Lithia Motors 8-K 2008
Item 7.01 Regulation FD Disclosure.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
LITHIA MOTORS, INC.
Date: June 2, 2008 By:____________________________________
LITHIA MOTORS ANNOUNCES MAJOR RESTRUCTURING PLAN
MEDFORD, OR. June 2nd, 2008 (5:30am, PT) Lithia Motors, Inc. (NYSE: LAD), today announced its planned actions to address the short and long-term conditions that are impacting the auto retail industry and the company.
As the economic environment has worsened, we have taken a comprehensive look at our business and determined how it can be right-sized to achieve our profit margin and growth objectives for the long term, said Sid DeBoer, CEO and Chairman of Lithia Motors.
The Company noted that although falling consumer confidence, declining home values, tightening credit markets, and domestic auto manufacturers losing market share are all adversely impacting vehicle sales, the driving force is the accelerated rise in gasoline and diesel prices. Oil prices have doubled in the past year, and have increased six-fold since 2002.
The company is accelerating its cost cuts because of the reduced sales volume. In addition to the $6 million annualized cuts announced at the end of April on our first quarter conference call, the Companys plans include further cost reductions that are expected to result in additional savings of $1 million per month for a total of $18 million annualized. This cost cutting plan is partially implemented and should be completed within the next ninety days.
Cost cutting measures include:
o Restructuring store management personnel and duties
In addition to the $18 million annualized savings above, the following restructuring actions will help to preserve capital and improve profitability:
o Reducing domestic exposure within our business units by divesting 10 15 underperforming
Details on the additional savings and other financial impact of the above noted restructuring plans will be announced by the second
Mr. DeBoer added, After improving sequentially to near break-even in the first quarter, we are continuing to improve in the second quarter. April sales volume came in a little below plan but May is tracking in line with our internal projections. With the cost cuts partially in place and the positive trend in May, we are hoping that June comes in ahead of objectives.
all of its locations. Lithia retailed 105,108 new and used vehicles and had $3.22 billion in total revenue in 2007. Lithia is publicly traded (NYSE:LAD) and is available on the web at www.Lithia.com.
Forward Looking Statements