Lithia Motors Reports Third Quarter 2011 Earnings of $0.61 per Share; Introduces 2012 Outlook Range of $1.95 to $2.05 per Share
MEDFORD, OR -- (Marketwire) -- 10/26/11 -- Lithia Motors, Inc. (NYSE: LAD) today reported 2011 third quarter income from continuing operations of $16.3 million, or $0.61 per diluted share. This compares to a 2010 third quarter income from continuing operations of $9.6 million, or $0.36 per diluted share. Third quarter 2011 revenue from continuing operations increased $164.9 million, or 29% to $737.9 million, compared to $573.0 million in the third quarter of 2010.
Third Quarter Year-over-Year Operating Highlights:
- New vehicle same store sales increased 28%
- Used vehicle retail same store sales increased 14%
- Service, body and parts same store sales increased 3%
- SG&A expense as a percentage of gross profit reduced 310 basis points, to 70.8%
"Our team continued to execute in the third quarter," said Sid DeBoer, Chairman and CEO of Lithia. "We increased quarterly revenue 29 percent, and grew diluted earnings per share 69 percent. As we remain disciplined on controlling costs, incremental operating leverage demonstrates the earnings power of our company."
For the first nine months of 2011, revenue from continuing operations increased 30% to $2.0 billion as compared to $1.6 billion in 2010. Same store new vehicle sales increased 31%, used vehicle retail same store sales increased 16% and service, body and parts same store sales increased 5%. For the first nine months of 2011 adjusted income from continuing operations was $1.48 per diluted share as compared to $0.72 per diluted share in 2010. Unadjusted, for the first nine months of 2011, income from continuing operations was $1.47 per diluted share, compared to $0.35 per diluted share for 2010.
"We grew new vehicle same store sales 28 percent, well above the national average," said Bryan DeBoer, President and COO. "Our import stores grew new unit sales volume two percent, despite shortage of import brand new vehicle inventory. However, we still have opportunity to increase our market share in both new and used vehicle sales."
Corporate Development
On October 6, 2011, Lithia purchased a Subaru and Mitsubishi store in Fresno, California, with estimated annual revenues of $25.0 million. Including this acquisition, Lithia has purchased six stores in 2011. On October 19, 2011, Lithia sold a Volkswagen store in Thornton, Colorado, a suburb of Denver.
Commenting on the acquisition and divestiture activity, Bryan DeBoer said, "Lithia Subaru Mitsubishi of Fresno complements our existing Ford Mazda and Nissan Hyundai stores in the Fresno market. We continue to pursue exclusive franchises in the markets we operate in, and have strategically purchased and sold stores this year to further that strategy."
Share Repurchases
During the third quarter, Lithia repurchased 650,809 shares of its Class A common stock. Under the 1.0 million share repurchase program authorized in 2000, 416,776 shares were repurchased. Under a new 2.0 million authorization approved by the Board of Directors in August 2011, an additional 234,033 shares were repurchased. At the end of the third quarter, authority to purchase 1.77 million shares remained under this authorization.
Chris Holzshu, SVP and Chief Financial Officer, commented, "We remain focused on the prudent allocation of capital. While our first choice remains acquisitions and internal investment, we are pleased to provide a dividend and opportunistically repurchase shares to return value to our shareholders."
Balance Sheet Update
On September 30, 2011, Lithia entered into a new three-year $200 million credit facility with US Bank, N.A. and JPMorgan Chase Bank, N.A. The revolving facility will provide $100 million for new vehicle inventory floor plan financing and $100 million for general corporate purposes including working capital and acquisitions.
Lithia ended the period with $16 million in cash and $49 million in unfinanced new vehicle inventory. The new credit facility provides available funds of approximately $29 million. In total, this represents approximately $94 million in available liquidity.
Dividend Payment
Lithia announced that the Board of Directors has approved a dividend of $0.07 per share for the third quarter 2011. Lithia will pay the dividend November 25, 2011 to shareholders of record on November 11, 2011.
