Lithia Motors Inc. has focused on reversing a centralized culture and giving dealership managers autonomy to run their stores. As it has made acquisitions, it has left the existing leadership in place.
Lithia Motors Inc.'s fourth-quarter net income surged on record revenue and special gains, particularly from tax-law changes. Same-store gross profit grew in all operations except used vehicles.
Net income climbed 74 percent to $89.4 million, while revenue rose 18 percent to a fourth-quarter record $2.7 billion from a year earlier, the nation's fourth-largest dealership group said Wednesday.
Net included $38 million in one-time gains, including $32.9 million related to changes in the federal tax law, vs. one-time gains totaling $6.8 million a year earlier.
"For the second consecutive year, we acquired over a billion dollars in annualized revenues," CEO Bryan DeBoer said in a statement. "We continue to see an active acquisition market with ample stores available."
Last year, Lithia purchased 18 stores and opened one. It expects that those stores combined will generate over $1.7 billion in annualized revenue. Last month, the group bought two stores in the Buffalo, N.Y., market, which it expects to produce $140 million in annualized revenue.
Sales: New-vehicle sales rose 17 percent to 45,202 while used-vehicle retail sales grew 12 percent to 32,242.
Same-store sales: New-vehicle sales edged up 0.8 percent to 38,669, outperforming the industry's 1.8 percent drop in fourth-quarter U.S. light-vehicle sales.
For all of 2017, revenue increased 16 percent to a record $10.09 billion, while net income jumped 24 percent to $245.2 million.
In a conference call with analysts and media, DeBoer said the company expects continued benefits from its lowered federal corporate-tax rate. "Positive gains should be seen in both our existing store operations as well as new acquisition opportunities. We estimate our effective tax rate will decrease from 38 percent to 27 percent, a savings of roughly 11 percent or an incremental 40 million dollars in annual tax flows," he said.