income from continuing operations | $ 16,363 | $ 4,239 | $ 12,124 | 286.0 | % | |||
Income from discontinued operations | 2,403 | 140 | 2,263 | NM | ||||
Net income | $ 18,766 | $ 4,379 | $ 14,387 | 328.5 | % | |||
Diluted net income per share: | ||||||||
Continuing operations | $ 0.62 | $ 0.16 | $ 0.46 | 287.5 | % | |||
Discontinued operations | 0.09 | - | 0.09 | NM | ||||
Net income per share | $ 0.71 | $ 0.16 | $ 0.55 | 343.8 | % | |||
Diluted shares outstanding | 26,442 | 26,540 | (98) | (0.4) | % |
NM– not meaningful
Lithia Motors, Inc.
Key Performance Metrics (Unaudited)
Three Months Ended | % | |||||||
December 31, | Increase | Increase | ||||||
2011 | 2010 | (Decrease) | (Decrease) | |||||
Gross margin | ||||||||
New vehicle retail | 7.6 | % | 7.8 | % | (20) bps | |||
Used vehicle retail | 13.4 | 13.6 | (20) bps | |||||
Used vehicle wholesale | (0.1) | (0.2) | 10 bps | |||||
Finance and insurance | 100.0 | 100.0 | - bps | |||||
Service, body and parts | 46.9 | 46.0 | 90 bps | |||||
Fleet and Other | 10.0 | 15.0 | (500) bps | |||||
Gross profit margin | 16.3 | 17.1 | (80) bps | |||||
Unit sales | ||||||||
New vehicle retail | 11,515 | 8,596 | 2,919 | 34.0 | % | |||
Used vehicle retail | 10,092 | 8,106 | 1,986 | 24.5 | ||||
Used vehicle wholesale | 4,388 | 3,569 | 819 | 22.9 | ||||
Total units sold | 25,995 | 20,271 | 5,724 | 28.2 | ||||
Average selling price | ||||||||
New vehicle retail | $ 34,266 | $ 32,628 | $ 1,638 | 5.0 | % | |||
Used vehicle retail | 17,369 | 16,779 | 590 | 3.5 | ||||
Used vehicle wholesale | 8,187 | 7,723 | 464 | 6.0 | ||||
Average gross profit per unit | ||||||||
New vehicle retail | $ 2,608 | $ 2,559 | $ 49 | 1.9 | % | |||
Used vehicle retail | 2,327 | 2,277 | 50 | 2.2 | ||||
Used vehicle wholesale | (7) | (16) | 9 | NM | ||||
Finance and insurance | 1,061 | 1,004 | 57 | 5.7 | ||||
Revenue mix | ||||||||
New vehicle retail | 55.0 | % | 52.1 | % | ||||
Used vehicle retail | 24.4 | 25.3 | ||||||
Used vehicle wholesale | 5.0 | 5.1 | ||||||
Finance and insurance, net | 3.2 | 3.1 | ||||||
Service, body and parts | 11.8 | 13.8 | ||||||
Fleet and other | 0.6 | 0.6 | ||||||
Other metrics | ||||||||
SG&A as a % of revenue | 11.4 | % | 13.9 | % | (250) bps | |||
SG&A as a % of gross profit | 69.8 | 81.4 | (1,160) bps | |||||
Operating profit as a % of revenue | 4.3 | 2.3 | 200 bps | |||||
Operating profit as a % of gross profit | 26.2 | 13.5 | 1,270 bps | |||||
Pretax margin | 3.4 | 1.2 | 220 bps | |||||
NM– not meaningful
Lithia Motors, Inc.