Updated Outlook for 2011
Lithia projects its 2011 fourth quarter earnings guidance within a range of $0.37 to $0.39 per diluted share. Full-year 2011 earnings guidance is projected within a range of $1.86 to $1.88 per diluted share. Both projections are based on the following annual assumptions:
- Total revenues in range of $2.6 to $2.7 billion
- New vehicle same store sales increasing 26%
- New vehicle gross margin ranging from 7.5% to 7.7%
- Used vehicle same store sales increasing 16%
- Used vehicle gross margin ranging from 14.5% to 14.7%
- Service body and parts same store sales increasing 3.6%
- Service body and parts gross margin ranging from 48.4% to 48.7%
- Finance and insurance gross profit of $1,000 per unit
- Tax rate of 40%
- Average diluted shares outstanding of 26.7 million
- Capital expenditures of $35 million
- Guidance excludes the impact of future acquisitions, dispositions, and any potential non-core items
Outlook for 2012
Lithia projects its 2012 first quarter earnings guidance within a range of $0.37 to $0.39 per diluted share. Full-year 2012 earnings guidance is projected within a range of $1.95 to $2.05 per diluted share. Both projections are based on the following annual assumptions:
- Total revenues in range of $2.9 to $3.0 billion
- New vehicle same store sales increasing 9.0%
- New vehicle gross margin ranging from 7.5% to 7.7%
- Used vehicle same store sales increasing 8.5%
- Used vehicle gross margin ranging from 14.5% to 14.7%
- Service body and parts same store sales increasing 2.0%
- Service body and parts gross margin ranging from 48.4% to 48.7%
- Finance and insurance gross profit of $980 per unit
- Tax rate of 40%
- Average diluted shares outstanding of 26.8 million
- Capital expenditures of $38 million
- Guidance excludes the impact of future acquisitions, dispositions, and any potential non-core items
Third Quarter Earnings Conference Call and Updated Presentation
The third quarter conference call may be accessed at 10:00 a.m. ET today by telephone at 877-407-8029. An updated presentation highlighting the third 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 October 26, 2011 through November 2, 2011 by calling 877-660-6853 (Conference ID: 379757).
About Lithia
Lithia Motors, Inc. is the ninth largest automotive retailer in the United States. Lithia sells 28 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.
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 fourth quarter and full year 2011 results, first quarter and full year 2012 results, the effect of acquisitions on annual revenues, 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.
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 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 or selling, general and administrative costs 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 %
September 30, Increase Increase
----------------------
2011 2010 (Decrease) (Decrease)
---------- ---------- ---------- ----------
Revenues:
New vehicle retail $ 391,120 $ 288,125 $ 102,995 35.7 %
Used vehicle retail 189,338 156,539 32,799 21.0
Used vehicle wholesale 36,612 30,414 6,198 20.4
Finance and insurance 23,029 18,629 4,400 23.6
Service, body and parts 87,669 76,169 11,500 15.1
Fleet and other 10,133 3,121 7,012 224.7
---------- ---------- ---------- -------
Total revenues 737,901 572,997 164,904 28.8
Cost of sales:
New vehicle retail 361,175 264,286 96,889 36.7
Used vehicle retail 161,881 133,602 28,279 21.2
Used vehicle wholesale 36,697 30,386 6,311 20.8
Service, body and parts 45,034 38,850 6,184 15.9
Fleet and other 9,443 2,684 6,759 251.8
---------- ---------- ---------- -------
Total cost of sales 614,230 469,808 144,422 30.7
---------- ---------- ---------- -------
Gross profit 123,671 103,189 20,482 19.8
SG&A expense 87,595 76,211 11,384 14.9
Depreciation and amortization 4,201 4,182 19 0.5
---------- ---------- ---------- -------
Income from operations 31,875 22,796 9,079 39.8
Floor plan interest expense (2,066) (3,047) (981) (32.2)
Other interest expense (3,082) (3,718) (636) (17.1)
Other income, net 216 73 143 195.9
---------- ---------- ---------- -------
Income from continuing
operations before income
taxes 26,943 16,104 10,839 67.3
Income tax expense 10,604 6,545 4,059 62.0
Income tax rate 39.4% 40.6%
---------- ---------- ---------- -------
Income from continuing
operations $ 16,339 $ 9,559 $ 6,780 70.9 %
Discontinued operations 224 233 (9) (3.9)
---------- ---------- ---------- -------
Net income $ 16,563 $ 9,792 $ 6,771 69.1 %
========== ========== ========== =======
Diluted net income per share:
Continuing operations $ 0.61 $ 0.36 $ 0.25 69.4 %
Discontinued operations 0.01 0.01 - -
---------- ---------- ---------- -------
Net income per share $ 0.62 $ 0.37 $ 0.25 67.6 %
========== ========== ========== =======
Diluted shares outstanding 26,654 26,328 326 1.2 %
Lithia Motors, Inc.
