Lithia Motors Reports a 78% Increase in Net Profit on 74% More Sales in 1999; Earns $1.60 Per Share
23 February 2000
Lithia Motors Reports a 78% Increase in Net Profit on 74% More Sales in 1999; Earns $1.60 Per Share
MEDFORD, Ore., Feb. 23 -- Lithia Motors, Inc.
today announced that net profit for the full year of 1999 rose 78% to
$19.17 million compared to $10.79 million in 1998 or $1.60 per share on
12.0 million diluted shares outstanding in 1999 vs. $1.14 per share on
9.5 million diluted shares in 1998. That represents a 40% increase in EPS on
26% mores shares outstanding. Cash flow per diluted share (net income plus
depreciation and amortization) was $2.06 per share in 1999 versus $1.51 a year
ago.
(Photo: http://www.newscom.com/cgi-bin/prnh/19990909/LITHIALOGO )
For the fourth quarter of 1999, net profit rose 69% to $5.72 million
compared to $3.39 million in the fourth quarter of 1998 or $0.43 per share on
13.2 million diluted shares outstanding vs. $0.32 per share on 10.5 million
diluted shares in the same quarter of 1998. That represents an increase in
EPS of 34% on 26% more shares outstanding. Cash flow per diluted share was
$0.55 per share in the fourth quarter of 1999 versus $0.42 a year ago.
Lithia Motors also reported total revenues of $1.24 billion for the full
year of 1999, an increase of 74% from $714.7 million in 1998. For the fourth
quarter, total revenues increased 77% to $353.4 million from $199.1 million in
the fourth quarter of 1998.
Chairman and Chief Executive Officer, Sidney B. DeBoer, stated, "We are
pleased to announce these results which make thirteen consecutive quarters
that Lithia has exceeded First Call consensus estimates. We've recorded
impressive CAGR (Compounded Annual Growth Rate) figures over the past three
years in three key areas: annual revenues at 105%, net profit at 94%, and
earnings per share or EPS at 45% per year. Lithia remains the premier
operator/consolidator in the auto-retailing sector."
In 1999, new vehicle sales increased by 73.3%, retail used vehicle sales
increased by 79.9%, service, body and parts sales increased by 67.2% and other
revenues (which includes finance and insurance) increased 117.7%. For the
year, Lithia sold 28,645 new vehicles and 23,840 retail used vehicles compared
to 17,708 and 13,645 respectively, for the same period of 1998. This total of
52,485 new and used retail vehicles in 1999 represents an increase of 67.4%
over 1998.
For the fourth quarter of 1999, new vehicle sales increased by 75.5%,
retail used vehicle sales increased by 87.4%, service and parts sales
increased by 52.1% and other revenues, which includes finance and insurance,
increased by 141.1% as compared to the fourth quarter of 1998. These
increases are due to a combination of acquisitions and internal growth.
M.L. Dick Heimann, Lithia's President and Chief Operating Officer, stated,
"These results once again demonstrate the discipline of Lithia's operating
model in a number of key areas. Even as we have continuously added new stores
with lower initial profitability than our own, we have continued to improve
our operating margin from 3.0% when we went public in 1996 to 4.1% in this
most recent quarter. We have also managed to realize significant economies of
scale as demonstrated by the fact that our costs (SG&A) as a percentage of
sales have declined steadily from 13.9% of sales in 1996 to 11.9% in this most
recent quarter.
"Our same store sales increased 6.9% for the year on top of a very strong
14.7% increase in 1998. We posted a 7.0% increase in same store sales growth
for the quarter on top of last year's 14.0% increase. The strongest
components of this quarter's gain in same store sales were the finance and
insurance businesses that increased 17.8%. We have dedicated additional
resources into this area and are pleased to see our efforts show such
immediate results," concluded Mr. Heimann.
With regard to the acquisition pipeline, Brian R. Neill, Senior Vice
President and Chief Financial Officer, commented, "The number of attractive
dealerships available for purchase in our target acquisition areas remains
high. With our acquisition facility from Ford Credit and expected future
internal cash flow from operations, Lithia is well positioned to continue its
current disciplined growth plan and increase earnings per share with each
future acquisition. Our current acquisition facility of $115 million remains
totally undrawn. Finally, it is worth noting that we were able to pay-down
our long term debt from cash flow during the last two quarters despite
continued acquisitions, lowering our long-term debt to total capitalization
ratio to 32% from 36% at the end of June. Our balance sheet remains one of
the strongest in our sector, which enables us to continue to execute our
acquisition plans."
