Lithia Motors Reports Record Adjusted EPS of $0.74 for Fourth Quarter and $2.96 for Full Year 2012

Marketwired

MEDFORD, OR--(Marketwire - Feb 20, 2013) - Lithia Motors, Inc. (NYSE: LAD) today reported the highest fourth quarter adjusted net income in Company history, and increased earnings 52% for the fourth quarter 2012 over the prior year period.

2012 fourth quarter adjusted income from continuing operations was $19.3 million, or $0.74 per diluted share. This compares to a 2011 fourth quarter adjusted income from continuing operations of $12.7 million, or $0.48 per diluted share.

Unadjusted net income from continuing operations for the fourth quarter of 2012 was $19.7 million or $0.76 per diluted share, compared to $16.0 million or $0.61 per diluted share for 2011. As shown in the attached non-GAAP reconciliation tables, the 2012 fourth 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 fourth quarter adjusted results from continuing operations exclude a benefit of $0.15 per share gain on the sale of real estate offset by a non-core reserve adjustment charge of $0.02 per share.

Fourth Quarter-over-Quarter Operating Highlights:

  • New vehicle same store sales increased 31%
  • Used vehicle retail same store sales increased 20%
  • Service, body and parts same store sales increased 8%
  • SG&A expense as a percentage of gross profit was 70%

Fourth quarter 2012 revenue from continuing operations increased $182.0 million, or 26%, to $877.4 million from $695.4 million in the fourth quarter of 2011.

Full Year-over-Year Operating Highlights:

  • New vehicle same store sales increased 30%
  • Used vehicle retail same store sales increased 21%
  • Service, body and parts same store sales increased 7%
  • Adjusted SG&A expense as a percentage of gross profit was 69%

For the full year of 2012, revenue from continuing operations increased 26% to $3.3 billion from $2.6 billion in 2011.

"We grew total same store revenue 23% in 2012," said Bryan DeBoer, President and CEO. "This is on top of total same store revenue increases of 22% in 2011 and 18% in 2010. Most automotive analysts believe a multi-year recovery in auto sales remains ahead of us, and many of the western markets we do business in are still significantly below peak registration levels experienced in 2005 and 2006. Our store leaders continue to challenge their teams and remain driven to improve store performance in 2013 and beyond."

For the full year of 2012, adjusted net income from continuing operations increased 52% to $2.96 per diluted share compared to $1.95 per diluted share for the full year 2011. Unadjusted, for the full year of 2012, net income from continuing operations was $3.03 per diluted share, compared to $2.07 per diluted share for the full year of 2011.

Chris Holzshu, SVP and CFO, said, "We finished 2012 with full year adjusted SG&A expense as a percentage of gross profit of 69.4%. This is a record result and finishing below 70% is a milestone we have been pursuing for the past two years. For the full year, incremental throughput, or the percentage of additional same store gross profit dollars that we retain after deducting selling costs, was 51%. Our stores remain focused on maintaining incremental throughput above 50%, which will reduce our SG&A expense as a percentage of gross profit in 2013. We believe SG&A expense as a percentage of gross profit can be in the high 60 percent range with improved sales."

Corporate Development
For the full year 2012, we purchased four stores and were granted two new stores, contributing estimated annualized revenues of $260 million.

Bryan DeBoer, President and CEO, stated, "We continue to emphasize acquisitions as one of the long term drivers of growth for Lithia. We remain focused on increasing our store count through acquisitions in 2013, and believe that compelling opportunities currently exist in the marketplace."

Balance Sheet Update
We ended the fourth quarter with $43 million in cash and $120 million in available credit on our credit facilities. Additionally, approximately $102 million of operating real estate is currently unfinanced, which could provide up to an additional $77 million in available liquidity, for total liquidity of $240 million.

During the fourth quarter, we increased the capacity on our syndicated credit facility by $150 million to $800 million in total availability. The facility allocates $575 million to new vehicle floorplan financing, $80 million to used vehicle floorplan financing, and $145 million to our revolving line of credit, and matures in April 2017.

Dividend Payment
As previously announced, we declared and paid a dividend of $0.10 per share in December 2012 for the fourth quarter of 2012. The dividend was in lieu of the dividend typically declared and paid each year in March.

