SOURCE: Lithia Motors

Lithia Motors

February 23, 2011 16:05 ET

Lithia Motors Reports 71% Increase in Adjusted Full Year Continuing Operations EPS; Increases 2011 Outlook

Lithia Motors Declares $0.05 per Share Dividend for Fourth Quarter 2010

MEDFORD, OR--(Marketwire - February 23, 2011) - Lithia Motors, Inc. (NYSE: LAD) today reported 2010 adjusted fourth quarter net income from continuing operations of $5.6 million, or $0.21 per diluted share. This compares to a 2009 adjusted fourth quarter net loss from continuing operations of $(0.7) million, or $(0.03) per diluted share. Fourth quarter 2010 revenue from continuing operations increased $130.7 million, or 30.8% to $555.6 million, compared to $424.9 million in the year-ago period.

Fourth Quarter Operating Highlights:

  • New vehicle same store sales increased 34.4%
  • Used vehicle retail same store sales increased 21.1%
  • Service, body and parts same store sales increased 5.4%

As shown in the attached reconciliation table, the 2010 and 2009 fourth quarter adjusted results from continuing operations excluded non-core charges of $0.05 and $0.04 per share, respectively, on asset impairments, disposal gains and reserve adjustments. Unadjusted, net income (loss) from continuing operations for the fourth quarter of 2010 and 2009 was $4.4 million or $0.16 per diluted share and $(1.8) million or $(0.07) per diluted share, respectively.

Sid DeBoer, Lithia's Chairman and CEO, commented, "The economic recovery continued to accelerate through the fourth quarter. All states we operate in posted double digit increases in same store sales."

For the full year 2010, revenue from continuing operations increased 19.7% to $2.1 billion as compared to $1.8 billion in 2009. Same store new vehicle sales increased 19.5%, used vehicle retail same store sales increased 19.3% and service, body and parts same store sales increased 0.4%. Full year 2010 adjusted net income from continuing operations was $0.94 per share as compared to $0.55 per share in 2009. Unadjusted, full year net income from continuing operations was $0.53 per diluted share, compared to net income from continuing operations of $0.31 per diluted share for 2009.

Mr. DeBoer continued, "For the full year, our adjusted earnings per share from continuing operations increased 71%. This improvement is a testament to the earnings potential Lithia can realize as we increase our market share in an improving economy."

Balance Sheet Update
Lithia ended the period with $98.2 million in immediately available funds, including $9.3 million in cash, $23.3 million in availability on its revolving credit facility, and $65.6 million in unfinanced new vehicle inventory.

Dividend Payment
Lithia announced that the Board of Directors has approved a dividend of $0.05 per share for the fourth quarter 2010. Lithia will pay the dividend March 25, 2011 to shareholders of record on March 11, 2011.

Increased Outlook for 2011
Lithia projects its 2011 first quarter earnings guidance within a range of $0.19 to $0.21 per diluted share. Full-year 2011 earnings guidance is projected within a range of $1.20 to $1.28 per diluted share. Both projections are based on the following annual assumptions:

  • Total revenues in range of $2.3 to $2.45 billion
  • New vehicle same store sales increasing 16%
  • New vehicle gross margin ranging from 7.9% to 8.1%
  • Used vehicle same store sales increasing 10%
  • Used vehicle gross margin ranging from 13.7% to 14.0%
  • Service body and parts same store sales increasing 2%
  • Service body and parts gross margin ranging from 48.3% to 48.6%
  • Finance and insurance gross profit of $970 per unit
  • Tax rate of 40%
  • Estimated average diluted shares outstanding of 26.9 million
  • Capital expenditures of approximately $26 million
  • Guidance excludes the impact of future acquisitions, dispositions, and any potential non-core items

Fourth Quarter Earnings Conference Call and Updated Presentation
The fourth quarter conference call may be accessed at 2:00 p.m. PT today by telephone at 877-407-8029. An updated presentation highlighting the fourth 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 the conference call icon. A playback of the conference call will be available after 5:00 p.m. PT on February 23, 2011 through March 2, 2011 by calling 877-660-6853 (Conference ID: 366539 Account: 305).

