Lithia Motors Posts $9.1 Million in 1Q Income
Lithia Motors Inc. reported on Wednesday adjusted first quarter 2011 net income from continuing operations of $9.1 million, up from $2.3 million in the year-ago period.
MEDFORD, Ore. — Lithia Motors Inc. reported on Wednesday adjusted first quarter 2011 net income from continuing operations of $9.1 million, up from $2.3 million in the year-ago period. First quarter 2011 revenue from continuing operations increased $143.8 million, or 31.3 percent to $603 million, compared to $459.2 million in the year-ago period.
On a GAAP basis, net income from continuing operations for the first quarter of 2011 was $8.7 million, up from $1.4 million in 2010, respectively. New-vehicle same store sales increased 41 percent. Used-vehicle retail same store sales increased 17 percent. Service, body and parts same store sales increased 8 percent. Adjusted selling, general and adminstrative expense as a percentage of gross profit declined 680 basis points.
Sid DeBoer, Lithia's Chairman and CEO, commented, "Our team delivered another strong performance in the first quarter. Although new-vehicle sales increased 45 percent, we maintained a near 1:1 used-to-new ratio. Service, body and parts sales increased 11 percent despite difficult comparisons due to the Toyota recalls last year. The economic recovery is expanding in our western markets, and our stores are focused on exceeding customer expectations."
Lithia ended the first quarter with $102.9 million in immediately available funds, including $13.1 million in cash, $37.6 million in availability on its revolving credit facility, and $52.2 million in unfinanced new vehicle inventory.
In addition, the company said it completed the acquisition of Rasmussen BMW/MINI, Mercedes-Benz of Portland and Mercedes-Benz of Wilsonville on April 18, 2011. The stores will add approximately $176 million in revenue over the next 12 months.
Outlook for 2011
Commenting on the Japanese tragedy, DeBoer continued, "Our sincere condolences go out to the people of Japan, and for the manufacturers and suppliers with employees impacted by the magnitude of events in March. While the entire supply chain is focused on minimizing the disruptions associated with the tragedy, it is clear that vehicle supply will be interrupted in the second and third quarters of 2011. Our guidance has been updated assuming our best estimate of the impact of these events on our operations. While we hope these assumptions prove to be conservative, the near-term outlook for our manufacturer partners remains uncertain."
Lithia projects its 2011 second quarter earnings guidance within a range of $0.32 to $0.34 per diluted share. Full-year 2011 earnings guidance is projected within a range of $1.42 to $1.50 per diluted share. Both projections are based on the following annual assumptions:
• Total revenues in range of $2.5 to $2.6 billion
• New vehicle same store sales increasing 14 percent
• New vehicle gross margin ranging from 7.5 to 7.7 percent
• Used vehicle same store sales increasing 16 percent
• Used vehicle gross margin ranging from 14 to 14.3 percent
• Service body and parts same store sales increasing 2 percent
• Service body and parts gross margin ranging from 48.3 to 48.6 percent
• Finance and insurance gross profit of $980 per unit
• Tax rate of 40 percent
• Estimated average diluted shares outstanding of 26.9 million
• Capital expenditures of approximately $28 million
• Guidance excludes the impact of future acquisitions, dispositions, and any potential non-core items
More F&I

AI: Facilitator, Not Fixer, in F&I
The dealerships that thrive in the years ahead will be those that embrace technology while continuing to invest in the people who make customer interactions count.
Read More →
Modern Technology Objection Handling
In this video, Trent White shares how to confidently handle technology-based objections by helping customers understand the value of protection, even with modern vehicle technology.
Read More →
Consistency at Scale: Driving F&I Performance
With 75 rooftops across the Sunshine State, Morgan Auto Group has proven to Floridians that it knows a thing or two about driving performance in a competitive market. But it didn’t start at the top.
Read More →
Gitty Up on GAP
The foundational finance-and-insurance product hasn’t kept up with the latest conditions for auto dealers. Is the time ripe?
Read More →
How AI-Powered Coaching Is Transforming F&I Performance
See how AI-powered coaching can turn F&I customer conversations into actionable insights that support compliance, performance and profitability
Read More →
Sell Value, Build Trust
In this video, Trent White explains why selling on value, not fear, builds lasting customer trust, reduces cancellations, and drives long-term success.
Read More →
F&I Sales Give Dealers First-Half Lift
Product business shored up total profits to avoid an overall revenue tanking as product penetrations held steady, StoneEagle reported.
Read More →
Targeted Training Drives Results
Today’s technology, instead of threatening F&I managers, can actually make them better, according to an industry veteran who’s watched market setbacks roil the unprepared.
Read More →
Double the Change, Double the Chance
When an F&I manager gets a customer refusal, it’s a wise move to tweak more than one thing in the product offering.
Read More →
Just Do It
F&I managers need training, but instead of resisting application or expecting perfection, they should improve by simply acting on what they learn.
Read More →