Increased Outlook for 2013
We project 2013 first quarter earnings of $0.69 to $0.71 per diluted share and full-year 2013 earnings of $3.25 to $3.35 per diluted share. Both projections are based on the following annual assumptions:

  • Total revenues of $3.7 to $3.8 billion
  • New vehicle same store sales increasing 11.5%
  • New vehicle gross margin of 7.1% to 7.3%
  • Used vehicle same store sales increasing 9.0%
  • Used vehicle gross margin of 14.3% to 14.5%
  • Service body and parts same store sales increasing 5.0%
  • 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 26.5 million
  • Capital expenditures of $55 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 10:00 a.m. ET 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 webcasts. A playback of the conference call will be available on February 22, 2013 through March 6, 2013 by calling 877-660-6853 (Conference ID: 401506).

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 87 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.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 "expects," "anticipates," "intends," "plans," "believes," "estimates," "may," "seeks," "would," "should," "likely," or "will" and similar references to future periods. Examples of forward-looking statements in this press release include, among others, (1) statements regarding our belief about whether there will be a multi-year recovery in auto sales and (2) statements regarding our future SG&A expense as a percentage of gross profit.

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           %  
    December 31,     Increase     Increase  
    2012     2011     (Decrease)     (Decrease)  
Revenues:                              
New vehicle retail   $ 506,871     $ 382,004     $ 124,867     32.7 %
Used vehicle retail     208,367       170,053       38,314     22.5  
Used vehicle wholesale     35,768       34,862       906     2.6  
Finance and insurance     29,244       22,397       6,847     30.6  
Service, body and parts     89,665       82,053       7,612     9.3  
Fleet and other     7,458       3,979       3,479     87.4  
  Total revenues     877,373       695,348       182,025     26.2  
Cost of sales:                              
New vehicle retail     471,336       353,207       118,129     33.4  
Used vehicle retail     179,186       147,227       31,959     21.7  
Used vehicle wholesale     35,010       34,872       138     0.4  
Service, body and parts     46,410       43,652       2,758     6.3  
Fleet and other     7,071       3,538       3,533     99.9  
  Total cost of sales     739,013       582,496       156,517     26.9  
Gross profit     138,360       112,852       25,508     22.6  
Asset Impairments     -       504       (504 )   NM  
SG&A expense     97,126       78,331       18,795     24.0  
Depreciation and amortization     4,441       4,095       346     8.4  
Income from operations     36,793       29,922       6,871     23.0  
Floor plan interest expense     (3,490 )     (2,706 )     784     29.0  
Other interest expense     (2,239 )     (3,532 )     (1,293 )   (36.6 )
Other income, net     754       233       521     223.6  
Income from continuing operations before income taxes     31,818       23,917       7,901     33.0  
Income tax expense     (12,154 )     (7,896 )     4,258     53.9  
Income tax rate     38.2 %     33.0 %              
Income from continuing operations   $ 19,664     $ 16,021     $ 3,643     22.7 %
Income from discontinued operations, net of tax     169       2,745       (2,576 )   (93.8 )
Net income   $ 19,833     $ 18,766     $ 1,067     5.7 %
                               
Diluted net income per share:                              
Continuing operations   $ 0.76     $ 0.61     $ 0.15     24.6 %
Discontinued operations     -       0.10       (0.10 )   NM  
Net income per share   $ 0.76     $ 0.71     $ 0.05     7.0 %
                               
Diluted shares outstanding     26,068       26,442       (374 )   (1.4 )%
                               
NM - not meaningful
 
   
Lithia Motors, Inc.  
Key Performance Metrics  
(Unaudited)  
   
    Three months ended           %  
    December 31,     Increase     Increase  
    2012     2011     (Decrease)     (Decrease)  
Gross margin                              
New vehicle retail     7.0 %     7.5 %     (50) bps        
Used vehicle retail     14.0       13.4       60 bps        
Used vehicle wholesale     2.1       0.0       210 bps        
Finance and insurance     100.0       100.0       - bps        
Service, body and parts     48.2       46.8       140 bps        
Fleet and Other     5.2       11.1       (590) bps        
Gross profit margin     15.8       16.2       (40) bps        
                               