Key Performance Metrics (Unaudited)
Three Months Ended %
September 30, Increase Increase
------------------------
2011 2010 (Decrease) (Decrease)
---------- ---------- ---------- ----------
Gross margin
New vehicle retail 7.7 % 8.3 % (60) bps
Used vehicle retail 14.5 14.7 (20) bps
Used vehicle wholesale (0.2) 0.1 (30) bps
Finance and insurance 100.0 100.0 - bps
Service, body and parts 48.6 49.0 (40) bps
Fleet and Other 6.8 14.0 (720) bps
Gross profit margin 16.8 18.0 (120) bps
Unit sales
New vehicle retail 11,729 9,045 2,684 29.7 %
Used vehicle retail 10,912 9,547 1,365 14.3
Used vehicle wholesale 4,618 3,984 634 15.9
Total units sold 27,259 22,576 4,683 20.7
Average selling price
New vehicle retail $ 33,346 $ 31,855 $ 1,491 4.7 %
Used vehicle retail 17,351 16,397 954 5.8
Used vehicle wholesale 7,928 7,634 294 3.9
Average gross profit per
unit
New vehicle retail $ 2,553 $ 2,636 $ (83) (3.1) %
Used vehicle retail 2,516 2,403 113 4.7
Used vehicle wholesale (18) 7 (25) NM
Finance and insurance 1,017 1,002 15 1.5
Revenue mix
New vehicle retail 53.0 % 50.3 %
Used vehicle retail 25.7 27.3
Used vehicle wholesale 4.9 5.3
Finance and insurance,
net 3.1 3.3
Service, body and parts 11.9 13.3
Fleet and other 1.4 0.5
Three Months Ended
September 30,
------------------------
Other metrics 2011 2010
---------- ----------
SG&A as a % of revenue 11.9 % 13.3 %
SG&A as a % of gross
profit 70.8 73.9
Operating profit as a %
of revenue 4.3 4.0
Operating profit as a %
of gross profit 25.8 22.1
Pretax margin 3.7 2.8
NM - not meaningful
Lithia Motors, Inc.
Same Store Operating Highlights (Unaudited)
(In thousands except per unit data)
Three Months Ended %
September 30, Increase Increase
----------------------
2011 2010 (Decrease) (Decrease)
---------- ---------- ---------- ----------
Revenues
New vehicle retail $ 369,518 $ 287,821 $ 81,697 28.4 %
Used vehicle retail 177,737 155,620 22,117 14.2
Used vehicle wholesale 34,841 30,158 4,683 15.5
Finance and insurance 21,741 18,032 3,709 20.6
Service, body and parts 78,225 75,920 2,305 3.0
Fleet and Other 9,615 2,985 6,630 222.1
Gross profit (loss)
New vehicle retail $ 27,933 $ 23,789 $ 4,144 17.4 %
Used vehicle retail 26,263 22,770 3,493 15.3
Used vehicle wholesale (128) 58 (186) NM
Finance and insurance 21,741 18,032 3,709 20.6
Service, body and parts 37,203 36,533 670 1.8
Fleet and Other 231 73 158 216.4
Unit sales
New vehicle retail 11,213 9,030 2,183 24.2 %
Used vehicle retail 10,395 9,480 915 9.7
Used vehicle wholesale 4,477 3,959 518 13.1
Total units sold 26,085 22,469 3,616 16.1
Average selling price
New vehicle retail $ 32,954 $ 31,874 $ 1,080 3.4 %
Used vehicle retail 17,098 16,416 682 4.2
Used vehicle wholesale 7,782 7,618 164 2.2
Average gross profit (loss)
per unit
New vehicle retail $ 2,491 $ 2,634 $ (143) (5.4) %
Used vehicle retail 2,527 2,402 125 5.2
Used vehicle wholesale (29) 15 (44) NM
Finance and insurance 1,006 974 32 3.3
NM - not meaningful
Lithia Motors, Inc.
