Lithia Motors Reports Adjusted EPS of $0.98 for Fourth Quarter 2013 and $3.99 for Full Year 2013
MEDFORD, OR -- (Marketwired) -- 02/19/14 -- Lithia Motors, Inc. (NYSE: LAD) reported the highest fourth quarter adjusted net income in Company history and increased adjusted net income from continuing operations 33% for the fourth quarter 2013 over the prior year period.
2013 fourth quarter adjusted net income from continuing operations was $25.7 million, or $0.98 per diluted share. This compares to 2012 fourth quarter adjusted net income from continuing operations of $19.3 million, or $0.74 per diluted share.
Unadjusted net income from continuing operations for the fourth quarter of 2013 was $27.2 million, or $1.03 per diluted share, compared to $19.7 million or $0.76 per diluted share for 2012. As shown in the attached non-GAAP reconciliation tables, the 2013 fourth quarter adjusted income from continuing operations is reduced to exclude a benefit of $0.06 per share for a gain on a sale of land and a $0.05 per share net benefit from non-core tax attributes, offset by a non-core charge of $0.06 per share related to an adjustment to a legal reserve associated with a lawsuit filed in 2006 and settled in 2013. The 2012 fourth quarter adjusted results from continuing operations exclude a benefit of $0.02 per share for a non-core tax attribute.
Fourth quarter 2013 revenue from continuing operations increased $147.5 million, or 17%, to $1.0 billion from $877.4 million in the fourth quarter of 2012.
Fourth Quarter-over-Quarter Operating Highlights:
- Total same store sales increased 11%
- New vehicle same store sales increased 11%
- Used vehicle retail same store sales increased 16%
- Service, body and parts same store sales increased 8%
- Adjusted SG&A expense as a percentage of gross profit decreased 200 basis points to 68.2%
For the full year of 2013, revenue from continuing operations increased 21% to $4.0 billion from $3.3 billion in 2012.
Full Year-over-Year Operating Highlights:
- Total same store sales increased 15%
- New vehicle same store sales increased 16%
- Used vehicle retail same store sales increased 18%
- Service, body and parts same store sales increased 7%
- Adjusted SG&A expense as a percentage of gross profit decreased 220 basis points to 67.2%
"For the third consecutive quarter, we exceeded $1.0 billion in revenue," said Bryan DeBoer, President and CEO. "We also exceeded $4.0 billion in annual revenue for the first time in Company history. We grew same store revenue 15% in 2013, on top of total same store revenue increases of 23% in 2012, 22% in 2011 and 18% in 2010. We've been able to maintain cost discipline over the last four years of growth, resulting in expanding operating margin each year. Our store leaders continue to challenge their teams to improve store performance while earning customers for life. Significant opportunities remain to increase used car sales and to capture the coming wave of service work from greater vehicle sales volumes over the last few years."
For the full year of 2013, adjusted net income per diluted share from continuing operations increased 35% to $3.99 from $2.96 for the full year of 2012. Unadjusted, net income from continuing operations was $4.02 per diluted share for the full year of 2013, compared to $3.03 per diluted share for the full year of 2012.
Chris Holzshu, SVP and CFO, said, "We finished 2013 with full year adjusted SG&A expense as a percentage of gross profit of 67.2%. This is a record result for the company and is 220 basis points lower than our full year 2012 SG&A expense. For the full year, incremental throughput, or the percentage of additional same store gross profit dollars that we retain after deducting selling costs, was 51.4%. Our stores remain focused on maintaining incremental throughput above 50%, which can continue to lever our SG&A expense going forward."
Corporate Development
In October 2013, we acquired Stockton Nissan Kia in Stockton, California and Fresno Lincoln Volvo in Fresno, California. In November 2013, we acquired Lodi Toyota Scion in Lodi, California. In December 2013, we acquired Diablo Subaru of Walnut Creek, in Walnut Creek, California. The combined estimated annual revenues for these acquisitions is $150 million.
