Lithia Motors, Inc. (NYSE: LAD) today reported 2011 adjusted second
quarter net income from continuing operations of $14.6 million, or
$0.54 per diluted share. This compares to a 2010 adjusted second
quarter net income from continuing operations of $7.0 million, or
$0.27 per diluted share. Second quarter 2011 revenue from
continuing operations increased $158.9 million, or 30% to $689.1
million, compared to $530.2 million in the year-ago period.
Second Quarter Year-over-Year Operating
Highlights:
- New vehicle same store sales increased 24%
- Used vehicle retail same store sales increased 16%
- Service, body and parts same store sales increased 5%
- Adjusted SG&A expense as a percentage of gross profit
declined 560 basis points, to 71.4%
As shown in the attached non-GAAP reconciliation table, the 2011
second quarter adjusted results from continuing operations exclude
a non-core benefit of $0.01 per share due to a tax item, and the
2010 second quarter adjusted results from continuing operations
exclude a non-core charge of $0.33 per share on asset impairments
and reserve adjustments. Unadjusted, net income (loss) from
continuing operations for the second quarter of 2011 and 2010 was
$14.8 million or $0.55 per diluted share and $(1.6) million or
$(0.06) per diluted share, respectively.
"We had a better than expected quarter, with revenue up 30% year
over year, and the highest second quarter earnings per share since
2006," said Sid DeBoer, Chairman and CEO of Lithia. "We continue to
build on the momentum we have created over the past 24 months
through our philosophy of continuous improvement."
For the first six months of 2011, revenue from continuing
operations increased 31% to $1.3 billion as compared to $1.0
billion in 2010. Same store new vehicle sales increased 32%, used
vehicle retail same store sales increased 17% and service, body and
parts same store sales increased 7%. For the first six months of
2011 adjusted net income from continuing operations was $0.88 per
share as compared to $0.36 per share in 2010. Unadjusted, for the
first six months of 2011, net income from continuing operations was
$0.87 per diluted share, compared to net loss from continuing
operations of $(0.01) per diluted share for 2010.
Mr. DeBoer continued, "The outlook for the remainder of 2011
remains volatile. Gas prices have fluctuated over the past three
months, unemployment remains high and the supply disruption that
affected Japanese manufacturers will reduce vehicle availability
through the third quarter. We anticipate new vehicle inventory will
recover to normal levels by the first quarter of 2012."
Balance Sheet Update Lithia ended the
period with $61 million in immediately available funds, including
$12 million in cash, $8 million in availability on its revolving
credit facility, and $41 million in unfinanced new vehicle
inventory.
Dividend Payment Lithia announced that the
Board of Directors has approved a dividend of $0.07 per share for
the second quarter 2011. Lithia will pay the dividend August 25,
2011 to shareholders of record on August 11, 2011.
Updated Outlook for 2011 Lithia projects
its 2011 third quarter earnings guidance within a range of $0.45 to
$0.47 per diluted share. Full-year 2011 earnings guidance is
projected within a range of $1.67 to $1.73 per diluted share. Both
projections are based on the following annual assumptions:
- Total revenues in range of $2.6 to $2.7 billion
- New vehicle same store sales increasing 23%
- New vehicle gross margin ranging from 7.5% to 7.7%
- Used vehicle same store sales increasing 17%
- Used vehicle gross margin ranging from 14.6% to 14.8%
- Service body and parts same store sales increasing 2%
- Service body and parts gross margin ranging from 48.5% to
48.8%
- Finance and insurance gross profit of $980 per unit
- Tax rate of 40%
- Estimated average diluted shares outstanding of 26.9
million
- Capital expenditures of approximately $28 million
- Guidance excludes the impact of future acquisitions,
dispositions, and any potential non-core items
Second Quarter Earnings Conference Call and
Updated Presentation The second quarter conference call may be
accessed at 10:00 a.m. ET today by telephone at 877-407-8029. An
updated presentation highlighting the second quarter results has
been added to Investor Relations on www.lithia.com.
