Lithia Motors, Inc. Presents On Internet Day At First Union Capital Markets Investor Conference
6 July 1999
Lithia Motors, Inc. Presents On Internet Day At First Union Capital Markets Investor Conference
NANTUCKET, Mass.--July 6, 1999--Lithia Motors, Inc. presented today at The 1999 First Union Capital Markets Nantucket Conference in Nantucket, Massachusetts.The conference features over 140 companies whose senior managers are making presentations over a four day period to over 200 institutional investors from the UK and from around the United States. Among the companies presenting are Earthweb, Online Resources, OnHealth, BroadVision, @Plan, Nextel Communication, Circuit City Stores, Mellon Bank, and Ingersoll-Rand.
The highlights of the Lithia Motors presentation which occurred on the e-commerce/internet day of the conference are as follows:
1) The auto retailing industry is the largest retailing sector in
the U.S. with over $670 billion in new and used vehicle sales
($1.3 trillion when auto finance and service businesses are
included). This is more than 4x the size of the home improvement
industry and 8x the consumer electronics industry;
2) The industry is still highly fragmented and in the very early
stages of consolidation with around 22,000 dealerships operated
by under 15,000 owners. There are no dominant national or
regional players as the Top 10 dealers control only 5% of the
market and the Top 100 dealers control only 11%;
3) Lithia Motors, Inc. has been in the automobile retailing industry
since 1946 and became a public company in December of 1996. The
senior management team has been together for more than 28 years
and has been solely focused on auto retailing throughout that
period of time;
4) Lithia has increased revenues by more than five times on an
actual basis since 1996 when it went public while increasing its
operating margin from 3.0% to 3.7% over the same period of time.
The company stands out as one of the premier operators in the
auto retailing sector and has exceeded Wall Street consensus
estimates all ten quarters since becoming a public company.
Lithia's presentation focused on its rapidly expanding internet business through Lithia.com:
1) The Web represents a new sales channel for auto retailing and is
a significant new opportunity; large auto retailers, like Lithia,
with an established distribution infrastructure are the best
positioned to be the winners;
2) Brick-and-mortar stores are a significant advantage because of
the important role they play in the sales and ownership
experience, including parts and service;
3) Only franchised auto retail stores can sell new vehicles directly
to the consumers. Lithia now owns 77 franchises in California,
Oregon, Washington, Nevada and Colorado. The company sells 24
brands of new vehicles over the internet. Strong state franchise
laws that favor established auto retailers are a significant
barrier to entry and are being strengthened in numerous states
across the country;
4) As a franchised dealer, Lithia benefits from strong existing
brand loyalty to Ford, Dodge, Jeep, Chevy, Toyota, Honda and
eighteen other brands as well as the Lithia brand in its local
markets;
5) The Web expands Lithia stores' sales opportunities allowing
Lithia to take share from competitors.
Lithia also sells used vehicles, arranges finance, warranty, and credit insurance contracts, provides vehicle parts, maintenance, and repair services at all of its locations. Lithia retailed 31,353 new and used vehicle in 1998. Lithia's current annualized revenue run rate, including all completed acquisitions, is approximately $1.2 billion.
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.