In February 2014, we acquired Island Honda in Kahului, Hawaii, and Stockton Volkswagen in Stockton, California. The combined estimated annual revenues for these acquisitions is $50 million
Bryan DeBoer, President and CEO, stated, "The pace of acquisitions accelerated in the fourth quarter of 2013 as we completed the purchase of four additional locations. For the full year 2013, we acquired seven stores and 2014 is off to a strong start with our first acquisition in the state of Hawaii and an additional store increasing our footprint in northern California. We believe the acquisition market remains active and anticipate 2014 will be a productive year for Lithia to grow our network of stores."
Balance Sheet Update
We ended the fourth quarter with $24 million in cash and $160 million in available credit on our credit facilities. Additionally, approximately $181 million of our operating real estate is currently unfinanced, which we estimate could provide up to an additional $136 million in available liquidity, for total liquidity of $320 million.
During the fourth quarter, we amended our syndicated credit facility, increasing the capacity by $200 million to $1.0 billion in total availability. The amendment increased the number of participants from 10 to 13, including six banks and seven captive finance companies. The amendment also reduced the interest rate and non-use fees on the facility, provided the ability to upsize the overall capacity to $1.25 billion and extended the maturity date to December 2018.
Dividend Payment
Lithia announced that the Board of Directors has approved a dividend of $0.13 per share related to fourth quarter 2013 financial results. Lithia will pay the dividend March 21, 2014 to shareholders of record on March 7, 2014.
Outlook for 2014
We project 2014 first quarter earnings of $0.92 to $0.94 per diluted share and full-year 2014 earnings of $4.30 to $4.40 per diluted share. These projections are based on the following annual assumptions about 2014 performance:
- Total revenues of $4.5 to $4.6 billion
- New vehicle same store sales increasing 8.0%
- New vehicle gross margin of 6.4% to 6.6%
- Used vehicle same store sales increasing 8.0%
- Used vehicle gross margin of 14.5% to 14.7%
- Service body and parts same store sales increasing 7.0%
- Service body and parts gross margin of 48.2% to 48.4%
- Finance and insurance gross profit of $1,125 per unit
- Tax rate of 39.5%
- Average diluted shares outstanding of 26.2 million
- Capital expenditures of $84 million
These projections exclude the impact of future acquisitions, dispositions and non-core items. Actual results may be affected by items described in the Forward-Looking statements below.
Fourth Quarter Earnings Conference Call and Updated Presentation
The fourth quarter conference call may be accessed at 10:00 a.m. ET today by telephone at 877-407-8029. An updated presentation highlighting the fourth quarter results has been added to www.lithiainvestorrelations.com.
To listen live on our website or for replay, visit www.lithiainvestorrelations.com and click on webcasts.
About Lithia
Lithia Motors, Inc. is the ninth largest automotive retailer in the United States. Lithia sells 28 brands of new vehicles and all brands of used vehicles at 96 stores in 12 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.lithiainvestorrelations.com
www.lithiacareers.com
www.assuredservice.com
Lithia Motors on Facebook
http://www.facebook.com/LithiaMotors
Lithia Motors on Twitter
http://twitter.com/lithiamotors
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. 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 "project," "outlook," "expect," "anticipate," "intend," "plan," "believe," "estimate," "may," "seek," "would," "should," "likely," "goal," "strategy," "future," "maintain" or "will" and similar references to future periods. Examples of forward-looking statements in this press release include, among others, statements we make regarding:
- Expected operating results, such as improved store performance, maintaining incremental throughput above 50%, strategy for customer retention, growth and financial results and all projections set forth under the heading "Outlook for 2014";
- Anticipated acquisitions in 2014 and
- Anticipated availability of liquidity from our unfinanced operating real estate.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events that depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance, and our actual results of operations, financial condition and liquidity and development of the industries in which we operate may differ materially from those made in or suggested by the forward-looking statements in this press release. The risks and uncertainties that could cause actual results to differ materially from estimated or projected results include, without limitation, future economic and financial conditions (both nationally and locally), changes in customer demand, our relationship with, and the financial and operational stability of, vehicle manufacturers and other suppliers, risks associated with our indebtedness (including available borrowing capacity, compliance with financial covenants and ability to refinance or repay indebtedness on favorable terms), government regulations, legislation and others set forth throughout Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2012 and from time to time in our other filings with the SEC. We urge you to carefully consider this information and not place undue reliance on forward-looking statements. 