Lithia Motors Reports Third Quarter 2011 Earnings of $0.61 per Share; Introduces 2012 Outlook Range of $1.95 to $2.05 per Share
Lithia Motors Declares $0.07 per Share Dividend for Third Quarter 2011
(firmenpresse) - MEDFORD, OR -- (Marketwire) -- 10/26/11 -- Lithia Motors, Inc. (NYSE: LAD) today reported 2011 third quarter income from continuing operations of $16.3 million, or $0.61 per diluted share. This compares to a 2010 third quarter income from continuing operations of $9.6 million, or $0.36 per diluted share. Third quarter 2011 revenue from continuing operations increased $164.9 million, or 29% to $737.9 million, compared to $573.0 million in the third quarter of 2010.
New vehicle same store sales increased 28%
Used vehicle retail same store sales increased 14%
Service, body and parts same store sales increased 3%
SG&A expense as a percentage of gross profit reduced 310 basis points, to 70.8%
"Our team continued to execute in the third quarter," said Sid DeBoer, Chairman and CEO of Lithia. "We increased quarterly revenue 29 percent, and grew diluted earnings per share 69 percent. As we remain disciplined on controlling costs, incremental operating leverage demonstrates the earnings power of our company."
For the first nine months of 2011, revenue from continuing operations increased 30% to $2.0 billion as compared to $1.6 billion in 2010. Same store new vehicle sales increased 31%, used vehicle retail same store sales increased 16% and service, body and parts same store sales increased 5%. For the first nine months of 2011 adjusted income from continuing operations was $1.48 per diluted share as compared to $0.72 per diluted share in 2010. Unadjusted, for the first nine months of 2011, income from continuing operations was $1.47 per diluted share, compared to $0.35 per diluted share for 2010.
"We grew new vehicle same store sales 28 percent, well above the national average," said Bryan DeBoer, President and COO. "Our import stores grew new unit sales volume two percent, despite shortage of import brand new vehicle inventory. However, we still have opportunity to increase our market share in both new and used vehicle sales."
On October 6, 2011, Lithia purchased a Subaru and Mitsubishi store in Fresno, California, with estimated annual revenues of $25.0 million. Including this acquisition, Lithia has purchased six stores in 2011. On October 19, 2011, Lithia sold a Volkswagen store in Thornton, Colorado, a suburb of Denver.
Commenting on the acquisition and divestiture activity, Bryan DeBoer said, "Lithia Subaru Mitsubishi of Fresno complements our existing Ford Mazda and Nissan Hyundai stores in the Fresno market. We continue to pursue exclusive franchises in the markets we operate in, and have strategically purchased and sold stores this year to further that strategy."
During the third quarter, Lithia repurchased 650,809 shares of its Class A common stock. Under the 1.0 million share repurchase program authorized in 2000, 416,776 shares were repurchased. Under a new 2.0 million authorization approved by the Board of Directors in August 2011, an additional 234,033 shares were repurchased. At the end of the third quarter, authority to purchase 1.77 million shares remained under this authorization.
Chris Holzshu, SVP and Chief Financial Officer, commented, "We remain focused on the prudent allocation of capital. While our first choice remains acquisitions and internal investment, we are pleased to provide a dividend and opportunistically repurchase shares to return value to our shareholders."
On September 30, 2011, Lithia entered into a new three-year $200 million credit facility with US Bank, N.A. and JPMorgan Chase Bank, N.A. The revolving facility will provide $100 million for new vehicle inventory floor plan financing and $100 million for general corporate purposes including working capital and acquisitions.
Lithia ended the period with $16 million in cash and $49 million in unfinanced new vehicle inventory. The new credit facility provides available funds of approximately $29 million. In total, this represents approximately $94 million in available liquidity.
Lithia announced that the Board of Directors has approved a dividend of $0.07 per share for the third quarter 2011. Lithia will pay the dividend November 25, 2011 to shareholders of record on November 11, 2011.
Lithia projects its 2011 fourth quarter earnings guidance within a range of $0.37 to $0.39 per diluted share. Full-year 2011 earnings guidance is projected within a range of $1.86 to $1.88 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 26%
New vehicle gross margin ranging from 7.5% to 7.7%
Used vehicle same store sales increasing 16%
Used vehicle gross margin ranging from 14.5% to 14.7%
Service body and parts same store sales increasing 3.6%
Service body and parts gross margin ranging from 48.4% to 48.7%
Finance and insurance gross profit of $1,000 per unit
Tax rate of 40%
Average diluted shares outstanding of 26.7 million
Capital expenditures of $35 million
Guidance excludes the impact of future acquisitions, dispositions, and any potential non-core items
Lithia projects its 2012 first quarter earnings guidance within a range of $0.37 to $0.39 per diluted share. Full-year 2012 earnings guidance is projected within a range of $1.95 to $2.05 per diluted share. Both projections are based on the following annual assumptions:
Total revenues in range of $2.9 to $3.0 billion
New vehicle same store sales increasing 9.0%
New vehicle gross margin ranging from 7.5% to 7.7%
Used vehicle same store sales increasing 8.5%
Used vehicle gross margin ranging from 14.5% to 14.7%
Service body and parts same store sales increasing 2.0%
Service body and parts gross margin ranging from 48.4% to 48.7%
Finance and insurance gross profit of $980 per unit
Tax rate of 40%
Average diluted shares outstanding of 26.8 million
Capital expenditures of $38 million
Guidance excludes the impact of future acquisitions, dispositions, and any potential non-core items
The third quarter conference call may be accessed at 10:00 a.m. ET today by telephone at 877-407-8029. An updated presentation highlighting the third quarter results has been added to Investor Relations on .
To listen live on our website or for replay, visit Investor Relations on and click on webcasts. A playback of the conference call will be available after 1:00 p.m. ET on October 26, 2011 through November 2, 2011 by calling 877-660-6853 (Conference ID: 379757).
Lithia Motors, Inc. is the ninth largest automotive retailer in the United States. Lithia sells 28 brands of new and all brands of used vehicles at 86 stores, which are located in 11 states. Lithia also arranges finance, warranty, and credit insurance contracts; and provides vehicle parts, maintenance, and repair services at all of its locations.
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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 fourth quarter and full year 2011 results, first quarter and full year 2012 results, the effect of acquisitions on annual revenues, estimated new vehicle inventory and sales levels and the sustainability of future incremental operating leverage. 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.
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 floor plan 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.
For additional information on Lithia Motors, contact
John North
VP Finance and Controller
(541) 618-5748
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