Lithia Motors (LAD) Prelim. Q2 EPS Tops Consensus

Lithia Motors, Inc. (NYSE: LAD) today reported that based on preliminary results, second quarter 2017 net income is estimated to be in the range of $51.5 million to $53.0 million, or $2.05 to $2.11 per diluted share. This compares to second quarter 2016 net income of $51.4 million, or $2.01 per diluted share. Adjusted second quarter 2017 net income is estimated to be in the range of $55.1 million to $56.6 million, or $2.20 to $2.26 per diluted share, compared to $50.2 million, or $1.96 per diluted share, from the same period a year ago.

(Street sees Q2 EPS of $2.19 on revenue of $2.40 billion)

As shown in the attached non-GAAP reconciliation tables, our results for the three months ended June 30, 2017, exclude non-core charges in the range of $0.14 to $0.15 related to acquisition expenses and a hail storm insurance reserve. Our results for the three months ended June 30, 2016, exclude a non-core benefit of $0.05 related to an equity investment.

Second Quarter Preliminary Operating Results:

• Revenue in the range of $2,425 million and $2,475 million
• Operating income in the range of $100.0 million and $104.0 million and adjusted operating income in the range of $106.0 million and $110.0 million
• Net income in the range of $51.5 million and $53.0 million and adjusted net income in the range of $55.1 million and $56.6 million
• Diluted net income per share in the range of $2.05 and $2.11 and adjusted diluted net income per share in the range of $2.20 and $2.26
• EBITDA in the range of $106.2 million and $108.7 million and adjusted EBITDA in the range of $111.1 million and $113.6 million

Second Quarter Same Store Highlights:

• Total same store sales increase in the range of 2.3% to 2.6%
• New vehicle same store sales increase in the range of 0.5% to 0.8%
• New vehicle same store unit sales decreased (0.4)%
• Used vehicle retail same store sales increase in the range of 3.8% to 4.1%
• Used vehicle same store unit sales increased 4.6%
• Service, body and parts same store sales increase in the range of 6.8% to 7.1%
• Same store F&I per unit in the range of $1,330 to $1,355

As previously announced, Lithia is launching a $300 million senior notes private offering. We are releasing our preliminary second quarter results in conjunction with the offering.

"We grew revenue and adjusted earnings per diluted share by double digits as our results exceeded our internal projections in the second quarter. Our store leaders continue to modify their tactics in this dynamic market and produced strong results in retail used vehicle sales, service and parts and F&I," said Bryan DeBoer, President and CEO. "The acquisition market remains active and we believe this is an opportune time to access additional capital for growth. We seek greenfield-like returns on our acquisition targets and anticipate further activity in the near future."

Second Quarter Earnings and Conference Call

Lithia also announced its second quarter 2017 earnings will be released before the market opens on Friday, July 28, 2017. A conference call to discuss our earnings results is scheduled for the same day at 10:00 a.m. Eastern Time. The conference call may be accessed by telephone at (877) 407-8029. To listen live on our website or for replay, visit www.lithiainvestorrelations.com and click on webcasts.

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