SOURCE: Lithia Motors

Lithia Motors

July 25, 2012 07:30 ET

Lithia Motors Reports Adjusted EPS of $0.76 for Second Quarter 2012, Revenue Up 26%; Increases 2012 Outlook

Lithia Motors Declares $0.10 per Share Dividend for Second Quarter 2012

MEDFORD, OR--(Marketwire - Jul 25, 2012) - Lithia Motors, Inc. (NYSE: LAD) today reported 2012 second quarter adjusted income from continuing operations of $19.9 million, or $0.76 per diluted share. This compares to a 2011 second quarter adjusted income from continuing operations of $14.4 million, or $0.54 per diluted share. Unadjusted net income from continuing operations for the second quarter of 2012 was $20.5 million or $0.78 per diluted share, compared to $14.7 million or $0.55 per diluted share for 2011.

As shown in the attached non-GAAP reconciliation table, the 2012 second quarter adjusted income from continuing operations is reduced to exclude a benefit of $0.02 per share for a non-core tax attribute. The 2011 second quarter adjusted results from continuing operations exclude a benefit of $0.01 per share for a tax item.

Second quarter 2012 revenue from continuing operations increased $174.6 million, or 26% to $847.1 million, compared to $672.5 million in the second quarter of 2011.

Second Quarter Year-over-Year Operating Highlights:

  • New vehicle same store sales increased 34%
  • Used vehicle retail same store sales increased 20%
  • Service, body and parts same store sales increased 7%
  • SG&A expense as a percentage of gross profit was 69.6%, a reduction of 160 basis points
  • Earnings per share increased 41%; $0.76 is the highest second quarter EPS in company history

"We remain focused on improving our operations and increasing our market share," said Bryan DeBoer, President and CEO. "I'm proud of the results our team delivered in the second quarter. With that said, we still have opportunities in all facets of our business and our leaders continue to identify areas where performance can improve. Additionally, in many of our western markets, the new vehicle sales recovery has lagged national levels. This factor will serve as a future catalyst for growth."

For the first six months of 2012, revenue from continuing operations increased 28% to $1.6 billion as compared to $1.3 billion in 2011. Same store new vehicle sales increased 30%, used vehicle retail same store sales increased 19% and service, body and parts same store sales increased 6%. For the first six months of 2012 adjusted net income from continuing operations was $1.36 per share as compared to $0.87 per share in 2011. Unadjusted, for the first six months of 2012, net income from continuing operations was $1.42 per diluted share, compared to $0.86 per diluted share for 2011.

Corporate Development
On April 30, 2012, Lithia purchased a Chevrolet Cadillac store in Bellingham, Washington with estimated annual revenues of $40 million. On June 12, 2012, Lithia purchased GMC and Buick franchises in Fairbanks, Alaska, to combine with our Chevrolet store in the community. On June 25, 2012, Lithia was awarded Dodge and Ram franchises and opened a store in Las Cruces, New Mexico. Estimated annual revenues from the Fairbanks and Las Cruces franchises are $35 million.

Commenting on the acquisition activity, DeBoer said, "In the second quarter, we were able to identify several opportunities that fit our core strategy of seeking exclusive franchises in our markets. I am excited to welcome our new employees to the family."

Share Repurchases
During the second quarter, Lithia repurchased 741,092 shares of its Class A common stock at a weighted average price of $24.23 per share. For the first six months of 2012, Lithia repurchased 823,092 shares of its Class A common stock at a weighted average price of $24.17 per share.

The Board of Directors has increased the existing authorization by 1 million shares, bringing the total remaining repurchase authorization to 1,879,853 shares.

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."

Balance Sheet Update
Lithia ended the second quarter with $16 million in cash and $76 million in available credit on our credit facilities. In total, this represents approximately $92 million in available liquidity.

During the second quarter, Lithia strategically retired approximately $23 million in mortgages, and refinanced approximately $70 million of mortgages to extend the maturity dates. As a result, Lithia has no mortgage maturities until 2015, when approximately $13 million matures.

Dividend Payment
Lithia announced that the Board of Directors has approved a dividend of $0.10 per share for the second quarter 2012. Lithia will pay the dividend August 24, 2012 to shareholders of record on August 10, 2012.

