SOURCE: Lithia Motors

Lithia Motors

October 23, 2013 07:29 ET

Lithia Motors Reports Adjusted EPS of $1.13 for Third Quarter 2013, Revenue Up 22%; Increases 2013 Outlook

Lithia Motors Declares $0.13 per Share Dividend for Third Quarter 2013

MEDFORD, OR--(Marketwired - Oct 23, 2013) -  Lithia Motors, Inc. (NYSE: LAD) today reported the highest quarterly adjusted net income from continuing operations in Company history, and a 27% increase in adjusted net income per share from continuing operations for the third quarter 2013 over the prior year period.

Adjusted income from continuing operations for the third quarter 2013 was $29.6 million, or $1.13 per diluted share. This compares to 2012 third quarter income from continuing operations of $23.1 million, or $0.89 per diluted share.

Unadjusted net income from continuing operations for the third quarter of 2013 was $30.9 million, or $1.18 per diluted share. As shown in the attached non-GAAP reconciliation tables, the 2013 third quarter adjusted results from continuing operations exclude a $1.3 million benefit, or $0.05 per diluted share, related to a non-core tax attribute. We did not have any adjustments to the 2012 third quarter results from continuing operations.

Third quarter 2013 revenue from continuing operations increased $190.8 million, or 22%, to $1.1 billion from $878.5 million in the third quarter of 2012.

Third Quarter-over-Quarter Operating Highlights:

  • New vehicle same store sales increased 16%
  • Used vehicle retail same store sales increased 17%
  • Service, body and parts same store sales increased 6%
  • SG&A expense as a percentage of gross profit decreased 120 basis points to 65.6%

"Our stores delivered another solid quarter of sales growth that outpaced the national rate of recovery," said Bryan DeBoer, President and CEO. "However, opportunities continue to exist for our team to improve new and used vehicle sales volumes and new vehicle gross margin levels. Our focus is on capturing the benefit of additional unit sales for future business -- both through the sale of trade-in vehicles, incremental F&I income and the annuity value of future service work on vehicles sold today."

For the first nine months of 2013, adjusted net income per diluted share from continuing operations increased 36% to $3.02 from $2.22 for the first nine months of 2012. Unadjusted, net income from continuing operations was $2.98 per diluted share for the first nine months of 2013, compared to $2.28 per diluted share for the first nine months of 2012.

Chris Holzshu, SVP and CFO, said, "Adjusted SG&A expense as a percentage of gross profit was a record low 65.6% in the quarter, and 66.8% for the first nine months of 2013. Our same store incremental throughput, or the percentage of additional gross profit we retain after selling costs, was 41% in the third quarter. Our target of 50% incremental throughput remains unchanged, and we believe it is achievable despite the shortfall in the quarter. Our stores remain focused on leveraging our cost structure as we grow organically and through acquisitions."

Corporate Development
On October 7, 2013, we acquired Stockton Nissan Kia in Stockton, California, with estimated annualized revenues of $45 million.

Bryan DeBoer, President and CEO, stated, "We are pleased to add another store to the family, bringing the total number of new locations in 2013 to five. As the improvement in new vehicle sales growth moderates, acquisitions will become an increasingly important component in our strategic plan."

Balance Sheet Update
We ended the third quarter with $16 million in cash and $165 million in available credit on our credit facilities. Additionally, approximately $160 million of our operating real estate is currently unfinanced, which we estimate could provide up to an additional $120 million in available liquidity, for total liquidity of $301 million.

Dividend Payment
Lithia announced that the Board of Directors has approved a dividend of $0.13 per share related to third quarter 2013 financial results. Lithia will pay the dividend November 22, 2013 to shareholders of record on November 8, 2013.

Increased Outlook for 2013
We project 2013 fourth quarter earnings of $0.88 to $0.90 per diluted share and full year 2013 earnings of $3.90 to $3.92 per diluted share. Both projections are based on the following annual assumptions:

  • Total revenues of $3.9 to $4.0 billion
  • New vehicle same store sales increasing 16.6%
  • New vehicle gross margin of 6.4% to 6.6%
  • Used vehicle same store sales increasing 17.2%
  • Used vehicle gross margin of 14.6% to 14.8%
  • Service body and parts same store sales increasing 6.3%
  • Service body and parts gross margin of 48.3% to 48.5%
  • Finance and insurance gross profit of $1,100 per unit
  • Tax rate of 39.5%
  • Average diluted shares outstanding of 26.2 million
  • Capital expenditures of $55 million
  • Guidance excludes the impact of future acquisitions, dispositions, and any potential non-core items