About Lithia
Lithia Motors, Inc. is the ninth largest automotive retailer in the United States. As of today, Lithia sells 25 brands of new and all brands of used vehicles at 83 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 John North, VP Finance / Controller at (541) 618-5748 or visit www.lithia.com and click on "Investor Relations."

Sites
www.lithia.com
www.lithiacares.com
www.lithiajobs.com

Lithia Motors on Facebook
http://www.facebook.com/LithiaMotors

Lithia Life on Facebook
http://www.facebook.com/pages/Lithia-Lifecom/34360183908?ref=ts

Lithia Life on YouTube
http://www.youtube.com/user/LithiaLife

Lithia Life on Twitter
http://twitter.com/LithiaLife

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 2011 results, the sustainability of the economic recovery and the earnings power produced by increasing revenues. 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 adjusted to 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           %  
    December 31,     Increase     Increase  
    2010     2009     (Decrease)     (Decrease)  
Revenues:                              
New vehicle retail   $ 290,073     $ 210,494     $ 79,579     37.8 %
Used vehicle retail     139,652       112,051       27,601     24.6  
Used vehicle wholesale     28,209       18,212       9,997     54.9  
Finance and insurance     17,267       12,299       4,968     40.4  
Service, body and parts     77,297       71,268       6,029     8.5  
Fleet and other     3,093       524       2,569     NM  
  Total revenues     555,591       424,848       130,743     30.8  
Cost of sales:                              
New vehicle retail     267,407       193,970       73,437     37.9  
Used vehicle retail     120,755       96,622       24,133     25.0  
Used vehicle wholesale     28,270       18,217       10,053     55.2  
Service, body and parts     41,698       38,632       3,066     7.9  
Fleet and other     2,623       205       2,418     NM  
  Total cost of sales     460,753       347,646       113,107     32.5  
Gross profit     94,838       77,202       17,636     22.8  
Asset impairment charges     550       153       397     259.5  
SG&A expense     77,292       67,507       9,785     14.5  
Depreciation and amortization     4,188       6,316       (2,128 )   (33.7 )
Income from operations     12,808       3,226       9,582     297.0  
Floorplan interest expense     (2,194 )     (2,387 )     (193 )   (8.1 )
Other interest expense     (3,730 )     (3,476 )     254     7.3  
Other income, net     66       48       18     37.5  
Income (loss) from continuing operations before income taxes     6,950       (2,589 )     9,539     NM  
Income tax expense (benefit)     2,571       (775 )     3,346     NM  
Income tax rate     37.0 %     29.9 %              
Income (loss) from continuing operations   $ 4,379     $ (1,814 )   $ 6,193     NM %
                               
Income from discontinued operations, net of income tax     -       260       (260 )   100.0  
Net income (loss)   $ 4,379     $ (1,554 )   $ 5,933     NM %
                               
Diluted net income (loss) per share:                              
Continuing operations   $ 0.16     $ (0.07 )   $ 0.23     NM %
Discontinued operations     -       0.01       (0.01 )   NM  
Net income per share   $ 0.16     $ (0.06 )   $ 0.22     NM %
                               
Diluted shares outstanding     26,540       25,113       1,427     5.7 %
                               
                               
 
Lithia Motors, Inc.
Key Performance Metrics (Unaudited)
 
    Three Months Ended           %  
    December 31,     Increase     Increase  
    2010     2009     (Decrease)     (Decrease)  
Gross margin                              
New vehicle retail     7.8 %     7.9 %     (10) bps        
Used vehicle retail     13.5       13.8       (30) bps        
Used vehicle wholesale     (0.2 )     -       (20) bps        
Finance & insurance     100.0       100.0       - bps        
Service, body & parts     46.1       45.8       30 bps        
Gross profit margin     17.1       18.2       (110) bps        
                               