Updated Outlook for 2012
Lithia projects its 2012 third quarter earnings within a range of $0.74 to $0.76 per diluted share. Full-year 2012 earnings are projected within a range of $2.69 to $2.75 per diluted share. Both projections are based on the following annual assumptions:

  • Total revenues in range of $3.2 to $3.3 billion
  • New vehicle same store sales increasing 22.0%
  • New vehicle gross margin ranging from 7.3% to 7.6%
  • Used vehicle same store sales increasing 16.0%
  • Used vehicle gross margin ranging from 14.7% to 14.9%
  • Service body and parts same store sales increasing 4.5%
  • Service body and parts gross margin ranging from 48.3% to 48.5%
  • Finance and insurance gross profit of $1,050 per unit
  • Tax rate of 40%
  • Average diluted shares outstanding of 26.1 million 
  • Capital expenditures of $48 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 first 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 on July 25, 2012 through August 8, 2012 by calling 877-660-6853 (Conference ID: 397183, 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 85 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.

Sites
www.lithia.com
www.lithiacareers.com
www.assuredservice.com

Lithia Motors on Facebook
http://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 2012 results, the new vehicle sales recovery in western markets and incremental opportunities to improve our operational 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, which are made as of the date of this release.

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 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.

   
Lithia Motors, Inc.  
Consolidated Statements of Operations (Unaudited)  
(In thousands except per share data)  
   
    Three Months Ended           %  
    June 30,     Increase     Increase  
    2012     2011     (Decrease)     (Decrease)  
Revenues:                              
New vehicle retail   $ 470,424     $ 347,727     $ 122,697     35.3 %
Used vehicle retail     212,767       176,591       36,176     20.5  
Used vehicle wholesale     36,083       29,153       6,930     23.8  
Finance and insurance     27,870       20,886       6,984     33.4  
Service, body and parts     88,585       80,937       7,648     9.4  
Fleet and other     11,394       17,193       (5,799 )   (33.7 )
  Total revenues     847,123       672,487       174,636     26.0  
Cost of sales:                              
New vehicle retail     435,785       319,726       116,059     36.3  
Used vehicle retail     181,023       149,590       31,433     21.0  
Used vehicle wholesale     35,779       28,885       6,894     23.9  
Service, body and parts     45,343       41,242       4,101     9.9  
Fleet and other     11,004       15,907       (4,903 )   (30.8 )
  Total cost of sales     708,934       555,350       153,584     27.7  
Gross profit     138,189       117,137       21,052     18.0  
Other asset impairments     -       490       (490 )   NM  
SG&A expense     96,167       82,768       13,399     16.2  
Depreciation and amortization     4,261       4,217       44     1.0  
Income from operations     37,761       29,662       8,099     27.3  
Floor plan interest expense     (3,119 )     (3,359 )     (240 )   (7.1 )
Other interest expense     (2,549 )     (3,011 )     (462 )   (15.3 )
Other income, net     820       171       649     379.5  
Income from continuing operations before income taxes     32,913       23,463       9,450     40.3  
Income tax expense     (12,422 )     (8,777 )     3,645     41.5  
Income tax rate     37.7 %     37.4 %              
Income from continuing operations   $ 20,491     $ 14,686     $ 5,805     39.5 %
Income from discontinued operations     -       140       (140 )   NM  
Net income   $ 20,491     $ 14,826     $ 5,665     38.2 %
                               
Diluted net income per share:                              
Continuing operations   $ 0.78     $ 0.55     $ 0.23     41.8 %
Discontinued operations     -       -       -     -  
Net income per share   $ 0.78     $ 0.55     $ 0.23     41.8 %
                               
Diluted shares outstanding     26,185       26,860       (675 )   (2.5) %
                               
NM - not meaningful
 
 
 
   
Lithia Motors, Inc.  
Key Performance Metrics (Unaudited)  
   
