Lithia Motors, Inc. (NYSE:LAD) today announced that third quarter
2006 sales increased 3% to $880.4 million as compared to $858.9
million in the same period last year. New vehicle sales increased
1%, used vehicle sales increased 6%, finance/insurance sales
increased 5% and parts/service sales increased 12%. Third quarter
2006 net income from continuing operations was $12.8 million as
compared to $18.1 million in the third quarter of 2005. Diluted
earnings per share from continuing operations, including the $0.03
effect of accounting for equity compensation under FAS123-R, were
$0.60. Third quarter 2006 earnings per share from continuing
operations, excluding the effect of accounting for equity
compensation under FAS123-R, were $0.63 as compared to $0.85 in the
same period last year. Sid DeBoer, Lithia�s Chairman and CEO,
commented, �Recently Lithia reached a milestone of 100 stores over
a period of 10 years as a public company. We are excited about this
achievement, although we are only just beginning to realize some of
the growth and operating opportunities that lay ahead of us.� �Our
third quarter revenues were up 3% compared to last year�s third
quarter. Although this is due to acquisitions, it is still
noteworthy considering the very difficult comparison with the third
quarter of last year where we saw exceptionally strong sales driven
by effective employee pricing. Incentives were not as effective in
the third quarter this year.� �While total revenues were up, third
quarter earnings were down year over year due to a combination of
factors; high inventory levels and higher interest rates impacted
our bottom line by approximately 12 cents per share for the
quarter. This excludes inventories from acquisitions over the prior
year. We also experienced increased costs resulting from
company-wide operational initiatives in the quarter. We estimate
expenses for all these new initiatives to be in the range of seven
to eight cents per share for the full-year 2006. Additionally, for
most of September, we were unable to sell the majority of our Dodge
RAM light duty pickups, one of our core products, due to a �sell
hold� from the manufacturer that is related to a safety restraint
system in these vehicles.� �Total same store sales declined 3.5%
against a backdrop of 9.1% growth in the third quarter of last
year. New vehicle inventories remained above historical average
levels at the end of September, but are down $230 million
sequentially from the second quarter. We expect them to continue to
decline by year-end. Fuel costs have declined recently and that
should benefit consumer sentiment and help increase truck sales.
Interest rates have risen steadily for the last two years and with
interest rates currently steady, floorplan interest costs should
stop increasing in the year ahead,� concluded Mr. DeBoer. For the
nine-month period ending September 30, 2006, total sales increased
9% to $2.48 billion from $2.27 billion in the same period last
year. New vehicle sales increased 10%, used vehicle sales increased
9%, finance/insurance sales increased 12%, and parts/service sales
increased 12%. For the first nine months, Lithia�s net income from
continuing operations was $35.1 million as compared to $41.7
million in the first nine months of 2005. Diluted earnings per
share from continuing operations, including the $0.09 effect of
accounting for equity compensation under FAS123-R, were $1.65. For
the first nine months of 2006 earnings per share from continuing
operations, excluding the affect of accounting for equity
compensation under FAS123-R, were $1.74 as compared to $1.98 in the
same period last year. Jeffrey B. DeBoer, Senior Vice President and
CFO added, �In the past four months we have completed four
acquisitions: a Chrysler store in Ukiah, California; two stores in
Grand Forks, North Dakota with a combination of import and domestic
brands; and more recently, BMW and Porsche stores in Seaside,
California and BMW and Mercedes Benz stores in Des Moines, Iowa.
