Apr 29, 2009 |
Lithia Motors Reports First Quarter 2009 Results |
|
Lithia posts profit despite negative industry environment Tripled initial cost savings objectives, with an annualized reduction now of $55 million
MEDFORD, Ore.--(BUSINESS WIRE)--Apr. 29, 2009-- Lithia Motors, Inc. (NYSE: LAD) announced today that net income from continuing operations in the first quarter of 2009 was $0.2 million or one cent per diluted share, the same as prior year. Consolidated net income for the first quarter of 2009 was six cents per share after inclusion of one cent per share income from continuing operations and five cents per share income from discontinued operations and disposal activities. In the quarter, the Company had a net benefit from certain items of $1.5 million, including a gain on early extinguishment of debt and a net gain on asset sales and dispositions, partially offset by asset impairment charges.
First quarter 2009 revenue totaled $398 million, compared to $567 million in the year-ago period, driven primarily by lower vehicle sales. Same store sales for new and used vehicle retail sales declined 39.9% and 13.0% respectively, when compared to the same quarter last year. Parts and service same-store sales declined 6.3% compared to the same quarter of last year.
Sid DeBoer
, Lithia's Chairman and CEO, commented: "We are pleased to post a profit in the first quarter of 2009. Despite the declining revenue base and decreasing same store sales, we were able to improve gross margins in each of our business lines and continue to reduce costs. As business conditions remain challenging, we have accelerated our cost reduction program. We now project our annualized cost savings on continuing operations to exceed $55 million.
"We continue to strengthen our balance sheet. We were in compliance with all debt covenants at the end of the quarter. As of today, only $6.9 million of our convertible notes due in May 2009 remain outstanding. We have generated approximately $41 million of cash since January 1st from financings, the sale of assets and other activities. Our liquidity is strong, including cash and availability on our credit facilities of approximately $52 million.
"We continue to execute the restructuring plan announced in June 2008. Of the 31 stores we identified for disposal, 20 have been divested to date," concluded Mr. DeBoer.
The first quarter conference call may be accessed at 2:00 p.m. Pacific Time today by phone at 973-409-9255 Conference ID: 95124108. A playback of the conference call will be available after 5 p.m. Pacific Time April 29, 2009 through May 8, 2009 by calling 800-642-1687 access code: 95124108.
About Lithia
Lithia Motors, Inc. is a Fortune 700 Company, selling 27 brands of new and all brands of used vehicles at 91 stores, which are located in 13 states. Internet sales are centralized at www.Lithia.com. Lithia also sells used vehicles; arranges finance, warranty, and credit insurance contracts; and provides vehicle parts, maintenance, and repair services at all of its locations.
Additional Information
For additional information on Lithia Motors, contact the Investor Relations Department: 541-776-6591 or log-on to: www.lithia.com - go to Investor Relations
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. 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 make forward-looking statements about our annualized cost savings. Specific risks in this press release include execution of the restructuring plan and expense reductions, future interest rates and macro-economic and market factors affecting the company's sales levels and profitability.
LITHIA MOTORS, INC.
|
(In thousands except per share data)
|
Unaudited |
|
Three Months Ended |
|
|
|
% |
|
|
March 31, |
|
Increase |
|
Increase |
|
|
2009 |
|
2008 |
|
(Decrease) |
|
(Decrease) |
New vehicle sales |
|
$187,104 |
|
$312,358 |
|
$(125,254) |
|
(40.1) |
|
% |
Used vehicle sales |
|
124,844 |
|
155,132 |
|
(30,288) |
|
(19.5) |
|
|
Finance and insurance |
|
13,462 |
|
21,463 |
|
(8,001) |
|
(37.3) |
|
|
Service, body and parts |
|
71,853 |
|
77,278 |
|
(5,425) |
|
(7.0) |
|
|
Fleet and other revenues |
