Lithia Motors Declares $0.10 per Share Dividend for Third Quarter 2012
MEDFORD, OR -- (Marketwire - October 24, 2012) - Lithia Motors, Inc. (NYSE: LAD) today reported 2012 third quarter income from continuing operations of $23.3 million, or $0.90 per diluted share. This compares to a 2011 third quarter income from continuing operations of $16.3 million, or $0.61 per diluted share, an increase of 48%.
Third quarter 2012 revenue from continuing operations increased $173.2 million, or 24%, to $888.4 million from $715.2 million in the third quarter of 2011.
Third Quarter Year-over-Year Operating Highlights:
- New vehicle same store sales increased 30%
- Used vehicle retail same store sales increased 24%
- Service, body and parts same store sales increased 6%
- SG&A expense as a percentage of gross profit was 66.8%, a reduction of 340 basis points, and the lowest quarterly percentage in company history
- Earnings per share (EPS) increased 48% to $0.90
"Our stores delivered solid results in the third quarter," said Bryan DeBoer, President and CEO. "We generated the highest quarterly EPS in our history while driving SG&A expense as a percentage of gross profit to an all-time low. We continue our focus on improving vehicle sales volumes, service revenues and customer satisfaction. Our team challenges each other every day to increase performance throughout the organization, and remains vigilant to identify areas of opportunity."
For the first nine months of 2012, revenue from continuing operations increased 27% to $2.5 billion from $2.0 billion in 2011. Same store new vehicle sales increased 30%, used vehicle retail same store sales increased 21% and service, body and parts same store sales increased 6%. For the first nine months of 2012, adjusted net income from continuing operations was $2.24 per share compared to $1.48 per share in the first nine months of 2011. Unadjusted, for the first nine months of 2012, net income from continuing operations was $2.30 per diluted share, compared to $1.47 per diluted share for the first nine months of 2011.
Sid DeBoer, Founder and Executive Chairman, commented, "New vehicle sales volumes in the United States continue to recover. New safety and technology features, improved fuel economy and improving consumer credit markets, coupled with an aging fleet of vehicles, are all tailwinds for increasing sales levels through the remainder of 2012 and in 2013. Our new leadership team and a revitalized group of store managers is poised to continue this growth."
Recent Developments
On August 27, 2012, we purchased Connell Chevrolet in Killeen, Texas, with estimated annual revenues of $60 million. Our earnings guidance has been updated to reflect the impact of this transaction.
"We are excited to add this new store in Texas, which fits our core strategy of seeking exclusive franchises in our markets, and welcome our new employees to the family," said Bryan DeBoer.
Balance Sheet Update
We ended the third quarter with $20 million in cash and $29 million in available credit on our credit facilities. We also have the ability to expand the existing credit facilities by $150 million to $800 million in total, subject to lender approval. Additionally, approximately $115 million of operating real estate is currently unfinanced, which could provide an additional $86 million in available liquidity.
During the third quarter, we strategically retired approximately $5 million in mortgages, and refinanced approximately $16 million of mortgages to extend the maturity dates. As a result, we have no mortgage maturities until 2016.
Chris Holzshu, SVP and CFO said, "We've taken actions throughout the third quarter to strengthen our balance sheet and improve our capital position. As of the end of the quarter, we have fixed the interest rates on approximately 60% of our outstanding mortgages. This year we have retired approximately $35 million in mortgage debt, and reduced our overall average mortgage interest rate by 180 basis points while significantly extending maturity dates. We remain well-positioned to use free cash flow and available liquidity for acquisitions and internal investments that meet our strict return metrics."
Dividend Payment
Our Board of Directors approved a dividend of $0.10 per share for the third quarter 2012. We will pay the dividend on November 23, 2012 to shareholders of record on November 9, 2012.