Outlook for 2014
We project 2014 first quarter earnings of $0.91 to $0.93 per diluted share and full-year 2014 earnings of $4.15 to $4.25 per diluted share. Both projections are based on the following annual assumptions:

  • Total revenues of $4.3 to $4.4 billion
  • New vehicle same store sales increasing 8.2%
  • New vehicle gross margin of 6.2% to 6.4%
  • Used vehicle same store sales increasing 7.6%
  • Used vehicle gross margin of 14.5% to 14.7%
  • Service body and parts same store sales increasing 6.0%
  • Service body and parts gross margin of 48.0% to 48.2%
  • Finance and insurance gross profit of $1,100 per unit
  • Tax rate of 39.5%
  • Average diluted shares outstanding of 26.4 million
  • Capital expenditures of $63 million
  • Guidance excludes the impact of future acquisitions, dispositions, and any potential non-core items

Third Quarter Earnings Conference Call and Updated Presentation
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 www.lithiainvestorrelations.com.

To listen live on our website or for replay, visit www.lithiainvestorrelations.com and click on webcasts.

About Lithia
Lithia Motors, Inc. is the ninth largest automotive retailer in the United States. Lithia sells 27 brands of new vehicles and all brands of used vehicles at 92 stores 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.lithiainvestorrelations.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. 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 "project," "outlook," "expect," "anticipate," "intend," "plan," "believe," "estimate," "may," "seek," "would," "should," "likely," or "will" and similar references to future periods. Examples of forward-looking statements in this press release include our outlook of earnings per share results and the assumptions that underlie them.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events that depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance, and our actual results of operations, financial condition and liquidity and development of the industries in which we operate may differ materially from those made in or suggested by the forward-looking statements in this press release. The risks and uncertainties that could cause actual results to differ materially from estimated or projected results include without limitation, future economic and financial conditions (both nationally and locally), changes in customer demand, our relationship with, and the financial and operational stability of, vehicle manufacturers and other suppliers, risks associated with our indebtedness (including available borrowing capacity, compliance with financial covenants and ability to refinance or repay indebtedness on favorable terms), government regulations, legislation and others set forth from time to time in our filings with the SEC. We urge you to carefully consider this information and not place undue reliance on forward-looking statements. 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 non-GAAP financial measures 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. Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not comparable to similarly titled measures used by other companies. As a result, we review any non-GAAP financial measures in connection with a review of the most directly comparable measures calculated in accordance with GAAP. We caution you not to place undue reliance on such non-GAAP measures, but also to consider them with the most directly comparable GAAP measures. We present cash flows from operations in the attached tables, 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, we have reconciled these measures to the most directly comparable GAAP measures in the attachments to this release. We believe the non-GAAP financial measures we present improve the transparency of our disclosures; provide a meaningful presentation of our results from core business operations, because they exclude items not related to core business operations and other non-cash items; and improve the period-to-period comparability of our results from core business operations. These presentations 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           %  
    September 30,     Increase     Increase  
    2013     2012     (Decrease)     (Decrease)  
Revenues:                              
New vehicle retail   $ 604,135     $ 491,846     $ 112,289     22.8 %
Used vehicle retail     280,734       227,157       53,577     23.6  
Used vehicle wholesale     43,396       35,006       8,390     24.0  
Finance and insurance     37,132       30,929       6,203     20.1  
Service, body and parts     97,784       89,038       8,746     9.8  
Fleet and other     6,109       4,550       1,559     34.3  
  Total revenues     1,069,290       878,526       190,764     21.7  
Cost of sales:                              
New vehicle retail     565,549       456,753       108,796     23.8  
Used vehicle retail     239,093       193,885       45,208     23.3  
Used vehicle wholesale     42,686       35,042       7,644     21.8  
Service, body and parts     50,793       46,033       4,760     10.3  
Fleet and other     5,780       4,303       1,477     34.3  
  Total cost of sales     903,901       736,016       167,885     22.8  
Gross profit     165,389       142,510       22,879     16.1  
SG&A expense     108,570       95,132       13,438     14.1  
Depreciation and amortization     5,099       4,351       748     17.2  
Income from operations     51,720       43,027       8,693     20.2  
Floor plan interest expense     (2,909 )     (3,370 )     (461 )   (13.7 )
Other interest expense     (1,933 )     (2,125 )     (192 )   (9.0 )
Other income, net     835       453       382     84.3  
Income from continuing operations before income taxes     47,713       37,985       9,728     25.6  
Income tax expense     (16,822 )     (14,893 )     1,929     13.0  
Income tax rate     35.3 %     39.2 %              
Income from continuing operations   $ 30,891     $ 23,092     $ 7,799     33.8 %
Income from discontinued operations, net of tax     127       151       (24 )   (15.9 )
Net income   $ 31,018     $ 23,243     $ 7,775     33.5 %
                               