These more recent acquisitions have provided a good demonstration
of our continuing brand diversification efforts. Year to date we
have completed acquisitions with approximately $390 million in
annualized revenues, and we plan on continuing our normal
acquisition pace in 2007.� "Our guidance for the full-year 2006 and
2007 is included in the table below. For the full-year 2007 we are
giving guidance for a flat year as a number of key items are
material to the year ahead. Company health and benefit plan costs
will be increasing, negatively impacting earnings by 10 to 12 cents
per share. We will also continue with our special operational
projects and initiatives which include: Office Automation; Lithia�s
Store Management System; Human Development Systems and our Assured
Used Vehicle Program. Long-term we expect these projects to reduce
the company�s SG&A expense and allow the stores to focus more
on customers which will help drive long-term sales growth. We also
expect that in the coming year, our domestic product mix will
continue to negatively impact earnings, however, we believe that
the restructurings now underway at the domestic manufacturers along
with changes in mix and product improvements will help us in the
future.� �We are excited about the start up of our first
independent used vehicle retail outlets in 2007. Start up costs for
this initiative will impact earnings by approximately 10 cents per
share. Once established, we expect that each independent used
vehicle store will reach monthly operational profitability within
12 months of opening,� concluded Jeffrey B. DeBoer. Guidance
Guidance Earnings per Share FY 2006 FY 2007 -------------
------------- From Continuing Operations: $1.95 - $1.99 $1.90 -
$2.10 The company currently has a 1,000,000 share repurchase
program in place. Prior to the beginning of�2006, 60,231 shares had
been purchased. In the past few months the company purchased
196,600 shares, leaving 743,169 shares still available for
repurchase under the program. Conference Call Information Lithia
Motors will be providing more detailed information on the results
for the third quarter 2006 in its conference call scheduled for 2
p.m. PT today. The call can be accessed live by calling
973-633-1010. To listen to a live webcast or hear a replay, log-on
to: www.lithia.com � go to Investor Relations � and click on the
Live Webcast icon. About Lithia Lithia Motors, Inc. is a Fortune
700 and Russell 2000 Company. Lithia sells 26 brands of new
vehicles at 102 stores which are located in 42 markets within 15
states. Internet sales are centralized at www.Lithia.com. 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 103,333
new and used vehicles and had $2.9 billion in total revenue in
2005. Forward Looking Statements This press release includes
forward looking statements within the meaning of the �Safe-Harbor�
provisions of the Private Securities Litigation Reform Act of 1995,
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
items which impact earnings, anticipated revenues of recently
acquired and projected new store acquisitions, anticipated
profitability of independent used vehicle stores and projected
full-year 2006 and 2007 earnings per share guidance. Additional
Information For additional information on Lithia Motors, contact
the Investor Relations Department: (541) 776-6591 or log-on to:
www.lithia.com � go to Investor Relations LITHIA MOTORS, INC. (In
Thousands except per share and unit data) Unaudited Three Months
Ended September 30, $Increase %Increase 2006 2005 (Decrease)
(Decrease) New Vehicle Sales $515,059 $510,541 $4,518 0.9% Used
Vehicle Sales 239,387 226,518 12,869 5.7 Finance & Insurance
33,982 32,462 1,520 4.7 Service, Body & Parts Sales 90,108