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. Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not comparable to similarly titled measures used by other companies. As a result, we review any non-GAAP financial measures in connection with a review of the most directly comparable measures calculated in accordance with GAAP. We caution you not to place undue reliance on such non-GAAP measures, but also to consider them with the most directly comparable GAAP measures. 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 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 %
December 31, Increase Increase
------------------------
2013 2012 (Decrease) (Decrease)
----------- ----------- ----------- ----------
Revenues:
New vehicle retail $ 589,535 $ 506,871 $ 82,664 16.3%
Used vehicle retail 253,797 208,367 45,430 21.8
Used vehicle wholesale 37,642 35,768 1,874 5.2
Finance and insurance 35,994 29,244 6,750 23.1
Service, body and parts 100,797 89,665 11,132 12.4
Fleet and other 7,109 7,458 (349) (4.7)
----------- ----------- ----------- ----------
Total revenues 1,024,874 877,373 147,501 16.8
Cost of sales:
New vehicle retail 550,438 471,336 79,102 16.8
Used vehicle retail 218,446 179,186 39,260 21.9
Used vehicle wholesale 37,310 35,011 2,299 6.6
Service, body and parts 52,690 46,409 6,281 13.5
Fleet and other 6,697 7,071 (374) (5.3)
----------- ----------- ----------- ----------
Total cost of sales 865,581 739,013 126,568 17.1
----------- ----------- ----------- ----------
Gross profit 159,293 138,360 20,933 15.1
SG&A expense 108,416 97,126 11,290 11.6
Depreciation and
amortization 5,316 4,441 875 19.7
----------- ----------- ----------- ----------
Income from operations 45,561 36,793 8,769 23.8
Floor plan interest
expense (2,979) (3,490) (511) (14.6)
Other interest expense (2,115) (2,239) (124) (5.5)
Other income, net 773 754 19 2.4
----------- ----------- ----------- ----------
Income from continuing
operations before income
taxes 41,240 31,818 9,422 29.6
Income tax expense (14,080) (12,154) 1,926 15.8
Income tax rate 34.1% 38.2%
----------- ----------- ----------- ----------
Income from continuing
operations $ 27,160 $ 19,664 $ 7,496 38.1%
Income from discontinued
operations, net of tax 212 169 43 26.2
----------- ----------- ----------- ----------
Net income $ 27,372 $ 19,833 $ 7,539 38.0%
Diluted net income per
share:
Continuing operations $ 1.03 $ 0.76 $ 0.27 35.5%
Discontinued operations 0.01 - 0.01 NM
----------- ----------- ----------- ----------
Net income per share $ 1.04 $ 0.76 $ 0.28 36.8%
=========== =========== =========== ==========
Diluted shares
outstanding 26,283 26,068 215 0.8%
NM - not meaningful
Lithia Motors, Inc.
Key Performance Metrics (Unaudited)
Three months ended %
December 31, Increase Increase
------------------------
2013 2012 (Decrease) (Decrease)
----------- ----------- ----------- ----------
Gross margin
New vehicle retail 6.6% 7.0% (40) bps
Used vehicle retail 13.9 14.0 (10) bps
Used vehicle wholesale 0.9 2.1 (120) bps
Finance and insurance 100.0 100.0 - bps
Service, body and parts 47.7 48.2 (50) bps
Fleet and Other 5.8 5.2 60 bps
Gross profit margin 15.5 15.8 (30) bps
Unit sales
New vehicle retail 17,004 14,713 2,291 15.6%
Used vehicle retail 13,830 11,943 1,887 15.8
Total retail units sold 30,834 26,656 4,178 15.7
Used vehicle wholesale 5,462 5,009 453 9.0
Average selling price
New vehicle retail $ 34,670 $ 34,451 $ 219 0.6%
Used vehicle retail 18,351 17,447 904 5.2
Used vehicle wholesale 6,892 7,141 (249) (3.5)
Average gross profit per
unit
New vehicle retail $ 2,299 $ 2,415 $ (116) (4.8)%
Used vehicle retail 2,556 2,443 113 4.6
Used vehicle wholesale 61 151 (90) (59.6)
Finance and insurance 1,167 1,097 70 6.4
Total vehicle(1) 3,593 3,553 40 1.1
Revenue mix
New vehicle retail 57.5% 57.8%
Used vehicle retail 24.8 23.7
Used vehicle wholesale 3.7 4.1
Finance and insurance,
net 3.5 3.3
Service, body and parts 9.8 10.2
Fleet and other 0.7 0.9
Adjusted As reported
------------------------ -----------------------
Three months ended Three months ended
December 31, December 31,
------------------------ -----------------------
Other metrics 2013 2012 2013 2012
----------- ----------- ----------- ----------
SG&A as a % of revenue 10.6% 11.1% 10.6% 11.1%
SG&A as a % of gross
profit 68.2 70.2 68.1 70.2
Operating profit as a %
of revenue 4.4 4.2 4.4 4.2
Operating profit as a %
of gross profit 28.5 26.6 28.6 26.6
Pretax margin 4.0 3.6 4.0 3.6
Net profit margin 2.5 2.2 2.7 2.2
NM - not meaningful
(1) - includes the sales and gross profit related to new, used retail, used
wholesale and finance and insurance and unit sales for new and used retail
Lithia Motors, Inc.
