Lithia Motors, Inc. (NYSE: LAD) today reported, as previously
announced, 2009 adjusted fourth quarter earnings of $0.01 per
diluted share. This compares to a 2008 adjusted fourth quarter net
loss of $(0.16) per diluted share. As shown in the attached
reconciliation table, the 2009 results exclude non-cash charges on
asset impairments and expenses related to reserves of $0.09 per
share. The 2008 results exclude a one-time gain of $0.11 related to
debt extinguishment, net of certain asset impairment charges.
Unadjusted, net loss from continuing operations was $(2.1) million,
or $(0.08) per diluted share, for the quarter ended December 31,
2009.
Fourth quarter 2009 revenue totaled $419 million, compared to
$399 million in the year-ago period, an increase of 4.9%, driven
primarily by higher used vehicle sales. Same store new vehicle
sales increased 1.2% while used vehicle retail sales increased
17.9% when compared to the prior year. Service, body and parts same
store sales declined 2.7% compared to the prior year.
Sid DeBoer, Lithia's Chairman and CEO, commented, "Our fourth
quarter results were impacted by weak new vehicle sales at our
Chrysler stores. This was caused by the delay in the release of new
products, like the 2010 Ram heavy duty pickup, and lower
advertising and incentive spending by Chrysler which slowed floor
traffic. In response, we focused on increasing used vehicle sales
at the affected locations. We also improved new vehicle sales of
our other brands. Excluding Chrysler, we had approximately 18.5%
new vehicle same store sales growth over the fourth quarter of
2008. On an adjusted basis, we were profitable in the fourth
quarter, despite significant headwinds."
For the full year 2009, total sales declined 15.2% to $1.7
billion as compared to $2.1 billion in 2008. Same store new vehicle
sales decreased 23.6%, retail used vehicle sales increased 3.1% and
service, body and parts sales decreased 3.3%.
Adjusted net income from continuing operations for the full year
2009 was $0.50 per share, compared to $0.01 per share for 2008, as
shown in the attached reconciliation table. Full year 2009 GAAP net
income from continuing operations was $6.1 million, or $0.27 per
diluted share, compared to a net loss from continuing operations of
$(226.5) million, or $(11.22) per share in 2008.
Liquidity Update Lithia ended the year
with $74.2 million in immediately available funds, including $12.8
million in cash, $25.7 million in availability on its revolving
credit facility, and $35.7 million in unfloored new vehicle
inventory. At December 31, 2009, Lithia was in compliance with all
debt covenants, and has no mortgage maturities until 2011.
Outlook for 2010 Lithia reaffirms its 2010
earnings guidance as provided on February 3, 2010. First quarter
earnings guidance is projected within a range of $0.04 to $0.06 per
diluted share. Full year 2010 earnings guidance is projected within
a range of $0.55 to $0.63 per diluted share. This guidance includes
approximately 18% additional dilution related to the equity
offering completed in October 2009. Specific reference is made to
the February 3, 2010 release for assumptions upon which this
guidance was given.
Fourth Quarter Earnings Conference Call
The fourth quarter conference call may be accessed at 2:00 p.m.
Pacific Time today by telephone at (800) 254-5933 Conference ID:
47221792 or via the internet (audio webcast) at www.lithia.com by
clicking on "Investor Relations." A playback of the conference call
will be available after 5 p.m. Pacific Time February 24, 2010
through March 10, 2010 by calling (800) 642-1687 access code:
47221792 and via the internet at www.lithia.com.
An updated investor presentation containing fourth quarter and
full year results can be accessed at www.lithia.com by clicking on
"Investor Relations."
About Lithia Lithia Motors, Inc. is a
Fortune 800 Company, selling 26 brands of new and all brands of
used vehicles at 85 stores, which are located in 12 states. 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.
For additional information on Lithia Motors, contact the
Investor Relations Department at (541) 776-6591 or visit
www.lithia.com and click on "Investor Relations."
Sites www.lithia.com www.lithiacares.com
www.lithiajobs.com
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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. Forward-looking statements in this press release
include our guidance regarding first quarter and full year 2010
results. Forward looking statements include statements regarding
our goals, plans, projections and guidance regarding our financial
position, results of operations, market position, pending and
potential future acquisitions and business strategy, and often
contain words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks" or "will." 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 urge you to
carefully consider this information. We undertake no duty to update
our forward-looking statements, including our earnings outlook.