80,786 9,322 11.5 Fleet & Other Revenues 1,836 8,548 (6,712)
(78.5) -------- -------- -------- ------- Total Revenues 880,372
858,855 21,517 2.5 Cost of Sales 733,116 717,591 15,525 2.2
-------- -------- -------- ------- Gross Profit 147,256 141,264
5,992 4.2 SG&A Expense 109,122 98,588 10,534 10.7
Depreciation/Amortization 4,411 3,624 787 21.7 -------- --------
-------- ------- Income from Operations 33,723 39,052 (5,329)
(13.6) Flooring Interest Expense (10,027) (5,534) 4,493 81.2 Other
Interest Expense (3,819) (3,037) 782 25.7 Other Income, net 188 186
2 1.1 -------- -------- -------- ------- Income from continuing
operations before income taxes 20,065 30,667 (10,602) (34.6) Income
Tax Expense (7,289) (12,551) (5,262) (41.9) Income Tax Rate 36.3%
40.9% -------- -------- -------- ------- Income from continuing
ops. 12,776 18,116 (5,340) (29.5) Income (Loss) from discontinued
operations, net of income taxes (81) (484) (403) (83.3) Net Income
$12,695 $17,632 ($4,937) (28.0)% ========= ======== =======
======== Diluted Net Income per share: Continuing Operations $0.63
$0.85 $(0.22) (25.9)% Effects of FAS123-R (0.03) - Diluted Net
Income per share after effect of FAS123-R: $0.60 $0.85 (0.25)
(29.4)% Discontinued Operations - (0.02) -------- -------- --------
------- Net Income per share $0.60 $0.83 (0.23) (27.7)% =========
======== ======= ======== Diluted Shares Outstanding 22,128 21,882
246 1.1% Increase Increase Unit Sales: 2006 2005 (Decrease)
(Decrease) New Vehicle 18,829 18,682 147 0.8% Used - Retail Vehicle
11,925 12,057 (132) (1.1) Used - Wholesale 7,686 7,091 595 8.4
Total Units Sold 38,440 37,830 610 1.6 LITHIA MOTORS, INC. Three
Months Ended September 30, $Increase % Increase Average Selling
Price: 2006 2005 (Decrease) (Decrease) ---------------------- ----
---- ---------- --------- New Vehicle $27,355 $27,328 $27 0.1% Used
- Retail Vehicle 16,223 15,502 721 4.7 Used - Wholesale 5,976 5,586
390 7.0 Key Financial Data: ------------------- Gross Profit Margin
16.7% 16.4% SG&A as a % of Gross Profit 74.1% 69.8% Operating
Margin 3.8% 4.5% Pre-Tax Margin 2.3% 3.6% Gross Margin/Profit Data
2006 2005 ------------------------ ---- ---- New Vehicle Retail
7.7% 7.7% Used Vehicle Retail 14.5% 15.8% Used Vehicle Wholesale
0.9% 1.7% Service, Body & Parts 49.8% 48.1% New Retail Gross
Profit/Unit $2,101 $2,112 Used Retail Gross Profit/Unit $2,348
$2,448 Used Wholesale Gross Profit/Unit $56 $93 Finance &
Insurance/ Retail Unit $1,105 $1,056 Same Store Data 2006 2005
--------------- ---- ---- New Vehicle Retail Sales (5.8)% 9.3% Used
Vehicle Sales (includes Wholesale) (1.0)% 10.2% Total Vehicle Sales
(excludes fleet) (4.4)% 9.6% Finance & Insurance Sales (2.6)%
8.5% Service, Body & Parts Sales 3.6% 4.9% Total Sales
(Excluding Fleet) (3.5)% 9.1% Total Gross Profit (Excluding Fleet)
(3.5)% 7.0% LITHIA MOTORS, INC. (In Thousands except per share and
unit data) Unaudited Nine Months Ended September 30, $Increase %
Increase 2006 2005 (Decrease) (Decrease) New Vehicle Sales
$1,438,930 $1,308,535 $130,395 10.0% Used Vehicle Sales 679,374
624,609 54,765 8.8 Finance & Insurance 94,312 84,282 10,030
11.9 Service, Body & Parts Sales 258,317 230,468 27,849 12.1
Fleet & Other Revenues 4,105 20,716 (16,611) (80.2) ---------
--------- -------- ------- Total Revenues 2,475,038 2,268,610
206,428 9.1 Cost of Sales 2,052,776 1,882,869 169,907 9.0 ---------
--------- -------- ------- Gross Profit 422,262 385,741 36,521 9.5
SG&A Expense 317,375 281,043 36,332 12.9 Depreciation/
Amortization 12,669 10,418 2,251 21.6 --------- --------- --------
------- Income from Operations 92,218 94,280 (2,062) (2.2) Flooring
Interest Expense (25,573) (16,636) 8,937 53.7 Other Interest
Expense (10,791) (8,878) 1,913 21.5 Other Income, net 930 718 212