Same Store Operating Highlights (Unaudited)
Three months ended %
December 31, Increase Increase
------------------------
2013 2012 (Decrease) (Decrease)
----------- ----------- ----------- ----------
Revenues
New vehicle retail $ 562,622 $ 509,086 $ 53,536 10.5%
Used vehicle retail 242,049 208,356 33,693 16.2
Used vehicle wholesale 36,462 35,731 731 2.0
Finance and insurance 34,289 29,271 5,018 17.1
Service, body and parts 96,659 89,619 7,040 7.9
Fleet and other 7,001 7,314 (313) (4.3)
----------- ----------- -----------
Total revenues $ 979,082 $ 879,377 $ 99,705 11.3
Gross profit
New vehicle retail $ 37,376 $ 35,420 $ 1,956 5.5%
Used vehicle retail 33,761 29,196 4,565 15.6
Used vehicle wholesale 352 673 (321) (47.7)
Finance and insurance 34,289 29,271 5,018 17.1
Service, body and parts 45,460 42,535 2,925 6.9
Fleet and other 304 243 61 25.1
----------- ----------- -----------
Total gross profit $ 151,542 $ 137,338 $ 14,204 10.3
Gross margin
New vehicle retail 6.6% 7.0% (40) bps
Used vehicle retail 13.9 14.0 (10) bps
Used vehicle wholesale 1.0 1.9 (90) bps
Finance and insurance 100.0 100.0 - bps
Service, body and parts 47.0 47.5 (50) bps
Fleet and Other 4.3 3.3 100 bps
Gross profit margin 15.5 15.6 (10) bps
Unit sales
New vehicle retail 16,078 14,774 1,304 8.8%
Used vehicle retail 13,137 11,941 1,196 10.0
Total retail units sold 29,215 26,715 2,500 9.4
Used vehicle wholesale 5,271 5,006 265 5.3
Average selling price
New vehicle retail $ 34,993 $ 34,458 $ 535 1.6%
Used vehicle retail 18,425 17,449 976 5.6
Used vehicle wholesale 6,917 7,138 (221) (3.1)
Average gross profit per
unit
New vehicle retail $ 2,325 $ 2,397 $ (72) (3.0)%
Used vehicle retail 2,570 2,445 125 5.1
Used vehicle wholesale 67 134 (67) (50.0)
Finance and insurance 1,174 1,096 78 7.1
Total vehicle(1) 3,621 3,540 81 2.3
(1) - includes the sales and gross profit related to new, used retail, used
wholesale and finance and insurance and unit sales for new and used retail
Lithia Motors, Inc.
