Lithia Motors Inc.
) announced that it has increased its five-year revolving
syndicated credit facility by $150 million to $800 million with
ten institutions. The credit facility is expected to mature in
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The institutions include four auto manufacturing related finance
companies and six commercial banks. The manufacturing-related
companies include Mercedes-Benz Financial Services of
); Toyota Motor Credit Corporation of T
oyota Motor Corporation.
); BMW Financial Services of BMW; and Nissan Motor Acceptance
Nissan Motor Co.
). The commercial banks include U.S. Bank, JP Morgan Chase Bank,
Bank of America, Wells Fargo Bank, Bank of the West; and Key
The credit facility will be used for new vehicle inventory
floorplan financing ($575 million) and used vehicle inventory
floorplan financing ($80 million). The remaining $145 million
will be used for general corporate purposes, including working
capital and acquisitions.
The company has recently acquired Connell Chevrolet in Killeen,
Texas, Chevrolet Cadillac store in Bellingham, Washington, GMC
and Buick franchises in Fairbanks, Alaska, and new Dodge and Ram
franchises in Las Cruces, New Mexico. The acquisitions and
improved vehicle sales have led to an increase in inventory
requirements. The additional credit facility will support this
move and lead to growth opportunities for the company.
Lithia Motors recorded a 47.5% increase in profits to 90 cents
per share in the third quarter of 2012, compared with 61 cents
per share in the corresponding quarter last year. The profit
surpassed the Zacks Consensus Estimate by 13 cents per share.
Revenues in the quarter rose 24.2% to $888.4 million. The
company's debt to capitalization ratio was 38.97% as of September
30, 2012 compared with 36.86% as of June 30, 2012.
Lithia Motors, Inc. is the ninth largest automotive retailer in
the U.S. With 87 stores in operation in 11 states, the company
supplies 29 brands of new and used vehicles. It also provides
finance, warranty, and credit insurance contracts.
Lithia Motors competes with
Penske Automotive Group Inc.
). Currently, it retains a Zacks #1 Rank, which translates into a
short-term (1 to 3 months) Strong Buy rating.