| Lithia Motors Reports Adjusted First Quarter 2011 Earnings of $0.34 per Share |
| Release: 4/27/2011 8:00:00 AM |
 
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MEDFORD, OR -- (Marketwire) -- 04/27/11 -- Lithia Motors, Inc. (NYSE: LAD) today reported 2011 adjusted first quarter net income from continuing operations of $9.1 million, or $0.34 per diluted share. This compares to a 2010 adjusted first quarter net income from continuing operations of $2.3 million, or $0.09 per diluted share. First quarter 2011 revenue from continuing operations increased $143.8 million, or 31.3% to $603.0 million, compared to $459.2 million in the year-ago period. First Quarter Operating Highlights:
As shown in the attached reconciliation table, the 2011 and 2010 first quarter adjusted results from continuing operations excluded non-core charges of $0.01 and $0.03 per share, respectively, on asset impairments, disposal gains, reserve adjustments, and a stock-based compensation tax shortfall. On a GAAP basis, net income from continuing operations for the first quarter of 2011 and 2010 was $8.7 million or $0.33 per diluted share and $1.4 million or $0.06 per diluted share, respectively. Sid DeBoer, Lithia's Chairman and CEO, commented, "Our team delivered another strong performance in the first quarter. Although new vehicle sales increased 45%, we maintained a near 1:1 used-to-new ratio. Service, body and parts sales increased 11% despite difficult comparisons due to the Toyota recalls last year. The economic recovery is expanding in our western markets, and our stores are focused on exceeding customer expectations." Balance Sheet Update Acquisition Outlook for 2011 Lithia projects its 2011 second quarter earnings guidance within a range of $0.32 to $0.34 per diluted share. Full-year 2011 earnings guidance is projected within a range of $1.42 to $1.50 per diluted share. Both projections are based on the following annual assumptions:
First Quarter Earnings Conference Call and Updated Presentation 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 April 27, 2011 through May 4, 2011 by calling 877-660-6853 (Conference ID: 369958 Account: 305). About Lithia For additional information on Lithia Motors, contact John North, VP Finance / Controller at (541) 618-5748 or visit www.lithia.com and click on "Investor Relations." Sites
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Lithia Motors, Inc.
Consolidated Statement of Operations (Unaudited)
(In thousands except per share data)
Three Months Ended
March 31, %
-------------------- Increase Increase
2011 2010 (Decrease) (Decrease)
--------- --------- --------- ---------
Revenues:
New vehicle retail $ 312,234 $ 215,617 $ 96,617 44.8%
Used vehicle retail 160,723 135,899 24,824 18.3
Used vehicle wholesale 30,386 23,465 6,921 29.5
Finance and insurance 19,923 14,638 5,285 36.1
Service, body and parts 76,585 68,797 7,788 11.3
Fleet and other 3,146 803 2,343 291.8
--------- --------- --------- ---------
Total revenues 602,997 459,219 143,778 31.3
Cost of sales:
New vehicle retail 288,904 197,213 91,691 46.5
Used vehicle retail 137,131 117,305 19,826 16.9
Used vehicle wholesale 29,966 23,094 6,872 29.8
Service, body and parts 39,467 35,251 4,216 12.0
Fleet and other 2,595 451 2,144 475.4
--------- --------- --------- ---------
Total cost of sales 498,063 373,314 124,749 33.4
--------- --------- --------- ---------
Gross profit 104,934 85,905 19,029 22.2
Asset impairment charges 382 1,491 (1,109) (74.4)
SG&A expense 79,741 71,039 8,702 12.2
Depreciation and amortization 4,193 4,749 (556) (11.7)
--------- --------- --------- ---------
Income from operations 20,618 8,626 11,992 139.0
Floorplan interest expense (2,563) (2,751) (188) (6.8)
Other interest expense (3,304) (3,588) (284) (7.9)
Other income, net 77 68 9 13.2
--------- --------- --------- ---------
Income from continuing
operations before income taxes 14,828 2,355 12,473 529.6
Income tax expense 6,123 912 5,211 571.4
Income tax rate 41.3% 38.7%
--------- --------- --------- ---------
Income from continuing
operations $ 8,705 $ 1,443 $ 7,262 503.3%
Loss from discontinued
operations, net of income tax - (176) 176 NM
--------- --------- --------- ---------
Net income $ 8,705 $ 1,267 $ 7,438 587.1%
========= ========= ========= =========
Diluted net income (loss)
per share:
Continuing operations $ 0.33 $ 0.06 $ 0.27 450.0%
Discontinued operations - (0.01) 0.01 NM
--------- --------- --------- ---------
Net income per share $ 0.33 $ 0.05 $ 0.28 560.0%
========= ========= ========= =========
Diluted shares outstanding 26,694 26,019 675 2.6%
Lithia Motors, Inc.
