EX-99.1 2 f8klad1qea042909ex991.htm EXHIBIT 99.1 f8klad1qea042909ex991.htm - Generated by SEC Publisher for SEC Filing

EXHIBIT 99.1

LITHIA MOTORS REPORTS FIRST QUARTER 2009 RESULTS

  • Lithia posts profit despite negative industry environment

  • Tripled initial cost savings objectives, with an annualized reduction now of $55 million

Medford, Oregon, April 29, 2009 (1:05 p.m. PT) – Lithia Motors, Inc. (NYSE: LAD) announced today that net income from continuing operations in the first quarter of 2009 was $0.2 million or one cent per diluted share, the same as prior year. Consolidated net income for the first quarter of 2009 was six cents per share after inclusion of one cent per share income from continuing operations and five cents per share income from discontinued operations and disposal activities. In the quarter, the Company had a net benefit from certain items of $1.5 million, including a gain on early extinguishment of debt and a net gain on asset sales and dispositions, partially offset by asset impairment charges.

First quarter 2009 revenue totaled $398 million, compared to $567 million in the year-ago period, driven primarily by lower vehicle sales. Same store sales for new and used vehicle retail sales declined 39.9% and 13.0% respectively, when compared to the same quarter last year. Parts and service same-store sales declined 6.3% compared to the same quarter of last year.

Sid DeBoer, Lithia’s Chairman and CEO, commented: “We are pleased to post a profit in the first quarter of 2009. Despite the declining revenue base and decreasing same store sales, we were able to improve gross margins in each of our business lines and continue to reduce costs. As business conditions remain challenging, we have accelerated our cost reduction program. We now project our annualized cost savings on continuing operations to exceed $55 million.”

“We continue to strengthen our balance sheet. We were in compliance with all debt covenants at the end of the quarter. As of today, only $6.9 million of our convertible notes due in May 2009 remain outstanding. We have generated approximately $41 million of cash since January 1st from financings, the sale of assets and other activities. Our liquidity is strong, including cash and availability on our credit facilities of approximately $52 million.”

“We continue to execute the restructuring plan announced in June 2008. Of the 31 stores we identified for disposal, 20 have been divested to date,” concluded Mr. DeBoer.

The first quarter conference call may be accessed at 2:00 p.m. Pacific Time today by phone at (973) 409-9255 Conference ID: 95124108. A playback of the conference call will be available after 5 p.m. Pacific Time April 29, 2009 through May 8, 2009 by calling 800-642-1687 access code: 95124108.

About Lithia

Lithia Motors, Inc. is a Fortune 700 Company, selling 27 brands of new and all brands of used vehicles at 91 stores, which are located in 13 states. Internet sales are centralized at www.Lithia.com. Lithia also sells used vehicles; arranges finance, warranty, and credit insurance contracts; and provides vehicle parts, maintenance, and repair services at all of its locations.

Additional Information

For additional information on Lithia Motors, contact the Investor Relations Department: (541) 776-6591 or log-on to: www.lithia.com – go to Investor Relations

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. 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 make forward-looking statements about our annualized cost savings. Specific risks in this press release include execution of the restructuring plan and expense reductions, future interest rates and macro-economic and market factors affecting the company’s sales levels and profitability.

LITHIA MOTORS, INC.                         
(In thousands except per share data)                         
Unaudited         Three Months Ended         %    
    March 31,   Increase   Increase    
    2009     2008     (Decrease)   (Decrease)    
New vehicle sales  $ 187,104   $ 312,358   $ (125,254 )  (40.1 )  % 
Used vehicle sales    124,844     155,132     (30,288 )  (19.5 )   
Finance and insurance    13,462     21,463     (8,001 )  (37.3 )   
Service, body and parts    71,853     77,278     (5,425 )  (7.0 )   
Fleet and other revenues    539     913     (374 )  (41.0 )   
Total revenues    397,802     567,144     (169,342 )  (29.9 )   
 
