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Lithia Posts Record Revenues for 2013

The company’s revenues exceeded $1 billion in the fourth quarter and $4 billion for the full year. Its F&I operations also posted increases in F&I penetrations and profit per retail unit.

February 20, 2014
3 min to read


MEDFORD, Ore. — Lithia Motors reported its highest fourth quarter adjusted net income in the company’s history — $25.7 million, or $0.98 per diluted share — during a Feb. 19 investor call. Net income for the same quarter in 2012 was $19.3 million, or $0.74 per diluted share.

The company’s revenue exceeded $1 billion in the fourth quarter and $4 billion for the full year. “This is the highest annual revenue in our history and an increase of 21% over the prior year,” said Bryan Deboer, CEO, president and director of Lithia. “For the full year 2013, we grew same-store revenue 15%. This was on top of same-store revenue increases of 23% in 2012, 22% in 2011 and 18% in 2010.”

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Also during the quarter, total same-store sales increased 11%. New vehicles same store sales also increased 11%, while used vehicle retail same store sales increased 16%.

“On a unit basis, we sold over 16,000 new vehicles, an increase of 1,300 units, or 9%, which was above the national average of 6%,” Deboer reported. “We sold approximately 13,100 retail used vehicles, resulting in a used-to-new ratio of 0.8 to 1.”

Gross profit per new vehicle retailed was $2,325, a decrease of $72 from a year ago. Gross profit per used vehicle retailed was $2,570, compared to $2,445 in the fourth quarter of 2012, an increase of $125 per unit.

Deboer pointed out that store personnel evaluate overall gross profit per retail vehicle sale to evaluate their own individual performance. “To calculate this, we add total gross profit on new and retail used vehicles plus F&I profit and wholesale profit, and divide it by total new and retail used units sold. In the fourth quarter, the blended overall gross profit per unit was $3,621, compared to $3,540 last year or an increase of $81.”

Lithia dealerships recorded a monthly average of 53 used vehicles per store, up from 48 units in 2012. The company is aiming to increase that number to 75 used vehicles per store in the coming year.

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F&I penetrations also increased during the fourth quarter. “Our F&I per vehicle was $1,174 per unit, compared to $1,096 per unit last year,” Deboer said. “Of the 29,200 vehicles we sold in the quarter, we arranged financing on 72%, sold a service contract on 43% and sold a lifetime oil product on 37%.”

Of the vehicles the company financed in the fourth quarter, 11% were to subprime customers.

The company’s penetration rates in service contracts and lifetime oil sales increased 240 and 340 basis points, respectively. Service, body and parts sales increased 8% from the fourth quarter of 2012. “This was on top of last year's 8% increase over the fourth quarter of 2011,” Deboer added.

During 2013, the company purchased 7 stores, which represents $273 million in estimated annual revenues.

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