Updated Outlook for 2012
We project 2012 fourth quarter earnings of $0.64 to $0.66 per diluted share. Full-year 2012 earnings are projected between $2.88 to $2.90 per diluted share. Both projections are based on the following annual assumptions:
- Total revenues of $3.2 to $3.3 billion
- New vehicle same store sales increasing 27%
- New vehicle gross margin of 7.1% to 7.3%
- Used vehicle same store sales increasing 20%
- Used vehicle gross margin of 14.3% to 14.5%
- Service body and parts same store sales increasing 5.6%
- Service body and parts gross margin of 48.1% to 48.3%
- Finance and insurance gross profit of $1,050 per unit
- Tax rate of 40%
- Average diluted shares outstanding of 26.1 million
- Capital expenditures of $67 million
- Guidance excludes the impact of future acquisitions, dispositions, and any potential non-core items
Outlook for 2013
We project 2013 first quarter earnings of $0.65 to $0.67 per diluted share and full-year 2013 earnings of $3.11 to $3.21 per diluted share. Both projections are based on the following annual assumptions:
- Total revenues of $3.5 to $3.6 billion
- New vehicle same store sales increasing 10.6%
- New vehicle gross margin of 7.1% to 7.3%
- Used vehicle same store sales increasing 7.7%
- Used vehicle gross margin of 14.3% to 14.5%
- Service body and parts same store sales increasing 4.8%
- Service body and parts gross margin of 48.0% to 48.2%
- Finance and insurance gross profit of $1,050 per unit
- Tax rate of 40%
- Average diluted shares outstanding of 26.4 million
- Capital expenditures of $25 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 on October 24, 2012 through November 7, 2012 by calling 877-660-6853 (Conference ID: 401506).
About Lithia
Lithia Motors, Inc. is the ninth largest automotive retailer in the United States. Lithia sells 29 brands of new vehicles and all brands of used vehicles at 87 stores 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.
Sites
www.lithia.com
www.lithiacareers.com
www.assuredservice.com
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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, that management believes are a benefit to shareholders. 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." The risks and uncertainties that could cause actual results to differ materially from estimated or projected results include without limitation, future economic conditions and others set forth from time to time in our 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 non-GAAP financial measures 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. We present cash flows from operations in the attached tables, 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, we have reconciled these measures to the most directly comparable GAAP measures in the attachments to this release. We believe each of the non-GAAP financial measures we present improve the transparency of our disclosures; provide a meaningful presentation of our results from core business operations, because they exclude items not related to core business operations and other non-cash items; and improve the period-to-period comparability of our results from core business operations. These presentations 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 2012 2011 (Decrease) (Decrease) --------- --------- ----------- ---------- Revenues: New vehicle retail $ 496,365 $ 377,860 $ 118,505 31.4% Used vehicle retail 230,278 184,632 