Lithia Motors Earns 21 Cents Per Share on Record First
Quarter Sales
MEDFORD, Ore., April 30 Lithia Motors, Inc.
today announced total sales increased 6% to $420.2 million from $395.6 million
in the first quarter of 2000. New vehicle sales decreased 1% and comprised
51.2% of total sales vs. 55.1% in the same period last year. Used vehicle
sales increased 17% and comprised 32.6% of total sales vs. 29.5% in the first
quarter last year. Lithia retailed 8,854 used units vs. 8,732 new units, for
a total of 17,586 new and used retail units this quarter, a 7% increase over
the same period last year. Parts and service sales also increased 17%,
representing 10.7% of total sales up from 9.7% in the same period last year.
Finance and Insurance sales increased 13.4% and finance and insurance sales
per unit increased 6.4% to $867, an industry leading level among the publicly
traded auto-retailers.
Chairman and Chief Executive Officer, Sidney B. DeBoer, stated, "These
results are stronger than expected at the beginning of the year, with both
sales and earnings above forecast levels. Earnings were $0.21 per share this
quarter, exceeding First Call consensus estimates of $0.19 per share. New
vehicle sales were very strong in the first quarter of 2000 and made for a
difficult comparison in the first quarter in 2001. We are particularly
encouraged by the strength of our March results and expect easier comparisons
and stronger operating results in the coming three quarters."
"The counter-cyclical nature of the used vehicle and parts and service
businesses took center stage this quarter with solid gains in both segments.
This is the first quarter that Lithia has sold more used vehicles than new
vehicles since reporting as a public company. With the shift in the revenue
mix towards our higher margin business lines, including used cars, the gross
margin improved this quarter by 50 basis points to 16.4% of sales compared to
the same period last year. Gross margin expansion is common in the auto-
retailing business as new vehicle sales slow."
"SG&A as a percentage of revenues increased to 13.1%. We had forecast
increased SG&A expense along with gross margin expansion in our year-end 2000
conference call and earnings release. Both our gross margin and SG&A numbers
were slightly above forecast ranges, however, they served to cancel each other
out at the operating income line with an operating margin of 2.8%, which was
within forecast ranges. Same-store retail sales declined by 6.9%, much better
than our forecast for a 10 to 12% decline. All business lines, other than new
vehicle sales, showed positive same-store growth for the quarter."
"Net income was $2.86 million, or $0.21 per diluted share on 13.8 million
diluted shares outstanding. This compares to net income in the first quarter
of 2000 of $4.96 million or $0.37 per share on 13.5 million diluted shares.
EBITDA was $13.8 million vs. $15.8 million in the same period last year. Cash
flow per share (net income plus depreciation and amortization) was $0.37 per
share in the first quarter of 2001 versus $0.50 a year ago. Cash flow per
share was 76% higher than EPS for the quarter," concluded Sidney B. DeBoer.
Jeffrey B. DeBoer, Senior Vice President and CFO added, "For the remainder
of 2001, we are assuming approximately $250 - $300 million in annualized
revenues from acquisitions. Year to date we have closed on approximately
$83 million in revenues. These acquisitions, in total, should contribute
approximately $150 to $200 million in revenues throughout 2001. With our
untapped acquisition facility of $130 million from Ford Credit and expected
internal cash flow from operations, Lithia is well positioned to continue its
current disciplined growth plan. It is worth noting that despite two
acquisitions in the first quarter of this year, our debt levels are lower than
at the year-end 2000 due to aggressive debt repayments resulting in a long-
term debt to total capitalization ratio of only 26% vs. 29% at year end. This
represents a 13% sequential reduction in long-term debt. 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."
"We are providing guidance for the second quarter and full year 2001."
FORWARD ESTIMATES
2Q 2001 2001
Revenue $430 - 450M $1.7 - 1.9B
Diluted EPS $0.31 - 0.33 $1.25 - 1.30
Gross Margin 16.0 - 16.4% 16.0 - 16.4%
SG&A 12.6 - 13.0% 12.4 - 12.8%
Operating Margin 2.8 - 3.0% 3.1 - 3.3%
Flooring Interest Expense 1.0 - 1.2% 1.1 - 1.2%
Same Store Sales -6 to -8% -5 to -8%
Tax Rate 38 - 39% 38 - 39%
An additional 50 basis point reduction in interest rates has been factored
into these estimates.
The quarterly breakout for 2001 is estimated as follows for Diluted EPS:
Q2; $0.31 - $0.33; Q3; $0.42 - $0.44; and Q4; $0.31 - $0.33.
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, INC.
(In Thousands except per share and unit data)
Unaudited Three Months Ended
March 31,
2001 2000
New Vehicle Sales $214,957 $218,009
Used Vehicle Sales 136,939 116,698
Service & Parts Sales 45,145 38,457
Other Revenues 23,110 22,439
Total Revenue $420,151 $395,603
Cost of Sales 351,254 332,739
Gross Profit 68,897 62,864
SG&A Expense 55,038 47,201
Depreciation 1,292 1,013
Amortization 923 707
Income from Operations $11,644 $13,943
Flooring Interest Expense 4,655 3,861
Other Interest Expense 2,267 1,795
Other Income (Expense), net (79) 128
Pre-Tax Profit $4,643 $8,415
Income Tax 1,788 3,451
Income Tax Rate 38.5% 41.0%
Net Profit $2,855 $4,964
Shares Outstanding 13,772 13,496
EPS $0.21 $0.37
Unit Sales:
New 8,732 9,030
Used - Retail 8,854 7,473
Used - Wholesale 4,325 4,040
Average Selling Price:
New $24,617 $24,143
Used - Retail 13,089 13,175
Used - Wholesale 4,867 4,515
Key Financial Data:
EBITDA $13,780 $15,791
Gross Profit Margin 16.4% 15.9%
SG&A as a % of Sales 13.1% 11.9%
Operating Margin 2.8% 3.5%
Pre-Tax Margin 1.1% 2.1%
Balance Sheet Highlights (Dollars in Thousands)
Unaudited
March 31, December 31,
2001 2000
Cash & Cash Equivalents $28,315 $38,789
Inventory 318,330 314,290
Other Current Assets 41,584 43,443
Total Current Assets 388,229 396,522
Real Estate - Net 64,181 60,788
Equipment & Leases - net 32,407 29,452
Goodwill, net 138,264 133,871
Other Assets 7,352 7,370
Total Assets $630,433 $628,003
Floorplan Notes Payable $256,170 $255,137
Other Current Liabilities 45,033 42,468
Total Current Liabilities 301,203 297,605
Used Vehicle Flooring 63,000 59,000
Real Estate Debt 28,577 28,898
Other Long-Term Debt 34,721 43,566
Other Liabilities 20,719 17,159
Total Liabilities $448,220 $446,228
Shareholders Equity 182,213 181,775
TOTAL LIABILITIES &
SHAREHOLDERS' EQUITY $630,433 $628,003
Other Balance Sheet Data (Dollars in Thousands)
Current Ratio 1.3x 1.3x
LT Debt/Total Cap. 26% 29%
[Excludes Used Vehicle Flooring]
Working Capital $87,026 $98,917