Unit sales                              
New vehicle retail     8,907       6,537       2,370     36.3 %
Used vehicle retail     8,386       6,574       1,812     27.6  
Used vehicle wholesale     3,708       3,166       542     17.1  
Total units sold     21,001       16,277       4,724     29.0  
                               
Average selling price                              
New vehicle retail   $ 32,567     $ 32,200     $ 367     1.1 %
Used vehicle retail     16,653       17,044       (391 )   (2.3 )
Used vehicle wholesale     7,608       5,753       1,855     32.3  
                               
Average gross profit per unit                              
New vehicle retail   $ 2,545     $ 2,528     $ 17     0.7 %
Used vehicle retail     2,253       2,347       (94 )   (4.0 )
Used vehicle wholesale     (16 )     (2 )     (14 )   700.0  
Finance & insurance     999       938       61     6.5  
                               
Revenue mix                              
New vehicle retail     52.2 %     49.5 %              
Used vehicle retail     25.1       26.4                
Used vehicle wholesale     5.1       4.3                
Finance & insurance, net     3.1       2.9                
Service, body & parts     13.9       16.8                
Fleet and other     0.6       0.1                
                               
    Adjusted     As reported  
    Three Months Ended     Three Months Ended  
    December 31,     December 31,  
Other metrics   2010     2009     2010     2009  
SG&A as a % of revenue     13.9 %     15.8 %     13.9 %   15.9 %
SG&A as a % of gross profit     80.8       85.3       81.5     87.4  
Operating profit as a % of revenue     2.6       1.1       2.3     0.8  
Operating profit as a % of gross profit     14.9       6.1       13.5     4.2  
Pretax margin     1.5       (0.2 )     1.3     (0.6 )
                               
 
 
Lithia Motors, Inc.
Same Store Operating Highlights (Unaudited)
(In thousands except per unit data)
 
                   
    Three Months Ended           %  
    December 31,     Increase     Increase  
    2010     2009     (Decrease)     (Decrease)  
Revenues                              
New vehicle retail   $ 283,707     $ 211,022     $ 72,685     34.4 %
Used vehicle retail     135,834       112,203       23,631     21.1  
Used vehicle wholesale     27,481       18,146       9,335     51.4  
Finance and insurance     15,962       11,908       4,054     34.0  
Service, body and parts     75,098       71,272       3,826     5.4  
                               
Gross profit                              
New vehicle retail     21,771       16,622       5,149     31.0  
Used vehicle retail     18,507       15,357       3,150     20.5  
Used vehicle wholesale     (46 )     (2 )     (44 )   NM  
Finance and insurance     15,962       11,908       4,054     34.0  
Service, body and parts     34,996       33,328       1,668     5.0  
                               
Unit sales                              
New vehicle retail     8,699       6,554       2,145     32.7 %
Used vehicle retail     8,152       6,583       1,569     23.8  
Used vehicle wholesale     3,597       3,160       437     13.8  
Total units sold     20,448       16,297       4,151     25.5  
                               
Average selling price                              
New vehicle retail   $ 32,614     $ 32,197     $ 417     1.3 %
Used vehicle retail     16,663       17,044       (381 )   (2.2 )
Used vehicle wholesale     7,640       5,742       1,898     33.0  
                               
Average gross profit per unit                              
New vehicle retail   $ 2,503     $ 2,536     $ (33 )   (1.3 )%
Used vehicle retail     2,270       2,333       (63 )   (2.7 )
Used vehicle wholesale     (13 )     (1 )     (12 )   NM  
Finance & insurance     947       906       41     4.5  
                               
                               
 
Lithia Motors, Inc.
Consolidated Statement of Operations (Unaudited)
(In thousands except per share data)
 
