Lithia Motors Earns 46 Cents Per Share; Raises Full Year Estimates 10% To $1.65 - $1.75
MEDFORD, Ore., July 23 -- Lithia Motors, Inc. today announced that net earnings rose 7% to $8.5 million in the second quarter of 2003 compared to $7.9 million in the second quarter of 2002. Earnings per share rose 7% to $0.46 per share versus $0.43 in the same period last year. This exceeds First Call estimates of $0.33 per share by thirteen cents.
Lithia Motors also reported that total revenues for the second quarter increased 14% to $667.5 million from $584.3 million in the second quarter of 2002. New vehicle sales increased 27%, used vehicle sales increased 6%, parts/service sales increased 17%, and finance/insurance sales increased 15%. Lithia's retail used/new ratio for the quarter was 0.8:1. Finance and Insurance income per retail unit increased to $916 per unit compared to $902 in the second quarter of last year.
Second Quarter 2003 Highlights Vs. Second Quarter 2002: Margins: Total Revenues: +14% Gross Margin: 15.9% Same-Store Retail Sales: +6% SG&A as a % of Sales: 12.5% Earnings Per Share: +7% Operating Margin (EBIT): 3.0%
Chairman and Chief Executive Officer, Sidney B. DeBoer, stated, "We continued to be aggressive in all of our markets in the second quarter of the year. New vehicle same-store sales for Lithia increased 13.3% for the quarter and 10.7% for the first six months of the year. New vehicle sales nationally were down 0.6% and 2.3% for the same periods of the year. This demonstrates our ability to continue to take market share and markedly outperform in a declining market. Our new vehicle gross margin increased 40 basis points from the first quarter of the year. The combination of strong new vehicle same- store sales and an improved margin helped drive our results for the quarter."
Jeffrey B. DeBoer, Senior Vice President and CFO added, "In the second quarter, Lithia completed three acquisitions; Lithia Auto Center of Missoula, MT; Lithia Dodge of Broken Arrow, OK and Lithia Dodge of Billings, MT. The stores have combined annualized sales of approximately $100 million. We have ample capital and credit lines to continue with our growth plans."
"In the second quarter we saw margins returning to more normalized levels. Our operating margin of 3.0% is still below historical averages but showed a notable 90 basis point improvement over the first quarter of the year. A substantial part of Sales General and Administrative Expense (SG&A) is the infrastructure we have developed for improving and integrating operations in our newly acquired stores. Operating margins should improve over time as we continue to leverage this infrastructure."
"Finally, our annual guidance for 2003 has been increased 10% to $1.65
-- $1.75 per share, and we are becoming more optimistic about the third quarter of the year, due to recent trends in our business," concluded Jeffrey B. DeBoer.
Lithia Motors will be providing more detailed information on the results for the second quarter of 2003 in its conference call scheduled for 11 a.m. PDT July 24, 2003. 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 Motors, Inc. is a Fortune 1000 and Russell 2000 Company that sells 24 brands of new vehicles and operates 75 stores and 140 franchises in 12 states in the Western United States 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 retailed 91,478 new and used vehicles and had $2.38 billion in total revenue in 2002.
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 growth opportunities, the ability to improve operating margins by increasing our sales, improved earnings for the balance of the year and third quarter results.
Additional Information
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 (dretzlaff@lithia.com) or log-on to: www.lithia.com -- go to About Lithia -- Investor Relations
LITHIA MOTORS, INC.
(in thousands except per share and unit data)
Unaudited Three Months Ended
June 30, Increase % Increase
2003 2002 (Decrease) (Decrease)
New Vehicle Sales $381,622 $300,605 $81,017 27.0%
Used Vehicle Sales 196,320 185,660 10,660 5.7
Service, Body
& Parts Sales 64,361 54,995 9,366 17.0
Finance & Insurance 23,364 20,247 3,117 15.4
Fleet & Other Revenues 1,867 22,811 (20,944) (91.8)
Total Revenues 667,534 584,318 83,216 14.2
Cost of Sales 561,572 491,436 70,136 14.3
Gross Profit 105,962 92,882 13,080 14.1
SG&A Expense 83,550 73,540 10,010 13.6
Depreciation/Amortization 2,438 1,895 543 28.7
Income from Operations 19,974 17,447 2,527 14.5
Flooring Interest Expense (3,839) (2,882) (957) 33.2
Other Interest Expense (1,586) (1,464) (122) 8.3
Other Income
(Expense), net (280) (177) (103) 58.2
Pre-Tax Profit 14,269 12,924 1,345 10.4
Income Tax 5,750 4,989 761 15.3
Income Tax Rate 40.3% 38.6%
Net Profit $8,519 $7,935 $584 7.4%
Shares Outstanding 18,379 18,454 (75) (0.4) %
Diluted EPS $0.46 $0.43 $0.03 7.0%
Unit Sales:
New 14,431 11,861 2,570 21.7%
Used - Retail 11,073 10,580 493 4.7
Used - Wholesale 6,989 6,151 838 13.6
Total Units Sold 32,493 28,592 3,901 13.6
Finance/Insurance
per retail unit $916 $902 $14 1.6
LITHIA MOTORS, INC.
