Annual Reports | Quarterly Filings | News | Prospectuses | Proxies | Mergers & Acquisitions | Initial Public Offerings

LITHIA MOTORS INC
10-Q/A, 2000-09-06
AUTO DEALERS & GASOLINE STATIONS

Previous: BROOKDALE LIVING COMMUNITIES INC, SC TO-T/A, EX-99, 2000-09-06

Next: IFB HOLDINGS INC, 15-12G, 2000-09-06

QuickLinks -- Click here to rapidly navigate through this document

---

---

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

---

FORM 10-Q/A

(Mark One)

/x/	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2000 OR

/ /	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                to                

Commission file number: 000-21789

---

LITHIA MOTORS, INC.
(Exact name of registrant as specified in its charter)

Registrant's telephone number, including area code: 541-776-6899

---

    Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes /x/  No / /

    Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

---

---

---

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

LITHIA MOTORS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

				June 30, 2000			December 31, 1999
				(Unaudited)
Assets
Current Assets:
	Cash and cash equivalents			$	29,432		$	30,364
	Trade receivables, net of allowance for doubtful accounts of $688 and $851				31,743			25,683
	Notes receivable, current portion, net of allowance for doubtful accounts of $1,004 and $677				1,868			2,777
	Related party receivable				187			—
	Inventories, net				325,722			268,281
	Vehicles leased to others, current portion				3,011			3,000
	Prepaid expenses and other				2,296			3,815
	Deferred income taxes				46			724
		Total Current Assets			394,305			334,644
Property and Equipment, net of accumulated depreciation of $6,713 and $5,683					68,155			52,368
Notes Receivable, less current portion					3,936			4,095
Vehicles Leased to Others, less current portion					5,282			2,808
Goodwill, net of accumulated amortization of $4,555 and $3,073					120,334			110,677
Other Non-Current Assets, net of accumulated amortization of $163 and $143					1,599			1,841
		Total Assets		$	593,611		$	506,433
Liabilities and Shareholders' Equity
Current Liabilities:
	Flooring notes payable			$	267,110		$	208,403
	Current maturities of long-term debt				6,816			7,039
	Current portion of capital leases				78			93
	Trade payables				13,156			11,873
	Payable to related party				—			9,000
	Accrued liabilities				23,394			23,237
		Total Current Liabilities			310,554			259,645
Long-Term Debt, less current maturities					97,257			73,715
Long-Term Capital Lease Obligation, less current portion					122			196
Deferred Revenue					1,994			2,262
Other Long-Term Liabilities					6,489			5,456
Deferred Income Taxes					9,184			9,521
		Total Liabilities			425,600			350,795
Shareholders' Equity:
	Preferred stock—no par value; authorized 15,000 shares; 15 shares designated Series M Preferred; issued and outstanding 14.9 and 10.4				8,915			6,216
	Class A common stock—no par value; authorized 100,000 shares; issued and outstanding 8,357 and 7,824				108,010			102,333
	Class B common stock authorized 25,000 shares; issued and outstanding 4,087				508			508
	Additional paid-in capital				267			7,428
	Retained earnings				50,311			39,153
		Total Shareholders' Equity			168,011			155,638
		Total Liabilities and Shareholders' Equity		$	593,611		$	506,433

The accompanying notes are an integral part of these consolidated balance sheets.

2

---

LITHIA MOTORS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share amounts)

(Unaudited)

				Three months ended June 30,						Six months ended June 30,
				2000			1999			2000			1999
Revenues:
	New vehicle sales			$	222,039		$	167,222		$	440,048		$	284,075
	Used vehicle sales				119,277			93,049			235,975			164,858
	Service, body and parts				40,476			28,477			78,933			51,907
	Other revenues				36,059			19,005			58,498			31,058
		Total revenues			417,851			307,753			813,454			531,898
Cost of sales					350,667			258,967			683,406			447,912
Gross profit					67,184			48,786			130,048			83,986
Selling, general and administrative					48,528			36,061			95,729			62,709
Depreciation and amortization					1,887			1,364			3,607			2,439
		Income from operations			16,769			11,361			30,712			18,838
Other income (expense)
	Floorplan interest expense				(4,712	)		(2,179	)		(8,573	)		(4,288	)
	Other interest expense				(1,862	)		(1,065	)		(3,657	)		(1,694	)
	Other income (expense), net				305			(338	)		433			(72	)
					(6,269	)		(3,582	)		(11,797	)		(6,054	)
Income before income taxes					10,500			7,779			18,915			12,784
Income tax expense					4,306			3,202			7,757			5,178
Net income				$	6,194		$	4,577		$	11,158		$	7,606
Basic net income per share				$	0.50		$	0.42		$	0.90		$	0.72
Diluted net income per share				$	0.45		$	0.40		$	0.81		$	0.69

The accompanying notes are an integral part of these consolidated statements.