To listen live on our website or for replay, visit Investor
Relations on www.lithia.com and click on webcasts. A playback of
the conference call will be available after 1:00 p.m. ET on July
27, 2011 through August 4, 2011 by calling 877-660-6853 (Conference
ID: 374114 Account: 305).
About Lithia Lithia Motors, Inc. is the
ninth largest automotive retailer in the United States. Lithia
sells 27 brands of new and all brands of used vehicles at 86
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.
Sites http://www.lithia.com/
http://www.lithiacareers.com/ http://www.assuredservice.com/
Lithia Motors on Facebook
https://www.facebook.com/LithiaMotors
Lithia Motors on Twitter
http://twitter.com/lithiamotors
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 third quarter and full year 2011
results, the effect of acquisitions on our full year 2011 EPS, the
impact of the Japanese disaster on new vehicle inventory and sales
levels and the sustainability of the economic recovery. 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 This press
release and the attached financial tables contain certain non-GAAP
financial measures as defined under SEC rules, such as adjusted net
income and diluted earnings per share from continuing operations,
adjusted SG&A as a percentage of revenues and gross profit,
adjusted operating margin, adjusted operating profit as a
percentage of gross profit, and adjusted pre-tax margin. These
measures exclude certain items disclosed in the attached financial
tables. Cash flows from operations were adjusted to include the
change in non-trade floorplan debt to improve the visibility of
cash flows related to vehicle financing. 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. These presentations are not intended to
provide net income, cash flows from operations, operating income or
selling, general and administrative costs in accordance with GAAP
and should not be considered an alternative to GAAP measures.
Lithia Motors, Inc.
Consolidated Statement of Operations (Unaudited)
(In thousands except per share data)
Three Months Ended %
June 30, Increase Increase
------------------------
2011 2010 (Decrease) (Decrease)
----------- ----------- ----------- ----------
Revenues:
New vehicle retail $ 357,638 $ 266,760 $ 90,878 34.1%
Used vehicle retail 180,039 145,786 34,253 23.5
Used vehicle wholesale 29,701 25,501 4,200 16.5
Finance and insurance 21,371 16,158 5,213 32.3
Service, body and parts 83,128 71,247 11,881 16.7
Fleet and other 17,191 4,700 12,491 265.8
----------- ----------- ----------- ----------
Total revenues 689,068 530,152 158,916 30.0
Cost of sales:
New vehicle retail 329,156 244,826 84,330 34.4
Used vehicle retail 152,497 124,697 27,800 22.3
Used vehicle wholesale 29,429 25,196 4,233 16.8
Service, body and parts 42,343 36,214 6,129 16.9
Fleet and other 15,907 4,257 11,650 273.7
----------- ----------- ----------- ----------
Total cost of sales 569,332 435,190 134,142 30.8
----------- ----------- ----------- ----------
Gross profit 119,736 94,962 24,774 26.1
Asset impairment charges 490 13,260 (12,770) (96.3)
SG&A expense 84,955 74,155 10,800 14.6
Depreciation and
amortization 4,303 4,392 (89) (2.0)
----------- ----------- ----------- ----------
Income from operations 29,988 3,155 26,833 850.5
Floorplan interest expense (3,434) (2,535) 899 35.5
Other interest expense (3,020) (3,529) (509) (14.4)
Other income, net 171 214 (43) (20.1)
----------- ----------- ----------- ----------
Income (loss) from
continuing operations
before income taxes 23,705 (2,695) 26,400 NM
Income tax expense
(benefit) 8,875 (1,132) 10,007 NM
Income tax rate 37.4% 42.0%
----------- ----------- ----------- ----------
Income (loss) from
continuing operations $ 14,830 $ (1,563) $ 16,393 NM%
Discontinued operations (4) (156) 152 (97.4)
----------- ----------- ----------- ----------
Net income (loss) $ 14,826 $ (1,719) $ 16,545 NM%
=========== =========== =========== ==========
Diluted net income (loss)
per share:
Continuing operations $ 0.55 $ (0.06) $ 0.61 NM%
Discontinued operations - (0.01) 0.01 NM
----------- ----------- ----------- ----------
Net income (loss) per
share $ 0.55 $ (0.07) $ 0.62 NM%
=========== =========== =========== ==========
Diluted shares outstanding 26,860 26,014 846 3.3%
Lithia Motors, Inc.