    Three Months Ended           %  
    June 30,     Increase     Increase  
    2012     2011     (Decrease)     (Decrease)  
Gross margin                              
New vehicle retail     7.4 %     8.1 %     (70) bps        
Used vehicle retail     14.9       15.3       (40) bps        
Used vehicle wholesale     0.8       0.9       (10) bps        
Finance and insurance     100.0       100.0       - bps        
Service, body and parts     48.8       49.0       (20) bps        
Fleet and Other     3.4       7.5       (410) bps        
Gross profit margin     16.3       17.4       (110) bps        
                               
Unit sales                              
New vehicle retail     14,406       10,725       3,681     34.3 %
Used vehicle retail     11,923       10,085       1,838     18.2  
Used vehicle wholesale     4,621       3,767       854     22.7  
Total units sold     30,950       24,577       6,373     25.9  
                               
Average selling price                              
New vehicle retail   $ 32,655     $ 32,422     $ 233     0.7 %
Used vehicle retail     17,845       17,510       335     1.9  
Used vehicle wholesale     7,808       7,739       69     0.9  
                               
Average gross profit per unit                              
New vehicle retail   $ 2,404     $ 2,611     $ (207 )   (7.9) %
Used vehicle retail     2,662       2,677       (15 )   (0.6 )
Used vehicle wholesale     66       71       (5 )   (7.0 )
Finance and insurance     1,059       1,004       55     5.5  
                               
Revenue mix                              
New vehicle retail     55.5 %     51.7 %              
Used vehicle retail     25.1       26.3                
Used vehicle wholesale     4.3       4.3                
Finance and insurance, net     3.3       3.1                
Service, body and parts     10.5       12.0                
Fleet and other     1.3       2.6                
                               
    Adjusted     As reported  
    Three Months Ended
June 30,
    Three Months Ended
June 30,
 
Other metrics   2012     2011     2012     2011  
SG&A as a % of revenue     11.4 %     12.4 %     11.4 %   12.3 %
SG&A as a % of gross profit     69.6       71.2       69.6     70.7  
Operating profit as a % of revenue     4.5       4.4       4.5     4.4  
Operating profit as a % of gross profit     27.3       25.2       27.3     25.3  
Pretax margin     3.9       3.5       3.9     3.5  
Net profit margin     2.4       2.1       2.4     2.2  
                               
                               
                               
   
Lithia Motors, Inc.  
Same Store Operating Highlights (Unaudited)  
   
    Three Months Ended           %  
    June 30,     Increase     Increase  
    2012     2011     (Decrease)     (Decrease)  
Revenues                              
New vehicle retail   $ 454,445     $ 339,427     $ 115,018     33.9 %
Used vehicle retail     205,794       171,768       34,026     19.8  
Used vehicle wholesale     34,828       28,209       6,619     23.5  
Finance and insurance     27,086       20,163       6,923     34.3  
Service, body and parts     83,960       78,598       5,362     6.8  
Fleet and Other     9,613       17,043       (7,430 )   (43.6 )
Total revenues   $ 815,726     $ 655,208     $ 160,518     24.5  
                               
Gross profit                              
New vehicle retail   $ 33,375     $ 27,328     $ 6,047     22.1 %
Used vehicle retail     30,779       26,319       4,460     16.9  
Used vehicle wholesale     291       257       34     13.2  
Finance and insurance     27,086       20,163       6,923     34.3  
Service, body and parts     40,089       37,779       2,310     6.1  
Fleet and Other     195       813       (618 )   (76.0 )
Total gross profit   $ 131,815     $ 112,659     $ 19,156     17.0  
                               
Unit sales                              
New vehicle retail     13,939       10,486       3,453     32.9 %
Used vehicle retail     11,546       9,847       1,699     17.3  
Used vehicle wholesale     4,497       3,683       814     22.1  
Total units sold     29,982       24,016       5,966     24.8  
                               
Average selling price                              
New vehicle retail   $ 32,602     $ 32,370     $ 232     0.7 %
Used vehicle retail     17,824       17,444       380     2.2  
Used vehicle wholesale     7,745       7,659       86     1.1  
                               
Average gross profit per unit                              
New vehicle retail   $ 2,394     $ 2,606     $ (212 )   (8.1) %
Used vehicle retail     2,666       2,673       (7 )   (0.3 )
Used vehicle wholesale     65       70       (5 )   (7.1 )
Finance and insurance     1,063       992       71     7.2  
                               
                               
                               
