Lithia Motors Reports a 75% Increase in Net Income; Earnings Per Share of 40 Cents and Record Q1 Revenues
MEDFORD, Ore.--April 26, 2004--Lithia Motors, Inc.Lithia Motors' First-quarter 2004 Highlights for continuing operations: Operating Income: +49% Net Income: +75% Earnings Per Share: +67% Retail Same-Store Sales: +1.7%
Lithia Motors, Inc. today announced that first quarter 2004 net income from continuing operations increased 75% to $7.6 million from $4.3 million in the first quarter of 2003. Earnings per share from continuing operations increased 67% to $0.40 as compared to $0.24 in the first quarter of 2003. This was on 5% more diluted shares outstanding.
First quarter 2004 sales increased 14% to $637.8 million as compared to $559.6 million in the same period last year. New vehicle sales increased 15%, used vehicle sales increased 10%, parts/service sales increased 23%, and finance/insurance sales increased 15%.
Sid DeBoer, Lithia's Chairman and CEO, commented, "The first quarter results were driven by growth in sales and better margins. Our operating margin improved by 60 basis points for the quarter.
"Combined new and used retail vehicle sales improved with retail vehicle same-store sales up nearly 1%. Retail new and used margins also demonstrated improvements leading to growth in same-store retail vehicle gross profits of nearly 5%. New vehicle same-store sales have now grown for five consecutive quarters. The used vehicle sales market has continued to stabilize and show signs of improvement. Lithia's strategy of producing strong new vehicle sales combined with high sales rates for our Lifetime Oil & Filter product is starting to demonstrate results in the parts and service department. Parts and Service same-store sales for the quarter were up 8.0%. Parts and service same-store sales have now grown for 3 consecutive quarters.
"Total retail same-store sales for the quarter were up 1.7%. All business lines produced positive growth in same-store gross profits for the quarter," concluded Mr. DeBoer.
Jeffrey B. DeBoer, Senior Vice President and CFO, added, "For the full-year 2004, we are raising earnings guidance from continuing operations to a range of $2.06 to $2.14 per diluted share. We expect second quarter earnings per share in the range of $0.51 to $0.53.
"In the first quarter, we completed two acquisitions; a Chrysler-Jeep store in Reno, Nevada and a Chevrolet store in Helena, Montana. The two stores have approximately $95 million in annualized revenues."
Lithia Motors will be providing more detailed information on the results for the first quarter 2004 in its conference call scheduled for 7 a.m. PDT today. The call can be accessed live 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 Webcast icon.
Lithia Motors, Inc. is a Fortune 1000 and Russell 2000 Company that sells 25 brands of new vehicles and operates 80 stores and 149 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 95,255 new and used vehicles and had $2.51 billion in total revenue in 2003.
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, projected 2004 earnings per share guidance, comfort with analyst earnings expectations for the second quarter and market condition assumptions.
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
---------------------------- March 31,
------------------- $ Increase % Increase
2004 2003 (Decrease) (Decrease)
--------- --------- ---------- ----------
New Vehicle Sales $353,601 $308,494 $45,107 14.6%
Used Vehicle Sales 189,906 172,096 17,810 10.3
Service, Body & Parts Sales 69,426 56,485 12,941 22.9
Finance & Insurance 23,385 20,410 2,975 14.6
Fleet & Other Revenues 1,531 2,075 (544) (26.2)
--------- --------- ---------- ----------
Total Revenues 637,849 559,560 78,289 14.0
Cost of Sales 531,615 471,073 60,542 12.9
--------- --------- ---------- ----------
Gross Profit 106,234 88,487 17,747 20.1
SG&A Expense 85,187 74,229 10,958 14.8
Depreciation/Amortization 2,954 2,131 823 38.6
--------- --------- ---------- ----------
Income from Operations 18,039 12,127 5,966 49.2
Flooring Interest Expense (3,616) (3,546) 70 2.0
Other Interest Expense (1,740) (1,388) 352 25.4
Other Expense, net (339) (147) 192 130.6
--------- --------- ---------- ----------
Income from continuing
operations before income
taxes 12,398 7,046 5,352 76.0
Income Tax Expense 4,836 2,731 2,105 77.1
Income Tax Rate 39.0% 38.8%
Net Income from continuing
ops. 7,562 4,315 3,247 75.2
--------- --------- ---------- ----------
Loss from discontinued
operations, net of income
taxes (83) (150) (67) (44.7)
Net Income $7,479 $4,165 $3,314 79.6%
========= ========= ========== ==========
Diluted Net income per
share:
Continuing Operations $0.40 $0.24 $0.16 66.7%
Discontinued Operations (0.01) (0.01)
--------- ---------
Net Income $0.39 $0.23 $0.16 69.6%
========= ========= ========== ==========
Diluted Shares
Outstanding 19,111 18,272 839 4.6%
Unit Sales: 2004 2003
---------------------------- --------- ---------
New Vehicle 12,845 12,010 835 7.0%
Used - Retail Vehicle 10,777 9,752 1,025 10.5
Used - Wholesale 6,087 6,147 (60) (1.0)
Total Units Sold 29,709 27,909 1,800 6.4
Average Selling Price:
----------------------------
New Vehicle $27,528 $25,686 $1,842 7.2%
Used - Retail Vehicle 14,634 14,498 136 0.9
Used - Wholesale 5,289 4,996 293 5.9
Key Financial Data:
----------------------------
Gross Profit Margin 16.7% 15.8%
SG&A as a % of Sales 13.4% 13.3%
Operating Margin 2.8% 2.2%
Pre-Tax Margin 1.9% 1.3%
Total Retail Same-Store
Sales 1.7% 0.7%
LITHIA MOTORS, INC.
Balance Sheet Highlights (Dollars in Thousands)
March 31, 2004 December 31, 2003
----------------- -----------------
Unaudited
-----------------
Cash & Cash Equivalents $39,813 $74,408
Trade Receivables(a) 85,128 86,908
Inventory 482,212 445,281
Assets Held for Sale 15,673 20,408
Other Current Assets 9,548 9,932
----------------- -----------------
Total Current Assets 632,374 636,937
Real Estate, net 179,527 164,676
Equipment & Leases, net 64,173 62,637
Goodwill, net 212,829 207,027
Other Assets 33,782 31,505
----------------- -----------------
Total Assets $1,122,685 $1,102,782
================= =================
Floorplan Notes Payable $407,179 $378,961
Liabilities Held for Sale 8,874 13,045
Other Current Liabilities 92,449 84,865
----------------- -----------------
Total Current Liabilities 508,502 476,871
Used Vehicle Flooring 58,950 56,267
Real Estate Debt 88,999 80,159
Other Long-Term Debt 66,005 98,308
Other Liabilities 33,534 32,251
----------------- -----------------
Total Liabilities 755,990 743,856
----------------- -----------------
Shareholders' Equity 366,695 358,926
----------------- -----------------
Total Liabilities &
Shareholders' Equity $1,122,685 $1,102,782
================= =================
--------------
(a) Includes contracts-in-transit of $42,541 and $44,709 for 2004 and
2003.
Other Balance Sheet Data (Dollars in Thousands)
Current Ratio 1.2x 1.3x
LT Debt/Total Cap. (Excludes Used
- Vehicle Flooring) 30% 33%
Working Capital $123,872 $160,066