Lithia Motors F&I Sales Up 24.7 Percent Over Last Year; Tops Among Auto Retailers
Lithia Motors, Inc. on July 25 announced that finance and insurance (F&I) sales increased 24.7 percent in the second quarter of 2001 as compared to the second quarter of 2000.
F&I per-unit sales for the second quarter increased 12.0 percent to $945, a record level for Lithia that tops among the publicly traded auto-retailers.
For the first six months, finance and insurance sales increased 19.2 percent. F&I per-unit sales increased 9.4 percent to $908 per unit for the first six months.
New vehicle sales increased 7.5 percent, used retail vehicle sales increased 19.2 percent, parts and service sales increased 12.4 percent, according to Lithia.
According to Lithia, total sales increased 10.6 percent to $462.1 million in the second quarter of 2001 from $417.9 million in the second quarter of 2000. For the first six months of 2001, total revenues increased 8.5 percent to $882.2 million from $813.5 million in the first six months of 2000.
Lithia retailed 9,119 used units and 9,772 new units, for a total of 18,891 new and used retail units this quarter, an 11.4 percent increase over the same period last year.
For the first six months, new vehicle sales increased 3.1 percent, used retail vehicle sales increased 18.5 percent, parts and service sales increased 14.9 percent.
Lithia retailed 17,973 used units and 18,504 new units, for a total of 36,477 new and used retail units for the first six months of 2001, a 9.0 percent increase over the same period last year.
For the quarter, net income was $5.1 million, or $0.37 per diluted share on 13.8 million diluted shares outstanding. This compares to net income in the second quarter of 2000 of $6.2 million or $0.45 per share on 13.8 million
diluted shares.
Cash flow per share (net income plus depreciation and amortization) was $0.53 per share in the second quarter of 2001 as compared to $0.58 in the same period last year. Cash flow per share was 43.2 percent higher than EPS for the quarter.
"We are pleased to report another quarter with both sales and earnings above forecast
levels," said Sidney B. DeBoer, chairman and chief executive officer of Lithia Motors. "Earnings were $0.37 per share this quarter, exceeding by 4 cents the First Call consensus estimate of $0.32 per share.
"Despite a slowdown in the economy, we saw an increase in new vehicle sales from the second quarter of last year, and the counter-cyclical used vehicle and parts and service businesses continued to demonstrate exceptional strength. The finance and insurance business was very robust this quarter, growing 25 percent year over year. For the rest of the year we expect these positive trends to continue. In 2002 we are looking for double-digit sales and earnings growth.
"The shift in the revenue mix continued to favor our higher margin used vehicle and parts and service business lines. As a result, the gross margin mproved this quarter by 20 basis points to 16.3 percent as compared to the
same period last year," DeBoer said.
"Our gross margin came in at the upper-end of our forecast range and Sales General and Administrative Expense (SG&A) hit the favorable end of the forecast range helping us to exceed the estimates for the quarter. SG&A as a
percentage of revenues increased to 12.7 percent year over year, but improved 40 basis points sequentially. The net result at the operating income line was an operating margin of 3.1 percent, which was above forecast ranges and a 30 basis point sequential improvement.
"Same-store retail sales were essentially flat at -0.3 percent for the quarter, much better than the forecast of a 6 to 8 percent decline. New vehicle same-store sales showed a slight single digit decline, with all other business lines demonstrating positive same-store growth for the quarter.
"While we remain cautious due to the uncertain and difficult economic environment, we are confident that we will be able to grow our business through good acquisitions and continuing operational improvements. Our
guidance for the next two quarters is unchanged," DeBoer said.
"For the remainder of 2001, we expect a number of acquisitions which should contribute
approximately $100 to $150 million in revenues throughout the rest of 2001," said Jeffrey B. DeBoer, senior vice president and CFO of Lithia.
"These acquisitions will be paid for with internal cash flow from operations and our untapped acquisition facility of $130 million from Ford Credit. For the first half of the year, we have been able to add to our cash position, while reducing debt levels. Net cash provided by operating activities was $20.7 million as compared to $18.9 million in the same period last year. Our balance sheet remains very strong, and we are well positioned to continue our growth strategy in the second half of the year," Jeffrey DeBoer said.
Lithia Motors will be provided more detailed information on the results for the second quarter 2001 in a conference call at A.M. PDT July 25. To hear a replay, visit www.lithia.com, then go to About Lithia -- Investor Relations -- and click on the Live Conference Call
icon.
About Lithia Motors, Inc.
Lithia Motors, Inc., a Fortune 1000 company, operates 114 franchises in California, Oregon, Washington, Nevada, Colorado, Idaho, South Dakota and Alaska.
Lithia sells 26 brands of new vehicles at 56 stores and over the Internet through "Lithia.com -- America's Car & Truck Store."
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. Lithia retailed 68,126 new and used vehicles and had $1.66 billion in total revenue in 2000.
For more information on Lithia Motors, contact Jeff DeBoer, senior VP and chief financial officer, 541-776-6868; e-mail
invest@lithia.com; call Dan Retzlaff, Investor Relations, 541-776-6819; or visit invest@lithia.com.
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