   
Lithia Motors, Inc.  
Consolidated Statements of Operations (Unaudited)  
(In thousands except per share data)  
   
    Six Months Ended           %  
    June 30,     Increase     Increase  
    2012     2011     (Decrease)     (Decrease)  
Revenues:                              
New vehicle retail   $ 874,712     $ 648,367     $ 226,345     34.9 %
Used vehicle retail     408,188       333,069       75,119     22.6  
Used vehicle wholesale     70,419       58,690       11,729     20.0  
Finance and insurance     53,290       40,185       13,105     32.6  
Service, body and parts     175,033       154,698       20,335     13.1  
Fleet and other     24,375       20,335       4,040     19.9  
  Total revenues     1,606,017       1,255,344       350,673     27.9  
Cost of sales:                              
New vehicle retail     808,947       597,760       211,187     35.3  
Used vehicle retail     347,530       283,084       64,446     22.8  
Used vehicle wholesale     69,697       58,023       11,674     20.1  
Service, body and parts     90,198       79,242       10,956     13.8  
Fleet and other     23,585       18,502       5,083     27.5  
  Total cost of sales     1,339,957       1,036,611       303,346     29.3  
Gross profit     266,060       218,733       47,327     21.6  
Other asset impairments     115       872       (757 )   (86.8 )
SG&A expense     187,757       159,902       27,855     17.4  
Depreciation and amortization     8,460       8,309       151     1.8  
Income from operations     69,728       49,650       20,078     40.4  
Floor plan interest expense     (6,069 )     (5,821 )     248     4.3  
Other interest expense     (5,296 )     (6,303 )     (1,007 )   (16.0 )
Other income, net     1,319       248       1,071     431.9  
Income from continuing operations before income taxes     59,682       37,774       21,908     (58.0 )
Income tax expense     (22,395 )     (14,700 )     7,695     52.3  
Income tax rate     37.5 %     38.9 %              
Income from continuing operations   $ 37,287     $ 23,074     $ 14,213     (61.6 )%
Income from discontinued operations     -       457       (457 )   NM  
Net income   $ 37,287     $ 23,531     $ 13,756     58.5 %
                               
Diluted net income per share:                              
Continuing operations   $ 1.42     $ 0.86     $ 0.56     (65.1) %
Discontinued operations     -       0.02       (0.02 )   NM  
Net income per share   $ 1.42     $ 0.88     $ 0.54     (61.4) %
                               
Diluted shares outstanding     26,331       26,779       (448 )   (1.7) %
                               
NM - not meaningful               
                               
                               
                               
   
Lithia Motors, Inc.  
Key Performance Metrics (Unaudited)  
   
    Six Months Ended           %  
    June 30,     Increase     Increase  
    2012     2011     (Decrease)     (Decrease)  
Gross margin                              
New vehicle retail     7.5 %     7.8 %     (30) bps        
Used vehicle retail     14.9       15.0       (10) bps        
Used vehicle wholesale     1.0       1.1       (10) bps        
Finance and insurance     100.0       100.0       - bps        
Service, body and parts     48.5       48.8       (30) bps        
Fleet and Other     3.2       9.0       (580) bps        
Gross profit margin     16.6       17.4       (80) bps        
                               
Unit sales                              
New vehicle retail     26,875       20,250       6,625     32.7 %
Used vehicle retail     23,431       19,591       3,840     19.6  
Used vehicle wholesale     9,214       7,509       1,705     22.7  
Total units sold     59,520       47,350       12,170     25.7  
                               
Average selling price                              
New vehicle retail   $ 32,547     $ 32,018     $ 529     1.7 %
Used vehicle retail     17,421       17,001       420     2.5  
Used vehicle wholesale     7,643       7,816       (173 )   (2.2 )
                               
Average gross profit per unit                              
New vehicle retail   $ 2,447     $ 2,499     $ (52 )   (2.1) %
Used vehicle retail     2,589       2,551       38     1.5  
Used vehicle wholesale     78       89       (11 )   (12.4 )
Finance and insurance     1,059       1,009       50     5.0  
                               
