Lithia Motors Makes Progress on Store Divestitures; Raising Capital
October 03 2008 - 8:00AM
Business Wire
Lithia Motors, Inc. (NYSE: LAD) advanced another step forward in
their restructuring plans announced on June 2nd with the sale of
three more store locations. Lithia Dodge of Sioux Falls and Lithia
Chevrolet of Sioux Falls were both sold to Billion Automotive on
Monday, September 29th, and Lithia Chrysler Jeep Dodge of La Crosse
in Wisconsin was sold September 30th to Pischke Motors of La
Crosse. Of the fifteen stores scheduled for divestiture, a total of
six have already been successfully divested since July 1st. Two
additional stores that were not on the original list were sold as a
result of attractive unsolicited offers. The following is a re-cap
of the progress made thus far to raise capital and right-size the
company: Completed sale of Lithia Dodge Sioux Falls, South Dakota
Completed sale of Lithia Chevrolet of Sioux Falls, South Dakota
Completed sale of Lithia Chrysler Jeep Dodge of La Crosse,
Wisconsin Completed sale of dealership facility Cedar Rapids, Iowa
Completed sale of development property in Klamath Falls, Oregon
Completed sale of Lithia Chevrolet of Issaquah (previously
reported) Completed sale of Lithia Chrysler Jeep Dodge of
Burlingame (previously reported) Consolidation of two Northern
California stores into other nearby Lithia stores serving similar
markets Consolidation of Suzuki store in Reno with other nearby
Lithia facility Financing of BMW capital project through BMW
Financial Financing of Abilene Toyota facility through Toyota
Financial Net proceeds from all above transactions and financing
activities are approximately $101.2 million since the beginning of
the year, with $22.5 million in the first quarter and the balance
of $78.7 million since the beginning of the second quarter. In
addition to raising the above capital, the Company has successfully
reduced used vehicle inventory levels by approximately $50.0
million since the beginning of the third quarter. This strategy
effectively reduces the floorplan obligations by the same amount.
Summarizing the progress so far, CEO and Chairman Sid DeBoer
commented, �Six of the above stores that we sold were in our
bottom-ten performers. The successful steps we have taken to divest
these stores demonstrates our ability to generate liquidity from
even our most unprofitable stores. We have received goodwill from
the sale of most of these stores.� Mr. DeBoer continued, �Despite
the turbulent economy, Lithia continues to successfully execute our
restructuring plan. We have shifted our domestic/import brand mix
closer to the levels we are targeting. We have adjusted our
geographic footprint, while raising capital and cutting costs.
Moving forward with this plan will continue to strengthen our
company and bring us into a stronger position to weather the
current and future economic challenges.� About Lithia Lithia
Motors, Inc. is a Fortune 700 Company, selling 27 brands of new and
all brands of used vehicles at 102 stores, which are located in 44
markets within 13 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 105,108 new and used vehicles and had $3.2 billion
in total revenue in 2007. Additional Information For additional
information on Lithia Motors, contact the Investor Relations
Department: (541) 618-5770 or log-on to: www.lithia.com � go to
Investor Relations. 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, future economic
conditions and others set forth from time to time in the company�s
filings with the SEC. We make forward-looking statements about our
ability to manage through the current sales and economic
environment. Specific risks in this press release include execution
of the restructuring plan and macro-economic and market factors.
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