Lithia Motors has strong balance sheet, good cash position in crisis

By Devika Patel

Knoxville, Tenn., April 22 – Lithia Motors Inc. is in a good position, despite current market uncertainties due the Covid-19 pandemic, according to its management.

“Our balance sheet is the strongest in our history, with the lowest leverage in our industry and cash reserves of over $550 million,” president and chief executive officer Bryan DeBoer said on the company’s first quarter ended March 31 earnings conference call on Wednesday.

Last year’s debt offering and refinancing activities positioned the company well going into the Covid-19 pandemic.

“Late last year, we took actions to strengthen our balance sheet to support the company’s future growth plans,” senior vice president and chief financial officer Tina Miller said on the call.

“We raised $400 million through issuing senior notes while modifying our $2.8 billion syndicated credit facility with a maturity extension to 2025, increased maximum allowable leverage ratios of 5.75x and reduced interest rates across the various lines.

“This financial position, coupled with no material debt maturities over the next four years, over $1 billion in cash, available credit and unfinanced real estate and three turns of headroom on our leverage covenants have positioned us well,” Miller said.

As of March 31, the company’s adjusted leverage ratio of net debt to adjusted EBITDA was 2.2x.

Lithia Motors is a Medford, Ore.-based automotive retailer.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.