Announces Dividend of $0.42 per Share for Second Quarter
MEDFORD,
Ore., July 20, 2022 /PRNewswire/ -- Lithia &
Driveway (NYSE: LAD) today reported the highest second quarter
revenue and earnings per share in company history.
Second quarter 2022 revenue increased 20% to $7.2 billion from $6.0
billion in the second quarter of 2021.
Second quarter 2022 net income attributable to LAD per diluted
share was $11.60, an 8% increase from
$10.75 per diluted share reported in
the second quarter of 2021. Adjusted second quarter 2022 net income
attributable to LAD per diluted share was $12.18, a 10% increase compared to $11.12 per diluted share in the same period of
2021. Foreign currency exchange negatively impacted earnings per
share by $0.25.
Second quarter 2022 net income was $338
million, a 11% increase compared to net income of
$305 million in the same period of
2021. Adjusted second quarter 2022 net income was $354 million, a 12% increase compared to adjusted
net income of $315 million for the
same period of 2021.
As shown in the attached non-GAAP reconciliation tables, 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 the sale of stores. The
2021 second quarter adjusted results include a $0.37 per diluted share net non-core charge
related to a net loss on the sale of stores, insurance reserves,
and acquisition expenses, partially offset by a non-cash unrealized
investment gain.
Second Quarter-Over-Quarter Comparisons and 2022 Performance
Highlights:
- Revenues increased 20.5%
- Gross profit increased 21.6%
- Vehicle gross profit per unit increased 14.7%
- Driveway reached 2.3 million monthly unique visitors in
June
- Driveway achieved over 4,600 transactions in June, 740%
increase compared to 2021
- Driveway Finance Corp remains the #1 lender to LAD customers
with 12.9% penetration rate in June
- Adjusted SG&A as a percentage of gross profit was
58.0%
"The second quarter results demonstrate the diversity and
strength across our business lines as we have delivered the highest
quarterly revenues in our history," said Bryan DeBoer, Lithia & Driveway, President
and CEO. "These results directly reflect the team's outstanding
track record of operational excellence and integrating
acquisitions, while building a strong finance portfolio and
e-commerce business. We are excited about our progress thus far as
we are well on our way to achieving our 2025 plan and leading the
consolidation of our industry."
For the first six months of 2022 revenues increased 35% to
$13.9 billion, compared to
$10.4 billion in 2021.
Net income attributable to LAD for the first six months of 2022
was $23.15 per diluted share,
compared to $16.69 per diluted share
in 2021, an increase of 39%. Adjusted net income attributable to
LAD per diluted share for the first six months of 2022 increased
41% to $24.14 from $17.15 in the same period of 2021. Foreign
currency exchange negatively impacted earnings per share by
$0.12.
Corporate Development
During the quarter, LAD acquired
thirteen locations including Sisley
Honda in Thornhill,
Ontario; nine Lehman Auto World locations and two Esserman
International locations in Miami-Dade
County in Florida and
Henderson Hyundai and Genesis in Henderson, Nevada. Earlier in July, LAD
acquired Elk Grove Ford in Elk Grove,
California. Collectively the stores are expected to generate
$1.2 billion in annualized revenues.
In 2022, LAD has acquired $2.3
billion in annualized revenues and since the announcement of
the 2025 Plan in July 2020,
$12.7 billion in annualized revenues
have been acquired.
"Our operating results continue to perform ahead of
expectations, giving us the opportunity to invest further in our
network, expand our adjacencies to grow earnings and expand our
many competitive advantages," said DeBoer. "Our balanced approach
towards building our business is grounded in our customers'
evolving needs. As we continue to consolidate retail mobility, we
deliver returns to our shareholders through a combination of
acquisitions, building complementary business lines, dividends and
share repurchases."
Balance Sheet Update
LAD ended the second quarter with
approximately $0.8 billion in cash
and availability on our revolving lines of credit. In addition,
unfinanced real estate could provide additional liquidity of
approximately $1.7 billion.
Dividend Payment and Share Repurchases
The Board of
Directors approved a dividend of $0.42 per share related to second quarter 2022
financial results. The dividend is expected to be paid on
August 26, 2022 to shareholders of record on August 12,
2022.
