Lithia Reports Highest Second Quarter Net Income in Company History

Declares Dividend of $0.31 Per Share for Second Quarter

MEDFORD, Ore.–(BUSINESS WIRE)–Lithia Motors, Inc. (NYSE: LAD) today reported second quarter 2020 revenue of $2.8 billion.

Second quarter 2020 net income per diluted share was $3.38, a 29% increase from $2.63 per diluted share reported in the second quarter of 2019. Adjusted second quarter 2020 net income per diluted share was $3.72, a 26% increase compared to adjusted net income of $2.95 per diluted share in the same period of 2019.

Second quarter 2020 net income was $78 million, a 26% increase compared to net income of $62 million in the same period of 2019. Adjusted second quarter 2020 net income was $86 million, a 23% increase compared to adjusted net income of $69 million for the same period of 2019.

As shown in the attached non-GAAP reconciliation tables, the 2020 second quarter adjusted results exclude a $0.34 net non-core charge related to an impairment charge, insurance reserves and acquisition expenses, partially offset by a net gain on sale of stores and a beneficial tax attribute. The 2019 second quarter adjusted results exclude a $0.32 net non-core charge due to a net loss on sale of stores, insurance reserves, and acquisition expenses.

Second Quarter-over-Quarter Operating Highlights:

  • Same store new vehicle sales decreased 23.5 %
  • Same store used vehicle retail sales increased 0.5%
  • Same store F&I per unit increased 9.4% to $1,590
  • Same store total gross profit per unit increased 11.4% to $4,030
  • SG&A as a percentage of gross profit improved 540bps to 64.7%

“The strong sequential improvements throughout the quarter, coupled with our stores’ responsiveness to the current environment, led us to the highest quarterly adjusted earnings per share in our company’s history,” said Bryan DeBoer, President and CEO. “This record performance illustrates the massive opportunity that exists within our $2 trillion industry that we are unlocking through continued growth and the activation of our ecommerce digital home solutions.”

For the first six months of 2020 revenues decreased 8% to $5.6 billion, compared to $6.1 billion in 2019.

Net income for the first six months of 2020 was $5.32 per diluted share, compared to $5.08 per diluted share in 2019, an increase of 5%. Adjusted net income per diluted share for the first six months of 2020 increased 5% to $5.70 from $5.42 in the same period of 2019.

Corporate Development

In July, we announced the acquisitions of Smolich CJDR and Nissan in Bend, Oregon and Ladin Subaru in Thousand Oaks, California. These acquisitions are anticipated to generate $160 million in annualized steady state revenues. For the year, this brings our total anticipated annualized revenue from acquired locations to $320 million and expanded our density in both the Southwest and Northwest regions.

Balance Sheet Update

We ended the second quarter with over $750 million in cash and availability on our revolving lines of credit. Earlier this month, we closed on a $255 million syndicated real estate revolving line of credit, bringing our current total cash and available credit to over $1 billion. Our unfinanced real estate could provide additional liquidity of approximately $250 million.

“The acquisition market is robust and we are accelerating the build out of our coast-to-coast network enabling us to serve customers wherever, whenever, and however they desire,” said DeBoer. “Our balance sheet is in the strongest position in our company’s history and we are well positioned to accelerate our plan to reach 5% national market share.”

Dividend Payment

Our Board of Directors approved increasing our dividend to $0.31 per share. We expect to pay the dividend on August 28, 2020 to shareholders of record on August 14, 2020.

Second Quarter Earnings Conference Call and Updated Presentation

The second quarter 2020 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 2020 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 a leading provider of personal transportation solutions in the United States and is among the fastest growing companies in the Fortune 500 (#252-2020). Lithia’s rapid growth is powered by people, an industry leading coast-to-coast physical network and ecommerce digital home solutions. Lithia increases market share and optimizes profitability by focusing on the consumer experience and applying proprietary performance measurement systems fueled by data science. Lithia’s unique growth model generates significant cash flows, which funds innovations and the expansion of its nationwide network, creating personal transportation solutions wherever, whenever and however consumers desire.

