Lithia Motors Reports Record Full Year Revenues and Earnings per Share
MEDFORD, Ore., Feb. 26 -- Lithia Motors, Inc. today announced that net earnings rose 49% to $32.3 million for the full-year 2002 compared to $21.8 million in 2001. Earnings per share rose 15% to $1.84 per share versus $1.60 in the same period last year. This was on 29% more diluted shares outstanding than in 2001.
Full-year 2002 revenues increased 27% to $2.38 billion as compared to $1.87 billion in the same period last year. New vehicle sales increased 29%, used vehicle sales increased 26%, parts/service sales increased 23%, and finance/insurance sales increased 23%.
Lithia retailed 41,974 used retail vehicles and 49,504 new vehicles for a used/new ratio of 0.8:1. Finance and Insurance income per new and used retail unit was $886 vs. $857 in 2001.
Lithia Motors' Full-year 2002 Highlights/Margins: Total Revenues: +27% Gross Margin: 15.8% Same-Store Retail Sales: +1.1% SG&A as a % of Sales: 12.5% Net Profits: +49% Operating Margin (EBIT): 3.0%
Sid DeBoer, Lithia's Chairman and CEO, commented: "2002 was similar to 2001 with a slow economy and growing unemployment offset by low interest rates, periodically strong incentives and high vehicle affordability. When we started the year we expected to see total retail same store sales declines of 6 to 8%. However, we pushed hard in all our markets to gain market share and increase new vehicle volume and ended the year with positive new vehicles same store sales of +5.7%, as compared to an industry that was down 2%, and positive total retail same store sales of +1.1%. We are pleased to report earnings of $1.84 for 2002, an increase of 15%, with the addition of 29% more shares outstanding."
Lithia Motors reported that fourth quarter 2002 net earnings increased 18% to $7.3 million from $6.1 million in the fourth quarter of 2001. Earnings per share were $0.40 on 33% more shares outstanding.
Fourth quarter 2002 revenues increased 12% to $580.6 million as compared to $519.7 million in the same period last year. New vehicle sales increased 12%, used vehicle sales increased 10%, parts/service sales increased 22%, and finance/insurance sales increased 16%. Total retail same store sales for the quarter declined 7.0% on top of a record 11.4% increase in the prior year when zero percent financing was first announced.
For the fourth quarter, Lithia retailed 9,492 used retail vehicles and 12,255 new vehicles for a used/new ratio of 0.8:1. Finance and Insurance income was $960 per new and used retail unit as compared to $877 in the fourth quarter of 2001.
Results for the fourth quarter and full-year 2001 included goodwill amortization, which has been eliminated this year pursuant to Statement of Financial Accounting Standards No. 142 "Goodwill and other Intangible Assets" (SFAS 142). Net income for 2001, reflecting this change, would have been $6.7 million and $24.0 million, respectively.
Sid DeBoer, added, "Our Compounded Annual Growth Rate (CAGR) over the past six years in three key areas are: annual revenues at 60%, net profit at 52%, and earnings per share or EPS at 23% per year. Average same-store retail sales growth for the past five years is 4.7%."
Jeff DeBoer, Senior Vice President and Chief Financial Officer, commented, "We added $455 million in annualized revenues from acquisitions in 2002, or approximately 24% to our base of 2001 revenues. We are well positioned to continue to accelerate acquisitions this year, with expectations to add from $350 to $450 million in annualized acquisition revenues. Earlier this February, we completed the acquisition of Richardson Chevrolet in Salinas, California with approximately $35 million in annualized acquisition revenues. Book value per share has grown from $4.22 at the end of 1996 when we went public, to $17.72 as of the end of 2002."
"We are updating our quarterly guidance and annual guidance for the full year 2003."