Revenue mix                              
New vehicle retail     54.5 %     51.6 %              
Used vehicle retail     25.4       26.5                
Used vehicle wholesale     4.4       4.8                
Finance and insurance, net     3.3       3.2                
Service, body and parts     10.9       12.3                
Fleet and other     1.5       1.6                
                               
    Adjusted     As reported  
    Six Months Ended
June 30,
    Six Months Ended
June 30,
 
Other metrics   2012     2011     2012     2011  
SG&A as a % of revenue     11.7 %     12.8 %     11.7 %   12.7 %
SG&A as a % of gross profit     70.8       73.4       70.6     73.1  
Operating profit as a % of revenue     4.3       4.0       4.3     4.0  
Operating profit as a % of gross profit     26.0       22.8       26.2     22.7  
Pretax margin     3.7       3.0       3.7     3.0  
Net profit margin     2.2       1.9       2.3     1.8  
                               
                               
                               
   
Lithia Motors, Inc.  
Same Store Operating Highlights (Unaudited)  
   
    Six Months Ended           %  
    June 30,     Increase     Increase  
    2012     2011     (Decrease)     (Decrease)  
Revenues                              
New vehicle retail   $ 825,948     $ 636,106     $ 189,842     29.8 %
Used vehicle retail     388,771       325,676       63,095     19.4  
Used vehicle wholesale     66,789       56,944       9,845     17.3  
Finance and insurance     50,825       38,627       12,198     31.6  
Service, body and parts     159,943       151,122       8,821     5.8  
Fleet and Other     19,376       19,953       (577 )   (2.9 )
Total revenues   $ 1,511,652     $ 1,228,428     $ 283,224     23.1  
                               
Gross profit                              
New vehicle retail   $ 61,748     $ 49,520     $ 12,228     24.7 %
Used vehicle retail     58,191       48,629       9,562     19.7  
Used vehicle wholesale     670       649       21     3.2  
Finance and insurance     50,825       38,627       12,198     31.6  
Service, body and parts     75,678       71,915       3,763     5.2  
Fleet and Other     404       967       (563 )   (58.2 )
Total gross profit   $ 247,516     $ 210,307     $ 37,209     17.7  
                               
Unit sales                              
New vehicle retail     25,570       19,877       5,693     28.6 %
Used vehicle retail     22,403       19,197       3,206     16.7  
Used vehicle wholesale     8,809       7,354       1,455     19.8  
Total units sold     56,782       46,428       10,354     22.3  
                               
Average selling price                              
New vehicle retail   $ 32,301     $ 32,002     $ 299     0.9 %
Used vehicle retail     17,354       16,965       389     2.3  
Used vehicle wholesale     7,582       7,743       (161 )   (2.1 )
                               
Average gross profit per unit                              
New vehicle retail   $ 2,415     $ 2,491     $ (76 )   (3.1) %
Used vehicle retail     2,597       2,533       64     2.5  
Used vehicle wholesale     76       88       (12 )   (13.6 )
Finance and insurance     1,059       989       70     7.1  
                               
                               
                               
 
Lithia Motors, Inc.
Other Highlights (Unaudited)
 
    As of
    June 30,   December 31,   June 30,
    2012   2011   2011
Days Supply(1)            
New vehicle inventory   74   62   68
Used vehicle inventory   52   52   56
             
(1) Days supply calculated based on current inventory levels, excluding in-transit vehicles, and a 30-day historical cost of sales level.
             
             
Financial covenants        
    Requirement   As of June 30, 2012
Current ratio   Not less than 1.20 to 1   1.30 to 1
Fixed charge coverage ratio   Not less than 1.20 to 1   1.49 to 1
Leverage ratio   Not more than 5.00 to 1   2.19 to 1
Funded debt restriction   Not more than $375 million   $180.5 million
         
         
         
   
Lithia Motors, Inc.  
Revenue Mix (Unaudited)  
   