Consolidated Statements of Operations (Unaudited)
(In thousands except per share data)
Nine Months Ended %
September 30, Increase Increase
------------------------
2011 2010 (Decrease) (Decrease)
---------- ---------- ---------- ----------
Revenues:
New vehicle retail $1,052,252 $ 765,009 $ 287,243 37.5 %
Used vehicle retail 525,919 435,186 90,733 20.8
Used vehicle wholesale 95,882 78,895 16,987 21.5
Finance and insurance 63,815 49,096 14,719 30.0
Service, body and parts 245,148 213,926 31,222 14.6
Fleet and other 30,467 8,620 21,847 253.4
---------- ---------- ---------- -------
Total revenues 2,013,483 1,550,732 462,751 29.8
Cost of sales:
New vehicle retail 971,246 701,298 269,948 38.5
Used vehicle retail 447,850 372,862 74,988 20.1
Used vehicle wholesale 95,289 78,199 17,090 21.9
Service, body and parts 125,725 109,113 16,612 15.2
Fleet and other 27,945 7,392 20,553 278.0
---------- ---------- ---------- -------
Total cost of sales 1,668,055 1,268,864 399,191 31.5
---------- ---------- ---------- -------
Gross profit 345,428 281,868 63,560 22.5
Asset impairment charges 872 14,751 (13,879) (94.1)
SG&A expense 250,264 219,622 30,642 14.0
Depreciation and
amortization 12,593 13,221 (628) (4.8)
---------- ---------- ---------- -------
Income from operations 81,699 34,274 47,425 138.4
Floor plan interest
expense (8,018) (8,276) (258) (3.1)
Other interest expense (9,395) (10,832) (1,437) (13.3)
Other income, net 463 354 109 30.8
---------- ---------- ---------- -------
Income from continuing
operations before income
taxes 64,749 15,520 49,229 317.2
Income tax expense 25,317 6,228 19,089 306.5
Income tax rate 39.1 % 40.1 %
---------- ---------- ---------- -------
Income from continuing
operations $ 39,432 $ 9,292 $ 30,140 324.4 %
Discontinued operations 662 48 614 1,279.2
---------- ---------- ---------- -------
Net income $ 40,094 $ 9,340 $ 30,754 329.3 %
========== ========== ========== =======
Diluted net income per
share:
Continuing operations $ 1.47 $ 0.35 $ 1.12 320.0 %
Discontinued operations 0.03 0.01 0.02 200.0
---------- ---------- ---------- -------
Net income per share $ 1.50 $ 0.36 $ 1.14 316.7 %
========== ========== ========== =======
Diluted shares
outstanding 26,738 26,191 547 2.1 %
Lithia Motors, Inc.