Diluted net income per share:                              
Continuing operations   $ 1.18     $ 0.89     $ 0.29     32.6 %
Discontinued operations     -       0.01       (0.01 )   (100.0 )
Net income per share   $ 1.18     $ 0.90     $ 0.28     31.1 %
                               
Diluted shares outstanding     26,237       25,947       290     1.1 %
                               
                               
                               

Lithia Motors, Inc.
Key Performance Metrics
(Unaudited)

                   
    Three months ended           %  
    September 30,     Increase     Increase  
    2013     2012     (Decrease)     (Decrease)  
Gross margin                            
New vehicle retail   6.4 %     7.1 %     (70) bps        
Used vehicle retail   14.8       14.6       20 bps        
Used vehicle wholesale   1.6       (0.1 )     170 bps        
Finance and insurance   100.0       100.0       - bps        
Service, body and parts   48.1       48.3       (20) bps        
Fleet and Other   5.4       5.4       - bps        
Gross profit margin   15.5       16.2       (70) bps        
                             
Unit sales                            
New vehicle retail   18,109       14,841       3,268     22.0 %
Used vehicle retail   15,496       13,211       2,285     17.3  
Used vehicle wholesale   6,059       5,142       917     17.8  
Total units sold   39,664       33,194       6,470     19.5  
                             
Average selling price                            
New vehicle retail   33,361     $ 33,141     $ 220     0.7 %
Used vehicle retail   18,117       17,195       922     5.4  
Used vehicle wholesale   7,162       6,808       354     5.2  
                             
Average gross profit per unit                            
New vehicle retail   2,131     $ 2,365     $ (234 )   (9.9) %
Used vehicle retail   2,687       2,519       168     6.7  
Used vehicle wholesale   117       (7 )     124     NM  
Finance and insurance   1,105       1,103       2     0.2  
                             
Revenue mix                            
New vehicle retail   56.5 %     56.0 %              
Used vehicle retail   26.3       25.9                
Used vehicle wholesale   4.1       4.0                
Finance and insurance, net   3.5       3.5                
Service, body and parts   9.1       10.1                
Fleet and other   0.5       0.5                
             
             
             
    Adjusted     As reported  
 
 
 
 
Three months ended
September 30,
    Three months ended
September 30,
 
Other metrics   2013     2012     2013     2012  
SG&A as a % of revenue   10.2 %   10.8 %   10.2 %   10.8 %
SG&A as a % of gross profit   65.6     66.8     65.6     66.8  
Operating profit as a % of revenue   4.8     4.9     4.8     4.9  
Operating profit as a % of gross profit   31.3     30.2     31.3     30.2  
Pretax margin   4.5     4.3     4.5     4.3  
Net profit margin   2.8     2.6     2.9     2.6  
                         
NM - not meaningful                        
                         
                         
                         

Lithia Motors, Inc.
Same Store Operating Highlights
(Unaudited)

                   
    Three months ended           %  
    September 30,     Increase     Increase  
    2013   2012     (Decrease)     (Decrease)  
Revenues                            
New vehicle retail   $ 569,744   $ 492,063     $ 77,681     15.8 %
Used vehicle retail     265,734     227,311       38,423     16.9  
Used vehicle wholesale     41,371     35,084       6,287     17.9  
Finance and insurance     35,110     30,003       5,107     17.0  
Service, body and parts     93,938     88,989       4,949     5.6  
Fleet and other     5,997     4,397       1,600     36.4  
Total revenues   $ 1,011,894   $ 877,847     $ 134,047     15.3  
                             
Gross profit                            
New vehicle retail   $ 35,995   $ 35,107     $ 888     2.5 %
Used vehicle retail     39,766     33,312       6,454     19.4  
Used vehicle wholesale     642     (32 )     674     NM  
Finance and insurance     35,110     30,003       5,107     17.0  
Service, body and parts     44,281     42,034       2,247     5.3  
Fleet and other     209     96       113     117.7  
Total gross profit   $ 156,003   $ 140,520     $ 15,483     11.0  
                             