Non-GAAP Financial Measures The attached
financial tables contain certain non-GAAP financial measures as
defined under SEC rules, such as net income and diluted earnings
per share from continuing operations, cash flow from operations
adjusted to include the change in non-trade floorplan debt,
adjusted to exclude certain items disclosed in the attached
financial tables. As required by SEC rules, the Company has
provided reconciliations of these measures to the most directly
comparable GAAP measures, which are set forth in the attachments to
this release. The Company believes that each of the foregoing
non-GAAP financial measures improves the transparency of the
Company's disclosure, provides a meaningful presentation of the
Company's results from its core business operations excluding
adjustments for items not related to the Company's ongoing core
business operations or other non-cash adjustments, and improves the
period-to-period comparability of the Company's results from its
core business operations.
LITHIA MOTORS, INC.
(In thousands except per share data)
Unaudited Three Months Ended
December 31,
--------------------
2009 2008 Variance % Variance
--------- --------- --------- --------
New vehicle sales $ 209,707 $ 206,207 $ 3,500 1.7 %
Used vehicle sales 127,994 107,404 20,590 19.2
Finance and insurance 12,220 13,716 (1,496) (10.9)
Service, body and parts 68,221 70,133 (1,912) (2.7)
Fleet and other revenues 528 1,664 (1,136) (68.3)
--------- --------- --------- --------
Total revenues 418,670 399,124 19,546 4.9
--------- --------- --------- --------
Cost of sales 343,265 323,127 20,138 6.2
--------- --------- --------- --------
Gross profit 75,405 75,997 (592) (0.8)
Asset impairment charges 177 1,147 (970) (84.6)
SG&A expense 66,083 67,437 (1,354) (2.0)
Depreciation and amortization 6,331 3,980 2,351 59.1
--------- --------- --------- --------
Income from operations 2,814 3,433 (619) (18.0)
Floorplan interest expense (2,380) (5,511) 3,131 56.8
Other interest expense (3,474) (4,215) 741 17.6
Other income, net 47 3,619 (3,572) (98.7)
--------- --------- --------- --------
Loss from continuing operations
before income taxes (2,993) (2,674) (319) (11.9)
Income tax benefit 923 1,667 (744) (44.6)
Income tax rate 30.8% 62.3%
--------- --------- --------- --------
Loss from continuing operations (2,070) (1,007) (1,063) (105.6)%
Income (loss) from discontinued
operations, net of income tax 516 (3,271) 3,787 NM
--------- --------- --------- --------
Net loss $ (1,554) $ (4,278) 2,724 63.7 %
========= ========= ========= ========
Diluted net income (loss) per
share:
Continuing operations $ (0.08) $ (0.05) $ (0.03) (60.0)%
Discontinued operations 0.02 (0.16) 0.18 NM
--------- --------- --------- --------
Net loss per share $ (0.06) $ (0.21) $ 0.15 71.4
========= ========= ========= ========
Diluted shares outstanding 25,113 20,519 4,594 22.4 %
NM - not meaningful
LITHIA MOTORS, INC.
(Continuing operations) Three Months Ended
Unaudited December 31,
-------------------
2009 2008 Variance % Variance
-------- -------- --------- --------
Unit sales:
New vehicle 6,516 6,808 (292) (4.3)%
Used - retail vehicle 6,420 5,880 540 9.2
Used - wholesale 3,139 2,860 279 9.8
Total units sold 16,075 15,548 527 3.4
Average selling price:
New vehicle $ 32,183 $ 30,289 $ 1,894 6.3 %
Used - retail vehicle 17,109 15,808 1,301 8.2
Used - wholesale 5,784 5,053 731 14.5
Gross margin/profit data
New vehicle retail 7.8 % 8.7 % (90)bps
Used vehicle retail 13.8 % 11.8 % 200bps
Used vehicle wholesale (0.2)% (4.9)% 470bps
Service, body & parts 46.0 % 48.1 % (210)bps
Finance & insurance 100.0 % 100.0 % -
Gross profit margin 18.0 % 19.0 % (100)bps
New retail gross profit/unit $ 2,524 $ 2,629 $ (105)
Used retail gross profit/unit 2,353 1,865 488
Used wholesale gross
profit/unit (13) (247) 234
Finance & insurance/retail unit 945 1,081 (136)
Revenue mix:
New vehicles 50.1 % 51.7 %
Used retail vehicles 26.2 % 23.3 %
Used wholesale vehicles 4.4 % 3.6 %
Finance and insurance, net 2.9 % 3.4 %
Service and parts 16.3 % 17.6 %
Fleet and other 0.1 % 0.4 %
LITHIA MOTORS, INC.