Key Performance Metrics (Unaudited)
Nine Months Ended
September 30, Increase % Increase
------------------------
2011 2010 (Decrease) (Decrease)
---------- ---------- ---------- ----------
Gross margin
New vehicle retail 7.7 % 8.3 % (60) bps
Used vehicle retail 14.8 14.3 50 bps
Used vehicle wholesale 0.6 0.9 (30) bps
Finance and insurance 100.0 100.0 - bps
Service, body and parts 48.7 49.0 (30) bps
Fleet and Other 8.3 14.2 (590) bps
Gross profit margin 17.2 18.2 (100) bps
Unit sales
New vehicle retail 32,386 24,345 8,041 33.0 %
Used vehicle retail 30,758 26,133 4,625 17.7
Used vehicle wholesale 12,246 10,476 1,770 16.9
Total units sold 75,390 60,954 14,436 23.7
Average selling price
New vehicle retail $ 32,491 $ 31,424 $ 1,067 3.4 %
Used vehicle retail 17,099 16,653 446 2.7
Used vehicle wholesale 7,830 7,531 299 4.0
Average gross profit per
unit
New vehicle retail $ 2,501 $ 2,617 $ (116) (4.4) %
Used vehicle retail 2,538 2,385 153 6.4
Used vehicle wholesale 48 66 (18) (27.3)
Finance and insurance 1,011 973 38 3.9
Revenue mix
New vehicle retail 52.3 % 49.3 %
Used vehicle retail 26.1 28.1
Used vehicle wholesale 4.7 5.1
Finance and insurance,
net 3.2 3.2
Service, body and parts 12.2 13.8
Fleet and other 1.5 0.5
Adjusted As reported
------------------------ -------------------
Nine Months Ended Nine Months Ended
September 30, September 30,
------------------------ -------------------
Other metrics 2011 2010 2011 2010
---------- ---------- ---------- -------
SG&A as a % of revenue 12.5 % 14.1 % 12.4% 14.2 %
SG&A as a % of gross
profit 72.6 77.6 72.5 77.9
Operating profit as a %
of revenue 4.1 3.2 4.1 2.2
Operating profit as a %
of gross profit 23.7 17.8 23.7 12.2
Pretax margin 3.2 2.0 3.2 1.0
Lithia Motors, Inc.
Same Store Operating Highlights (Unaudited)
(In thousands except per unit data)
Nine Months Ended
September 30, Increase % Increase
----------------------
2011 2010 (Decrease) (Decrease)
---------- ---------- ---------- ----------
Revenues
New vehicle retail $ 999,136 $ 765,861 $ 233,275 30.5 %
Used vehicle retail 499,349 432,154 67,195 15.5
Used vehicle wholesale 92,445 77,487 14,958 19.3
Finance and insurance 60,474 47,264 13,210 27.9
Service, body and parts 224,779 213,391 11,388 5.3
Fleet and Other 22,633 8,202 14,431 175.9
Gross profit
New vehicle retail $ 76,202 $ 63,639 $ 12,563 19.7 %
Used vehicle retail 74,579 61,661 12,918 21.0
Used vehicle wholesale 500 838 (338) (40.3)
Finance and insurance 60,474 47,264 13,210 27.9
Service, body and parts 106,711 102,328 4,383 4.3
Fleet and Other 654 145 509 351.0
Unit sales
New vehicle retail 31,011 24,364 6,647 27.3 %
Used vehicle retail 29,496 25,927 3,569 13.8
Used vehicle wholesale 11,912 10,344 1,568 15.2
Total units sold 72,419 60,635 11,784 19.4
Average selling price
New vehicle retail $ 32,219 $ 31,434 $ 785 2.5 %
Used vehicle retail 16,929 16,668 261 1.6
Used vehicle wholesale 7,761 7,491 270 3.6
Average gross profit per unit
New vehicle retail $ 2,457 $ 2,612 $ (155) (5.9) %
Used vehicle retail 2,528 2,378 150 6.3
Used vehicle wholesale 42 81 (39) (48.1)
Finance and insurance 999 940 59 6.3
Lithia Motors, Inc.
