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Lithia grows, but may soon decline Mail Tribune / Jim Craven Three people pass by Lithia Motors� newest lot at Riverside and McAndrews in Medford. Although the company posted a profit in 2000, officials predict that 2001 will bring a significant drop in sales. Lithia Motors Inc.�s net profit for 2000 rose 27 percent to $24.31 million compared to $19.17 million in 1999, but the auto dealer saw a sales and profit decline in the fourth quarter as the economy softened. In a quarterly financial report released this week, company officials warned that sales for the current quarter will show a significant drop. But that won�t keep the auto dealer from expanding. Forward estimates released Wednesday predict a 10 to 12 percent drop in same-store auto sales for the current quarter and a 5 to 8 percent drop overall for 2001. Same-store sales for all of 2000 were reported as a 1.1 percent increase. "We are revising our estimates for the first quarter and full year 2001 to reflect the recent softening in the economy," said Jeff DeBoer, senior vice president and chief financial officer for Lithia, a publicly traded auto retailer based in Medford. Lithia reported more than $1.6 billion in sales for 2000, which came from new and used automotive sales, parts sales and service center revenues. Lithia purchased eight new dealerships last year. Lithia�s management will continue the aggressive expansion that has made the formerly regional auto dealer into a national powerhouse. "Despite expectations of a much more difficult operating environment in 2001, (Lithia) plans to continue to invest in acquisitions and in the management infrastructure necessary to add value at acquired stores," DeBoer said. DeBoer added that the recent downturn in the economy anticipated to continue through 2001 will present an opportunity to purchase more dealerships. The company plans to spend up to $400 million on new acquisitions this year, which DeBoer says are expected to contribute up to an additional $200 million in revenues in 2001. "We�re getting more and more aggressive," DeBoer said. "Now, more businesses are becoming available and ... we can buy them at even better prices than we could two years ago. There will be no slowing down of acquisitions. "... While this will likely hurt near-term performance, we believe it sets (Lithia) up for much stronger positioning longer-term." In the fourth quarter of 2000, net profit declined 1.5 percent to $5.63 million compared to $5.71 million in the fourth quarter of 1999, Lithia reported. Total fiscal-year revenues for the auto retailer increased 34 percent to $1.66 billion from $1.24 billion in 1999. For the fourth quarter, total revenues increased 14 percent to $402.1 million from $353.4 million in the fourth quarter of 1999. For the year, new vehicle sales increased 33 percent, used vehicle sales increased 28 percent, parts and service sales increased 36 percent and other revenues increased 59 percent compared to 1999. Lithia sold 68,126 new and used vehicles in 2000, company officials reported. Used vehicle sales increased 10 percent, parts and service sales increased 22 percent and other revenues increased 24 percent compared to the same period last year. The increase in sales and revenue came primarily from the purchase of eight dealerships with annual revenues of approximately $254 million. Lithia now owns 113 franchises in California, Oregon, Washington, Nevada, Colorado, Idaho, South Dakota and Alaska and sells 26 brands of new vehicles at 54 stores and through Lithia.com on the Web. Lithia also sells used autos and provides parts, maintenance and repair services at all of its locations. Chairman and Chief Executive Officer Sidney B. DeBoer said, "This has been another outstanding year for Lithia, with total sales of over $1.6 billion. ..." "Auto sales in the fourth quarter of 2000 within the U.S. market were challenging with a year-on-year decline in new vehicle sales of 4.2 percent nationally," he said. "Lithia posted a 1.8 percent decline in same-store retail sales for the quarter." Lithia�s management predicted up to a 2 percent decline in retail sales for the fourth quarter 2000. The declining numbers aren�t unique to Lithia, Lithia�s chairman said. "All of our margins remain at public auto-retailing sector leading levels. Even as we have continuously added new stores with lower initial profitability than our own, we have continued to improve our operating margin from 3 percent when we went public in 1996 to 3.9 percent in 2000." Mail Tribune Home | Ottaway Newspapers, Inc. | Dow Jones & Co., Inc. | Privacy | Contact Us Copyright � 2001 Mail Tribune, Inc.