|
539 |
|
913 |
|
(374) |
|
(41.0) |
|
|
Total revenues |
|
397,802 |
|
567,144 |
|
(169,342) |
|
(29.9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
319,620 |
|
470,205 |
|
(150,585) |
|
(32.0) |
|
|
Gross profit |
|
78,182 |
|
96,939 |
|
(18,757) |
|
(19.3) |
|
|
SG&A expense |
|
68,059 |
|
82,577 |
|
(14,518) |
|
(17.6) |
|
|
Depreciation and amortization
|
|
4,307 |
|
4,538 |
|
(231) |
|
(5.1) |
|
|
Income from operations |
|
5,816 |
|
9,824 |
|
(4,008) |
|
(40.8) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Floorplan interest expense |
|
(2,863) |
|
(5,062) |
|
(2,199) |
|
(43.4) |
|
|
Other interest expense |
|
(3,779) |
|
(4,449) |
|
(670) |
|
(15.1) |
|
|
Other income, net |
|
1,171 |
|
63 |
|
1,108 |
|
1,758.7 |
|
|
Income from continuing operations before income taxes
|
|
345 |
|
376 |
|
(31) |
|
(8.2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
153 |
|
154 |
|
(1) |
|
(0.6) |
|
|
Income tax rate |
|
44.1% |
|
41.0% |
|
|
|
|
|
|
Income from continuing operations |
|
192 |
|
222 |
|
(30) |
|
(13.5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
Loss from operations, net of income tax
|
|
(1,594) |
|
(2,383) |
|
(789) |
|
(33.1) |
|
|
Gain from disposal activities, net of income tax
|
|
2,731 |
|
- |
|
2,731 |
|
NM |
|
|
Net income (loss) |
|
$1,329 |
|
$(2,161) |
|
3,490 |
|
161.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share: |
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
0.01 |
|
0.01 |
|
- |
|
- |
|
|
Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
Loss from operations, net of income tax
|
|
(0.08) |
|
(0.12) |
|
|
|
|
|
|
Gain from disposal activities, net of income tax
|
|
0.13 |
|
- |
|
|
|
|
|
|
Net income per share |
|
$0.06 |
|
$(0.11) |
|
$0.17 |
|
154.5 |
|
|
Diluted shares outstanding |
|
20,831 |
|
19,962 |
|
869 |
|
4.4 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
NM – not meaningful
|
Lithia Motors, Inc.
|
(Continuing Operations)
|
|
Three Months Ended |
|
|
|
|
|
% |
|
|
Unaudited |
|
March 31, |
|
|
|
Increase
|
|
Increase |
|
|
|
|
2009 |
|
|
|
2008 |
|
|
|
(Decrease)
|
|
(Decrease) |
|
|
Unit sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle |
|
6,243 |
|
|
|
10,542 |
|
|
|
(4,299) |
|
(40.8) |
|
% |
Used - retail vehicle |
|
7,055 |
|
|
|
7,105 |
|
|
|
(50)
|
|
(0.7) |
|
|
Used - wholesale |
|
3,077 |
|
|
|
4,660 |
|
|
|
(1,583) |
|
(34.0) |
|
|
Total units sold |
|
16,375 |
|
|
|
22,307 |
|
|
|
(5,932) |
|
(26.6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average selling price:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle |
|
$ 29,970 |
|
|
|
$ 29,630 |
|
|
|
$ 340 |
|
1.1 |
|
% |
Used - retail vehicle |
|
15,392 |
|
|
|
17,496 |
|
|
|
(2,104) |
|
(12.0) |
|
|
Used - wholesale |
|
5,283 |
|
|
|
6,614 |
|
|
|
(1,331) |
|
(20.1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin/profit data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle retail |
|
8.7 |
|
% |
|
7.8 |
|
% |
|
90 bps |
|
|
|
|
Used vehicle retail |
|
12.4 |
|
% |
|
12.0 |
|
% |
|
40 bps |
|
|
|
|
Used vehicle wholesale |
|
2.3 |
|
% |
|
(1.2) |
|
% |
|
350 bps |
|
|
|
|
Service, body & parts |
|
47.7 |
|
% |
|
46.9 |
|
% |
|
80 bps |
|
|
|
|
Finance & insurance |
|
100.0 |
|
% |
|
100.0 |
|
% |
|
- |
|
|
|
|
Gross profit margin |
|
19.7 |
|
% |
|
17.1 |
|
% |
|
260 bps |
|
|
|
|
New retail gross profit/unit |
|
$2,604 |
|
|
|
$2,312 |
|
|
|
$292 |
|
|
|
|
Used retail gross profit/unit |
|
1,916 |
|
|
|
2,095 |
|
|
|
(179) |
|
|
|
|
Used wholesale gross profit/unit |
|
120 |
|
|
|
(83) |
|
|
|
203 |
|
|
|
|
Finance & insurance/retail unit |
|
1,012 |
|
|
|
1,216 |
|
|
|
(204) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue mix:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicles |
|
47.0 |
|
% |
|
55.1 |
|
% |
|
|
|
|
|
|
Used retail vehicles |
|
27.3 |
|
% |
|
21.9 |
|
% |
|
|
|
|
|
|
Used wholesale vehicles |
|
4.1 |
|
% |
|
5.4 |
|
% |
|
|
|
|
|
|
Finance and insurance, net |
|
3.4 |
|
% |
|
3.8 |
|
% |
|
|
|
|
|
|
Service and parts |
|
18.1 |
|
% |
|
13.6 |
|
% |
|
|
|
|
|
|
Fleet and other |
|
0.1 |
|
% |
|
0.2 |
|
% |
|
|
|
|
|
|
Lithia Motors, Inc.