In 2022, LAD repurchased 2.1 million shares at a weighted
average price of $284.58. Under the
current share repurchase authorization, approximately $114 million remains available.
Second Quarter Earnings Conference Call and Updated
Presentation
The second quarter 2022 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 2022 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)
LAD is a growth
company focused on profitably consolidating the largest retail
sector in North America 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 our 2025 Plan (or
"50/50" Plan) and any business expansion
- The growth, expansion, make-up and success of our network,
including our acquiring additional and accretive stores
- Annualized revenues from acquired stores
- The growth and performance of our Driveway e-commerce home
solution and Driveway Finance, their synergies and other impacts on
our business and our realizing Driveway and Driveway
Finance-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
- Future expected operating and financial results, such as
projections of improved store performance and generation of future
revenue or earnings
- Our anticipated financial condition and liquidity, including
from our cash and the future availability of our credit facility,
unfinanced real estate and other financing sources
- Our continuing to purchase shares under our share repurchase
program
- Impacts from the continued COVID-19 pandemic
- Our compliance with financial and restrictive covenants in our
credit facility and other debt agreements
- Our programs and initiatives for employee recruitment,
training, and retention
- Our strategies for customer retention, growth, market position,
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 the COVID-19 pandemic, 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
|
|
|
2022
|
|
2021
|
|
(Decrease)
|
|
2022
|
|
2021
|
|
(Decrease)
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
$
3,250.7
|
|
$
3,146.2
|
|
3.3 %
|
|
$
6,312.4
|
|
$
5,339.5
|
|
18.2 %
|
Used vehicle
retail
|
|
2,509.9
|
|
1,804.9
|
|
39.1
|
|
4,744.3
|
|
3,157.0
|
|
50.3
|
Used vehicle
wholesale
|
|
369.2
|
|
217.4
|
|
69.8
|
|
755.1
|
|
352.6
|
|
114.2
|
Finance and
insurance
|
|
330.4
|
|
269.6
|
|
22.6
|
|
643.7
|
|
467.9
|
|
37.6
|
Service, body and
parts
|
|
682.6
|
|
521.0
|
|
31.0
|
|
1,310.4
|
|
925.0
|
|
41.7
|
Fleet and
other
|
|
97.3
|
|
50.3
|
|
93.4
|
|
179.5
|
|
110.4
|
|
62.6
|
Total
revenues
|
|
7,240.1
|
|
6,009.4
|
|
20.5 %
|
|
13,945.4
|
|
10,352.4
|
|
34.7 %
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
2,840.3
|
|
2,832.5
|
|
0.3
|
|
5,500.7
|
|
4,869.0
|
|
13.0
|
Used vehicle
retail
|
|
2,270.5
|
|
1,572.3
|
|
44.4
|
|
4,281.2
|
|
2,788.3
|
|
53.5
|
Used vehicle
wholesale
|
|
366.5
|
|
201.0
|
|
82.3
|
|
744.6
|
|
331.6
|
|
124.5
|
Service, body and
parts
|
|
319.1
|
|
242.9
|
|
31.4
|
|
617.9
|
|
428.6
|
|
