Lithia Motors, Inc. · NYSE:LAD
Lithia Motors — Investor Presentation (March 2008)
18 slides from Lithia Motors's investor presentation, Mar 6, 2008
Slide 1: Before we begin...
Before we begin. . . _ ihe Company Wants VOUnto KnOWuhaninis presemialon Includes forward IOOKING Statements: Uihese Sidiemenits are mecessarily SUb|Ect to risk and uncentalniy anokaciial resiitsicould aifier materially due to certain risk factors, InclUGINg Withour limitation economic conditions, a
Slide 2: “Lithia” - Named after Lithia springs in Ashland, Oregon
“Lithia” - Named after Lithia springs in Ashland, Oregon
Slide 3: Lithia - America’s Car & Truck Store
Lithia - America’s Car & Truck Store ° 15 States, 46 Markets, 110 Store Locations |@|,P.O, in Dec. 1996 - 5 Stores $3.2 Bn revenues in 2007 The 7th largest U.S. auto retailer - by retail sales 833% revenue CAGR since going public Target 15% long-term Earnings Per Share Growth Quarterly Dividend $0.1
Slide 4: L2 Used Vehicle Operation
L2 Used Vehicle Operation SUnlimited Growth Potential SWe can open in any market SDon’t need manufacturer approval SNo goodwill - only start-up costs Three stores currently Fourth store in second quarter STwo more stores coming on-line late 2008 §12 - 18 stores by 2010 Le x
Slide 5: L2 Auto
AUTO =Not ramping up the pace -- Going slow and steady “Applying what we are learning to Lithia model as quickly as possible
Slide 6: Learning From Each Other
Slide 7: Simplifying of duties
Simplifying of duties isSales staff - Higher volume, greater productivity, restructured payplans "Management - Consolidation of duties Reduction of headcount Restructuring payplans
Slide 8: Why Now?
y Now? e spoken mands it Recessionary environment is perfect opportunity
Slide 9: Current Situation
Current Situation: Recession Structural changes Actions we are taking
Slide 10: Cost cutting
Cost cutting - Recession related =Review of all costs =Reducing expenses Reducing personnel due to lower sales volume «Slowing any cap-ex we can
Slide 11: SG&A Expenses
_ SG&A Expenses Increase related to acquisitions Increase in expense related to L2 Auto Increase in employee benefits Asset impairment Other expenses (Banking, Property Tax, Maint/Repair, Data Process, Equipment) Savings in salaries and bonuses Savings in travel expense Savings in advertising expens
Slide 12: Current Store Count
Current Store Count ® Disposing of underperforming stores (ROI) ® Modifying acquisitions strategy
Slide 13: Structural Changes: New & Used Vehicle Sales
structural Changes New & Used Vehicle Sales Drive-It-Now Price s3-Day/500 mile return policy "No ADM’s Negotiation-Free Selling Calculated stages
Slide 14: Structural Changes: Service and Parts
otructural Changes service and Parts s Extending hours 8 3-Year/50,000 mile warranty Ss All repair work = Parts and labor = Guaranteed price based on estimate given = No appointment needed = Quick-Lube; ramping up
Slide 15: Operational Changes
Operational Changes (Back-End of the business) Centralization of operations § Accounting functions 8 Processing of customer transactions Pricing Inventory control
Slide 16: Where will we be?
where will we be ? Earnings of $3.00 per share in 2011
Slide 17: Revenue Growth Goal @ 12% a Year
17 10 - Year Revenue Growth Goal @ 12% Year $ in Billions 12.00 $12 billion revenues by 2017 9.63 - j 7.26 eB ope aps 2.51 0.14 saglll| 4999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 213 2014 2015 2016 2017 Reyen ues fos) Co a
Slide 18: Lithia’s Mission
Lithie’s Mistio emia APS AND TRUCKS AN beh MERICA , d profitable growth. We spea fncvexeculetinest. in-class processes in all of our Spesctions. SWenaverivnamic and dedicated leadership COMMAeG Tole stcncarcs onclminsion of TifRiGs ¢We provide Oppenunieston OUnDE@plestonexcel and grow in a positive,