Lithia & Driveway (LAD) Reports 12% Revenue Increase and Diluted EPS of $10.78

12 5 Lithia & Driveway (LAD) Reports 12% Revenue Increase and Diluted EPS of $10.78

Announces Dividend to $0.50 per Share for Second Quarter

MEDFORD, Ore., July 26, 2023 /PRNewswire/ — Lithia & Driveway (NYSE: LAD) today reported the highest second quarter revenue in company history.

Second quarter 2023 revenue increased 12% to $8.1 billion from $7.2 billion in the second quarter of 2022.

Second quarter 2023 net income attributable to LAD per diluted share was $10.78, a 7% decrease from $11.60 per diluted share reported in the second quarter of 2022. Adjusted second quarter 2023 net income attributable to LAD per diluted share was $10.91, a 10% decrease compared to $12.18 per diluted share in the same period of 2022. Unrealized foreign currency gains positively impacted earnings per share by $0.23.

Second quarter 2023 net income was $301 million, an 11% decrease compared to net income of $338 million in the same period of 2022. Adjusted second quarter 2023 net income was $305 million, a 14% decrease compared to adjusted net income of $355 million for the same period of 2022.

As shown in the attached non-GAAP reconciliation tables, the 2023 second quarter adjusted results exclude a $0.13 per diluted share impact resulting from non-core charges, specifically acquisition expenses and insurance reserves, partially offset by a net gain on the sale of stores and non-cash unrealized investment gain. The 2022 second quarter adjusted results exclude a $0.58 per diluted share net non-core charge related to a non-cash unrealized investment loss and acquisition expenses, partially offset by a net gain on sale of stores.

Second Quarter-Over-Quarter Comparisons and 2023 Performance Highlights:

  • Revenues increased 12%
  • New and used unit growth was 22% and (1)% , respectively
  • Total vehicle gross profit per unit of $5,710, down $853
  • Driveway averaged over 2.7 million monthly unique visitors in the quarter
  • Driveway Finance Corporation (DFC) originated $558 million in loans in Q2
  • Service, body, and parts revenues increased 18%
  • Adjusted SG&A as a percentage of gross profit was 60.4%

“Our second quarter performance was strong across all our business lines and our teams demonstrated strong operating discipline as we continue to build out our adjacencies with consumer optionality and provide products and services fitting all affordability levels,” said Bryan DeBoer, Lithia & Driveway, President and CEO. “Our commitment to improving our operating results through a relentless focus on high performance is demonstrated in our results, allowing us to continue acquiring stores domestically and abroad. We see DFC and our omnichannel footprint enhancing our offering and driving us towards our targets in the 2025 Plan and beyond. We are well capitalized and our free cash flow generation gives us flexibility to deliver on our strategy.”

For the first six months of 2023 revenues increased 8% to $15.1 billion, compared to $13.9 billion in 2022.

Net income attributable to LAD for the first six months of 2023 was $19.08 per diluted share, compared to $23.15 per diluted share in 2022, a decrease of 18%. Adjusted net income attributable to LAD per diluted share for the first six months of 2023 decreased 20% to $19.35 from $24.14 in the same period of 2022. Foreign currency exchange positively impacted earnings per share by $0.18.

Corporate Development

During the second quarter, LAD acquired a total of 14 locations across the mid-Atlantic and southeast regions of the United States, which are expected to generate nearly $1.5 billion in annualized revenues. LAD divested three stores, combined they made approximately $70 million in revenues the past year. Year-to-date, we have acquired over $3.5 billion in annualized revenues. Since announcing the 2025 Plan in July 2020, we have acquired over $17.5 billion in annualized revenues.

Balance Sheet Update

LAD ended the second quarter with approximately $1.0 billion in cash and availability on our revolving lines of credit. In addition, unfinanced real estate could provide additional liquidity of approximately $0.5 billion.

Dividend Payment

The Board of Directors approved a dividend of $0.50 per share related to second quarter 2023 financial results. The dividend is expected to be paid on August 25, 2023 to shareholders of record on August 11, 2023.

