EXHIBIT 99.1

 

 

LITHIA MOTORS REPORTS ADJUSTED EPS OF $0.76 FOR SECOND QUARTER 2012,

REVENUE UP 26%; INCREASES 2012 OUTLOOK

__________________________________________________

 

LITHIA MOTORS DECLARES $0.10 PER SHARE DIVIDEND FOR SECOND QUARTER 2012

 

Medford, Oregon, July 25, 2012 – Lithia Motors, Inc. (NYSE: LAD) today reported 2012 second quarter adjusted income from continuing operations of $19.9 million, or $0.76 per diluted share. This compares to a 2011 second quarter adjusted income from continuing operations of $14.4 million, or $0.54 per diluted share. Unadjusted net income from continuing operations for the second quarter of 2012 was $20.5 million or $0.78 per diluted share, compared to $14.7 million or $0.55 per diluted share for 2011.

 

As shown in the attached non-GAAP reconciliation table, the 2012 second quarter adjusted income from continuing operations is reduced to exclude a benefit of $0.02 per share for a non-core tax attribute. The 2011 second quarter adjusted results from continuing operations exclude a benefit of $0.01 per share for a tax item.

 

Second quarter 2012 revenue from continuing operations increased $174.6 million, or 26% to $847.1 million, compared to $672.5 million in the second quarter of 2011.

 

Second Quarter Year-over-Year Operating Highlights:

• New vehicle same store sales increased 34%
• Used vehicle retail same store sales increased 20%
• Service, body and parts same store sales increased 7%
• SG&A expense as a percentage of gross profit was 69.6%, a reduction of 160 basis points
• Earnings per share increased 41%; $0.76 is the highest second quarter EPS in company history

 

“We remain focused on improving our operations and increasing our market share,” said Bryan DeBoer, President and CEO. “I’m proud of the results our team delivered in the second quarter. With that said, we still have opportunities in all facets of our business and our leaders continue to identify areas where performance can improve. Additionally, in many of our western markets, the new vehicle sales recovery has lagged national levels. This factor will serve as a future catalyst for growth.”

 

For the first six months of 2012, revenue from continuing operations increased 28% to $1.6 billion as compared to $1.3 billion in 2011. Same store new vehicle sales increased 30%, used vehicle retail same store sales increased 19% and service, body and parts same store sales increased 6%. For the first six months of 2012 adjusted net income from continuing operations was $1.36 per share as compared to $0.87 per share in 2011. Unadjusted, for the first six months of 2012, net income from continuing operations was $1.42 per diluted share, compared to $0.86 per diluted share for 2011.

 

Corporate Development

On April 30, 2012, Lithia purchased a Chevrolet Cadillac store in Bellingham, Washington with estimated annual revenues of $40 million. On June 12, 2012, Lithia purchased GMC and Buick franchises in Fairbanks, Alaska, to combine with our Chevrolet store in the community. On June 25, 2012, Lithia was awarded Dodge and Ram franchises and opened a store in Las Cruces, New Mexico. Estimated annual revenues from the Fairbanks and Las Cruces franchises are $35 million.

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Commenting on the acquisition activity, DeBoer said, “In the second quarter, we were able to identify several opportunities that fit our core strategy of seeking exclusive franchises in our markets. I am excited to welcome our new employees to the family.”

 

Share Repurchases

During the second quarter, Lithia repurchased 741,092 shares of its Class A common stock at a weighted average price of $24.23 per share. For the first six months of 2012, Lithia repurchased 823,092 shares of its Class A common stock at a weighted average price of $24.17 per share.

 

The Board of Directors has increased the existing authorization by 1 million shares, bringing the total remaining repurchase authorization to 1,879,853 shares.

 

Chris Holzshu, SVP and Chief Financial Officer, commented, “We remain focused on the prudent allocation of capital. While our first choice remains acquisitions and internal investment, we are pleased to provide a dividend and opportunistically repurchase shares to return value to our shareholders.”