Unit sales                              
New vehicle retail     14,713       11,161       3,552     31.8 %
Used vehicle retail     11,943       9,810       2,133     21.7  
Used vehicle wholesale     5,009       4,270       739     17.3  
Total units sold     31,665       25,241       6,424     25.5  
                               
Average selling price                              
New vehicle retail   $ 34,451     $ 34,227     $ 224     0.7 %
Used vehicle retail     17,447       17,335       112     0.6  
Used vehicle wholesale     7,141       8,164       (1,023 )   (12.5 )
                               
Average gross profit per unit                              
New vehicle retail   $ 2,415     $ 2,580     $ (165 )   (6.4 )%
Used vehicle retail     2,443       2,327       116     5.0  
Used vehicle wholesale     151       (2 )     153     NM  
Finance and insurance     1,097       1,068       29     2.7  
                               
Revenue mix                              
New vehicle retail     57.8 %     54.9 %              
Used vehicle retail     23.7       24.5                
Used vehicle wholesale     4.1       5.0                
Finance and insurance, net     3.3       3.2                
Service, body and parts     10.2       11.8                
Fleet and other     0.9       0.6                
                               
             
    Adjusted     As reported  
    Three months ended
December 31,
    Three months ended
December 31,
 
Other metrics   2012     2011     2012     2011  
SG&A as a % of revenue   11.1 %   12.2 %   11.1 %   11.3 %
SG&A as a % of gross profit   70.2     74.4     70.2     69.4  
Operating profit as a % of revenue   4.2     3.6     4.2     4.3  
Operating profit as a % of gross profit   26.6     22.0     26.6     26.5  
Pretax margin   3.6     2.7     3.6     3.4  
Net profit margin   2.2     1.8     2.2     2.3  
                         
NM - not meaningful                        
                         
   
Lithia Motors, Inc.  
Same Store Operating Highlights  
(Unaudited)  
   
    Three months ended           %  
    December 31,     Increase     Increase  
    2012   2011     (Decrease)     (Decrease)  
Revenues                            
New vehicle retail   $ 489,968   $ 374,573     $ 115,395     30.8 %
Used vehicle retail     200,409     166,889       33,520     20.1  
Used vehicle wholesale     33,191     32,653       538     1.6  
Finance and insurance     28,360     21,703       6,657     30.7  
Service, body and parts     87,088     80,557       6,531     8.1  
Fleet and other     7,260     3,544       3,716     104.9  
Total revenues   $ 846,276   $ 679,919     $ 166,357     24.5  
                             
Gross profit                            
New vehicle retail   $ 34,107   $ 28,178     $ 5,929     21.0 %
Used vehicle retail     28,300     22,440       5,860     26.1  
Used vehicle wholesale     685     38       647     NM  
Finance and insurance     28,360     21,703       6,657     30.7  
Service, body and parts     41,255     37,777       3,478     9.2  
Fleet and other     240     (120 )     360     NM  
Total gross profit   $ 132,947   $ 110,016     $ 22,931     20.8  
                             
Unit sales                            
New vehicle retail     14,216     10,933       3,283     30.0 %
Used vehicle retail     11,482     9,613       1,869     19.4  
Used vehicle wholesale     4,744     4,076       668     16.4  
Total units sold     30,442     24,622       5,820     23.6  
                             
Average selling price                            
New vehicle retail   $ 34,466   $ 34,261     $ 205     0.6 %
Used vehicle retail     17,454     17,361       93     0.5  
Used vehicle wholesale     6,996     8,011       (1,015 )   (12.7 )
                             
Average gross profit per unit                            
New vehicle retail   $ 2,399   $ 2,577     $ (178 )   (6.9 )%
Used vehicle retail     2,465     2,334       131     5.6  
Used vehicle wholesale     144     9       135     NM  
Finance and insurance     1,104     1,056       48     4.5  
                             
NM - not meaningful
 
   
Lithia Motors, Inc.  
Consolidated Statements of Operations  
(Unaudited)  
(In thousands except per share data)  
   
