MEDFORD, Ore., Apr 26, 2007 (BUSINESS WIRE) -- Lithia Motors, Inc. (NYSE:LAD) today announced that first quarter 2007 sales increased 9% to $800.7 million as compared to $736.4 million in the same period last year. New vehicle sales increased 7%, used vehicle sales increased 7%, finance/insurance sales increased 12%, and parts/service sales increased 19%.
First quarter 2007 net income from continuing operations was $7.1 million as compared to $10.9 million in the first quarter of 2006. Diluted earnings per share from continuing operations were $0.34 as compared to $0.52 in the first quarter of 2006. For a more accurate comparison of earnings, last year's fair market value adjustment to our swaps needs to be considered. Our interest rate swaps did not qualify for hedge accounting in 2006, which had the effect of increasing first quarter 2006 earnings per share by 4 cents due to a change in fair market value. Our swaps do qualify for hedge accounting in 2007 and there was no comparable effect on earnings per share in the first quarter.
Sid DeBoer, Lithia's Chairman and CEO, commented, "Lithia earned 34 cents from continuing operations in the first quarter, which met the company's internal forecast for the quarter. First quarter vehicle sales were weak in January and February and then rebounded substantially in March. We are encouraged by the positive trends we saw in March with healthy sales trends in both the new and used vehicle business. For the quarter, total same-store sales declined 2.1%, however, we had a difficult comparison against 8.4% growth in the first quarter of 2006."
"Lithia's strategy over the past few years of selling volume and increasing units in operation has continued to benefit the parts and service business, as these buyers return to Lithia stores for their service work. This was apparent in the 4.9% same-store sales growth in the parts and service business for the quarter. Same-store sales also grew 2.9% in the finance and insurance business."
"Vehicle inventories are at conservative levels going into the second quarter of the year. New vehicle inventories at the end of March were 16 days below our historical average levels and the lowest day's supply that we have seen in the last 5 years. Used vehicle inventories were right at historical average levels for the March ended period," concluded Mr. DeBoer.
Jeffrey B. DeBoer, Senior Vice President and CFO added, "Year to date, we have completed one acquisition of four stores in the Des Moines, Iowa area representing the Honda, Acura, Nissan, Infiniti, VW and Audi brands. The stores had approximately $100 million in annualized revenues."
"Our guidance for the full-year 2007 remains unchanged given that the quarterly results were in line with our expectations. In the first quarter, we had two stores classified as discontinued operations. The full-year 2007 guidance is on a continuing operations basis and assumes a steady pace of acquisitions and dispositions," concluded Jeffrey B. DeBoer.
Guidance
Earnings per Share FY 2007
--------------
From Continuing Operations: $1.90 - $2.10
The company currently has a 1,000,000 share repurchase program in place. Prior to the beginning of 2007, 256,831 shares had been purchased. In the first quarter the company purchased 121,800 shares, leaving 621,369 shares still available for repurchase under the program.
Conference Call Information
Lithia Motors will be providing more detailed information on the results for the first quarter 2007 in its conference call scheduled for today at 2 p.m. PDT and 5 p.m. EDT. The call can be accessed live by calling 973-582-2750; Conference ID #: 8680214. To listen LIVE on our website or for REPLAY: Log-on to www.Lithia.com - Go to Investor Relations - and click on the Conference Call Icon.
About Lithia
Lithia Motors, Inc. is a Fortune 700 and Russell 2000 Company. Lithia sells 30 brands of new vehicles at 108 stores which are located in 46 markets within 15 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. Lithia retailed 109,648 new and used vehicles and had $3.17 billion in total revenue in 2006.
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 economic conditions, acquisition risk factors and others set forth from time to time in the company's filings with the SEC. Specific risks in this press release include the accuracy of the company's internal forecasts, benefits or strength of Lithia's operating model, anticipated revenues from acquired stores and projected full-year 2007 earnings per share guidance.
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
LITHIA MOTORS, INC.