Key Performance Metrics (Unaudited)
Three Months Ended %
June 30, Increase Increase
------------------------
2011 2010 (Decrease) (Decrease)
----------- ----------- ----------- ----------
Gross margin
New vehicle retail 8.0% 8.2% (20) bps
Used vehicle retail 15.3 14.5 80 bps
Used vehicle wholesale 0.9 1.2 (30) bps
Finance & insurance 100.0 100.0 - bps
Service, body & parts 49.1 49.2 (10) bps
Gross profit margin 17.4 17.9 (50) bps
Unit sales
New vehicle retail 11,061 8,615 2,446 28.4%
Used vehicle retail 10,320 8,588 1,732 20.2
Used vehicle wholesale 3,869 3,290 579 17.6
Total units sold 25,250 20,493 4,757 23.2
Average selling price
New vehicle retail $ 32,333 $ 30,965 $ 1,368 4.4%
Used vehicle retail 17,446 16,976 470 2.8
Used vehicle wholesale 7,677 7,751 (74) (1.0)
Average gross profit per
unit
New vehicle retail $ 2,575 $ 2,546 $ 29 1.2%
Used vehicle retail 2,669 2,456 213 8.8
Used vehicle wholesale 70 93 (23) (24.7)
Finance & insurance 999 939 60 6.4
Revenue mix
New vehicle retail 51.9% 50.3%
Used vehicle retail 26.1 27.5
Used vehicle wholesale 4.3 4.8
Finance & insurance, net 3.1 3.1
Service, body & parts 12.1 13.4
Fleet and other 2.5 0.9
Adjusted As reported
---------------------- -----------------------
Three Months Ended Three Months Ended
June 30, June 30,
---------------------- -----------------------
Other metrics 2011 2010 2011 2010
---------- ---------- ---------- -----------
SG&A as a % of revenue 12.4% 13.8% 12.3% 14.0%
SG&A as a % of gross profit 71.4 77.0 71.0 78.1
Operating profit as a % of
revenue 4.3 3.3 4.4 0.6
Operating profit as a % of
gross profit 25.0 18.4 25.0 3.3
Pretax margin 3.4 2.2 3.4 (0.5)
Lithia Motors, Inc.
Same Store Operating Highlights (Unaudited)
(In thousands except per unit data)
Three Months Ended %
June 30, Increase Increase
-----------------------
2011 2010 (Decrease) (Decrease)
----------- ----------- ----------- ----------
Revenues
New vehicle retail $ 332,505 $ 267,522 $ 64,983 24.3%
Used vehicle retail 168,663 145,171 23,492 16.2
Used vehicle wholesale 28,492 24,933 3,559 14.3
Finance and insurance 20,190 15,778 4,412 28.0
Service, body and parts 74,318 70,971 3,347 4.7
Gross profit
New vehicle retail $ 26,247 $ 21,925 $ 4,322 19.7%
Used vehicle retail 26,010 20,967 5,043 24.1
Used vehicle wholesale 221 389 (168) (43.2)
Finance and insurance 20,190 15,778 4,412 28.0
Service, body and parts 35,572 34,265 1,307 3.8
Unit sales
New vehicle retail 10,398 8,635 1,763 20.4%
Used vehicle retail 9,789 8,551 1,238 14.5
Used vehicle wholesale 3,745 3,241 504 15.6
Total units sold 23,932 20,427 3,505 17.2
Average selling price
New vehicle retail $ 31,978 $ 30,981 $ 997 3.2%
Used vehicle retail 17,230 16,977 253 1.5
Used vehicle wholesale 7,608 7,693 (85) (1.1)
Average gross profit per
unit
New vehicle retail $ 2,524 $ 2,539 $ (15) (0.6)%
Used vehicle retail 2,657 2,452 205 8.4
Used vehicle wholesale 59 120 (61) (50.8)
Finance & insurance 1,000 918 82 8.9
Lithia Motors, Inc.
