Lithia Motors Reports Second Quarter Earnings
26 July 2000
Earns 45 Cents Per Share
MEDFORD, Ore. - Lithia Motors, Inc. today announced that net earnings rose
35% to $6.19 million in the second quarter of 2000 compared to $4.58 million in
the second quarter of 1999 or $0.45 per share on 13.82 million diluted shares
outstanding vs. $0.40 per share on 11.57 million diluted shares in the same
quarter of 1999. Cash flow per diluted share (net income plus depreciation and
amortization) was $0.58 per share in the second quarter of 2000 vs. $0.51 a year
ago.
Net earnings for the first six months of 2000 rose 47% to $11.16 million
compared to $7.61 million in the same period of 1999 or $0.81 per share on
13.80 million diluted shares outstanding in the first half of 2000 vs.
$0.69 per share on 11.09 million diluted shares in the same period of 1999.
Cash flow per diluted share (net income plus depreciation and amortization)
was $1.07 per share in the first half of 2000 vs. $0.91 a year ago.
Lithia Motors also reported that total revenues increased 36% to
$417.9 million in the second quarter of 2000 from $307.8 million in the second
quarter of 1999. For the first six months of 2000, total revenues increased
53% to $813.5 million from $531.9 million in the first six months of 1999.
For the quarter, EBITDA increased 53% from $12.4 million to $19.0 million.
For the first six months, EBITDA increased 64% to $34.8 million vs.
$21.2 million in the same period last year.
For the quarter, new vehicle sales increased 33%, used vehicle sales
increased 28%, service and parts sales increased 42% and other revenues
increased 90%. For the six month period new vehicle sales increased by 55%,
used vehicle sales increased by 43%, service and parts sales increased by 52%
and other revenues, which includes our highest margin finance and insurance,
increased by 88%.
Chairman and Chief Executive Officer, Sidney B. DeBoer, stated, "We are
pleased to announce these results which exceed the consensus Wall Street
estimates for the fifteenth consecutive quarter. This quarter once again
demonstrates the discipline of Lithia's operating model. It also helps to
answer the question as to how we would perform in a slowing sales environment.
We improved our gross margin to 16.1% from 15.9%, and our operating margin to
4.0% from 3.7% compared to the same period last year. The SG&A expense as a
percentage of gross profit improved 170 bp to 72.2%. These improvements are
due to increased economies of scale and improvements in the sales mix.
"I would also like to thank the Lithia team. We currently employ over
3000 people in the six states in which we have operations, and it is the
dedication and hard work of our management team working closely with our
employees that has lead to our impressive margin improvements, declining SG&A,
and the overall success in our stores.
"DaimlerChrysler, which accounts for 41% of our total sales, has been
experiencing weakening sales nationally. Our DaimlerChrysler stores reflected
this weakness with a decline in DaimlerChrysler same-store retail sales of
4.2% for the quarter. Overall, second quarter same-store retail sales declined
1.2%, as our non-Chrysler stores posted positive same-store sales, with
particular strength in Ford, Volkswagen and Nissan. This 1.2% decline is on
the high side of analyst estimates of flat to a 6% decline in same-store
sales. We are pleased with the results. DaimlerChrysler sales were
strengthening in June, and are showing improvements in July. We are very
confident that the new minivans and PT Cruiser along with the new incentives
will restore Chrysler's sales increases going forward.
"For the six month period, same store retail sales increased 1.7% compared
to the first half of last year. Again we showed good margin improvements with
gross margins of 16.0% vs. 15.8% and operating margins of 3.8% vs. 3.5% in the
same period last year," concluded Sidney B. DeBoer.
Lithia Motors operates 103 franchises in California, Oregon, Washington,
Nevada, Colorado and Idaho. Lithia sells 25 brands of new vehicles at
49 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.
LITHIA MOTORS, INC.
(In Thousands except per share and unit data)
Three Months Ended Six Months Ended
June 30, June 30,
Unaudited 1999 2000 1999 2000
New Vehicle Sales $167,222 $222,039 $284,075 $440,048
Used Vehicle Sales 93,049 119,277 164,858 235,975
Service, Body & Parts Sales 28,477 40,476 51,907 78,933
Other Revenues 19,005 36,059 31,058 58,498
Total Revenues 307,753 417,851 531,898 813,454
Cost of Sales 258,967 350,667 447,912 683,406
Gross Profit 48,786 67,184 83,986 130,048
SG&A Expense 36,061 48,528 62,709 95,729
Depreciation & Amortization 1,364 1,887 2,439 3,607
Income from Operations 11,361 16,769 18,838 30,712
Flooring Interest Expense 2,179 4,712 4,288 8,573
Other Interest Expense 1,065 1,862 1,694 3,657
Other Income (Expense), net (338) 305 (72) 433
Pre-Tax Profit 7,779 10,500 12,784 18,915
Income Tax 3,202 4,306 5,178 7,757
Income Tax Rate 41.2% 41.0% 40.5% 41.0%
Net Profit $4,577 $6,194 $7,606 $11,158
Shares Outstanding 11.570 13.819 11.085 13.801
Diluted EPS $0.40 $0.45 $0.69 $0.81
Unit Sales:
New 7,229 9,303 12,460 18,333
Used - Retail 5,875 7,660 10,128 15,133
Used - Wholesale 3,133 3,991 6,328 8,031
Total Units Sold 16,237 20,954 28,916 41,497
Average Selling Price:
New $23,132 $23,867 $22,799 $24,003
Used - Retail $13,285 $13,249 $13,144 $13,213
Used - Wholesale $4,787 $4,457 $5,015 $4,486
Key Financial Data: 1999 2000 1999 2000
EBITDA $12,387 $18,961 $21,205 $34,752
Gross Margin 15.9% 16.1% 15.8% 16.0%
SG&A Expense 11.7% 11.6% 11.8% 11.8%
Operating Margin 3.7% 4.0% 3.5% 3.8%
Pre-Tax Margin 2.5% 2.5% 2.4% 2.3%
LITHIA MOTORS, INC.
Balance Sheet Highlights:
(Dollars in Thousands)
Unaudited March 31, 2000
June 30, 2000
Cash & Cash Equivalents $34,233 $29,432
Inventory 305,930 325,722
Other Current Assets 34,859 39,151
Total Current Assets 378,209 394,305
Property & Equipment, net 59,245 68,155
Goodwill, net 118,699 120,334
Other Assets 1,449 10,817
TOTAL ASSETS $563,984 $593,611
Floorplan Notes Payable $244,098 $267,110
Other Current Liabilities 42,836 43,444
Total Current Liabilities 286,934 310,554
Long-Term Debt 97,549 97,257
Other Liabilities 17,991 17,789
Total Liabilities $402,474 $425,600
Shareholders' Equity 161,510 168,011
TOTAL LIABILITIES
& SHAREHOLDERS' EQUITY $563,984 $593,611
Other Balance Sheet Data: (Dollars in Thousands)
Current Ratio 1.3x 1.3x
Long-Term Debt to Capitalization 38% 37%
Working Capital $91,275 $83,751
