Lithia Motors, Inc. (NYSE:LAD) today announced that first quarter
2007 sales increased 9% to $800.7 million as compared to $736.4
million in the same period last year. New vehicle sales increased
7%, used vehicle sales increased 7%, finance/insurance sales
increased 12%, and parts/service sales increased 19%. First quarter
2007 net income from continuing operations was $7.1 million as
compared to $10.9 million in the first quarter of 2006. Diluted
earnings per share from continuing operations were $0.34 as
compared to $0.52 in the first quarter of 2006. For a more accurate
comparison of earnings, last year�s fair market value adjustment to
our swaps needs to be considered. Our interest rate swaps did not
qualify for hedge accounting in 2006, which had the effect of
increasing first quarter 2006 earnings per share by 4 cents due to
a change in fair market value. Our swaps do qualify for hedge
accounting in 2007 and there was no comparable effect on earnings
per share in the first quarter. Sid DeBoer, Lithia�s Chairman and
CEO, commented, �Lithia earned 34 cents from continuing operations
in the first quarter, which met the company�s internal forecast for
the quarter. First quarter vehicle sales were weak in January and
February and then rebounded substantially in March. We are
encouraged by the positive trends we saw in March with healthy
sales trends in both the new and used vehicle business. For the
quarter, total same-store sales declined 2.1%, however, we had a
difficult comparison against 8.4% growth in the first quarter of
2006.� �Lithia�s strategy over the past few years of selling volume
and increasing units in operation has continued to benefit the
parts and service business, as these buyers return to Lithia stores
for their service work. This was apparent in the 4.9% same-store
sales growth in the parts and service business for the quarter.
Same-store sales also grew 2.9% in the finance and insurance
business.� �Vehicle inventories are at conservative levels going
into the second quarter of the year. New vehicle inventories at the
end of March were 16 days below our historical average levels and
the lowest day�s supply that we have seen in the last 5 years. Used
vehicle inventories were right at historical average levels for the
March ended period,� concluded Mr. DeBoer. Jeffrey B. DeBoer,
Senior Vice President and CFO added, �Year to date, we have
completed one acquisition of four stores in the Des Moines, Iowa
area representing the Honda, Acura, Nissan, Infiniti, VW and Audi
brands. The stores had approximately $100 million in annualized
revenues.� "Our guidance for the full-year 2007 remains unchanged
given that the quarterly results were in line with our
expectations. In the first quarter, we had two stores classified as
discontinued operations. The full-year 2007 guidance is on a
continuing operations basis and assumes a steady pace of
acquisitions and dispositions," concluded Jeffrey B. DeBoer.
Guidance Earnings per Share FY 2007 From Continuing Operations: $
1.90 - $2.10� The company currently has a 1,000,000 share
repurchase program in place. Prior to the beginning of�2007,
256,831 shares had been purchased. In the first quarter the company
purchased 121,800 shares, leaving 621,369 shares still available
for repurchase under the program. Conference Call Information
Lithia Motors will be providing more detailed information on the
results for the first quarter 2007 in its conference call scheduled
for today at 2 p.m. PDT and 5 p.m. EDT. The call can be accessed
live by calling 973-582-2750; Conference ID #: 8680214. To listen
LIVE on our website or for REPLAY: Log-on to www.Lithia.com � Go to
Investor Relations � and click on the Conference Call Icon. About
Lithia Lithia Motors, Inc. is a Fortune 700 and Russell 2000
Company. Lithia sells 30 brands of new vehicles at 108 stores which
are located in 46 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 109,648 new and used vehicles and
had $3.17 billion in total revenue in 2006. 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 the accuracy of the
company�s internal forecasts, benefits or strength of Lithia�s
operating model, anticipated revenues from acquired stores and
projected full-year 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 data) � Unaudited Three Months Ended
March 31, $ Increase % Increase 2007� 2006� (Decrease) (Decrease)
New Vehicle Sales $ 451,156� $ 420,395� $ 30,761� 7.3% Used Vehicle
Sales 221,771� 206,506� 15,265� 7.4� Finance & Insurance
30,405� 27,231� 3,174� 11.7� Service, Body & Parts Sales
96,635� 81,084� 15,551� 19.2� Fleet & Other Revenues 689�
1,155� (466) (40.3) Total Revenues 800,656� 736,371� 64,285� 8.7�
Cost of Sales 660,665� 608,593� 52,072� 8.6� Gross Profit 139,991�
127,778� 12,213� 9.6� SG&A Expense 111,027� 97,564� 13,463�
13.8� Depreciation/Amortization 4,899� 3,983� 916� 23.0� Income
from Operations 24,065� 26,231� (2,166) (8.3) Flooring Interest
Expense (7,656) (5,405) 2,251� 41.6� Other Interest Expense (4,976)
(3,299) 1,677� 50.8� Other Income, net 212� 378� (166) (43.9)
Income from continuing operations before income taxes 11,645�
17,905� (6,260) (35.0) Income Tax Expense 4,576� 6,969� (2,393)
(34.3) Income Tax Rate 39.3% 38.9% Net Income from continuing ops.