    Twelve months ended           %  
    December 31,     Increase     Increase  
    2012     2011     (Decrease)     (Decrease)  
Revenues:                              
New vehicle retail   $ 1,847,603     $ 1,391,375     $ 456,228     32.8 %
Used vehicle retail     833,484       678,571       154,913     22.8  
Used vehicle wholesale     139,237       128,329       10,908     8.5  
Finance and insurance     112,234       84,130       28,104     33.4  
Service, body and parts     347,703       315,958       31,745     10.0  
Fleet and other     36,226       34,383       1,843     5.4  
  Total revenues     3,316,487       2,632,746       683,741     26.0  
Cost of sales:                              
New vehicle retail     1,713,156       1,284,225       428,931     33.4  
Used vehicle retail     711,763       580,357       131,406     22.6  
Used vehicle wholesale     137,823       127,732       10,091     7.9  
Service, body and parts     179,633       163,738       15,895     9.7  
Fleet and other     34,812       31,410       3,402     10.8  
  Total cost of sales     2,777,187       2,187,462       589,725     27.0  
Gross profit     539,300       445,284       94,016     21.1  
Asset impairments     115       1,376       (1,261 )   (91.6 )
SG&A expense     373,688       316,663       57,025     18.0  
Depreciation and amortization     17,128       16,427       701     4.3  
Income from operations     148,369       110,818       37,551     33.9  
Floor plan interest expense     (12,816 )     (10,364 )     2,452     23.7  
Other interest expense     (9,621 )     (12,878 )     (3,257 )   (25.3 )
Other income, net     2,525       694       1,831     263.8  
Income from continuing operations before income taxes     128,457       88,270       40,187     45.5  
Income tax expense     (49,062 )     (33,060 )     16,002     48.4  
Income tax rate     38.2 %     37.5 %              
Income from continuing operations   $ 79,395     $ 55,210     $ 24,185     43.8 %
Income from discontinued operations, net of tax     967       3,650       (2,683 )   (73.5 )
Net income   $ 80,362     $ 58,860     $ 21,502     36.5 %
                               
Diluted net income per share:                              
Continuing operations   $ 3.03     $ 2.07     $ 0.96     46.4 %
Discontinued operations     0.04       0.14       (0.10 )   (71.4 )
Net income per share   $ 3.07     $ 2.21     $ 0.86     38.9 %
                               
Diluted shares outstanding     26,170       26,664       (494 )   (1.9 )%
                               
   
Lithia Motors, Inc.  
Key Performance Metrics  
(Unaudited)  
   
    Twelve months ended           %  
    December 31,     Increase     Increase  
    2012     2011     (Decrease)     (Decrease)  
Gross margin                              
New vehicle retail     7.3 %     7.7 %     (40) bps        
Used vehicle retail     14.6       14.5       10 bps        
Used vehicle wholesale     1.0       0.5       50 bps        
Finance and insurance     100.0       100.0       - bps        
Service, body and parts     48.3       48.2       10 bps        
Fleet and Other     3.9       8.6       (470) bps        
Gross profit margin     16.3       16.9       (60) bps        
                               
Unit sales                              
New vehicle retail     55,666       42,139       13,527     32.1 %
Used vehicle retail     47,965       39,436       8,529     21.6  
Used vehicle wholesale     19,144       16,085       3,059     19.0  
Total units sold     122,775       97,660       25,115     25.7  
                               
Average selling price                              
New vehicle retail   $ 33,191     $ 33,019     $ 172     0.5 %
Used vehicle retail     17,377       17,207       170     1.0  
Used vehicle wholesale     7,273       7,978       (705 )   (8.8 )
                               
Average gross profit per unit                              
New vehicle retail   $ 2,415     $ 2,543     $ (128 )   (5.0 )%
Used vehicle retail     2,538       2,490       48     1.9  
Used vehicle wholesale     74       37       37     100.0  
Finance and insurance     1,083       1,031       52     5.0  
                               
Revenue mix                              
New vehicle retail     55.7 %     52.8 %              
Used vehicle retail     25.1       25.8                
Used vehicle wholesale     4.2       4.9                
Finance and insurance, net     3.4       3.2                
Service, body and parts     10.5       12.0                
Fleet and other     1.1       1.3                
                         