(Continuing operations)
Unaudited Three Months Ended
December 31,
-----------------
2009 2008
----- -----
New vehicle unit sales brand mix:
Chrysler Brands 23.7% 35.9%
General Motors 17.4% 14.5%
Toyota 16.5% 15.3%
Honda 9.5% 7.5%
Ford 5.8% 4.6%
BMW 6.2% 5.3%
Hyundai 3.8% 4.1%
Nissan 3.7% 2.8%
Volkswagen, Audi 3.3% 3.2%
Subaru 7.4% 4.6%
Mercedes 1.3% 1.3%
Other 1.4% 0.9%
(Selected Same Store Data)
Unaudited Three Months Ended
December 31,
---------------
2009 2008
vs. vs.
2008 2007
---- ----
Same store revenue:
New vehicle retail sales 1.2 % (38.8)%
Chrysler Brands (29.9)% (41.4)%
General Motors 24.1 % (42.3)%
Toyota 5.8 % (33.0)%
All other brands 20.9 % (36.5)%
Used vehicle retail sales 17.9 % (17.7)%
Used wholesale sales 30.4 % (50.5)%
Total vehicle sales (excluding
fleet) 7.4 % (34.6)%
Finance & insurance sales (10.2)% (33.1)%
Service, body and parts sales (2.7)% (0.7)%
Total sales (excluding fleet) 5.1 % (30.3)%
Total gross profit (excluding
fleet) 2.5 % (19.4)%
LITHIA MOTORS, INC.
(In thousands except per share data)
Unaudited Twelve Months Ended
December 31,
------------------------
2009 2008 Variance % Variance
----------- ----------- ----------- ----------
New vehicle sales $ 874,701 $ 1,147,418 $ (272,717) (23.8)%
Used vehicle sales 539,352 547,706 (8,354) (1.5)
Finance and insurance 56,010 76,679 (20,669) (27.0)
Service, body and parts 276,690 286,326 (9,636) (3.4)
Fleet and other
revenues 2,562 4,871 (2,309) (47.4)
----------- ----------- ----------- ----------
Total revenues 1,749,315 2,063,000 (313,685) (15.2)
----------- ----------- ----------- ----------
Cost of sales 1,419,696 1,706,525 (286,829) (16.8)
----------- ----------- ----------- ----------
Gross profit 329,619 356,475 (26,856) (7.5)
Asset impairment
charges 6,976 335,672 (328,696) (97.9)
SG&A expense 270,245 307,316 (37,071) (12.1)
Depreciation and
amortization 18,248 16,943 1,305 7.7
----------- ----------- ----------- ----------
Income (loss) from
operations 34,150 (303,456) 337,606 NM
Floorplan interest
expense (10,878) (20,517) 9,639 47.0
Other interest expense (14,063) (17,878) 3,815 21.3
Other income, net 1,494 6,624 (5,130) (77.4)
----------- ----------- ----------- ----------
Income (loss) from
continuing operations
before income taxes 10,703 (335,227) 345,930 NM
Income tax expense
(benefit) 4,639 (108,720) 113,359 NM
Income tax rate 43.3% 32.4%
----------- ----------- ----------- ----------
Income (loss) from
continuing operations 6,064 (226,507) 232,571 NM %
Income (loss) from
discontinued
operations, net of
income tax 3,087 (26,079) 29,166 NM
----------- ----------- ----------- ----------
Net income (loss) $ 9,151 $ (252,586) $ 261,737 NM %
=========== =========== =========== ==========
Diluted net income
(loss) per share:
Continuing operations $ 0.27 $ (11.22) $ 11.49 NM %
Discontinued operations 0.14 (1.29) 1.43 NM
----------- ----------- ----------- ----------
Net income (loss) per
share $ 0.41 $ (12.51) $ 12.92 NM
=========== =========== =========== ==========
Diluted shares
outstanding 22,176 20,195 1,981 9.8 %
NM - not meaningful
LITHIA MOTORS, INC.