In 1999, Lithia completed the acquisition of thirteen stores with
annualized revenues of approximately $585 million. Lithia now owns
98 franchises in California, Oregon, Washington, Nevada, Colorado and Idaho,
and sells 24 brands of new vehicles at 41 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's current annualized revenue run rate, including all completed
acquisitions, is over $1.5 billion, considering recent same store sales
growth.
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. Specific risk statements
in this press release include expected earning per share growth, acquisition
pricing and availability, operational improvements and the availability of
financing sources.
For additional information on Lithia Motors, contact: Jeff DeBoer, VP
-- Finance/Investor Relations 541-776-6868 or log-on to http://www.lithia.com
(E-mail: invest@lithia.com)
LITHIA MOTORS, INC.
(In Thousands except per share data)
Audited
Three Months Ended Year Ended
December 31, December 31,
1998 1999 1998 1999
New Vehicle Sales $108,322 $190,157 $388,431 $673,339
Used Vehicle Sales 58,244 105,270 220,544 375,562
Service, Body & Parts Sales 22,959 34,917 72,216 120,722
Other Revenues 9,561 23,048 33,549 73,036
Total Revenues $199,087 $353,392 $714,740
$1,242,659
Cost of Sales 165,522 295,337 599,379 1,043,373
Gross Profit 33,565 58,055 115,361 199,286
SG&A Expense 23,836 42,108 85,188 146,381
Depreciation & Amortization 1,022 1,574 3,469 5,573
Income from Operations $8,707 $14,373 $26,704 $47,332
Flooring Interest Expense 1,907 3,727 7,108 11,105
Other Interest Expense 837 1,365 2,735 4,250
Other Income (Expense), net -242 62 921 74
Pre-Tax Profit $5,721 $9,343 $17,782 $32,051
Income Tax 2,332 3,628 6,993 12,877
Net Profit $3,389 $5,715 $10,789 $19,174
Shares Outstanding 10,532 13,214 9,470 11,998
Diluted EPS $0.32 $0.43 $1.14 $1.60
Three Months Ended Year Ended
December 31, December 31,
1998 1999 1998 1999
Other Data:
EBITDA ($Thousands) $9,487 $16,009 $31,094 $52,979
EBITDA/Interest Coverage 3.5x 3.1x 3.2x 3.5x
Income Tax Rate 40.8% 38.8% 39.3% 40.2%
Gross Margin 16.9% 16.4% 16.1% 16.0%
SG&A Expense 12.0% 11.9% 11.9% 11.8%
Operating Margin 4.4% 4.1% 3.7% 3.8%
Pre-tax Margin 2.9% 2.6% 2.5% 2.6%
Unit Sales:
New 4,782 7,786 17,708 28,645
Used - Retail 3,686 6,694 13,645 23,840
Used - Wholesale 2,403 3,732 9,532 13,424
Total Units Sold 10,871 18,212 40,885 65,909
Average Selling Price:
New $22,652 $24,423 $21,935 $23,506
Used - Retail $12,783 $13,191 $12,768 $13,148
Used - Wholesale $4,630 $4,547 $4,860 $4,627
Balance Sheet Highlights
(In Thousands) Audited Audited
Dec 31, Dec 31,
1998 1999
Cash & Cash Equivalents $20,879 $30,364
Inventories 157,455 268,281
Other Current Assets 25,862 35,999
Total Current Assets 204,196 334,644
Property & Equipment, net 32,933 52,368
Goodwill, net 42,951 110,677
Other Assets 14,318 8,744
TOTAL ASSETS $294,398 $506,433
Floorplan Notes Payable $124,167 $208,403
Other Current Liabilities 26,476 51,242
Total Current Liabilities 150,643 259,645
Long-Term Debt 38,994 73,715
Other Liabilities 13,250 17,435
Total Liabilities $202,887 $350,795
Shareholders' Equity 91,511 155,638
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $294,398 $506,433
Other Balance Sheet Data (Dollars in Thousands)
Current Ratio 1.36x 1.29x
LT Debt/Total Cap. 30% 32%
Working Capital $53,553 $74,999