Declares Dividend of $0.29 Per Share for Second Quarter
Lithia Motors, Inc. (NYSE: LAD) today reported the highest second
quarter revenue and earnings per share in company history.
Second quarter 2018 revenue increased 26% to $3.1 billion from $2.5
billion in the second quarter of 2017.
Second quarter 2018 net income per diluted share was $2.44, a 15%
increase over $2.12 per diluted share reported in the second quarter of
2017. Adjusted second quarter 2018 net income per diluted share was
$2.52, a 11% increase compared to adjusted net income of $2.28 per
diluted share in the same period of 2017. Second quarter 2018 net income
was $61 million, a 14% increase over $53 million reported in the second
quarter of 2017. Adjusted second quarter 2018 net income was $63
million, a 10% increase compared to adjusted net income of $57 million
for the same period of 2017.
As shown in the attached non-GAAP reconciliation tables, the 2018 second
quarter adjusted results exclude a $0.08 net non-core charge related to
acquisition expenses and storm insurance reserves partially offset by a
tax attribute. The 2017 second quarter adjusted results exclude a $0.16
net non-core charge related to acquisition expenses and hail storm
insurance reserves.
Second Quarter-over-Quarter Operating Highlights: -
Online traffic up 35% over prior year
-
Total retail units sold increased 21%
-
Service, body and parts sales increased 27%
-
Total same store sales increased 3%
-
New vehicle same store sales were flat
-
Used vehicle retail same store sales increased 7%
-
Same store F&I per unit was $1,305
-
Service, body and parts same store sales increased 3%
"Our stores generated strong revenue growth, both overall and on a same
store basis," said Bryan DeBoer, President and CEO. "Total gross profit
increased over 20% and our service operations performed well. We
continue to attack the over $250 million in dry powder available in both
revenue and cost management as operations season and stabilize. At the
same time, we are targeting further acquisition growth and continue to
invest in innovation and digital initiatives for the future."
For the first six months of 2018, revenues increased 22% to $5.8
billion, compared to $4.7 billion in the first six months of 2017.
Net income for the first six months of 2018 was $4.50 per diluted share,
compared to $4.13 per diluted share for the similar period in 2017.
Adjusted net income per diluted share for the first six months of 2018
increased 13% to $4.59 from $4.06 for the first six months of 2017.
Corporate Development
As previously announced, during the second quarter, we added Broadway
Ford in Idaho Falls, Idaho and Buhler Ford in Eatontown, New Jersey and
divested a Mitsubishi franchise in Fresno, California. In July, we
opened a Chrysler Jeep Dodge location in Calallen, Texas, separated a
Subaru franchise into a stand-alone facility in Utica, New York and
divested an Audi franchise in Monroeville, Pennsylvania.
"Our recent actions further optimize our nationwide network of service
and delivery points," said DeBoer. "We remain focused on purchasing and
improving strong franchises that underperform their potential, while
developing new ways to meet our consumers' personal transportation
needs. Generating substantial revenue growth creates a profit engine
that we can invest to accelerate innovation, build out our physical
footprint and deliver compelling shareholder returns."
Balance Sheet Update
We ended the second quarter with $30 million in cash and $204 million in
availability under our credit facility. Additionally, approximately $297
million of our operating real estate is currently unfinanced, which we
estimate could provide $223 million in capital, for total potential
liquidity of $457 million.
In June, we executed an amended and restated loan agreement modifying
our existing syndicated credit facility. The amended facility includes
13 bank and seven captive finance partners, and provides up to $2.6
billion in total available credit for new vehicles, used vehicles and a
working capital facility. The agreement matures in July 2023.
Dividend Payment and Share Repurchases
Our Board of Directors approved a dividend of $0.29 per share related to
second quarter 2018 financial results. We expect to pay the dividend on
August 29, 2018 to shareholders of record on August 15, 2018.
Year to date, we have repurchased 677,437 shares at a weighted average
price of $99.57 per share. Under our existing $250 million share
repurchase authorization, approximately $95 million remains available.
Earnings Outlook
For 2018, we updated our outlook to full year revenues of $11.75 to
$12.25 billion and earnings per share of $9.50. Actual results may be
affected by items described under Forward-Looking Statements below.
Beginning in 2019, we will no longer provide an annual earnings outlook.
Second Quarter Earnings Conference Call and Updated Presentation
The second quarter conference call may be accessed at 11:00 a.m. ET
today by telephone at 877-407-8029. An updated presentation highlighting
the second quarter results has been added to our investor relations
website. To listen live on our website or for replay, visit www.lithiainvestorrelations.com
and click on webcasts.
