Lithia Highlights Used-Vehicle Sales Success as Revenue Driver
MEDFORD, Ore. — A stronger push to move used vehicles helped Lithia Motors overcome a sluggish new-unit retail sales performance and improve its fourth-quarter revenue figure.
Company executives indicated that same-store new-vehicle sales increased just 1.2 percent during the closing quarter of 2009. Meanwhile, Lithia highlighted its used-vehicle retail sales jumped 17.9 percent when compared to the same period of the prior year.
As a result, Lithia revealed during on Thursday that fourth quarter revenue totaled $419 million. That figure computed into a 4.9-percent increase from the 2008 fourth-quarter revenue total of $399 million.
Along with softer new-vehicle retail sales performance, Lithia also noted that service, body and parts same store sales declined 2.7 percent in the fourth quarter compared to the prior year.
Sid DeBoer, Lithia's chairman and chief executive officer, further explained how the company's performances came to be.
"Our fourth-quarter results were impacted by weak new-vehicle sales at our Chrysler stores. This was caused by the delay in the release of new products, like the 2010 Ram heavy duty pickup, and lower advertising and incentive spending by Chrysler which slowed floor traffic," DeBoer stated.
"In response, we focused on increasing used-vehicle sales at the affected locations. We also improved new-vehicle sales of our other brands," he continued.
"Excluding Chrysler, we had approximately 18.5 percent new-vehicle same-store sales growth over the fourth quarter of 2008," DeBoer went on to say. "On an adjusted basis, we were profitable in the fourth quarter, despite significant headwinds."
Lithia executives also offered details about its full-year financial performance.
The company indicated that total sales declined 15.2 percent in 2009 to $1.7 billion as compared with $2.1 billion Lithia posted in 2008. Officials also revealed that same-store new-vehicle sales dropped 23.6 percent but retail used-vehicle sales climbed 3.1 percent. They went on to note that service, body and parts sales decreased 3.3 percent.
When combining all of those figures, Lithia found that 2009 GAAP net income from continuing operations was $6.1 million. The turnaround was enormous since executives pointed out that the net loss from continuing operations in 2008 was $226.5 million.
Lithia also highlighted that it ended the year with $74.2 million in immediately available funds. Executives said that figure included $12.8 million in cash, $25.7 million in availability on its revolving credit facility and $35.7 million in un-floored new-vehicle inventory.
"At Dec. 31 Lithia was in compliance with all debt covenants and has no mortgage maturities until 2011," executives stressed.