EX-99.1 2 f8klad2qea072711wprstnex991.htm EXHIBIT 99.1

EXHIBIT 99.1

 

 

LITHIA MOTORS REPORTS ADJUSTED SECOND QUARTER 2011 EARNINGS OF $0.54 PER SHARE; INCREASES 2011 OUTLOOK

__________________________________________________

 

LITHIA MOTORS DECLARES $0.07 PER SHARE DIVIDEND FOR SECOND QUARTER 2011

 

Medford, Oregon, July 27, 2011 (7:30 a.m. ET) – Lithia Motors, Inc. (NYSE: LAD) today reported 2011 adjusted second quarter net income from continuing operations of $14.6 million, or $0.54 per diluted share. This compares to a 2010 adjusted second quarter net income from continuing operations of $7.0 million, or $0.27 per diluted share. Second quarter 2011 revenue from continuing operations increased $158.9 million, or 30% to $689.1 million, compared to $530.2 million in the year-ago period.

 

Second Quarter Year-over-Year Operating Highlights:

·         New vehicle same store sales increased 24%

·         Used vehicle retail same store sales increased 16%

·         Service, body and parts same store sales increased 5%

·         Adjusted SG&A expense as a percentage of gross profit declined 560 basis points, to 71.4%

 

As shown in the attached non-GAAP reconciliation table, the 2011 second quarter adjusted results from continuing operations exclude a non-core benefit of $0.01 per share due to a tax item, and the 2010 second quarter adjusted results from continuing operations exclude a non-core charge of $0.33 per share on asset impairments and reserve adjustments. Unadjusted, net income (loss) from continuing operations for the second quarter of 2011 and 2010 was $14.8 million or $0.55 per diluted share and $(1.6) million or $(0.06) per diluted share, respectively.

 

“We had a better than expected quarter, with revenue up 30% year over year, and the highest second quarter earnings per share since 2006,” said Sid DeBoer, Chairman and CEO of Lithia. “We continue to build on the momentum we have created over the past 24 months through our philosophy of continuous improvement.”

 

For the first six months of 2011, revenue from continuing operations increased 31% to $1.3 billion as compared to $1.0 billion in 2010. Same store new vehicle sales increased 32%, used vehicle retail same store sales increased 17% and service, body and parts same store sales increased 7%. For the first six months of 2011 adjusted net income from continuing operations was $0.88 per share as compared to $0.36 per share in 2010. Unadjusted, for the first six months of 2011, net income from continuing operations was $0.87 per diluted share, compared to net loss from continuing operations of $(0.01) per diluted share for 2010.

 

Mr. DeBoer continued, “The outlook for the remainder of 2011 remains volatile. Gas prices have fluctuated over the past three months, unemployment remains high and the supply disruption that affected Japanese manufacturers will reduce vehicle availability through the third quarter. We anticipate new vehicle inventory will recover to normal levels by the first quarter of 2012.”

 

Balance Sheet Update

Lithia ended the period with $61 million in immediately available funds, including $12 million in cash, $8 million in availability on its revolving credit facility, and $41 million in unfinanced new vehicle inventory.

 
 

 

Dividend Payment

Lithia announced that the Board of Directors has approved a dividend of $0.07 per share for the second quarter 2011. Lithia will pay the dividend August 25, 2011 to shareholders of record on August 11, 2011.

 

Updated Outlook for 2011

Lithia projects its 2011 third quarter earnings guidance within a range of $0.45 to $0.47 per diluted share. Full-year 2011 earnings guidance is projected within a range of $1.67 to $1.73 per diluted share. Both projections are based on the following annual assumptions:

 

·         Total revenues in range of $2.6 to $2.7 billion

·         New vehicle same store sales increasing 23%

·         New vehicle gross margin ranging from 7.5% to 7.7%

·         Used vehicle same store sales increasing 17%

·         Used vehicle gross margin ranging from 14.6% to 14.8%

·         Service body and parts same store sales increasing 2%

·         Service body and parts gross margin ranging from 48.5% to 48.8%

·         Finance and insurance gross profit of $980 per unit

·         Tax rate of 40%

·         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

 

Second Quarter Earnings Conference Call and Updated Presentation

The second quarter conference call may be accessed at 10:00 a.m. ET today by telephone at 877-407-8029. An updated presentation highlighting the second 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 after 1:00 p.m. ET on July 27, 2011 through August 4, 2011 by calling 877-660-6853 (Conference ID: 374114 Account: 305).

