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
|
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SOURCE Lithia Motors, Inc.