About Lithia
Lithia Motors, Inc. is one of the largest providers of personal
transportation solutions in the United States and is among the fastest
growing companies in the Fortune 500 (#294-2018). Consumers can buy,
sell and service vehicles digitally or through our 188 coast to coast
locations. Our mission statement, Growth Powered by People, drives us to
continuously improve and to give back to our communities.
Sites www.lithiamotors.com www.lithiainvestorrelations.com www.lithiacareers.com
Lithia Motors on Facebook www.facebook.com/LithiaMotors
Lithia Motors on Twitter https://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. 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 "project," "outlook,"
"expect," "anticipate," "intend," "plan," "believe," "estimate," "may,"
"seek," "would," "should," "likely," "goal," "strategy," "future,"
"maintain," "continue," "remain," "target" or "will" and similar
references to future periods. Examples of forward-looking statements in
this press release include, among others, statements regarding:
-
Expected operating results, such as improved store efficiency and
performance; achieving a 2018 full year earnings target of $9.50 per
diluted share and all projections set forth under the headings
"Earnings Outlook";
-
Our ability to improve store performance;
-
Anticipated acquisition opportunities and additions of dealership
locations to our portfolio in the future, and our ability to improve
earnings and achieve returns on investments;
-
Anticipated revenues from acquired and open point stores; and
-
Anticipated availability of liquidity from our credit facility and
unfinanced operating real estate.
By their nature, forward-looking statements involve risks and
uncertainties because they relate to events that depend on circumstances
that may or may not occur in the future. Forward-looking statements are
not guarantees of future performance, and our actual results of
operations, financial condition and liquidity and development of the
industry in which we operate may differ materially from those made in or
suggested by the forward-looking statements in this press release. The
risks and uncertainties that could cause actual results to differ
materially from estimated or projected results include, without
limitation, future economic and financial conditions (both nationally
and locally), changes in customer demand, our relationship with, and the
financial and operational stability of, vehicle manufacturers and other
suppliers, risks associated with our indebtedness (including available
borrowing capacity, compliance with financial covenants and ability to
refinance or repay indebtedness on favorable terms), acts of God or
other incidents which may adversely impact our operations and financial
performance, government regulations, legislation and others set forth
throughout "Part II, Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations" and in "Part I, Item 1A.
Risk Factors" of our most recent Annual Report on Form 10-K, and from
time to time in our other filings with the SEC. We urge you to carefully
consider this information and not place undue reliance on
forward-looking statements. We undertake no duty to update our
forward-looking statements, including our earnings outlook, which are
made as of the date of this release.
Non-GAAP Financial Measures
This press release and the attached financial tables contain non-GAAP
financial measures such as adjusted net income and diluted earnings per
share, adjusted SG&A as a percentage of revenue and gross profit,
adjusted operating margin, adjusted operating profit as a percentage of
gross profit, adjusted pre-tax margin, EBITDA, adjusted EBITDA,
leveraged cash flow and adjusted total debt. Non-GAAP measures do not
have definitions under GAAP and may be defined differently by and not
comparable to similarly titled measures used by other companies. As a
result, we review any non-GAAP financial measures in connection with a
review of the most directly comparable measures calculated in accordance
with GAAP. We caution you not to place undue reliance on such non-GAAP
measures, but also to consider them with the most directly comparable
GAAP measures. We present cash flows from operations in the attached
tables, adjusted to include the change in non-trade floor plan debt to
improve the visibility of cash flows related to vehicle financing. As
required by SEC rules, we have reconciled these measures to the most
directly comparable GAAP measures in the attachments to this release. We
believe the non-GAAP financial measures we present improve the
transparency of our disclosures; provide a meaningful presentation of
our results from core business operations, because they exclude items
not related to core business operations and other non-cash items; and
improve the period-to-period comparability of our results from core
business operations.These presentations should not be considered
an alternative to GAAP measures.