|
(Brand Mix)
|
|
Three Months Ended |
Unaudited |
|
March 31, |
|
|
2009 |
|
2008 |
New vehicle unit sales brand mix – continuing operations:
|
|
|
|
|
|
|
|
|
Chrysler Brands |
|
33.8 |
|
% |
|
33.5 |
|
% |
General Motors & Saturn |
|
16.0 |
|
% |
|
18.9 |
|
% |
Toyota |
|
13.9 |
|
% |
|
14.5 |
|
% |
Honda |
|
8.9 |
|
% |
|
8.5 |
|
% |
Ford |
|
5.0 |
|
% |
|
4.8 |
|
% |
BMW |
|
5.0 |
|
% |
|
4.4 |
|
% |
Hyundai |
|
3.7 |
|
% |
|
2.7 |
|
% |
Nissan |
|
3.3 |
|
% |
|
4.8 |
|
% |
Volkswagen, Audi |
|
3.8 |
|
% |
|
3.0 |
|
% |
Subaru |
|
4.2 |
|
% |
|
2.4 |
|
% |
Mercedes |
|
0.6 |
|
% |
|
0.5 |
|
% |
Other |
|
1.8 |
|
% |
|
2.0 |
|
% |
|
|
|
|
|
|
|
|
|
New vehicle unit sales brand mix – including discontinued operations:
|
|
|
|
|
|
|
|
|
Chrysler Brands |
|
36.7 |
|
% |
|
38.4 |
|
% |
General Motors & Saturn |
|
14.9 |
|
% |
|
17.1 |
|
% |
Toyota |
|
14.1 |
|
% |
|
14.4 |
|
% |
Honda |
|
7.9 |
|
% |
|
6.9 |
|
% |
Ford |
|
4.9 |
|
% |
|
4.9 |
|
% |
BMW |
|
4.5 |
|
% |
|
3.6 |
|
% |
Hyundai |
|
4.1 |
|
% |
|
3.1 |
|
% |
Nissan |
|
2.9 |
|
% |
|
4.0 |
|
% |
Volkswagen, Audi |
|
3.4 |
|
% |
|
2.5 |
|
% |
Subaru |
|
4.1 |
|
% |
|
2.4 |
|
% |
Mercedes |
|
1.0 |
|
% |
|
1.2 |
|
% |
Other |
|
1.5 |
|
% |
|
1.5 |
|
% |
LITHIA MOTORS, INC.
|
(Selected Same Store Data)
|
Unaudited
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2009
|
|
2008
|
Same store total sales geographic mix:
|
|
|
|
|
|
|
|
|
Texas |
|
24.3 |
|
% |
|
29.1 |
|
% |
Oregon |
|
16.1 |
|
% |
|
14.8 |
|
% |
California |
|
11.1 |
|
% |
|
11.1 |
|
% |
Alaska |
|
9.8 |
|
% |
|
7.9 |
|
% |
Washington |
|
8.7 |
|
% |
|
8.9 |
|
% |
Iowa |
|
7.0 |
|
% |
|
7.0 |
|
% |
Montana |
|
7.3 |
|
% |
|
6.8 |
|
% |
Idaho |
|
7.5 |
|
% |
|
6.8 |
|
% |
Nevada |
|
4.9 |
|
% |
|
4.4 |
|
% |
Colorado |
|
1.9 |
|
% |
|
1.8 |
|
% |
Nebraska |
|
1.4 |
|
% |
|
1.4 |
|
% |
|
|
|
|
|
|
|
|
|
Same store revenue:
|
|
|
|
|
|
|
|
|
New vehicle retail sales |
|
(39.9) |
|
% |
|
(12.9) |
|
% |
Chrysler Brands |
|
(39.7) |
|
% |
|
(16.7) |
|
% |
General Motors & Saturn |
|
(47.6) |
|
% |
|
(5.6) |
|
% |
Toyota |
|
(44.5) |
|
% |
|
4.2 |
|
% |
All other brands |
|
(33.4) |
|
% |
|
(18.7) |
|
% |
Used vehicle retail sales |
|
(13.0) |
|
% |
|
(9.3) |
|
% |
Used wholesale sales |
|
(48.1) |
|
% |
|
(8.0) |
|
% |
Total vehicle sales (excluding fleet) |
|
(33.2) |
|
% |
|
(11.7) |
|
% |
Finance & insurance sales |
|
(33.0) |
|
% |
|
(11.7) |
|
% |
Service, body and parts sales |
|
(6.3) |
|
% |
|
3.5 |
|
% |
Total sales (excluding fleet) |
|
(29.5) |
|
% |
|
(9.9) |
|
% |
Total gross profit (excluding fleet) |
|
(17.9) |
|
% |
|
(14.1) |
|
% |
LITHIA MOTORS, INC.
