Lithia Motors Reports Adjusted Continuing Operations EPS of $0.49 for Fourth Quarter and $1.97 for Full Year 2011; Increases 2012 Outlook
MEDFORD, OR -- (Marketwire) -- 02/22/12 -- Lithia Motors, Inc. (NYSE: LAD) today reported the highest fourth quarter net income in company history, and more than doubled earnings for the fourth quarter and full year 2011 over the prior year periods.
2011 fourth quarter adjusted income from continuing operations was $13.0 million, or $0.49 per diluted share. This compares to a 2010 fourth quarter adjusted income from continuing operations of $5.4 million, or $0.20 per diluted share. 2011 full year adjusted income from continuing operations was $1.97 per diluted share as compared to $0.93 per diluted share in 2010.
Unadjusted net income from continuing operations for the fourth quarter of 2011 was $16.4 million or $0.62 per diluted share, compared to $4.2 million or $0.16 per diluted share for 2010. Unadjusted 2011 full year income from continuing operations was $2.09 per diluted share, compared to $0.51 per diluted share for 2010.
As shown in the attached non-GAAP reconciliation table, the 2011 fourth quarter adjusted income from continuing operations is reduced to exclude a benefit of $0.15 per share gain on the sale of real estate offset by a non-core reserve adjustment charge of $0.02 per share. The 2010 fourth quarter adjusted results from continuing operations exclude a non-core charge of $0.04 per share on asset impairments and reserve adjustments.
Fourth quarter 2011 revenue from continuing operations increased $179.4 million, or 33% to $717.5 million, compared to $538.1 million in the fourth quarter of 2010.
Fourth Quarter Year-over-Year Operating Highlights:
- New vehicle same store sales increased 29%
- Used vehicle retail same store sales increased 21%
- Service, body and parts same store sales increased 3%
- Adjusted SG&A expense as a percentage of gross profit reduced 610 basis points, to 74.6%
For the full year of 2011, revenue from continuing operations increased 30% to $2.7 billion as compared to $2.1 billion in 2010. New vehicle same store sales increased 29%, used vehicle retail same store sales increased 17% and service, body and parts same store sales increased 5%.
"We increased both fourth quarter and full year total same store sales 23%," said Bryan DeBoer, President and COO of Lithia. "New vehicle same store sales increased 29% in both the fourth quarter and full year 2011."
Mr. DeBoer continued, "Our team is aligned and focused on continuous improvement. Although we had a successful 2011, we still have opportunities to increase new and used vehicles sales in our markets. Improving customer satisfaction in both our sales and service offerings will be a key objective in 2012."
Chris Holzshu, SVP and Chief Financial Officer, commented, "We continue our focus on leveraging our expense structure as sales volumes increase. Adjusted SG&A as a percentage of gross profit was 72.9% for the full year, an improvement of 530 basis points over our 2010 results. Our team has remained vigilant to ensure the fixed expenses we took out of the business do not return as sales volumes recover. We believe we can continue to improve our leverage and have a goal to lower full year SG&A to gross profit into the 70% range."
CEO Succession
Effective May 1, 2012, Bryan DeBoer, President and COO, will be promoted to Chief Executive Officer. Sid DeBoer, Founder, Chairman and CEO, will assume the role of Executive Chairman and remain Chairman of the Board.
Bryan DeBoer has served as President and COO since 2007, and has been directly responsible for Lithia's operational performance. Bryan has been a Lithia employee for over 26 years, starting in retail sales and moving into corporate development roles. With the promotion to CEO, Bryan will expand his responsibilities to include strategy and vision for the organization. Sid DeBoer will continue to serve Lithia in an executive capacity, including strategic oversight, manufacturer relations, governmental relations and business development.
Commenting on the changes, Tom Becker, Lead Independent Director, stated, "This transition is part of our plan to position the next generation of Lithia's leaders for success. Under Bryan's direction as COO, the team has outperformed the overall automotive retail sector. The Board of Directors believes the time is right for this change. We look forward to continued success in the future and feel that Lithia has never been better positioned to prosper under the leadership of Bryan as CEO and Sid as Founder and Executive Chairman."
