Lithia Motors Exceeds Guidance with 3 Cent Loss Per Share in the First Quarter from Continuing Operations Excluding a One-Time Charge
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MEDFORD, Ore.--(BUSINESS WIRE)--April 29, 2008--Lithia Motors, Inc. (NYSE:LAD) today announced that, excluding a one-time after-tax expense of $1.3 million (or seven cents per share) related to the recently completed investigation, losses from continuing operations were three cents per share. The company's guidance for the quarter was for a loss of five to ten cents per share. First quarter 2008 sales were $699.3 million, a 9.7% decrease from $774.5 million in the same period last year. First quarter 2008 loss from continuing operations was $1.9 million. This compared to earnings of $7.2 million in the first quarter of 2007, which included extremely strong sales in March. Sid DeBoer, Lithia's Chairman and CEO, commented, "Sales improved each month of the first quarter. With the stronger selling season upon us, we feel well positioned to perform going forward. Spring and summer will help give us what we need to push through the current economic challenges just as we have in past recessionary environments. We are continuing necessary cost-cutting measures, largely in the area of personnel. We are increasing productivity, and improving our customer offerings and our marketing message. Our business model's strength lies in our ability to adapt to changing retail environments." Jeff DeBoer, Senior Vice President and CFO, added, "We are providing second quarter EPS guidance and are maintaining our full year 2008 guidance as shown below." "Our guidance is based on income from continuing operations and assumes a continuation of challenging economic conditions and fifteen to twenty cents of annual start up costs associated with L2," concluded Jeff DeBoer. 2008 Key Earnings Guidance Assumptions:
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Sales $3.1 billion - $3.2 billion
Same Store Sales Decline 5.0% - 6.0%
Gross Margin 16.9% - 17.0%
SG&A as % of Sales 13.1% - 13.4%
SG&A as % of Gross Profit 78.0% - 81.0%
Operating Margin 2.6% - 2.8%
Flooring Interest Expense 0.7% - 0.8%
Other Interest Expense 0.7% - 0.8%
Tax Rate 39.5% - 40.5%
Net Margin 0.7% - 0.9%
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Earnings per Share from Continuing Operations:
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Guidance Guidance
Q2 2008 FY 2008
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$0.25 - $0.30 $1.00 - $1.30
Conference Call Information Lithia Motors will be providing more detailed information on the results for the first quarter 2008 in its conference call scheduled for today at 2 p.m. PT and 5 p.m. ET. The call can be accessed live by calling 973-409-9255; Conference ID #: 43227703. 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 28 brands of new and all brands of used vehicles at 110 stores which are located in 46 markets within 15 states. Internet sales are centralized at www.Lithia.com, or through www.L2Auto.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 105,108 new and used vehicles and had $3.22 billion in total revenue in 2007. 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 comments and predictions related to the retail sales environment and its ability to successfully adjust to those conditions and achieve the earnings per share projected. Additional Information For additional information on Lithia Motors, contact the Investor Relations Department: 541-618-5770 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 30, Increase Increase
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2008 2007 (Decrease) (Decrease)
---------- --------- ---------- ----------
New vehicle sales $ 373,692 $437,507 $(63,815) (14.6)%
Used vehicle sales 201,460 213,034 (11,574) (5.4)
Finance and insurance 25,683 29,644 (3,961) (13.4)
Service, body and parts 97,520 93,642 3,878 4.1
Fleet and other revenues 953 690 263 38.1
---------- --------- ---------- ---------
Total revenues 699,308 774,517 (75,209) (9.7)
---------- --------- ---------- ---------
Cost of sales 581,237 638,653 57,416 (9.0)
---------- --------- ---------- ---------
Gross Profit 118,071 135,864 (17,793) (13.1)
SG&A expense 103,451 107,430 (3,979) (3.7)
Depreciation and
amortization 5,771 4,763 1,008 21.2
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Income from operations 8,849 23,671 (14,822) (62.2)
Floorplan interest expense (6,326) (7,354) (1,028) (14.0)
Other interest expense (5,600) (4,628) 972 21.0
Other income, net 98 212 (114) (53.8)
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Income (loss) from
continuing operations
before income taxes (2,979) 11,901 14,880 NM
Income tax expense
(benefit) (1,108) 4,676 (5,784) NM
Income Tax Rate 37.2% 39.3%
---------- --------- ---------- ---------
Income (loss) from
continuing operations (1,871) 7,225 (9,096) NM
Discontinued Operations:
Loss from operations, net
of income tax (290) (150) 140 93.3
---------- --------- ---------- ---------
Net income (loss) $ (2,161) $ 7,075 $ 9,236 NM
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Diluted net income (loss)
per share:
Continuing Operations $ (0.10) $ 0.35 $ (0.45) NM
Discontinued Operations:
Loss from operations, net
of income tax (0.01) (0.01)
---------- --------- ---------- ---------
Net income (loss) per share $ (0.11) $ 0.34 $ (0.45) NM
========== ========= ========== =========
Diluted shares outstanding 19,687(A) 22,131 (2,444) (11.0)%
========== ========= ========== =========
(A) Excludes shares issuable upon conversion of the convertible debt
as well as common stock equivalents, as their effect on EPS would be
antidilutive.