                         
    Adjusted     As reported  
    Twelve months ended
December 31,
    Twelve months ended
December 31,
 
Other metrics   2012     2011     2012     2011  
SG&A as a % of revenue   11.3 %   12.3 %   11.3 %   12.0 %
SG&A as a % of gross profit   69.4     72.5     69.3     71.1  
Operating profit as a % of revenue   4.5     4.0     4.5     4.2  
Operating profit as a % of gross profit   27.4     23.8     27.5     24.9  
Pretax margin   3.8     3.2     3.9     3.4  
Net profit margin   2.3     2.0     2.4     2.1  
                         
   
Lithia Motors, Inc.  
Same Store Operating Highlights  
(Unaudited)  
   
    Twelve months ended         %  
    December 31,   Increase     Increase  
    2012   2011   (Decrease)     (Decrease)  
Revenues                          
New vehicle retail   $ 1,776,896   $ 1,367,176   $ 409,720     30.0 %
Used vehicle retail     802,169     664,292     137,877     20.8  
Used vehicle wholesale     132,722     123,046     9,676     7.9  
Finance and insurance     107,376     81,055     26,321     32.5  
Service, body and parts     329,803     309,805     19,998     6.5  
Fleet and Other     30,928     33,426     (2,498 )   (7.5 )
Total revenues   $ 3,179,894   $ 2,578,800   $ 601,094     23.3  
                           
Gross profit                          
New vehicle retail   $ 128,894   $ 104,960   $ 23,934     22.8 %
Used vehicle retail     117,817     96,126     21,691     22.6  
Used vehicle wholesale     1,320     635     685     107.9  
Finance and insurance     107,376     81,055     26,321     32.5  
Service, body and parts     155,813     146,827     8,986     6.1  
Fleet and Other     739     1,018     (279 )   (27.4 )
Total gross profit   $ 511,959   $ 430,621   $ 81,338     18.9  
                           
Unit sales                          
New vehicle retail     53,590     41,391     12,199     29.5 %
Used vehicle retail     46,179     38,628     7,551     19.5  
Used vehicle wholesale     18,383     15,613     2,770     17.7  
Total units sold     118,152     95,632     22,520     23.5  
                           
Average selling price                          
New vehicle retail   $ 33,157   $ 33,031   $ 126     0.4 %
Used vehicle retail     17,371     17,197     174     1.0  
Used vehicle wholesale     7,220     7,881     (661 )   (8.4 )
                           
Average gross profit per unit                          
New vehicle retail   $ 2,405   $ 2,536   $ (131 )   (5.2 )%
Used vehicle retail     2,551     2,489     62     2.5  
Used vehicle wholesale     72     41     31     75.6  
Finance and insurance     1,076     1,013     63     6.2  
                           
 
Lithia Motors, Inc.
Other Highlights
(Unaudited)
 
    As of December 31,    
    2012   2011   Increase
Days Supply(1)            
New vehicle inventory   76   62   14 days
Used vehicle inventory   56   52   4 days
             
(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 December 31, 2012
Current ratio   Not less than 1.20 to 1     1.43 to 1
Fixed charge coverage ratio   Not less than 1.20 to 1     2.35 to 1
Leverage ratio   Not more than 5.00 to 1     2.08 to 1
Funded debt restriction   Not more than $375 million   $ 195.7 million
           
   
Lithia Motors, Inc.  
Other Highlights  
(Unaudited)  
    Three months ended
December 31,
    Twelve months ended
December 31,
 
    2012     2011     2012     2011  
New vehicle unit sales brand mix                        
Chrysler   32.0 %   31.4 %   32.2 %   31.4 %
General Motors   14.7     15.9     15.2     16.7  
Toyota   13.8     12.0     13.7     12.3  
Subaru   7.8     6.1     7.3     5.5  
BMW, MINI   7.5     8.2     6.8     7.0  
Honda, Acura   6.7     6.1     6.9     6.9  
Ford   6.2     6.5     5.5     6.2  
Hyundai   2.7     3.9     3.6     4.4  
Mercedes   2.7     2.7     2.2     1.7  
Nissan   2.5     3.1     2.8     3.6  
Volkswagen, Audi   1.7     2.5     2.0     2.4  
Kia   0.6     1.0     0.9     1.2  
Mazda   0.5     0.3     0.5     0.5  
Other   0.6     0.3     0.4     0.2  
                         