Sites

www.lithia.com
www.lithiainvestorrelations.com
www.lithiacareers.com

Lithia Motors on Facebook

http://www.facebook.com/LithiaMotors

Lithia Motors on Twitter

http://twitter.com/lithiamotors

Forward-Looking Statements

Certain statements in this presentation, and at times made by our officers and representatives, constitute forward-looking statements within the meaning of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. Generally, you can identify forward-looking statements by terms such as “project”, “outlook”, “target”, “may”, “will”, “would”, “should”, “seek”, “expect”, “plan”, “intend”, “forecast”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “likely”, “goal”, “strategy”, “future”, “maintain”, and “continue” or the negative of these terms or other comparable terms. Examples of forward-looking statements in this presentation include, among others, statements regarding:

  • Future market conditions, including anticipated car sales levels;
  • Anticipated impacts on consumer demand or governmental restrictions related to the COVID-19 pandemic or otherwise;
  • Expected level of business interruption due to shelter in place policies or lifting of those restrictions, and when volumes and consumer demand will return;
  • Continuation of our sales and services, including in-store appointments and home deliveries;
  • Expected growth from our ecommerce home solutions and digital strategies;
  • Expected operating results, such as improved store performance; continued improvement of selling, general and administrative expenses (“SG&A”) as a percentage of gross profit and all projections;
  • Anticipated integration, success and growth of acquired stores;
  • Anticipated ability to capture additional market share;
  • Anticipated ability to find accretive acquisitions;
  • Expected revenues from acquired stores;
  • Anticipated synergies, ability to monetize our investment in digital innovation;
  • Anticipated additions of dealership locations to our portfolio in the future;
  • Anticipated financial condition and liquidity, including from our cash, availability on our credit facility and unfinanced real estate;
  • Anticipated use of proceeds from our financings;
  • Anticipated allocations, uses and levels of capital expenditures in the future;
  • Expectations regarding compliance with financial and restrictive covenants in our credit facility and other debt agreements; and
  • Our strategies for customer retention, growth, market position, financial results and risk management.

Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. 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 presentation. Therefore, you should not rely on any of these forward-looking statements. 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), including as a result of the COVID-19 pandemic;
  • 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);
  • The adequacy of our cash flow and earnings and other conditions which may affect our ability to pay our quarterly dividend at the planned level;
  • Disruptions to our technology network including computer systems and software, as well as natural events such as severe weather, fires, floods and earthquakes or man-made or other disruptions of our operating systems, structures, facilities or equipment; and
  • Government regulations and legislation, and other risks 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, Item 8.01 in our Form 8-K filed on April 13, 2020, and from time to time in our other filings with the SEC.

Any forward-looking statement made by us in this presentation is based only on information currently available to us and speaks only as of the date on which it is made. Except as required by law, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Non-GAAP Financial Measures

This presentation contains 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 revenue and gross profit, adjusted pre-tax margin and net profit margin, EBITDA, adjusted EBITDA, leveraged EBITDA 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 millions except per share data)

 

 

Three months ended

June 30,

 

%

 

Six months ended

June 30,

 

%

 

 

 

Increase

 

 

Increase

 

 

2020

 

2019

 

(Decrease)

 

2020

 

2019

 

(Decrease)

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle retail

 

$

1,367.8

 

 

$

1,707.4

 

 

(19.9

)%

 

$

2,741.3

 

 

$

3,168.5

 

 

(13.5

)%

Used vehicle retail

 

922.2

 

 

888.3

 

 

3.8

 

 

1,796.5

 

 

1,716.2

 

 

4.7

 

Used vehicle wholesale

 

51.3

 

 

81.7

 

 

(37.2

)

 

118.0

 

 

159.1

 

 

(25.8

)

Finance and insurance

 

124.9

 

 

129.0

 

 

(3.2

)

 

246.7

 

 

246.5

 

 

0.1

 

Service, body and parts

 

275.5

 

 

335.5

 

 

(17.9

)

 

605.4

 

 