NM - Not Meaningful
LITHIA MOTORS, INC.
(Selected Same Store Data)
Unaudited Three Months Ended %
March 30, Increase Increase
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2008 2007 (Decrease) (Decrease)
--------- -------- ---------- ----------
Same Store Unit Sales:
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New Vehicle 12,425 15,313 (2,888) (18.9)%
Used - Retail Vehicle 8,784 10,659 (1,875) (17.6)
Used - Wholesale 5,599 6,067 (468) (7.7)
Total Units Sold 26,808 32,039 (5,231) (16.3)
Same Store Average Selling
Price:
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New Vehicle $29,530 $28,631 $ 899 3.1 %
Used - Retail Vehicle 17,257 16,214 1,043 6.4
Used - Wholesale 6,556 6,712 (156) (2.3)
Same Store Revenue:
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New Vehicle Retail Sales (16.3)% (3.4)%
Used Vehicle Retail Sales (12.3)% (4.5)%
Used Wholesale Sales (9.9)% 15.8 %
Total Vehicle Sales
(excluding Fleet) (14.8)% (2.6)%
Finance & Insurance Sales (15.0)% 3.2 %
Service, Body and Parts Sales 1.5 % 5.0 %
Total Sales (excluding Fleet) (12.9)% (1.6)%
Total Gross Profit (excluding
Fleet) (16.7)% (1.6)%
Same Store Average Gross
Profit Data:
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New Retail Gross Profit/Unit $ 2,255 $ 2,260 $ (5)
Used Retail Gross Profit/Unit $ 1,873 $ 2,365 $ (492)
Used Wholesale Gross
Profit/Unit $ (97) $ 269 $ (366)
Same Store Total Sales
Geographic Mix:
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Texas 24.3 % 19.6 %
Oregon 13.3 % 15.1 %
California 12.2 % 13.6 %
Washington 10.4 % 10.7 %
Alaska 6.6 % 6.3 %
Montana 6.1 % 5.7 %
Colorado 5.9 % 6.7 %
Idaho 5.6 % 6.0 %
Iowa 4.7 % 3.8 %
Nevada 3.7 % 4.4 %
Nebraska 2.7 % 2.7 %
South Dakota 1.9 % 2.2 %
New Mexico 1.1 % 1.1 %
North Dakota 1.0 % 1.5 %
Wisconsin 0.5 % 0.6 %
Balance Sheet Highlights (Dollars in Thousands)
Unaudited
March 31, 2008 December 31, 2007
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Cash & Cash Equivalents $ 27,855 $ 21,665
Trade Receivables(A) 102,374 109,387
Inventory 640,480 601,759
Assets held for sale 22,887 23,807
Other Current Assets 25,860 21,920
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Total Current Assets 819,456 778,538
Real Estate, net 367,595 363,391
Equipment & Other, net 100,665 98,355
Goodwill, net 311,954 311,527
Other Assets 74,782 74,924
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Total Assets $1,674,452 $1,626,735
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Flooring Notes Payable $ 493,980 $ 451,590
Liabilities held for sale 17,243 17,857
Other Current Liabilities 114,042 115,644
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Total Current Liabilities 625,265 585,091
Used Vehicle Flooring 117,811 122,550
Real Estate Debt 197,732 179,160
Other Long-Term Debt 147,584 153,785
Other Liabilities 83,011 77,937
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Total Liabilities $1,171,403 $1,118,523
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Shareholders' Equity 503,049 508,212
-------------- -----------------
Total Liabilities & Shareholders'
Equity $1,674,452 $1,626,735
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(A) Includes contracts-in-transit of $42,567 and $48,474 for 2008 and
2007
Other Balance Sheet Data (Dollars
in Thousands)
Current Ratio 1.3x 1.3x
LT Debt/Total Cap.
(Excludes Real Estate) 35% 35%
Working Capital $ 194,191 $ 193,447
Book Value per Basic Share 25.55 26.02
CONTACT: Lithia Motors, Inc. |
Safe Harbor Statement under the Private Securities Reform Act of 1995
With the exception of historical information, the matters discussed or incorporated by reference in this Annual Report include forward-looking statements. These statements are necessarily subject to risk and uncertainty. Actual results could differ materially from those projected in these forward-looking statements as a result of certain risks including those set forth from time to time in the Company's filings with the SEC. These risk factors include, but are not limited to, the cyclical nature of automobile sales and the intense competition in the automobile retail industry, the Company's ability to negotiate profitable acquisitions, and the ability to secure manufacturer approvals for such acquisitions.