Gross margin                            
New vehicle retail     6.3 %   7.1 %     (80) bps        
Used vehicle retail     15.0     14.7       30 bps        
Used vehicle wholesale     1.6     (0.1 )     170 bps        
Finance and insurance     100.0     100.0       - bps        
Service, body and parts     47.1     47.2       (10) bps        
Fleet and Other     3.5     2.2       130 bps        
Gross profit margin     15.4     16.0       (60) bps        
                             
Unit sales                            
New vehicle retail     17,048     14,846       2,202     14.8 %
Used vehicle retail     14,690     13,223       1,467     11.1  
Used vehicle wholesale     5,783     5,148       635     12.3  
Total units sold     37,521     33,217       4,304     13.0  
                             
Average selling price                            
New vehicle retail   $ 33,420   $ 33,144     $ 276     0.8 %
Used vehicle retail     18,089     17,191       898     5.2  
Used vehicle wholesale     7,154     6,815       339     5.0  
                             
Average gross profit per unit                            
New vehicle retail   $ 2,111   $ 2,365     $ (254 )   (10.7) %
Used vehicle retail     2,707     2,519       188     7.5  
Used vehicle wholesale     111     (6 )     117     NM  
Finance and insurance     1,106     1,069       37     3.5  
                             
                             
                             

Lithia Motors, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands except per share data)

                   
    Nine months ended           %  
    September 30,     Increase     Increase  
    2013     2012     (Decrease)     (Decrease)  
Revenues:                              
New vehicle retail   $ 1,667,063     $ 1,340,731     $ 326,332     24.3 %
Used vehicle retail     778,427       625,117       153,310     24.5  
Used vehicle wholesale     120,593       103,469       17,124     16.5  
Finance and insurance     103,013       82,989       20,024     24.1  
Service, body and parts     282,686       258,038       24,648     9.6  
Fleet and other     29,093       28,770       323     1.1  
  Total revenues     2,980,875       2,439,114       541,761     22.2  
Cost of sales:                              
New vehicle retail     1,555,042       1,241,820       313,222     25.2  
Used vehicle retail     662,920       532,577       130,343     24.5  
Used vehicle wholesale     118,214       102,812       15,402     15.0  
Service, body and parts     145,223       133,224       11,999     9.0  
Fleet and other     27,816       27,741       75     0.3  
  Total cost of sales     2,509,215       2,038,174       471,041     23.1  
Gross profit     471,660       400,940       70,720     17.6  
Asset impairments     -       115       (115 )   (100.0 )
SG&A expense     318,984       276,561       42,423     15.3  
Depreciation and amortization     14,719       12,687       2,032     16.0  
Income from operations     137,957       111,577       26,380     23.6  
Floor plan interest expense     (9,394 )     (9,326 )     68     0.7  
Other interest expense     (6,235 )     (7,382 )     (1,147 )   (15.5 )
Other income, net     2,220       1,770       450     25.4  
Income from continuing operations before income taxes     124,548       96,639       27,909     28.9  
Income tax expense     (46,494 )     (36,908 )     9,586     26.0  
Income tax rate     37.3 %     38.2 %              
Income from continuing operations   $ 78,054     $ 59,731     $ 18,323     30.7 %
Income from discontinued operations, net of tax     574       799       (225 )   (28.2 )
Net income   $ 78,628     $ 60,530     $ 18,098     29.9 %
                               
Diluted net income per share:                              
Continuing operations   $ 2.98     $ 2.28     $ 0.70     30.7 %
Discontinued operations     0.03       0.03       -     -  
Net income per share   $ 3.01     $ 2.31     $ 0.70     30.3 %
                               
Diluted shares outstanding     26,159       26,203       (44 )   (0.2) %
                               
                               
                               

Lithia Motors, Inc.
Key Performance Metrics
(Unaudited)

                   
    Nine months ended           %  
    September 30,     Increase     Increase  
    2013     2012     (Decrease)     (Decrease)  
Gross margin                              
New vehicle retail     6.7 %     7.4 %     (70) bps        
Used vehicle retail     14.8       14.8       - bps        
Used vehicle wholesale     2.0       0.6       140 bps        
Finance and insurance     100.0       100.0       - bps        
Service, body and parts     48.6       48.4       20 bps        
Fleet and Other     4.4       3.6       80 bps        
Gross profit margin     15.8       16.4       (60) bps        
                               