                   
    Twelve Months Ended           %  
    December 31,     Increase     Increase  
    2010     2009     (Decrease)     (Decrease)  
Revenues:                              
New vehicle retail   $ 1,067,648     $ 881,329     $ 186,319     21.1 %
Used vehicle retail     581,185       477,253       103,932     21.8  
Used vehicle wholesale     108,113       72,699       35,414     48.7  
Finance and insurance     67,107       56,397       10,710     19.0  
Service, body and parts     295,823       291,075       4,748     1.6  
Fleet and other     11,722       2,614       9,108     NM  
  Total revenues     2,131,598       1,781,367       350,231     19.7  
Cost of sales:                              
New vehicle retail     980,264       806,912       173,352     21.5  
Used vehicle retail     499,182       410,087       89,095     21.7  
Used vehicle wholesale     107,468       72,288       35,180     48.7  
Service, body and parts     153,239       152,532       707     0.5  
Fleet and other     10,015       1,283       8,732     NM  
  Total cost of sales     1,750,168       1,443,102       307,066     21.3  
Gross profit     381,430       338,265       43,165     12.8  
Asset impairment charges     15,301       8,272       7,029     85.0  
SG&A expense     300,612       276,021       24,591     8.9  
Depreciation and amortization     17,577       18,259       (682 )   (3.7 )
Income from operations     47,940       35,713       12,227     34.2  
Floorplan interest expense     (10,597 )     (11,015 )     (418 )   (3.8 )
Other interest expense     (14,572 )     (14,115 )     457     3.2  
Other income, net     422       1,495       (1,073 )   (71.8 )
Income from continuing operations before income taxes     23,193       12,078       11,115     92.0  
Income tax expense     9,093       5,162       3,931     76.2  
Income tax rate     39.2 %     42.7 %              
Income from continuing operations   $ 14,100     $ 6,916     $ 7,184     103.9 %
                               
Income (loss) from discontinued operations, net of income tax     (381 )     2,235       (2,616 )   NM  
Net income   $ 13,719     $ 9,151     $ 4,568     49.9 %
                               
Diluted net income (loss) per share:                              
Continuing operations   $ 0.53     $ 0.31     $ 0.22     71.0 %
Discontinued operations     (0.01 )     0.10       (0.11 )   NM  
Net income per share   $ 0.52     $ 0.41     $ 0.11     26.8 %
                               
Diluted shares outstanding     26,279       22,176       4,103     18.5 %
                               
NM - not meaningful                               
                               
                               
 
Lithia Motors, Inc.
Key Performance Metrics (Unaudited)
 
    Twelve Months Ended              
    December 31,     Increase     % Increase  
    2010     2009     (Decrease)     (Decrease)  
Gross margin                              
New vehicle retail     8.2 %     8.4 %     (20) bps        
Used vehicle retail     14.1       14.1       - bps        
Used vehicle wholesale     0.6       0.6       - bps        
Finance & insurance     100.0       100.0       - bps        
Service, body & parts     48.2       47.6       60 bps        
Gross profit margin     17.9       19.0       (110) bps        
                               
Unit sales                              
New vehicle retail     33,701       29,316       4,385     15.0 %
Used vehicle retail     34,969       29,453       5,516     18.7  
Used vehicle wholesale     14,365       13,623       742     5.4  
Total units sold     83,035       72,392       10,643     14.7  
                               
Average selling price                              
New vehicle retail   $ 31,680     $ 30,063     $ 1,617     5.4 %
Used vehicle retail     16,620       16,204       416     2.6  
Used vehicle wholesale     7,526       5,337       2,189     41.0  
                               
Average gross profit per unit                              
New vehicle retail   $ 2,593     $ 2,538     $ 55     2.2 %
Used vehicle retail     2,345       2,280       65     2.9  
Used vehicle wholesale     45       30       15     50.0  
Finance & insurance     977       960       17     1.8  
                               
Revenue mix                              
New vehicle retail     50.1 %     49.5 %              
Used vehicle retail     27.3       26.8                
Used vehicle wholesale     5.1       4.1                
Finance & insurance, net     3.1       3.2                
Service, body & parts     13.9       16.3                
Fleet and other     0.5       0.1                
                               