Cost of sales    319,620     470,205     (150,585 )  (32.0 )   
Gross profit    78,182     96,939     (18,757 )  (19.3 )   
SG&A expense    68,059     82,577     (14,518 )  (17.6 )   
Depreciation and amortization    4,307     4,538     (231 )  (5.1 )   
Income from operations    5,816     9,824     (4,008 )  (40.8 )   
 
Floorplan interest expense    (2,863 )    (5,062 )    (2,199 )  (43.4 )   
Other interest expense    (3,779 )    (4,449 )    (670 )  (15.1 )   
Other income, net    1,171     63     1,108   1,758.7    
Income from continuing operations                         
before income taxes    345     376     (31 )  (8.2 )   
 
Income tax expense    153     154     (1 )  (0.6 )   
Income tax rate    44.1 %    41.0 %             
Income from continuing operations    192     222     (30 )  (13.5 )   
 
Discontinued operations:                         
Loss from operations,                         
net of income tax    (1,594 )    (2,383 )    (789 )  (33.1 )   
Gain from disposal activities,                         
net of income tax    2,731     -     2,731   NM    
Net income (loss)  $ 1,329   $ (2,161 )    3,490   161.5    
 
Diluted net income per share:                         
Continuing operations    0.01     0.01     -   -    
Discontinued operations:                         
Loss from operations,                         
net of income tax    (0.08 )    (0.12 )             
Gain from disposal activities,                         
net of income tax    0.13     -              
Net income per share  $ 0.06   $ (0.11 )  $ 0.17   154.5    
Diluted shares outstanding    20,831     19,962     869   4.4   % 
 
 
NM – not meaningful                         

Lithia Motors, Inc.                           
(Continuing Operations)    Three Months Ended         %    
Unaudited    March 31,     Increase   Increase    
    2009      2008       (Decrease)   (Decrease)    
Unit sales:                           
New vehicle    6,243      10,542       (4,299 )  (40.8 )  % 
Used - retail vehicle    7,055      7,105       (50 )  (0.7 )   
Used - wholesale    3,077      4,660       (1,583 )  (34.0 )   
Total units sold    16,375      22,307       (5,932 )  (26.6 )   
 
Average selling price:                           
New vehicle  $ 29,970    $ 29,630     $ 340   1.1   % 
Used - retail vehicle    15,392      17,496       (2,104 )  (12.0 )   
Used - wholesale    5,283      6,614       (1,331 )  (20.1 )   
 
Gross margin/profit data                           
New vehicle retail    8.7  %    7.8   %    90 bps       
Used vehicle retail    12.4  %    12.0   %    40 bps       
Used vehicle wholesale    2.3  %    (1.2 )  %    350 bps       
Service, body & parts    47.7  %    46.9   %    80 bps       
Finance & insurance    100.0  %    100.0   %    -        
Gross profit margin    19.7  %    17.1   %    260 bps       
New retail gross profit/unit  $ 2,604    $ 2,312     $ 292        
Used retail gross profit/unit    1,916      2,095       (179 )       
Used wholesale gross profit/unit    120      (83 )      203        
Finance & insurance/retail unit    1,012      1,216       (204 )       
 
Revenue mix:                           
New vehicles    47.0  %    55.1   %             
Used retail vehicles    27.3  %    21.9   %             
Used wholesale vehicles    4.1  %    5.4   %             
Finance and insurance, net    3.4  %    3.8   %             
Service and parts    18.1  %    13.6   %             
Fleet and other    0.1  %    0.2   %             

Lithia Motors, Inc.         
(Brand Mix)  Three Months Ended   
Unaudited  March 31,  
  2009    2008   
New vehicle unit sales brand         
mix – continuing operations:         
Chrysler Brands  33.8  %  33.5  % 
General Motors & Saturn  16.0  %  18.9  % 
Toyota  13.9  %  14.5  % 
Honda  8.9  %  8.5  % 
Ford  5.0  %  4.8  % 
BMW  5.0  %  4.4  % 
Hyundai  3.7  %  2.7  % 
Nissan  3.3  %  4.8  % 
Volkswagen, Audi  3.8  %  3.0  % 
Subaru  4.2  %  2.4  % 
Mercedes  0.6  %  0.5  % 
Other  1.8  %  2.0  % 
 