Same Store Operating Highlights(Unaudited)
(In thousands except per unit data)
Three Months Ended | % | |||||||
December 31, | Increase | Increase | ||||||
2011 | 2010 | (Decrease) | (Decrease) | |||||
Revenues | ||||||||
New vehicle retail | $ 361,968 | $ 281,179 | $ 80,789 | 28.7 | % | |||
Used vehicle retail | 164,644 | 135,824 | 28,820 | 21.2 | ||||
Used vehicle wholesale | 33,967 | 27,548 | 6,419 | 23.3 | ||||
Finance and insurance | 21,745 | 15,768 | 5,977 | 37.9 | ||||
Service, body and parts | 76,164 | 74,185 | 1,979 | 2.7 | ||||
Fleet and Other | 3,498 | 2,920 | 578 | 19.8 | ||||
Total revenues | 661,986 | 537,424 | 124,562 | 23.2 | ||||
Gross profit (loss) | ||||||||
New vehicle retail | $ 27,002 | $ 21,705 | $ 5,297 | 24.4 | % | |||
Used vehicle retail | 22,313 | 18,459 | 3,854 | 20.9 | ||||
Used vehicle wholesale | (20) | (60) | 40 | 66.7 | ||||
Finance and insurance | 21,745 | 15,768 | 5,977 | 37.9 | ||||
Service, body and parts | 35,600 | 34,675 | 925 | 2.7 | ||||
Fleet and Other | (50) | 59 | (109) | NM | ||||
Total gross profit | 106,590 | 90,606 | 15,984 | 17.6 | ||||
Unit sales | ||||||||
New vehicle retail | 10,761 | 8,616 | 2,145 | 24.9 | % | |||
Used vehicle retail | 9,659 | 8,089 | 1,570 | 19.4 | ||||
Used vehicle wholesale | 4,225 | 3,564 | 661 | 18.5 | ||||
Total units sold | 24,645 | 20,269 | 4,376 | 21.6 | ||||
Average selling price | ||||||||
New vehicle retail | $ 33,637 | $ 32,635 | $ 1,002 | 3.1 | % | |||
Used vehicle retail | 17,046 | 16,791 | 255 | 1.5 | ||||
Used vehicle wholesale | 8,039 | 7,730 | 309 | 4.0 | ||||
Average gross profit (loss) per unit | ||||||||
New vehicle retail | $ 2,509 | $ 2,519 | $ (10) | (0.4) | % | |||
Used vehicle retail | 2,310 | 2,282 | 28 | 1.2 | ||||
Used vehicle wholesale | (5) | (17) | 12 | 70.6 | ||||
Finance and insurance | 1,065 | 944 | 121 | 12.8 | ||||
NM – not meaningful
Lithia Motors, Inc.
Consolidated Statements of Operations (Unaudited)
(In thousands except per share data)
Twelve Months Ended | % | ||||||||
December 31, | Increase | Increase | |||||||
2011 | 2010 | (Decrease) | (Decrease) | ||||||
Revenues: | |||||||||
New vehicle retail | $1,426,888 | $1,038,321 | $ 388,567 | 37.4 | % | ||||
Used vehicle retail | 695,796 | 566,803 | 128,993 | 22.8 | |||||
Used vehicle wholesale | 130,720 | 105,714 | 25,006 | 23.7 | |||||
Finance and insurance | 85,852 | 65,274 | 20,578 | 31.5 | |||||
Service, body and parts | 325,658 | 284,170 | 41,488 | 14.6 | |||||
Fleet and other | 34,446 | 11,706 | 22,740 | 194.3 | |||||
Total revenues | 2,699,360 | 2,071,988 | 627,372 | 30.3 | |||||
Cost of sales: | |||||||||
New vehicle retail | 1,316,413 | 953,186 | 363,227 | 38.1 | |||||
Used vehicle retail | 595,178 | 486,739 | 108,439 | 22.3 | |||||
Used vehicle wholesale | 130,167 | 105,070 | 25,097 | 23.9 | |||||
Service, body and parts | 168,538 | 147,119 | 21,419 | 14.6 | |||||
Fleet and other | 31,526 | 10,015 | 21,511 | 214.8 | |||||
Total cost of sales | 2,241,822 | 1,702,129 | 539,693 | 31.7 | |||||
Gross profit | 457,538 | 369,859 | 87,679 | 23.7 | |||||
Asset impairment charges | 1,376 | 15,301 | (13,925) | (91.0) | |||||
SG&A expense | 327,545 | 290,833 | 36,712 | 12.6 | |||||