29.5 --------- --------- -------- ------- Income from continuing
operations before income taxes 56,784 69,484 (12,700) (18.3) Income
Tax Expense (21,662) (27,787) (6,125) (22.0) Income Tax Rate 38.1%
40.0% --------- --------- -------- ------- Net Income from
continuing ops. 35,122 41,697 (6,575) (15.8)% Income (Loss) from
discontinued operations, net of income taxes (1,452) (1,400) 52 3.7
Net Income $33,670 $40,297 ($6,627) (16.4)% ========= =========
======== ======= Diluted Net Income per share: Continuing
Operations $1.74 $1.98 $(0.24) (12.1)% Effects of FAS123-R (0.09) -
Diluted Net Income per share after effect of FAS123-R: $1.65 $1.98
(0.33) (16.7)% Discontinued Operations (0.06) (0.07) ---------
--------- -------- ------- Net Income per share $1.59 $1.91 (0.32)
(16.8)% ========= ========= ======== ======= Diluted Shares
Outstanding 22,120 21,765 355 1.6% Increase Increase Unit Sales:
2006 2005 (Decrease) (Decrease) ----------- ------ ------ ---------
--------- New Vehicle 52,346 47,147 5,199 11.0% Used - Retail
Vehicle 34,543 33,478 1,065 3.2 Used - Wholesale 19,537 18,338
1,199 6.5 Total Units Sold 106,426 98,963 7,463 7.5 LITHIA MOTORS,
INC. Nine Months Ended September 30, $Increase % Increase Average
Selling Price: 2006 2005 (Decrease) (Decrease)
---------------------- New Vehicle $27,489 $27,754 ($265) (1.0)%
Used - Retail Vehicle 16,220 15,469 751 4.9 Used - Wholesale 6,095
5,821 274 4.7 Key Financial Data: ------------------- Gross Profit
Margin 17.1% 17.0% SG&A as a % of Gross Profit 75.2% 72.9%
Operating Margin 3.7% 4.2% Pre-Tax Margin 2.3% 3.1% Gross
Margin/Profit Data 2006 2005 ------------------------ ---- ---- New
Vehicle Retail 7.6% 7.9% Used Vehicle Retail 15.2% 15.7% Used
Vehicle Wholesale 2.8% 3.2% Service, Body & Parts 49.7% 48.7%
New Retail Gross Profit/ Unit $2,098 $2,193 Used Retail Gross
Profit/ Unit $2,469 $2,430 Used Wholesale Gross Profit/ Unit $168
$188 Finance & Insurance/ Retail Unit $1,085 $1,045 Same Store
Data 2006 2005 --------------- ---- ---- New Vehicle Retail Sales
3.1% 3.3% Used Vehicle Sales (includes Wholesale) 2.7% 4.2% Total
Vehicle Sales (excludes fleet) 2.9% 3.6% Finance & Insurance
Sales 4.8% 3.6% Service, Body & Parts Sales 5.4% 2.3% Total
Sales (Excluding Fleet) 3.3% 3.5% Total Gross Profit (Excluding
Fleet) 2.5% 4.0% LITHIA MOTORS, INC. Balance Sheet Highlights
(Dollars in Thousands) September 30, 2006 December 31, 2005
Unaudited ------------------ ----------------- Cash & Cash
Equivalents $41,329 $48,566 Trade Receivables(a) 99,935 106,443
Inventory 652,071 606,047 Assets Held for Sale - 27,411 Other
Current Assets 13,971 15,781 -------- -------- Total Current Assets
807,306 804,248 Real Estate, net 293,904 255,372 Equipment &
Leases, net 86,135 77,805 Goodwill, net 277,717 260,899 Other
Assets 63,817 54,390 -------- -------- Total Assets $1,528,879
$1,452,714 ========== ========== Floorplan Notes Payable $537,557
$530,452 Liabilities held for sale - 22,388 Other Current
Liabilities 117,745 95,560 -------- -------- Total Current
Liabilities 655,302 648,400 Used Vehicle Flooring 71,000 - Real
Estate Debt 161,195 154,046 Other Long-Term Debt 92,473 136,505
Other Liabilities 57,802 54,130 -------- -------- Total Liabilities
1,037,772 993,081 -------- -------- Shareholders' Equity 491,107
459,633 -------- -------- Total Liabilities & Shareholders'
Equity $1,528,879 $1,452,714 ========== ========== ______________
(a) Includes contracts-in-transit of $49,181 and $52,453 at
September 30, 2006 and December 31, 2005 respectively. Other
Balance Sheet Data (Dollars in Thousands except per share data)
Current Ratio 1.2x 1.2x LT Debt/Total Cap. (Excludes Used -Vehicle
Flooring and Real Estate) 16% 23% Working Capital $152,004 $155,848
Book Value per Basic Share $25.20 $23.97 Lithia Motors, Inc.