Consolidated Statement of Operations (Unaudited)
(In thousands except per share data)
Six Months Ended %
June 30, Increase Increase
------------------------
2011 2010 (Decrease) (Decrease)
----------- ----------- ----------- ----------
Revenues:
New vehicle retail $ 666,830 $ 480,351 $ 186,479 38.8%
Used vehicle retail 339,608 280,781 58,827 21.0
Used vehicle wholesale 59,974 48,894 11,080 22.7
Finance and insurance 41,123 30,689 10,434 34.0
Service, body and parts 159,031 139,319 19,712 14.1
Fleet and other 20,333 5,500 14,833 269.7
----------- ----------- ----------- ----------
Total revenues 1,286,899 985,534 301,365 30.6
Cost of sales:
New vehicle retail 615,291 440,212 175,079 39.8
Used vehicle retail 288,610 241,195 47,415 19.7
Used vehicle wholesale 59,296 48,224 11,072 23.0
Service, body and parts 81,427 71,051 10,376 14.6
Fleet and other 18,502 4,708 13,794 293.0
----------- ----------- ----------- ----------
Total cost of sales 1,063,126 805,390 257,736 32.0
----------- ----------- ----------- ----------
Gross profit 223,773 180,144 43,629 24.2
Asset impairment charges 872 14,751 (13,879) (94.1)
SG&A expense 164,140 144,572 19,568 13.5
Depreciation and
amortization 8,485 9,131 (646) (7.1)
----------- ----------- ----------- ----------
Income from operations 50,276 11,690 38,586 330.1
Floorplan interest expense (5,964) (5,251) 713 13.6
Other interest expense (6,321) (7,116) (795) (11.2)
Other income, net 249 281 (32) (11.4)
----------- ----------- ----------- ----------
Income (loss) from
continuing operations
before income taxes 38,240 (396) 38,636 NM
Income tax expense
(benefit) 14,882 (242) 15,124 NM
Income tax rate 38.9% 61.1%
----------- ----------- ----------- ----------
Income (loss) from
continuing operations $ 23,358 $ (154) $ 23,512 NM%
Discontinued operations 173 (298) 471 NM
---------- ---------- ---------- ----------
Net income (loss) $ 23,531 $ (452) $ 23,983 NM%
=========== =========== =========== ==========
Diluted net income (loss)
per share:
Continuing operations $ 0.87 $ (0.01) $ 0.88 NM%
Discontinued operations 0.01 (0.01) 0.02 NM
----------- ----------- ----------- ----------
Net income (loss) per
share $ 0.88 $ (0.02) $ 0.90 NM%
=========== =========== =========== ==========
Diluted shares outstanding 26,779 25,955 824 3.2%
NM - not meaningful
Lithia Motors, Inc.
Key Performance Metrics (Unaudited)
Six Months Ended
June 30, Increase % Increase
------------------------
2011 2010 (Decrease) (Decrease)
----------- ----------- ----------- ----------
Gross margin
New vehicle retail 7.7% 8.4% (70) bps
Used vehicle retail 15.0 14.1 90 bps
Used vehicle wholesale 1.1 1.4 (30) bps
Finance & insurance 100.0 100.0 - bps
Service, body & parts 48.8 49.0 (20) bps
Gross profit margin 17.4 18.3 (90) bps
Unit sales
New vehicle retail 20,884 15,432 5,452 35.3%
Used vehicle retail 20,055 16,728 3,327 19.9
Used vehicle wholesale 7,719 6,555 1,164 17.8
Total units sold 48,658 38,715 9,943 25.7
Average selling price
New vehicle retail $ 31,930 $ 31,127 $ 803 2.6%
Used vehicle retail 16,934 16,785 149 0.9
Used vehicle wholesale 7,770 7,459 311 4.2
Average gross profit per
unit
New vehicle retail $ 2,468 $ 2,601 $ (133) (5.1)%
Used vehicle retail 2,543 2,366 177 7.5
Used vehicle wholesale 88 102 (14) (13.7)
Finance & insurance 1004 954 50 5.2
Revenue mix
New vehicle retail 51.8% 48.7%
Used vehicle retail 26.4 28.5
Used vehicle wholesale 4.6 5.0
Finance & insurance, net 3.2 3.1
Service, body & parts 12.4 14.1
Fleet and other 1.6 0.6
Adjusted As reported
---------------------- ----------------------
Six Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
Other metrics 2011 2010 2011 2010
---------- ---------- ---------- ----------
SG&A as a % of revenue 12.8% 14.6% 12.8% 14.7%
SG&A as a % of gross profit 73.6 79.7 73.4 80.3
Operating profit as a % of
revenue 3.9 2.8 3.9 1.2
Operating profit as a % of
gross profit 22.6 15.3 22.5 6.5
Pretax margin 3.0 1.6 3.0 0.0
Lithia Motors, Inc.
