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Lithia Motors (LAD) Bryan DeBoer on Q1 2016 Results - Earnings Call Transcript

Q1 2016 Results Earnings Conference Call

April 21, 2016, 10:00 AM ET

Executives

John North - Chief Accounting Officer

Bryan DeBoer - President & CEO

Christopher Holzshu - VP & CFO

Sidney DeBoer - Founder & Executive Chairman

Analysts

Paresh Jain - Morgan Stanley

Elizabeth Suzuki - Bank of America Merrill Lynch

Tony Cristello - BB&T Capital Markets

Brett Hoselton - KeyBanc

Jamie Albertine - Stifel

Will Armstrong - C.L. King & Associates

Steven Dyer - Craig Hallum Capital Group

N. Richard Nelson - Stephens, Inc.

Bret Jordan - Jefferies

Michael Montani - Evercore ISI

Operator

Greetings and welcome to the Lithia Motors Inc. First Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Mr. John North, Chief Accounting Officer for Lithia Motors Inc. Thank you. You may begin.

John North

Thanks and good morning. Welcome to Lithia Motors' first quarter 2015 earnings conference call. Before we begin, the company wants you to know that this conference call includes forward-looking statements. Forward-looking statements are not guarantees of future performance and our actual results of operations, financial condition, liquidity and development of the auto industry and markets in which we operate may differ materially from those made and/or suggested by the forward-looking statements in this call.

Examples of forward-looking statements include statements regarding expected operating results, projections for our 2016 performance, expected increases in our annual revenues related to acquisitions, anticipated availability from our unfinanced operating real estate and anticipated levels of future capital expenditures and free cash flow. We urge you to carefully consider this information and not place undue reliance on forward-looking statements. We undertake no duty to update our forward-looking statements, including our earnings outlook, which are made as of the date of this release.

During this call, we may discuss certain non-GAAP items such as adjusted net income and diluted earnings per share, adjusted SG&A as a percentage of gross profit and adjusted pre-tax margin. Non-GAAP measures do not have definitions under GAAP and may be defined differently and not comparable to similarly titled measures used by other companies. We caution you not to place undue reliance on such non-GAAP measures, but also to consider them with the most directly comparable GAAP measures.

We believe the non-GAAP financial measures we present improve the transparency of our disclosures, provide a meaningful presentation of our results from core business operations, because they exclude items not related to core business operations and improve the period-to-period comparability of our results from core business operations.

These presentations should not be considered an alternative to GAAP measures. A full reconciliation of these non-GAAP items is provided in the financial tables of today's press release. We've also posted an updated investor presentation on our website, lithiainvestorrelations.com, highlighting our first quarter results.

Presenting the call today are Bryan DeBoer, President and CEO and Chris Holzshu, Senior Vice President and CFO. Also in the room is Sid DeBoer, Chairman of the Board. At the end of our prepared remarks, we will open the call to questions and I'm also available in my office after the call for any follow-up you may have.

And with that, I would like to turn the call over to Bryan.

Bryan DeBoer

Good morning and thank you for joining us today. Earlier, we reported first quarter adjusted net income of $40 million compared to $37 million a year ago, an increase of 9%. We earned $1.55 per share in the first quarter compared to $1.39 per share last year, up 12%.