Lithia Motors Announces Share Repurchase Program
8 June 2000
Lithia Motors Announces Share Repurchase Program
MEDFORD, Ore. - Lithia Motors, Inc. today announced that its Board of
Directors has authorized the repurchase of up to 1,000,000 of the Class A Common
Shares of the Company. Shares may be acquired either through open market
purchases, negotiated transactions, or other means based upon market conditions.
Chairman and Chief Executive Officer, Sidney B. DeBoer, stated, "Our stock
currently trades at a very compelling multiple of approximately 7.5x 1999
earnings per share. Lithia has delivered an average annual growth in earnings
per share of 46% over the three year period that it has been a public company.
This growth includes the dilution of an IPO, a secondary offering, and shares
issued in acquisitions for a total of over 7.0 million shares, a 140% increase
since 1996. Lithia has consistently beat analyst estimates for the past
fourteen quarters. Our top management team remains in place to continue our
industry leading performance. The share repurchase program will enable us to
assist our shareholders in preserving the value of their shares."
"Even after the repurchase of these shares, we will have adequate capital
available from our credit lines and internal cash flow to proceed with our
steady acquisition program. The company has not yet drawn on our acquisition
line of credit of $115,000,000. We continue to see numerous attractive
dealerships for sale and expect to complete further purchases later this
year," added Jeffrey B. DeBoer, Senior Vice President and Chief Financial
Officer.
"We are more than eleven times our size on a revenue run-rate basis
compared to when we went public in December 1996 and our operating margin has
improved from 3.0% in 1996 to 3.8% in 1999, despite our rapid growth. Lithia
continues to lead the industry in operating margins. These accomplishments
have been achieved due to our focused and disciplined acquisition strategy and
a proven operating model that adds value to our acquisitions by allowing all
five departments of an auto retail store to move towards realizing their full
potential.
"Despite these achievements, our stock closed trading today at just over
$12/share which is $1/share higher than when we went public and is below book
value of $12.96/share as of March 31, 2000. Our book value per share was
$4.22 at the end of 1996 when we went public. Clearly, the market has focused
on large-cap stocks with liquidity, particularly in the technology sector, at
the expense of quality smaller-cap names in other industries," concluded
Jeffrey B. DeBoer.
Lithia Motors operates 103 franchises in California, Oregon, Washington,
Nevada, Colorado and Idaho. Lithia sells 25 brands of new vehicles at
47 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 52,485 new and used
vehicles in 1999. Lithia's current annualized revenue run rate, including all
completed acquisitions, is over $1.6 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 and others set forth from time to time in the
company's filings with the SEC. Specific risks in this press release include
assumed future earnings, the price of purchased shares, the continuation of
affordable credit facilities from lenders, the availability of future
acquisitions, and the company revenue run rate.