Depreciation and amortization | 16,626 | 17,154 | (528) | (3.1) | |||||
Income from operations | 111,991 | 46,571 | 65,420 | 140.5 | |||||
Floor plan interest expense | (10,584) | (10,325) | 259 | 2.5 | |||||
Other interest expense | (12,928) | (14,545) | (1,617) | (11.1) | |||||
Other income, net | 696 | 419 | 277 | 66.1 | |||||
Income from continuing operations before income taxes | 89,175 | 22,120 | 67,055 | 303.1 | |||||
Income tax expense | (33,408) | (8,589) | 24,819 | 289.0 | |||||
Income tax rate | 37.5 | % | 38.8 | % | |||||
Income from continuing operations | $ 55,767 | $ 13,531 | $ 42,236 | 312.1 | % | ||||
Income from discontinued operations | 3,093 | 188 | 2,905 | NM | |||||
Net income | $ 58,860 | $ 13,719 | $ 45,141 | 329.0 | % | ||||
Diluted net income per share: | |||||||||
Continuing operations | $ 2.09 | $ 0.51 | $ 1.58 | 309.8 | % | ||||
Discontinued operations | 0.12 | 0.01 | 0.11 | NM | |||||
Net income per share | $ 2.21 | $ 0.52 | $ 1.69 | 325.0 | % | ||||
Diluted shares outstanding | 26,664 | 26,279 | 385 | 1.5 | % | ||||
NM – not meaningful
Lithia Motors, Inc.
Key Performance Metrics (Unaudited)
Twelve Months Ended | |||||||||||||
December 31, | Increase | % Increase | |||||||||||
2011 | 2010 | (Decrease) | (Decrease) | ||||||||||
Gross margin | |||||||||||||
New vehicle retail | 7.7 | % | 8.2 | % | (50) bps | ||||||||
Used vehicle retail | 14.5 | 14.1 | 40 bps | ||||||||||
Used vehicle wholesale | 0.4 | 0.6 | (20) bps | ||||||||||
Finance and insurance | 100.0 | 100.0 | - bps | ||||||||||
Service, body and parts | 48.2 | 48.2 | - bps | ||||||||||
Fleet and Other | 8.5 | 14.4 | (590) bps | ||||||||||
Gross profit margin | 16.9 | 17.9 | (100) bps | ||||||||||
Unit sales | |||||||||||||
New vehicle retail | 43,273 | 32,664 | 10,609 | 32.5 | % | ||||||||
Used vehicle retail | 40,457 | 33,869 | 6,588 | 19.5 | |||||||||
Used vehicle wholesale | 16,439 | 13,906 | 2,533 | 18.2 | |||||||||
Total units sold | 100,169 | 80,439 | 19,730 | 24.5 | |||||||||
Average selling price | |||||||||||||
New vehicle retail | $ 32,974 | $ 31,788 | $ 1,186 | 3.7 | % | ||||||||
Used vehicle retail | 17,198 | 16,735 | 463 | 2.8 | |||||||||
Used vehicle wholesale | 7,952 | 7,602 | 350 | 4.6 | |||||||||
Average gross profit per unit | |||||||||||||
New vehicle retail | $ 2,553 | $ 2,606 | $ (53) | (2.0) | % | ||||||||
Used vehicle retail | 2,487 | 2,364 | 123 | 5.2 | |||||||||
Used vehicle wholesale | 34 | 46 | (12) | (26.1) | |||||||||
Finance and insurance | 1,025 | 981 | 44 | 4.5 | |||||||||
Revenue mix | |||||||||||||
New vehicle retail | 52.9 | % | 50.1 | % | |||||||||
Used vehicle retail | 25.8 | 27.4 | |||||||||||
Used vehicle wholesale | 4.8 | 5.1 | |||||||||||
Finance and insurance, net | 3.2 | 3.1 | |||||||||||
Service, body and parts | 12.0 | 13.7 | |||||||||||
Fleet and other | 1.3 | 0.6 | |||||||||||
Other metrics | |||||||||||||
SG&A as a % of revenue | 12.1 | % | 14.0 | % | (190) bps | ||||||||
SG&A as a % of gross profit | 71.6 | 78.6 | (700) bps | ||||||||||
Operating profit as a % of revenue | 4.1 | 2.2 | 190 bps | ||||||||||
Operating profit as a % of gross profit | 24.5 | 12.6 | 1,190 bps | ||||||||||
Pretax margin | 3.3 | 1.1 | 220 bps | ||||||||||
Lithia Motors, Inc.