Second Quarter Earnings Conference Call and Updated Presentation

The second quarter 2023 conference call may be accessed at 10:00 a.m. ET today by telephone at 877-407-8029. An updated presentation highlighting the second quarter 2023 results has been added to our investor relations website. To listen live on our website or for replay, visit investors.lithiadriveway.com and click on quarterly earnings.

About Lithia & Driveway (LAD)

Lithia & Driveway (NYSE: LAD) is a growth company focused on profitably consolidating the largest retail sector globally through providing personal transportation solutions wherever, whenever, and however consumers desire.

Sites

www.lithia.com

investors.lithiadriveway.com

www.lithiacareers.com

www.driveway.com

www.greencars.com

www.drivewayfinancecorp.com

Lithia & Driveway on Facebook

https://www.facebook.com/LithiaMotors

https://www.facebook.com/DrivewayHQ

Lithia & Driveway on Twitter

https://twitter.com/lithiamotors

https://twitter.com/DrivewayHQ

https://twitter.com/GreenCarsHQ

Forward-Looking Statements

Certain statements in this presentation, and at times made by our officers and representatives, constitute forward-looking statements within the meaning of the “Safe Harbor”provisions of the Private Securities Litigation Reform Act of 1995. Generally, you can identify forward-looking statements by terms such as “project,” “outlook,” “target,” “may,” “will,” “would,” “should,” “seek,” “expect,” “plan,” “intend,” “forecast,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “likely,” “goal,” “strategy,” “future,” “maintain,” and “continue” or the negative of these terms or other comparable terms. Examples of forward-looking statements in this presentation include, among others, statements regarding:

  • Future market conditions, including anticipated car and other sales levels and the supply of inventory
  • Our business strategy and plans, including achieving our 2025 Plan and related targets
  • The growth, expansion, make-up and success of our network, including our finding accretive acquisitions and acquiring additional stores
  • Annualized revenues from acquired stores
  • The growth and performance of our Driveway e-commerce home solution and Driveway Finance Corporation (DFC), their synergies and other impacts on our business and our ability to meet Driveway and DFC-related targets
  • The impact of sustainable vehicles and other market and regulatory changes on our business
  • Our capital allocations and uses and levels of capital expenditures in the future
  • Expected operating results, such as improved store performance, continued improvement of selling, general and administrative expenses as a percentage of gross profit and any projections
  • Our anticipated financial condition and liquidity, including from our cash and the future availability of our credit facilities, unfinanced real estate and other financing sources
  • Our continuing to purchase shares under our share repurchase program
  • Our compliance with financial and restrictive covenants in our credit facilities and other debt agreements
  • Our programs and initiatives for employee recruitment, training, and retention
  • Our strategies and targets for customer retention, growth, market position, operations, financial results and risk management

Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Forward-looking statements are not guarantees of future performance, and our actual results of operations, financial condition and liquidity and development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements in this presentation. Therefore, you should not rely on any of these forward-looking statements. The risks and uncertainties that could cause actual results to differ materially from estimated or projected results include, without limitation:

  • Future national and local economic and financial conditions, including as a result of regional or global public health issues, inflation and governmental programs, and spending
  • The market for dealerships, including the availability of stores to us for an acceptable price
  • Changes in customer demand, our relationship with, and the financial and operational stability of, OEMs and other suppliers
  • Changes in the competitive landscape, including through technology and our ability to deliver new products, services and customer experiences and a portfolio of in-demand and available vehicles
  • Risks associated with our indebtedness, including available borrowing capacity, interest rates, compliance with financial covenants and ability to refinance or repay indebtedness on favorable terms
  • The adequacy of our cash flows and other conditions which may affect our ability to fund capital expenditures, obtain favorable financing and pay our quarterly dividend at planned levels
  • Disruptions to our technology network including computer systems, as well as natural events such as severe weather or man-made or other disruptions of our operating systems, facilities or equipment
  • Government regulations and legislation
  • The risks set forth throughout “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in “Part I, Item 1A. Risk Factors” of our most recent Annual Report on Form 10-K, and in “Part II, Item 1A. Risk Factors” of our Quarterly Reports on Form 10-Q, and from time to time in our other filings with the SEC.

