Lithia Motors Reports Fourth Quarter EPS Of $0.52; and Record Full-Year EPS Of $1.92
MEDFORD, Ore.--Feb. 2, 20044, 2004--Lithia Motors, Inc. :Lithia Motors' Fourth-quarter 2003 Highlights/Margins for continuing operations: Operating Income: +28% Gross Margin: 16.3% Net Income: +31% SG&A as a % of Sales: 12.3% Earnings Per Share: +27% Operating Margin (EBIT): 3.6%
Lithia Motors, Inc. today announced that fourth quarter 2003 net earnings from continuing operations increased 31% to $9.9 million from $7.5 million in the fourth quarter of 2002. Earnings per share from continuing operations increased 27% to $0.52 as compared to $0.41 in the fourth quarter of 2002. This was on 4% more diluted shares outstanding.
In addition, Lithia announced today that it has declared a dividend of $0.07 per share for the fourth quarter of 2003. Shareholders of record as of March 5, 2004, will receive the dividend that will be payable March 19, 2004.
Fourth quarter 2003 sales increased 10% to $612.2 million as compared to $557.3 million in the same period last year. New vehicle sales increased 15%, used retail vehicle sales increased 1%, parts/service sales increased 16%, and finance/insurance sales increased 9%. Total retail same-store sales for the quarter declined 0.7%.
Sid DeBoer, Lithia's Chairman and CEO, commented: "Sales growth, margin improvements and lower expenses drove our fourth quarter results. Lithia's operating margin was 3.6%, up 50 basis points from 3.1% in the fourth quarter of 2002. New vehicle same-store sales for the quarter grew 2.3%."
Lithia Motors reported that full-year 2003 net earnings from continuing operations rose 10% to $35.6 million as compared to $32.4 million in 2002. Earnings per share from continuing operations rose 4% to $1.92 per share versus $1.84 in the same period last year. This was on 5% more diluted shares outstanding than in 2002.
Full-year 2003 sales increased 11% to $2.51 billion as compared to $2.27 billion in the same period last year. New vehicle sales increased 18%, used retail vehicle sales increased 1%, parts/service sales increased 16%, and finance/insurance sales increased 16%. Lithia retailed 41,451 used retail vehicles and 53,804 new vehicles for a used/new ratio of 0.8:1.
Sid DeBoer, added, "Total retail same-store sales for the year were up 1.2%, led by new vehicle, finance/insurance and parts/service same-store sales growth. We saw 6.2% new vehicle same-store sales growth for the full-year. This compares to industry new vehicle sales that were down approximately 1% for 2003. Domestic brands outperformed import brands for the year. The used vehicle market was weak throughout the year; however, margin improvements led to positive same-store used vehicle gross profits for Lithia in 2003."
Jeff DeBoer, Senior Vice President and Chief Financial Officer, commented, "We added approximately $330 million in annualized revenues from acquisitions in 2003, or nearly 15% to our base of 2002 revenues. The acquisition pipeline looks strong for 2004. In January, we started the year with the acquisition of Reno Chrysler Jeep in Nevada, with approximately $55 million in annualized acquisition revenues. Book value per basic share has grown at a compound annual growth rate of 25% from $4.22 at the end of 1996 when we went public, to $19.63 as of the end of 2003.
"Our annual guidance for the full-year 2004 is $1.95 to $2.05 and we expect first quarter earnings per share in the range of $0.29 to $0.31. We believe the new vehicle sales environment in 2004 will continue to be challenging in our markets."
Lithia Motors will be providing more detailed information on the results for the fourth quarter and full-year 2003 in its conference call scheduled for 7 a.m. PT, 10 a.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 148 franchises in Oregon, Washington, California, Texas, Colorado, Idaho, Nevada, South Dakota, Alaska, Nebraska, Montana and Oklahoma and sells 25 brands of new vehicles at 79 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 MOTORS, INC.
(In Thousands except per share and unit data)
Unaudited Three Months Ended
--------- December 31,
-------------- Increase % Increase
2003 2002 (Decrease) (Decrease)
-------- -------- ---------- ----------
New Vehicle Sales $357,303 $311,899 $45,404 14.6%
Used Retail Vehicle Sales 166,079 164,517 1,562 0.9
Service, Body & Parts Sales 65,950 56,668 9,282 16.4
Finance & Insurance 22,023 20,221 1,802 8.9
Fleet & Other Revenues 835 4,003 (3,168) (79.1)
-------- -------- ------- ----------
Total Revenues 612,190 557,308 54,882 9.8
Cost of Sales 512,111 467,400 44,711 9.6
-------- -------- ------- ----------
Gross Profit 100,079 89,908 10,171 11.3
SG&A Expense 75,571 70,844 4,727 6.7
Depreciation/Amortization 2,704 2,050 654 31.9
-------- -------- ------- ----------
Income from Operations 21,804 17,014 4,790 28.2
Flooring Interest Expense (3,455) (2,955) (500) 16.9
Other Interest Expense (1,633) (1,448) (185) 12.8
Other Income (Expense), net (306) (333) 27 (8.1)
-------- -------- ------- ----------
Income from continuing
operations before income
taxes 16,410 12,278 4,132 33.7
Income Tax Expense 6,531 4,759 1,772 37.2
Income Tax Rate 39.8% 38.8%
Income from continuing
operations 9,879 7,519 2,360 31.4
-------- -------- ------- ----------
Income (Loss) from
discontinued operations,
net of income taxes 103 (258) 361
Net Income $ 9,982 $ 7,261 $ 2,721 37.5%
========= ========= ========== ==========
Diluted Net income per
share:
Continuing Operations $ 0.52 $ 0.41 $ 0.11 26.8%
Discontinued Operations 0.01 (0.01)
Net Income $ 0.53 $ 0.40 $ 0.13 32.5%
========= ========= ========== ==========
Diluted Shares Outstanding 18,922 18,243 679 3.7%
Unit Sales: 2003 2002
---------- -------- --------
New 12,716 11,720 996 8.5%
Used - Retail 9,415 9,249 166 1.8
Used - Wholesale 6,061 5,902 159 2.7
Total Units Sold 28,192 26,871 1,321 4.9
Average Selling Price:
---------------------
New $ 28,099 $ 26,613 $ 1,486 5.6%
Used - Retail 14,663 14,750 ($87) (0.6)
Used - Wholesale 4,625 4,760 ($135) (2.8)
Key Financial Data:
Gross Profit Margin 16.3% 16.1%
SG&A as a % of Sales 12.3% 12.7%
Operating Margin 3.6% 3.1%
Pre-Tax Margin 2.7% 2.2%
Total Retail Same-Store
Sales (0.7%) (6.2%)
LITHIA MOTORS, INC.