Same Store Operating Highlights (Unaudited)
(In thousands except per unit data)
Six Months Ended
June 30, Increase % Increase
-----------------------
2011 2010 (Decrease) (Decrease)
----------- ----------- ----------- ----------
Revenues
New vehicle retail $ 635,316 $ 481,507 $ 153,809 31.9%
Used vehicle retail 324,639 278,669 45,970 16.5
Used vehicle wholesale 58,308 47,740 10,568 22.1
Finance and insurance 39,070 29,454 9,616 32.6
Service, body and parts 148,106 139,032 9,074 6.5
Gross profit
New vehicle retail $ 48,747 $ 40,117 $ 8,630 21.5%
Used vehicle retail 48,701 39,091 9,610 24.6
Used vehicle wholesale 627 781 (154) (19.7)
Finance and insurance 39,070 29,454 9,616 32.6
Service, body and parts 70,324 66,570 3,754 5.6
Unit sales
New vehicle retail 20,025 15,466 4,559 29.5%
Used vehicle retail 19,310 16,589 2,721 16.4
Used vehicle wholesale 7,526 6,448 1,078 16.7
Total units sold 46,861 38,503 8,358 21.7
Average selling price
New vehicle retail $ 31,726 $ 31,133 $ 593 1.9%
Used vehicle retail 16,812 16,798 14 0.1
Used vehicle wholesale 7,748 7,404 344 4.6
Average gross profit per
unit
New vehicle retail $ 2,434 $ 2,594 $ (160) (6.2)%
Used vehicle retail 2,522 2,356 166 7.0
Used vehicle wholesale 83 121 (38) (31.2)
Finance & insurance 993 919 74 8.1
Lithia Motors, Inc.
Revenue Mix (Unaudited)
Three months ended Six months ended
June 30, June 30,
------------------------ ------------------------
2011 2010 2011 2010
----------- ----------- ----------- -----------
New vehicle unit sales
brand mix
Chrysler 29.6% 28.3% 28.8% 26.9%
General Motors 17.7 17.7 17.4 17.1
Toyota 11.1 12.9 12.5 13.8
Honda, Acura 7.5 8.9 7.6 8.8
BMW, Mini 7.1 5.4 5.9 5.5
Ford 5.8 5.7 5.8 5.6
Hyundai 5.3 5.6 5.6 6.0
Subaru 4.6 5.0 5.2 5.4
Volkswagen, Audi 3.4 3.5 3.3 3.4
Nissan 3.2 3.2 3.7 3.5
Mercedes 2.0 1.1 1.5 1.1
Kia 1.7 1.8 1.8 2.0
Other 1.0 0.9 0.9 0.9
Three months ended Six months ended
June 30, June 30,
------------------------ ------------------------
2011 2010 2011 2010
----------- ----------- ----------- -----------
Revenue geographic mix
Texas 23.8% 25.1% 24.0% 25.3%
Oregon 20.4 14.6 18.5 14.7
California 9.4 10.4 9.8 10.7
Alaska 9.4 11.7 9.1 10.9
Washington 9.0 9.7 9.6 10.1
Montana 7.9 7.3 8.0 6.9
Iowa 6.6 7.2 6.7 7.1
Idaho 5.3 6.2 5.9 6.4
Nevada 4.2 4.0 4.5 4.1
North Dakota 2.1 2.0 2.0 2.0
New Mexico 1.0 1.0 1.0 1.0
Colorado 0.9 0.8 0.9 0.8
As of July 27, 2011
------------------------
Current store count mix # of stores % of total
----------- -----------
Chrysler 22 25.6%
General Motors 12 14.0
Honda, Acura 9 10.4
Toyota 8 9.3
BMW 7 8.1
Hyundai 6 7.0
Ford 5 5.8
Volkswagen, Audi 4 4.7
Nissan 4 4.7
Mercedes 3 3.5
Subaru 2 2.3
Kia 2 2.3
Other 2 2.3
Lithia Motors, Inc.