Lithia Motors, Inc. | Consolidated Statements of Operations (Unaudited) |
(In thousands except per share data)
| |
| |
| Three months ended June 30, |
| % |
| Six months ended June 30, |
| % | | | | Increase | | | Increase | | | 2018 |
| 2017 | | (Decrease) | | 2018 |
| 2017 | | (Decrease) | Revenues: | | | | | | | | | | | | | | |
New vehicle retail
| |
$
|
1,726,803
| | |
$
|
1,384,055
| | |
24.8
|
%
| |
$
|
3,181,528
| | |
$
|
2,594,359
| | |
22.6
|
%
|
Used vehicle retail
| |
804,098
| | |
633,635
| | |
26.9
| | |
1,519,672
| | |
1,235,858
| | |
23.0
| |
Used vehicle wholesale
| |
85,335
| | |
69,512
| | |
22.8
| | |
161,290
| | |
141,015
| | |
14.4
| |
Finance and insurance
| |
114,492
| | |
94,851
| | |
20.7
| | |
220,997
| | |
181,628
| | |
21.7
| |
Service, body and parts
| |
311,407
| | |
246,005
| | |
26.6
| | |
597,104
| | |
478,579
| | |
24.8
| |
Fleet and other
| |
54,402
|
| |
38,978
|
| |
39.6
|
| |
75,625
|
| |
71,698
|
| |
5.5
|
| Total revenues | | 3,096,537 | | | 2,467,036 | | | 25.5 | % | | 5,756,216 | | | 4,703,137 | | | 22.4 | % | Cost of sales: | | | | | | | | | | | | | | |
New vehicle retail
| |
1,625,309
| | |
1,303,516
| | |
24.7
| | |
2,993,087
| | |
2,443,702
| | |
22.5
| |
Used vehicle retail
| |
716,997
| | |
559,129
| | |
28.2
| | |
1,358,960
| | |
1,092,569
| | |
24.4
| |
Used vehicle wholesale
| |
83,409
| | |
67,800
| | |
23.0
| | |
158,438
| | |
137,786
| | |
15.0
| |
Service, body and parts
| |
157,700
| | |
123,525
| | |
27.7
| | |
304,989
| | |
242,905
| | |
25.6
| |
Fleet and other
| |
52,395
|
| |
37,795
|
| |
38.6
|
| |
71,904
|
| |
69,252
|
| |
3.8
|
| Total cost of sales | |
2,635,810
|
| |
2,091,765
|
| |
26.0
|
| |
4,887,378
|
| |
3,986,214
|
| |
22.6
|
| Gross profit | | 460,727 | | | 375,271 | | | 22.8 | % | | 868,838 | | | 716,923 | | | 21.2 | % |
SG&A expense
| |
333,350
| | |
257,290
| | |
29.6
| | |
630,844
| | |
500,062
| | |
26.2
| |
Depreciation and amortization
| |
18,821
|
| |
14,031
|
| |
34.1
|
| |
35,675
|
| |
26,770
|
| |
33.3
|
| Income from operations | | 108,556 | | | 103,950 | | | 4.4 | % | | 202,319 | | | 190,091 | | | 6.4 | % |
Floor plan interest expense
| |
(15,634
|
)
| |
(9,332
|
)
| |
67.5
| | |
(29,168
|
)
| |
(17,384
|
)
| |
67.8
| |
Other interest expense
| |
(13,829
|
)
| |
(7,169
|
)
| |
92.9
| | |
(25,635
|
)
| |
(13,840
|
)
| |
85.2
| |
Other income (expense), net
| |
1,659
|
| |
387
|
| |
NM
|
| |
3,033
|
| |
10,232
|
| |
NM
|
| Income before income taxes | | 80,752 | | | 87,836 | | | (8.1 | )% | | 150,549 | | | 169,099 | | | (11.0 | )% |
Income tax expense
| |
(20,092
|
)
| |
(34,636
|
)
| |
(42.0
|
)
| |
(37,828
|
)
| |
(65,172
|
)
| |
(42.0
|
)
|
Income tax rate
| |
24.9
|
%
| |
39.4
|
%
| |
|
| |
25.1
|
%
| |
38.5
|
%
| |
|
| Net income | | $ | 60,660 |
| | $ | 53,200 |
| | 14.0 | % | | $ | 112,721 |
| | $ | 103,927 |
| | 8.5 | % | | | | | | | | | | | | | | |
| Diluted net income per share: | | | | | | | | | | | | | | |
Net income per share
| |
$
|
2.44
| | |
$
|
2.12
| | |
15.1
|
%
| |
$
|
4.50
| | |
$
|
4.13
| | |
9.0
|
%
| | | | | | | | | | | | | | |
|
Diluted shares outstanding
| |
24,882
| |
25,106
| |
(0.9
|
)%
| |
25,028
| |
25,177
| |
(0.6
|
)%
| | | | | | | | | | | | | | |
|
NM - not meaningful
| | | | | | | | | | | | | | |
|
Lithia Motors, Inc. | Key Performance Metrics (Unaudited)
|
| |
| Three months ended June 30, |
| % |
| Six months ended June 30, |
| % | | | | Increase | | | Increase | | | 2018 |