    Three months ended
June 30,
    Six months ended
June 30,
 
    2012     2011     2012     2011  
New vehicle unit sales brand mix                        
Chrysler   32.8 %   30.5 %   32.5 %   29.7 %
General Motors   15.8     16.9     15.1     16.7  
Toyota   13.4     11.4     13.0     12.9  
Subaru   6.7     4.7     7.0     5.3  
Honda, Acura   7.1     7.7     6.8     7.9  
BMW, Mini   6.3     7.3     6.5     6.1  
Ford   4.9     6.0     5.2     5.9  
Hyundai   4.6     5.5     4.7     5.8  
Nissan   2.5     3.3     2.8     3.8  
Mercedes   2.4     2.1     2.5     1.5  
Volkswagen, Audi   1.8     2.4     1.9     2.3  
Kia   0.8     1.2     1.0     1.2  
Mazda   0.5     0.6     0.6     0.5  
Other   0.4     0.4     0.4     0.4  
   
Three months ended
June 30,
   
Six months ended
June 30,
 
    2012     2011     2012     2011  
Revenue geographic mix                        
Texas   25.1 %   24.4 %   24.8 %   24.7 %
Oregon   20.1     20.9     20.8     18.9  
California   10.2     9.6     10.3     10.0  
Washington   9.6     9.2     9.4     9.9  
Montana   8.8     8.1     8.6     8.2  
Alaska   8.5     9.6     8.5     9.3  
Idaho   5.1     5.5     5.2     6.0  
Nevada   4.4     4.3     4.6     4.6  
Iowa   4.7     5.3     4.6     5.3  
North Dakota   2.4     2.1     2.2     2.1  
New Mexico   1.1     1.0     1.0     1.0  
   
As of July 27, 2012
             
Current store count mix   # of stores     % of total              
Chrysler   23     27.1 %            
General Motors   13     15.3              
Honda, Acura   9     10.6              
Toyota   8     9.4              
BMW, MINI   7     8.2              
Hyundai   6     7.1              
Ford   5     5.9              
Nissan   3     3.5              
Mercedes   3     3.5              
Subaru   3     3.5              
Kia   2     2.4              
Other   2     2.4              
Volkswagen, Audi   1     1.1              
                         
                         
                         
   
Lithia Motors, Inc.  
Consolidated Balance Sheets (Unaudited)  
(In thousands except per share data)  
   
    June 30, 2012     December 31, 2011  
Cash and cash equivalents   $ 16,247     $ 20,851  
Trade receivables, net     117,747       99,407  
Inventories, net     617,568       506,484  
Deferred income taxes     3,976       4,730  
Other current assets     10,588       16,719  
Total current assets   $ 766,126     $ 648,191  
                 
Property and equipment, net     387,652       373,779  
Goodwill     22,608       18,958  
Franchise value     59,319       59,095  
Deferred income taxes     29,849       29,270  
Other non-current assets     18,021       16,840  
Total assets   $ 1,283,575       1,146,133  
                 
Floor plan notes payable   $ 13,743     $ 114,760  
Floor plan notes payable: non trade     482,390       229,180  
Current maturities of long-term debt     7,718       8,221  
Trade payables     40,196       31,712  
Accrued liabilities     79,758       72,711  
Total current liabilities   $ 623,805       456,584  
                 
Long-term debt     224,746       278,653  
Deferred revenue     30,110       25,146  
Other long-term liabilities     19,921       18,629  
Total liabilities   $ 898,582     $ 779,012  
                 
Class A common stock     263,559       279,366  
Class B common stock     437       468  
Additional paid-in capital     10,949       10,918  
Accumulated other comprehensive loss     (3,718 )     (4,508 )
Retained earnings     113,766       80,877  
Total liabilities & stockholders' equity   $ 1,283,575     $ 1,146,133  
                 
                 
                 
   
Lithia Motors, Inc.  
Summarized Cash Flow from Operations (Unaudited)  
(In thousands)  
   
    Six Months Ended  
    June 30,  
    2012     2011  
Net income   $ 37,287     $ 23,531  
                 