Corporate Development
Lithia is pleased to announce the addition of a Scion franchise to our existing Toyota store in Billings, Montana. Additionally, Lithia has relocated MINI of Portland from our BMW store in Portland, Oregon to a stand-alone location in Beaverton, Oregon and relocated Subaru of Spokane from our BMW store to a stand-alone location in Spokane, Washington.
Balance Sheet Update
Lithia ended the period with $21 million in cash, $10 million in available credit on our credit facility and $66 million in unfinanced new vehicle inventory. In total, this represents approximately $97 million in available liquidity.
Dividend Payment
Lithia announced that the Board of Directors has approved a dividend of $0.07 per share for the fourth quarter 2011. Lithia will pay the dividend March 23, 2012 to shareholders of record on March 9, 2012.
Updated Outlook for 2012
Commenting on Lithia's outlook for the future, Sid DeBoer, Chairman and CEO, stated, "We expect that 2012 will be another year of increased vehicle sales due to several factors. As consumer credit availability for auto loans increases, the population of vehicles in operation continues to age, and the number of vehicles being scrapped each year is at or above current new vehicle sales levels, a multi-year expansion of vehicle sales lies ahead. Additionally, new and innovative products with improved safety and fuel efficiency features are an additional catalyst to increased sales."
Lithia projects its 2012 first quarter earnings within a range of $0.41 to $0.43 per diluted share. Full-year 2012 earnings are projected within a range of $2.06 to $2.16 per diluted share. Both projections are based on the following annual assumptions:
- Total revenues in range of $2.9 to $3.1 billion
- New vehicle same store sales increasing 10.8%
- New vehicle gross margin ranging from 7.4% to 7.6%
- Used vehicle same store sales increasing 10.5%
- Used vehicle gross margin ranging from 14.3% to 14.5%
- Service body and parts same store sales increasing 2.0%
- Service body and parts gross margin ranging from 48.3% to 48.5%
- Finance and insurance gross profit of $1,000 per unit
- Tax rate of 40%
- Average diluted shares outstanding of 26.6 million
- Capital expenditures of $44 million
- Guidance excludes the impact of future acquisitions, dispositions, and any potential non-core items
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 Investor Relations on www.lithia.com.
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 February 22, 2012 through March 7, 2012 by calling 877-660-6853 (Conference ID: 387816, Account: 305).
About Lithia
Lithia Motors, Inc. is the ninth largest automotive retailer in the United States. Lithia sells 25 brands of new and all brands of used vehicles at 86 stores, which are located in 11 states. Lithia also arranges finance, warranty, and credit insurance contracts; and provides vehicle parts, maintenance, and repair services at all of its locations.
For additional information on Lithia Motors, contact John North, VP Finance and Controller at (541) 618-5748.