(NYSE:LAD) today announced that third quarter 2006 sales increased
3% to $880.4 million as compared to $858.9 million in the same
period last year. New vehicle sales increased 1%, used vehicle
sales increased 6%, finance/insurance sales increased 5% and
parts/service sales increased 12%. Third quarter 2006 net income
from continuing operations was $12.8 million as compared to $18.1
million in the third quarter of 2005. Diluted earnings per share
from continuing operations, including the $0.03 effect of
accounting for equity compensation under FAS123-R, were $0.60.
Third quarter 2006 earnings per share from continuing operations,
excluding the effect of accounting for equity compensation under
FAS123-R, were $0.63 as compared to $0.85 in the same period last
year. Sid DeBoer, Lithia's Chairman and CEO, commented, "Recently
Lithia reached a milestone of 100 stores over a period of 10 years
as a public company. We are excited about this achievement,
although we are only just beginning to realize some of the growth
and operating opportunities that lay ahead of us." "Our third
quarter revenues were up 3% compared to last year's third quarter.
Although this is due to acquisitions, it is still noteworthy
considering the very difficult comparison with the third quarter of
last year where we saw exceptionally strong sales driven by
effective employee pricing. Incentives were not as effective in the
third quarter this year." "While total revenues were up, third
quarter earnings were down year over year due to a combination of
factors; high inventory levels and higher interest rates impacted
our bottom line by approximately 12 cents per share for the
quarter. This excludes inventories from acquisitions over the prior
year. We also experienced increased costs resulting from
company-wide operational initiatives in the quarter. We estimate
expenses for all these new initiatives to be in the range of seven
to eight cents per share for the full-year 2006. Additionally, for
most of September, we were unable to sell the majority of our Dodge
RAM light duty pickups, one of our core products, due to a "sell
hold" from the manufacturer that is related to a safety restraint
system in these vehicles." "Total same store sales declined 3.5%
against a backdrop of 9.1% growth in the third quarter of last
year. New vehicle inventories remained above historical average
levels at the end of September, but are down $230 million
sequentially from the second quarter. We expect them to continue to
decline by year-end. Fuel costs have declined recently and that
should benefit consumer sentiment and help increase truck sales.
Interest rates have risen steadily for the last two years and with
interest rates currently steady, floorplan interest costs should
stop increasing in the year ahead," concluded Mr. DeBoer. For the
nine-month period ending September 30, 2006, total sales increased
9% to $2.48 billion from $2.27 billion in the same period last
year. New vehicle sales increased 10%, used vehicle sales increased
9%, finance/insurance sales increased 12%, and parts/service sales
increased 12%. For the first nine months, Lithia's net income from
continuing operations was $35.1 million as compared to $41.7
million in the first nine months of 2005. Diluted earnings per
share from continuing operations, including the $0.09 effect of
accounting for equity compensation under FAS123-R, were $1.65. For
the first nine months of 2006 earnings per share from continuing
operations, excluding the affect of accounting for equity
compensation under FAS123-R, were $1.74 as compared to $1.98 in the
same period last year. Jeffrey B. DeBoer, Senior Vice President and
CFO added, "In the past four months we have completed four
acquisitions: a Chrysler store in Ukiah, California; two stores in
Grand Forks, North Dakota with a combination of import and domestic
brands; and more recently, BMW and Porsche stores in Seaside,
California and BMW and Mercedes Benz stores in Des Moines, Iowa.