 

Balance Sheet Update

Lithia ended the second quarter with $16 million in cash and $76 million in available credit on our credit facilities. In total, this represents approximately $92 million in available liquidity.

 

During the second quarter, Lithia strategically retired approximately $23 million in mortgages, and refinanced approximately $70 million of mortgages to extend the maturity dates. As a result, Lithia has no mortgage maturities until 2015, when approximately $13 million matures.

 

Dividend Payment

Lithia announced that the Board of Directors has approved a dividend of $0.10 per share for the second quarter 2012. Lithia will pay the dividend August 24, 2012 to shareholders of record on August 10, 2012.

 

Updated Outlook for 2012

Lithia projects its 2012 third quarter earnings within a range of $0.74 to $0.76 per diluted share. Full-year 2012 earnings are projected within a range of $2.69 to $2.75 per diluted share. Both projections are based on the following annual assumptions:

 

• Total revenues in range of $3.2 to $3.3 billion
• New vehicle same store sales increasing 22.0%
• New vehicle gross margin ranging from 7.3% to 7.6%
• Used vehicle same store sales increasing 16.0%
• Used vehicle gross margin ranging from 14.7% to 14.9%
• Service body and parts same store sales increasing 4.5%
• Service body and parts gross margin ranging from 48.3% to 48.5%
• Finance and insurance gross profit of $1,050 per unit
• Tax rate of 40%
• Average diluted shares outstanding of 26.1 million
• Capital expenditures of $48 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 first 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 on July 25, 2012 through August 8, 2012 by calling 877-660-6853 (Conference ID: 397183, Account: 305).

 

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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 85 stores, which are located in 11 states. Lithia also arranges finance, warranty, and credit insurance contracts; and provides vehicle parts, maintenance, and repair services at all of its locations.

 

Sites

www.lithia.com

www.lithiacareers.com

www.assuredservice.com

 

Lithia Motors on Facebook

http://www.facebook.com/LithiaMotors

 

Lithia Motors on Twitter

http://twitter.com/lithiamotors

 

Source: Lithia Motors, Inc.

 

Contact:

John North

VP Finance and Controller

(541) 618-5748

 

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 2012 results, the new vehicle sales recovery in western markets and incremental opportunities to improve our operational results. 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, which are made as of the date of this release.

 

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 floor plan 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.

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Lithia Motors, Inc.

Consolidated Statements of Operations (Unaudited)

(In thousands except per share data)

 

		Three Months Ended						%
		June 30,				Increase		Increase
		2012		2011		(Decrease)		(Decrease)
Revenues:
New vehicle retail	$	470,424	$	347,727	$	122,697		35.3	%
Used vehicle retail		212,767		176,591		36,176		20.5
Used vehicle wholesale		36,083		29,153		6,930		23.8
Finance and insurance		27,870		20,886		6,984		33.4
Service, body and parts		88,585		80,937		7,648		9.4
Fleet and other		11,394		17,193		(5,799)		(33.7)
Total revenues		847,123		672,487		174,636		26.0
Cost of sales:
New vehicle retail		435,785		319,726		116,059		36.3
Used vehicle retail		181,023		149,590		31,433		21.0
Used vehicle wholesale		35,779		28,885		6,894		23.9
Service, body and parts		45,343		41,242		4,101		9.9
Fleet and other		11,004		15,907		(4,903)		(30.8)
Total cost of sales		708,934		555,350		153,584		27.7
Gross profit		138,189		117,137		21,052		18.0
Other asset impairments		-		490		(490)		NM
SG&A expense		96,167		82,768		13,399		16.2
Depreciation and amortization		4,261		4,217		44		1.0
Income from operations		37,761		29,662		8,099		27.3
Floor plan interest expense		(3,119)		(3,359)		(240)		(7.1)
Other interest expense		(2,549)		(3,011)		(462)		(15.3)
Other income, net		820		171		649		379.5
Income from continuing operations before income taxes		32,913		23,463		9,450		40.3
Income tax expense		(12,422)		(8,777)		3,645		41.5
Income tax rate		37.7%		37.4%
Income from continuing operations	$	20,491	$	14,686	$	5,805		39.5	%
Income from discontinued operations		-		140		(140)		NM
Net income	$	20,491	$	14,826	$	5,665		38.2	%
Diluted net income per share:
Continuing operations	$	0.78	$	0.55	$	0.23		41.8	%
Discontinued operations		-		-		-		-
Net income per share	$	0.78	$	0.55	$	0.23		41.8	%
Diluted shares outstanding		26,185		26,860		(675)		(2.5)	%