Any forward-looking statement made by us in this presentation is based only on information currently available to us and speaks only as of the date on which it is made. Except as required by law, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Non-GAAP Financial Measures

This presentation contains non-GAAP financial measures such as adjusted net income and diluted earnings per share, adjusted SG&A as a percentage of revenue and gross profit, adjusted operating margin, adjusted operating profit as a percentage of revenue and gross profit, adjusted pre-tax margin and net profit margin, EBITDA, adjusted EBITDA, leveraged EBITDA and adjusted total debt. Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not comparable to similarly titled measures used by other companies. As a result, we review any non-GAAP financial measures in connection with a review of the most directly comparable measures calculated in accordance with GAAP. 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 present cash flows from operations in the attached tables, adjusted to include the change in non-trade floor plan debt to improve the visibility of cash flows related to vehicle financing. As required by SEC rules, we have reconciled these measures to the most directly comparable GAAP measures in the attachments to this release. 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 other non-cash items; 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.

LAD

Consolidated Statements of Operations (Unaudited)

(In millions except per share data)




Three months ended

June 30,


%


Six months ended

June 30,


%




Increase



Increase



2023


2022


(Decrease)


2023


2022


(Decrease)

Revenues:













New vehicle retail


$  4,014.7


$  3,250.7


23.5 %


$                  7,293.6


$                  6,312.4


15.5 %

Used vehicle retail


2,455.1


2,496.7


(1.7)


4,682.6


4,731.2


(1.0)

Used vehicle wholesale


403.9


382.4


5.6


766.3


768.2


(0.2)

Finance and insurance


337.9


330.4


2.3


656.2


643.7


1.9

Service, body and parts


804.4


682.6


17.8


1,540.8


1,310.4


17.6

Fleet and other


95.5


97.3


(1.8)


151.5


179.5


(15.6)

Total revenues


8,111.5


7,240.1


12.0 %


15,091.0


13,945.4


8.2 %

Cost of sales:













New vehicle retail


3,627.6


2,840.3


27.7


6,572.6


5,500.7


19.5

Used vehicle retail


2,242.4


2,258.4


(0.7)


4,304.3


4,269.0


0.8

Used vehicle wholesale


404.6


378.6


6.9


769.8


756.8


1.7

Service, body and parts


360.5


319.1


13.0


702.5


617.9


13.7

Fleet and other


91.3


93.0


(1.8)


145.5


172.1


(15.5)

Total cost of sales


6,726.4


5,889.4


14.2


12,494.7


11,316.5


10.4

Gross profit


1,385.1


1,350.7


2.5 %


2,596.3


2,628.9


(1.2) %














Financing operations (loss) income


(18.7)


3.3


(666.7) %


(39.5)


8.3


(575.9) %














SG&A expense


842.2


796.9


5.7


1,606.6


1,537.1


4.5

Depreciation and amortization


48.4


38.0


27.4


95.6


74.6


28.2

Income from operations


475.8


519.1


(8.3) %


854.6


1,025.5


(16.7) %

Floor plan interest expense


(34.7)


(3.8)


813.2


(62.3)


(8.7)


616.1

Other interest expense


(43.9)


(28.3)


55.1


(83.0)


(54.5)


52.3

Other income (expense), net


9.8


(18.8)


NM


12.0


(24.3)


NM

Income before income taxes


407.0


468.2


(13.1) %


721.3


938.0


(23.1) %

Income tax expense


(105.9)


(130.6)


(18.9)


(190.6)


(256.7)


(25.7)

Income tax rate


26.0 %


27.9 %




26.4 %


27.4 %



Net income


$  301.1


$  337.6


(10.8) %


$  530.7


$  681.3


(22.1) %

Net income attributable to non-controlling interests


(1.8)


(3.8)


(52.6) %


(2.5)


(4.4)


(43.2) %

Net income attributable to redeemable non-controlling interest


(2.1)