Sites
www.lithia.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, which management believes are a benefit to shareholders. Forward-looking statements in this press release include our guidance regarding first quarter and full year 2012 results, estimated new vehicle inventory and sales levels and the sustainability of future incremental operating leverage. 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 "expects," "anticipates," "intends," "plans," "believes," "seeks" or "will." 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 urge you to carefully consider this information. 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 certain non-GAAP financial measures as defined under SEC rules, such as adjusted net income and diluted earnings per share from continuing operations, adjusted service, body and parts margin, adjusted gross margin, 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. These measures exclude certain items disclosed in the attached financial tables. Cash flows from operations were 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, the Company has provided reconciliations of these measures to the most directly comparable GAAP measures, which are set forth in the attachments to this release. The Company believes that each of the foregoing non-GAAP financial measures improves the transparency of the Company's disclosure, provides a meaningful presentation of the Company's results from its core business operations excluding adjustments for items not related to the Company's ongoing core business operations or other non-cash adjustments, and improves the period-to-period comparability of the Company's results from its core business operations. These presentations are not intended to provide net income, cash flows from operations, operating income, selling, general and administrative costs, or cost of sales in accordance with GAAP and 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
----------------------
2011 2010 (Decrease) (Decrease)
---------- ---------- ---------- -----------
Revenues:
New vehicle retail $ 394,570 $ 280,467 $ 114,103 40.7%
Used vehicle retail 175,284 136,008 39,276 28.9
Used vehicle wholesale 35,925 27,562 8,363 30.3
Finance and insurance 22,920 16,776 6,144 36.6
Service, body and parts 84,799 74,184 10,615 14.3
Fleet and other 3,980 3,087 893 28.9
---------- ---------- ---------- ---------
Total revenues 717,478 538,084 179,394 33.3
Cost of sales:
New vehicle retail 364,535 258,472 106,063 41.0
Used vehicle retail 151,799 117,553 34,246 29.1
Used vehicle wholesale 35,957 27,618 8,339 30.2
Service, body and parts 45,009 40,035 4,974 12.4
Fleet and other 3,581 2,623 958 36.5
---------- ---------- ---------- ---------
Total cost of sales 600,881 446,301 154,580 34.6
---------- ---------- ---------- ---------
Gross profit 116,597 91,783 24,814 27.0
Other Asset Impairments 504 550 (46) (8.4)
SG&A expense 81,396 74,751 6,645 8.9
Depreciation and
amortization 4,156 4,109 47 1.1
---------- ---------- ---------- ---------
Income from operations 30,541 12,373 18,168 146.8
Floor plan interest expense (2,753) (2,117) 636 30.0
Other interest expense (3,550) (3,719) (169) (4.5)
Other income, net 233 65 168 258.5
---------- ---------- ---------- ---------
Income from continuing
operations before income
taxes 24,471 6,602 17,869 270.7
Income tax expense (8,108) (2,363) 5,745 243.1
Income tax rate 33.1% 35.8%
---------- ---------- ---------- ---------
Income from continuing
operations $ 16,363 $ 4,239 $ 12,124 286.0%
Income from discontinued
operations 2,403 140 2,263 NM
---------- ---------- ---------- ---------
Net income $ 18,766 $ 4,379 $ 14,387 328.5%
========== ========== ========== =========
Diluted net income per
share:
Continuing operations $ 0.62 $ 0.16 $ 0.46 287.5%
Discontinued operations 0.09 - 0.09 NM
---------- ---------- ---------- ---------
Net income per share $ 0.71 $ 0.16 $ 0.55 343.8%
========== ========== ========== =========
Diluted shares outstanding 26,442 26,540 (98) (0.4)%
NM - not meaningful
Lithia Motors, Inc.
Key Performance Metrics (Unaudited)
Three Months Ended %
December 31, Increase Increase
------------------
2011 2010 (Decrease) (Decrease)
-------- -------- ------------- ----------
Gross margin
New vehicle retail 7.6% 7.8% (20) bps
Used vehicle retail 13.4 13.6 (20) bps
Used vehicle wholesale (0.1) (0.2) 10 bps
Finance and insurance 100.0 100.0 - bps
Service, body and parts 46.9 46.0 90 bps
Fleet and Other 10.0 15.0 (500) bps
Gross profit margin 16.3 17.1 (80) bps
Unit sales
New vehicle retail 11,515 8,596 2,919 34.0%
Used vehicle retail 10,092 8,106 1,986 24.5
Used vehicle wholesale 4,388 3,569 819 22.9
Total units sold 25,995 20,271 5,724 28.2
Average selling price
New vehicle retail $ 34,266 $ 32,628 $ 1,638 5.0%
Used vehicle retail 17,369 16,779 590 3.5
Used vehicle wholesale 8,187 7,723 464 6.0
Average gross profit per unit
New vehicle retail $ 2,608 $ 2,559 $ 49 1.9%
Used vehicle retail 2,327 2,277 50 2.2
Used vehicle wholesale (7) (16) 9 NM
Finance and insurance 1,061 1,004 57 5.7
Revenue mix
New vehicle retail 55.0% 52.1%
Used vehicle retail 24.4 25.3
Used vehicle wholesale 5.0 5.1
Finance and insurance, net 3.2 3.1
Service, body and parts 11.8 13.8
Fleet and other 0.6 0.6
Other metrics
SG&A as a % of revenue 11.4% 13.9% (250) bps
SG&A as a % of gross profit 69.8 81.4 (1,160) bps
Operating profit as a % of
revenue 4.3 2.3 200 bps
Operating profit as a % of
gross profit 26.2 13.5 1,270 bps
Pretax margin 3.4 1.2 220 bps
NM - not meaningful
Lithia Motors, Inc.