7,069� 10,936� (3,867) (35.4)% Income (Loss) from discontinued
operations, net of income taxes 6� (1,568) 1,574� 100.4� Net Income
$ 7,075� $ 9,368� $ (2,293) (24.5)% Diluted Net Income per share:
Continuing Operations $ 0.34� $ 0.52� $ (0.18) (34.6)% Discontinued
Operations -� (0.07) Net Income per share $ 0.34� $ 0.45� (0.11)
(24.4)% Diluted Shares Outstanding 22,131� 22,066� 65� 0.3% LITHIA
MOTORS, INC. Three Months Ended March 31, Increase % Increase Unit
Sales: 2007� 2006� (Decrease) (Decrease) New Vehicle 15,711�
14,983� 728� 4.9% Used - Retail Vehicle 11,032� 10,629� 403� 3.8�
Used - Wholesale 6,274� 5,447� 827� 15.2� Total Units Sold 33,017�
31,059� 1,958� 6.3� � Average Selling Price: New Vehicle $ 28,716�
$ 28,058� $ 658� 2.3% Used - Retail Vehicle 16,281� 16,171� 110�
0.7� Used - Wholesale 6,720� 6,357� 363� 5.7� � Key Financial Data:
Gross Profit Margin 17.5% 17.4% +10 bps SG&A as a % of Gross
Profit 79.3% 76.4% +290 bps Operating Margin 3.0% 3.6% -60 bps
Pre-Tax Margin 1.5% 2.4% -90 bps � Gross Margin/Profit Data New
Vehicle Retail 7.7% 7.9% -20 bps Used Vehicle Retail 15.0% 15.2%
-20 bps Used Vehicle Wholesale 4.0% 5.1% -110 bps Service, Body
& Parts 47.5% 47.9% -40 bps Finance & Insurance 100.0%
100.0% -� � New Retail Gross Profit/Unit $ 2,210� $ 2,227� -$17�
Used Retail Gross Profit/Unit $ 2,447� $ 2,461� -$14� Used
Wholesale Gross Profit/Unit $ 269� $ 324� -$55� Finance &
Insurance/Retail Unit $ 1,137� $ 1,063� +$74� � Same Store Data New
Vehicle Retail Sales (3.9)% 13.5% Used Vehicle Sales (including
Wholesale) (1.9)% 0.5% Total Vehicle Sales (excluding fleet) (3.2)%
8.8% Finance & Insurance Sales 2.9% 5.3% Service, Body &
Parts Sales 4.9% 5.8% Total Sales (excluding Fleet) (2.1)% 8.4%
Total Gross Profit (excluding Fleet) (1.6)% 5.7% LITHIA MOTORS,
INC. � Balance Sheet Highlights (Dollars in Thousands) � March 31,
2007 December 31, 2006 Cash & Cash Equivalents $ 21,023� $
26,600� Trade Receivables(a) 130,119� 118,528� Inventory 599,942�
603,306� Assets Held for Sale 13,324� 15,485� Other Current Assets
15,709� 15,721� Total Current Assets 780,117� 779,640� � Real
Estate, net 339,924� 327,890� Equipment & Leases, net 96,689�
89,213� Goodwill, net 314,877� 307,424� Other Assets 77,379�
75,190� Total Assets $ 1,608,986� $ 1,579,357� � Floorplan Notes
Payable $ 495,954� $ 499,679� Liabilities held for sale 9,880�
11,610� Other Current Liabilities 133,756� 118,650� Total Current
Liabilities 639,590� 629,939� � Used Vehicle Flooring 95,789�
95,614� Real Estate Debt 149,112� 155,890� Other Long-Term Debt
156,806� 140,879� Other Liabilities 69,910� 63,642� � Total
Liabilities 1,111,207� 1,085,964� � Shareholders' Equity 497,779�
493,393� � Total Liabilities & Shareholders' Equity $
1,608,986� $ 1,579,357� (a) Includes contracts-in-transit of
$62,334 and $56,211 for 2007 and 2006. Other Balance Sheet Data
(Dollars in Thousands except per share data) � Current Ratio 1.2x
1.2x LT Debt/Total Cap. (Excludes Real Estate) 34% 32% Working
Capital $ 140,527� $ 149,701� Book Value per Basic Share $ 25.54� $
25.32�
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