Same Store Operating Highlights(Unaudited)
(In thousands except per unit data)
Twelve Months Ended | ||||||||||||
December 31, | Increase | % Increase | ||||||||||
2011 | 2010 | (Decrease) | (Decrease) | |||||||||
Revenues | ||||||||||||
New vehicle retail | $ 1,341,171 | $1,039,886 | $ 301,285 | 29.0 | % | |||||||
Used vehicle retail | 658,586 | 563,587 | 94,999 | 16.9 | ||||||||
Used vehicle wholesale | 125,324 | 104,292 | 21,032 | 20.2 | ||||||||
Finance and insurance | 81,335 | 62,433 | 18,902 | 30.3 | ||||||||
Service, body and parts | 296,655 | 283,636 | 13,019 | 4.6 | ||||||||
Fleet and Other | 26,132 | 11,122 | 15,010 | 135.0 | ||||||||
Total revenues | 2,529,203 | 2,064,956 | 464,247 | 22.5 | ||||||||
Gross profit | ||||||||||||
New vehicle retail | $ 102,639 | $ 84,773 | $ 17,866 | 21.1 | % | |||||||
Used vehicle retail | 95,955 | 79,405 | 16,550 | 20.8 | ||||||||
Used vehicle wholesale | 472 | 782 | (310) | (39.6) | ||||||||
Finance and insurance | 81,335 | 62,433 | 18,902 | 30.3 | ||||||||
Service, body and parts | 140,218 | 135,090 | 5,128 | 3.8 | ||||||||
Fleet and Other | 604 | 204 | 400 | 196.1 | ||||||||
Total gross profit | 421,223 | 362,687 | 58,536 | 16.1 | ||||||||
Unit sales | ||||||||||||
New vehicle retail | 41,144 | 32,703 | 8,441 | 25.8 | % | |||||||
Used vehicle retail | 38,762 | 33,646 | 5,116 | 15.2 | ||||||||
Used vehicle wholesale | 15,942 | 13,769 | 2,173 | 15.8 | ||||||||
Total units sold | 95,848 | 80,118 | 15,730 | 19.6 | ||||||||
Average selling price | ||||||||||||
New vehicle retail | $ 32,597 | $ 31,798 | $ 799 | 2.5 | % | |||||||
Used vehicle retail | 16,991 | 16,751 | 240 | 1.4 | ||||||||
Used vehicle wholesale | 7,861 | 7,574 | 287 | 3.8 | ||||||||
Average gross profit per unit | ||||||||||||
New vehicle retail | $ 2,495 | $ 2,592 | $ (97) | (3.7) | % | |||||||
Used vehicle retail | 2,475 | 2,360 | 115 | 4.9 | ||||||||
Used vehicle wholesale | 30 | 57 | (27) | (47.4) | ||||||||
Finance and insurance | 1,018 | 941 | 77 | 8.2 | ||||||||
Lithia Motors, Inc.