Consolidated Statements of Operations (Unaudited)
(In thousands except per share data)
Twelve months ended %
December 31, Increase Increase
------------------------
2013 2012 (Decrease) (Decrease)
----------- ----------- ----------- ----------
Revenues:
New vehicle retail $ 2,256,598 $ 1,847,603 $ 408,995 22.1%
Used vehicle retail 1,032,224 833,484 198,740 23.8
Used vehicle wholesale 158,235 139,237 18,998 13.6
Finance and insurance 139,007 112,234 26,773 23.9
Service, body and parts 383,483 347,703 35,780 10.3
Fleet and other 36,202 36,226 (24) (0.1)
----------- ----------- ----------- ----------
Total revenues 4,005,749 3,316,487 689,262 20.8
Cost of sales:
New vehicle retail 2,105,480 1,713,156 392,324 22.9
Used vehicle retail 881,366 711,763 169,603 23.8
Used vehicle wholesale 155,524 137,823 17,701 12.8
Service, body and parts 197,913 179,633 18,280 10.2
Fleet and other 34,513 34,812 (299) (0.9)
----------- ----------- ----------- ----------
Total cost of sales 3,374,796 2,777,187 597,609 21.5
----------- ----------- ----------- ----------
Gross profit 630,953 539,300 91,653 17.0
Asset impairments - 115 (115) (100.0)
SG&A expense 427,400 373,688 53,712 14.4
Depreciation and
amortization 20,035 17,128 2,907 17.0
----------- ----------- ----------- ----------
Income from operations 183,518 148,369 35,149 23.7
Floor plan interest
expense (12,373) (12,816) (443) (3.5)
Other interest expense (8,350) (9,621) (1,271) (13.2)
Other income, net 2,993 2,525 468 18.5
----------- ----------- ----------- ----------
Income from continuing
operations before income
taxes 165,788 128,457 37,331 29.1
Income tax expense (60,574) (49,062) 11,512 23.5
Income tax rate 36.5% 38.2%
----------- ----------- ----------- ----------
Income from continuing
operations $ 105,214 $ 79,395 $ 25,819 32.5%
Income from discontinued
operations, net of tax 786 967 (181) (18.7)
----------- ----------- ----------- ----------
Net income $ 106,000 $ 80,362 $ 25,638 31.9%
Diluted net income per
share:
Continuing operations $ 4.02 $ 3.03 $ 0.99 32.7%
Discontinued operations 0.03 0.04 (0.01) (25.0)
----------- ----------- ----------- ----------
Net income per share $ 4.05 $ 3.07 $ 0.98 31.9%
=========== =========== =========== ==========
Diluted shares
outstanding 26,191 26,170 21 0.1%
Lithia Motors, Inc.
Key Performance Metrics (Unaudited)
Twelve months ended %
December 31, Increase Increase
------------------------
2013 2012 (Decrease) (Decrease)
----------- ----------- ----------- ----------
Gross margin
New vehicle retail 6.7% 7.3% (60) bps
Used vehicle retail 14.6 14.6 - bps
Used vehicle wholesale 1.7 1.0 70 bps
Finance and insurance 100.0 100.0 - bps
Service, body and parts 48.4 48.3 10 bps
Fleet and Other 4.7 3.9 80 bps
Gross profit margin 15.8 16.3 (50) bps
Unit sales
New vehicle retail 66,857 55,666 11,191 20.1%
Used vehicle retail 57,061 47,965 9,096 19.0
Total retail units sold 123,918 103,631 20,287 19.6
Used vehicle wholesale 22,086 19,144 2,942 15.4
Average selling price
New vehicle retail $ 33,753 $ 33,191 $ 562 1.7%
Used vehicle retail 18,090 17,377 713 4.1
Used vehicle wholesale 7,164 7,273 (109) (1.5)
Average gross profit per
unit
New vehicle retail $ 2,260 $ 2,415 $ (155) (6.4)%
Used vehicle retail 2,644 2,538 106 4.2
Used vehicle wholesale 123 74 49 66.2
Finance and insurance 1,122 1,083 39 3.6
Total vehicle(1) 3,581 3,569 12 0.3
Revenue mix
New vehicle retail 56.3% 55.7%
Used vehicle retail 25.8 25.1
Used vehicle wholesale 3.9 4.2
Finance and insurance,
net 3.5 3.4
Service, body and parts 9.6 10.5
Fleet and other 0.9 1.1
Adjusted As reported
------------------------ -----------------------
Twelve months ended Twelve months ended
December 31, December 31,
------------------------ -----------------------
Other metrics 2013 2012 2013 2012
----------- ----------- ----------- ----------
SG&A as a % of revenue 10.6% 11.3% 10.7% 11.3%
SG&A as a % of gross
profit 67.2 69.4 67.7 69.3
Operating profit as a %
of revenue 4.7 4.5 4.6 4.5
Operating profit as a %
of gross profit 29.7 27.4 29.1 27.5
Pretax margin 4.2 3.8 4.1 3.9
Net profit margin 2.6 2.3 2.6 2.4
(1) - includes the sales and gross profit related to new, used retail, used
wholesale and finance and insurance and unit sales for new and used retail
Lithia Motors, Inc.