Key Performance Metrics (Unaudited)
Three Months Ended
March 31, %
-------------------- Increase Increase
2011 2010 (Decrease) (Decrease)
--------- --------- --------- ---------
Gross margin
------------
New vehicle retail 7.5% 8.5% (100) bps
Used vehicle retail 14.7 13.7 100 bps
Used vehicle wholesale 1.4 1.6 (20) bps
Finance & insurance 100.0 100.0 - bps
Service, body & parts 48.5 48.8 (30) bps
Gross profit margin 17.4 18.7 (130) bps
Unit sales
----------
New vehicle retail 9,929 6,884 3,045 44.2%
Used vehicle retail 9,812 8,211 1,601 19.5
Used vehicle wholesale 3,883 3,286 597 18.2
Total units sold 23,624 18,381 5,243 28.5
Average selling price
---------------------
New vehicle retail $ 31,447 $ 31,321 $ 126 0.4%
Used vehicle retail 16,380 16,551 (171) (1.0)
Used vehicle wholesale 7,825 7,141 684 9.6
Average gross profit per unit
-----------------------------
New vehicle retail $ 2,350 $ 2,673 $ (323) (12.1)%
Used vehicle retail 2,404 2,265 139 6.1
Used vehicle wholesale 108 113 (5) (4.4)
Finance & insurance 1,009 970 39 4.0
Revenue mix
-----------
New vehicle retail 51.8% 47.0%
Used vehicle retail 26.7 29.6
Used vehicle wholesale 5.0 5.0
Finance & insurance, net 3.3 3.2
Service, body & parts 12.7 15.0
Fleet and other 0.5 0.2
Adjusted As reported
-------------------- --------------------
Three Months Ended Three Months Ended
March 31, March 31,
-------------------- --------------------
Other metrics 2011 2010 2011 2010
------------- --------- --------- --------- ---------
SG&A as a % of revenue 13.2% 15.5% 13.2% 15.5%
SG&A as a % of gross profit 76.0 82.8 76.0 82.7
Operating profit as a
% of revenue 3.5 2.2 3.4 1.9
Operating profit as a
% of gross profit 20.0 11.7 19.6 10.0
Pretax margin 2.5 0.8 2.5 0.5
Lithia Motors, Inc.
Same Store Operating Highlights (Unaudited)
(In thousands except per unit data)
Three Months Ended
March 31, %
-------------------- Increase Increase
2011 2010 (Decrease) (Decrease)
--------- --------- --------- ---------
Revenues
--------
New vehicle retail $ 305,345 $ 215,981 $ 89,364 41.4%
Used vehicle retail 157,130 134,402 22,728 16.9
Used vehicle wholesale 29,929 22,880 7,049 30.8
Finance and insurance 19,045 13,778 5,267 38.2
Service, body and parts 74,467 68,728 5,739 8.3
Gross profit
------------
New vehicle retail 22,730 18,390 4,340 23.6
Used vehicle retail 22,826 18,220 4,606 25.3
Used vehicle wholesale 420 397 23 5.8
Finance and insurance 19,045 13,778 5,267 38.2
Service, body and parts 35,049 32,584 2,465 7.6
Unit sales
----------
New vehicle retail 9,708 6,897 2,811 40.8%
Used vehicle retail 9,598 8,109 1,489 18.4
Used vehicle wholesale 3,814 3,228 586 18.2
Total units sold 23,120 18,234 4,886 26.8
Average selling price
---------------------
New vehicle retail $ 31,453 $ 31,315 $ 138 0.4%
Used vehicle retail 16,371 16,574 (203) (1.2)
Used vehicle wholesale 7,847 7,088 759 10.7
Average gross profit per unit
-----------------------------
New vehicle retail $ 2,341 $ 2,666 $ (325) (12.2)%
Used vehicle retail 2,378 2,247 131 5.8
Used vehicle wholesale 110 123 (13) (10.6)
Finance & insurance 986 918 68 7.4
Lithia Motors, Inc.