Unit sales                              
New vehicle retail     49,853       40,953       8,900     21.7 %
Used vehicle retail     43,231       36,022       7,209     20.0  
Used vehicle wholesale     16,624       14,135       2,489     17.6  
Total units sold     109,708       91,110       18,598     20.4  
                               
Average selling price                              
New vehicle retail   $ 33,440     $ 32,738     $ 702     2.1 %
Used vehicle retail     18,006       17,354       652     3.8  
Used vehicle wholesale     7,254       7,320       (66 )   (0.9 )
                               
Average gross profit per unit                              
New vehicle retail   $ 2,247     $ 2,415     $ (168 )   (7.0 )%
Used vehicle retail     2,672       2,569       103     4.0  
Used vehicle wholesale     143       46       97     210.9  
Finance and insurance     1,107       1,078       29     2.7  
                               
Revenue mix                              
New vehicle retail     55.9 %     55.0 %              
Used vehicle retail     26.1       25.6                
Used vehicle wholesale     4.0       4.2                
Finance and insurance, net     3.5       3.4                
Service, body and parts     9.5       10.6                
Fleet and other     1.0       1.2                
                               
                               
                               
    Adjusted     As reported  
Nine months ended
September 30,
    Nine months ended
September 30,
 
Other metrics   2013     2012     2013     2012  
SG&A as a % of revenue   10.6 %   11.4 %   10.7 %   11.3 %
SG&A as a % of gross profit   66.8     69.2     67.6     69.0  
Operating profit as a % of revenue   4.8     4.5     4.6     4.6  
Operating profit as a % of gross profit   30.1     27.7     29.2     27.8  
Pretax margin   4.3     3.9     4.2     4.0  
Net profit margin   2.6     2.4     2.6     2.4  
                         
                         
                         

Lithia Motors, Inc.
Same Store Operating Highlights
(Unaudited)

                 
    Nine months ended         %  
    September 30,   Increase     Increase  
    2013   2012   (Decrease)     (Decrease)  
Revenues                          
New vehicle retail   $ 1,585,504   $ 1,336,187   $ 249,317     18.7 %
Used vehicle retail     739,487     622,080     117,407     18.9  
Used vehicle wholesale     113,417     102,892     10,525     10.2  
Finance and insurance     97,671     80,983     16,688     20.6  
Service, body and parts     273,130     256,782     16,348     6.4  
Fleet and Other     28,683     28,313     370     1.3  
Total revenues   $ 2,837,892   $ 2,427,237   $ 410,655     16.9  
                           
Gross profit                          
New vehicle retail   $ 105,498   $ 98,458   $ 7,040     7.2 %
Used vehicle retail     110,616     92,251     18,365     19.9  
Used vehicle wholesale     2,402     712     1,690     237.4  
Finance and insurance     97,671     80,983     16,688     20.6  
Service, body and parts     130,208     121,537     8,671     7.1  
Fleet and Other     882     612     270     44.1  
Total gross profit   $ 447,277   $ 394,553   $ 52,724     13.4  
                           
Gross margin                          
New vehicle retail     6.7   7.4   (70) bps        
Used vehicle retail     15.0     14.8     20 bps        
Used vehicle wholesale     2.1     0.7     140 bps        
Finance and insurance     100.0     100.0     - bps        
Service, body and parts     47.7     47.3     40 bps        
Fleet and Other     3.1     2.2     90 bps        
Gross profit margin     15.8     16.3     (50) bps        
                           
Unit sales                          
New vehicle retail     47,411     40,816     6,595     16.2 %
Used vehicle retail     41,197     35,841     5,356     14.9  
Used vehicle wholesale     15,752     14,046     1,706     12.1  
Total units sold     104,360     90,703     13,657     15.1  
                           
Average selling price                          
New vehicle retail   $ 33,442   $ 32,737   $ 705     2.2 %
Used vehicle retail     17,950     17,357     593     3.4  
Used vehicle wholesale     7,200     7,325     (125 )   (1.7 )
                           
Average gross profit per unit                          
New vehicle retail   $ 2,225   $ 2,412   $ (187 )   (7.8) %
Used vehicle retail     2,685     2,574     111     4.3  
Used vehicle wholesale     152     51     101     198.0  
Finance and insurance     1,102     1,056     46     4.4  
                           