Same Store Operating Highlights (Unaudited)
Twelve months ended %
December 31, Increase Increase
------------------------
2013 2012 (Decrease) (Decrease)
----------- ----------- ----------- ----------
Revenues
New vehicle retail $ 2,148,126 $ 1,845,273 $ 302,853 16.4%
Used vehicle retail 981,536 830,435 151,101 18.2
Used vehicle wholesale 149,878 138,623 11,255 8.1
Finance and insurance 131,960 110,254 21,706 19.7
Service, body and parts 369,789 346,402 23,387 6.8
Fleet and Other 35,685 35,627 58 0.2
----------- ----------- -----------
Total revenues $ 3,816,974 $ 3,306,614 $ 510,360 15.4
Gross profit
New vehicle retail $ 142,874 $ 133,878 $ 8,996 6.7%
Used vehicle retail 144,376 121,446 22,930 18.9
Used vehicle wholesale 2,754 1,386 1,368 98.7
Finance and insurance 131,960 110,254 21,706 19.7
Service, body and parts 175,667 164,072 11,595 7.1
Fleet and Other 1,188 855 333 38.9
----------- ----------- -----------
Total gross profit $ 598,819 $ 531,891 $ 66,928 12.6
Gross margin
New vehicle retail 6.7% 7.3% (60) bps
Used vehicle retail 14.7 14.6 10 bps
Used vehicle wholesale 1.8 1.0 80 bps
Finance and insurance 100.0 100.0 - bps
Service, body and parts 47.5 47.4 10 bps
Fleet and Other 3.3 2.4 90 bps
Gross profit margin 15.7 16.1 (40) bps
Unit sales
New vehicle retail 63,489 55,590 7,899 14.2%
Used vehicle retail 54,334 47,782 6,552 13.7
Total retail units sold 117,823 103,372 14,451 14.0
Used vehicle wholesale 21,023 19,052 1,971 10.3
Average selling price
New vehicle retail $ 33,835 $ 33,194 $ 641 1.9%
Used vehicle retail 18,065 17,380 685 3.9
Used vehicle wholesale 7,129 7,276 (147) (2.0)
Average gross profit per
unit
New vehicle retail $ 2,250 $ 2,408 $ (158) (6.6)%
Used vehicle retail 2,657 2,542 115 4.5
Used vehicle wholesale 131 73 58 79.5
Finance and insurance 1,120 1,067 53 5.0
Total vehicle(1) 3,581 3,550 31 0.9
(1) - includes the sales and gross profit related to new, used retail, used
wholesale and finance and insurance and unit sales for new and used retail
Lithia Motors, Inc.
Other Highlights (Unaudited)
As of December 31,
-------------------------
Increase
2013 2012 (Decrease)
------------ ------------ ------------
Days Supply(1)
New vehicle inventory 74 76 (2)
Used vehicle inventory 63 56 7
(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 December 31, 2013
-------------------------- --------------------------
Current ratio Not less than 1.20 to 1 1.41 to 1
Fixed charge coverage
ratio Not less than 1.20 to 1 3.94 to 1
Leverage ratio Not more than 5.00 to 1 1.38 to 1
Funded debt
restriction Not more than $375 million $167.6 million
Lithia Motors, Inc.
