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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 8, 1997
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LITHIA MOTORS, INC.
(Exact name of registrant as specified in its charter)
Oregon 93-0572810
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
360 E. Jackson Street, Medford, Oregon 97501
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (541) 776-6899
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LITHIA MOTORS, INC.
FORM 8-K
INDEX
Item Description Page
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Item 2. Acquisition or Disposition of Assets 2
Item 7. Financial Statements and Exhibits 3
Signatures 4
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) On August 8, 1997, Lithia Motors, Inc. (the "Company"), acquired the
inventories, operating assets and intangible assets of Sun Valley Ford,
Inc., a California corporation, dba "Sun Valley Ford Volkswagen Hyundai"
("Sun Valley Ford" or the "Seller"), located in Concord, California,
pursuant to an Agreement for Purchase and Sale of Business Assets (the
"Agreement") dated April 2, 1997. Pursuant to the Agreement, the total
purchase price was $17.6 million, consisting of $2.8 million in cash from
the Company's existing cash balances, $4.4 million in notes to the Seller,
$0.6 million financed on the Company's operating line of credit and $9.8
million financed through the Company's flooring line of credit. The
Company has assumed the leases of the land and facilities.
There was no previous relationship between the Company and Sun Valley Ford,
nor any of the Company's and Sun Valley Ford's affiliates, officers or
directors.
(b) The Company acquired vehicle and parts and supplies inventories, as well as
other assets used in the business of vehicle sales, service and support.
The Company intends to utilize the purchased assets in the same capacity.
2
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION, AND EXHIBITS
(a) FINANCIAL STATEMENTS OF THE BUSINESS ACQUIRED
Financial statements of the business acquired are not presently available,
and will be filed as soon as practicable, but not later than sixty days
from the due date for the filing of this Form 8-K.
(b) PRO FORMA FINANCIAL INFORMATION
Pro forma financial information is not presently available, and will be
filed as soon as practicable, but not later than sixty days from the due
date for the filing of this Form 8-K.
(c) EXHIBITS
The exhibits filed as a part of this report are listed below and this list
constitutes the exhibit index.
2.1 Agreement for Purchase and Sale of Business Assets, by and between Sun
Valley Ford, Inc., a California corporation, dba Sun Valley Ford
Volkswagen Hyundai, and the Company, dated April 2, 1997, previously
filed with the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1997 and filed with the Securities and Exchange
Commission on August 12, 1997, and is incorporated herein by
reference.
10.1 Promissory Note for Leasehold Improvements by and between Lithia
Motors, Inc. and Sun Valley Ford, Inc., dated August 8, 1997.
10.2 Promissory Note for Intangible Assets by and between Lithia Motors,
Inc. and Sun Valley Ford, Inc., dated August 8, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: August 20, 1997 LITHIA MOTORS, INC.
By /s/ SIDNEY B. DEBOER
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Sidney B. DeBoer
Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
By /s/ BRIAN R. NEILL
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Brian R. Neill
Senior Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer)
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PROMISSORY NOTE
LEASEHOLD IMPROVEMENTS
$695,800.00 AUGUST 8, 1997
FOR VALUE RECEIVED, I, We, the undersigned Lithia Motors, Inc., (Borrower)
promise to pay to Sun Valley Ford, Inc., (Lender) the sum of $695,800.00
together with interest thereon at the rate of 9 percent per annum payable as
follows:
On September 8, 1997 and at regular monthly intervals thereafter on the
same day of each month thereafter for 59 months, payments shall be due and
payable in the amount of $8,814.51 and one final payment for the entire unpaid
balance with accrued interest shall be paid on August 8, 2002.
Borrower shall have the right at any time to prepay all or any portion of
the unpaid balance without penalty or premium. Any prepayment shall be applied
against the last maturing installments of principal then due (with the principal
balance being reduced accordingly), and shall not excuse Borrower from making
the regular installment payments subsequently due until the principal balance
has been paid in full.
If Borrower fails to pay any amount of principal or interest due pursuant
to this note within ten (10) days after the date when due, and if Lender
notifies Borrower in writing of that default and Borrower fails to cure that
default within ten (10) days after receipt of that written notice from Lender,
then Lender shall have the right, at any time prior to the moment when Borrower
cures that default, to declare (and thereby cause) the entire unpaid balance of
the this note to be immediately due and payable.
This Promissory Note is secured by Lender's leaseholds as defined in the
AGREEMENT FOR PURCHASE AND SALE OF BUSINESS ASSETS as executed by the Lender on
April 2 and 3, 1997 and by the Borrower on April 2, 1997.
All payments shall be made payable to the Borrower or _____________________
and shall be mailed to the following address:
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LITHIA MOTORS, INC. (BORROWER)
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Raymond B. Gray, Executive Vice President
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Lender's approval: Lender's approval:
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Sun Valley Ford, Inc. Sun Valley Ford, Inc.
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PROMISSORY NOTE
INTANGIBLE ASSETS
$3,500,000.00 AUGUST 8, 1997
FOR VALUE RECEIVED, I, We, the undersigned Lithia Motors, Inc., (Borrower)
promise to pay to Sun Valley Ford, Inc., (Lender) the sum of $3,500,000.00
together with interest thereon at the rate of 9 percent per annum payable as
follows:
One lump sum payment of principal in the amount of $1,500,000.00 shall be
due and payable on August 8, 1998 and on the same date all accrued interest in
the amount of $315,000.00 shall then be added to the unpaid balance of
$2,000,000.00 resulting in the total unpaid balance being $2,315,000.00. All
subsequent accrued interest shall then be computed from August 8, 1998.
On September 8, 1998 and at regular monthly intervals thereafter on the
same day of each month for 47 months, payments shall be due and payable in the
amount of $57,609.00 and one final payment for the entire unpaid balance with
accrued interest shall be paid on August 8, 2002.
Borrower shall have the right at any time to prepay all or any portion of
the unpaid without penalty or premium. Any prepayment shall be applied against
the last maturing installments of principal then due (with the principal balance
being reduced accordingly), and shall not excuse Borrower from making the
regular installment payments subsequently due until the principal balance has
been paid in full.
If Borrower fails to pay any amount of principal or interest due pursuant
to this note within ten (10) days after the date when due, and if Lender
notifies Borrower in writing of that default and Borrower fails to cure that
default within ten (10) days after receipt of that written notice from Lender,
then Lender shall have the right, at any time prior to the moment when Borrower
cures that default, to declare (and thereby cause) the entire unpaid balance of
the this note to be immediately due and payable.
This Promissory Note is unsecured.
All payments shall be made payable to the Borrower or _____________________
and shall be mailed to the following address:
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LITHIA MOTORS, INC. (BORROWER)
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Raymond B. Gray, Executive Vice President
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Lender's approval: Lender's approval:
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Sun Valley Ford, Inc. Sun Valley Ford, Inc.