45,646 24.7 Used vehicle wholesale 35,419 35,597 (178) (0.5) Finance and insurance 31,088 22,423 8,665 38.6 Service, body and parts 90,626 84,592 6,034 7.1 Fleet and other 4,597 10,111 (5,514) (54.5) --------- --------- ----------- ---------- Total revenues 888,373 715,215 173,158 24.2 Cost of sales: New vehicle retail 460,754 348,495 112,259 32.2 Used vehicle retail 196,735 157,902 38,833 24.6 Used vehicle wholesale 35,446 35,663 (217) (0.6) Service, body and parts 46,866 43,478 3,388 7.8 Fleet and other 4,348 9,442 (5,094) (54.0) --------- --------- ----------- ---------- Total cost of sales 744,149 594,980 149,169 25.1 --------- --------- ----------- ---------- Gross profit 144,224 120,235 23,989 20.0 SG&A expense 96,380 84,360 12,020 14.2 Depreciation and amortization 4,381 4,129 252 6.1 --------- --------- ----------- ---------- Income from operations 43,463 31,746 11,717 36.9 Floor plan interest expense (3,397) (1,977) 1,420 71.8 Other interest expense (2,131) (3,067) (936) (30.5) Other income, net 452 213 239 112.2 --------- --------- ----------- ---------- Income from continuing operations before income taxes 38,387 26,915 11,472 42.6 Income tax expense (15,048) (10,594) 4,454 42.0 Income tax rate 39.2% 39.4% --------- --------- ----------- ---------- Income from continuing operations $ 23,339 $ 16,321 $ 7,018 43.0% Income (loss) from discontinued operations (96) 242 (338) NM --------- --------- ----------- ---------- Net income $ 23,243 $ 16,563 $ 6,680 40.3% Diluted net income per share: Continuing operations $ 0.90 $ 0.61 $ 0.29 47.5% Discontinued operations - 0.01 (0.01) NM --------- --------- ----------- ---------- Net income per share $ 0.90 $ 0.62 $ 0.28 45.2% ========= ========= =========== ========== Diluted shares outstanding 25,947 26,654 (707) (2.7)%
NM - not meaningful
Lithia Motors, Inc. Key Performance Metrics (Unaudited) Three months ended September 30, % -------------------- Increase Increase 2012 2011 (Decrease) (Decrease) --------- --------- ----------- ----------- Gross margin New vehicle retail 7.2% 7.8% (60) bps Used vehicle retail 14.6 14.5 10 bps Used vehicle wholesale (0.1) (0.2) 10 bps Finance and insurance 100.0 100.0 - bps Service, body and parts 48.3 48.6 (30) bps Fleet and Other 5.4 6.6 (120) bps Gross profit margin 16.2 16.8 (60) bps Unit sales New vehicle retail 14,923 11,262 3,661 32.5% Used vehicle retail 13,320 10,567 2,753 26.1 Used vehicle wholesale 5,173 4,452 721 16.2 Total units sold 33,416 26,281 7,135 27.1 Average selling price New vehicle retail $ 33,262 $ 33,552 $ (290) (0.9)% Used vehicle retail 17,288 17,473 (185) (1.1) Used vehicle wholesale 6,847 7,996 (1,149) (14.4) Average gross profit per unit New vehicle retail $ 2,386 $ 2,607 $ (221) (8.5)% Used vehicle retail 2,518 2,530 (12) (0.5) Used vehicle wholesale (5) (15) 10 66.7 Finance and insurance 1,101 1,027 74 7.2 Revenue mix New vehicle retail 55.9% 52.8% Used vehicle retail 25.9 25.8 Used vehicle wholesale 4.0 5.1 Finance and insurance, net 3.5 3.1 Service, body and parts 10.2 11.8 Fleet and other 0.5 1.4 Three months ended September 30, -------------------- Other metrics 2012 2011 --------- --------- SG&A as a % of revenue 10.8% 11.8% SG&A as a % of gross profit 66.8 70.2 Operating profit as a % of revenue 4.9 4.4 Operating profit as a % of gross profit 30.1 26.4 Pretax margin 4.3 3.8 Net profit margin 2.6 2.3 Lithia Motors, Inc. Same Store Operating Highlights (Unaudited) Three