Lithia Motors Reports Q1 Revenue
6 May 1998
Lithia Motors Reports Revenue Growth of 167% and 21 Cents EPS for the First Quarter of 1998
MEDFORD, Ore., May 6 -- Lithia Motors, Inc.
today released additional first quarter 1998 information. Revenues increased
167.3% to $146.2 million in the first quarter of 1998 from $54.7 million in
the first quarter of 1997. Net earnings rose 33.3% to $1.52 million compared
to $1.14 million in the first quarter of 1997 or $0.21 per share on
7.4 million shares outstanding vs. $0.16 per share on 7.2 million shares in
the same quarter of 1997.
Chairman and Chief Executive Officer, Sid DeBoer, stated, "We are pleased
to have once again posted results in excess of Wall Street expectations,
despite the first quarter traditionally being our seasonally slowest quarter
of the year. The new Dodge and Ford trucks and the Toyota car products are
being particularly well-received by consumers. We've continued to accomplish
the growth rates we set out to achieve with the 31% increase in earnings per
share."
New vehicle sales increased by 201.7%, used vehicle sales increased by
120.0%, and other operating revenue increased 197.1%. Lithia sold 3,422 new
vehicles and 3,027 retail used vehicles during the quarter compared to
1,197 and 1,450, respectively, during the first quarter of 1997. This
represents year-on-year unit increases of 185.9% and 108.8%, respectively.
The average selling prices of new vehicles increased by 5.5% to $21,890 and
retail used vehicles by 4.4% to $12,649.
Revenue benefited from a combination of 9.9% same-store growth and the
inclusion of 15 locations in California and Nevada acquired since March 1997.
The 9.9% same-store growth breaks down into a 10.4% increase in vehicle sales
and a 5.9% increase in other revenue, which includes the highest margin
products of service, parts, finance fees and insurance. New vehicles
same-store sales growth was 16.4%. Finance penetration increased to 73% for
the quarter compared to 72% last year. The trend towards strong new car sales
and flat used car sales continued in the first quarter its manufacturer
incentives increased the attraction of new vehicles relative to used vehicles.
Lithia's gross margins on new and used vehicles continue to be at roughly the
same level.
Total gross margin was 15.5% in the first quarter of 1998 vs. 16.4% in the
first quarter of 1997 as Lithia has added multiple stores that do not yet
operate at the gross margin levels achieved at Lithia's core stores. The
average U.S. dealership posted a 12.9% gross margin through November
1997, according to the National Auto Dealers Association. The sales and
general administration expense ratio improved from 12.8% to 12.3% of sales in
the first quarter of 1998 as economies of scale and other efficiencies are
realized versus the same period of 1997, resulting in an earnings before
interest, tax, depreciation and amortization (EBITDA) margin of 3.3%.
Sid DeBoer commented, "We continue to be reassured by the number of
attractive dealerships available for purchase as the $670 billion retail auto
industry continues to consolidate. We remain the leading public consolidator
on the West Coast."
During the first three months of 1998, Lithia announced and completed the
acquisition of five "fill-in" locations in its existing markets. These five
locations now operate as Lithia Nissan of Fresno and Lithia Jeep/Hyundai in
Fresno, California, Lithia Nissan and BMW in Medford, Oregon, Lithia's
Donnelly Volkswagen in Reno, Nevada and Lithia Jeep in Bakersfield,
California.
On May 1, 1998, Lithia Motors successfully completed the sale of
3.0 million newly-issued shares of its Class A Common Stock in a public
offering at a price of $14.50 per share. The proceeds will be used primarily
to acquire additional automotive dealerships. Lithia is the first public
automotive retailer to complete a follow-on offering of its shares.
This press release includes forward-looking statements, 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, manufacturer approval, and others set forth from
time to time in the company's filings with the SEC.
LITHIA MOTORS, INC.
(In Thousands except per share and unit data)
(Unaudited)
Three months ended March 31 1997 1998
New Vehicle Revenue $24,829 $74,908
Used Vehicle Revenue 22,641 49,801
Other Operating Revenue 7,234 21,489
Total Operating Revenue 54,704 146,198
Cost of Sales 45,755 123,474
Gross Profit 8,949 22,724
SG&A Expense 6,999 17,916
EBITDA 1,950 4,808
Depreciation & Amortization 169 498
EBIT (Operating Profit) 1,781 4,310
Interest Expense (net) (82) 1,844
Pre-Tax Profit 1,863 2,466
Income Tax 719 948
Income Tax Rate 38.6% 38.4%
Net Profit 1,144 1,518
Shares Outstanding 7.2m 7.4m
EPS $0.16 $0.21
Unit Sales:
New 1,197 3,422
Used - Retail 1,450 3,027
Used - Wholesale 1,029 1,952
Average Selling Price:
New $20,743 $21,890
Used - Retail $12,112 $12,649
Used - Wholesale $4,936 $5,898
LITHIA MOTORS, INC.
Balance Sheet Highlights
(in Thousands of Dollars) Period Period
Ended Ended
December 31, March 31,
1997 1998
Cash & Cash Equivalents $18,454 $14,181
Inventory 89,845 123,107
Total Current Assets 119,887 149,802
Other Assets 46,639 58,667
Total Assets 166,526 208,469
Floorplan Notes Payable 82,598 94,642
Total Current Liabilities 96,016 108,917
Long-Term Debt 24,242 50,867
Other Liabilities 8,391 8,288
Total Liabilities 128,649 168,072
Shareholders Equity 37,877 40,397
Total Liabilities & Shareholders Equity 166,526 208,469
SOURCE Lithia Motors, Inc.