Lithia Motors Reports Net Profit in 2000
MEDFORD, Ore., Feb. 21 Lithia Motors, Inc.
Net profit for the full year of 2000 rose 27% to $24.31 million compared
to $19.17 million in 1999 or $1.76 per share on 13.8 million diluted shares
outstanding in 2000 vs. $1.60 per share on 12.0 million diluted shares in
1999. Cash flow per diluted share (net income plus depreciation and
amortization) was $2.31 per share in 2000 versus $2.06 a year ago.
Total revenues increased 34% to $1.66 billion for the full year of 2000
from $1.24 billion in 1999. EBITDA increased 37% to $72.8 million vs.
$53.0 million in 1999.
For the year, new vehicle sales increased 33%, used vehicle sales
increased 28%, parts and service sales increased 36% and other revenues
increased 59% compared to 1999. Lithia retailed 68,126 new and used vehicles
in 2000.
In the fourth quarter of 2000, net profit declined 1.5% to $5.63 million
compared to $5.71 million in the fourth quarter of 1999 or $0.41 per share on
13.8 million diluted shares outstanding vs. $0.43 per share on 13.2 million
diluted shares in the same quarter of 1999. Cash flow per diluted share
increased to $0.56 per share in the fourth quarter of 2000 versus $0.55 a year
ago.
For the fourth quarter, total revenues increased 14% to $402.1 million
from $353.4 million in the fourth quarter of 1999. EBITDA increased 11% to
$17.7 million from $16.0 million in the same period last year. New vehicle
sales increased 13%, used vehicle sales increased 10%, parts and service sales
increased 22% and other revenues increased 24% compared to the same period
last year.
Chairman and Chief Executive Officer, Sidney B. DeBoer, stated, "This has
been another outstanding year for Lithia, with total sales of over
$1.6 billion. Our sector leading gross and operating margins improved 10 basis
points, respectively, to 16.1% and 3.9% from 16.0% and 3.8% in 1999. Sales
General & Administrative Expense (SG&A) as a percent of revenue remained at
11.8% and SG&A as a percent of gross profit improved 40 basis points to 73.1%
compared to the same period last year. Our same store retail sales increased
1.1% for the year.
"Auto sales in the fourth quarter of 2000 within the U.S. market were
challenging with a year-on-year decline in new vehicle sales of 4.2%
nationally. Lithia posted a 1.8% decline in same store retail sales for the
quarter, which was within our past guidance of a 0 to 2% decline. Our gross
margin was very strong with an improvement of 20 basis points to 16.6% from
the same period last year. As new vehicle sales slow, the higher margin used
vehicle, parts and service and other revenues make up a larger portion of
total revenues, positively impacting gross margin. SG&A as a percent of
revenues increased 20 basis points and as a result operating margins declined
20 basis points to 3.9% from 4.1% in the fourth quarter of last year. It's
important to note that our gross and operating margins exceeded guidance
levels and SG&A and same store sales were well within previous guidance levels
for the fourth quarter. All of our margins remain at public auto-retailing
sector leading levels.
"These results once again demonstrate the discipline of Lithia's operating
model. Even as we have continuously added new stores with lower initial
profitability than our own, we have continued to improve our operating margin
from 3.0% when we went public in 1996 to 3.9% in 2000. We have also managed to
realize significant economies of scale as demonstrated by the fact that our
costs (SG&A) as a percentage of gross profit have declined steadily from 76.8%
of gross profit in 1996, to 73.1% in 2000.
"We have recorded impressive CAGR (Compounded Annual Growth Rate) figures
over the past four years in three key areas: annual revenues at 85%, net
profit at 75%, and earnings per share or EPS at 36% per year. Lithia remains
the premier operator/consolidator in the public auto-retailing sector."
Jeff DeBoer, Senior Vice President and Chief Financial Officer, commented,
"For the full year 2001 we are assuming approximately $350 - $400 million in
annualized acquisition revenues which includes our most recent acquisition in
Alaska with $35 million in annualized revenues. These acquisitions will
contribute approximately $150 to $200 million in revenues throughout 2001.
With our recently expanded acquisition facility from Ford Credit and expected
future internal cash flow from operations, Lithia is well positioned to
continue its current disciplined growth plan. Our current acquisition facility
of $130 million remains totally undrawn. It is worth noting that despite
recent acquisitions our debt levels remain low, with a long-term debt to total
capitalization ratio of 29%. Our balance sheet remains one of the strongest in
our sector, which enables us to continue to execute our acquisition plans, in
an environment which we expect to be increasingly attractive for completing
deals.
"Our book value per share has grown from $4.22 at the end of 1996 when we
went public to $14.54 as of December 31, 2000.