months ended September 30, % -------------------- Increase Increase 2012 2011 (Decrease) (Decrease) ---------- --------- ----------- ----------- Revenues New vehicle retail $ 484,527 $ 372,858 $ 111,669 29.9% Used vehicle retail 223,890 180,691 43,199 23.9 Used vehicle wholesale 34,566 34,269 297 0.9 Finance and insurance 29,430 21,585 7,845 36.3 Service, body and parts 88,442 83,330 5,112 6.1 Fleet and Other 4,375 9,971 (5,596) (56.1) ---------- --------- ----------- Total revenues $ 865,230 $ 702,704 $ 162,526 23.1 Gross profit New vehicle retail $ 34,851 $ 28,846 $ 6,005 20.8% Used vehicle retail 32,721 26,377 6,344 24.1 Used vehicle wholesale 9 (57) 66 NM Finance and insurance 29,430 21,585 7,845 36.3 Service, body and parts 41,676 39,798 1,878 4.7 Fleet and Other 97 141 (44) (31.2) ---------- --------- ----------- Total gross profit $ 138,784 $ 116,690 $ 22,094 18.9 Unit sales New vehicle retail 14,528 11,106 3,422 30.8% Used vehicle retail 12,926 10,345 2,581 24.9 Used vehicle wholesale 5,054 4,329 725 16.7 Total units sold 32,508 25,780 6,728 26.1 Average selling price New vehicle retail $ 33,351 $ 33,573 $ (222) (0.7)% Used vehicle retail 17,321 17,467 (146) (0.8) Used vehicle wholesale 6,839 7,916 (1,077) (13.6) Average gross profit per unit New vehicle retail $ 2,399 $ 2,597 $ (198) (7.6)% Used vehicle retail 2,531 2,550 (19) (0.7) Used vehicle wholesale 2 (13) 15 NM Finance and insurance 1,072 1,006 66 6.6
NM - not meaningful
Lithia Motors, Inc. Consolidated Statements of Operations (Unaudited) (In thousands except per share data) Nine months ended September 30, % ------------------------ Increase Increase 2012 2011 (Decrease) (Decrease) ----------- ----------- ----------- ----------- Revenues: New vehicle retail $ 1,355,463 $ 1,015,872 $ 339,591 33.4% Used vehicle retail 632,361 512,006 120,355 23.5 Used vehicle wholesale 104,663 93,800 10,863 11.6 Finance and insurance 83,440 61,915 21,525 34.8 Service, body and parts 262,589 236,216 26,373 11.2 Fleet and other 28,971 30,408 (1,437) (4.7) ----------- ----------- ----------- ----------- Total revenues 2,467,487 1,950,217 517,270 26.5 Cost of sales: New vehicle retail 1,255,024 936,762 318,262 34.0 Used vehicle retail 539,121 436,196 102,925 23.6 Used vehicle wholesale 103,998 93,204 10,794 11.6 Service, body and parts 135,545 121,173 14,372 11.9 Fleet and other 27,933 27,927 6 0.0 ----------- ----------- ----------- ----------- Total cost of sales 2,061,621 1,615,262 446,359 27.6 ----------- ----------- ----------- ----------- Gross profit 405,866 334,955 70,911 21.2 Asset impairments 115 872 (757) (86.8) SG&A expense 280,292 240,537 39,755 16.5 Depreciation and amortization 12,777 12,372 405 3.3 ----------- ----------- ----------- ----------- Income from operations 112,682 81,174 31,508 38.8 Floor plan interest expense (9,402) (7,723) 1,679 21.7 Other interest expense (7,398) (9,353) (1,955) (20.9) Other income, net 1,771 462 1,309 283.3 ----------- ----------- ----------- ----------- Income from continuing operations before income taxes 97,653 64,560 33,093 51.3 Income tax expense (37,287) (25,244) 12,043 47.7 Income tax rate 38.2% 39.1% ----------- ----------- ----------- ----------- Income from continuing operations $ 60,366 $ 39,316 $ 21,050 53.5% Income from discontinued operations 164 778 (614) (78.9) ----------- ----------- ----------- ----------- Net income $ 60,530 $ 40,094 $ 20,436 51.0% Diluted net income per