(Continuing Operations) Twelve Months Ended
Unaudited December 31,
-------------------
2009 2008 Variance % Variance
--------- -------- --------- ------
Unit sales:
New vehicle 29,109 39,091 (9,982) (25.5)%
Used - retail vehicle 28,750 27,305 1,445 5.3
Used - wholesale 13,413 15,840 (2,427) (15.3)
Total units sold 71,272 82,236 (10,964) (13.3)
Average selling price:
New vehicle $ 30,049 $ 29,352 $ 697 2.4 %
Used - retail vehicle 16,266 16,638 (372) (2.2)
Used - wholesale 5,345 5,897 (552) (9.4)
Gross margin/profit data
New vehicle retail 8.4% 7.9 % 50bps
Used vehicle retail 14.1% 11.5 % 260bps
Used vehicle wholesale 0.3% (3.2)% 350bps
Service, body & parts 47.9% 48.2 % (30)bps
Finance & insurance 100.0% 100.0 % -
Gross profit margin 18.8% 17.3 % 150bps
New retail gross profit/unit $ 2,533 $ 2,325 $ 208
Used retail gross profit/unit 2,290 1,919 371
Used wholesale gross
profit/unit 18 (191) 209
Finance & insurance/retail unit 968 1,155 (187)
Revenue mix:
New vehicles 50.0% 55.6 %
Used retail vehicles 26.7% 22.0 %
Used wholesale vehicles 4.2% 4.6 %
Finance and insurance, net 3.2% 3.7 %
Service and parts 15.8% 13.9 %
Fleet and other 0.1% 0.2 %
LITHIA MOTORS, INC.
(Continuing operations)
Unaudited Twelve Months Ended
December 31,
---------------
2009 2008
---- ----
New vehicle unit sales brand mix:
Chrysler Brands 30.2% 33.9%
General Motors 15.6% 17.0%
Toyota 15.2% 15.5%
Honda 8.8% 8.3%
Ford 5.0% 4.2%
BMW 5.1% 4.9%
Hyundai 5.0% 4.1%
Nissan 3.9% 4.1%
Volkswagen, Audi 3.2% 2.6%
Subaru 5.7% 3.4%
Mercedes 1.1% 0.9%
Other 1.2% 1.1%
(Selected same store data)
Unaudited
Twelve Months Ended
December 31,
---------------
2009 2008
vs. vs.
2008 2007
---- ----
Same store revenue:
New vehicle retail sales (23.6)% (25.4)%
Chrysler Brands (32.1)% (33.5)%
General Motors (26.9)% (15.0)%
Toyota (27.0)% (14.3)%
All other brands (11.8)% (24.9)%
Used vehicle retail sales 3.1 % (17.0)%
Used wholesale sales (23.1)% (30.2)%
Total vehicle sales (excluding
fleet) (16.4)% (23.6)%
Finance & insurance sales (26.2)% (22.5)%
Service, body and parts sales (3.3)% 0.1 %
Total sales (excluding fleet) (14.9)% (20.9)%
Total gross profit (excluding
fleet) (6.3)% (19.2)%
LITHIA MOTORS, INC.