| 2017 | | (Decrease) | | 2018 |
| 2017 | | (Decrease) | Gross margin | | | | | | | | | | | | |
New vehicle retail
| |
5.9
|
%
| |
5.8
|
%
| |
10
|
bps
| |
5.9
|
%
| |
5.8
|
%
| |
10
|
bps
|
Used vehicle retail
| |
10.8
| | |
11.8
| | |
(100
|
)
| |
10.6
| | |
11.6
| | |
(100
|
)
|
Finance and insurance
| |
100.0
| | |
100.0
| | |
-
| | |
100.0
| | |
100.0
| | |
-
| |
Service, body and parts
| |
49.4
| | |
49.8
| | |
(40
|
)
| |
48.9
| | |
49.2
| | |
(30
|
)
|
Gross profit margin
| |
14.9
| | |
15.2
| | |
(30
|
)
| |
15.1
| | |
15.2
| | |
(10
|
)
| | | | | | | | | | | | |
| Unit sales | | | | | | | | | | | | |
New vehicle retail
| |
49,027
| | |
40,876
| | |
19.9
|
%
| |
90,524
| | |
76,492
| | |
18.3
|
%
|
Used vehicle retail
| |
39,096
| | |
32,171
| | |
21.5
| | |
75,210
| | |
62,954
| | |
19.5
| |
Total retail units sold
| |
88,123
| | |
73,047
| | |
20.6
| | |
165,734
| | |
139,446
| | |
18.9
| | | | | | | | | | | | | |
| Average selling price | | | | | | | | | | | | |
New vehicle retail
| |
$
|
35,221
| | |
$
|
33,860
| | |
4.0
|
%
| |
$
|
35,146
| | |
$
|
33,917
| | |
3.6
|
%
|
Used vehicle retail
| |
20,567
| | |
19,696
| | |
4.4
| | |
20,206
| | |
19,631
| | |
2.9
| | | | | | | | | | | | | |
| Average gross profit per unit | | | | | | | | | | | | |
New vehicle retail
| |
$
|
2,070
| | |
$
|
1,970
| | |
5.1
|
%
| |
$
|
2,082
| | |
$
|
1,970
| | |
5.7
|
%
|
Used vehicle retail
| |
2,228
| | |
2,316
| | |
(3.8
|
)
| |
2,137
| | |
2,276
| | |
(6.1
|
)
|
Finance and insurance
| |
1,299
| | |
1,298
| | |
0.1
| | |
1,333
| | |
1,302
| | |
2.4
| |
Total vehicle(1) | |
3,461
| | |
3,444
| | |
0.5
| | |
3,457
| | |
3,434
| | |
0.7
| | | | | | | | | | | | | |
| Revenue mix | | | | | | | | | | | | |
New vehicle retail
| |
55.8
|
%
| |
56.1
|
%
| | | |
55.3
|
%
| |
55.2
|
%
| | |
Used vehicle retail
| |
26.0
| | |
25.7
| | | | |
26.4
| | |
26.3
| | | |
Used vehicle wholesale
| |
2.8
| | |
2.8
| | | | |
2.8
| | |
3.0
| | | |
Finance and insurance, net
| |
3.7
| | |
3.8
| | | | |
3.8
| | |
3.9
| | | |
Service, body and parts
| |
10.1
| | |
10.0
| | | | |
10.4
| | |
10.2
| | | |
Fleet and other
| |
1.6
| | |
1.6
| | | | |
1.3
| | |
1.4
| | | | | | | | | | | | | | | | | | | |
|
|
| Adjusted |
| As reported |
| Adjusted |
| As reported | | | Three months ended June 30, | | Three months ended June 30, | | Six months ended June 30, | | Six months ended June 30, | Other metrics | | 2018 |
| 2017 | | 2018 |
| 2017 | | 2018 |
| 2017 | | 2018 |
| 2017 |
SG&A as a % of revenue
| |
10.6
|
%
| |
10.2
|
%
| |
10.8
|
%
| |
10.4
|
%
| |
10.9
|
%
| |
10.5
|
%
| |
11.0
|
%
| |
10.6
|
%
|
SG&A as a % of gross profit
| |
71.3
| | |
67.0
| | |
72.4
| | |
68.6
| | |
72.1
| | |
68.9
| | |
72.6
| | |
69.8
| |
Operating profit as a % of revenue
| |
3.7
| | |
4.5
| | |
3.5
| | |
4.2
| | |
3.6
| | |
4.2
| | |
3.5
| | |
4.0
| |
Operating profit as a % of gross profit
| |
24.6
| | |
29.3
| | |
23.6
| | |
27.7
| | |
23.8
| | |
27.4
| | |
23.3
| | |
26.5
| |
Pretax margin
| |
2.8
| | |
3.8
| | |
2.6
| | |
3.6
| | |
2.7
| | |
3.5
| | |
2.6
| | |
3.6
| |
Net profit margin
| |
2.0
| | |
2.3
| | |
2.0
| | |
2.2
| | |
2.0
| | |
2.2
| | |
2.0
| | |
2.2
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
(1) |
|
Includes the sales and gross profit related to new, used retail,
used wholesale and finance and insurance and unit sales for new and
used retail
| | |
|
Lithia Motors, Inc. | Same Store Operating Highlights (Unaudited)