These more recent acquisitions have provided a good demonstration
of our continuing brand diversification efforts. Year to date we
have completed acquisitions with approximately $390 million in
annualized revenues, and we plan on continuing our normal
acquisition pace in 2007." "Our guidance for the full-year 2006 and
2007 is included in the table below. For the full-year 2007 we are
giving guidance for a flat year as a number of key items are
material to the year ahead. Company health and benefit plan costs
will be increasing, negatively impacting earnings by 10 to 12 cents
per share. We will also continue with our special operational
projects and initiatives which include: Office Automation; Lithia's
Store Management System; Human Development Systems and our Assured
Used Vehicle Program. Long-term we expect these projects to reduce
the company's SG&A expense and allow the stores to focus more
on customers which will help drive long-term sales growth. We also
expect that in the coming year, our domestic product mix will
continue to negatively impact earnings, however, we believe that
the restructurings now underway at the domestic manufacturers along
with changes in mix and product improvements will help us in the
future." "We are excited about the start up of our first
independent used vehicle retail outlets in 2007. Start up costs for
this initiative will impact earnings by approximately 10 cents per
share. Once established, we expect that each independent used
vehicle store will reach monthly operational profitability within
12 months of opening," concluded Jeffrey B. DeBoer. -0- *T Guidance
Guidance Earnings per Share FY 2006 FY 2007 -------------
------------- From Continuing Operations: $1.95 - $1.99 $1.90 -
$2.10 *T The company currently has a 1,000,000 share repurchase
program in place. Prior to the beginning of 2006, 60,231 shares had
been purchased. In the past few months the company purchased
196,600 shares, leaving 743,169 shares still available for
repurchase under the program. Conference Call Information Lithia
Motors will be providing more detailed information on the results
for the third quarter 2006 in its conference call scheduled for 2
p.m. PT today. The call can be accessed live by calling
973-633-1010. To listen to a live webcast or hear a replay, log-on
to: www.lithia.com - go to Investor Relations - and click on the
Live Webcast icon. About Lithia Lithia Motors, Inc. is a Fortune
700 and Russell 2000 Company. Lithia sells 26 brands of new
vehicles at 102 stores which are located in 42 markets within 15
states. Internet sales are centralized at www.Lithia.com. 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 103,333
new and used vehicles and had $2.9 billion in total revenue in
2005. Forward Looking Statements This press release includes
forward looking statements within the meaning of the "Safe-Harbor"
provisions of the Private Securities Litigation Reform Act of 1995,
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
items which impact earnings, anticipated revenues of recently
acquired and projected new store acquisitions, anticipated
profitability of independent used vehicle stores and projected
full-year 2006 and 2007 earnings per share guidance. Additional
Information For additional information on Lithia Motors, contact
the Investor Relations Department: (541) 776-6591 or log-on to:
www.lithia.com - go to Investor Relations -0- *T LITHIA MOTORS,
INC. (In Thousands except per share and unit data) Unaudited Three
Months Ended September 30, $Increase %Increase 2006 2005 (Decrease)
(Decrease) New Vehicle Sales $515,059 $510,541 $4,518 0.9% Used
Vehicle Sales 239,387 226,518 12,869 5.7 Finance & Insurance
33,982 32,462 1,520 4.7 Service, Body & Parts Sales 90,108
80,786 9,322 11.5 Fleet & Other Revenues 1,836 8,548 (6,712)