Same Store Operating Highlights (Unaudited)
(In thousands except per unit data)
Three Months Ended %
December 31, Increase Increase
--------------------
2011 2010 (Decrease) (Decrease)
--------- --------- ---------- ----------
Revenues
New vehicle retail $ 361,968 $ 281,179 $ 80,789 28.7%
Used vehicle retail 164,644 135,824 28,820 21.2
Used vehicle wholesale 33,967 27,548 6,419 23.3
Finance and insurance 21,745 15,768 5,977 37.9
Service, body and parts 76,164 74,185 1,979 2.7
Fleet and Other 3,498 2,920 578 19.8
Total revenues 661,986 537,424 124,562 23.2
Gross profit (loss)
New vehicle retail $ 27,002 21,705 $ 5,297 24.4%
Used vehicle retail 22,313 18,459 3,854 20.9
Used vehicle wholesale (20) (60) 40 66.7
Finance and insurance 21,745 15,768 5,977 37.9
Service, body and parts 35,600 34,675 925 2.7
Fleet and Other (50) 59 (109) NM
Total gross profit 106,590 90,606 15,984 17.6
Unit sales
New vehicle retail 10,761 8,616 2,145 24.9%
Used vehicle retail 9,659 8,089 1,570 19.4
Used vehicle wholesale 4,225 3,564 661 18.5
Total units sold 24,645 20,269 4,376 21.6
Average selling price
New vehicle retail $ 33,637 $ 32,635 $ 1,002 3.1%
Used vehicle retail 17,046 16,791 255 1.5
Used vehicle wholesale 8,039 7,730 309 4.0
Average gross profit (loss) per
unit
New vehicle retail $ 2,509 $ 2,519 $ (10) (0.4)%
Used vehicle retail 2,310 2,282 28 1.2
Used vehicle wholesale (5) (17) 12 70.6
Finance and insurance 1,065 944 121 12.8
NM - not meaningful
Lithia Motors, Inc.
Consolidated Statements of Operations (Unaudited)
(In thousands except per share data)
Twelve Months Ended %
December 31, Increase Increase
------------------------
2011 2010 (Decrease) (Decrease)
----------- ----------- ----------- -----------
Revenues:
New vehicle retail $ 1,426,888 $ 1,038,321 $ 388,567 37.4%
Used vehicle retail 695,796 566,803 128,993 22.8
Used vehicle wholesale 130,720 105,714 25,006 23.7
Finance and insurance 85,852 65,274 20,578 31.5
Service, body and parts 325,658 284,170 41,488 14.6
Fleet and other 34,446 11,706 22,740 194.3
----------- ----------- ----------- ----------
Total revenues 2,699,360 2,071,988 627,372 30.3
Cost of sales:
New vehicle retail 1,316,413 953,186 363,227 38.1
Used vehicle retail 595,178 486,739 108,439 22.3
Used vehicle wholesale 130,167 105,070 25,097 23.9
Service, body and parts 168,538 147,119 21,419 14.6
Fleet and other 31,526 10,015 21,511 214.8
----------- ----------- ----------- ----------
Total cost of sales 2,241,822 1,702,129 539,693 31.7
----------- ----------- ----------- ----------
Gross profit 457,538 369,859 87,679 23.7
Asset impairment charges 1,376 15,301 (13,925) (91.0)
SG&A expense 327,545 290,833 36,712 12.6