"We are revising our estimates for the first quarter and full year 2001 to
reflect the recent softening in the economy. "
FORWARD ESTIMATES
1Q, 2001 2001
Revenue: $390 - 410M $1.7 - 1.9B
Diluted EPS $0.18 - 0.20 $1.25 - 1.30
Gross Margin: 15.9 - 16.3% 15.9 - 16.3%
SG&A 12.4 - 12.8% 12.3 - 12.7%
Operating Margin: 2.8 - 3.0% 3.1 - 3.3%
Flooring Interest Exp. 1.1 - 1.2% 1.1 - 1.2%
Same Store Sales -10 to -12% -5 to -8%
Tax Rate 38 - 39% 38 - 39%
An additional 100 basis point reduction in interest rates has been
factored into our estimates
The quarterly breakout for 2001 is estimated as follows for Diluted EPS:
Q1 $0.18 - $0.20; Q2 $0.32 - $0.34; Q3 $0.41 - $0.43; and Q4 $0.32 - $0.34.
The above estimates are made by management based upon information
available to it at this time. The company in making these estimates assumes no
burden to update these estimates during the quarter or year even if it appears
actual results will differ materially from these estimates.
Lithia Motors will be providing more detailed information on the results
for the fourth quarter 2000 and full year 2000 in its conference call
scheduled for 8 a.m. PT today. The call can be accessed live by calling
973-872-3100. To listen to a live webcast or hear a replay, log-on to:
http://www.lithia.com -- go to About Lithia -- Investor Relations -- and click on the
Live Conference Call icon.
In 2000, Lithia completed the acquisition of eight stores with annualized
revenues of approximately $254 million. Lithia now owns 113 franchises in
California, Oregon, Washington, Nevada, Colorado, Idaho, South Dakota and
Alaska and sells 26 brands of new vehicles at 54 stores and over the internet
through "Lithia.com-America's Car & Truck Store." 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's current annualized revenue run rate, including all
completed acquisitions, is over $1.7 billion.
LITHIA MOTORS, INC.
(In Thousands except per share and unit data)
Audited
Three Months Ended Year Ended
December 31, December 31,
2000 1999 2000 1999
New Vehicle Sales $214,799 $190,157 $898,016 $673,339
Used Vehicle Sales 115,911 105,270 480,846 375,562
Service, Body
& Parts Sales 42,736 34,917 164,002 120,722
Other Revenues 28,645 23,048 115,747 73,036
Total Revenues $402,091 $353,392 $1,658,611 $1,242,659
Cost of Sales 335,490 295,337 1,391,042 1,043,373
Gross Profit 66,601 58,055 267,569 199,286
SG&A Expense 48,730 42,108 195,500 146,381
Depreciation 1,181 902 4,419 3,640
Amortization 885 672 3,186 1,933
Income from Operations $15,805 $14,373 $64,464 $47,332
Flooring
Interest Expense 3,834 3,727 17,728 11,105
Other Interest Expense 2,989 1,365 7,917 4,250
Other Income
(Expense), net (168) 62 716 74
Pre-Tax Profit $8,814 $9,343 $39,535 $32,051
Income Tax 3,182 3,628 15,222 12,877
Net Profit $5,632 $5,715 $24,313 $19,174
Shares Outstanding 13,837 13,214 13,804 11,998
Diluted EPS $0.41 $0.43 $1.76 $1.60
Unit Sales:
New 8,675 7,786 37,230 28,645
Used - Retail 7,443 6,694 30,896 23,840
Used - Wholesale 4,114 3,732 16,751 13,424
Total Units Sold 20,232 18,212 84,877 65,909
Average Selling Price:
New $24,761 $24,423 $24,121 $23,506
Used - Retail $13,109 $13,191 $13,149 $13,148
Used - Wholesale $4,458 $4,547 $4,454 $4,627
Key Financial Data:
EBITDA $17,703 $16,009 $72,785 $52,979
Gross Margin 16.6% 16.4% 16.1% 16.0%
SG&A Expense 12.1% 11.9% 11.8% 11.8%
Operating Margin 3.9% 4.1% 3.9% 3.8%
Pre-tax Margin 2.2% 2.6% 2.4% 2.6%
Balance Sheet Highlights (Dollars in Thousands)
Audited
December 31, 2000 December 31, 1999
Cash & Cash Equivalents $38,789 $30,364
Inventories 314,290 268,281
Other Current Assets 43,443 35,999
Total Current Assets 396,522 334,644
Real Estate - Net 60,788 31,301
Equipment & Leases - Net 29,452 21,067
Goodwill, net 133,871 110,677
Other Assets 7,370 8,744
TOTAL ASSETS $628,003 $506,433
Floorplan Notes Payable $255,137 $208,403
Other Current Liabilities 42,468 51,242
Total Current Liabilities 297,605 259,645
Used Vehicle Flooring 59,000 35,500
Real Estate Debt 28,898 18,963
Other Long-Term Debt 43,566 19,252
Other Liabilities 17,159 17,435
Total Liabilities $446,228 $350,795
Shareholders' Equity 181,775 155,638
TOTAL LIABILITIES &
SHAREHOLDERS' EQUITY $628,003 $506,433
Other Balance Sheet Data (Dollars in Thousands)
Current Ratio 1.33x 1.29x
LT Debt/Total Cap. 29% 20%
[Excludes Used Vehicle Flooring]
Working Capital $98,917 $74,999