(In Thousands except per share and unit data)
Unaudited Twelve Months Ended
--------- December 31,
---------------------- Increase % Increase
2003 2002 (Decrease) (Decrease)
---------- ---------- ---------- ----------
New Vehicle Sales $1,441,000 $1,218,364 $ 222,636 18.3%
Used Retail Vehicle Sales 725,547 715,760 9,787 1.4
Service, Body & Parts
Sales 251,316 216,382 34,934 16.1
Finance & Insurance 89,982 77,776 12,206 15.7
Fleet & Other Revenues 5,657 43,114 (37,457) (86.9)
---------- ---------- --------- ----------
Total Revenues 2,513,502 2,271,396 242,106 10.7
Cost of Sales 2,110,393 1,913,704 196,689 10.3
---------- ---------- --------- ----------
Gross Profit 403,109 357,692 45,417 12.7
SG&A Expense 313,289 280,310 32,979 11.8
Depreciation/
Amortization 9,593 7,192 2,401 33.4
---------- ---------- --------- ----------
Income from Operations 80,227 70,190 10,037 14.3
Flooring Interest Expense (13,997) (10,775) (3,222) 29.9
Other Interest Expense (6,081) (5,985) (96) 1.6
Other Income (Expense),
net (951) (589) (362) 61.5
---------- ---------- --------- ----------
Income from continuing
operations before
income taxes 59,198 52,841 6,357 12.0
Income Tax Expense 23,561 20,480 3,081 15.0
Income Tax Rate 39.8% 38.8%
Income from continuing
operations 35,637 32,361 3,276 10.1
---------- ---------- --------- ----------
Income (Loss) from
discontinued operations,
net of income taxes (90) (45) (45) 100.0
Net Income $ 35,547 $ 32,316 $ 3,231 10.0%
=========== =========== ========== ==========
Diluted Net income per
share:
Continuing Operations $ 1.92 $ 1.84 $ 0.08 4.3%
Discontinued Operations 0.00 0.00
---------- ----------
Net Income $ 1.92 $ 1.84 $ 0.08 4.3%
=========== =========== ========== ==========
Diluted Shares
Outstanding 18,546 17,598 948 5.4%
Unit Sales: 2003 2002
---------- ---------- ----------
New 53,804 46,929 6,875 14.6%
Used - Retail 41,451 40,781 670 1.6
Used - Wholesale 25,982 24,475 1,507 6.2
Total Units Sold 121,237 112,185 9,052 8.1
Average Selling Price:
New $ 26,782 $ 25,962 $ 820 3.2%
Used - Retail 14,550 14,572 ($22) (0.2)
Used - Wholesale 4,713 4,964 ($251) (5.1)
Key Financial Data:
Gross Profit Margin 16.0% 15.7%
SG&A as a % of Sales 12.5% 12.3%
Operating Margin 3.2% 3.1%
Pre-Tax Margin 2.4% 2.3%
Total Retail Same-Store
Sales 1.2% 1.1%
LITHIA MOTORS, INC.
Balance Sheet Highlights (Dollars in Thousands)
Unaudited
---------
December 31, 2003 December 31, 2002
----------------- -----------------
Cash & Cash Equivalents $ 74,408 $ 15,932
Trade Receivables(a) 86,908 82,173
Inventory 445,281 445,908
Assets Held for Sale 20,408 0
Other Current Assets 9,932 11,765
---------------- ----------------
Total Current Assets 636,937 555,778
Real Estate, net 164,676 118,696
Equipment & Leases, net 62,637 58,215
Goodwill, net 207,027 185,212
Other Assets 31,505 24,148
----------------- -----------------
Total Assets $ 1,102,782 $ 942,049
================= =================
Floorplan Notes Payable $ 378,961 $ 364,635
Liabilities Held for Sale 13,045 0
Other Current Liabilities 84,865 64,835
----------------- -----------------
Total Current Liabilities 476,871 429,470
Used Vehicle Flooring 56,267 63,000
Real Estate Debt 80,159 73,798
Other Long-Term Debt 98,308 30,914
Other Liabilities 32,251 24,874
----------------- -----------------
Total Liabilities $ 743,856 $ 622,056
----------------- -----------------
Shareholders' Equity 358,926 319,993
----------------- -----------------
Total Liabilities &
Shareholders' Equity $ 1,102,782 $ 942,049
================= =================
-- (a)Note: Includes contracts- in-transit of $44,70 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) 33% 25%
Working Capital $ 160,066 $ 126,308