 

NM – not meaningful

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Lithia Motors, Inc.

Key Performance Metrics (Unaudited)

 

	Three Months Ended						%
	June 30,				Increase		Increase
	2012		2011		(Decrease)		(Decrease)
Gross margin
New vehicle retail	7.4	%	8.1	%	(70) bps
Used vehicle retail	14.9		15.3		(40) bps
Used vehicle wholesale	0.8		0.9		(10) bps
Finance and insurance	100.0		100.0		-  bps
Service, body and parts	48.8		49.0		(20) bps
Fleet and Other	3.4		7.5		(410) bps
Gross profit margin	16.3		17.4		(110) bps
Unit sales
New vehicle retail	14,406		10,725		3,681		34.3	%
Used vehicle retail	11,923		10,085		1,838		18.2
Used vehicle wholesale	4,621		3,767		854		22.7
Total units sold	30,950		24,577		6,373		25.9
Average selling price
New vehicle retail	$    32,655		$    32,422		$      233		0.7	%
Used vehicle retail	17,845		17,510		335		1.9
Used vehicle wholesale	7,808		7,739		69		0.9
Average gross profit per unit
New vehicle retail	$      2,404		$      2,611		$    (207)		(7.9)	%
Used vehicle retail	2,662		2,677		(15)		(0.6)
Used vehicle wholesale	66		71		(5)		(7.0)
Finance and insurance	1,059		1,004		55		5.5
Revenue mix
New vehicle retail	55.5	%	51.7	%
Used vehicle retail	25.1		26.3
Used vehicle wholesale	4.3		4.3
Finance and insurance, net	3.3		3.1
Service, body and parts	10.5		12.0
Fleet and other	1.3		2.6
	Adjusted				As reported
	Three Months Ended				Three Months Ended
	June 30,				June 30,
Other metrics	2012		2011		2012		2011
SG&A as a % of revenue	11.4	%	12.4	%	11.4	%	12.3	%
SG&A as a % of gross profit	69.6		71.2		69.6		70.7
Operating profit as a % of revenue	4.5		4.4		4.5		4.4
Operating profit as a % of gross profit	27.3		25.2		27.3		25.3
Pretax margin	3.9		3.5		3.9		3.5
Net profit margin	2.4		2.1		2.4		2.2

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Lithia Motors, Inc.

Same Store Operating Highlights (Unaudited)

		Three Months Ended						%
		June 30,				Increase		Increase
		2012		2011		(Decrease)		(Decrease)
Revenues
New vehicle retail	$	454,445	$	339,427	$	115,018		33.9	%
Used vehicle retail		205,794		171,768		34,026		19.8
Used vehicle wholesale		34,828		28,209		6,619		23.5
Finance and insurance		27,086		20,163		6,923		34.3
Service, body and parts		83,960		78,598		5,362		6.8
Fleet and Other		9,613		17,043		(7,430)		(43.6)
Total revenues	$	815,726	$	655,208	$	160,518		24.5
Gross profit
New vehicle retail	$	33,375	$	27,328	$	6,047		22.1	%
Used vehicle retail		30,779		26,319		4,460		16.9
Used vehicle wholesale		291		257		34		13.2
Finance and insurance		27,086		20,163		6,923		34.3
Service, body and parts		40,089		37,779		2,310		6.1
Fleet and Other		195		813		(618)		(76.0)
Total gross profit	$	131,815	$	112,659	$	19,156		17.0
Unit sales
New vehicle retail		13,939		10,486		3,453		32.9	%
Used vehicle retail		11,546		9,847		1,699		17.3
Used vehicle wholesale		4,497		3,683		814		22.1
Total units sold		29,982		24,016		5,966		24.8
Average selling price
New vehicle retail	$	32,602	$	32,370	$	232		0.7	%
Used vehicle retail		17,824		17,444		380		2.2
Used vehicle wholesale		7,745		7,659		86		1.1
Average gross profit per unit
New vehicle retail	$	2,394	$	2,606	$	(212)		(8.1)	%
Used vehicle retail		2,666		2,673		(7)		(0.3)
Used vehicle wholesale		65		70		(5)		(7.1)
Finance and insurance		1,063		992		71		7.2