share: Continuing operations $ 2.30 $ 1.47 $ 0.83 56.5% Discontinued operations 0.01 0.03 (0.02) (66.7) ----------- ----------- ----------- ----------- Net income per share $ 2.31 $ 1.50 $ 0.81 54.0% =========== =========== =========== =========== Diluted shares outstanding 26,203 26,738 (535) (2.0)% Lithia Motors, Inc. Key Performance Metrics (Unaudited) Nine months ended September 30, % -------------------- Increase Increase 2012 2011 (Decrease) (Decrease) --------- --------- ----------- ----------- Gross margin New vehicle retail 7.4% 7.8% (40) bps Used vehicle retail 14.7 14.8 (10) bps Used vehicle wholesale 0.6 0.6 - bps Finance and insurance 100.0 100.0 - bps Service, body and parts 48.4 48.7 (30) bps Fleet and Other 3.6 8.2 (460) bps Gross profit margin 16.4 17.2 (80) bps Unit sales New vehicle retail 41,217 31,097 10,120 32.5% Used vehicle retail 36,286 29,750 6,536 22.0 Used vehicle wholesale 14,206 11,834 2,372 20.0 Total units sold 91,709 72,681 19,028 26.2 Average selling price New vehicle retail $ 32,886 $ 32,668 $ 218 0.7% Used vehicle retail 17,427 17,210 217 1.3 Used vehicle wholesale 7,368 7,926 (558) (7.0) Average gross profit per unit New vehicle retail $ 2,437 $ 2,544 $ (107) (4.2)% Used vehicle retail 2,570 2,548 22 0.9 Used vehicle wholesale 47 50 (3) (6.0) Finance and insurance 1,077 1,018 59 5.8 Revenue mix New vehicle retail 54.9% 52.1% Used vehicle retail 25.6 26.3 Used vehicle wholesale 4.3 4.7 Finance and insurance, net 3.4 3.2 Service, body and parts 10.6 12.1 Fleet and other 1.2 1.6 Adjusted As reported -------------------- ------------------------ Nine months ended Nine months ended September 30, September 30, -------------------- ------------------------ Other metrics 2012 2011 2012 2011 --------- --------- ----------- ----------- SG&A as a % of revenue 11.4% 12.4% 11.4% 12.3% SG&A as a % of gross profit 69.2 72.0 69.1 71.8 Operating profit as a % of revenue 4.5 4.2 4.6 4.2 Operating profit as a % of gross profit 27.6 24.3 27.8 24.2 Pretax margin 3.9 3.3 4.0 3.3 Net profit margin 2.4 2.0 2.4 2.0 Lithia Motors, Inc. Same Store Operating Highlights (Unaudited) Nine months ended September 30, % ----------------------- Increase Increase 2012 2011 (Decrease) (Decrease) ----------- ----------- ----------- ----------- Revenues New vehicle retail $ 1,294,861 $ 998,609 $ 296,252 29.7% Used vehicle retail 606,556 500,671 105,885 21.1 Used vehicle wholesale 100,180 90,726 9,454 10.4 Finance and insurance 79,316 59,519 19,797 33.3 Service, body and parts 245,315 231,378 13,937 6.0 Fleet and Other 23,751 29,887 (6,136) (20.5) ----------- ----------- ----------- Total revenues $ 2,349,979 $ 1,910,790 $ 439,189 23.0 Gross profit New vehicle retail $ 95,662 $ 77,503 $ 18,159 23.4% Used vehicle retail 89,951 74,101 15,850 21.4 Used vehicle wholesale 649 587 62 10.6 Finance and insurance 79,316 59,519 19,797 33.3 Service, body and parts 115,803 110,188 5,615 5.1 Fleet and Other 501 1,087 (586) (54.0) ----------- ----------- ----------- Total gross profit $ 381,882 $ 322,985 $ 58,897 18.2 Unit sales New vehicle retail 39,517 30,568 8,949 29.3% Used vehicle retail 34,864 29,134 5,730 19.7 Used vehicle wholesale 13,682 11,556 2,126 18.4 Total units sold 88,063 71,258 16,805 23.6 Average selling price New vehicle retail $ 32,767 $ 32,668 $ 99 0.3% Used vehicle retail 17,398 17,185 213 1.2 Used vehicle wholesale 7,322 7,851 (529) (6.7) Average gross profit per unit New vehicle