Revenue Mix (Unaudited)
Three months ended Nine months ended
September 30, September 30,
------------------- -------------------
2011 2010 2011 2010
-------- -------- -------- --------
New vehicle unit sales brand mix
Chrysler 33.7 % 28.7 % 30.8 % 27.7 %
General Motors 17.5 16.0 17.6 16.8
Toyota 10.4 13.2 11.8 13.6
BMW, Mini 6.7 5.2 6.3 5.4
Ford 5.9 6.2 5.8 5.9
Hyundai 5.5 6.0 5.6 6.0
Honda, Acura 5.3 8.3 6.9 8.7
Subaru 4.6 5.9 5.0 5.6
Nissan 3.4 3.5 3.6 3.5
Volkswagen, Audi 2.3 3.1 2.3 2.7
Mercedes 2.1 1.3 1.7 1.2
Kia 1.7 2.0 1.8 2.0
Other 0.9 0.6 0.8 0.9
Three months ended Nine months ended
September 30, September 30,
------------------- -------------------
2011 2010 2011 2010
-------- -------- -------- --------
Revenue geographic mix
Texas 23.7 % 24.9 % 24.1 % 25.3 %
Oregon 20.3 15.5 19.2 15.1
California 9.6 10.4 9.8 10.7
Alaska 9.5 9.9 9.3 10.5
Washington 9.0 10.2 9.5 10.2
Montana 8.4 8.1 8.2 7.3
Iowa 6.3 7.2 6.6 7.1
Idaho 5.7 6.5 5.8 6.5
Nevada 4.1 4.2 4.3 4.2
North Dakota 2.2 2.3 2.1 2.1
New Mexico 1.2 0.8 1.1 1.0
As of October 26,
2011
-------------------
Current store count mix # of % of
stores total
-------- --------
Chrysler 22 25.6 %
General Motors 12 14.0
Honda, Acura 9 10.5
Toyota 8 9.3
BMW, Mini 7 8.1
Hyundai 6 7.0
Ford 5 5.8
Nissan 4 4.6
Mercedes 3 3.5
Subaru 3 3.5
Volkswagen, Audi 3 3.5
Kia 2 2.3
Other 2 2.3
Lithia Motors, Inc.
Consolidated Balance Sheets (Unaudited)
(In thousands except per share data)
September 30, 2011 December 31, 2010
------------------ ------------------
Cash and cash equivalents $ 15,936 $ 9,306
Trade receivables, net 84,247 75,011
Inventories, net 489,217 415,228
Deferred income taxes 4,554 2,937
Other current assets 5,298 6,062
Assets held for sale 4,912 -
------------------ ------------------
Total current assets $ 604,164 $ 508,544
Property and equipment, net 379,515 362,433
Goodwill 18,191 6,186
Franchise value 58,400 45,193
Deferred income taxes 34,776 39,524
Other non-current assets 20,169 9,796
------------------ ------------------
Total assets $ 1,115,215 $ 971,676
================== ==================
Floor plan notes payable $ 324,307 $ 251,257
Current maturities of long-term debt 11,633 12,081
Trade payables 28,575 23,747
Accrued liabilities 71,102 58,784
Liabilities related to assets held
for sale 866 -
------------------ ------------------
Total current liabilities $ 436,483 $ 345,869
Long-term debt 285,954 268,693
Deferred revenue 23,774 20,158
Other long-term liabilities 20,621 16,739
------------------ ------------------
Total liabilities $ 766,832 $ 651,459
------------------ ------------------
Class A common stock 277,803 284,807
Class B common stock 468 468
Additional paid-in capital 11,171 10,972
Accumulated other comprehensive loss (4,986) (4,869)
Retained earnings 63,927 28,839
------------------ ------------------
Total liabilities & stockholders'
equity $ 1,115,215 $ 971,676
================== ==================
Lithia Motors, Inc.