Non-GAAP Performance Metrics(Unaudited)
Three Months Ended | ||||||||
December 31, | Increase | |||||||
2011 | 2010 | (Decrease) | ||||||
Adjusted gross margin | ||||||||
Service, body and parts | 48.0 | % | 47.4 | % | 60 bps | |||
Gross profit margin | 16.4 | 17.3 | (90) bps | |||||
Adjusted other metrics | ||||||||
SG&A as a % of revenue | 12.2 | % | 13.9 | % | (170) bps | |||
SG&A as a % of gross profit | 74.6 | 80.7 | (610) bps | |||||
Operating profit as a % of revenue | 3.6 | 2.6 | 100 bps | |||||
Operating profit as a % of gross profit | 21.9 | 14.9 | 700 bps | |||||
Pretax margin | 2.7 | 1.5 | 120 bps | |||||
Twelve Months Ended | ||||||||
December 31, | Increase | |||||||
2011 | 2010 | (Decrease) | ||||||
Adjusted gross margin | ||||||||
Service, body and parts | 48.5 | % | 48.6 | % | (10) bps | |||
Gross profit margin | 17.0 | 17.9 | (90) bps | |||||
Adjusted other metrics | ||||||||
SG&A as a % of revenue | 12.4 | % | 14.0 | % | (160) bps | |||
SG&A as a % of gross profit | 72.9 | 78.2 | (530) bps | |||||
Operating profit as a % of revenue | 4.0 | 3.1 | 90 bps | |||||
Operating profit as a % of gross profit | 23.4 | 17.2 | 620 bps | |||||
Pretax margin | 3.1 | 1.9 | 120 bps | |||||
Lithia Motors, Inc. | ||||||||
Other Highlights (Unaudited) | ||||||||
As of December 31, | Increase | |||||||
2011 | 2010 | (Decrease) | ||||||
Days Supply(1) | ||||||||
New vehicle inventory | 62 | 74 | (12) days | |||||
Used vehicle inventory | 52 | 53 | (1) day | |||||
(1) Days supply calculated based on current inventory levels, excluding in-transit vehicles, and a 30-day historical cost of sales level. |
| ||||||||||||||||
Financial covenants | ||||||||||||||||
Requirement | As of December 31, 2011 | |||||||||||||||
Current ratio | Not less than 1.20 to 1 | 1.44 to 1 | ||||||||||||||
Fixed charge coverage ratio | Not less than 1.20 to 1 | 1.39 to 1 | ||||||||||||||
Liabilities to tangible net worth ratio | Not more than 4.00 to 1 | 2.72 to 1 | ||||||||||||||
Funded debt restriction | Not more than $310 million | $199.9 million | ||||||||||||||
Lithia Motors, Inc.
Revenue Mix(Unaudited)
Three months ended | Twelve months ended | ||||||||
December 31, | December 31, | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
New vehicle unit sales brand mix | |||||||||
Chrysler | 31.4 | % | 31.1 | % | 32.3 | % | 29.9 | % | |
General Motors | 16.0 | 15.5 | 16.8 | 17.2 | |||||
BMW, Mini | 11.0 | 9.8 | 10.1 | 9.3 | |||||
Toyota | 10.2 | 12.5 | 10.5 | 12.2 | |||||
Ford | 6.6 | 6.1 | 6.2 | 6.1 | |||||
Mercedes | 5.8 | 2.6 | 3.7 | 2.3 | |||||
Honda, Acura | 4.8 | 7.3 | 5.6 | 7.2 | |||||
Subaru | 4.5 | 4.8 | 4.2 | 4.5 | |||||
Hyundai | 3.4 | 3.6 | 3.9 | 4.1 | |||||
Nissan | 2.3 | 2.5 | 2.7 | 2.7 | |||||
Volkswagen, Audi | 2.2 | 2.4 | 2.1 | 2.5 | |||||
Kia | 0.7 | 0.9 | 0.8 | 0.9 | |||||
Other | 1.1 | 0.9 | 1.1 | 1.1 | |||||
Three months ended | Twelve months ended | ||||||||
December 31, | December 31, | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
Revenue geographic mix | |||||||||
Texas | 23.7 | % | 24.6 | % | 24.2 | % | 25.3 | % | |
Oregon | 22.6 | 16.1 | 20.4 | 15.5 | |||||
California | 9.8 | 10.6 | 9.9 | 10.7 | |||||
Washington | 9.5 | 10.5 | 9.6 | 10.4 | |||||
Alaska | 8.1 | 9.3 | 9.1 | 10.3 | |||||
Montana | 7.8 | 8.7 | 8.2 | 7.8 | |||||
Idaho | 5.6 | 6.0 | 5.8 | 6.4 | |||||
Iowa | 5.1 | 6.0 | 5.1 | 6.1 | |||||
Nevada | 4.5 | 4.6 | 4.4 | 4.3 | |||||
North Dakota | 2.3 | 2.5 | 2.2 | 2.2 | |||||
New Mexico | 1.0 | 1.1 | 1.1 | 1.0 | |||||
As of February 24, 2012 | |||||||||
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 | 8 | 9.3 | |||||||
Hyundai | 6 | 7.0 | |||||||
Ford | 5 | 5.8 | |||||||
Nissan | 4 | 4.6 | |||||||
Mercedes | 3 | 3.5 | |||||||
Subaru | 3 | 3.5 | |||||||
Volkswagen, Audi | 2 | 2.3 | |||||||
Kia | 2 | 2.3 | |||||||
Other | 2 | 2.3 |
Lithia Motors, Inc.