New vehicle unit sales brand         
mix – including discontinued operations:         
Chrysler Brands  36.7  %  38.4  % 
General Motors & Saturn  14.9  %  17.1  % 
Toyota  14.1  %  14.4  % 
Honda  7.9  %  6.9  % 
Ford  4.9  %  4.9  % 
BMW  4.5  %  3.6  % 
Hyundai  4.1  %  3.1  % 
Nissan  2.9  %  4.0  % 
Volkswagen, Audi  3.4  %  2.5  % 
Subaru  4.1  %  2.4  % 
Mercedes  1.0  %  1.2  % 
Other  1.5  %  1.5  % 

LITHIA MOTORS, INC.             
(Selected Same Store Data)             
Unaudited  Three Months Ended
  March 31,
           2009  2008 
Same store total sales geographic mix:             
Texas  24.3   %  29.1   % 
Oregon  16.1   %  14.8   % 
California  11.1   %  11.1   % 
Alaska  9.8   %  7.9   % 
Washington  8.7   %  8.9   % 
Iowa  7.0   %  7.0   % 
Montana  7.3   %  6.8   % 
Idaho  7.5   %  6.8   % 
Nevada  4.9   %  4.4   % 
Colorado  1.9   %  1.8   % 
Nebraska  1.4   %  1.4   % 
 
Same store revenue:             
New vehicle retail sales  (39.9 )  %  (12.9 )  % 
     Chrysler Brands  (39.7 )  %  (16.7 )  % 
     General Motors & Saturn  (47.6 )  %  (5.6 )  % 
     Toyota  (44.5 )  %  4.2   % 
     All other brands  (33.4 )  %  (18.7 )  % 
Used vehicle retail sales  (13.0 )  %  (9.3 )  % 
Used wholesale sales  (48.1 )  %  (8.0 )  % 
Total vehicle sales (excluding fleet)  (33.2 )  %  (11.7 )  % 
Finance & insurance sales  (33.0 )  %  (11.7 )  % 
Service, body and parts sales  (6.3 )  %  3.5   % 
Total sales (excluding fleet)  (29.5 )  %  (9.9 )  % 
Total gross profit (excluding fleet)  (17.9 )  %  (14.1 )  % 

LITHIA MOTORS, INC.             
Balance Sheet Highlights (Dollars in Thousands)        
Unaudited             
    March 31, 2009     December 31, 2008  
Cash & cash equivalents  $ 9,104   $ 10,874  
Trade receivables*    60,031     69,615  
Inventory    391,959     422,812  
Assets held for sale    139,603     161,423  
Other current assets    10,331     31,828  
Total current assets    611,028     696,552  
 
Real estate, net    284,875     284,088  
Equipment & other, net    59,238     62,188  
Other assets    93,144     90,631  
Total assets  $ 1,048,285   $ 1,133,459  
 
Flooring notes payable  $ 264,901   $ 337,700  
Liabilities related to assets held for sale    89,162     108,172  
Current maturities of senior             
subordinated convertible notes    39,300     42,500  
Other current liabilities    110,746     108,656  
Total current liabilities    504,109     597,028  
 
Real estate debt    171,239     163,708  
Other long-term debt    87,683     101,476  
Other liabilities    33,664     22,904  
Total liabilities  $ 796,695   $ 885,116  
 
Shareholders' equity    251,590     248,343  
 
Total liabilities & shareholders' equity  $ 1,048,285   $ 1,133,459  
 
*Note: Includes contracts-in-transit of $23,589 and $27,799 for 2009 and 2008        
 
Other balance sheet data             
Lt debt/total cap (excludes real estate)    26 %    29 % 
Book value per basic share    12.12     12.30  
 
Debt covenant ratios             
    Requirement     As of March 31, 2009  
Minimum net worth    Not less than $175 million     $252 million
Fixed charge coverage ratio    Not less than 1.0 to 1     1.30 to 1 
Cash flow leverage ratio    Not more than 3.0 to 1     2.48 to 1 
Minimum current ratio    Not less than 1.2 to 1     1.31 to 1