(2.5)


(16.0) %


(2.3)


(3.4)


(32.4) %

Net income attributable to LAD


$  297.2


$  331.3


(10.3) %


$  525.9


$  673.5


(21.9) %














Diluted earnings per share attributable to LAD:













Net income per share


$  10.78


$  11.60


(7.1) %


$  19.08


$  23.15


(17.6) %














Diluted shares outstanding


27.6


28.6


(3.5) %


27.6


29.1


(5.2) %


NM – not meaningful

 

LAD

Key Performance Metrics (Unaudited)




Three months ended

June 30,


%


Six months ended

June 30,


%




Increase



Increase



2023


2022


(Decrease)


2023


2022


(Decrease)

Gross margin













New vehicle retail


9.6 %


12.6 %


     (300) bps


9.9 %


12.9 %


     (300) bps

Used vehicle retail


8.7


9.5


(80)


8.1


9.8


(170)

Finance and insurance


100.0


100.0



100.0


100.0


Service, body and parts


55.2


53.3


190


54.4


52.9


150

Gross profit margin


17.1


18.7


(160)


17.2


18.9


(170)














Unit sales













New vehicle retail


83,539


68,752


21.5 %


151,334


133,694


13.2 %

Used vehicle retail


80,573


81,026


(0.6)


158,715


154,715


2.6














Average selling price













New vehicle retail


$  48,058


$  47,281


1.6 %


$                  48,195


$                  47,216


2.1 %

Used vehicle retail


30,471


30,814


(1.1)


29,503


30,580


(3.5)














Average gross profit per unit













New vehicle retail


$ 4,635


$ 5,970


(22.4) %


$  4,764


$  6,071


(21.5) %

Used vehicle retail


2,640


2,942


(10.3)


2,384


2,987


(20.2)

Finance and insurance


2,059


2,206


(6.7)


2,117


2,232


(5.2)

Total vehicle(1)


5,710


6,563


(13.0)


5,651


6,689


(15.5)














Revenue mix













New vehicle retail


49.5 %


44.9 %




48.3 %


45.3 %



Used vehicle retail


30.3


34.5




31.0


33.9



Used vehicle wholesale


5.0


5.3




5.1


5.5



Finance and insurance, net


4.2


4.6




4.3


4.6



Service, body and parts


9.9


9.4




10.2


9.4



Fleet and other


1.1


1.3




1.1


1.3
















Gross Profit Mix













New vehicle retail


28.0 %


30.4 %




27.8 %


30.9 %



Used vehicle retail


15.4


17.6




14.6


17.6



Used vehicle wholesale



0.3




(0.1)


0.4



Finance and insurance, net


24.4


24.5




25.3


24.5



Service, body and parts


31.9


26.9




32.2


26.3



Fleet and other


0.3


0.3




0.2


0.3



 



Adjusted


As reported


Adjusted


As reported



Three months ended

June 30,


Three months ended

June 30,


Six months ended

June 30,


Six months ended

June 30,

Other metrics


2023


2022


2023


2022


2023


2022


2023


2022

SG&A as a % of revenue


10.3 %


11.0 %


10.4 %


11.0 %


10.6 %


11.1 %


10.6 %


11.0 %

SG&A as a % of gross profit


60.4


59.1


60.8


59.0


61.5


58.7


61.9


58.5

Operating profit as a % of revenue


5.9


7.1


5.9


7.2


5.7


7.3


5.7


7.4

Operating profit as a % of gross profit


34.8


38.3


34.4


38.4


33.3


38.8


32.9


39.0

Pretax margin


5.1


6.7


5.0


6.5


4.8


6.9


4.8


6.7

Net profit margin


3.8


4.9


3.7


4.7


3.6


5.1


3.5


4.9



(1) 

Includes the sales and gross profit related to new, used retail, used wholesale and finance and insurance and unit sales for new and used retail 

 

LAD

Same Store Operating Highlights (Unaudited)




Three months ended

June 30,


%


Six months ended

June 30,


%




Increase



Increase



2023


2022


(Decrease)