                         
    Three months ended
December 31,
    Twelve months ended
December 31,
 
    2012     2011     2012     2011  
Revenue geographic mix                        
Texas   24.3 %   25.0 %   25.0 %   25.2 %
Oregon   20.1     20.1     19.9     18.4  
California   10.5     10.3     10.4     10.4  
Washington   8.8     8.4     8.3     8.4  
Montana   8.7     8.2     8.8     8.6  
Alaska   7.8     8.5     8.5     9.5  
Iowa   5.2     5.4     5.1     5.4  
Idaho   5.0     5.8     5.3     6.1  
Nevada   4.8     4.8     4.7     4.6  
North Dakota   2.9     2.4     2.5     2.3  
New Mexico   1.9     1.1     1.5     1.1  
                         
       
    As of February 20, 2013  
Current store count mix   # of stores   % of total  
Chrysler   23   26.4 %
General Motors   14   16.1  
Honda, Acura   9   10.3  
Toyota   8   9.2  
BMW, MINI   7   8.0  
Hyundai   6   6.9  
Ford   5   5.7  
Nissan   3   3.5  
Mercedes   3   3.5  
Subaru   3   3.5  
Other   3   3.5  
Kia   2   2.3  
Volkswagen, Audi   1   1.1  
           
   
Lithia Motors, Inc.  
Consolidated Balance Sheets  
(Unaudited)  
(In thousands)  
   
    December 31, 2012     December 31, 2011  
Cash and cash equivalents   $ 42,839     $ 20,851  
Trade receivables, net     133,149       99,407  
Inventories, net     723,326       506,484  
Deferred income taxes     3,832       4,730  
Other current assets     17,484       16,719  
Assets held for sale     12,579       -  
Total current assets   $ 933,209     $ 648,191  
                 
Property and equipment, net     425,086       373,779  
Goodwill     32,047       18,958  
Franchise value     62,429       59,095  
Deferred income taxes     17,123       29,270  
Other non-current assets     22,808       16,840  
Total assets   $ 1,492,702       1,146,133  
                 
Floor plan notes payable   $ 13,454     $ 114,760  
Floor plan notes payable: non trade     568,130       229,180  
Current maturities of long-term debt     8,182       8,221  
Trade payables     41,589       31,712  
Accrued liabilities     81,602       72,711  
Liabilities related to assets held for sale     8,347       -  
Total current liabilities   $ 721,304       456,584  
                 
Long-term debt     286,876       278,653  
Deferred revenue     33,589       25,146  
Other long-term liabilities     22,832       18,629  
Total liabilities   $ 1,064,601     $ 779,012  
                 
Class A common stock     268,801       279,366  
Class B common stock     343       468  
Additional paid-in capital     12,399       10,918  
Accumulated other comprehensive loss     (2,615 )     (4,508 )
Retained earnings     149,173       80,877  
Total liabilities & stockholders' equity   $ 1,492,702     $ 1,146,133  
                 
   
Lithia Motors, Inc.  
Summarized Cash Flow from Operations  
(Unaudited)  
(In thousands)  
   
    Twelve months ended  
    December 31,  
    2012     2011  
Net income   $ 80,362     $ 58,860  
                 
Adjustments to reconcile net income to net cash used in operating activities:                
Asset impairments     115       1,376  
Depreciation and amortization     17,128       16,427  
Depreciation and amortization within discontinued operations     186       521  
Stock-based compensation     3,116       2,001  
Gain on disposal of assets     (747 )     (6,495 )
(Gain) loss from disposal activities within discontinued operations     621       (4,396 )
Deferred income taxes     14,172       8,093  
Excess tax benefit from share-based payment arrangements     (2,802 )     (525 )
(Increase) decrease:                
  Trade receivables, net     (33,704 )     (22,503 )
  Inventories     (230,442 )     (78,202 )
  Other current assets     (4,194 )     (13,111 )
  Other non-current assets     (6,176 )     (1,108 )
Increase (decrease):                
  Floor plan notes payable     (82,109 )     13,510  
  Trade payables     8,001       5,998  
  Accrued liabilities     10,538       11,605  
  Other long-term liabilities and deferred revenue     13,459       7,183  
Net cash used in operating activities   $ (212,476 )   $ (766 )
                 
