LCM Investments Holdings II LLC

Overview Key strengths Key risks Resilient business model with diverse revenue streams. Rising risk of disruption from online competitors, direct to consumer sales models, and the electrification of cars. Above-average EBITDA margins even before recent price increases for vehicles. Significant geographic concentration and more modest scale than public peers. Low capital spending requirements. Operates in a fragmented and competitive industry. . Compared to national peers that operate more than 150 rooftops on average across various states and geographies, Morgan Auto operates only 53 dealerships and exclusively in Florida. Still, the company?s footprint in Florida has benefited from population growth across the southeastern U.S. Similar to other dealership companies, Morgan Auto?s business model benefits from diverse revenue streams ranging from the

...We continue to view LCM Investments Holdings II LLC (dba Morgan Automotive Group) as a smaller automotive retail operator given its geographic concentration, though with a relatively competitive cost structure. Compared to national peers that operate more than 150 rooftops on average across various states and geographies, Morgan Auto operates only 53 dealerships and exclusively in Florida. Still, the company's footprint in Florida has benefited from population growth across the southeastern U.S. Similar to other dealership companies, Morgan Auto's business model benefits from diverse revenue streams ranging from the sale of new and used vehicles, finance and insurance products, and parts and services with the latter two categories providing a recurring stream of income that can stabilize performance during an economic downturn. Additionally, Morgan Auto has a lower cost structure because...

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