2023


2022


(Decrease)

Revenues













New vehicle retail


$  3,402.8


$  3,178.8


7.0 %


$                  6,299.0


$                  6,169.0


2.1 %

Used vehicle retail


2,061.8


2,447.9


(15.8)


4,048.1


4,629.0


(12.5)

Finance and insurance


300.6


322.8


(6.9)


584.6


628.0


(6.9)

Service, body and parts


702.0


663.3


5.8


1,369.2


1,273.3


7.5

Total revenues


6,869.4


7,077.8


(2.9)


13,074.8


13,619.2


(4.0)














Gross profit













New vehicle retail


$ 327.5


$ 401.6


(18.5) %


$  622.4


$  793.6


(21.6) %

Used vehicle retail


176.7


234.4


(24.6)


324.9


452.3


(28.2)

Finance and insurance


300.6


322.8


(6.9)


584.6


628.0


(6.9)

Service, body and parts


385.4


353.9


8.9


739.8


674.0


9.8

Total gross profit


1,193.1


1,320.3


(9.6)


2,273.4


2,566.1


(11.4)














Gross margin













New vehicle retail


9.6 %


12.6 %


     (300) bps


9.9 %


12.9 %


     (300) bps

Used vehicle retail


8.6


9.6


(100)


8.0


9.8


(180)

Finance and insurance


100.0


100.0



100.0


100.0


Service, body and parts


54.9


53.4


150


54.0


52.9


110

Gross profit margin


17.4


18.7


(130)


17.4


18.8


(140)














Unit sales













New vehicle retail


69,473


67,069


3.6 %


128,817


130,359


(1.2) %

Used vehicle retail


70,080


79,293


(11.6)


140,058


151,026


(7.3)














Average selling price













New vehicle retail


$                  48,980


$                  47,396


3.3 %


$                 48,898


$                 47,324


3.3 %

Used vehicle retail


29,421


30,872


(4.7)


28,903


30,650


(5.7)














Average gross profit per unit













New vehicle retail


$ 4,714


$ 5,987


(21.3) %


$  4,832


$  6,088


(20.6) %

Used vehicle retail


2,521


2,957


(14.7)


2,320


2,995


(22.5)

Finance and insurance


2,154


2,206


(2.4)


2,174


2,232


(2.6)

Total vehicle(1)


5,761


6,577


(12.4)


5,683


6,702


(15.2)

(1) 

Includes the sales and gross profit related to new, used retail, used wholesale and finance and insurance and unit sales for new and used retail 

 

LAD

Other Highlights (Unaudited)



As of


June 30,


December 31,


June 30,


2023


2022


2022

Days Supply(1)






New vehicle inventory

51


47


32

Used vehicle inventory

58


55


62

(1)

Days supply calculated based on current inventory levels, including in-transit vehicles, and a 30-day historical cost of sales level.

 

Selected Financing Operations Financial Information



Three months ended June 30,


Six months ended June 30,

($ in millions)

2023


% (1)


2022


% (1)


2023


% (1)


2022


% (1)

Interest margin:
















Interest, fee, and lease income

$        64.0


9.1


$         27.0


8.9


$       117.9


9.1


$         49.4


8.9

Interest expense

(45.6)


(6.5)


(6.1)


(2.0)


(83.1)


(6.4)


(10.0)


(1.8)

Total interest margin

$        18.4


2.6


$         20.9


6.9


$        34.8


2.7


$         39.4


7.1

Provision expense

$       (25.8)


(3.7)


$          (7.3)


(2.4)


$       (52.0)


(4.0)


$        (11.0)


(2.0)

Financing operations income (loss)

$       (18.7)


(2.7)


$           3.3


1.1


$       (39.5)


(3.0)


$           8.3


1.5

















Total average managed finance receivables

$   2,823.3




$    1,223.9




$    2,618.2




$    1,120.3



















Ending funded managed receivables

$   2,528.6




$       977.3




$    2,528.6




$       977.3



% of ending managed receivables

84.9 %




69.2 %




84.9 %




69.2 %



(1) 