                           
                           

Lithia Motors, Inc.
Other Highlights
(Unaudited)

     
    As of
    September 30,   December 31,   September 30,
    2013   2012   2012
Days Supply(1)            
New vehicle inventory   76   76   75
Used vehicle inventory   52   56   50
             
(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 September 30, 2013
Current ratio   Not less than 1.20 to 1   1.44 to 1
Fixed charge coverage ratio   Not less than 1.20 to 1   3.54 to 1
Leverage ratio   Not more than 5.00 to 1   1.48 to 1
Funded debt restriction   Not more than $375 million   $169.3 million
         
         
         

Lithia Motors, Inc.
Other Highlights
(Unaudited)

             
    Three months ended
September 30,
    Nine months ended
September 30,
 
    2013     2012     2013     2012  
New vehicle unit sales brand mix                        
Chrysler   29.5 %   32.7 %   30.1 %   32.3 %
Toyota   14.9     14.3     14.8     13.7  
General Motors   14.5     15.2     15.5     15.4  
Honda, Acura   8.8     6.8     7.7     6.9  
Subaru   8.0     6.8     7.8     7.1  
BMW, MINI   6.4     6.4     6.4     6.6  
Ford   5.9     5.2     5.9     5.3  
Nissan   2.8     2.9     2.8     2.9  
Volkswagen, Audi   2.8     2.4     2.3     2.1  
Hyundai   2.6     3.7     2.7     3.9  
Mercedes   2.5     2.2     2.5     2.0  
Kia   0.7     0.8     0.6     1.0  
Mazda   0.4     0.4     0.5     0.5  
Other   0.2     0.2     0.4     0.3  
             
             
             
    Three months ended
September 30,
    Nine months ended
September 30,
 
    2013     2012     2013     2012  
Revenue geographic mix                        
Texas   24.0 %   24.4 %   24.9 %   25.0 %
Oregon   22.0     20.1     21.1     20.2  
California   10.1     10.0     10.4     10.3  
Montana   9.1     9.2     9.0     9.0  
Washington   8.0     8.5     8.1     8.1  
Alaska   7.9     8.4     7.8     8.7  
Idaho   5.0     5.4     5.1     5.4  
Nevada   5.0     4.6     4.8     4.7  
Iowa   4.9     5.3     4.8     5.0  
North Dakota   2.3     2.3     2.4     2.3  
New Mexico   1.7     1.8     1.6     1.3  
             
    As of October 23, 2013        
Current store count mix   # of stores     % of total              
Chrysler   23     25.1 %            
General Motors   13     14.1              
Honda, Acura   10     10.9              
Toyota   9     9.8              
BMW, MINI   9     9.8              
Hyundai   5     5.4              
Ford   5     5.4              
Mercedes   4     4.3              
Subaru   4     4.3              
Nissan   4     4.3              
Volkswagen, Audi   3     3.3              
Other   3     3.3              
                         
                         
                         

Lithia Motors, Inc.
Consolidated Balance Sheets
(Unaudited)
(In thousands)

             
    September 30, 2013     December 31, 2012  
Cash and cash equivalents   $ 16,093     $ 42,839  
Trade receivables, net     140,086       133,149  
Inventories, net     755,698       723,326  
Deferred income taxes     1,999       3,832  
Other current assets     9,477       17,484  
Assets held for sale     11,845       12,579  
Total current assets   $ 935,198     $ 933,209  
                 
Property and equipment, net     452,367       425,086  
Goodwill     40,313       32,047  
Franchise value     66,465       62,429  
Deferred income taxes     15,826       17,123  
Other non-current assets     29,009       22,808  
Total assets   $ 1,539,178     $ 1,492,702  
                 
Floor plan notes payable   $ 19,221     $ 13,454  
Floor plan notes payable: non trade     569,027       568,130  
Current maturities of long-term debt     7,066       8,182  
Trade payables     48,645       41,589  
Accrued liabilities     94,678       81,602  
Liabilities related to assets held for sale     7,403       8,347  
Total current liabilities   $ 746,040     $ 721,304  
                 
Long-term debt     218,172       286,876  
Deferred revenue     40,774       33,589  
Other long-term liabilities     27,063       22,832  
Total liabilities   $ 1,032,049     $ 1,064,601  
                 