 

About Lithia

Lithia Motors, Inc. is the ninth largest automotive retailer in the United States. Lithia sells 27 brands of new and all brands of used vehicles at 86 stores, which are located in 12 states. 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.

 

For additional information on Lithia Motors, contact John North, VP Finance / Controller at (541) 618-5748 or visit www.lithia.com and click on “Investor Relations.”

 

Sites

http://www.lithia.com/

http://www.lithiacareers.com/

http://www.assuredservice.com/

 

Lithia Motors on Facebook

https://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, which management believes are a benefit to shareholders. Forward-looking statements in this press release include our guidance regarding third quarter and full year 2011 results, the effect of acquisitions on our full year 2011 EPS, the impact of the Japanese disaster on new vehicle inventory and sales levels and the sustainability of the economic recovery. 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," "seeks" or "will." 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 urge you to carefully consider this information. We undertake no duty to update our forward-looking statements, including our earnings outlook.

 

Non-GAAP Financial Measures

This press release and the attached financial tables contain certain non-GAAP financial measures as defined under SEC rules, 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. These measures exclude certain items disclosed in the attached financial tables. Cash flows from operations were adjusted to include the change in non-trade floorplan debt to improve the visibility of cash flows related to vehicle financing. As required by SEC rules, the Company has provided reconciliations of these measures to the most directly comparable GAAP measures, which are set forth in the attachments to this release. The Company believes that each of the foregoing non-GAAP financial measures improves the transparency of the Company's disclosure, provides a meaningful presentation of the Company's results from its core business operations excluding adjustments for items not related to the Company's ongoing core business operations or other non-cash adjustments, and improves the period-to-period comparability of the Company's results from its core business operations. These presentations are not intended to provide net income, cash flows from operations, operating income or selling, general and administrative costs in accordance with GAAP and should not be considered an alternative to GAAP measures.

 

Lithia Motors, Inc.

Consolidated Statement of Operations (Unaudited)

(In thousands except per share data)

  Three Months Ended       %  
  June 30,   Increase   Increase  
  2011   2010   (Decrease)   (Decrease)  
Revenues:                
New vehicle retail $   357,638   $   266,760     $   90,878   34.1 %
Used vehicle retail 180,039   145,786           34,253   23.5  
Used vehicle wholesale 29,701   25,501   4,200   16.5  
Finance and insurance 21,371   16,158   5,213   32.3  
Service, body and parts 83,128   71,247   11,881   16.7  
Fleet and other 17,191   4,700   12,491   265.8  
     Total revenues 689,068   530,152           158,916   30.0  
Cost of sales:                
New vehicle retail 329,156   244,826   84,330   34.4  
Used vehicle retail 152,497   124,697   27,800   22.3  
Used vehicle wholesale 29,429   25,196   4,233   16.8  
Service, body and parts 42,343   36,214   6,129   16.9  
Fleet and other 15,907   4,257   11,650   273.7  
     Total cost of sales 569,332   435,190   134,142   30.8  
Gross profit 119,736   94,962   24,774   26.1  
Asset impairment charges 490   13,260   (12,770)   (96.3)  
SG &A expense 84,955   74,155   10,800   14.6  
Depreciation and amortization 4,303   4,392   (89)   (2.0)  
Income from operations 29,988   3,155   26,833   850.5  
Floorplan interest expense (3,434)   (2,535)   899   35.5  
Other interest expense (3,020)   (3,529)   (509)   (14.4)  
Other income, net 171   214   (43)   (20.1)  
Income (loss) from continuing operations before income taxes 23,705   (2,695)   26,400   NM  
Income tax expense (benefit) 8,875   (1,132)   10,007   NM  
Income tax rate 37.4%   42.0%          
Income (loss) from continuing operations

  $   14,830

  

  $   (1,563)

   $   16,393    NM %
                 
Discontinued operations (4)   (156)   152   (94.4)  
Net income (loss)

   $   14,826

  

$   (1,719)

   $    16,545   NM %
                 
Diluted net income (loss) per share:                
Continuing operations $        0.55   $      (0.06)   $        0.61   NM %
Discontinued operations -           (0.01)   0.01   NM  
Net income (loss) per share $        0.55  

  $      (0.07)  

  $        0.62   NM %
                 
Diluted shares outstanding 26,860   26,014   846   3.3 %
                 
                 

 

 
 

Lithia Motors, Inc.

