Lithia Motors Inc., expecting revenue of about $3 billion in 2012, plans capital expenditures of $43 million and has more than $100 million in liquidity to buy dealerships, company officials told investor conferences in New York and Boston last week.
This year Lithia will continue to trim costs, streamline store operations and pursue acquisitions, CEO Bryan DeBoer said in New York.
"My goal is to stay focused, keep capital discipline and continue to grow our business as we have from the ground up," DeBoer, 46, said.
The company expects new-vehicle gross margin and the finance and insurance gross profit per unit to be about the same as it was in 2011, CFO Chris Holzshu said in Boston.
The company's first-quarter net income rose to $16.8 million, from $8.7 million during the same quarter last year. Revenue surged 30 percent to $759 million.
Lithia, of Medford, Ore., ranks No. 9 on the Automotive News list of top U.S. dealership groups, based on 44,537 retail new-vehicle sales in 2011. It has 86 stores in 11 states.
There are about 80 markets west of the Mississippi River and 160 east of the river in which Lithia wants to snap up dealerships, said DeBoer. Lithia wants to buy dealerships that sell Chevrolet, Ford, Toyota, Honda, Hyundai, Subaru and Nissan vehicles.
"We're a little bit different from other operators in that we operate exclusively in our markets -- meaning we're the only dealer representing that brand in a market," DeBoer said. "Our areas are typically rural, under 250,000 people."
DeBoer said Lithia is considering more populous markets for luxury import dealership acquisitions. There are about 500 U.S. metro markets selling luxury brands, and Lithia is in about 30 of them, he said.
"We have a very good idea which dealers are in those markets, how their stores are performing and what we'd have to pay for them," DeBoer said. "We have brokers in those markets to represent us."
Lithia will continue a campaign started three years ago to flatten the dealership group's organization and management layers, DeBoer said.
"Our executive team is now about half the size it used to be, and they are more engaged with our dealerships and regularly visit stores," he said. "So everything is about what happens in your marketplace, not what happens to Lithia."