652.9

 

 

(7.3

)

Fleet and other

 

16.9

 

 

79.8

 

 

(78.8

)

 

54.4

 

 

128.2

 

 

(57.6

)

Total revenues

 

2,758.6

 

 

3,221.7

 

 

(14.4

)%

 

5,562.3

 

 

6,071.4

 

 

(8.4

)%

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle retail

 

1,275.6

 

 

1,612.0

 

 

(20.9

)

 

2,570.9

 

 

2,987.2

 

 

(13.9

)

Used vehicle retail

 

823.9

 

 

795.1

 

 

3.6

 

 

1,608.3

 

 

1,538.4

 

 

4.5

 

Used vehicle wholesale

 

49.2

 

 

79.9

 

 

(38.4

)

 

115.3

 

 

156.4

 

 

(26.3

)

Service, body and parts

 

131.1

 

 

165.2

 

 

(20.6

)

 

292.8

 

 

323.1

 

 

(9.4

)

Fleet and other

 

14.4

 

 

75.9

 

 

(81.0

)

 

49.7

 

 

122.0

 

 

(59.3

)

Total cost of sales

 

2,294.2

 

 

2,728.1

 

 

(15.9

)

 

4,637.0

 

 

5,127.1

 

 

(9.6

)

Gross profit

 

464.4

 

 

493.6

 

 

(5.9

)%

 

925.3

 

 

944.3

 

 

(2.0

)%

Asset impairments

 

7.9

 

 

 

 

NM

 

7.9

 

 

0.5

 

 

NM

SG&A expense

 

304.5

 

 

356.5

 

 

(14.6

)

 

650.5

 

 

678.3

 

 

(4.1

)

Depreciation and amortization

 

22.3

 

 

20.2

 

 

10.4

 

 

44.3

 

 

40.0

 

 

10.8

 

Income from operations

 

129.7

 

 

116.9

 

 

10.9

%

 

222.6

 

 

225.5

 

 

(1.3

)%

Floor plan interest expense

 

(8.1

)

 

(19.4

)

 

(58.2

)

 

(22.1

)

 

(37.5

)

 

(41.1

)

Other interest expense

 

(16.8

)

 

(15.0

)

 

12.0

 

 

(33.8

)

 

(30.3

)

 

11.6

 

Other income, net

 

3.5

 

 

3.0

 

 

NM

 

5.8

 

 

5.6

 

 

NM

Income before income taxes

 

108.3

 

 

85.5

 

 

26.7

%

 

172.5

 

 

163.3

 

 

5.6

%

Income tax expense

 

(30.6

)

 

(23.6

)

 

29.7

 

 

(48.6

)

 

(45.0

)

 

8.0

 

Income tax rate

 

28.3

%

 

27.6

%

 

 

 

28.2

%

 

27.6

%

 

 

Net income

 

$

77.7

 

 

$

61.9

 

 

25.5

%

 

$

123.9

 

 

$

118.3

 

 

4.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share

 

$

3.38

 

 

$

2.63

 

 

28.5

%

 

$

5.32

 

 

$

5.08

 

 

4.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted shares outstanding

 

23.0

 

23.5

 

(2.1

) %

 

23.3

 

23.3

 

%

NM – not meaningful

Lithia Motors, Inc.

Key Performance Metrics (Unaudited)

 

 

Three months ended

June 30,

 

%

 

Six months ended

June 30,

 

%

 

 

 

Increase

 

 

Increase

 

 

2020

 

2019

 

(Decrease)

 

2020

 

2019

 

(Decrease)

Gross margin

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle retail

 

6.7

%

 

5.6

%

 

110

bps

 

6.2

%

 

5.7

%

 

50

bps

Used vehicle retail

 

10.7

 

 

10.5

 

 

20

 

 

10.5

 

 

10.4

 

 

10

 

Finance and insurance

 

100.0

 

 

100.0

 

 

 

 

100.0

 

 

100.0

 

 

 

Service, body and parts

 

52.4

 

 

50.8

 

 

160

 

 