Consolidated Balance Sheet (Unaudited)
(In thousands except per share data)
June 30, December 31,
2011 2010
------------ ------------
Cash and cash equivalents $ 11,738 $ 9,306
Trade receivables, net 88,793 75,011
Inventories, net 497,530 415,228
Deferred income taxes 3,641 2,937
Other current assets 5,473 6,062
------------ ------------
Total current assets $ 607,175 $ 508,544
Property and equipment, net 366,414 362,433
Goodwill 18,288 6,186
Franchise value 59,015 45,193
Deferred income taxes 36,501 39,524
Other non-current assets 13,808 9,796
------------ ------------
Total assets $ 1,101,201 $ 971,676
============ ============
Floorplan notes payable $ 336,486 $ 251,257
Current maturities of long-term debt 10,986 12,081
Trade payables 29,110 23,747
Accrued liabilities 68,126 58,784
------------ ------------
Total current liabilities $ 444,708 $ 345,869
Long-term debt 275,183 268,693
Deferred revenue 22,441 20,158
Other long-term liabilities 15,033 16,739
------------ ------------
Total liabilities $ 757,365 $ 651,459
------------ ------------
Class A common stock 287,896 284,807
Class B common stock 468 468
Additional paid-in capital 10,632 10,972
Accumulated other comprehensive loss (4,363) (4,869)
Retained earnings 49,203 28,839
------------ ------------
Total liabilities & stockholders' equity $ 1,101,201 $ 971,676
============ ============
Lithia Motors, Inc.
Summarized Cash Flow from Operations (Unaudited)
(In thousands)
Six Months Ended
June 30,
--------------------------
2011 2010
------------ ------------
Net income (loss) $ 23,531 $ (452)
Adjustments to reconcile net income (loss) to
net cash used in operating activities:
Asset impairments 872 14,751
Depreciation and amortization 8,485 9,131
Depreciation and amortization within
discontinued operations 21 28
Stock-based compensation 1,034 948
Gain on disposal of assets (190) (201)
Loss from disposal activities within
discontinued operations 53 294
Deferred income taxes 2,060 (4,784)
Excess tax benefit from share-based payment
arrangements (278) -
(Increase) decrease:
Trade receivables, net (6,579) (9,430)
Inventories (60,498) (30,104)
Other current assets (461) 1,350
Other non-current assets (884) (870)
Increase (decrease):
Floorplan notes payable 1,744 3,249
Trade payables 4,679 7,655
Accrued liabilities 7,757 2,106
Other long-term liabilities and deferred
revenue 1,418 50
------------ ------------
Net cash used in operating activities $ (17,236) $ (6,279)
Lithia Motors, Inc.
Reconciliation of Non-GAAP Cash Flow from Operations (Unaudited)
(In thousands)
Six Months Ended
June 30,
--------------------------
Net cash (used in) provided by operating
activities 2011 2010
------------ ------------
As reported $ (17,236) $ (6,279)
Floorplan notes payable, non-trade 65,789 23,854
------------ ------------
Adjusted $ 48,553 $ 17,575
Lithia Motors, Inc.
Other Highlights (Unaudited)
(In thousands except per share data)
June 30, December 31, June 30,
2011 2010 2010
----------- ------------ ------------
Days Supply(1)
New vehicle inventory 68 75 68
Used vehicle inventory 56 53 53
(1) Days supply calculated based on current inventory levels,
excluding in-transit vehicles, and a 30-day historical cost of
sales level.