Other Highlights (Unaudited)
Three months ended Twelve months ended
December 31, December 31,
---------------------- ----------------------
2013 2012 2013 2012
---------- ---------- ---------- ----------
New vehicle unit sales brand
mix
Chrysler 27.6% 32.0% 29.5% 32.2%
General Motors 14.2 14.7 15.2 15.2
Toyota 14.0 13.8 14.6 13.7
Subaru 9.3 7.8 8.2 7.3
Honda, Acura 8.5 6.7 7.9 6.9
BMW, MINI 7.5 7.5 6.7 6.8
Ford 6.0 6.2 6.0 5.5
Mercedes 3.9 2.7 2.8 2.2
Nissan 3.4 2.5 3.0 2.8
Hyundai 2.4 2.7 2.6 3.6
Volkswagen, Audi 1.8 1.7 2.2 2.0
Kia 0.8 0.6 0.7 0.9
Mazda 0.2 0.5 0.4 0.5
Other 0.4 0.6 0.2 0.4
Three months ended Twelve months ended
December 31, December 31,
---------------------- ----------------------
2013 2012 2013 2012
---------- ---------- ---------- ----------
Revenue geographic mix
Texas 23.0% 24.3% 24.5% 24.9%
Oregon 23.0 20.1 21.6 20.1
California 11.7 10.5 10.7 10.4
Montana 8.6 8.7 8.9 8.9
Washington 8.2 8.8 8.1 8.3
Alaska 7.2 7.8 7.6 8.4
Iowa 5.1 5.2 4.9 5.0
Nevada 4.7 4.8 4.8 4.7
Idaho 4.6 5.0 4.9 5.3
North Dakota 2.3 2.9 2.4 2.5
New Mexico 1.6 1.9 1.6 1.5
As of February 19,
2014
----------------------
# of
Current store count mix stores % of total
---------- ----------
Chrysler 23 24.0%
General Motors 13 13.5
Honda, Acura 11 11.4
Toyota 10 10.4
BMW, MINI 9 9.4
Hyundai 5 5.2
Subaru 5 5.2
Ford 5 5.2
Mercedes 4 4.2
Nissan 4 4.2
Volkswagen, Audi 4 4.2
Other 3 3.1
Lithia Motors, Inc.
Consolidated Balance Sheets (Unaudited)
(In thousands)
December 31, 2013 December 31, 2012
----------------- -----------------
Cash and cash equivalents $ 23,686 $ 42,839
Trade receivables, net 170,519 133,149
Inventories, net 859,019 723,326
Deferred income taxes 1,548 3,832
Other current assets 15,251 17,484
Assets held for sale 11,526 12,579
----------------- -----------------
Total current assets $ 1,081,549 $ 933,209
Property and equipment, net 481,212 425,086
Goodwill 49,511 32,047
Franchise value 71,199 62,429
Deferred income taxes 10,256 17,123
Other non-current assets 31,394 22,808
----------------- -----------------
Total assets $ 1,725,121 $ 1,492,702
================= =================
Floor plan notes payable $ 18,789 $ 13,454
Floor plan notes payable: non trade 695,066 568,130
Current maturities of long-term debt 7,083 8,182
Trade payables 51,159 41,589
Accrued liabilities 94,143 81,602
Liabilities related to assets held for
sale 6,271 8,347
----------------- -----------------
Total current liabilities $ 872,511 $ 721,304
Long-term debt 245,471 286,876
Deferred revenue 44,005 33,589
Other long-term liabilities 28,412 22,832
----------------- -----------------
Total liabilities $ 1,190,399 $ 1,064,601
----------------- -----------------
Class A common stock 268,255 268,801
Class B common stock 319 343
Additional paid-in capital 22,598 12,399
Accumulated other comprehensive loss (1,538) (2,615)
Retained earnings 245,088 149,173
----------------- -----------------
Total liabilities & stockholders'
equity $ 1,725,121 $ 1,492,702
================= =================
Lithia Motors, Inc.
Summarized Cash Flow from Operations (Unaudited)
(In thousands)
Twelve months ended
December 31,
------------------------
2013 2012
----------- -----------
Net income $ 106,000 $ 80,362
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Asset impairments - 115
Depreciation and amortization 20,035 17,128
Depreciation and amortization within discontinued
operations - 186
Stock-based compensation 6,565 3,116
Gain on disposal of assets (2,339) (747)
Loss on disposal activities within discontinued
operations - 621
Deferred income taxes 14,477 14,172
Excess tax benefit from share-based payment
arrangements (5,994) (2,802)
(Increase) decrease:
Trade receivables, net (37,370) (33,704)
Inventories (106,896) (230,442)
Other current assets (901) (4,194)
Other non-current assets (4,754) (6,176)
Increase (decrease):
Floor plan notes payable, net 5,300 (82,109)
Trade payables 8,480 8,001
Accrued liabilities 12,304 10,538
Other long-term liabilities and deferred revenue 17,152 13,459
----------- -----------
Net cash provided by (used in) operating
activities $ 32,059 $ (212,476)
=========== ===========
Lithia Motors, Inc.