Key Performance Metrics (Unaudited)

 

 

  Three Months Ended       %  
  June 30,   Increase   Increase  
  2011   2010   (Decrease)   (Decrease)  
Gross margin                
New vehicle retail 8.0 % 8.2 % (20) bps      
Used vehicle retail 15.3   14.5   80 bps      
Used vehicle wholesale 0.9   1.2   (30) bps      
Finance & insurance 100.0   100.0   -  bps      
Service, body & parts 49.1   49.2     (10) bps      
Gross profit margin 17.4   17.9   (50) bps      
                 
Unit sales                
New vehicle retail 11,061   8,615           2,446   28.4

%

Used vehicle retail 10,320   8,588   1,732   20.2  
Used vehicle wholesale 3,869   3,290   579   17.6  
Total units sold 25,250   20,493            4,757   23.2  
                 
Average selling price                
New vehicle retail $    32,333   $    30,965         $     1,368   4.4

%

Used vehicle retail 17,446   16,976   470   2.8  
Used vehicle wholesale 7,677   7,751   (74)   (1.0)  
                 
Average gross profit per unit                
New vehicle retail $      2,575   $      2,546   $         29   1.2

%

Used vehicle retail 2,669   2,456   213   8.8  
Used vehicle wholesale 70   93   (23)   (24.7)  
Finance & insurance 999   939   60   6.4  
                 
Revenue mix                
New vehicle retail 51.9 % 50.3 %        
Used vehicle retail 26.1   27.5          
Used vehicle wholesale 4.3   4.8          
Finance & insurance, net 3.1   3.1          
Service, body & parts 12.1   13.4          
Fleet and other 2.5   0.9          
                 
  Adjusted   As reported  
  Three Months Ended   Three Months Ended  
  June 30,   June 30,  
Other metrics 2011   2010   2011   2010  
SG &A as a % of revenue 12.4

%

 13.8

%

 12.3

%

 14.0

%

SG &A as a % of gross profit 71.4   77.0   71.0   78.1  
Operating profit as a % of revenue 4.3   3.3   4.4   0.6  
Operating profit as a % of gross profit 25.0   18.4   25.0   3.3  
Pretax margin 3.4   2.2   3.4   (0.5)  
                   
 
 

Lithia Motors, Inc.

Same Store Operating Highlights (Unaudited)

(In thousands except per unit data)

                   
  Three Months Ended       %    
  June 30,   Increase   Increase    
  2011   2010   (Decrease)   (Decrease)    
Revenues                  
New vehicle retail $   332,505   $  267,522   $        64,983   24.3 %  
Used vehicle retail 168,663   145,171   23,492   16.2    
Used vehicle wholesale 28,492   24,933   3,559   14.3    
Finance and insurance 20,190   15,778   4,412   28.0    
Service, body and parts 74,318   70,971   3,347   4.7    
                   
Gross profit                  
New vehicle retail $    26,247   $    21,925  

$        4,322

   19.7 %  
Used vehicle retail 26,010   20,967   5,043   24.1    
Used vehicle wholesale 221   389             (168)   (43.2)    
Finance and insurance 20,190   15,778   4,412   28.0    
Service, body and parts 35,572   34,265            1,307   3.8    
                 
Unit sales                
New vehicle retail 10,398   8,635   1,763   20.4 %
Used vehicle retail 9,789   8,551             1,238   14.5  
Used vehicle wholesale 3,745   3,241   504   15.6  
Total units sold 23,932   20,427            3,505   17.2  
                 
Average selling price                
New vehicle retail $    31,978   $    30,981   $           997   3.2 %
Used vehicle retail 17,230   16,977   253   1.5  
Used vehicle wholesale 7,608   7,693   (85)   (1.1)  
                 
Average gross profit per unit                
New vehicle retail $      2,524   $      2,539   $          (15)   (0.6) %
Used vehicle retail 2,657   2,452   205   8.4  
Used vehicle wholesale 59   120   (61)   (50.8)  
Finance & insurance 1,000   918   82   8.9  
                 
                   
                       

 

 
 

Lithia Motors, Inc.