44.2
|
Fleet and
other
|
|
93.0
|
|
50.1
|
|
85.6
|
|
172.1
|
|
108.8
|
|
58.2
|
Total cost of
sales
|
|
5,889.4
|
|
4,898.8
|
|
20.2
|
|
11,316.5
|
|
8,526.3
|
|
32.7
|
Gross
profit
|
|
1,350.7
|
|
1,110.6
|
|
21.6 %
|
|
2,628.9
|
|
1,826.1
|
|
44.0 %
|
SG&A
expense
|
|
781.5
|
|
634.0
|
|
23.3
|
|
1,507.6
|
|
1,084.2
|
|
39.1
|
Depreciation and
amortization
|
|
40.9
|
|
30.3
|
|
35.0
|
|
80.2
|
|
57.2
|
|
40.2
|
Income from
operations
|
|
528.3
|
|
446.3
|
|
18.4 %
|
|
1,041.1
|
|
684.7
|
|
52.1 %
|
Floor plan interest
expense
|
|
(3.8)
|
|
(6.4)
|
|
(40.6)
|
|
(8.7)
|
|
(13.3)
|
|
(34.6)
|
Other interest
expense
|
|
(34.4)
|
|
(28.1)
|
|
22.4
|
|
(64.5)
|
|
(51.6)
|
|
25.0
|
Other income (expense),
net
|
|
(21.9)
|
|
7.6
|
|
NM
|
|
(29.9)
|
|
11.1
|
|
NM
|
Income before income
taxes
|
|
468.2
|
|
419.4
|
|
11.6 %
|
|
938.0
|
|
630.9
|
|
48.7 %
|
Income tax
expense
|
|
(130.6)
|
|
(114.5)
|
|
14.1
|
|
(256.7)
|
|
(169.8)
|
|
51.2
|
Income tax
rate
|
|
27.9 %
|
|
27.3 %
|
|
|
|
27.4 %
|
|
26.9 %
|
|
|
Net
income
|
|
$
337.6
|
|
$
304.9
|
|
10.7 %
|
|
$
681.3
|
|
$
461.1
|
|
47.8 %
|
Net income attributable
to non-controlling interests
|
|
(3.8)
|
|
—
|
|
NM
|
|
(4.4)
|
|
—
|
|
NM
|
Net income attributable
to redeemable non-controlling interest
|
|
(2.5)
|
|
—
|
|
NM
|
|
(3.4)
|
|
—
|
|
NM
|
Net income
attributable to LAD
|
|
$
331.3
|
|
$
304.9
|
|
8.7 %
|
|
$
673.5
|
|
$
461.1
|
|
46.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to LAD:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share
|
|
$
11.60
|
|
$
10.75
|
|
7.9 %
|
|
$
23.15
|
|
$
16.69
|
|
38.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares
outstanding
|
|
28.6
|
|
28.4
|
|
0.7 %
|
|
29.1
|
|
27.6
|
|
5.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM - not
meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
LAD
Key Performance
Metrics (Unaudited)
|
|
|
|
Three months
ended
June 30,
|
|
%
|
|
Six months ended
June 30,
|
|
%
|
|
|
|
Increase
|
|
|
Increase
|
|
|
2022
|
|
2021
|
|
(Decrease)
|
|
2022
|
|
2021
|
|
(Decrease)
|
Gross
margin
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
12.6 %
|
|
10.0 %
|
|
260
bps
|
|
12.9 %
|
|
8.8 %
|
|
410
bps
|
Used vehicle
retail
|
|
9.5
|
|
12.9
|
|
(340)
|
|
9.8
|
|
11.7
|
|
(190)
|
Finance and
insurance
|
|
100.0
|
|
100.0
|
|
—
|
|
100.0
|
|
100.0
|
|
—
|
Service, body and
parts
|
|
53.3
|
|
53.4
|
|
(10)
|
|
52.9
|
|
53.7
|
|
(80)
|
Gross profit
margin
|
|
18.7
|
|
18.5
|
|
20
|
|
18.9
|
|
17.6
|
|
130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unit
sales
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
68,752
|
|
75,176
|
|
(8.5) %
|
|
133,694
|
|
129,040
|
|
3.6 %
|
Used vehicle
retail
|
|
81,026
|
|
70,254
|
|
15.3
|
|
154,715
|
|
129,281
|
|
19.7
|
Total retail units
sold
|
|
149,778
|
|
145,430
|
|
3.0
|
|
288,409
|
|
258,321
|
|
11.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average selling