51.6

 

 

50.5

 

 

110

 

Gross profit margin

 

16.8

 

 

15.3

 

 

150

 

 

16.6

 

 

15.6

 

 

100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unit sales

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle retail

 

34,869

 

 

45,887

 

 

(24.0

)%

 

70,776

 

 

85,582

 

 

(17.3

)%

Used vehicle retail

 

43,505

 

 

42,865

 

 

1.5

 

 

86,136

 

 

83,540

 

 

3.1

 

Total retail units sold

 

78,374

 

 

88,752

 

 

(11.7

)

 

156,912

 

 

169,122

 

 

(7.2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Average selling price

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle retail

 

$

39,226

 

 

$

37,208

 

 

5.4

%

 

$

38,732

 

 

$

37,023

 

 

4.6

%

Used vehicle retail

 

21,196

 

 

20,724

 

 

2.3

 

 

20,857

 

 

20,543

 

 

1.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average gross profit per unit

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle retail

 

$

2,643

 

 

$

2,078

 

 

27.2

%

 

$

2,407

 

 

$

2,119

 

 

13.6

%

Used vehicle retail

 

2,259

 

 

2,174

 

 

3.9

 

 

2,185

 

 

2,128

 

 

2.7

 

Finance and insurance

 

1,593

 

 

1,453

 

 

9.6

 

 

1,572

 

 

1,457

 

 

7.9

 

Total vehicle(1)

 

4,050

 

 

3,598

 

 

12.6

 

 

3,875

 

 

3,596

 

 

7.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue mix

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle retail

 

49.6

%

 

53.0

%

 

 

 

49.3

%

 

52.2

%

 

 

Used vehicle retail

 

33.4

 

 

27.6

 

 

 

 

32.3

 

 

28.3

 

 

 

Used vehicle wholesale

 

1.9

 

 

2.5

 

 

 

 

2.1

 

 

2.6

 

 

 

Finance and insurance, net

 

4.5

 

 

4.0

 

 

 

 

4.4

 

 

4.1

 

 

 

Service, body and parts

 

10.0

 

 

10.4

 

 

 

 

10.9

 

 

10.8

 

 

 

Fleet and other

 

0.6

 

 

2.5

 

 

 

 

1.0

 

 

2.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit Mix

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle retail

 

19.8

%

 

19.3

%

 

 

 

18.4

%

 

19.2

%

 

 

Used vehicle retail

 

21.2

 

 

18.9

 

 

 

 

20.3

 

 

18.8

 

 

 

Used vehicle wholesale

 

0.5

 

 

0.4

 

 

 

 

0.3

 

 

0.3

 

 

 

Finance and insurance, net

 

26.9

 

 

26.1

 

 

 

 

26.7

 

 

26.1

 

 

 

Service, body and parts

 

31.0

 

 

34.5

 

 

 

 

33.8

 

 

34.9

 

 

 

Fleet and other

 

0.6

 

 

0.8

 

 

 

 

0.5

 

 

0.7

 

 

 

 

 

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

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

SG&A as a % of revenue

 

10.9

%

 

10.7

%

 

11.0

%

 

11.1

%

 

11.6

%

 

11.0

%

 

11.7

%

 

11.2

%

SG&A as a % of gross profit

 

64.7

 

 

70.1

 

 

65.6

 

 

72.2

 

 

69.7

 

 

70.7

 

 

70.3

 

 

71.8

 

Operating profit as a % of revenue

 

5.1

 

 

3.9

 

 

4.7

 

 

3.6

 

 

4.2

 

 

3.9

 

 

4.0

 

 

3.7

 

Operating profit as a % of gross profit

 

30.5

 

 

25.8

 

 

27.9

 

 

23.7

 

 

25.5

 

 

25.0

 

 

24.1

 

 

23.9

 

Pretax margin

 

4.4

 

 

3.0

 

 

3.9

 

 

2.7

 

 

3.3

 

 

2.9

 

 

3.1

 

 

2.7

 

Net profit margin

 

3.1

 

 

2.2

 

