Lithia adds two more lots
From wire and staff reports
Lithia Motors has added two more dealerships to its fold.
The Medford-based company took over two Boise operations selling Chevrolet, Lincoln/Mercury and Isuzu brands last week.
Lithia purchased the two dealerships from a company called Roundtree of Idaho for $8.5 million in cash and stock.
The latest acquisition marks Lithia's first expansion into Idaho and gives the company 41 dealerships in six Western states. It had five Rogue Valley dealerships when it went public in 1995.
Lithia officials said the Boise dealerships, which did a estimated $101 million in sales this year, fit well with the company's growth strategy.
Our focus is on middle-sized markets, said Brian Neill, Lithia's chief financial officer. It's a great market.
Boise ranked first in a recent study of the best business climates in the nation. The study, done by two professors from the University of Texas at El Paso, looked at a dozen economic indicators used to gauge opportunity for consumer-oriented businesses. Medford ranked eighth in the study, as was reported in last Wednesday's Mail Tribune.
Neill says Lithia has focused its efforts on western states like Idaho not only because they are closer to Medford but because of the opportunities in those states.
The West really is the best climate for auto retailers, he said, noting that national studies have found the western and mountain states the most profitable for auto dealers.
Last week's announcement came as AutoNation, another publicly traded automobile retailer based in Fort Lauderdale, Fla., said it was shutting down its national chain of 23 used-car megastores at a one-time loss of $490 million.
The coincidental timing helped focus attention on Lithia, which ranks among the most successful of the automobile dealership companies that went public earlier this decade to get money for expansion.
They've been one of the most consistent performers in meeting Wall Street's expectations, Laura A. Richardson, a stock analyst for Pacific Crest Securities in Portland, said of Lithia.
Lithia almost doubled per-share earnings from 60 cents to $1.14 between 1995 and 1998. A consensus of analysts surveyed by Zacks Investment Research anticipates final 1999 earnings of $1.55 per share.
Lithia's most-recent quarterly earnings of 49 cents a share placed it at the top of eight public companies that sell new, used or both categories of cars.
Jeff DeBoer, Lithia's vice-president for finance, said the company was building itself on proven practices.
We are not trying to revolutionize the business, he said. However, we are willing to change as fast as possible within a profitable model.