3

---

LITHIA MOTORS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

						Six months ended June 30,
						2000			1999
Cash flows from operating activities:
	Net income					$	11,158		$	7,606
	Adjustments to reconcile net income to net cash flows provided by operating activities:
		Depreciation and amortization					3,607			2,439
		Compensation expense related to stock option issuances					39			39
		Loss on sale of assets					52			21
		Loss on sale of vehicles leased to others					72			111
		Deferred income taxes					(337	)		(1,446	)
		Equity in income of affiliate					(30	)		(151	)
		Changes in operating assets and liabilities, net of effect of acquisitions:
			Trade and installment contract receivables, net				(5,579	)		526
			Inventories				(41,634	)		(13,686	)
			Prepaid expenses and other				2,042			884
			Other noncurrent assets				(103	)		(42	)
			Floorplan notes payable				47,435			12,776
			Trade payables				1,283			(3,544	)
			Accrued liabilities				157			5,940
			Other long-term liabilities and deferred revenue				753			1,737
				Net cash provided by operating activities			18,915			13,210
Cash flows from investing activities:
	Notes receivable issued						(431	)		(418	)
	Principal payments received on notes receivable						2,185			2,496
	Capital expenditures						(14,555	)		(4,497	)
	Proceeds from sale of assets						1,134			389
	Expenditures for vehicles leased to others						(6,448	)		(4,932	)
	Proceeds from sale of vehicles leased to others						3,359			3,312
	Cash paid for acquisitions, net of cash acquired						(29,914	)		(21,490	)
	Distribution from affiliate						379			—
				Net cash used in investing activities			(44,291	)		(25,140	)
Cash flows from financing activities:
	Net borrowings on lines of credit						20,220			36,400
	Principal payments on long-term debt and capital leases						(4,090	)		(5,047	)
	Proceeds from issuance of long-term debt						7,138			1,351
	Proceeds from issuance of common stock						1,406			348
	Repurchase of common stock						(230	)		—
				Net cash provided by financing activities			24,444			33,052
Increase (decrease) in cash and cash equivalents							(932	)		21,122
Cash and cash equivalents:
	Beginning of period						30,364			20,879
	End of period					$	29,432		$	42,001

The accompanying notes are an integral part of these consolidated statements.

4

---

LITHIA MOTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts or as otherwise indicated)

(Unaudited)

Note 1. Basis of Presentation

    The financial information included herein as of June 30, 2000 and December 31, 1999 and for the three and six-month periods ended June 30, 2000 and 1999 is unaudited; however, such information reflects all adjustments consisting only of normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods. The financial information as of December 31, 1999 is derived from Lithia Motors, Inc.'s (the Company's) 1999 Annual Report on Form 10-K. The interim consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's 1999 Annual Report on Form 10-K. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the full year.

Note 2. Inventories

    Inventories are valued at cost, using the specific identification method for vehicles and the first-in first-out (FIFO) method of accounting for parts (collectively, the FIFO method). Detail of inventory is as follows:

Note 3. Supplemental Cash Flow Information

    Supplemental disclosure of cash flow information is as follows:

Note 4. Earnings Per Share

    Following is a reconciliation of basic earnings per share ("EPS") and diluted EPS:

		2000								1999
Three Months Ended June 30,		Income			Shares		Per Share Amount			Income			Shares		Per Share Amount
Basic EPS
Net income available to Common Shareholders		$	6,194		12,460		$	0.50		$	4,577		10,926		$	0.42
Diluted EPS
Effect of dilutive stock options			—		137						—		349
Conversion of preferred stock			—		1,222						—		295
Net income available to Common Shareholders		$	6,194		13,819		$	0.45		$	4,577		11,570		$	0.40

5

---

		2000								1999
Six Months Ended June 30,		Income			Shares		Per Share Amount			Income			Shares		Per Share Amount
Basic EPS
Net income available to Common Shareholders		$	11,158		12,408		$	0.90		$	7,606		10,585		$	0.72
Diluted EPS
Effect of dilutive stock options			—		171						—		353
Conversion of preferred stock			—		1,222						—		147
Net income available to Common Shareholders		$	11,158		13,801		$	0.81		$	7,606		11,085		$	0.69

    Potentially dilutive securities that are not included in the diluted EPS calculations because they would be antidilutive include 692 and 109 shares, respectively, issuable pursuant to stock options, for the three month periods ended June 30, 2000 and 1999, respectively, and 689 and 133 shares, respectively, for the six month periods ended June 30, 2000 and 1999, respectively.

Note 5. Acquisitions

    The following acquisitions were made in 2000. In March, Lithia acquired the Bob Rice Ford/Chrysler dealership in Boise, Idaho. The dealership had estimated 1999 revenues of approximately $73,000. In May, Lithia acquired Shumate Honda in Kennewick, Washington with estimated annual revenues of $27,000.

    The above acquisitions were accounted for under the purchase method of accounting. Pro forma results of operations are not materially different from actual results of operations.

    Additionally, in April 2000, Lithia added a Daewoo franchise and store in Twin Falls, Idaho. Two shared franchises in Reno, Nevada have now been split, creating two separate stores; Lithia Reno Subaru and Lithia Reno Hyundai.

Note 6. Purchase of Common Stock

    In June 2000, Lithia's Board of Directors authorized the repurchase of up to 1,000,000 shares of Lithia's Class A Common Stock. Lithia has purchased shares under this program and will continue to do so from time to time in the future as market conditions warrant.

Note 7. Subsequent Event

    In July 2000, Saturn of Eugene, Oregon was acquired with estimated revenues of $5,000.

6

---

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: September 6, 2000		LITHIA MOTORS, INC.
		By:	/s/ SIDNEY B. DEBOER    Sidney B. DeBoer Chairman of the Board, Chief Executive Officer and Secretary (Principal Executive Officer)
		By:	/s/ JEFFREY B. DEBOER    Jeffrey B. DeBoer Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

7

---

QuickLinks

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

SIGNATURES

FAQ | Privacy | Terms Of Service | Contact