|
| |
| Three months ended June 30, |
| % |
| Six months ended June 30, |
| % | | | | Increase | | | Increase | | | 2018 |
| 2017 | | (Decrease) | | 2018 |
| 2017 | | (Decrease) | Revenues | | | | | | | | | | | | |
New vehicle retail
| |
$
|
1,380,947
| | |
$
|
1,375,444
| | |
0.4
|
%
| |
$
|
2,563,814
| | |
$
|
2,576,578
| | |
(0.5
|
)%
|
Used vehicle retail
| |
673,955
| | |
629,198
| | |
7.1
| | |
1,296,344
| | |
1,224,239
| | |
5.9
| |
Finance and insurance
| |
95,177
| | |
94,244
| | |
1.0
| | |
185,668
| | |
180,322
| | |
3.0
| |
Service, body and parts
| |
251,449
| | |
243,603
| | |
3.2
| | |
487,260
| | |
472,987
| | |
3.0
| |
Total revenues
| |
2,515,454
| | |
2,450,671
| | |
2.6
| | |
4,727,682
| | |
4,665,925
| | |
1.3
| | | | | | | | | | | | | |
| Gross profit | | | | | | | | | | | | |
New vehicle retail
| |
$
|
79,141
| | |
$
|
79,830
| | |
(0.9
|
) %
| |
$
|
147,226
| | |
$
|
148,887
| | |
(1.1
|
)%
|
Used vehicle retail
| |
76,447
| | |
74,102
| | |
3.2
| | |
142,323
| | |
142,359
| | |
-
| |
Finance and insurance
| |
95,177
| | |
94,244
| | |
1.0
| | |
185,668
| | |
180,322
| | |
3.0
| |
Service, body and parts
| |
124,751
| | |
121,368
| | |
2.8
| | |
240,773
| | |
233,025
| | |
3.3
| |
Total gross profit
| |
378,843
| | |
372,424
| | |
1.7
| | |
721,509
| | |
710,221
| | |
1.6
| | | | | | | | | | | | | |
| Gross margin | | | | | | | | | | | | |
New vehicle retail
| |
5.7
|
%
| |
5.8
|
%
| |
(10
|
)bps
| |
5.7
|
%
| |
5.8
|
%
| |
(10
|
)bps
|
Used vehicle retail
| |
11.3
| | |
11.8
| | |
(50
|
)
| |
11.0
| | |
11.6
| | |
(60
|
)
|
Finance and insurance
| |
100.0
| | |
100.0
| | |
-
| | |
100.0
| | |
100.0
| | |
-
| |
Service, body and parts
| |
49.6
| | |
49.8
| | |
(20
|
)
| |
49.4
| | |
49.3
| | |
10
| |
Gross profit margin
| |
15.1
| | |
15.2
| | |
(10
|
)
| |
15.3
| | |
15.2
| | |
10
| | | | | | | | | | | | | |
| Unit sales | | | | | | | | | | | | |
New vehicle retail
| |
39,619
| | |
40,655
| | |
(2.5
|
) %
| |
73,489
| | |
76,031
| | |
(3.3
|
)%
|
Used vehicle retail
| |
33,328
| | |
31,933
| | |
4.4
| | |
65,005
| | |
62,337
| | |
4.3
| | | | | | | | | | | | | |
| Average selling price | | | | | | | | | | | | |
New vehicle retail
| |
$
|
34,856
| | |
$
|
33,832
| | |
3.0
|
%
| |
$
|
34,887
| | |
$
|
33,889
| | |
2.9
|
%
|
Used vehicle retail
| |
20,222
| | |
19,704
| | |
2.6
| | |
19,942
| | |
19,639
| | |
1.5
| | | | | | | | | | | | | |
| Average gross profit per unit | | | | | | | | | | | | |
New vehicle retail
| |
$
|
1,998
| | |
$
|
1,964
| | |
1.7
|
%
| |
$
|
2,003
| | |
$
|
1,958
| | |
2.3
|
%
|
Used vehicle retail
| |
2,294
| | |
2,321
| | |
(1.2
|
)
| |
2,189
| | |
2,284
| | |
(4.2
|
)
|
Finance and insurance
| |
1,305
| | |
1,298
| | |
0.5
| | |
1,341
| | |
1,303
| | |
2.9
| |
Total vehicle(1) | |
3,458
| | |
3,442
| | |
0.5
| | |
3,447
| | |
3,431
| | |
0.5
| |
(1) |
|
Includes the sales and gross profit related to new, used retail,
used wholesale and finance and insurance and unit sales for new and
used retail
| | |
|
Lithia Motors, Inc. | Other Highlights (Unaudited)
|
| |
| As of | | | June 30, |
| December 31, |
| June 30, | | | 2018 | | 2017 | | 2017 | Days Supply(1) | | | | | | |
New vehicle inventory
| |
77
| |
69
| |
75
|
Used vehicle inventory
| |
62
| |
67
| |
60
| | | | | | |
|
(1) |
|
Days supply calculated based on current inventory levels, excluding
in-transit vehicles, and a 30-day historical cost of sales level.