 

 

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Lithia Motors, Inc.

Consolidated Statements of Operations (Unaudited)

(In thousands except per share data)

		Six Months Ended						%
		June 30,				Increase		Increase
		2012		2011		(Decrease)		(Decrease)
Revenues:
New vehicle retail	$	874,712	$	648,367	$	226,345		34.9	%
Used vehicle retail		408,188		333,069		75,119		22.6
Used vehicle wholesale		70,419		58,690		11,729		20.0
Finance and insurance		53,290		40,185		13,105		32.6
Service, body and parts		175,033		154,698		20,335		13.1
Fleet and other		24,375		20,335		4,040		19.9
Total revenues		1,606,017		1,255,344		350,673		27.9
Cost of sales:
New vehicle retail		808,947		597,760		211,187		35.3
Used vehicle retail		347,530		283,084		64,446		22.8
Used vehicle wholesale		69,697		58,023		11,674		20.1
Service, body and parts		90,198		79,242		10,956		13.8
Fleet and other		23,585		18,502		5,083		27.5
Total cost of sales		1,339,957		1,036,611		303,346		29.3
Gross profit		266,060		218,733		47,327		21.6
Other asset impairments		115		872		(757)		(86.8)
SG&A expense		187,757		159,902		27,855		17.4
Depreciation and amortization		8,460		8,309		151		1.8
Income from operations		69,728		49,650		20,078		40.4
Floor plan interest expense		(6,069)		(5,821)		248		4.3
Other interest expense		(5,296)		(6,303)		(1,007)		(16.0)
Other income, net		1,319		248		1,071		431.9
Income from continuing operations before income taxes		59,682		37,774		21,908		(58.0)
Income tax expense		(22,395)		(14,700)		7,695		52.3
Income tax rate		37.5%		38.9%
Income from continuing operations	$	37,287	$	23,074	$	14,213		(61.6)	%
Income from discontinued operations		-		457		(457)		NM
Net income	$	37,287	$	23,531	$	13,756		58.5	%
Diluted net income per share:
Continuing operations	$	1.42	$	0.86	$	0.56		(65.1)	%
Discontinued operations		-		0.02		(0.02)		NM
Net income per share	$	1.42	$	0.88	$	0.54		(61.4)	%
Diluted shares outstanding		26,331		26,779		(448)		(1.7)	%

 

 

NM – not meaningful

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Lithia Motors, Inc.

Key Performance Metrics (Unaudited)

 