Consolidated Statement of Operations (Unaudited)

(In thousands except per share data)

                 
  Six Months Ended       %  
  June 30,   Increase   Increase  
  2011   2010   (Decrease)   (Decrease)  
                 
Revenues:                
New vehicle retail $ 666,830   $   480,351     $ 186,479   38.8 %
Used vehicle retail 339,608   280,781   58,827   21.0  
Used vehicle wholesale 59,974   48,894   11,080   22.7  
Finance and insurance 41,123   30,689   10,434   34.0  
Service, body and parts 159,031   139,319   19,712   14.1  
Fleet and other 20,333   5,500   14,833   269.7  
     Total revenues 1,286,899   985,534   301,365   30.6  
Cost of sales:                
New vehicle retail 615,291   440,212   175,079   39.8  
Used vehicle retail 288,610   241,195   47,415   19.7  
Used vehicle wholesale 59,296   48,224   11,072   23.0  
Service, body and parts 81,427   71,051   10,376   14.6  
Fleet and other 18,502   4,708   13,794   293.0  
     Total cost of sales 1,063,126   805,390   257,736   32.0  
Gross profit 223,773   180,144   43,629   24.2  
Asset impairment charges 872   14,751   (13,879)   (94.1)  
SG &A expense 164,140   144,572   19,568   13.5  
Depreciation and amortization 8,485   9,131   (646)   (7.1)  
Income from operations 50,276   11,690   38,586   330.1  
Floorplan interest expense (5,964)   (5,251)   713   13.6  
Other interest expense (6,321)   (7,116)   (795)   (11.2)  
Other income, net 249   281   (32)   (11.4)  
Income (loss) from continuing operations before income taxes 38,240   (396)   38,636   NM  
Income tax expense (benefit) 14,882   (242)   15,124   NM  
Income tax rate 38.9 % 61.1 %        
Income (loss) from continuing operations $    23,358  

  $        (154)

   $    23,512   NM %
                 

Discontinued operations

 

 173   (298)   471   NM  
Net income (loss) $    23,531  

$        (452)  

  $    23,983   NM %
                 
Diluted net income (loss) per share:                
Continuing operations

  $        0.87

  

  $       (0.01)

  

    $       0.88

   NM %
Discontinued operations           0.01   (0.01)            0.02   NM  
Net income (loss) per share

  $        0.88  

 

  $       (0.02)

  

  $       0.90  

  NM %
                 
Diluted shares outstanding 26,779   25,955   824   3.2 %
                 

NM – not meaningful

 
 

Lithia Motors, Inc.

Key Performance Metrics (Unaudited)

 

 

  Six Months Ended       %  
  June 30,   Increase   Increase  
  2011   2010   (Decrease)   (Decrease)  
Gross margin                
New vehicle retail 7.7 % 8.4 % (70) bps      
Used vehicle retail 15.0   14.1   90 bps      
Used vehicle wholesale 1.1   1.4   (30) bps      
Finance & insurance 100.0   100.0   -   bps      
Service, body & parts 48.8   49.0   (20) bps      
Gross profit margin 17.4   18.3   (90) bps      
                 
Unit sales                
New vehicle retail 20,884   15,432   5,452   35.3 %
Used vehicle retail 20,055   16,728   3,327   19.9  
Used vehicle wholesale 7,719   6,555   1,164   17.8  
Total units sold 48,658   38,715   9,943   25.7  
                 
Average selling price                
New vehicle retail $     31,930   $     31,127  

  $        803

   2.6 %
Used vehicle retail 16,934   16,785   149   0.9  
Used vehicle wholesale 7,770   7,459   311   4.2  
                 