price
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
$ 47,281
|
|
$ 41,852
|
|
13.0 %
|
|
$ 47,216
|
|
$ 41,379
|
|
14.1 %
|
Used vehicle
retail
|
|
30,976
|
|
25,691
|
|
20.6
|
|
30,665
|
|
24,420
|
|
25.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average gross profit
per unit
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
$ 5,970
|
|
$ 4,173
|
|
43.1 %
|
|
$
6,071
|
|
$
3,646
|
|
66.5 %
|
Used vehicle
retail
|
|
2,955
|
|
3,311
|
|
(10.8)
|
|
2,994
|
|
2,852
|
|
5.0
|
Finance and
insurance
|
|
2,206
|
|
1,854
|
|
19.0
|
|
2,232
|
|
1,811
|
|
23.2
|
Total
vehicle(1)
|
|
6,563
|
|
5,723
|
|
14.7
|
|
6,689
|
|
5,141
|
|
30.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
mix
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
44.9 %
|
|
52.4 %
|
|
|
|
45.3 %
|
|
51.6 %
|
|
|
Used vehicle
retail
|
|
34.7
|
|
30.0
|
|
|
|
34.0
|
|
30.5
|
|
|
Used vehicle
wholesale
|
|
5.1
|
|
3.6
|
|
|
|
5.4
|
|
3.4
|
|
|
Finance and insurance,
net
|
|
4.6
|
|
4.5
|
|
|
|
4.6
|
|
4.5
|
|
|
Service, body and
parts
|
|
9.4
|
|
8.7
|
|
|
|
9.4
|
|
8.9
|
|
|
Fleet and
other
|
|
1.3
|
|
0.8
|
|
|
|
1.3
|
|
1.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
Mix
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
30.4 %
|
|
28.2 %
|
|
|
|
30.9 %
|
|
25.8 %
|
|
|
Used vehicle
retail
|
|
17.7
|
|
20.9
|
|
|
|
17.6
|
|
20.2
|
|
|
Used vehicle
wholesale
|
|
0.2
|
|
1.5
|
|
|
|
0.4
|
|
1.2
|
|
|
Finance and insurance,
net
|
|
24.5
|
|
24.3
|
|
|
|
24.5
|
|
25.6
|
|
|
Service, body and
parts
|
|
26.9
|
|
25.1
|
|
|
|
26.3
|
|
27.1
|
|
|
Fleet and
other
|
|
0.3
|
|
—
|
|
|
|
0.3
|
|
0.1
|
|
|
|
|
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
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
SG&A as a % of
revenue
|
|
10.8 %
|
|
10.3 %
|
|
10.8 %
|
|
10.5 %
|
|
10.8 %
|
|
10.3 %
|
|
10.8 %
|
|
10.5 %
|
SG&A as a % of
gross profit
|
|
58.0
|
|
55.7
|
|
57.9
|
|
57.1
|
|
57.5
|
|
58.4
|
|
57.3
|
|
59.4
|
Operating profit as a %
of revenue
|
|
7.3
|
|
7.7
|
|
7.3
|
|
7.4
|
|
7.4
|
|
6.8
|
|
7.5
|
|
6.6
|
Operating profit as a %
of gross profit
|
|
39.0
|
|
41.6
|
|
39.1
|
|
40.2
|
|
39.4
|
|
38.5
|
|
39.6
|
|
37.5
|
Pretax
margin
|
|
6.7
|
|
7.2
|
|
6.5
|
|
7.0
|
|
6.9
|
|
6.3
|
|
6.7
|
|
6.1
|
Net profit
margin
|
|
4.9
|
|
5.2
|
|
4.7
|
|
5.1
|
|
5.1
|
|
4.6
|
|
4.9
|
|
4.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
|
2022
|
|
2021
|
|
(Decrease)
|
|
2022
|
|
2021
|
|
(Decrease)
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
$
2,475.1
|
|
$
2,980.2
|
|
(16.9) %
|
|
$
4,578.0
|
|
$
5,118.4
|
|
(10.6) %
|
Used vehicle
retail
|
|
2,042.2
|
|
1,737.4
|
|
17.5
|
|
3,756.8
|
|
3,050.9
|
|
23.1
|
Finance and
insurance
|
|
255.5
|
|
259.6
|
|
(1.6)
|
|
481.5
|
|
453.4
|
|
6.2
|
Service, body and
parts
|
|
546.3
|
|
499.4
|
|
9.4
|
|
994.4
|
|
895.1
|
|
11.1
|
Total
revenues
|
|
5,658.8
|
|
5,730.4
|
|
(1.2)
