Lithia Motors, Inc. Completes Moreland Transaction on Schedule
18 May 1999
Lithia Motors, Inc. Completes Moreland Transaction on Schedule
MEDFORD, Ore., May 18 -- Lithia Motors, Inc.
today announced that it completed the previously announced Moreland
transaction on schedule on May 14, 1999. The transaction adds seven
dealerships in four rapidly growing markets in Colorado and Nevada. The six
Colorado dealerships represent three new markets and form the base for a new
operating platform in the Inter-Mountain States. Together these six stores
represent approximately 25% of the Chrysler business in the State of Colorado.
The Reno store is a "fill-in" in the Reno, Nevada market where Lithia
currently has three dealerships. With the completion of this transaction,
Lithia Motors now has an annualized revenue run rate of approximately $1.2
billion.
M.L. Dick Heimann, President and COO of Lithia Motors, who previously made
his home in Colorado where he began his automotive career with Chrysler,
stated, "We are pleased to have Doug Moreland and his organization join the
Lithia Group and are reassured that we have the right fit in terms of people,
operations, and franchises. Doug Moreland is a veteran auto retailer whose
focus on customer service and vision of the automotive industry are closely
aligned with those of Lithia's management. Year to date, Moreland's
operations in Denver have realized solid growth in both sales and profits and
are off to an excellent start in 1999. The combination of Chrysler, Lithia
and Moreland in the Colorado market represents an unprecedented winning
opportunity for growth. With the new platform, we can now pursue 'fill-in'
acquisitions in the surrounding markets which should further improve our
return on investment."
Doug Moreland, President of the Moreland Group, stated, "I chose to invest
in Lithia because of their intense operational focus on selling cars and
making customers happy. Lithia's management team has the same strong Chrysler
background as we have at the Moreland Group. This is a natural fit in terms
of communication and strategic objectives. We are excited about being a part
of the best public automobile dealership group in the country."
Brian R. Neill, Senior Vice President and CFO of Lithia Motors, commented,
"We have a very full acquisition pipeline and are well capitalized. With the
undrawn $75 million acquisition credit facility from Ford Credit, we have
sufficient capital today to approximately double our current revenue base,
including Moreland, assuming a 50/50 mix of stock and cash, without further
capital market events. Pending transactions will be announced as we complete
the acquisitions."
Lithia now operates 35 dealerships in 14 markets located in California,
Oregon, Washington, Nevada and Colorado. The company sells 24 brands of new
vehicles through 77 franchises. Lithia also sells used vehicles, arranges
finance, warranty, and credit insurance contracts, provides vehicle parts,
maintenance, and repair services at all of its locations. The company
operates 6 collision repair centers. Please refer to the original Lithia
Motors press release of March 4, 1999 for further details on the Moreland
transaction.
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 filing with the SEC. Also please note with
regards to the Lithia press release on April 15,1999, that Lithia does not
necessarily endorse the conclusions of the analyst research, which is
independent research, nor will it be updating on a regular basis the
information provided in the press release.