FORWARD ESTIMATES Full-Year
1Q 2003 2003
Revenue $570 - 600M $2.60 - 2.80B
Gross Margin 15.7 - 16.1% 15.8 - 16.2%
SG&A 12.9 - 13.3% 12.6 - 12.9%
Operating Margin 2.6 - 2.8% 2.8 - 3.0%
Interest Expense 0.8 - 1.0% 0.8 - 1.0%
Same Store Sales -2 to -4% -2 to -4%
Tax Rate 38 - 39% 38 - 39%
Diluted EPS $0.31 - 0.34 $1.83 - 1.95
Shares Outstanding 18.2-18.4M 18.4-18.6M
The quarterly breakout for 2003 is estimated as follows for Diluted EPS: Q1: $0.31 - $0.34;Q2: $0.44 - $0.47; Q3: $0.61 - $0.64; and Q4: $0.47 - $0.50. The first quarter 2003 EPS guidance includes approximately 19% more shares outstanding than in the same period of 2002.
Management makes the above estimates 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. With the particularly uncertain political and economic environment that our country faces in the next few months, our guidance is subject to greater risk and our results could fall short of this guidance.
Lithia Motors will be providing more detailed information on the results for the fourth quarter and full-year 2002 in its conference call scheduled for 11 a.m. PT, 2 p.m. ET today. The live conference call can be accessed by calling 973-582-2700. To listen to a live webcast or hear a replay, log-on to: www.lithia.com -- go to Investor Relations -- and click on the Live Conference Call icon.
Lithia currently owns 132 franchises in California, Oregon, Washington, Nevada, Colorado, Idaho, South Dakota, Alaska, Texas and Nebraska and sells 24 brands of new vehicles at 71 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.
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 anticipated revenues of recently acquired stores.
For additional information on Lithia Motors, contact: Jeff DeBoer, Senior VP and Chief Financial Officer 541-776-6868 (E-mail: invest@lithia.com) or Dan Retzlaff, Director Investor Relations at 541-776-6819 or log-on to: www.lithia.com -- go to About Lithia -- Investor Relations
LITHIA MOTORS, INC.
LITHIA MOTORS, INC.
(In Thousands except per share and unit data)
Unaudited Three Months Ended
December 31, Increase % Increase
2002 2001 (Decrease) (Decrease)
New Vehicle Sales $326,006 $290,604 $35,402 12.2%
Used Vehicle Sales 169,734 154,754 14,980 9.7
Service, Body & Parts
Sales 59,973 49,185 10,788 21.9
Finance & Insurance 20,882 17,948 2,934 16.3
Other Revenues 4,004 7,178 (3,174) (44.2)
Total Revenues 580,599 519,669 60,930 11.7
Cost of Sales 486,931 437,169 49,762 11.4
Gross Profit 93,668 82,500 11,168 13.5
SG&A Expense 74,652 65,525 9,127 13.9
Depreciation/
Amortization 2,206 2,462 (256) (10.4)
Income from Operations 16,810 14,513 2,297 15.8
Flooring Interest
Expense (3,127) (2,620) (507) 19.4
Other Interest Expense (1,478) (1,869) 391 (20.9)
Other Income (Expense),
net (349) (45) (304) 675.6
Pre-Tax Profit 11,856 9,979 1,877 18.8
Income Tax 4,595 3,847 748 19.4
Income Tax Rate 38.8% 38.6%
Net Profit $7,261 $6,132 $1,129 18.4%
Diluted Shares
Outstanding 18,243 13,711 4,532 33.1%
Diluted EPS $0.40 $0.45 ($0.05) (11.1%)
Unit Sales: 2002 2001
New 12,255 11,299 956 8.5%
Used - Retail 9,492 9,162 330 3.6
Used - Wholesale 6,127 5,037 1,090 21.6
Total Units Sold 27,874 25,498 2,376 9.3
Finance/Insurance
per retail unit $960 $877 $83 9.5
Average Selling Price:
New $26,602 $25,719 $883 3.4%
Used - Retail 14,780 14,285 495 3.5
Used - Wholesale 4,806 4,740 66 1.4
Key Financial Data:
Gross Profit Margin 16.1% 15.9%
SG&A as a % of Sales 12.9% 12.6%
Operating Margin 2.9% 2.8%
Pre-Tax Margin 2.0% 1.9%
Total Retail
Same-Store Sales (7.0%) 11.4%
LITHIA MOTORS, INC.