Condensed balance sheet (dollars in thousands)
Unaudited
December 31, December 31,
2009 2008
------------- -------------
Cash & cash equivalents $ 12,776 $ 10,874
Trade receivables* 52,097 69,615
Inventory 328,726 422,812
Assets held for sale 11,693 161,423
Other current assets 12,771 31,828
------------- -------------
Total current assets 418,063 696,552
Real estate, net 326,625 284,088
Equipment & other, net 59,429 62,188
Other assets 90,983 90,631
------------- -------------
Total assets $ 895,100 $ 1,133,459
============= =============
Flooring notes payable $ 210,488 $ 337,700
Liabilities related to assets held for sale 5,050 108,172
Current maturities of senior subordinated
convertible notes - 42,500
Current maturities of LOC 24,000 -
Other current liabilities 81,639 108,656
------------- -------------
Total current liabilities 321,177 597,028
Real estate debt 230,265 163,708
Other long-term debt 2,800 101,476
Other liabilities 33,820 22,904
------------- -------------
Total liabilities $ 588,062 $ 885,116
------------- -------------
Shareholders' equity 307,038 248,343
------------- -------------
Total liabilities & shareholders' equity $ 895,100 $ 1,133,459
============= =============
*Note: Includes contracts-in-transit of $21,940 and $27,799 for 2009 and
2008, respectively
Other information
Lt debt/total cap (excludes real estate) 1% 29%
Book value per basic share $13.93 $12.30
Debt covenant ratios As of December
Requirement 31, 2009
-------------------------- --------------
Minimum tangible net worth Not less than $200 million $263.4 million
Vehicle equity Not less than $45 million $138.7 million
Fixed charge coverage ratio Not less than 1.05 to 1 1.35 to 1
Liabilities to tangible net
worth ratio Not more than 4.00 to 1 2.23 to 1
The following table reconciles reported GAAP income (loss) per the income
statement to non-GAAP income (loss):
Unaudited Three Months Ended December 31,
Net Income / Diluted earnings
(Loss) per share
------------------ ------------------
Continuing Operations 2009 2008 2009 2008
-------- -------- -------- --------
As reported $ (2,070) $ (1,007) $ (0.08) $ (0.05)
Asset impairments 1,057 178 0.04 0.01
Reserve adjustments 1,145 - 0.05 -
Gain on extinguishment of debt - (2,366) - (0.12)
-------- -------- -------- --------
Adjusted $ 132 $ (3,195) $ 0.01 $ (0.16)
Discontinued Operations
As reported $ 516 $ (3,271) $ 0.02 $ (0.16)
Impairments and disposal (gain)
loss (1,491) 1,444 (0.06) 0.07
-------- -------- -------- --------
Adjusted $ (975) $ (1,827) $ (0.04) $ (0.09)
Consolidated Operations
As reported $ (1,554) $ (4,278) $ (0.06) $ (0.21)
Adjusted $ (843) $ (5,022) $ (0.03) $ (0.25)
Twelve Months Ended December 31,
Diluted earnings
Net Income / (Loss) per share
---------------------- ----------------------
Continuing Operations 2009 2008 2009 2008
---------- ---------- ---------- ----------
As reported $ 6,064 $ (226,507) $ 0.27 $ (11.22)
Asset impairments 4,618 230,241 0.22 11.40
Reserve adjustments 1,145 - 0.05 -
Gain on extinguishment of
debt (791) (3,479) (0.04) (0.17)
---------- ---------- ---------- ----------
Adjusted $ 11,036 $ 255 $ 0.50 $ 0.01
Discontinued Operations
As reported $ 3,087 $ (26,079) $ 0.14 $ (1.29)
Impairments and disposal
(gain) loss (6,378) 18,962 (0.29) 0.94
---------- ---------- ---------- ----------
Adjusted $ (3,291) $ (7,117) $ (0.15) $ (0.35)
Consolidated Operations
As reported $ 9,151 $ (252,586) $ 0.41 $ (12.51)
Adjusted $ 7,745 $ (6,862) $ 0.35 $ (0.34)
The following table reconciles GAAP cash flows from operations per the
statement of cash flows to non-GAAP cash flows from operations:
Consolidated Statement of Cash Flows
Unaudited
Twelve Months Ended
December 31,
2009 2008
---------- ----------
As reported
Cash flows from operations $ 9,934 $ 85,165
Flooring notes payable:
non-trade 31,417 (16,803)
---------- ----------
Adjusted $ 41,351 $ 68,362
2009 2008
---------- ----------
As reported
Cash flows from financing $ (29,122) $ (100,242)
Flooring notes payable:
non-trade (31,417) 16,803
========== ==========
Adjusted $ (60,539) $ (80,439)
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Contact: Investor Relations Department (541) 776-6591
www.lithia.com
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