(78.5) -------- -------- -------- ------- Total Revenues 880,372
858,855 21,517 2.5 Cost of Sales 733,116 717,591 15,525 2.2
-------- -------- -------- ------- Gross Profit 147,256 141,264
5,992 4.2 SG&A Expense 109,122 98,588 10,534 10.7
Depreciation/Amortization 4,411 3,624 787 21.7 -------- --------
-------- ------- Income from Operations 33,723 39,052 (5,329)
(13.6) Flooring Interest Expense (10,027) (5,534) 4,493 81.2 Other
Interest Expense (3,819) (3,037) 782 25.7 Other Income, net 188 186
2 1.1 -------- -------- -------- ------- Income from continuing
operations before income taxes 20,065 30,667 (10,602) (34.6) Income
Tax Expense (7,289) (12,551) (5,262) (41.9) Income Tax Rate 36.3%
40.9% -------- -------- -------- ------- Income from continuing
ops. 12,776 18,116 (5,340) (29.5) Income (Loss) from discontinued
operations, net of income taxes (81) (484) (403) (83.3) Net Income
$12,695 $17,632 ($4,937) (28.0)% ========= ======== =======
======== Diluted Net Income per share: Continuing Operations $0.63
$0.85 $(0.22) (25.9)% Effects of FAS123-R (0.03) - Diluted Net
Income per share after effect of FAS123-R: $0.60 $0.85 (0.25)
(29.4)% Discontinued Operations - (0.02) -------- -------- --------
------- Net Income per share $0.60 $0.83 (0.23) (27.7)% =========
======== ======= ======== Diluted Shares Outstanding 22,128 21,882
246 1.1% Increase Increase Unit Sales: 2006 2005 (Decrease)
(Decrease) New Vehicle 18,829 18,682 147 0.8% Used - Retail Vehicle
11,925 12,057 (132) (1.1) Used - Wholesale 7,686 7,091 595 8.4
Total Units Sold 38,440 37,830 610 1.6 *T -0- *T LITHIA MOTORS,
INC. Three Months Ended September 30, $Increase % Increase Average
Selling Price: 2006 2005 (Decrease) (Decrease)
---------------------- ---- ---- ---------- --------- New Vehicle
$27,355 $27,328 $27 0.1% Used - Retail Vehicle 16,223 15,502 721
4.7 Used - Wholesale 5,976 5,586 390 7.0 Key Financial Data:
------------------- Gross Profit Margin 16.7% 16.4% SG&A as a %
of Gross Profit 74.1% 69.8% Operating Margin 3.8% 4.5% Pre-Tax
Margin 2.3% 3.6% Gross Margin/Profit Data 2006 2005
------------------------ ---- ---- New Vehicle Retail 7.7% 7.7%
Used Vehicle Retail 14.5% 15.8% Used Vehicle Wholesale 0.9% 1.7%
Service, Body & Parts 49.8% 48.1% New Retail Gross Profit/Unit
$2,101 $2,112 Used Retail Gross Profit/Unit $2,348 $2,448 Used
Wholesale Gross Profit/Unit $56 $93 Finance & Insurance/ Retail
Unit $1,105 $1,056 Same Store Data 2006 2005 --------------- ----
---- New Vehicle Retail Sales (5.8)% 9.3% Used Vehicle Sales
(includes Wholesale) (1.0)% 10.2% Total Vehicle Sales (excludes
fleet) (4.4)% 9.6% Finance & Insurance Sales (2.6)% 8.5%
Service, Body & Parts Sales 3.6% 4.9% Total Sales (Excluding
Fleet) (3.5)% 9.1% Total Gross Profit (Excluding Fleet) (3.5)% 7.0%
*T -0- *T LITHIA MOTORS, INC. (In Thousands except per share and
unit data) Unaudited Nine Months Ended September 30, $Increase %
Increase 2006 2005 (Decrease) (Decrease) New Vehicle Sales
$1,438,930 $1,308,535 $130,395 10.0% Used Vehicle Sales 679,374
624,609 54,765 8.8 Finance & Insurance 94,312 84,282 10,030
11.9 Service, Body & Parts Sales 258,317 230,468 27,849 12.1
Fleet & Other Revenues 4,105 20,716 (16,611) (80.2) ---------
--------- -------- ------- Total Revenues 2,475,038 2,268,610
206,428 9.1 Cost of Sales 2,052,776 1,882,869 169,907 9.0 ---------
--------- -------- ------- Gross Profit 422,262 385,741 36,521 9.5
SG&A Expense 317,375 281,043 36,332 12.9 Depreciation/
Amortization 12,669 10,418 2,251 21.6 --------- --------- --------
------- Income from Operations 92,218 94,280 (2,062) (2.2) Flooring
Interest Expense (25,573) (16,636) 8,937 53.7 Other Interest
Expense (10,791) (8,878) 1,913 21.5 Other Income, net 930 718 212
29.5 --------- --------- -------- ------- Income from continuing