Revenue Mix (Unaudited)
Three Months Ended
March 31,
---------------------
New vehicle unit sales brand mix 2011 2010
-------------------------------- --------- ---------
Chrysler 28.4% 26.0%
General Motors 16.9 16.2
Toyota 13.9 14.7
Honda, Acura 7.8 8.5
Hyundai 5.9 6.4
Subaru 5.8 5.9
Ford 5.6 5.5
BMW 4.6 5.6
Nissan 4.2 3.9
Volkswagen, Audi 3.2 3.3
Kia 1.9 2.1
Mercedes 0.9 1.1
Other 0.9 0.8
Three Months Ended
March 31,
---------------------
Revenue geographic mix 2011 2010
---------------------- --------- ---------
Texas 24.1% 25.3%
Oregon 16.0 14.8
California 11.1 11.8
Washington 10.3 10.4
Alaska 8.7 9.9
Montana 8.1 6.4
Iowa 6.7 6.9
Idaho 6.4 6.6
Nevada 4.7 4.2
North Dakota 2.0 1.9
New Mexico 1.0 1.0
Colorado 0.9 0.8
As of April 27, 2011
---------------------
# of % of
Current store count mix stores total
----------------------- --------- ---------
Chrysler 23 26.7%
General Motors 12 14.0
Honda, Acura 9 10.5
Toyota 8 9.3
BMW 7 8.2
Hyundai 6 7.0
Ford 4 4.6
Volkswagen, Audi 4 4.6
Nissan 4 4.6
Mercedes 3 3.5
Subaru 2 2.3
Kia 2 2.3
Porsche 1 1.2
Mazda 1 1.2
Lithia Motors, Inc.
Consolidated Balance Sheet (Unaudited)
(In thousands except per share data)
March 31, 2011 December 31, 2010
----------------- -----------------
Cash and cash equivalents $ 13,118 $ 9,306
Trade receivables, net 79,659 75,011
Inventories, net 456,945 415,228
Deferred income taxes 2,815 2,937
Other current assets 8,880 6,062
----------------- -----------------
Total current assets $ 561,417 $ 508,544
Property and equipment, net 357,303 362,433
Goodwill 6,186 6,186
Franchise value 45,193 45,193
Deferred income taxes 39,479 39,524
Other non-current assets 11,212 9,796
----------------- -----------------
Total assets $ 1,020,790 $ 971,676
================= =================
Floorplan notes payable $ 300,166 $ 251,257
Current maturities of long-term debt 14,237 12,081
Trade payables 27,043 23,747
Accrued liabilities 68,502 58,784
----------------- -----------------
Total current liabilities $ 409,948 $ 345,869
Long-term debt 245,864 268,693
Deferred revenue 21,064 20,158
Other long-term liabilities 15,047 16,739
----------------- -----------------
Total liabilities $ 691,923 $ 651,459
----------------- -----------------
Class A common stock 286,295 284,807
Class B common stock 468 468
Additional paid-in capital 10,183 10,972
Accumulated other comprehensive loss (4,307) (4,869)
Retained earnings 36,228 28,839
----------------- -----------------
Total liabilities & stockholders'
equity $ 1,020,790 $ 971,676
================= =================
Lithia Motors, Inc.