Average gross profit per unit                
New vehicle retail $       2,468   $       2,601   $        (133)   (5.1) %
Used vehicle retail 2,543   2,366   177   7.5  
Used vehicle wholesale 88   102   (14)   (13.7)  
Finance & insurance 1004   954   50   5.2  
                 
Revenue mix                
New vehicle retail 51.8 % 48.7 %        
Used vehicle retail 26.4   28.5          
Used vehicle wholesale 4.6   5.0          
Finance & insurance, net 3.2   3.1          
Service, body & parts 12.4   14.1          
Fleet and other 1.6   0.6          
                 
  Adjusted   As reported  
  Six Months Ended   Six Months Ended  
  June 30,   June 30,  
Other metrics 2011   2010   2011   2010  
SG &A as a % of revenue 12.8 % 14.6 % 12.8 % 14.7 %
SG &A as a % of gross profit 73.6   79.7   73.4   80.3  
Operating profit as a % of revenue 3.9   2.8   3.9   1.2  
Operating profit as a % of gross profit 22.6   15.3   22.5   6.5  
Pretax margin 3.0   1.6   3.0   0.0  
                 
 
 

Lithia Motors, Inc.

Same Store Operating Highlights (Unaudited)

(In thousands except per unit data)

                   
  Six Months Ended       %    
  June 30,   Increase   Increase    
  2011   2010   (Decrease)   (Decrease)    
Revenues                  
New vehicle retail $   635,316   $ 481,507   $   153,809   31.9   %  
Used vehicle retail 324,639   278,669   45,970   16.5    
Used vehicle wholesale 58,308   47,740   10,568   22.1    
Finance and insurance 39,070   29,454   9,616   32.6    
Service, body and parts 148,106   139,032   9,074   6.5    
                   
Gross profit                  
New vehicle retail $    48,747   $   40,117   $      8,630   21.5

 

 %  
Used vehicle retail 48,701   39,091   9,610   24.6    
Used vehicle wholesale 627   781   (154)   (19.7)    
Finance and insurance 39,070   29,454   9,616   32.6    
Service, body and parts 70,324   66,570   3,754   5.6    
                 
Unit sales                
New vehicle retail 20,025   15,466   4,559   29.5 %
Used vehicle retail 19,310   16,589   2,721     16.4  
Used vehicle wholesale 7,526   6,448   1,078   16.7  
Total units sold 46,861   38,503   8,358   21.7  
                 
Average selling price                
New vehicle retail $    31,726    $   31,133     $         593   1.9 %
Used vehicle retail 16,812   16,798   14   0.1  
Used vehicle wholesale 7,748   7,404   344   4.6  
                 
Average gross profit per unit                
New vehicle retail $       2,434   $    2,594   $      (160)   (6.2) %
Used vehicle retail 2,522   2,356     166   7.0  
Used vehicle wholesale 83   121   (38)   (31.2)  
Finance & insurance 993   919   74   8.1  
                 
                   
                       

 

 
 

Lithia Motors, Inc.

Revenue Mix (Unaudited)

 

Three months ended

June 30,

  

Six months ended

June 30,

  
  2011   2010   2011   2010  
New vehicle unit sales brand mix                
Chrysler 29.6 % 28.3 % 28.8 % 26.9 %
General Motors 17.7   17.7   17.4   17.1  
Toyota 11.1   12.9   12.5   13.8  
Honda, Acura 7.5   8.9   7.6   8.8  
BMW, Mini 7.1   5.4   5.9   5.5  
Ford 5.8   5.7   5.8   5.6  
Hyundai 5.3   5.6   5.6   6.0  
Subaru 4.6   5.0   5.2   5.4  
Volkswagen, Audi 3.4   3.5   3.3   3.4  
Nissan 3.2   3.2   3.7   3.5  
Mercedes 2.0   1.1   1.5   1.1  
Kia 1.7   1.8   1.8   2.0  
Other 1.0   0.9   0.9   0.9  
         
 

Three months ended

June 30,

  