	Six Months Ended						%
	June 30,				Increase		Increase
	2012		2011		(Decrease)		(Decrease)
Gross margin
New vehicle retail	7.5	%	7.8	%	(30) bps
Used vehicle retail	14.9		15.0		(10) bps
Used vehicle wholesale	1.0		1.1		(10) bps
Finance and insurance	100.0		100.0		-  bps
Service, body and parts	48.5		48.8		(30) bps
Fleet and Other	3.2		9.0		(580) bps
Gross profit margin	16.6		17.4		(80) bps
Unit sales
New vehicle retail	26,875		20,250		6,625		32.7	%
Used vehicle retail	23,431		19,591		3,840		19.6
Used vehicle wholesale	9,214		7,509		1,705		22.7
Total units sold	59,520		47,350		12,170		25.7
Average selling price
New vehicle retail	$    32,547		$    32,018		$      529		1.7	%
Used vehicle retail	17,421		17,001		420		2.5
Used vehicle wholesale	7,643		7,816		(173)		(2.2)
Average gross profit per unit
New vehicle retail	$      2,447		$      2,499		$     (52)		(2.1)	%
Used vehicle retail	2,589		2,551		38		1.5
Used vehicle wholesale	78		89		(11)		(12.4)
Finance and insurance	1,059		1,009		50		5.0
Revenue mix
New vehicle retail	54.5	%	51.6	%
Used vehicle retail	25.4		26.5
Used vehicle wholesale	4.4		4.8
Finance and insurance, net	3.3		3.2
Service, body and parts	10.9		12.3
Fleet and other	1.5		1.6
	Adjusted				As reported
	Six Months Ended				Six Months Ended
	June 30,				June 30,
Other metrics	2012		2011		2012		2011
SG&A as a % of revenue	11.7	%	12.8	%	11.7	%	12.7	%
SG&A as a % of gross profit	70.8		73.4		70.6		73.1
Operating profit as a % of revenue	4.3		4.0		4.3		4.0
Operating profit as a % of gross profit	26.0		22.8		26.2		22.7
Pretax margin	3.7		3.0		3.7		3.0
Net profit margin	2.2		1.9		2.3		1.8

 

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Lithia Motors, Inc.

Same Store Operating Highlights (Unaudited)

 

		Six Months Ended						%
		June 30,				Increase		Increase
		2012		2011		(Decrease)		(Decrease)
Revenues
New vehicle retail	$	825,948	$	636,106	$	189,842		29.8	%
Used vehicle retail		388,771		325,676		63,095		19.4
Used vehicle wholesale		66,789		56,944		9,845		17.3
Finance and insurance		50,825		38,627		12,198		31.6
Service, body and parts		159,943		151,122		8,821		5.8
Fleet and Other		19,376		19,953		(577)		(2.9)
Total revenues	$	1,511,652	$	1,228,428	$	283,224		23.1
Gross profit
New vehicle retail	$	61,748	$	49,520	$	12,228		24.7	%
Used vehicle retail		58,191		48,629		9,562		19.7
Used vehicle wholesale		670		649		21		3.2
Finance and insurance		50,825		38,627		12,198		31.6
Service, body and parts		75,678		71,915		3,763		5.2
Fleet and Other		404		967		(563)		(58.2)
Total gross profit	$	247,516	$	210,307	$	37,209		17.7
Unit sales
New vehicle retail		25,570		19,877		5,693		28.6	%
Used vehicle retail		22,403		19,197		3,206		16.7
Used vehicle wholesale		8,809		7,354		1,455		19.8
Total units sold		56,782		46,428		10,354		22.3
Average selling price
New vehicle retail	$	32,301	$	32,002	$	299		0.9	%
Used vehicle retail		17,354		16,965		389		2.3
Used vehicle wholesale		7,582		7,743		(161)		(2.1)
Average gross profit per unit
New vehicle retail	$	2,415	$	2,491	$	(76)		(3.1)	%
Used vehicle retail		2,597		2,533		64		2.5
Used vehicle wholesale		76		88		(12)		(13.6)
Finance and insurance		1,059		989		70		7.1

 

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Lithia Motors, Inc.

Other Highlights (Unaudited)

 

	As of
	June 30,		December 31,		June 30,
	2012		2011		2011
Days Supply(1)
New vehicle inventory	74		62		68
Used vehicle inventory	52		52		56

 

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

 

	Requirement		As of June 30, 2012
Current ratio	Not less than 1.20 to 1		1.30 to 1
Fixed charge coverage ratio	Not less than 1.20 to 1		1.49 to 1
Leverage ratio	Not more than 5.00 to 1		2.19 to 1
Funded debt restriction	Not more than $375 million		$180.5 million

 

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Lithia Motors, Inc.