 

2.8

 

 

1.9

 

 

2.4

 

 

2.1

 

 

2.2

 

 

1.9

 

(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

 

 

2020

 

2019

 

(Decrease)

 

2020

 

2019

 

(Decrease)

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle retail

 

$

1,277.9

 

 

$

1,670.2

 

 

(23.5

)%

 

$

2,550.9

 

 

$

3,092.8

 

 

(17.5

)%

Used vehicle retail

 

869.6

 

 

865.4

 

 

0.5

 

 

1,695.6

 

 

1,668.5

 

 

1.6

 

Finance and insurance

 

116.9

 

 

125.6

 

 

(6.9

)

 

230.4

 

 

240.0

 

 

(4.0

)

Service, body and parts

 

259.0

 

 

326.4

 

 

(20.6

)

 

567.2

 

 

632.4

 

 

(10.3

)

Total revenues

 

2,587.4

 

 

3,146.2

 

 

(17.8

)

 

5,206.4

 

 

5,912.7

 

 

(11.9

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle retail

 

$

85.2

 

 

$

93.7

 

 

(9.1

) %

 

$

157.8

 

 

$

177.6

 

 

(11.1

)%

Used vehicle retail

 

92.0

 

 

91.5

 

 

0.5

 

 

175.7

 

 

174.3

 

 

0.8

 

Finance and insurance

 

116.9

 

 

125.6

 

 

(6.9

)

 

230.4

 

 

240.0

 

 

(4.0

)

Service, body and parts

 

135.6

 

 

166.0

 

 

(18.3

)

 

292.8

 

 

320.2

 

 

(8.6

)

Total gross profit

 

434.4

 

 

482.4

 

 

(10.0

)

 

864.3

 

 

921.1

 

 

(6.2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle retail

 

6.7

%

 

5.6

%

 

110

bps

 

6.2

%

 

5.7

%

 

50

bps

Used vehicle retail

 

10.6

 

 

10.6

 

 

 

 

10.4

 

 

10.4

 

 

 

Finance and insurance

 

100.0

 

 

100.0

 

 

 

 

100.0

 

 

100.0

 

 

 

Service, body and parts

 

52.4

 

 

50.8

 

 

160

 

 

51.6

 

 

50.6

 

 

100

 

Gross profit margin

 

16.8

 

 

15.3

 

 

150

 

 

16.6

 

 

15.6

 

 

100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unit sales

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle retail

 

32,461

 

 

44,700

 

 

(27.4

)%

 

65,341

 

 

83,173

 

 

(21.4

)%

Used vehicle retail

 

41,030

 

 

41,676

 

 

(1.6

)

 

81,094

 

 

80,967

 

 

0.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average selling price

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle retail

 

$

39,366

 

 

$

37,364

 

 

5.4

%

 

$

39,039

 

 

$

37,185

 

 

5.0

%

Used vehicle retail

 

21,194

 

 

20,766

 

 

2.1

 

 

20,910

 

 

20,607

 

 

1.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average gross profit per unit

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle retail

 

$

2,625

 

 

$

2,095

 

 

25.3

%

 

$

2,415

 

 

$

2,136

 

 

13.1

%

Used vehicle retail

 

2,243

 

 

2,195

 

 

2.2

 

 

2,167

 

 

2,153

 

 

0.7

 

Finance and insurance

 

1,590

 

 

1,454

 

 

9.4

 

 

1,573

 

 

1,462

 

 

7.6

 

Total vehicle(1)

 

4,030

 

 

3,618

 

 

11.4

 

 

3,870

 

 

3,622

 

 

6.8

 

(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)

Financial covenants

 

 

 

 

Requirement

 

As of June 30, 2020

Current ratio

Not less than 1.10 to 1

 

1.37 to 1

Fixed charge coverage ratio

Not less than 1.20 to 1

 

2.78 to 1

Leverage ratio

Not more than 5.75 to 1

 

2.60 to 1

Lithia Motors, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

(In millions)

 

 

June 30, 2020

 