| | |
|
Financial covenants |
| |
| | | | Requirement | | As of June 30, 2018 |
Current ratio
| |
Not less than 1.10 to 1
| |
1.25 to 1
|
Fixed charge coverage ratio
| |
Not less than 1.20 to 1
| |
2.59 to 1
|
Leverage ratio
| |
Not more than 5.00 to 1
| |
3.52 to 1
| | | | |
|
Lithia Motors, Inc. | Condensed Consolidated Balance Sheets (Unaudited)
|
(In thousands)
|
| |
| June 30, 2018 |
| December 31, 2017 |
Cash and cash equivalents
| |
$
|
29,991
| | |
$
|
57,253
|
Trade receivables, net
| |
483,995
| | |
521,938
|
Inventories, net
| |
2,333,112
| | |
2,132,744
|
Other current assets
| |
46,231
|
| |
70,847
| Total current assets | | $ | 2,893,329 | | | $ | 2,782,782 | | | | |
|
Property and equipment, net
| |
1,232,054
| | |
1,185,169
|
Intangibles
| |
478,065
| | |
443,297
|
Other non-current assets
| |
560,714
|
| |
271,818
| Total assets | | $ | 5,164,162 |
| | $ | 4,683,066 | | | | |
|
Floor plan notes payable
| |
2,018,068
| | |
1,919,026
|
Other current liabilities
| |
394,143
|
| |
381,955
| Total current liabilities | | $ | 2,412,211 | | | $ | 2,300,981 | | | | |
|
Long-term debt
| |
1,295,077
| | |
1,028,476
|
Other long-term liabilities and deferred revenue
| |
296,006
|
| |
270,391
| Total liabilities | | $ | 4,003,294 |
| | $ | 3,599,848 | | | | |
|
Stockholder's Equity
| |
1,160,868
|
| |
1,083,218
| Total liabilities & stockholders' equity | | $ | 5,164,162 |
| | $ | 4,683,066 | | | | | | | |
|
Lithia Motors, Inc. | Summarized Cash Flow from Operations (Unaudited)
|
(In thousands)
| |
| Six months ended June 30, | | | 2018 |
| 2017 |
Net income
| |
$
|
112,721
| | |
$
|
103,927
| | Adjustments to reconcile net income to net cash provided by
operating activities: | | | | |
Depreciation and amortization
| |
35,675
| | |
26,770
| |
Stock-based compensation
| |
6,837
| | |
5,432
| |
(Gain) loss on disposal of assets
| |
(78
|
)
| |
256
| |
Loss on sale of franchise
| |
380
| | |
-
| |
Deferred income taxes
| |
345
| | |
(1,156
|
)
| (Increase) decrease: | | | | |
Trade receivables, net
| |
47,915
| | |
70,908
| |
Inventories
| |
(35,530
|
)
| |
(36,078
|
)
|
Other assets
| |
20,588
| | |
479
| | Increase (decrease): | | | | |
Floor plan notes payable, net
| |
15,056
| | |
1,330
| |
Trade payables
| |
2,929
| | |
414
| |
Accrued liabilities
| |
5,463
| | |
(3,684
|
)
|
Other long-term liabilities and deferred revenue
| |
24,030
|
| |
9,957
|
| Net cash provided by operating activities | | $ | 236,331 |
| | $ | 178,555 |
| | | | | | | | |
|
Lithia Motors, Inc. | Reconciliation of Non-GAAP Cash Flow from Operations (Unaudited)
|
(In thousands)
|
| |
| Six months ended June 30, | Net cash provided by operating activities | | 2018 |
| 2017 |
As reported
| |
$
|
236,331
| | |
$
|
178,555
| |
Floor plan notes payable, non-trade, net
| |
85,763
| | |
(32,124
|
)
|
Less: Borrowings on floor plan notes payable, non-trade associated
with acquired new vehicle inventory
| |
(120,899
|
)
| |
-
|
| Adjusted | | $ | 201,195 |