Reconciliation of Non-GAAP Cash Flow from Operations (Unaudited)
(In thousands)
Twelve months ended
December 31,
------------------------
Net cash provided by (used in) operating
activities 2013 2012
----------- -----------
As reported $ 32,059 $ (212,476)
Floor plan notes payable, non-trade, net 128,636 348,477
----------- -----------
Adjusted $ 160,695 $ 136,001
=========== ===========
Lithia Motors, Inc.
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)
(In thousands, except for per share data)
Three months ended December 31, 2013
-------------------------------------------------------
Asset
As disposal Reserve Tax
reported gain adjustments attributes Adjusted
-------- ---------- ----------- ---------- --------
Selling, general
and administrative 108,416 2,531 (2,341) - 108,606
Income from
operations 45,561 (2,531) 2,341 - 45,371
Income from
continuing
operations before
income taxes $ 41,240 $ (2,531) $ 2,341 $ - $ 41,050
Income tax expense (14,080) 968 (869) (1,320) (15,301)
-------- ---------- ----------- ---------- --------
Net income from
continuing
operations $ 27,160 $ (1,563) $ 1,472 $ (1,320) $ 25,749
======== ========== =========== ========== ========
Diluted earnings
per share from
continuing
operations $ 1.03 $ (0.06) $ 0.06 $ (0.05) $ 0.98
Diluted share count 26,283
Three months ended December 31,
2012
---------------------------------
As Tax
reported attributes Adjusted
-------- ---------- -----------
Income from
continuing
operations before
income taxes $ 31,818 $ - $ 31,818
Income tax expense (12,154) (374) (12,528)
-------- ---------- -----------
Net income from
continuing
operations $ 19,664 $ (374) $ 19,290
======== ========== ===========
Diluted earnings
per share from
continuing
operations $ 0.76 $ (0.02) $ 0.74
Diluted share count 26,068
Lithia Motors, Inc.
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)
(In thousands, except for per share data)
Twelve months ended December 31, 2013
-------------------------------------------------------
Asset
As disposal Reserve Tax
reported gain adjustments attributes Adjusted
-------- ---------- ----------- ---------- --------
Selling, general
and administrative 427,400 2,531 (6,153) - 423,778
Income from
operations 183,518 (2,531) 6,153 - 187,140
Income from
continuing
operations before
income taxes $165,788 $ (2,531) $ 6,153 $ - $169,410
Income tax expense (60,574) 968 (2,353) (2,832) (64,791)
-------- ---------- ----------- ---------- --------
Net income from
continuing
operations $105,214 $ (1,563) $ 3,800 $ (2,832) $104,619
======== ========== =========== ========== ========
Diluted earnings
per share from
continuing
operations $ 4.02 $ (0.06) $ 0.14 $ (0.11) $ 3.99
Diluted share count 26,191
Twelve months ended December 31, 2012
-------------------------------------------------------
Asset
impairment
and
As disposal Equity Tax
reported gain investment attributes Adjusted
-------- ---------- ----------- ---------- --------
Asset impairments $ 115 $ (115) $ - $ - $ -
Selling, general
and administrative 373,688 739 - - 374,427
Income from
operations 148,369 (624) - - 147,745
Other income, net 2,525 - (244) - 2,281
Income from
continuing
operations before
income taxes $128,457 $ (624) $ (244) $ - $127,589
Income tax expense (49,062) 244 95 (1,440) (50,163)
-------- ---------- ----------- ---------- --------
Net income from
continuing
operations $ 79,395 $ (380) $ (149) $ (1,440) $ 77,426
======== ========== =========== ========== ========
Diluted earnings
per share from
continuing
operations $ 3.03 $ (0.01) $ (0.01) $ (0.05) $ 2.96
Diluted share count 26,170
Contact:
John North
VP Finance and Controller
(541) 618-5748