Annualized percentage of total average managed finance receivables

 

LAD

Condensed Consolidated Balance Sheets (Unaudited)

(In millions)




June 30, 2023


December 31, 2022

Cash and restricted cash


$                           199.7


$                           246.7

Trade receivables, net


884.6


813.1

Inventories, net


4,278.9


3,409.4

Other current assets


130.8


161.7

Total current assets


$                        5,494.0


$                        4,630.9






Property and equipment, net


3,907.5


3,574.6

Finance receivables, net


2,882.4


2,187.6

Intangibles


3,626.4


3,316.9

Other non-current assets


1,772.4


1,296.6

Total assets


$                     17,682.7


$                     15,006.6






Floor plan notes payable


2,816.7


2,116.6

Other current liabilities


1,231.5


1,061.6

Total current liabilities


$                        4,048.2


$                        3,178.2






Long-term debt, less current maturities


5,414.0


5,088.3

Non-recourse notes payable, less current maturities


1,198.7


422.2

Other long-term liabilities and deferred revenue


1,219.1


1,066.8

Total liabilities


$                     11,880.0


$                        9,755.5






Equity


5,802.7


5,251.1

Total liabilities & equity


$                     17,682.7


$                     15,006.6

 

LAD

Condensed Statements of Cash Flows (Unaudited)

(In millions)




Six months ended June 30,

Cash flows from operating activities:


2023


2022

Net income


$                           530.7


$                           681.3

Adjustments to reconcile net income to net cash (used in) provided by operating activities


174.3


158.5

Changes in:





Inventories


(350.2)


(507.0)

Finance receivables, net


(684.6)


(573.1)

Floor plan notes payable, net


58.4


56.9

Other operating activities


(27.3)


(79.7)

Net cash used in operating activities


(298.7)


(263.1)

Cash flows from investing activities:





Capital expenditures


(97.1)


(136.6)

Cash paid for acquisitions, net of cash acquired


(978.5)


(706.0)

Proceeds from sales of stores


85.7


52.7

Other investing activities


(10.3)


7.2

Net cash used in investing activities


(1,000.2)


(782.7)

Cash flows from financing activities:





Net borrowings on floor plan notes payable, non-trade


223.5


243.5

Net borrowings (repayments) of non-recourse notes payable


824.9


(80.1)

Net borrowings of other debt and finance lease liabilities


249.6


1,454.4

Proceeds from issuance of common stock


14.9


18.7

Repurchase of common stock


(14.5)


(623.4)

Dividends paid


(25.4)


(22.2)

Other financing activity


(24.5)


(6.3)

Net cash provided by financing activities


1,248.5


984.6

Effect of exchange rate changes on cash and restricted cash


8.1


(0.4)

Change in cash and restricted cash


(42.3)


(61.6)

Cash and restricted cash at beginning of period


271.5


178.5

Cash and restricted cash at end of period


229.2


116.9

 

LAD

Reconciliation of Non-GAAP Cash Flow from Operations (Unaudited)

(In millions)




Six months ended June 30,

Net cash provided by operating activities


2023


2022

As reported


$                         (298.7)


$                         (263.1)

Floor plan notes payable, non-trade, net


223.5


243.5

Adjust: finance receivables activity


684.6


573.1

Less: Borrowings on floor plan notes payable, non-trade associated with acquired new vehicle inventory


(109.7)


(63.1)

Adjusted


$                           499.7


$                           490.4

 

LAD

Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)

(In millions, except for per share data)



Three Months Ended June 30, 2023


As reported


Net disposal

gain on sale

of stores


Investment

gain


Insurance

reserves


Acquisition

expenses


Adjusted

Selling, general and administrative

$       842.2


$           1.0


$             —


$          (2.4)


$          (4.5)


$       836.3

Operating income

475.8


(1.0)



2.4


4.5


481.7

Other income (expense), net

9.8



(1.2)




8.6













Income before income taxes

407.0


(1.0)


(1.2)


2.4


4.5


411.7

Income tax (provision) benefit

(105.9)