Revenue Mix (Unaudited)

	Three months ended				Six months ended
	June 30,				June 30,
	2012		2011		2012		2011
New vehicle unit sales brand mix
Chrysler	32.8	%	30.5	%	32.5	%	29.7	%
General Motors	15.8		16.9		15.1		16.7
Toyota	13.4		11.4		13.0		12.9
Subaru	6.7		4.7		7.0		5.3
Honda, Acura	7.1		7.7		6.8		7.9
BMW, Mini	6.3		7.3		6.5		6.1
Ford	4.9		6.0		5.2		5.9
Hyundai	4.6		5.5		4.7		5.8
Nissan	2.5		3.3		2.8		3.8
Mercedes	2.4		2.1		2.5		1.5
Volkswagen, Audi	1.8		2.4		1.9		2.3
Kia	0.8		1.2		1.0		1.2
Mazda	0.5		0.6		0.6		0.5
Other	0.4		0.4		0.4		0.4
	Three months ended				Six months ended
	June 30,				June 30,
	2012		2011		2012		2011
Revenue geographic mix
Texas	25.1	%	24.4	%	24.8	%	24.7	%
Oregon	20.1		20.9		20.8		18.9
California	10.2		9.6		10.3		10.0
Washington	9.6		9.2		9.4		9.9
Montana	8.8		8.1		8.6		8.2
Alaska	8.5		9.6		8.5		9.3
Idaho	5.1		5.5		5.2		6.0
Nevada	4.4		4.3		4.6		4.6
Iowa	4.7		5.3		4.6		5.3
North Dakota	2.4		2.1		2.2		2.1
New Mexico	1.1		1.0		1.0		1.0

 

 

	As of July 27, 2012
Current store count mix	# of stores		% of total
Chrysler	23		27.1	%
General Motors	13		15.3
Honda, Acura	9		10.6
Toyota	8		9.4
BMW, MINI	7		8.2
Hyundai	6		7.1
Ford	5		5.9
Nissan	3		3.5
Mercedes	3		3.5
Subaru	3		3.5
Kia	2		2.4
Other	2		2.4
Volkswagen, Audi	1		1.1

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Lithia Motors, Inc.

Consolidated Balance Sheets (Unaudited)

(In thousands except per share data)

 

		June 30, 2012		December 31, 2011
Cash and cash equivalents	$	16,247		$                     20,851
Trade receivables, net		117,747		99,407
Inventories, net		617,568		506,484
Deferred income taxes		3,976		4,730
Other current assets		10,588		16,719
Total current assets	$	766,126		$                   648,191
Property and equipment, net		387,652		373,779
Goodwill		22,608		18,958
Franchise value		59,319		59,095
Deferred income taxes		29,849		29,270
Other non-current assets		18,021		16,840
Total assets	$	1,283,575		1,146,133
Floor plan notes payable	$	13,743	$	114,760
Floor plan notes payable: non trade		482,390		229,180
Current maturities of long-term debt		7,718		8,221
Trade payables		40,196		31,712
Accrued liabilities		79,758		72,711
Total current liabilities	$	623,805		456,584
Long-term debt		224,746		278,653
Deferred revenue		30,110		25,146
Other long-term liabilities		19,921		18,629
Total liabilities	$	898,582	$	779,012
Class A common stock		263,559		279,366
Class B common stock		437		468
Additional paid-in capital		10,949		10,918
Accumulated other comprehensive loss		(3,718)		(4,508)
Retained earnings		113,766		80,877
Total liabilities & stockholders' equity	$	1,283,575	$	1,146,133

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Lithia Motors, Inc.