Six months ended

June 30,

  
  2011   2010   2011   2010  
Revenue geographic mix                
Texas 23.8 % 25.1 % 24.0 % 25.3 %
Oregon 20.4   14.6   18.5   14.7  
California 9.4   10.4   9.8   10.7  
Alaska 9.4   11.7   9.1   10.9  
Washington 9.0   9.7   9.6   10.1  
Montana 7.9   7.3   8.0   6.9  
Iowa 6.6   7.2   6.7   7.1  
Idaho 5.3   6.2   5.9   6.4  
Nevada 4.2   4.0   4.5   4.1  
North Dakota 2.1   2.0   2.0   2.0  
New Mexico 1.0   1.0   1.0   1.0  
Colorado 0.9   0.8   0.9   0.8  
             
  As of July 27, 2011          
Current store count mix # of stores   % of total          
Chrysler 22   25.6 %        
General Motors 12   14.0          
Honda, Acura 9   10.4          
Toyota 8   9.3          
BMW 7   8.1          
Hyundai 6   7.0          
Ford 5   5.8          
Volkswagen, Audi 4   4.7          
Nissan 4   4.7          
Mercedes 3   3.5          
Subaru 2   2.3          
Kia 2   2.3          
Other 2   2.3          
                   

 

 
 

Lithia Motors, Inc.

Consolidated Balance Sheet (Unaudited)

(In thousands except per share data)

 

  June 30, 2011   December 31, 2010
Cash and cash equivalents $                    11,738  

  $                     9,306

Trade receivables, net 88,793   75,011
Inventories, net 497,530   415,228
Deferred income taxes 3,641   2,937
Other current assets 5,473   6,062
Total current assets $                  607,175   $                  508,544
       
Property and equipment, net 366,414   362,433
Goodwill 18,288   6,186
Franchise value 59,015   45,193
Deferred income taxes 36,501   39,524
Other non-current assets 13,808   9,796
Total assets $                1,101,201   $                  971,676
       
Floorplan notes payable $                   336,486   $                   251,257
Current maturities of long-term debt 10,986   12,081
Trade payables 29,110   23,747
Accrued liabilities 68,126   58,784
Total current liabilities $                   444,708   $                  345,869
       
Long-term debt 275,183   268,693
Deferred revenue 22,441   20,158
Other long-term liabilities 15,033   16,739
Total liabilities $                   757,365   $                  651,459
       
Class A common stock 287,896   284,807
Class B common stock 468   468
Additional paid-in capital 10,632   10,972
Accumulated other comprehensive loss (4,363)   (4,869)
Retained earnings 49,203   28,839
Total liabilities & stockholders' equity $               1,101,201   $                  971,676
       
 
 

Lithia Motors, Inc.

Summarized Cash Flow from Operations (Unaudited)

(In thousands)

 

               Six Months Ended    
             June 30,    
  2011   2010      
Net income (loss) $   23,531 $    (452)      
           
Adjustments to reconcile net income (loss) to net cash used in operating activities:          
Asset impairments 872 14,751      
Depreciation and amortization 8,485 9,131      
Depreciation and amortization          
      within  discontinued operations 21 28      
Stock-based compensation 1,034 948      
Gain on disposal of assets (190) (201)      

Loss from disposal activities within

discontinued operations

 53 294      
Deferred income taxes 2,060   (4,784)      

Excess tax benefit from share-based

payment arrangements

 ( 278) -      
(Increase) decrease:          
     Trade receivables, net ( 6,579) (9,430)      
     Inventories ( 60,498) (30,104)      
     Other current assets (461) 1,350      
     Other non-current assets ( 884) (870)      
Increase (decrease):          
     Floorplan notes payable 1,744 3,249      
     Trade payables 4,679 7,655      
     Accrued liabilities 7,757 2,106      

Other long-term liabilities and

deferred revenue

 1,418 50      
Net cash used in operating activities $  (17,236) $   (6,279)      
           
           
           

Lithia Motors, Inc.

Reconciliation of Non-GAAP Cash Flow from Operations (Unaudited)

(In thousands)

  Six Months Ended  
  June 30,  
Net cash (used in) provided by operating activities 2011   2010  
As reported $    (17,236)   $    (6,279)  
Floorplan notes payable, non-trade 65,789   23,854  
Adjusted   $      48,553   $    17,575  
 
 

Lithia Motors, Inc.