(In Thousands except per share and unit data)
Unaudited Twelve Months Ended
December 31, Increase % Increase
2002 2001 (Decrease) (Decrease)
New Vehicle Sales $1,284,657 $993,635 $291,022 29.3%
Used Vehicle Sales 738,149 585,415 152,734 26.1
Service, Body &
Parts Sales 229,970 187,725 42,245 22.5
Finance and Insurance
Sales 81,068 65,815 15,253 23.2
Other Revenues 43,116 40,598 2,518 6.2
Total Revenues 2,376,960 1,873,188 503,772 26.9
Cost of Sales 2,002,157 1,566,713 435,444 27.8
Gross Profit 374,803 306,475 68,328 22.3
SG&A Expense 296,137 239,042 57,095 23.9
Depreciation/
Amortization 7,813 9,275 (1,462) (15.8)
Income from Operations 70,853 58,158 12,695 21.8
Flooring Interest
Expense (11,289) (14,497) 3,208 (22.1)
Other Interest
Expense (6,115) (7,822) 1,707 (21.8)
Other Income
(Expense), net (683) (410) (273) 66.6
Pre-Tax Profit 52,766 35,429 17,337 48.9
Income Tax 20,450 13,675 6,775 49.5
Income Tax Rate 38.8% 38.6%
Net Profit $32,316 $21,754 $10,562 48.6%
Shares Outstanding 17,598 13,612 3,986 29.3%
Diluted EPS $1.84 $1.60 $0.24 15.0%
Unit Sales: 2002 2001
New 49,504 39,875 9,629 24.1%
Used - Retail 41,974 36,960 5,014 13.6
Used - Wholesale 25,307 18,918 6,389 33.8
Total Units Sold 116,785 95,753 21,032 22.0
Finance/Insurance
per retail unit $886 $857 $29 3.4
Average Selling Price:
New $25,951 $24,919 $1,032 4.1%
Used - Retail 14,579 13,459 1,120 8.3
Used - Wholesale 4,987 4,651 336 7.2
Key Financial Data:
Gross Profit Margin 15.8% 16.4%
SG&A as a % of Sales 12.5% 12.8%
Operating Margin 3.0% 3.1%
Pre-Tax Margin 2.2% 1.9%
Total Retail Same-Store
Sales 1.1% (0.8)
LITHIA MOTORS, INC.
Balance Sheet Highlights (Dollars in Thousands)
Unaudited
December 31, December 31,
2002 2001
Cash & Cash Equivalents $15,932 $18,814
Trade Receivables 82,173 74,237
Inventory 445,908 275,398
Other Current Assets 11,765 11,960
Total Current Assets 555,778 380,409
Real Estate - Net 118,696 84,739
Equipment & Leases - net 58,215 37,238
Goodwill, net 185,212 149,742
Other Assets 24,148 10,816
Total Assets $942,049 $662,944
Floorplan Notes Payable $364,635 $211,947
Other Current Liabilities 64,835 63,628
Total Current Liabilities 429,470 275,575
Used Vehicle Flooring 63,000 69,000
Real Estate Debt 73,798 40,693
Other Long-Term Debt 30,914 55,137
Other Liabilities 24,874 19,042
Total Liabilities $622,056 $459,447
Shareholders Equity 319,993 203,497
Total Liabilities &
Shareholders' Equity $942,049 $662,944
*Note: Includes contracts-in-transit of $41,493 and $41,041 for 2002
and 2001.
Other Balance Sheet Data (Dollars in Thousands)
Current Ratio 1.3x 1.4x
LT Debt/Total Cap. (Excludes Used -
Vehicle Flooring) 25% 32%
Working Capital $126,308 $104,834