Summarized Cash Flow from Operations (Unaudited)

(In thousands)

 

		Six Months Ended
		June 30,
		2012		2011
Net income	$	37,287	$	23,531
Adjustments to reconcile net income to net cash used in operating activities:
Asset impairments		115		872
Depreciation and amortization		8,460		8,485
Depreciation and amortization within discontinued operations		-		21
Stock-based compensation		1,512		1,034
Gain on disposal of assets		(983)		(190)
Loss from disposal activities within discontinued operations		-		53
Deferred income taxes		302		2,060
Excess tax benefit from share-based payment arrangements		(1,026)		(278)
(Increase) decrease:
Trade receivables, net		(18,305)		(6,579)
Inventories		(109,592)		(60,498)
Other current assets		4,680		(461)
Other non-current assets		(1,847)		(884)
Increase (decrease):
Floor plan notes payable		(94,305)		1,744
Trade payables		7,289		4,679
Accrued liabilities		7,671		7,757
Other long-term liabilities and deferred revenue		6,700		1,418
Net cash used in operating activities	$	(152,042)	$	(17,236)

Lithia Motors, Inc.

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

(In thousands)

		Six Months Ended
		June 30,
Net cash provided by (used in) operating activities		2012		2011
As reported	$	(152,042)	$	(17,236)
Floor plan notes payable, non-trade		251,844		65,789
Adjusted	$	99,802	$	48,553

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Lithia Motors, Inc.

Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)

(In thousands, except for per share data)

 

 

		Three Months Ended June 30, 2012
		As reported		Tax attribute		Adjusted
Income from continuing operations before    income taxes	$	32,913	$	-	$	32,913
Income tax expense		(12,422)		(578)		(13,000)
Net income from continuing operations	$	20,491	$	(578)	$	19,913
Diluted earnings per share from continuing    operations	$	0.78	$	(0.02)	$	0.76
Diluted share count		26,185

 

 

 

		Three Months ended June 30, 2011
		As reported		Asset Impairment and disposal gain		Reversal of stock based comp tax shortfall		Adjusted
Asset impairments	$	490	$	(490)	$	-	$	-
Selling, general and administrative		82,768		580		-		83,348
Income from operations		29,662		(90)		-		29,572
Income from continuing operations before    income taxes	$	23,463	$	(90)	$	-	$	23,373
Income tax expense		(8,777)		37		(186)		(8,926)
Net income from continuing operations	$	14,686	$	(53)	$	(186)	$	14,447
Diluted earnings per share from continuing    operations	$	0.55	$	-	$	(0.01)	$	0.54
Diluted share count		26,860

 

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Lithia Motors, Inc.

Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)

(In thousands, except for per share data)

 

		Six Months Ended June 30, 2012
				Asset
				impairment
				and
				disposal		Equity		Tax
		As reported		gain		investment		attribute		Adjusted
Asset impairments	$	115	$	(115)	$	-	$	-	$	-
Selling, general and administrative		187,757		739		-		-		188,496
Income from operations		69,728		(624)		-		-		69,104
Other income, net		1,319		-		(244)		-		1,075
Income from continuing operations before    income taxes	$	59,682	$	(624)	$	(244)	$	-	$	58,814
Income tax expense		(22,395)		244		95		(1,072)		(23,128)
Net income from continuing operations	$	37,287	$	(380)	$	(149)	$	(1,072)	$	35,686
Diluted earnings per share from continuing    operations	$	1.42	$	(0.01)	$	(0.01)	$	(0.04)	$	1.36
Diluted share count		26,331

 

 

 

 

		Six Months Ended June 30, 2011
				Asset
				impairment
				and
				disposal
		As reported		gain		Adjusted
Asset impairments	$	872	$	(872)	$	-
Selling, general and administrative		159,902		580		160,482
Income from operations		49,650		292		49,942
Income from continuing operations before    income taxes	$	37,774	$	292	$	38,066
Income tax expense		(14,700)		(116)		(14,816)
Net income from continuing operations	$	23,074	$	176	$	23,250
Diluted earnings per share from continuing    operations	$	0.86	$	0.01	$	0.87
Diluted share count		26,779

 

 

 

 

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