    Adjusted     As reported  
    Twelve Months Ended     Twelve Months Ended  
    December 31,     December 31,  
Other metrics   2010     2009     2010     2009  
SG&A as a % of revenue     14.1 %     15.5 %     14.1 %   15.5 %
SG&A as a % of gross profit     78.4       81.1       78.8     81.6  
Operating profit as a % of revenue     3.1       2.5       2.2     2.0  
Operating profit as a % of gross profit     17.0       13.4       12.6     10.6  
Pretax margin     1.9       1.1       1.1     0.7  
                               
                               
 
Lithia Motors, Inc.
Same Store Operating Highlights (Unaudited)
(In thousands except per unit data)
 
               
    Twelve Months Ended          
    December 31,       %  
    2010   2009   Increase   Increase  
Revenues                        
New vehicle retail   $ 1,053,411   $ 881,290   $ 172,121   19.5 %
Used vehicle retail     568,532     476,395     92,137   19.3  
Used vehicle wholesale     105,701     71,936     33,765   46.9  
Finance and insurance     63,096     53,843     9,253   17.2  
Service, body and parts     291,549     290,384     1,165   0.4  
                         
Gross profit                        
New vehicle retail     85,642     74,533     11,109   14.9 %
Used vehicle retail     80,118     65,565     14,553   22.2  
Used vehicle wholesale     808     633     175   27.6  
Finance and insurance     63,096     53,843     9,253   17.2  
Service, body and parts     138,694     136,883     1,811   1.3  
                         
Unit sales                        
New vehicle retail     33,173     29,302     3,871   13.2 %
Used vehicle retail     34,173     29,386     4,787   16.3  
Used vehicle wholesale     14,043     13,562     481   3.5  
Total units sold     81,389     72,250     9,139   12.6  
                         
Average selling price                        
New vehicle retail   $ 31,755   $ 30,076   $ 1,679   5.6 %
Used vehicle retail     16,637     16,212     425   2.6  
Used vehicle wholesale     7,527     5,304     2,223   41.9  
                         
Average gross profit per unit                        
New vehicle retail   $ 2,582   $ 2,544   $ 38   1.5 %
Used vehicle retail     2,344     2,231     113   5.1  
Used vehicle wholesale     58     47     11   23.2  
Finance & insurance     937     917     20   2.1  
                         
                         
                         
Lithia Motors, Inc.
Revenue Mix (Unaudited)
 
    Three months ended
December 31,
    Twelve months ended
December 31,
 
    2010     2009     2010     2009  
New vehicle unit sales brand mix                        
Chrysler   29.2 %   23.0 %   28.4 %   29.1 %
General Motors   15.1     17.9     16.1     16.5  
Toyota   13.8     16.5     13.5     15.1  
Honda   8.7     9.5     8.6     8.8  
Ford   5.8     5.8     5.8     5.0  
Hyundai   5.1     3.8     5.7     5.0  
Subaru   6.0     7.4     5.6     5.6  
BMW   5.8     6.2     5.4     5.1  
Volkswagen, Audi   3.5     3.4     3.6     3.2  
Nissan   3.0     3.7     3.4     3.9  
Kia   2.0     0.7     2.0     0.6  
Mercedes   1.4     1.3     1.2     1.1  
Other   0.6     0.8     0.7     1.0  
    Three months ended
December 31,
    Twelve months ended
December 31,
 
    2010     2009     2010     2009  
Revenue geographic mix                        
Texas   23.9 %   24.5 %   24.5 %   23.9 %
Oregon   15.6     15.5     15.0     16.4  
California   10.9     11.6     11.2     11.6  
Washington   10.2     10.7     10.1     10.0  
Alaska   9.0     9.7     10.0     9.9  
Montana   8.5     6.1     7.6     6.8  
Iowa   7.3     7.7     7.1     7.2  
Idaho   5.8     6.3     6.2     6.4  
Nevada   4.4     4.1     4.2     4.0  
North Dakota   2.4     2.1     2.2     1.9  
New Mexico   1.1     0.9     1.0     1.1  
Colorado   0.9     0.8     0.9     0.8  
    As of December 31, 2010        
Current store count mix   # of stores     % of total              
Chrysler   23     27.4 %            
General Motors   12     14.3              
Toyota   8     9.5              
Honda   8     9.5              
Hyundai   6     7.1              
BMW   6     7.1              
Ford   4     4.8              
Volkswagen, Audi   4     4.8              
Nissan   4     4.8              
Other   4     4.8              
Subaru   2     2.4              
Kia   2     2.4              
Mercedes   1     1.1              
                         