   
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   2012     2011  
As reported   $ (212,476 )   $ (766 )
  Floor plan notes payable, non-trade     348,477       63,145  
Adjusted   $ 136,001     $ 62,379  
                 
   
Lithia Motors, Inc.  
Reconciliation of Certain Non-GAAP Financial Measures  
(Unaudited)  
(In thousands, except for per share data)  
    Three months ended December 31, 2012  
    As reported     Tax attribute     Adjusted  
Income from continuing operations before income taxes   $ 31,818     $ -     $ 31,818  
Income tax expense     (12,154 )     (374 )     (12,528 )
Net income from continuing operations   $ 19,664     $ (374 )   $ 19,290  
                         
Diluted earnings per share from continuing operations   $ 0.76     $ (0.02 )   $ 0.74  
Diluted share count     26,068                  
                         
       
    Three months ended December 31, 2011  
    As reported     Asset impairment and disposal gain     Reserve adjustments     Adjusted  
Cost of sales - service, body and parts   $ 43,652     $ -     $ (950 )   $ 42,702  
Gross profit     112,852       -       950       113,802  
                                 
Asset impairments     504       (504 )     -       -  
Selling, general and administrative     78,331       6,301       -       84,632  
                                 
Income from operations     29,922       (5,797 )     950       25,075  
                                 
Income from continuing operations before income taxes   $ 23,917     $ (5,797 )   $ 950     $ 19,070  
Income tax expense     (7,896 )     1,842       (360 )     (6,414 )
Net income from continuing operations   $ 16,021     $ (3,955 )   $ 590     $ 12,656  
                                 
Diluted earnings per share from continuing operations   $ 0.61     $ (0.15 )   $ 0.02     $ 0.48  
Diluted share count     26,442                          
                                 
   
Lithia Motors, Inc.  
Reconciliation of Certain Non-GAAP Financial Measures  
(Unaudited)  
(In thousands, except for per share data)  
   
    Twelve months ended December 31, 2012  
    As reported     Asset impairment and disposal gain     Equity investment     Tax attribute     Adjusted  
Asset impairments   $ 115     $ (115 )   $ -     $ -     $ -  
Selling, general and administrative     373,688       739       -       -       374,427  
                                         
Income from operations     148,369       (624 )     -       -       147,745  
                                         
Other income, net     2,525       -       (244 )     -       2,281  
                                         
Income from continuing operations before income taxes   $ 128,457     $ (624 )   $ (244 )   $ -     $ 127,589  
Income tax expense     (49,062 )     249       97       (1,447 )     (50,163 )
Net income from continuing operations   $ 79,395     $ (375 )   $ (147 )   $ (1,447 )   $ 77,426  
                                         
Diluted earnings per share from continuing operations   $ 3.03     $ (0.01 )   $ (0.01 )   $ (0.05 )   $ 2.96  
Diluted share count     26,170                                  
                                         
       
    Twelve months ended December 31, 2011  
    As reported     Asset impairment and disposal gain     Reserve adjustments     Adjusted  
Cost of sales - service, body and parts   $ 163,738     $ -     $ (950 )   $ 162,788  
Gross profit     445,284       -       950       446,234  
                                 
Asset impairments     1,376       (1,376 )     -       -  
Selling, general and administrative     316,663       6,881       -       323,544  
                                 
Income from operations     110,818       (5,505 )     950       106,263  
                                 
Income from continuing operations before income taxes   $ 88,270     $ (5,505 )   $ 950     $ 83,715  
Income tax expense     (33,060 )     1,724       (360 )     (31,696 )
Net income from continuing operations   $ 55,210     $ (3,781 )   $ 590     $ 52,019  
                                 
Diluted earnings per share from continuing operations   $ 2.07     $ (0.14 )   $ 0.02     $ 1.95  
Diluted share count     26,664                          
                                 
Contact:

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