operations before income taxes 56,784 69,484 (12,700) (18.3) Income
Tax Expense (21,662) (27,787) (6,125) (22.0) Income Tax Rate 38.1%
40.0% --------- --------- -------- ------- Net Income from
continuing ops. 35,122 41,697 (6,575) (15.8)% Income (Loss) from
discontinued operations, net of income taxes (1,452) (1,400) 52 3.7
Net Income $33,670 $40,297 ($6,627) (16.4)% ========= =========
======== ======= Diluted Net Income per share: Continuing
Operations $1.74 $1.98 $(0.24) (12.1)% Effects of FAS123-R (0.09) -
Diluted Net Income per share after effect of FAS123-R: $1.65 $1.98
(0.33) (16.7)% Discontinued Operations (0.06) (0.07) ---------
--------- -------- ------- Net Income per share $1.59 $1.91 (0.32)
(16.8)% ========= ========= ======== ======= Diluted Shares
Outstanding 22,120 21,765 355 1.6% Increase Increase Unit Sales:
2006 2005 (Decrease) (Decrease) ----------- ------ ------ ---------
--------- New Vehicle 52,346 47,147 5,199 11.0% Used - Retail
Vehicle 34,543 33,478 1,065 3.2 Used - Wholesale 19,537 18,338
1,199 6.5 Total Units Sold 106,426 98,963 7,463 7.5 *T -0- *T
LITHIA MOTORS, INC. Nine Months Ended September 30, $Increase %
Increase Average Selling Price: 2006 2005 (Decrease) (Decrease)
---------------------- New Vehicle $27,489 $27,754 ($265) (1.0)%
Used - Retail Vehicle 16,220 15,469 751 4.9 Used - Wholesale 6,095
5,821 274 4.7 Key Financial Data: ------------------- Gross Profit
Margin 17.1% 17.0% SG&A as a % of Gross Profit 75.2% 72.9%
Operating Margin 3.7% 4.2% Pre-Tax Margin 2.3% 3.1% Gross
Margin/Profit Data 2006 2005 ------------------------ ---- ---- New
Vehicle Retail 7.6% 7.9% Used Vehicle Retail 15.2% 15.7% Used
Vehicle Wholesale 2.8% 3.2% Service, Body & Parts 49.7% 48.7%
New Retail Gross Profit/ Unit $2,098 $2,193 Used Retail Gross
Profit/ Unit $2,469 $2,430 Used Wholesale Gross Profit/ Unit $168
$188 Finance & Insurance/ Retail Unit $1,085 $1,045 Same Store
Data 2006 2005 --------------- ---- ---- New Vehicle Retail Sales
3.1% 3.3% Used Vehicle Sales (includes Wholesale) 2.7% 4.2% Total
Vehicle Sales (excludes fleet) 2.9% 3.6% Finance & Insurance
Sales 4.8% 3.6% Service, Body & Parts Sales 5.4% 2.3% Total
Sales (Excluding Fleet) 3.3% 3.5% Total Gross Profit (Excluding
Fleet) 2.5% 4.0% *T -0- *T LITHIA MOTORS, INC. Balance Sheet
Highlights (Dollars in Thousands) September 30, 2006 December 31,
2005 Unaudited ------------------ ----------------- Cash & Cash
Equivalents $41,329 $48,566 Trade Receivables(a) 99,935 106,443
Inventory 652,071 606,047 Assets Held for Sale - 27,411 Other
Current Assets 13,971 15,781 -------- -------- Total Current Assets
807,306 804,248 Real Estate, net 293,904 255,372 Equipment &
Leases, net 86,135 77,805 Goodwill, net 277,717 260,899 Other
Assets 63,817 54,390 -------- -------- Total Assets $1,528,879
$1,452,714 ========== ========== Floorplan Notes Payable $537,557
$530,452 Liabilities held for sale - 22,388 Other Current
Liabilities 117,745 95,560 -------- -------- Total Current
Liabilities 655,302 648,400 Used Vehicle Flooring 71,000 - Real
Estate Debt 161,195 154,046 Other Long-Term Debt 92,473 136,505
Other Liabilities 57,802 54,130 -------- -------- Total Liabilities
1,037,772 993,081 -------- -------- Shareholders' Equity 491,107
459,633 -------- -------- Total Liabilities & Shareholders'
Equity $1,528,879 $1,452,714 ========== ========== ______________
(a) Includes contracts-in-transit of $49,181 and $52,453 at
September 30, 2006 and December 31, 2005 respectively. Other
Balance Sheet Data (Dollars in Thousands except per share data)
Current Ratio 1.2x 1.2x LT Debt/Total Cap. (Excludes Used -Vehicle
Flooring and Real Estate) 16% 23% Working Capital $152,004 $155,848
Book Value per Basic Share $25.20 $23.97 *T
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