Depreciation and
amortization 16,626 17,154 (528) (3.1)
----------- ----------- ----------- ----------
Income from operations 111,991 46,571 65,420 140.5
Floor plan interest
expense (10,584) (10,325) 259 2.5
Other interest expense (12,928) (14,545) (1,617) (11.1)
Other income, net 696 419 277 66.1
----------- ----------- ----------- ----------
Income from continuing
operations before income
taxes 89,175 22,120 67,055 303.1
Income tax expense (33,408) (8,589) 24,819 289.0
Income tax rate 37.5% 38.8%
----------- ----------- ----------- ----------
Income from continuing
operations $ 55,767 $ 13,531 $ 42,236 312.1%
Income from discontinued
operations 3,093 188 2,905 NM
----------- ----------- ----------- ----------
Net income $ 58,860 $ 13,719 $ 45,141 329.0%
=========== =========== =========== ==========
Diluted net income per
share:
Continuing operations $ 2.09 $ 0.51 $ 1.58 309.8%
Discontinued operations 0.12 0.01 0.11 NM
----------- ----------- ----------- ----------
Net income per share $ 2.21 $ 0.52 $ 1.69 325.0%
=========== =========== =========== ==========
Diluted shares
outstanding 26,664 26,279 385 1.5%
NM - not meaningful
Lithia Motors, Inc.
Key Performance Metrics (Unaudited)
Twelve Months Ended
December 31, Increase % Increase
--------------------
2011 2010 (Decrease) (Decrease)
--------- --------- ---------- ----------
Gross margin
New vehicle retail 7.7% 8.2% (50) bps
Used vehicle retail 14.5 14.1 40 bps
Used vehicle wholesale 0.4 0.6 (20) bps
Finance and insurance 100.0 100.0 - bps
Service, body and parts 48.2 48.2 - bps
Fleet and Other 8.5 14.4 (590) bps
Gross profit margin 16.9 17.9 (100) bps
Unit sales
New vehicle retail 43,273 32,664 10,609 32.5%
Used vehicle retail 40,457 33,869 6,588 19.5
Used vehicle wholesale 16,439 13,906 2,533 18.2
Total units sold 100,169 80,439 19,730 24.5
Average selling price
New vehicle retail $ 32,974 $ 31,788 $ 1,186 3.7%
Used vehicle retail 17,198 16,735 463 2.8
Used vehicle wholesale 7,952 7,602 350 4.6
Average gross profit per unit
New vehicle retail $ 2,553 $ 2,606 $ (53) (2.0)%
Used vehicle retail 2,487 2,364 123 5.2
Used vehicle wholesale 34 46 (12) (26.1)
Finance and insurance 1,025 981 44 4.5
Revenue mix
New vehicle retail 52.9% 50.1%
Used vehicle retail 25.8 27.4
Used vehicle wholesale 4.8 5.1
Finance and insurance, net 3.2 3.1
Service, body and parts 12.0 13.7
Fleet and other 1.3 0.6
Other metrics
SG&A as a % of revenue 12.1% 14.0% (190) bps
SG&A as a % of gross profit 71.6 78.6 (700) bps
Operating profit as a % of
revenue 4.1 2.2 190 bps
Operating profit as a % of
gross profit 24.5 12.6 1,190 bps
Pretax margin 3.3 1.1 220 bps
Lithia Motors, Inc.