Summarized Cash Flow from Operations (Unaudited)
(In thousands)
Nine Months Ended
September 30,
----------------------
2011 2010
---------- ----------
Net income $ 40,094 $ 9,340
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Asset impairments 872 14,751
Depreciation and amortization 12,593 13,221
Depreciation and amortization within discontinued
operations 160 176
Stock-based compensation 1,686 1,450
Gain on disposal of assets (134) (59)
(Gain) loss from disposal activities within
discontinued operations (116) 294
Deferred income taxes 3,325 (2,610)
Excess tax benefit from share-based payment
arrangements (360) (89)
(Increase) decrease:
Trade receivables, net (7,177) (17,754)
Inventories (53,389) (57,040)
Other current assets (1,078) 2,564
Other non-current assets (4,079) (1,313)
Increase (decrease):
Floor plan notes payable (10,637) 3,111
Trade payables 3,759 6,167
Accrued liabilities 9,890 11,181
Other long-term liabilities and deferred revenue 8,018 623
---------- ----------
Net cash provided by (used in) operating activities $ 3,427 $ (15,987)
Lithia Motors, Inc.
Reconciliation of Non-GAAP Cash Flow from Operations (Unaudited)
(In thousands)
Nine Months Ended
September 30,
-----------------------
Net cash provided by (used in) operating activities 2011 2010
----------- ----------
As reported $ 3,427 $ (15,987)
Floor plan notes payable, non-trade 67,402 13,807
----------- ----------
Adjusted $ 70,829 $ (2,180)
Lithia Motors, Inc.
Other Highlights (Unaudited)
(In thousands except per share
data)
September 30, December 31, September 30,
2011 2010 2010
------------- ------------- -------------
Days Supply(1)
New vehicle inventory 66 75 73
Used vehicle inventory 53 53 49
(1) Days supply calculated based on current inventory levels, excluding in-
transit vehicles, and a 30-day historical cost of sales level.
September 30, December 31,
2011 2010
------------- -------------
Other information
Long-term debt/total
capitalization(2) 45.1 % 45.6 %
(2) Total capitalization is comprised of long-term debt and total
stockholder's equity.
Financial covenants
As of September 30,
Requirement 2011
-------------------------- -------------------
Current ratio Not less than 1.20 to 1 1.45 to 1
Fixed charge coverage ratio Not less than 1.20 to 1 1.69 to 1
Liabilities to tangible net
worth ratio Not more than 4.00 to 1 2.87 to 1
Funded debt restriction Not more than $310 million $228.6 million
Lithia Motors, Inc.
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)
(In thousands)
Nine months ended
September 30,
---------------------------
2011 2010
------------- ------------
Selling, general & administrative
As reported $ 250,264 $ 219,622
Disposal gain 580 365
Reserve adjustments - (1,334)
------------- ------------
Adjusted $ 250,844 $ 218,653
Income from operations
As reported $ 81,699 $ 34,274
Impairments and disposal gain 292 14,452
Reserve adjustments - 1,334
------------- ------------
Adjusted $ 81,991 $ 50,060
Income from continuing operations before income
taxes
As reported $ 64,749 $ 15,520
Impairments and disposal gain 292 14,452
Reserve adjustments - 1,334
------------- ------------
Adjusted $ 65,041 $ 31,306
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
Nine Months Ended September 30,
Diluted earnings per
Net income share
----------------------- -----------------------
2011 2010 2011 2010
---------- ----------- ---------- -----------
Continuing Operations
As reported $ 39,432 $ 9,292 $ 1.47 $ 0.35
Impairments and disposal
gain 176 8,776 0.01 0.34
Reserve adjustments - 722 - 0.03
---------- ----------- ---------- -----------
Adjusted $ 39,608 $ 18,790 $ 1.48 $ 0.72
Discontinued Operations
As reported $ 662 $ 48 $ 0.03 $ 0.01
Impairments and disposal
loss (61) 178 (0.01) -
---------- ----------- ---------- -----------
Adjusted $ 601 $ 226 $ 0.02 $ 0.01
Consolidated Operations
As reported $ 40,094 $ 9,340 $ 1.50 $ 0.36
Adjusted 40,209 19,016 1.50 0.73
For additional information on Lithia Motors, contact
John North
VP Finance and Controller
(541) 618-5748
