Lithia Motors Completes Acquisition of Tri-Cities Dodge in Kennewick
18 October 1999
Lithia Motors Completes Acquisition of Tri-Cities Dodge in Kennewick, Washington and an Additional Company-Wide Cost Savings Agreement LITHIA AUTOMOTIVE GROUP LOGO Lithia Automotive Group logo. Contact: Betty Whitney, 541-776-6591. (PRNewsFoto)[DM] MEDFORD, OR USA 09/09/1999
MEDFORD, Ore., Oct. 18 -- Lithia Motors, Inc.
announced that it has completed the acquisition of Tri-Cities Dodge in
Kennewick, Washington. The store has annualized sales of approximately
$33 million and began operation as Lithia Dodge of Tri-Cities in early
October. Lithia's net investment in the store totaled $3.9 million and was
paid for in a combination of stock and cash.
(Photo: http://www.newscom.com/cgi-bin/prnh/19990909/LITHIALOGO )
Sidney B. DeBoer, Chairman and CEO of Lithia Motors, stated, "This store
is strategically located in a highly attractive market southwest of Spokane in
Eastern Washington. We now own six Dodge stores in the Pacific Northwest.
This acquisition represents a continuation of our primary strategy to buy
dominant franchises in attractive middle-sized markets. We continue to look
for this type of fill-in acquisition due to our potential to improve the
operations by implementing the Lithia operating model and to earn a superior
return on invested capital."
Separately, Lithia announced that it has selected Enterprise Rent-a-Car as
its strategic partner to supply replacement vehicles to Lithia service and
body shop customers across Lithia's growing network of stores in five western
and inter-mountain states. Enterprise will open on-site operations in markets
where Lithia has a significant cluster of stores and utilize Lithia's service
departments for warranty and service repairs on its vehicles. The Enterprise
agreement is one of many examples of Lithia's ability to reduce costs in
certain areas through macro-economies of scale that result from Lithia's
increasing size. Areas where Lithia has been able to substantially reduce its
costs over the past two years include insurance, finance contracts, service
contracts, detail chemicals, documents and forms, oil products and computer
services. As Lithia continues to grow it expects to realize further cost
savings with its vendors.
With this most recent acquisition, Lithia now operates 94 franchises in
California, Oregon, Washington, Nevada and Colorado and sells 24 brands of new
vehicles at 39 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 retailed 31,353 new and used
vehicles in 1998. Lithia's current annualized revenue run rate, including all
completed acquisitions, is over $1.3 billion or approximately 59,000 retail
new and used units.
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 and others set forth from time to time in the
company's filings with the SEC. Specific risks included in this press release
include future acquisitions, operational improvements, return on investment,
expected cost savings, revenue run rate and unit sales run rate.
For additional information on Lithia Motors, contact: Jeff DeBoer, Vice
President of Finance/Investor Relations 541-776-6868 or log-on to
http://www.lithia.com (E-mail: invest@lithia.com)