Consolidated Balance Sheets(Unaudited)
(In thousands except per share data)
December 31, 2011 | December 31, 2010 | |||
Cash and cash equivalents | $ 20,851 | $ 9,306 | ||
Trade receivables, net | 99,407 | 75,011 | ||
Inventories, net | 506,484 | 415,228 | ||
Deferred income taxes | 4,730 | 2,937 | ||
Other current assets | 16,719 | 6,062 | ||
Total current assets | $ 648,191 | $ 508,544 | ||
Property and equipment, net | 373,779 | 362,433 | ||
Goodwill | 18,958 | 6,186 | ||
Franchise value | 59,095 | 45,193 | ||
Deferred income taxes | 29,270 | 39,524 | ||
Other non-current assets | 16,840 | 9,796 | ||
Total assets | $ 1,146,133 | $ 971,676 | ||
Floor plan notes payable | $ 343,940 | $ 251,257 | ||
Current maturities of long-term debt | 8,221 | 12,081 | ||
Trade payables | 31,712 | 23,747 | ||
Accrued liabilities | 72,711 | 58,784 | ||
Total current liabilities | $ 456,584 | $ 345,869 | ||
Long-term debt | 278,653 | 268,693 | ||
Deferred revenue | 25,146 | 20,158 | ||
Other long-term liabilities | 18,629 | 16,739 | ||
Total liabilities | $ 779,012 | $ 651,459 | ||
Class A common stock | 279,366 | 284,807 | ||
Class B common stock | 468 | 468 | ||
Additional paid-in capital | 10,918 | 10,972 | ||
Accumulated other comprehensive loss | (4,508) | (4,869) | ||
Retained earnings | 80,877 | 28,839 | ||
Total liabilities & stockholders' equity | $ 1,146,133 | $ 971,676 | ||
Lithia Motors, Inc.
Summarized Cash Flow from Operations(Unaudited)
(In thousands)
Twelve Months Ended | ||||
December 31, | ||||
2011 | 2010 | |||
Net income | $ 58,860 | $ 13,719 | ||
Adjustments to reconcile net income to net cash used in operating activities: | ||||
Asset impairments | 1,376 | 15,301 | ||
Depreciation and amortization | 16,626 | 17,154 | ||
Depreciation and amortization | ||||
within discontinued operations | 322 | 432 | ||
Stock-based compensation | 2,001 | 2,419 | ||
Gain on disposal of assets | (6,495) | (107) | ||
(Gain) loss from disposal activities within discontinued operations Deferred income taxes | (4,396) 8,093 | 301 (2,131) | ||
Excess tax benefit from share-based payment arrangements | (525) | (264) | ||
Increase: | ||||
Trade receivables, net | (22,503) | (22,881) | ||
Inventories | (78,202) | (68,305) | ||
Other current assets | (13,111) | (1,633) | ||
Other non-current assets | (1,108) | (2,029) | ||
Decrease: | ||||
Floor plan notes payable | 13,510 | 10,550 | ||
Trade payables | 5,998 | 4,960 | ||
Accrued liabilities | 11,605 | 10,029 | ||
Other long-term liabilities and deferred revenue | 7,183 | 1,155 | ||
Net cash used in operating activities | $ (766) | $ (21,330) | ||
Lithia Motors, Inc.