retail $ 2,421 $ 2,535 $ (114) (4.5)% Used vehicle retail 2,580 2,543 37 1.5 Used vehicle wholesale 47 51 (4) (7.8) Finance and insurance 1,066 997 69 6.9 Lithia Motors, Inc. Other Highlights (Unaudited) As of September 30, December 31, September 30, ----------------------------------------------- 2012 2011 2011 --------------- --------------- --------------- Days Supply(1) New vehicle inventory 75 62 66 Used vehicle inventory 50 52 53 (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 September 30, 2012 -------------------------- ------------------------ Current ratio Not less than 1.20 to 1 1.35 to 1 Fixed charge coverage ratio Not less than 1.20 to 1 1.95 to 1 Leverage ratio Not more than 5.00 to 1 2.11 to 1 Funded debt restriction Not more than $375 million $173.4 million Lithia Motors, Inc. Other Highlights (Unaudited) Three months ended Nine months ended September 30, September 30, ------------------------ ------------------------ 2012 2011 2012 2011 ----------- ----------- ----------- ----------- New vehicle unit sales brand mix Chrysler 32.5% 34.3% 32.1% 31.3% General Motors 15.1 16.7 15.3 16.9 Toyota 14.2 10.9 13.6 12.3 Subaru 6.7 4.8 7.0 5.2 Honda, Acura 6.8 5.6 6.9 7.2 BMW, Mini 6.3 6.9 6.6 6.5 Ford 5.2 6.1 5.3 6.1 Hyundai 3.7 4.4 3.8 4.5 Nissan 2.9 3.5 2.9 3.8 Mercedes 2.7 2.2 2.6 1.8 Volkswagen, Audi 2.4 2.4 2.1 2.4 Kia 0.8 1.4 0.9 1.3 Other 0.7 0.8 0.9 0.7 Three months ended Nine months ended September 30, September 30, ------------------------ ------------------------ 2012 2011 2012 2011 ----------- ----------- ----------- ----------- Revenue geographic mix Texas 23.7% 23.9% 24.4% 24.4% Oregon 20.7 20.6 20.8 19.6 California 9.7 9.8 10.1 9.9 Washington 9.9 9.2 9.5 9.6 Montana 9.0 8.6 8.7 8.3 Alaska 8.2 9.6 8.4 9.4 Idaho 5.2 5.8 5.2 5.9 Iowa 5.1 5.0 4.8 5.2 Nevada 4.5 4.1 4.6 4.4 North Dakota 2.3 2.2 2.2 2.1 New Mexico 1.7 1.2 1.3 1.2 As of October 26, 2012 ------------------------ Current store count mix # of stores % of total ----------- ----------- Chrysler 23 26.4% General Motors 14 16.1 Honda, Acura 9 10.3 Toyota 8 9.2 BMW, MINI 7 8.0 Hyundai 6 6.9 Ford 5 5.7 Nissan 3 3.5 Mercedes 3 3.5 Subaru 3 3.5 Other 3 3.5 Kia 2 2.3 Volkswagen, Audi 1 1.1 Lithia Motors, Inc. Consolidated Balance Sheets (Unaudited) (In thousands except per share data) September 30, December 31, 2012 2011 ------------- ------------- Cash and cash equivalents $ 19,757 $ 20,851 Trade receivables, net 128,602 99,407 Inventories, net 658,694 506,484 Deferred income taxes 4,532 4,730 Other current assets 11,240 16,719 Assets held for sale 14,671 - ------------- ------------- Total current assets $ 837,496 $ 648,191 Property and equipment, net 397,754 373,779 Goodwill 25,838 18,958 Franchise value 61,972 59,095 Deferred income taxes 23,005 29,270 Other non-current assets 20,472 16,840 ------------- ------------- Total assets $ 1,366,537 1,146,133 ============= ============= Floor plan notes payable $ 14,073 $ 114,760 Floor plan notes payable: non trade 489,935 229,180 Current maturities of long-term debt 7,810 8,221 Trade payables 38,973 31,712 Accrued liabilities 81,635 72,711 Liabilities related to assets held for sale 10,065 - ------------- ------------- Total current liabilities $ 642,491 456,584 Long-term debt 261,419 278,653 Deferred revenue 31,857 25,146 Other long-term liabilities 21,286 18,629 ------------- ------------- Total liabilities $ 957,053 $ 779,012 ------------- ------------- Class A