Average Selling Price:
New $26,445 $25,344 $1,101 4.3%
Used - Retail 14,694 14,619 75 0.5
Used - Wholesale 4,810 5,039 (229) (4.5)
Key Financial Data:
Gross Profit Margin 15.9% 15.9%
SG&A as a % of Sales 12.5% 12.6%
Operating Margin 3.0% 3.0%
Pre-Tax Margin 2.1% 2.2%
Change in Total Retail
Same-Store Sales 5.7% 0.2%
LITHIA MOTORS, INC.
(In Thousands except per share and unit data)
Unaudited Six Months Ended
June 30, Increase % Increase
2003 2002 (Decrease) (Decrease)
New Vehicle Sales $705,070 $568,422 $136,648 24.0%
Used Vehicle Sales 373,306 368,972 4,334 1.2
Service, Body
& Parts Sales 124,112 107,033 17,079 16.0
Finance & Insurance 44,578 38,079 6,499 17.1
Fleet & Other Revenues 3,945 26,210 (22,265) (84.9)
Total Revenues 1,251,011 1,108,716 142,295 12.8
Cost of Sales 1,052,616 932,187 120,429 12.9
Gross Profit 198,395 176,529 21,866 12.4
SG&A Expense 161,612 141,276 20,336 14.4
Depreciation/Amortization 4,725 3,563 1,162 32.6
Income from Operations 32,058 31,690 368 1.2
Flooring Interest Expense (7,541) (5,219) (2,322) 44.5
Other Interest Expense (2,996) (3,056) 60 (2.0)
Other Income
(Expense), net (452) (82) (370) 451.2
Pre-Tax Profit 21,069 23,333 (2,264) (9.7)
Income Tax 8,385 9,007 (622) (6.9)
Income Tax Rate 39.8% 38.6%
Net Profit $12,684 $14,326 $ (1,642) (11.5)%
Shares Outstanding 18,326 16,927 1,399 8.3%
Diluted EPS $0.69 $0.85 $ (0.16) (18.8) %
Unit Sales:
New 27,052 22,277 4,775 21.4%
Used - Retail 21,079 20,944 135 0.6
Used - Wholesale 13,340 12,257 1,083 8.8
Total Units Sold 61,471 55,478 5,993 10.8
Finance/Insurance
per retail unit $926 $881 $45 5.1
LITHIA MOTORS, INC.
Average Selling Price:
New $26,064 $25,516 $548 2.1%
Used - Retail 14,584 14,548 36 0.2
Used - Wholesale 4,939 5,245 (306) (5.8)
Key Financial Data:
Gross Profit Margin 15.9% 15.9%
SG&A as a % of Sales 12.9% 12.7%
Operating Margin 2.6% 2.9%
Pre-Tax Margin 1.7% 2.1%
Change in Total Retail
Same-Store Sales 3.0% 0.6%
Balance Sheet Highlights (Dollars in Thousands)
Unaudited
June 30, December 31, ` 2003 2002
Cash & Cash Equivalents $55,010 $15,932
Trade Receivables (*) 91,443 82,173
Inventory 468,201 445,908
Other Current Assets 13,946 11,765
Total Current Assets 628,600 555,778
Real Estate, net 128,881 118,696
Equipment & Leases, net 63,455 58,215
Goodwill, net 199,269 185,212
Other Assets 28,629 24,148
Total Assets $1,048,834 $942,049
Floorplan Notes Payable $409,792 $364,635
Other Current Liabilities 81,636 64,835
Total Current Liabilities 491,428 429,470
Used Vehicle Flooring 60,028 63,000
Real Estate Debt 82,961 73,798
Other Long-Term Debt 53,857 30,914
Other Liabilities 26,336 24,874
Total Liabilities $714,610 $622,056
Shareholders Equity 334,224 319,993
Total Liabilities &
Shareholders' Equity $1,048,834 $942,049
(*) Note: Includes contracts-in-transit of $48,284 and $41,493 for 2003
and 2002.
Other Balance Sheet Data (Dollars in Thousands)
Current Ratio 1.3x 1.3x
LT Debt/Total Cap.
(Excludes Used -
Vehicle Flooring) 29% 25%
Working Capital $137,172 $126,308