(In Thousands except per share data)
Unaudited Three Months Ended
March 31, $ Increase % Increase
-------------------
2007 2006 (Decrease) (Decrease)
-------- -------- ---------- ----------
New Vehicle Sales $451,156 $420,395 $30,761 7.3%
Used Vehicle Sales 221,771 206,506 15,265 7.4
Finance & Insurance 30,405 27,231 3,174 11.7
Service, Body & Parts Sales 96,635 81,084 15,551 19.2
Fleet & Other Revenues 689 1,155 (466) (40.3)
-------- -------- ------- ----------
Total Revenues 800,656 736,371 64,285 8.7
Cost of Sales 660,665 608,593 52,072 8.6
-------- -------- ------- ----------
Gross Profit 139,991 127,778 12,213 9.6
SG&A Expense 111,027 97,564 13,463 13.8
Depreciation/Amortization 4,899 3,983 916 23.0
-------- -------- ------- ----------
Income from Operations 24,065 26,231 (2,166) (8.3)
Flooring Interest Expense (7,656) (5,405) 2,251 41.6
Other Interest Expense (4,976) (3,299) 1,677 50.8
Other Income, net 212 378 (166) (43.9)
-------- -------- ------- ----------
Income from continuing
operations before income
taxes 11,645 17,905 (6,260) (35.0)
Income Tax Expense 4,576 6,969 (2,393) (34.3)
Income Tax Rate 39.3% 38.9%
-------- --------
Net Income from continuing
ops. 7,069 10,936 (3,867) (35.4)%
Income (Loss) from
discontinued operations,
net of income taxes 6 (1,568) 1,574 100.4
--------- -------- ------- ----------
Net Income $ 7,075 $ 9,368 $(2,293) (24.5)%
======== ======== ======= ==========
Diluted Net Income per
share:
Continuing Operations $ 0.34 $ 0.52 $ (0.18) (34.6)%
Discontinued Operations - (0.07)
--------
Net Income per share $ 0.34 $ 0.45 (0.11) (24.4)%
======== ======== ======= ==========
Diluted Shares Outstanding 22,131 22,066 65 0.3%
LITHIA MOTORS, INC. Three Months
Ended
March 31, Increase % Increase
-----------------
Unit Sales: 2007 2006 (Decrease) (Decrease)
------------------------------ ------- ------- ---------- ----------
New Vehicle 15,711 14,983 728 4.9%
Used - Retail Vehicle 11,032 10,629 403 3.8
Used - Wholesale 6,274 5,447 827 15.2
Total Units Sold 33,017 31,059 1,958 6.3
Average Selling Price:
------------------------------
New Vehicle $28,716 $28,058 $ 658 2.3%
Used - Retail Vehicle 16,281 16,171 110 0.7
Used - Wholesale 6,720 6,357 363 5.7
Key Financial Data:
------------------------------
Gross Profit Margin 17.5% 17.4% +10 bps
SG&A as a % of Gross Profit 79.3% 76.4% +290 bps
Operating Margin 3.0% 3.6% -60 bps
Pre-Tax Margin 1.5% 2.4% -90 bps
Gross Margin/Profit Data
------------------------------
New Vehicle Retail 7.7% 7.9% -20 bps
Used Vehicle Retail 15.0% 15.2% -20 bps
Used Vehicle Wholesale 4.0% 5.1% -110 bps
Service, Body & Parts 47.5% 47.9% -40 bps
Finance & Insurance 100.0% 100.0% -
New Retail Gross Profit/Unit $ 2,210 $ 2,227 -$17
Used Retail Gross Profit/Unit $ 2,447 $ 2,461 -$14
Used Wholesale Gross
Profit/Unit $ 269 $ 324 -$55
Finance & Insurance/Retail
Unit $ 1,137 $ 1,063 +$74
Same Store Data
------------------------------
New Vehicle Retail Sales (3.9)% 13.5%
Used Vehicle Sales (including
Wholesale) (1.9)% 0.5%
Total Vehicle Sales (excluding
fleet) (3.2)% 8.8%
Finance & Insurance Sales 2.9% 5.3%
Service, Body & Parts Sales 4.9% 5.8%
Total Sales (excluding Fleet) (2.1)% 8.4%
Total Gross Profit (excluding
Fleet) (1.6)% 5.7%
LITHIA MOTORS, INC.
Balance Sheet Highlights (Dollars in Thousands)
March 31, December 31,
2007 2006
------------ -------------
Cash & Cash Equivalents $ 21,023 $ 26,600
Trade Receivables(a) 130,119 118,528
Inventory 599,942 603,306
Assets Held for Sale 13,324 15,485
Other Current Assets 15,709 15,721
---------- ----------
Total Current Assets 780,117 779,640
Real Estate, net 339,924 327,890
Equipment & Leases, net 96,689 89,213
Goodwill, net 314,877 307,424
Other Assets 77,379 75,190
---------- ----------
Total Assets $1,608,986 $1,579,357
========== ==========
Floorplan Notes Payable $ 495,954 $ 499,679
Liabilities held for sale 9,880 11,610
Other Current Liabilities 133,756 118,650
---------- ----------
Total Current Liabilities 639,590 629,939
Used Vehicle Flooring 95,789 95,614
Real Estate Debt 149,112 155,890
Other Long-Term Debt 156,806 140,879
Other Liabilities 69,910 63,642
---------- ----------
Total Liabilities 1,111,207 1,085,964
---------- ----------
Shareholders' Equity 497,779 493,393
---------- ----------
Total Liabilities &
Shareholders' Equity $1,608,986 $1,579,357
========== ==========
(a) Includes contracts-in-transit of $62,334 and $56,211 for 2007 and 2006.
Other Balance Sheet Data (Dollars in Thousands except per share data)
Current Ratio 1.2x 1.2x
LT Debt/Total Cap.
(Excludes Real Estate) 34% 32%
Working Capital $140,527 $149,701
Book Value per Basic Share $ 25.54 $ 25.32
Lithia Motors, Inc.
Investor Relations Department, 541-776-6591,br>
www.lithia.com - go to Investor Relations
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