common stock 266,104 279,366 Class B common stock 362 468 Additional paid-in capital 11,789 10,918 Accumulated other comprehensive loss (3,234) (4,508) Retained earnings 134,463 80,877 ------------- ------------- Total liabilities & stockholders' equity $ 1,366,537 $ 1,146,133 ============= ============= Lithia Motors, Inc. Summarized Cash Flow from Operations (Unaudited) (In thousands) Nine months Ended September 30, ---------------------------- 2012 2011 ------------- ------------- Net income $ 60,530 $ 40,094 Adjustments to reconcile net income to net cash used in operating activities: Asset impairments 115 872 Depreciation and amortization 12,777 12,372 Depreciation and amortization within discontinued operations 96 381 Stock-based compensation 2,329 1,686 Gain on disposal of assets (775) (134) (Gain) loss from disposal activities within discontinued operations 397 (116) Deferred income taxes 6,851 3,325 Excess tax benefit from share-based payment arrangements (1,629) (360) (Increase) decrease: Trade receivables, net (29,160) (7,177) Inventories (158,186) (53,389) Other current assets 3,169 (1,078) Other non-current assets (4,346) (4,079) Increase (decrease): Floor plan notes payable (93,975) (10,637) Trade payables 5,381 3,759 Accrued liabilities 10,164 9,890 Other long-term liabilities and deferred revenue 9,927 8,018 ------------- ------------- Net cash provided by (used in) operating activities $ (176,335) $ 3,427 ============= ============= 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 2012 2011 ------------- -------------- As reported $ (176,335) $ 3,427 Floor plan notes payable, non-trade 272,760 67,402 ------------- -------------- Adjusted $ 96,425 $ 70,829 ============= ============== Lithia Motors, Inc. Reconciliation of Certain Non-GAAP Financial Measures (Unaudited) (In thousands, except for per share data) Nine months Ended September 30, 2012 ----------------------------------------------------- Asset impairment and As disposal Equity Tax reported gain investment attribute Adjusted -------- ---------- ---------- --------- -------- Asset impairments $ 115 $ (115) $ - $ - $ - Selling, general and administrative 280,292 739 - - 281,031 Income from operations 112,682 (624) - - 112,058 Other income, net 1,771 - (244) - 1,527 Income from continuing operations before income taxes $ 97,653 $ (624) $ (244) $ - $ 96,785 Income tax expense (37,287) 244 95 (1,072) (38,020) -------- ---------- ---------- --------- -------- Net income from continuing operations $ 60,366 $ (380) $ (149) $ (1,072) $ 58,765 ======== ========== ========== ========= ======== Diluted earnings per share from continuing operations $ 2.30 $ (0.01) $ (0.01) $ (0.04) $ 2.24 Diluted share count 26,203 Nine months Ended September 30, 2011 ------------------------------------- Asset impairment and disposal As reported gain Adjusted ----------- ----------- ----------- Asset impairments $ 872 $ (872) $ - Selling, general and administrative 240,537 580 241,117 Income from operations 81,174 292 81,466 Income from continuing operations before income taxes $ 64,560 $ 292 $ 64,852 Income tax expense (25,244) (116) (25,360) ----------- ----------- ----------- Net income from continuing operations $ 39,316 $ 176 $ 39,492 =========== =========== =========== Diluted earnings per share from continuing operations $ 1.47 $ 0.01 $ 1.48 Diluted share count 26,738
Contact: John North VP Finance and Controller (541) 618-5748