| | $ | 146,431 |
| | | | | | | | |
|
Lithia Motors, Inc. | Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)
|
(In thousands, except for per share data)
|
| |
| Three Months Ended June 30, 2018 | | | As reported |
| Insurance reserves |
| Acquisition expenses |
| Tax attributes |
| Adjusted |
Selling, general and administrative
| |
$
|
333,350
| | |
$
|
(1,490
|
)
| |
$
|
(3,251
|
)
| |
$
|
-
| | |
$
|
328,609
| | | | | | | | | | | |
|
Income from operations
| |
108,556
| | |
1,490
| | |
3,251
| | |
-
| | |
113,297
| | | | | | | | | | | |
|
Income before income taxes
| |
$
|
80,752
| | |
$
|
1,490
| | |
$
|
3,251
| | |
$
|
-
| | |
$
|
85,493
| |
Income tax benefit (expense)
| |
(20,092
|
)
| |
(389
|
)
| |
(853
|
)
| |
(1,409
|
)
| |
(22,743
|
)
|
Net income
| |
$
|
60,660
|
| |
$
|
1,101
|
| |
$
|
2,398
|
| |
$
|
(1,409
|
)
| |
$
|
62,750
|
| | | | | | | | | | |
|
Diluted earnings per share
| |
$
|
2.44
| | |
$
|
0.04
| | |
$
|
0.10
| | |
$
|
(0.06
|
)
| |
$
|
2.52
| |
Diluted share count
| |
24,882
| | | | | | | | | | | | | | | | | | | | |
|
|
| Three Months Ended June 30, 2017 | | | As reported |
| Insurance reserves |
| Acquisition expenses |
| Adjusted |
Selling, general and administrative
| |
$
|
257,290
| | |
$
|
(3,878
|
)
| |
$
|
(2,137
|
)
| |
$
|
251,275
| | | | | | | | | |
|
Income from operations
| |
103,950
| | |
3,878
| | |
2,137
| | |
109,965
| | | | | | | | | |
|
Income before income taxes
| |
$
|
87,836
| | |
$
|
3,878
| | |
$
|
2,137
| | |
$
|
93,851
| |
Income tax expense
| |
(34,636
|
)
| |
(1,231
|
)
| |
(821
|
)
| |
(36,688
|
)
|
Net income
| |
$
|
53,200
|
| |
$
|
2,647
|
| |
$
|
1,316
|
| |
$
|
57,163
|
| | | | | | | | |
|
Diluted earnings per share
| |
$
|
2.12
| | |
$
|
0.11
| | |
$
|
0.05
| | |
$
|
2.28
| |
Diluted share count
| |
25,106
| | | | | | | | | | | | | | | | |
|
Lithia Motors, Inc. | Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)
|
(In thousands, except for per share data)
|
| |
| Six Months Ended June 30, 2018 | | | As reported |
| Insurance reserves |
| Acquisition expenses |
| Tax attributes |
| Adjusted |
Selling, general and administrative
| |
$
|
630,844
| | |
$
|
(1,490
|
)
| |
$
|
(3,251
|
)
| |
$
|
-
| | |
$
|
626,103
| | | | | | | | | | | |
|
Income from operations
| |
202,319
| | |
1,490
| | |
3,251
| | |
-
| | |
207,060
| | | | | | | | | | | |
|
Income before income taxes
| |
$
|
150,549
| | |
$
|
1,490
| | |
$
|
3,251
| | |
$
|
-
| | |
$
|
155,290
| |
Income tax benefit (expense)
| |
(37,828
|
)
| |
(389
|
)
| |
(853
|
)
| |
(1,409
|
)
| |
(40,479
|
)
|
Net income
| |
$
|
112,721
|
| |
$
|
1,101
|
| |
$
|
2,398
|
| |
$
|
(1,409
|
)
| |
$
|
114,811
|
| | | | | | | | | | |
|
Diluted earnings per share
| |
$
|
4.50
| | |
0.04
| | |
$
|
0.11
| | |
$
|
(0.06
|
)
| |
$
|
4.59
| |
Diluted share count
| |
25,028
| | | | | | | | | | | | | | | | | | | | |
|
|
| Six Months Ended June 30, 2017 | | | As reported |
| Insurance reserves |
| Acquisition expenses |