Summarized Cash Flow from Operations (Unaudited)
(In thousands)
Three Months Ended
March 31,
---------------------
2011 2010
--------- ---------
Net income $ 8,705 $ 1,267
Adjustments to reconcile net income to cash
provided by (used in) operating activities:
Asset impairments 382 1,491
Depreciation and amortization 4,193 4,749
Amortization of debt discount - 4
Stock-based compensation 491 441
(Gain) loss on disposal of assets 105 (283)
Deferred income taxes (394) (5,264)
Excess tax benefit from share-based payment
arrangements (21) -
(Increase) decrease, net of effect of acquisitions
and divestitures
Trade receivables, net (4,648) (8,584)
Inventories (41,769) (24,744)
Other current assets (888) 2,332
Other non-current assets (412) (987)
Increase (decrease), net of effect of acquisitions
and divestitures
Floorplan notes payable 9,905 4,532
Trade payables 3,296 7,563
Accrued liabilities 9,683 7,234
Other long-term liabilities and deferred revenue 132 (160)
--------- ---------
Net cash used in operating activities $ (11,240) $ (10,409)
Lithia Motors, Inc.
Reconciliation of Non-GAAP Cash Flow from Operations (Unaudited)
(In thousands)
Three Months Ended
March 31,
---------------------
Net cash used in operating activities 2011 2010
------------------------------------- --------- ---------
As reported $ (11,240) $ (10,409)
Floorplan notes payable, non-trade 39,262 20,615
--------- ---------
Adjusted $ 28,022 $ 10,206
Lithia Motors, Inc.
Other Highlights (Unaudited)
(In thousands except per share data)
March 31, December 31, March 31,
2011 2010 2010
------------ ------------ ------------
Days Supply(1)
--------------
New vehicle inventory 61 75 69
Used vehicle inventory 47 53 47
(1) Days supply calculated based on current inventory levels, excluding
in-transit vehicles, and a 30-day historical cost of sales level.
March 31, December 31,
2011 2010
------------ ------------
Other information
-----------------
Long-term debt/total
capitalization(2) 42.8% 45.6%
(2) Total capitalization is comprised of long-term debt and total
shareholder's equity.
Debt covenant ratios
--------------------
Requirement As of March 31, 2011
-------------------------- --------------------------
Minimum tangible
net worth Not less than $200 million $275.7 million
Vehicle equity Not less than $65 million $185.7 million
Fixed charge
coverage ratio Not less than 1.20 to 1 1.83 to 1
Liabilities to
tangible net worth
ratio Not more than 4.00 to 1 2.51 to 1
Lithia Motors, Inc.
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)
(In thousands)
Three Months Ended
March 31,
---------------------
Selling, general & administrative
---------------------------------
As reported $ 79,741 $ 71,039
Impairments and disposal gain - 367
Reserve adjustments - (258)
--------- ---------
Adjusted $ 79,741 $ 71,148
Income from operations
----------------------
As reported $ 20,618 $ 8,626
Impairments and disposal gain 382 1,190
Reserve adjustments - 258
--------- ---------
Adjusted $ 21,000 $ 10,074
Income from continuing operations before income taxes
-----------------------------------------------------
As reported $ 14,828 $ 2,355
Impairments and disposal gain 382 1,190
Reserve adjustments - 258
--------- ---------
Adjusted $ 15,210 $ 3,803
Lithia Motors, Inc.
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)
(In thousands except per share data)
Adjusted net income/(loss) and diluted earnings per share
Three Months Ended March 31,
Diluted earnings
Net income/(loss) per share
--------------------- --------------------
2011 2010 2011 2010
---------- --------- --------- ---------
Continuing Operations
---------------------
As reported $ 8,705 $ 1,443 $ 0.33 $ 0.06
Impairments and disposal
gain 229 732 0.01 0.03
Reserve adjustments - 164 - -
Stock-based compensation
tax shortfall 186 - - -
---------- --------- --------- ---------
Adjusted $ 9,120 $ 2,339 $ 0.34 $ 0.09
Discontinued Operations
-----------------------
As reported $ - $ (176) $ - $ (0.01)
Impairments and disposal
(gain) loss - 10 - -
---------- --------- --------- ---------
Adjusted $ - $ (166) $ - $ (0.01)
Consolidated Operations
-----------------------
As reported $ 8,705 $ 1,267 $ 0.33 $ 0.05
Adjusted 9,120 2,173 0.34 0.08
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