SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 14, 1999
Lithia Motors, Inc.
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(Exact Name of Registrant as specified in its charter)
Oregon 0-21789 93-0572810
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.
of incorporation)
360 E. Jackson St., Medford, Oregon 97501
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Address of Principal Executive Office Zip Code
Registrant's telephone number including area code 541-776-6899
(Former name or former address, if changed since last report) Not applicable
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LITHIA MORTORS, INC.
FORM 8-K
INDEX
Item Description Page
Item 2 Acquisition or Disposition of Assets 3
Item 7 Financial Statements and Exhibits 4
Signatures 6
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Item 2. Acquisition or Disposition of Assets
(a) On May 14, 1999, Lithia Motors, Inc. (the "Company"), acquired all of
the stock of seven commonly controlled automotive dealerships
constituting the Moreland Automotive Group ("Moreland"), and the personal
goodwill of their principals, pursuant to seven Agreements and Plans of
Reorganization and related documents (the "Agreements") dated effective
January 1, 1999. Each of the dealerships were controlled by W. Douglas
Moreland through various limited liability companies he formed. In four
dealerships, the general managers of such stores owned minority interests
in the dealerships.
The total initial purchase price consisted of approximately $35.2 million
in cash drawn from the Company's existing used vehicle line of credit,
1,272,919 shares of the Company's Class A Common Stock with a value of
approximately $24.1 million at the time of issuance, and 10,360 shares of
the Company's newly created Series M Preferred Stock with a value of
approximately $6.2 million at the time of issuance. Pursuant to the
Agreements, additional amounts will be payable by the Company to the
Moreland Shareholders if the performance of the Moreland Automotive Group
exceeds certain targets set for 1999, as enumerated in the Agreements.
The Agreements also grant to the Company the option to purchase in the
future certain other dealerships controlled by W. Douglas Moreland.
At closing, Moreland had approximately $18.2 million in used vehicles
available for flooring under the Company's used vehicle line of credit,
reducing the Company's net investment in the acquired dealerships by that
amount.
The Company is leasing the land and facilities at these dealerships from
principals of Moreland and certain unrelated third parties.
Pursuant to the Agreements, the Board of Directors of the Company
increased the size of the Board to six positions and appointed W. Douglas
Moreland to the vacant position effective May 21, 1999.
There was no previous relationship between the Company and W. Douglas
Moreland, nor any of the Company's or Moreland's affiliates, officers or
directors.
(b) Through the acquisition of the stock of Moreland, the Company acquired
vehicle, parts and supplies inventories, as well as other assets used in
the business of vehicle sales, service and support. The Company intends
to utilize the purchased assets in the same capacity.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of the Business Acquired
Financial statements for Moreland will be filed not later than sixty days
from the due date for the filing of this Form 8-K.
(b) Pro forma financial Information
Pro forma financial information for Moreland will be filed not later than
sixty days from the due date for the filing of this Form 8-K.
(c) Exhibits
10.1 Agreement and Plan of Reorganization dated January 1, 1999 by and
between Lithia Motors, Inc. and Moreland Auto Limited Partnership,
RLLP and G. Michael Downey and Moreland Auto Corp., previously filed
as Exhibit 10.1 to the Company's Form 10-Q for the quarter ended
March 31, 1999 as filed with the Securities and Exchange Commission
on May 12, 1999 and is incorporated herein by reference.
10.2 Agreement and Plan of Reorganization dated January 1, 1999 by and
between Lithia Motors, Inc. and L.A.H. Automotive Limited
Partnership, RLLP and L.A.H. Automotive Enterprises, Inc.,
previously filed as Exhibit 10.2 to the Company's Form 10-Q for the
quarter ended March 31, 1999 as filed with the Securities and
Exchange Commission on May 12, 1999 and is incorporated herein by
reference.
10.3 Agreement and Plan of Reorganization dated January 1, 1999 by and
between Lithia Motors, Inc. and William D. Limited Partnership, RLLP
and James Jannicelli and William D. Corp., previously filed as
Exhibit 10.3 to the Company's Form 10-Q for the quarter ended March
31, 1999 as filed with the Securities and Exchange Commission on May
12, 1999 and is incorporated herein by reference.
10.4 Agreement and Plan of Reorganization dated January 1, 1999 by and
between Lithia Motors, Inc. and Cherry Creek Dodge Limited
Partnership, RLLP and Cherry Creek Dodge, Incorporated, previously
filed as Exhibit 10.4 to the Company's Form 10-Q for the quarter
ended March 31, 1999 as filed with the Securities and Exchange
Commission on May 12, 1999 and is incorporated herein by reference.
10.5 Agreement and Plan of Reorganization dated January 1, 1999 by and
between Lithia Motors, Inc. and Colorando Springs Jeep Eagle Limited
Partnership, RLLP and Alex Jannicelli and Colorado Springs
Jeep/Eagle, Inc., previously filed as Exhibit 10.5 to the Company's
Form 10-Q for the quarter ended March 31, 1999 as filed with the
Securities and Exchange Commission on May 12, 1999 and is
incorporated herein by reference.
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10.6 Agreement and Plan of Reorganization dated January 1, 1999 by and
between Lithia Motors, Inc. and Foothills Automotive Plaza Limited
Partnership, RLLP and Jerry Cash and Foothills Automotive Plaza,
Inc., previously filed as Exhibit 10.6 to the Company's Form 10-Q
for the quarter ended March 31, 1999 as filed with the Securities
and Exchange Commission on May 12, 1999 and is incorporated herein
by reference.
10.7 Agreement and Plan of Reorganization dated January 1, 1999 by and
between Lithia Motors, Inc. and Reno Auto Sales Limited Partnership,
RLLP and Reno Auto Sales, Inc., previously filed as Exhibit 10.7 to
the Company's Form 10-Q for the quarter ended March 31, 1999 as
filed with the Securities and Exchange Commission on May 12, 1999
and is incorporated herein by reference.
10.8 Assignment and Licenses of Intangible Assets dated May 14, 1999 by
and between Lithia Motors, Inc., W. Douglas Moreland, Alex
Jannicelli, James Jannicelli, Jerry Cash, G. Michael Downey, and
certain Licensed Dealerships.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: May 26, 1999 LITHIA MOTORS, INC.
By: /s/ SIDNEY B. DEBOER
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Sidney B. DeBoer
Chairman of the Board,
Chief Executive Officer and Secretary
(Principal Executive Officer)
By: /s/ BRIAN R. NEILL
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Brian R. Neill
Senior Vice President and
Chief Financial Officer
(Principal Financial and Accounting
Officer)
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