| OEM settlement |
| Adjusted |
Selling, general and administrative
| |
$
|
500,062
| | |
$
|
(3,878
|
)
| |
$
|
(2,137
|
)
| |
$
|
-
| | |
$
|
494,047
| | | | | | | | | | | |
|
Income from operations
| |
190,091
| | |
3,878
| | |
2,137
| | |
-
| | |
196,106
| | | | | | | | | | | |
|
Other income (expense), net
| |
10,232
| | |
-
| | |
-
| | |
(9,111
|
)
| |
1,121
| | | | | | | | | | | |
|
Income before income taxes
| |
$
|
169,099
| | |
$
|
3,878
| | |
$
|
2,137
| | |
$
|
(9,111
|
)
| |
$
|
166,003
| |
Income tax benefit (expense)
| |
(65,172
|
)
| |
(1,231
|
)
| |
(821
|
)
| |
3,423
|
| |
(63,801
|
)
|
Net income
| |
$
|
103,927
|
| |
$
|
2,647
|
| |
$
|
1,316
|
| |
$
|
(5,688
|
)
| |
$
|
102,202
|
| | | | | | | | | | |
|
Diluted earnings per share
| |
$
|
4.13
| | |
$
|
0.11
| | |
$
|
0.05
| | |
$
|
(0.23
|
)
| |
$
|
4.06
| |
Diluted share count
| |
25,177
| | | | | | | | | | | | | | | | | | | | |
|
Lithia Motors, Inc. | Adjusted EBITDA and Leveraged Free Cash Flow (Unaudited)
| |
| |
| Three months ended June 30, |
| % |
| Six months ended June 30, |
| % | | | | Increase | | | Increase | | | 2018 |
| 2017 | | (Decrease) | | 2018 |
| 2017 | | (Decrease) | EBITDA and Adjusted EBITDA | | | | | | | | | | | | | |
Net income
| |
$
|
60,660
| | |
$
|
53,200
| | |
14.0
|
%
| |
$
|
112,721
| | |
$
|
103,927
| | |
8.5
|
%
|
Other interest expense
| |
13,829
| | |
7,169
| | |
92.9
| | |
25,635
| | |
13,840
| | |
85.2
| |
Income tax expense
| |
20,092
| | |
34,636
| | |
(42.0
|
)
| |
37,828
| | |
65,172
| | |
(42.0
|
)
|
Depreciation and amortization
| |
18,821
|
| |
14,031
|
| |
34.1
| | |
35,675
|
| |
26,770
|
| |
33.3
| |
EBITDA
| |
$
|
113,402
|
| |
$
|
109,036
|
| |
4.0
|
%
| |
$
|
211,859
|
| |
$
|
209,709
|
| |
1.0
|
%
| | | | | | | | | | | | | |
|
Other adjustments:
| | | | | | | | | | | | | |
Less: used vehicle line of credit interest
| |
$
|
(22
|
)
| |
$
|
(1,131
|
)
| |
(98.1
|
)
| |
$
|
(535
|
)
| |
$
|
(2,157
|
)
| |
(75.2
|
)
|
Add: insurance reserve
| |
1,490
| | |
3,878
| | |
(61.6
|
)
| |
1,490
| | |
3,878
| | |
(61.6
|
)
|
Add: acquisition expenses
| |
3,251
| | |
2,137
| | |
52.1
| | |
3,251
| | |
2,137
| | |
52.1
| |
Less: OEM legal settlements
| |
-
|
| |
-
|
| |
NM
| | |
-
|
| |
(9,111
|
)
| |
(100.0
|
)
|
Adjusted EBITDA
| |
$
|
118,121
|
| |
$
|
113,920
|
| |
3.7
|
%
| |
$
|
216,065
|
| |
$
|
204,456
|
| |
5.7
|
%
| | | | | | | | | | | | | |
| Leveraged EBITDA | | | | | | | | | | | | | |
Adjusted EBITDA
| |
$
|
118,121
| | |
$
|
113,920
| | |
3.7
|
%
| |
$
|
216,065
| | |
$
|
204,456
| | |
5.7
|
%
|
Less: Capital expenditures
| |
(30,369
|
)
| |
(16,227
|
)
| |
87.2
| | |
(72,373
|
)
| |
(32,266
|
)
| |
124.3
| |
Leveraged EBITDA
| |
$
|
87,752
|
| |
$
|
97,693
|
| |
(10.2
|
)%
| |
$
|
143,692
|
| |
$
|
172,190
|
| |
(16.6
|
)%
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20180725005180/en/
Lithia Motors, Inc. John North, 541-618-5748 Senior Vice
President and Chief Financial Officer
|