December 31, 2019

Cash and cash equivalents

 

$

120.3

 

 

$

84.0

 

Trade receivables, net

 

446.4

 

 

505.0

 

Inventories, net

 

1,812.8

 

 

2,433.7

 

Other current assets

 

50.6

 

 

47.8

 

Total current assets

 

$

2,430.1

 

 

$

3,070.5

 

 

 

 

 

 

Property and equipment, net

 

1,663.0

 

 

1,611.7

 

Intangibles

 

947.7

 

 

761.3

 

Other non-current assets

 

498.2

 

 

640.4

 

Total assets

 

$

5,539.0

 

 

$

6,083.9

 

 

 

 

 

 

Floor plan notes payable

 

1,460.6

 

 

2,067.6

 

Other current liabilities

 

565.8

 

 

501.5

 

Total current liabilities

 

$

2,026.4

 

 

$

2,569.1

 

 

 

 

 

 

Long-term debt

 

1,357.9

 

 

1,430.6

 

Other long-term liabilities and deferred revenue

 

622.5

 

 

616.5

 

Total liabilities

 

$

4,006.8

 

 

$

4,616.2

 

 

 

 

 

 

Stockholder’s Equity

 

1,532.2

 

 

1,467.7

 

Total liabilities & stockholders’ equity

 

$

5,539.0

 

 

$

6,083.9

 

Lithia Motors, Inc.

Summarized Cash Flow from Operations (Unaudited)

(In millions)

 

 

Six months ended June 30,

 

 

2020

 

2019

Net income

 

$

123.9

 

 

$

118.3

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Asset impairments

 

7.9

 

 

0.5

 

Depreciation and amortization

 

44.3

 

 

40.0

 

Stock-based compensation

 

10.0

 

 

7.4

 

Gain on disposal of assets

 

(0.3

)

 

 

Gain on sale of franchises

 

(1.4

)

 

0.3

 

Deferred income taxes

 

(4.9

)

 

7.6

 

(Increase) decrease:

 

 

 

 

Trade receivables, net

 

53.8

 

 

40.1

 

Inventories

 

624.7

 

 

(63.0

)

Other assets

 

(10.6

)

 

6.4

 

Increase (decrease):

 

 

 

 

Floor plan notes payable, net

 

(130.7

)

 

89.7

 

Trade payables

 

0.3

 

 

3.5

 

Accrued liabilities

 

51.1

 

 

(8.8

)

Other long-term liabilities and deferred revenue

 

21.9

 

 

2.4

 

Net cash provided by operating activities

 

$

790.0

 

 

$

244.4

 

Lithia Motors, Inc.

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

(In millions)

 

 

Six months ended June 30,

Net cash provided by operating activities

 

2020

 

2019

As reported

 

$

790.0

 

 

$

244.4

 

Floor plan notes payable, non-trade, net

 

(456.8

)

 

(11.1

)

Less: Borrowings on floor plan notes payable, non-trade associated with acquired new vehicle inventory

 

(22.3

)

 

(19.3

)

Adjusted

 

$

310.9

 

 

$

214.0

 

Lithia Motors, Inc.

Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)

(In millions, except for per share data)

 

 

Three Months Ended June 30, 2020

 

 

As reported

 

Disposal

gain on sale

of stores

 

Asset

impairment

 

Insurance

reserves

 

Acquisition

expenses

 

Tax

attribute

 

Adjusted

Asset impairments

 

$

7.9

 

 

$

 

 

$

(7.9

)

 

$

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

304.5

 

 

1.3

 

 

 

 

(5.0

)

 

(0.5

)

 

 

 

300.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

129.7

 

 

(1.3

)

 

7.9

 

 

5.0

 

 

0.5

 

 

 

 

141.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

108.3

 

 

(1.3

)

 

7.9

 

 

5.0

 

 

0.5

 

 

 

 

120.4

 

Income tax (provision) benefit

 

(30.6

)

 

0.4

 

 

(2.3

)

 

(1.4

)

 

(0.2

)

 

(0.8

)

 

(34.9

)