Reconciliation of Non-GAAP Cash Flow from Operations(Unaudited)
(In thousands)
Twelve Months Ended | ||||
December 31, | ||||
Net cash used in operating activities | 2011 | 2010 | ||
As reported | $ (766) | $ (21,330) | ||
Floor plan notes payable, non-trade | 63,145 | 24,090 | ||
Adjusted | $ 62,379 | $ 2,760 |
Lithia Motors, Inc.
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)
(In thousands)
Three Months Ended | Twelve Months Ended | |||||||
December 31 | December 31, | |||||||
2011 | 2010 | 2011 | 2010 | |||||
Service, body and parts cost of sales | ||||||||
As reported | $45,009 | $40,035 | $168,538 | $147,119 | ||||
Reserve adjustments | (950) | (1,040) | (950) | (1,040) | ||||
Adjusted | $44,059 | $38,995 | $167,588 | $146,079 | ||||
Selling, general & administrative | ||||||||
As reported | $81,396 | $ 74,751 | $327,545 | $290,833 | ||||
Disposal gain | 6,301 | 47 | 6,881 | 419 | ||||
Reserve adjustments | - | 96 | - | (1,238) | ||||
Adjusted | $87,697 | $ 74,894 | $334,426 | $290,014 | ||||
Income from operations | ||||||||
As reported | $30,541 | $12,373 | $111,991 | $46,571 | ||||
Impairments and disposal (gain) loss | (5,797) | 503 | (5,505) | 14,882 | ||||
Reserve adjustments | 950 | 944 | 950 | 2,278 | ||||
Adjusted | $25,694 | $13,820 | $107,436 | $63,731 | ||||
Income from continuing operations before income taxes | ||||||||
As reported | $24,471 | $6,602 | $89,175 | $22,120 | ||||
Impairments and disposal (gain) loss | (5,797) | 503 | (5,505) | 14,882 | ||||
Reserve adjustments | 950 | 944 | 950 | 2,278 | ||||
Adjusted | $19,624 | $8,049 | $84,620 | $39,280 |
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 | |||||||||
Three Months Ended December 31, | |||||||||
Net income | Diluted earnings per share | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
Continuing Operations | |||||||||
As reported | $16,363 | $4,239 | $0.62 | $0.16 | |||||
Impairments and disposal (gain) loss | (3,908) | 435 | (0.15) | 0.02 | |||||
Reserve adjustments | 591 | 773 | 0.02 | 0.02 | |||||
Adjusted | $13,046 | $5,447 | $0.49 | $ 0.20 | |||||
Discontinued Operations | |||||||||
As reported | $2,403 | $140 | $0.09 | - | |||||
Disposal gain | (2,604) | - | (0.10) | - | |||||
Adjusted | $(201) | $140 | $(0.01) | - | |||||
Consolidated Operations | |||||||||
As reported | $18,766 | $4,379 | $0.71 | $0.16 | |||||
Adjusted | 12,845 | 5,587 | 0.48 | 0.20 | |||||
Twelve Months Ended December 31, | |||||||||
Net income | Diluted earnings per share | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
Continuing Operations | |||||||||
As reported | $55,767 | $13,531 | $2.09 | $0.51 | |||||
Impairments and disposal (gain) loss | (3,732) | 9,166 | (0.14) | 0.35 | |||||
Reserve adjustments | 591 | 1,496 | 0.02 | 0.07 | |||||
Adjusted | $52,626 | $24,193 | $1.97 | $0.93 | |||||
Discontinued Operations | |||||||||
As reported | $3,093 | $188 | $0.12 | $0.01 | |||||
Impairments and disposal (gain) loss | (2,665) | 181 | (0.10) | - | |||||
Adjusted | $428 | $369 | $0.02 | $0.01 | |||||
Consolidated Operations | |||||||||
As reported | $ 58,860 | $13,719 | $2.21 | $0.52 | |||||
Adjusted | 53,054 | 24,562 | 1.99 | 0.94 | |||||