Automotive News story on Lithia - Late and wrong?

[XDCX]

One of the reasons that I created DealershipForum.com is because I love Internet Forums - they're fast, efficient and interactive.

When I read today's story in Automotive News about Lithia's Fourth Quarter results and the departure of Don Jones, Jr., my first reaction was that it was just old news. My second reaction, however, was that they got the story wrong. And when you're talking about information, "late and wrong" are not the benchmarks that you strive for.

The part that they got wrong concerned the "reporting irregularities" and the "franchise impairments" - they have them tied together where the impairments are a result of the irregularities. That's not the way I interpreted the information released during the Conference Call.

The story in Automotive News indicates that Lithia took a $1.8 Million charge for "franchise impairments" due to the sales reporting issues. I think they got the story wrong.

Lithia's Management never indicated how many stores were involved with the sales reporting issue and they never indicated which franchises may be involved.

The "franchise impairment," as I understand it, relates to the amount of "goodwill" or "blue sky" a franchise can command in the marketplace. The franchises that were mentioned, Chrysler, Ford and Hyundai, would all be examples of franchises with dwindling "blue sky" values.

If I'm wrong, I know that there are members that will correct my mistakes and ensure that the correct information is presented. When Automotive News is wrong, thousands of readers are exposed to incorrect information and have to wait a week or more before the error is corrected.

Long live the Internet.

[XDCX]

In fairness to the reporter, I have assumed that she was the one who got the story wrong. Maybe it was one of her sources?

Is it possible that a Stock Analyst would confuse the sales reporting issue with the franchise impairment issue? I hope not, but I guess I can't rule it out either.

[SHACOS]

I'll comment after we issue our 10K.

[XDCX]

Originally Posted by SHACOS

I'll comment after we issue our 10K.

That would be awesome.

I read the Automotive News story three times before I decided to make that post. I still think they got the story wrong - I guess I'll have to wait for the 10K before I know for sure.

[XDCX]

I just received my March 24, 2008 edition of Automotive News and smiled when I read the story about "Lithia looks into improper sales reports at dealerships."

My initial rant that started this thread was based on the belief that Automotive News got the Lithia story wrong. (And it was old news when they finally reported it.)

The first story reported that Lithia was taking "franchise impairments" of $1.8 million as a result of the sales reporting issues. The second story reaffirms that position.

My belief is that the sales reporting issue and the "franchise impairment" issues are NOT related.

As before, this will all get sorted out when the 10K is released.