Same Store Operating Highlights (Unaudited)
(In thousands except per unit data)
Twelve Months Ended
December 31, Increase % Increase
-----------------------
2011 2010 (Decrease) (Decrease)
----------- ----------- ---------- ----------
Revenues
New vehicle retail $ 1,341,171 $ 1,039,886 $ 301,285 29.0%
Used vehicle retail 658,586 563,587 94,999 16.9
Used vehicle wholesale 125,324 104,292 21,032 20.2
Finance and insurance 81,335 62,433 18,902 30.3
Service, body and parts 296,655 283,636 13,019 4.6
Fleet and Other 26,132 11,122 15,010 135.0
Total revenues 2,529,203 2,064,956 464,247 22.5
Gross profit
New vehicle retail $ 102,639 $ 84,773 $ 17,866 21.1%
Used vehicle retail 95,955 79,405 16,550 20.8
Used vehicle wholesale 472 782 (310) (39.6)
Finance and insurance 81,335 62,433 18,902 30.3
Service, body and parts 140,218 135,090 5,128 3.8
Fleet and Other 604 204 400 196.1
Total gross profit 421,223 362,687 58,536 16.1
Unit sales
New vehicle retail 41,144 32,703 8,441 25.8%
Used vehicle retail 38,762 33,646 5,116 15.2
Used vehicle wholesale 15,942 13,769 2,173 15.8
Total units sold 95,848 80,118 15,730 19.6
Average selling price
New vehicle retail $ 32,597 $ 31,798 $ 799 2.5%
Used vehicle retail 16,991 16,751 240 1.4
Used vehicle wholesale 7,861 7,574 287 3.8
Average gross profit per unit
New vehicle retail $ 2,495 $ 2,592 $ (97) (3.7)%
Used vehicle retail 2,475 2,360 115 4.9
Used vehicle wholesale 30 57 (27) (47.4)
Finance and insurance 1,018 941 77 8.2
Lithia Motors, Inc.
Non-GAAP Performance Metrics (Unaudited)
Three Months Ended
December 31, Increase
------------------
2011 2010 (Decrease)
-------- -------- ----------
Adjusted gross margin
Service, body and parts 48.0% 47.4% 60 bps
Gross profit margin 16.4 17.3 (90) bps
Adjusted other metrics
SG&A as a % of revenue 12.2% 13.9% (170) bps
SG&A as a % of gross profit 74.6 80.7 (610) bps
Operating profit as a % of revenue 3.6 2.6 100 bps
Operating profit as a % of gross profit 21.9 14.9 700 bps
Pretax margin 2.7 1.5 120 bps
Twelve Months Ended
December 31, Increase
--------------------
2011 2010 (Decrease)
--------- --------- ----------
Adjusted gross margin
Service, body and parts 48.5% 48.6% (10) bps
Gross profit margin 17.0 17.9 (90) bps
Adjusted other metrics
SG&A as a % of revenue 12.4% 14.0% (160) bps
SG&A as a % of gross profit 72.9 78.2 (530) bps
Operating profit as a % of revenue 4.0 3.1 90 bps
Operating profit as a % of gross profit 23.4 17.2 620 bps
Pretax margin 3.1 1.9 120 bps
Lithia Motors, Inc.
Other Highlights
(Unaudited)
As of December 31, Increase
-------------------
2011 2010 (Decrease)
--------- --------- ----------
Days Supply(1)
New vehicle inventory 62 74 (12) days
Used vehicle inventory 52 53 (1) day
(1) Days supply calculated based on current inventory levels, excluding in-
transit vehicles, and a 30-day historical cost of sales level.
Financial covenants
As of December 31,
Requirement 2011
-------------------------- ------------------
Current ratio Not less than 1.20 to 1 1.44 to 1
Fixed charge coverage ratio Not less than 1.20 to 1 1.39 to 1
Liabilities to tangible net
worth ratio Not more than 4.00 to 1 2.72 to 1
Funded debt restriction Not more than $310 million $199.9 million
Lithia Motors, Inc.