   
   
Lithia Motors, Inc.  
Consolidated Balance Sheet (Unaudited)  
(In thousands except per share data)  
   
    December 31, 2010     December 31, 2009  
Cash and cash equivalents   $ 9,306     $ 12,776  
Trade receivables, net     75,011       52,097  
Inventories, net     415,228       333,628  
Other current assets     6,062       7,869  
Deferred income taxes     2,937       -  
Assets held for sale     -       11,693  
Total current assets   $ 508,544     $ 418,063  
                 
Property and equipment, net     362,433       386,054  
Goodwill     6,186       -  
Franchise value     45,193       42,428  
Other non-current assets     9,796       7,820  
Deferred income taxes     39,524       40,735  
Total assets   $ 971,676     $ 895,100  
                 
Floorplan notes payable     251,257       216,082  
Current maturities of long-term debt     12,081       32,708  
Trade payables     23,747       18,782  
Accrued liabilities     58,784       47,519  
Deferred income taxes     -       1,036  
Liabilities related to assets held for sale     -       5,050  
Total current liabilities   $ 345,869     $ 321,177  
                 
Long-term debt     268,693       233,065  
Deferred revenue     20,158       17,981  
Other long-term liabilities     16,739       15,839  
Total liabilities   $ 651,459     $ 588,062  
                 
Class A common stock     284,807       280,880  
Class B common stock     468       468  
Additional paid-in capital     10,972       10,501  
Other comprehensive income     (4,869 )     (3,850 )
Retained earnings     28,839       19,039  
Total liabilities & shareholders' equity   $ 971,676     $ 895,100  
   
   
   
Lithia Motors, Inc.  
Summarized Cash Flow from Operations (Unaudited)  
(In thousands)  
   
    Twelve Months Ended  
    December 31,  
    2010     2009  
Net income   $ 13,719     $ 9,151  
                 
Adjustments to reconcile net income to cash provided by (used in) operating activities:                
Asset impairments     15,301       8,272  
Depreciation and amortization     17,586       18,821  
Amortization of debt discount     -       48  
Stock-based compensation     2,419       2,054  
Gain on early extinguishment of debt     -       (1,317 )
(Gain) loss on disposal of assets     194       (10,686 )
Deferred income taxes     (2,131 )     5,627  
Excess tax deficit (benefit) from share-based payment arrangements     (264 )     45  
(Increase) decrease, net of effect of acquisitions and divestitures                
  Trade receivables, net     (22,881 )     17,780  
  Inventories     (68,305 )     120,785  
  Other current assets     (1,633 )     15,992  
  Other non-current assets     (2,029 )     (4,347 )
Increase (decrease), net of effect of acquisitions and divestitures                
  Floorplan notes payable     10,550       (179,893 )
  Trade payables     4,960       (2,789 )
  Accrued liabilities     10,029       (4,318 )
  Other long-term liabilities and
deferred revenue
    1,155       14,714  
Net cash provided by (used in) operating activities   $ (21,330 )   $ 9,939  
                 
                 
 
Lithia Motors, Inc.
Reconciliation of Non-GAAP Cash Flow from Operations (Unaudited)
(In thousands)
    Twelve Months Ended
    December 31,
Net cash provided by (used in) operating activities   2010     2009
As reported   $ (21,330 )   $ 9,939
  Floorplan notes payable, non-trade     24,090       31,417
Adjusted   $ 2,760     $ 41,356
 
 
 
Lithia Motors, Inc.
Other Highlights (Unaudited)
(In thousands except per share data)
 
    December
 31, 2010
    December 31, 2009    
Other information              
Long-term debt/total capitalization(1)   45.6 %   43.2 %  

(1)Total capitalization is comprised of long-term debt and total shareholder's equity.
 