0.4



(0.6)


(0.5)


(106.6)

Net income

$       301.1


$          (0.6)


$          (1.2)


$           1.8


$           4.0


$       305.1

Net income attributable to non-controlling interests

(1.8)






(1.8)

Net income attributable to redeemable non-controlling interest

(2.1)






(2.1)

Net income attributable to LAD

$       297.2


$          (0.6)


$          (1.2)


$           1.8


$           4.0


$       301.2













Diluted earnings per share attributable to LAD

$       10.78


$       (0.02)


$       (0.05)


$         0.06


$         0.14


$       10.91

Diluted share count

27.6











 

 


Three Months Ended June 30, 2022


As reported


Net disposal

gain on sale

of stores


Investment

loss


Acquisition

expenses


Adjusted

Selling, general and administrative

$       796.9


$           3.1


$           —


$          (1.5)


$       798.5

Operating income

519.1


(3.1)



1.5


517.5

Other income (expense), net

(18.8)



18.1



(0.7)











Income before income taxes

468.2


(3.1)


18.1


1.5


484.7

Income tax (provision) benefit

(130.6)


0.9



(0.5)


(130.2)

Net income

$       337.6


$          (2.2)


$        18.1


$           1.0


$       354.5

Net income attributable to non-controlling interests

$          (3.8)


$             —


$           —


$             —


$          (3.8)

Net income attributable to redeemable non-controlling interest

$          (2.5)


$             —


$           —


$             —


$          (2.5)

Net income attributable to LAD

$       331.3


$          (2.2)


$        18.1


$           1.0


$       348.2











Diluted earnings per share attributable to LAD

$       11.60


$       (0.08)


$        0.63


$         0.03


$       12.18

Diluted share count

28.6









 

LAD

Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)

(In millions, except for per share data)



Six Months Ended June 30, 2023


As reported


Net disposal

gain on sale

of stores


Investment

gain


Insurance

reserves


Acquisition

expenses


Vendor

contract

buyouts


Adjusted

Selling, general and administrative

$    1,606.6


$           8.2


$             —


$          (2.5)


$          (5.7)


$       (10.1)


$    1,596.5

Operating income

854.6


(8.2)



2.5


5.7


10.1


864.7

Other income (expense), net

12.0



(0.8)





11.2















Income before income taxes

721.3


(8.2)


(0.8)


2.5


5.7


10.1


730.6

Income tax (provision) benefit

(190.6)


2.4



(0.7)


(0.7)


(2.7)


(192.3)

Net income

$       530.7


$          (5.8)


$          (0.8)


$           1.8


$           5.0


$           7.4


$       538.3

Net income attributable to non-controlling interests

(2.5)







(2.5)

Net income attributable to redeemable non-controlling interest

(2.3)







(2.3)

Net income attributable to LAD

$       525.9


$          (5.8)


$          (0.8)


$           1.8


$           5.0


$           7.4


$       533.5















Diluted earnings per share attributable to LAD

$       19.08


$       (0.21)


$       (0.03)


$         0.06


$         0.18


$         0.27


$       19.35

Diluted share count

27.6













 


Six Months Ended June 30, 2022


As reported


Net disposal

gain on sale

of stores


Investment

loss


Acquisition

expenses


Adjusted

Selling, general and administrative

$    1,537.1


$         13.1


$             —


$          (8.1)


$    1,542.1

Operating income

1,025.5


(13.1)



8.1


1,020.5

Other income (expense), net

(24.3)



33.0



8.7











Income before income taxes

938.0


(13.1)


33.0


8.1


966.0

Income tax (provision) benefit

(256.7)


3.5



(2.5)


(255.7)

Net income

$       681.3


$          (9.6)


$         33.0


$           5.6


$       710.3

Net income attributable to non-controlling interests

(4.4)





(4.4)

Net income attributable to redeemable non-controlling interest

(3.4)




(0.1)


(3.5)

Net income attributable to LAD

$       673.5


$          (9.6)


$         33.0


$           5.5


$       702.4











Diluted earnings per share attributable to LAD

$       23.15


$       (0.33)