|
Balance Sheet Highlights (Dollars in Thousands) |
Unaudited |
|
|
March 31, 2009 |
|
December 31, 2008 |
Cash & cash equivalents |
|
$9,104 |
|
$10,874 |
Trade receivables* |
|
60,031 |
|
69,615 |
Inventory |
|
391,959 |
|
422,812 |
Assets held for sale |
|
139,603 |
|
161,423 |
Other current assets |
|
10,331 |
|
31,828 |
Total current assets |
|
611,028 |
|
696,552 |
|
|
|
|
|
Real estate, net |
|
284,875 |
|
284,088 |
Equipment & other, net |
|
59,238 |
|
62,188 |
Other assets |
|
93,144 |
|
90,631 |
Total assets |
|
$1,048,285 |
|
$1,133,459 |
|
|
|
|
|
Flooring notes payable |
|
$264,901 |
|
$337,700 |
Liabilities related to assets held for sale |
|
89,162 |
|
108,172 |
Current maturities of senior subordinated convertible notes |
|
39,300 |
|
42,500
|
Other current liabilities |
|
110,746
|
|
108,656 |
Total current liabilities |
|
504,109
|
|
597,028 |
|
|
|
|
|
Real estate debt |
|
171,239 |
|
163,708 |
Other long-term debt |
|
87,683 |
|
101,476 |
Other liabilities |
|
33,664
|
|
22,904 |
Total liabilities |
|
$796,695 |
|
$885,116 |
|
|
|
|
|
Shareholders' equity |
|
251,590 |
|
248,343 |
|
|
|
|
|
Total liabilities & shareholders' equity |
|
$1,048,285 |
|
$1,133,459 |
|
|
|
|
|
*Note: Includes contracts-in-transit of $23,589 and $27,799 for 2009 and 2008 |
|
|
|
|
|
Other balance sheet data
|
|
|
|
|
Lt debt/total cap (excludes real estate) |
|
26% |
|
29% |
Book value per basic share |
|
12.12 |
|
12.30 |
|
|
|
|
|
Debt covenant ratios
|
|
|
|
|
|
|
Requirement |
|
As of March 31, 2009
|
Minimum net worth |
|
Not less than $175 million |
|
$252 million |
Fixed charge coverage ratio |
|
Not less than 1.0 to 1 |
|
1.30 to 1 |
Cash flow leverage ratio |
|
Not more than 3.0 to 1 |
|
2.48 to 1 |
Minimum current ratio |
|
Not less than 1.2 to 1 |
|
1.31 to 1 |
Source: Lithia Motors, Inc.
Lithia Motors, Inc.
Investor Relations Department, 541-776-6591
|
Safe Harbor Statement under the Private Securities Reform Act of 1995
With the exception of historical information, the matters discussed or incorporated by reference in this Annual Report include forward-looking statements. These statements are necessarily subject to risk and uncertainty. Actual results could differ materially from those projected in these forward-looking statements as a result of certain risks including those set forth from time to time in the Company's filings with the SEC. These risk factors include, but are not limited to, the cyclical nature of automobile sales and the intense competition in the automobile retail industry, the Company's ability to negotiate profitable acquisitions, and the ability to secure manufacturer approvals for such acquisitions.
|
|