Revenue Mix (Unaudited)
Three months ended Twelve months ended
December 31, December 31,
------------------ -------------------
2011 2010 2011 2010
-------- -------- -------- ---------
New vehicle unit sales brand mix
Chrysler 31.4% 31.1% 32.3% 29.9%
General Motors 16.0 15.5 16.8 17.2
BMW, Mini 11.0 9.8 10.1 9.3
Toyota 10.2 12.5 10.5 12.2
Ford 6.6 6.1 6.2 6.1
Mercedes 5.8 2.6 3.7 2.3
Honda, Acura 4.8 7.3 5.6 7.2
Subaru 4.5 4.8 4.2 4.5
Hyundai 3.4 3.6 3.9 4.1
Nissan 2.3 2.5 2.7 2.7
Volkswagen, Audi 2.2 2.4 2.1 2.5
Kia 0.7 0.9 0.8 0.9
Other 1.1 0.9 1.1 1.1
Three months ended Twelve months ended
December 31, December 31,
------------------ -------------------
2011 2010 2011 2010
-------- -------- -------- ---------
Revenue geographic mix
Texas 23.7% 24.6% 24.2% 25.3%
Oregon 22.6 16.1 20.4 15.5
California 9.8 10.6 9.9 10.7
Washington 9.5 10.5 9.6 10.4
Alaska 8.1 9.3 9.1 10.3
Montana 7.8 8.7 8.2 7.8
Idaho 5.6 6.0 5.8 6.4
Iowa 5.1 6.0 5.1 6.1
Nevada 4.5 4.6 4.4 4.3
North Dakota 2.3 2.5 2.2 2.2
New Mexico 1.0 1.1 1.1 1.0
As of February 24,
2012
------------------
# of % of
Current store count mix stores total
-------- --------
Chrysler 22 25.6%
General Motors 12 14.0
Honda, Acura 9 10.5
Toyota 8 9.3
BMW, MINI 8 9.3
Hyundai 6 7.0
Ford 5 5.8
Nissan 4 4.6
Mercedes 3 3.5
Subaru 3 3.5
Volkswagen, Audi 2 2.3
Kia 2 2.3
Other 2 2.3
Lithia Motors, Inc.
Consolidated Balance Sheets (Unaudited)
(In thousands except per share data)
December 31, December 31,
2011 2010
------------ ------------
Cash and cash equivalents $ 20,851 $ 9,306
Trade receivables, net 99,407 75,011
Inventories, net 506,484 415,228
Deferred income taxes 4,730 2,937
Other current assets 16,719 6,062
------------ ------------
Total current assets $ 648,191 $ 508,544
Property and equipment, net 373,779 362,433
Goodwill 18,958 6,186
Franchise value 59,095 45,193
Deferred income taxes 29,270 39,524
Other non-current assets 16,840 9,796
------------ ------------
Total assets 1,146,133 $ 971,676
============ ============
Floor plan notes payable $ 343,940 $ 251,257
Current maturities of long-term debt 8,221 12,081
Trade payables 31,712 23,747
Accrued liabilities 72,711 58,784
------------ ------------
Total current liabilities $ 456,584 $ 345,869
Long-term debt 278,653 268,693
Deferred revenue 25,146 20,158
Other long-term liabilities 18,629 16,739
------------ ------------
Total liabilities $ 779,012 $ 651,459
------------ ------------
Class A common stock 279,366 284,807
Class B common stock 468 468
Additional paid-in capital 10,918 10,972
Accumulated other comprehensive loss (4,508) (4,869)
Retained earnings 80,877 28,839
------------ ------------
Total liabilities & stockholders' equity $ 1,146,133 $ 971,676
============ ============
Lithia Motors, Inc.
Summarized Cash Flow from Operations (Unaudited)
(In thousands)
Twelve Months Ended
December 31,
--------------------
2011 2010
--------- ---------
Net income $ 58,860 $ 13,719
Adjustments to reconcile net income to net cash used
in operating activities:
Asset impairments 1,376 15,301
Depreciation and amortization 16,626 17,154
Depreciation and amortization within discontinued
operations 322 432
Stock-based compensation 2,001 2,419
Gain on disposal of assets (6,495) (107)
(Gain) loss from disposal activities within
discontinued operations (4,396) 301
Deferred income taxes 8,093 (2,131)
Excess tax benefit from share-based payment
arrangements (525) (264)
Increase:
Trade receivables, net (22,503) (22,881)
Inventories (78,202) (68,305)
Other current assets (13,111) (1,633)
Other non-current assets (1,108) (2,029)
Decrease:
Floor plan notes payable 13,510 10,550
Trade payables 5,998 4,960
Accrued liabilities 11,605 10,029
Other long-term liabilities and deferred revenue 7,183 1,155
--------- ---------
Net cash used in operating activities $ (766) $ (21,330)
Lithia Motors, Inc.