Debt covenant ratios              
    Requirement   As of December 31, 2010
Minimum tangible net worth   Not less than $200 million   $267.1 million
Vehicle equity   Not less than $65 million   $187.7 million
Fixed charge coverage ratio   Not less than 1.20 to 1   1.68 to 1
Liabilities to tangible net worth ratio   Not more than 4.00 to 1   2.44 to 1
               
   
   
   
Lithia Motors, Inc.  
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)  
(In thousands)  
   
    Three months ended
December 31,
    Twelve months ended
December 31,
 
    2010   2009     2010     2009  
Selling, general & administrative                              
As reported   $ 77,292   $ 67,507     $ 300,612     $ 276,021  
  Impairments and disposal gain     48     -       413       -  
  Reserve adjustments     96     (454 )     (1,238 )     (454 )
Adjusted   $ 77,436   $ 67,053     $ 299,787     $ 275,567  
                               
Income from operations                              
As reported   $ 12,808   $ 3,226     $ 47,940     $ 35,713  
  Impairments and disposal gain     502     (277 )     14,954       7,842  
  Reserve adjustments     944     1,854       2,278       1,854  
Adjusted   $ 14,254   $ 4,803     $ 65,172     $ 45,409  
                               
Income (loss) from continuing operations before income taxes                              
As reported   $ 6,950   $ (2,589 )   $ 23,193     $ 12,078  
  Impairments and disposal gain     502     (277 )     14,954       7,842  
  Reserve adjustments     944     1,854       2,278       1,854  
  Gain on extinguishment of debt     -     -       -       (1,317 )
Adjusted   $ 8,396   $ (1,012 )   $ 40,425     $ 20,457  
                               
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 December 31,  
    Net income/(loss)     Diluted earnings per share  
    2010     2009     2010     2009  
Continuing Operations                                
As reported   $ 4,379     $ (1,814 )   $ 0.16     $ (0.07 )
  Impairments and disposal gain     401       (34 )     0.02       -  
  Reserve adjustments     807       1,103       0.03       0.04  
Adjusted   $ 5,587     $ (745 )   $ 0.21     $ (0.03 )
                                 
Discontinued Operations                                
As reported   $ -     $ 260     $ -     $ 0.01  
  Impairments and disposal (gain)
loss
    -       (1,474 )     -       (0.06 )
Adjusted   $ -     $ (1,214 )   $ -     $ (0.05 )
                                 
Consolidated Operations                                
As reported   $ 4,379     $ (1,554 )   $ 0.16     $ (0.06 )
Adjusted     5,587       (1,959 )     0.21       (0.08 )
                                 
    Twelve Months Ended December 31,  
    Net income/(loss)     Diluted earnings per share  
    2010     2009     2010     2009  
Continuing Operations                                
As reported   $ 14,100     $ 6,916     $ 0.53     $ 0.31  
  Impairments and disposal gain     9,178       4,967       0.35       0.22  
  Reserve adjustment     1,532       1,103       0.06       0.06  
  Gain on extinguishment of debt     -       (812 )     -       (0.04 )
Adjusted   $ 24,810     $ 12,174     $ 0.94     $ 0.55  
                                 
Discontinued Operations                                
As reported   $ (381 )   $ 2,235     $ (0.01 )   $ 0.10  
  Impairments and disposal (gain)
loss
    173       (6,589 )     -       (0.30 )
Adjusted   $ (208 )   $ (4,354 )   $ (0.01 )   $ (0.20 )
                                 
Consolidated Operations                                
As reported   $ 13,719     $ 9,151     $ 0.52     $ 0.41  
Adjusted     24,602       7,820       0.93       0.35  
                                 

 

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