Class A common stock     267,004       268,801  
Class B common stock     319       343  
Additional paid-in capital     20,401       12,399  
Accumulated other comprehensive loss     (1,677 )     (2,615 )
Retained earnings     221,082       149,173  
Total liabilities & stockholders' equity   $ 1,539,178     $ 1,492,702  
                 
                 
                 

Lithia Motors, Inc.
Summarized Cash Flow from Operations
(Unaudited)
(In thousands)

       
    Nine months ended  
    September 30,  
    2013     2012  
Net income   $ 78,628     $ 60,530  
                 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:                
Asset impairments     -       115  
Depreciation and amortization     14,719       12,687  
Depreciation and amortization within discontinued operations     -       186  
Stock-based compensation     4,161       2,329  
(Gain) loss on disposal of assets     107       (775 )
(Gain) loss on disposal activities within discontinued operations     -       397  
Deferred income taxes     8,504       6,851  
Excess tax benefit from share-based payment arrangements     (5,956 )     (1,629 )
(Increase) decrease:                
  Trade receivables, net     (6,937 )     (29,160 )
  Inventories     (18,187 )     (158,186 )
  Other current assets     5,464       3,169  
  Other non-current assets     (3,804 )     (4,346 )
Increase (decrease):                
  Floor plan notes payable, net     5,721       (93,975 )
  Trade payables     4,848       5,381  
  Accrued liabilities     13,099       10,164  
  Other long-term liabilities and deferred revenue     12,307       9,927  
Net cash provided by (used in) operating activities   $ 112,674     $ (176,335 )
                 
                 
                 

Lithia Motors, Inc.
Reconciliation of Non-GAAP Cash Flow from Operations
(Unaudited)
(In thousands)

       
    Nine months ended  
    September 30,  
Net cash provided by (used in) operating activities   2013   2012  
As reported   $ 112,674   $ (176,335 )
  Floor plan notes payable, non-trade, net     2,685     272,760  
Adjusted   $ 115,359   $ 96,425  
               
               
               

Lithia Motors, Inc.
Reconciliation of Certain Non-GAAP Financial Measures
(Unaudited)
(In thousands, except for per share data)

       
    Three months ended September 30, 2013  
    As reported     Tax attribute     Adjusted  
Income from continuing operations before income taxes   $ 47,713     $ -     $ 47,713  
Income tax expense     (16,822 )     (1,284 )     (18,106 )
Net income from continuing operations   $ 30,891     $ (1,284 )   $ 29,607  
                         
Diluted earnings per share from continuing operations   $ 1.18     $ (0.05 )   $ 1.13  
Diluted share count     26,237                  
                         
                         
                         

Lithia Motors, Inc.
Reconciliation of Certain Non-GAAP Financial Measures
(Unaudited)
(In thousands, except for per share data)

       
    Nine months ended September 30, 2013  
    As reported     Reserve adjustment     Tax attribute     Adjusted  
Selling, general and administrative   $ 318,984     $ (3,813 )   $ -     $ 315,171  
                                 
Income from operations   $ 137,957     $ 3,813     $ -     $ 141,770  
                                 
Income from continuing operations before income taxes   $ 124,548     $ 3,813     $ -     $ 128,361  
Income tax expense     (46,494 )     (1,484 )     (1,512 )     (49,490 )
Net income from continuing operations   $ 78,054     $ 2,329     $ (1,512 )   $ 78,871  
                                 
Diluted earnings per share from continuing operations   $ 2.98     $ 0.09     $ (0.05 )   $ 3.02  
Diluted share count     26,159                          
       
       
       
    Nine months ended September 30, 2012  
    As reported     Asset impairment and disposal gain     Equity investment     Tax attribute     Adjusted  
Asset impairments   $ 115     $ (115 )   $ -     $ -     $ -  
Selling, general and administrative     276,561       739       -       -       277,300  
                                         
Income from operations     111,577       (624 )     -       -       110,953  
                                         
Other income, net     1,770       -       (244 )     -       1,526  
                                         
Income from continuing operations before income taxes   $ 96,639     $ (624 )   $ (244 )   $ -     $ 95,771  
Income tax expense     (36,908 )     244       95       (1,066 )     (37,635 )
Net income from continuing operations   $ 59,731     $ (380 )   $ (149 )   $ (1,066 )   $ 58,136  
                                         
Diluted earnings per share from continuing operations   $ 2.28     $ (0.01 )   $ (0.01 )   $ (0.04 )   $ 2.22  
Diluted share count     26,203                                  

 

Contact Information

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