Reconciliation of Non-GAAP Cash Flow from Operations (Unaudited)
(In thousands)
Twelve Months Ended
December 31,
----------------------
Net cash used in operating activities 2011 2010
---------- ----------
As reported $ (766) $ (21,330)
Floor plan notes payable, non-trade 63,145 24,090
---------- ----------
Adjusted $ 62,379 $ 2,760
Lithia Motors, Inc.
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)
(In thousands)
Three Months Ended, Twelve Months Ended
December 31 December 31,
-------------------- --------------------
2011 2010 2011 2010
--------- --------- --------- ---------
Service, body and parts cost of
sales
As reported $ 45,009 $ 40,035 $ 168,538 $ 147,119
Reserve adjustments (950) (1,040) (950) (1,040)
--------- --------- --------- ---------
Adjusted $ 44,059 $ 38,995 $ 167,588 $ 146,079
Selling, general &
administrative
As reported $ 81,396 $ 74,751 $ 327,545 $ 290,833
Disposal gain 6,301 47 6,881 419
Reserve adjustments - 96 - (1,238)
--------- --------- --------- ---------
Adjusted $ 87,697 $ 74,894 $ 334,426 $ 290,014
Income from operations
As reported $ 30,541 $ 12,373 $ 111,991 $ 46,571
Impairments and disposal
(gain) loss (5,797) 503 (5,505) 14,882
Reserve adjustments 950 944 950 2,278
--------- --------- --------- ---------
Adjusted $ 25,694 $ 13,820 $ 107,436 $ 63,731
Income from continuing
operations before income taxes
As reported $ 24,471 $ 6,602 $ 89,175 $ 22,120
Impairments and disposal
(gain) loss (5,797) 503 (5,505) 14,882
Reserve adjustments 950 944 950 2,278
--------- --------- --------- ---------
Adjusted $ 19,624 $ 8,049 $ 84,620 $ 39,280
Lithia Motors, Inc.
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)
(In thousands except per share data)
Adjusted net income and diluted earnings per share
Three Months Ended December 31,
Diluted earnings
Net income per share
------------------ ------------------
2011 2010 2011 2010
-------- -------- -------- --------
Continuing Operations
As reported $ 16,363 $ 4,239 $ 0.62 $ 0.16
Impairments and disposal (gain) loss (3,908) 435 (0.15) 0.02
Reserve adjustments 591 773 0.02 0.02
-------- -------- -------- --------
Adjusted $ 13,046 $ 5,447 $ 0.49 $ 0.20
Discontinued Operations
As reported $ 2,403 $ 140 $ 0.09 -
Disposal gain (2,604) - (0.10) -
-------- -------- -------- --------
Adjusted $ (201) $ 140 $ (0.01) -
Consolidated Operations
As reported $ 18,766 $ 4,379 $ 0.71 $ 0.16
Adjusted 12,845 5,587 0.48 0.20
Twelve Months Ended December 31,
Diluted earnings
Net income per share
------------------ ------------------
2011 2010 2011 2010
-------- -------- -------- --------
Continuing Operations
As reported $ 55,767 $ 13,531 $ 2.09 $ 0.51
Impairments and disposal (gain) loss (3,732) 9,166 (0.14) 0.35
Reserve adjustments 591 1,496 0.02 0.07
-------- -------- -------- --------
Adjusted $ 52,626 $ 24,193 $ 1.97 $ 0.93
Discontinued Operations
As reported $ 3,093 $ 188 $ 0.12 $ 0.01
Impairments and disposal (gain) loss (2,665) 181 (0.10) -
-------- -------- -------- --------
Adjusted $ 428 $ 369 $ 0.02 $ 0.01
Consolidated Operations
As reported $ 58,860 $ 13,719 $ 2.21 $ 0.52
Adjusted 53,054 24,562 1.99 0.94
John North
VP Finance and Controller
(541) 618-5748