Net income

 

$

77.7

 

 

$

(0.9

)

 

$

5.6

 

 

$

3.6

 

 

$

0.3

 

 

$

(0.8

)

 

$

85.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

$

3.38

 

 

$

(0.04

)

 

$

0.24

 

 

$

0.16

 

 

$

0.01

 

 

$

(0.03

)

 

$

3.72

 

Diluted share count

 

23.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2019

 

 

As reported

 

Disposal loss

on sale of

stores

 

Insurance

reserves

 

Acquisition

expenses

 

Adjusted

Selling, general and administrative

 

$

356.5

 

 

$

(0.4

)

 

$

(8.4

)

 

$

(1.5

)

 

$

346.2

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

116.9

 

 

0.4

 

 

8.4

 

 

1.5

 

 

127.2

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

85.5

 

 

0.4

 

 

8.4

 

 

1.5

 

 

95.8

 

Income tax (provision) benefit

 

(23.6

)

 

(0.1

)

 

(2.3

)

 

(0.4

)

 

(26.4

)

Net income

 

$

61.9

 

 

$

0.3

 

 

$

6.1

 

 

$

1.1

 

 

$

69.4

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

$

2.63

 

 

$

0.01

 

 

$

0.26

 

 

$

0.05

 

 

$

2.95

 

Diluted share count

 

23.5

 

 

 

 

 

 

 

 

 

Lithia Motors, Inc.

Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)

(In millions, except for per share data)

 

 

Six Months Ended June 30, 2020

 

 

As reported

 

Disposal

gain on sale

of stores

 

Asset

impairment

 

Insurance

reserves

 

Acquisition

expenses

 

Tax

attribute

 

Adjusted

Asset impairments

 

$

7.9

 

 

$

 

 

$

(7.9

)

 

$

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

650.5

 

 

1.4

 

 

 

 

(5.8

)

 

(1.0

)

 

 

 

645.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

222.6

 

 

(1.4

)

 

7.9

 

 

5.8

 

 

1.0

 

 

 

 

235.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

172.5

 

 

(1.4

)

 

7.9

 

 

5.8

 

 

1.0

 

 

 

 

185.8

 

Income tax (provision) benefit

 

(48.6

)

 

0.4

 

 

(2.3

)

 

(1.6

)

 

(0.3

)

 

(0.8

)

 

(53.2

)

Net income

 

$

123.9

 

 

$

(1.0

)

 

$

5.6

 

 

$

4.2

 

 

$

0.7

 

 

$

(0.8

)

 

$

132.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

$

5.32

 

 

$

(0.04

)

 

$

0.24

 

 

$

0.18

 

 

$

0.03

 

 

$

(0.03

)

 

$

5.70

 

Diluted share count

 

23.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2019

 

 

As reported

 

Disposal loss

on sale of

stores

 

Asset

impairment

 

Insurance

reserves

 

Acquisition

expenses

 

Adjusted

Asset impairments

 

$

0.5

 

 

$

 

 

$

(0.5

)

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

678.3

 

 

(0.3

)

 

 

 

(8.4

)

 

(1.7

)

 

667.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

225.5

 

 

0.3

 

 

0.5

 

 

8.4

 

 

1.7

 

 

236.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

163.3

 

 

0.3

 

 

0.5

 

 

8.4

 

 

1.7

 

 

174.2

 

Income tax (provision) benefit

 

(45.0

)

 

(0.1

)

 

(0.1

)

 

(2.3

)

 

(0.5

)

 

(48.0

)

Net income

 

$

118.3

 

 

$

0.2

 

 

$

0.4

 

 

$

6.1

 

 

$

1.2

 

 

$

126.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

$

5.08

 

 

$

0.01

 

 

$

0.02

 

 

$

0.26

 

 

$

0.05

 

 

$

5.42

 

Diluted share count

 

23.3

 

 

 

 

 

 

 

 

 

 

 

Contacts

Eric Pitt

VP, Investor Relations and Treasurer

EPitt@lithia.com
(541) 864-1748

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