June 30, December 31,
2011 2010
----------- ------------
Other information
Long-term debt/total
capitalization(2) 44.5% 45.6%
(2) Total capitalization is comprised of long-term debt and
total shareholder's equity.
Debt covenant ratios
Requirement As of June 30, 2011
------------------------- ------------------------
Minimum tangible net
worth Not less than $200 million $264.8 million
Vehicle equity Not less than $65 million $184.5 million
Fixed charge coverage
ratio Not less than 1.20 to 1 2.04 to 1
Liabilities to tangible
net worth ratio Not more than 4.00 to 1 2.86 to 1
Lithia Motors, Inc.
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)
(In thousands)
Three months ended, Six months ended
June 30 June 30,
-------------------- --------------------
2011 2010 2011 2010
--------- --------- ---------- ---------
Selling, general &
administrative
As reported $ 84,955 $ 74,155 $ 164,140 $ 144,572
Disposal gain (loss) 580 (2) 580 365
Reserve adjustments - (1,076) - (1,334)
--------- --------- ---------- ---------
Adjusted $ 85,535 $ 73,077 $ 164,720 $ 143,603
Income from operations
As reported $ 29,988 $ 3,155 $ 50,276 $ 11,690
Impairments and disposal gain (90) 13,262 292 14,452
Reserve adjustments - 1,076 - 1,334
--------- --------- ---------- ---------
Adjusted $ 29,898 $ 17,493 $ 50,568 $ 27,476
Income (loss) from continuing
operations before income taxes
As reported $ 23,705 $ (2,695) $ 38,240 $ (396)
Impairments and disposal gain (90) 13,262 292 14,452
Reserve adjustments - 1,076 - 1,334
--------- --------- ---------- ---------
Adjusted $ 23,615 $ 11,643 $ 38,532 $ 15,390
Lithia Motors, Inc.
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)
(In thousands except per share data)
Adjusted net income/(loss) and diluted earnings per share
Three Months Ended June 30,
Diluted earnings per
Net income/(loss) share
-------------------- --------------------
2011 2010 2011 2010
--------- --------- --------- ---------
Continuing Operations
As reported $ 14,830 $ (1,563) $ 0.55 $ (0.06)
Impairments and disposal gain (49) 8,043 - 0.31
Reserve adjustments - 560 - 0.02
Stock-based compensation tax
shortfall (186) - (0.01) -
--------- --------- --------- ---------
Adjusted $ 14,595 $ 7,040 $ 0.54 $ 0.27
Discontinued Operations
As reported $ (4) $ (156) $ - $ (0.01)
Impairments and disposal
(gain) loss 32 167 - 0.01
--------- --------- --------- ---------
Adjusted $ 28 $ 11 $ - $ -
Consolidated Operations
As reported $ 14,826 $ (1,719) $ 0.55 $ (0.07)
Adjusted 14,623 7,051 0.54 0.27
Adjusted net income/(loss) and diluted earnings per share
Six Months Ended June 30,
Diluted earnings per
Net income/(loss) share
-------------------- --------------------
2011 2010 2011 2010
--------- --------- --------- ---------
Continuing Operations
As reported $ 23,358 $ (154) $ 0.87 $ (0.01)
Impairments and disposal gain 180 8,775 0.01 0.34
Reserve adjustments - 724 - 0.03
--------- --------- --------- ---------
Adjusted $ 23,538 $ 9,345 $ 0.88 $ 0.36
Discontinued Operations
As reported $ 173 $ (298) $ 0.01 $ (0.01)
Impairments and disposal loss 32 176 - 0.01
--------- --------- --------- ---------
Adjusted $ 205 $ (122) $ 0.01 $ -
Consolidated Operations
As reported $ 23,531 $ (452) $ 0.88 $ (0.02)
Adjusted 23,743 9,223 0.89 0.36
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For additional information on Lithia Motors, contact: John North
VP Finance / Controller (541) 618-5748 or visit www.lithia.com and
click on "Investor Relations"
Lithia Motors (NYSE:LAD)
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