Adjustments to reconcile net income to net cash used in operating activities:                
Asset impairments     115       872  
Depreciation and amortization     8,460       8,485  
Depreciation and amortization within discontinued operations     -       21  
Stock-based compensation     1,512       1,034  
Gain on disposal of assets     (983 )     (190 )
Loss from disposal activities within discontinued operations     -       53  
Deferred income taxes     302       2,060  
Excess tax benefit from share-based payment arrangements     (1,026 )     (278 )
(Increase) decrease:                
  Trade receivables, net     (18,305 )     (6,579 )
  Inventories     (109,592 )     (60,498 )
  Other current assets     4,680       (461 )
  Other non-current assets     (1,847 )     (884 )
Increase (decrease):                
  Floor plan notes payable     (94,305 )     1,744  
  Trade payables     7,289       4,679  
  Accrued liabilities     7,671       7,757  
  Other long-term liabilities and deferred revenue     6,700       1,418  
Net cash used in operating activities   $ (152,042 )   $ (17,236 )
                 
                 
                 
   
Lithia Motors, Inc.  
Reconciliation of Non-GAAP Cash Flow from Operations (Unaudited)  
(In thousands)  
   
    Six Months Ended  
    June 30,  
Net cash provided by (used in) operating activities   2012     2011  
As reported   $ (152,042 )   $ (17,236 )
  Floor plan notes payable, non-trade     251,844       65,789  
Adjusted   $ 99,802     $ 48,553  
                 
                 
                 
   
Lithia Motors, Inc.  
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)  
(In thousands, except for per share data)  
   
    Three Months Ended June 30, 2012  
    As reported     Tax attribute     Adjusted  
Income from continuing operations before income taxes   $ 32,913     $ -     $ 32,913  
Income tax expense     (12,422 )     (578 )     (13,000 )
Net income from continuing operations   $ 20,491     $ (578 )   $ 19,913  
                         
Diluted earnings per share from continuing operations   $ 0.78     $ (0.02 )   $ 0.76  
Diluted share count     26,185                  
                         
                         
    Three Months ended June 30, 2011  
    As reported     Asset Impairment and disposal gain     Reversal of stock based comp tax shortfall     Adjusted  
Asset impairments   $ 490     $ (490 )   $ -     $ -  
Selling, general and administrative     82,768       580       -       83,348  
                                 
Income from operations     29,662       (90 )     -       29,572  
                                 
Income from continuing operations before income taxes   $ 23,463     $ (90 )   $ -     $ 23,373  
Income tax expense     (8,777 )     37       (186 )     (8,926 )
Net income from continuing operations   $ 14,686     $ (53 )   $ (186 )   $ 14,447  
                                 
Diluted earnings per share from continuing operations   $ 0.55     $ -     $ (0.01 )   $ 0.54  
Diluted share count     26,860                          
                                 
                                 
                                 
   
Lithia Motors, Inc.  
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)  
(In thousands, except for per share data)  
   
    Six Months Ended June 30, 2012  
    As reported     Asset impairment and disposal gain     Equity investment     Tax attribute     Adjusted  
Asset impairments   $ 115     $ (115 )   $ -     $ -     $ -  
Selling, general and administrative     187,757       739       -       -       188,496  
                                         
Income from operations     69,728       (624 )     -       -       69,104  
                                         
Other income, net     1,319       -       (244 )     -       1,075  
                                         
Income from continuing operations before income taxes   $ 59,682     $ (624 )   $ (244 )   $ -     $ 58,814  
Income tax expense     (22,395 )     244       95       (1,072 )     (23,128 )
Net income from continuing operations   $ 37,287     $ (380 )   $ (149 )   $ (1,072 )   $ 35,686  
                                         
Diluted earnings per share from continuing operations   $ 1.42     $ (0.01 )   $ (0.01 )   $ (0.04 )   $ 1.36  
Diluted share count     26,331                                  
                                         
                                         
    Six Months Ended June 30, 2011  
    As reported     Asset impairment and disposal gain     Adjusted  
Asset impairments   $ 872     $ (872 )   $ -  
Selling, general and administrative     159,902       580       160,482  
                         
Income from operations     49,650       292       49,942  
                         
Income from continuing operations before income taxes   $ 37,774     $ 292     $ 38,066  
Income tax expense     (14,700 )     (116 )     (14,816 )
Net income from continuing operations   $ 23,074     $ 176     $ 23,250  
                         
Diluted earnings per share from continuing operations   $ 0.86     $ 0.01     $ 0.87  
Diluted share count     26,779                  
                         
                         
                         

Contact Information

  • Contact:
    John North
    VP Finance and Controller
    (541) 618-5748