$         1.13


$         0.19


$       24.14

Diluted share count

29.1









 

LAD

Adjusted EBITDA and Net Debt to Adjusted EBITDA (Unaudited)

(In millions)



Three months ended

June 30,


%


Six months ended

June 30,


%




Increase



Increase



2023


2022


(Decrease)


2023


2022


(Decrease)

EBITDA and Adjusted EBITDA













Net income


$      301.1


$      337.6


(10.8) %


$      530.7


$      681.3


(22.1) %

Flooring interest expense


34.7


3.8


813.2


62.3


8.7


616.1

Other interest expense


43.9


28.3


55.1


83.0


54.5


52.3

Financing operations interest expense


45.6


6.1


647.5


83.1


10.0


731.0

Income tax expense


105.9


130.6


(18.9)


190.6


256.7


(25.7)

Depreciation and amortization


48.4


38.0


27.4


95.6


74.6


28.2

Financing operations depreciation expense


2.0


2.9


(31.0) %


4.4


5.6


(21.4) %

EBITDA


$      581.6


$      547.3


6.3 %


$   1,049.7


$   1,091.4


(3.8) %














Other adjustments:













Less: flooring interest expense


$      (34.7)


$         (3.8)


813.2


$      (62.3)


$         (8.7)


616.1

Less: financing operations interest expense


(45.6)


(6.1)


647.5


(83.1)


(10.0)


731.0

Less: used vehicle line of credit interest


(3.3)


(2.0)


65.0


(4.8)


(2.2)


118.2

Add: acquisition expenses


4.5


1.5


200.0


5.7


8.1


(29.6)

Add: gain on divestitures


(1.0)


(3.1)


NM


(8.2)


(13.1)


NM

Add: investment loss (gain)


(1.2)


18.1


NM


(0.8)


33.0


NM

Add: insurance reserves


2.4



NM


2.5



NM

Add: vendor contract buyouts




NM


10.1



NM

Adjusted EBITDA


$      502.7


$      551.9


(8.9) %


$      908.8


$   1,098.5


(17.3) %

NM – not meaningful

 



As of


%



June 30,


Increase

Net Debt to Adjusted EBITDA


2023


2022


(Decrease)

Floor plan notes payable: non-trade


$ 1,708.8


$ 1,060.2


61.2 %

Floor plan notes payable


1,107.9


410.8


169.7

Used and service loaner vehicle inventory financing facility


876.0


1,063.3


(17.6)

Revolving lines of credit


1,453.6


858.5


69.3

Warehouse facilities


705.0


300.0


135.0

Non-recourse notes payable


1,247.1


237.4


425.3

4.625% Senior notes due 2027


400.0


400.0


4.375% Senior notes due 2031


550.0


550.0


3.875% Senior notes due 2029


800.0


800.0


Finance leases and other debt


687.8


658.0


4.5

Unamortized debt issuance costs


(31.4)


(25.2)


24.6

Total debt


$ 9,504.8


$ 6,313.0


50.6 %








Less: Floor plan related debt


$  (3,692.7)


$  (2,534.3)


45.7 %

Less: Investment in floorplan offset accounts




Less: Financing operations related debt


(1,952.1)


(537.4)


263.2

Less: Unrestricted cash


(88.7)


(64.4)


37.7

Less: Availability on used vehicle and service loaner financing facilities


(48.7)


(35.3)


38.0

Net Debt


$ 3,722.6


$ 3,141.6


18.5 %








TTM Adjusted EBITDA


$ 1,825.7


$ 2,162.9


(15.6) %








Net debt to Adjusted EBITDA


        2.04 x


        1.45 x



NM – not meaningful

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/lithia–driveway-lad-reports-12-revenue-increase-and-diluted-eps-of-10-78–301885878.html

SOURCE Lithia Motors, Inc.

rt Lithia & Driveway (LAD) Reports 12% Revenue Increase and Diluted EPS of $10.78

Featured image: DepositPhotos © Weerapat

Disclaimer