Other Highlights (Unaudited)

(In thousands except per share data)

 

 

  June 30, 2011   December 31, 2010   June 30, 2010      
Days Supply(1)                
New vehicle inventory 68   75   68      
Used vehicle inventory 56   53   53      

 

(1) Days supply calculated based on current inventory levels, excluding in-transit vehicles, and a 30-day historical cost of sales level.

 

                 
  June 30, 2011   December 31, 2010          
Other information                
Long-term debt/total capitalization(2) 44.5 % 45.6 %        

 

(2)Total capitalization is comprised of long-term debt and total shareholder’s equity.

 

Debt covenant ratios                
  Requirement   As of June 30, 2011  
Minimum tangible net worth Not less than $200 million   $ 264.8 million  
Vehicle equity Not less than $65 million   $ 184.5 million  
Fixed charge coverage ratio Not less than 1.20 to 1   2.04 to 1  
Liabilities to tangible net worth ratio Not more than 4.00 to 1   2. 86 to 1  

 

 

 

Lithia Motors, Inc.

Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)

(In thousands)

  Three months ended, June 30  

Six months ended

June 30,

  
  2011   2010   2011   2010  
Selling, general & administrative                
As reported $ 84,955  

   $  74,155

   $ 164,140   $ 144,572  
      Disposal gain (loss) 580   (2)   580   365  
       Reserve adjustments -   (1,076)   -   (1,334)  
Adjusted $ 85,535  

   $  73,077

   $ 164,720   $ 143,603  
                 
Income from operations                
As reported $ 29,988  

   $    3,155

   $   50,276   $   11,690  
     Impairments and disposal gain (90)   13,262   292   14,452  
       Reserve adjustments -   1,076   -   1,334  
Adjusted $ 29,898   $  17,493   $   50,568   $   27,476  
                 
Income (loss) from continuing operations before income taxes                
As reported $ 23,705   $  (2,695)   $   38,240   $     (396)  
     Impairments and disposal gain (90)   13,262   292   14,452  
       Reserve adjustments -   1,076   -   1,334  
Adjusted $ 23,615   $  11,643   $   38,532   $  15,390  
 
 

Lithia Motors, Inc.

Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)

(In thousands except per share data)

 

Adjusted net income/(loss) and diluted earnings per share  
  Three Months Ended June 30  
  Net income/(loss)   Diluted earnings per share  
  2011   2010   2011   2010  
Continuing Operations                
As reported $   14,830   $    (1,563)   $     0.55   $   (0.06)  
     Impairments and disposal gain (49)   8,043   -   0.31  
     Reserve adjustments -   560   -   0.02  

Stock-based compensation tax

shortfall

 (186)   -   (0.01)   -  
Adjusted $   14,595   $      7,040   $     0.54   $     0.27  
                 
Discontinued Operations                
As reported $         (4)   $       (156)   $          -   $   (0.01)  

Impairments and disposal (gain)

loss

 32   167   -   0.01  
Adjusted $         28  

  $           11

   $          -   $          -  
                 
Consolidated Operations                
As reported $   14,826   $    (1,719)   $     0.55   $   (0.07)  
Adjusted 14,623   7,051   0. 54   0. 27  
                 
Adjusted net income/(loss) and diluted earnings per share  
  Six Months Ended June 30  
  Net income/(loss)   Diluted earnings per share  
  2011   2010   2011   2010  
                 
Continuing Operations                
As reported $    23,358   $      (154)   $      0.87   $   (0.01)  
     Impairments and disposal gain 180   8,775   0.01   0.34  
     Reserve adjustments -   724   -   0.03  
Adjusted $    23,538   $     9,345   $      0.88   $     0.36  
                 
Discontinued Operations                
As reported $         173   $      (298)   $      0.01   $   (0.01)  
     Impairments and disposal loss 32   176   -   0.01  
Adjusted $         205  

   $      (122)

   $      0.01   $          -  
                 
Consolidated Operations                
As reported $    23,531   $      (452)   $      0.88   $   (0.02)  
Adjusted 23,743   9,223   0. 89   0. 36