|
|
10,418.8
|
|
9,961.8
|
|
4.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
$ 311.6
|
|
$ 299.0
|
|
4.2 %
|
|
$
591.7
|
|
$
452.3
|
|
30.8 %
|
Used vehicle
retail
|
|
192.6
|
|
223.5
|
|
(13.8)
|
|
361.7
|
|
356.8
|
|
1.4
|
Finance and
insurance
|
|
255.5
|
|
259.6
|
|
(1.6)
|
|
481.5
|
|
453.4
|
|
6.2
|
Service, body and
parts
|
|
294.4
|
|
268.5
|
|
9.6
|
|
538.4
|
|
482.4
|
|
11.6
|
Total gross
profit
|
|
1,057.6
|
|
1,066.5
|
|
(0.8)
|
|
1,980.9
|
|
1,767.1
|
|
12.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
12.6 %
|
|
10.0 %
|
|
260
bps
|
|
12.9 %
|
|
8.8 %
|
|
410
bps
|
Used vehicle
retail
|
|
9.4
|
|
12.9
|
|
(350)
|
|
9.6
|
|
11.7
|
|
(210)
|
Finance and
insurance
|
|
100.0
|
|
100.0
|
|
—
|
|
100.0
|
|
100.0
|
|
—
|
Service, body and
parts
|
|
53.9
|
|
53.8
|
|
10
|
|
54.1
|
|
53.9
|
|
20
|
Gross profit
margin
|
|
18.7
|
|
18.6
|
|
10
|
|
19.0
|
|
17.7
|
|
130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unit
sales
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
51,822
|
|
71,160
|
|
(27.2) %
|
|
95,453
|
|
123,571
|
|
(22.8) %
|
Used vehicle
retail
|
|
67,201
|
|
67,324
|
|
(0.2)
|
|
123,753
|
|
124,474
|
|
(0.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average selling
price
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
$
47,762
|
|
$
41,880
|
|
14.0 %
|
|
$
47,961
|
|
$
41,421
|
|
15.8 %
|
Used vehicle
retail
|
|
30,389
|
|
25,806
|
|
17.8
|
|
30,357
|
|
24,510
|
|
23.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average gross profit
per unit
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
$ 6,013
|
|
$ 4,201
|
|
43.1 %
|
|
$
6,199
|
|
$
3,660
|
|
69.4 %
|
Used vehicle
retail
|
|
2,866
|
|
3,319
|
|
(13.6)
|
|
2,922
|
|
2,867
|
|
1.9
|
Finance and
insurance
|
|
2,146
|
|
1,875
|
|
14.5
|
|
2,196
|
|
1,828
|
|
20.1
|
Total
vehicle(1)
|
|
6,388
|
|
5,762
|
|
10.9
|
|
6,558
|
|
5,173
|
|
26.8
|
|
(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,
|
|
2022
|
|
2021
|
|
2021
|
Days
Supply(1)
|
|
|
|
|
|
New vehicle
inventory
|
32
|
|
24
|
|
23
|
Used vehicle
inventory
|
62
|
|
61
|
|
58
|
|
(1) Days supply calculated based on
current inventory levels, including in-transit vehicles, and a
30-day historical cost of sales level.
|
Financial
covenants
|
|
|
|
|
Requirement
|
|
As of June 30,
2022
|
Fixed charge coverage
ratio
|
Not less than 1.20 to
1
|
|
3.11 to 1
|
Leverage
ratio
|
Not more than 5.75 to
1
|
|
1.50 to 1
|
LAD
Condensed
Consolidated Balance Sheets (Unaudited)
(In
millions)
|
|
|
|
June 30,
2022
|
|
December 31,
2021
|
Cash, restricted cash,
and cash equivalents
|
|
$
113.2
|
|
$
174.8
|
Trade receivables,
net
|
|
978.4
|
|
910.0
|
Inventories,
net
|
|
2,985.0
|
|
2,385.5
|
Other current
assets
|
|
85.2
|
|
63.0
|
Total current
assets
|
|
$
4,161.8
|
|
$
3,533.3
|
|
|
|
|
|
Property and equipment,
net
|
|
3,390.9
|
|
3,052.6
|
Intangibles
|
|
2,681.4
|
|
1,776.4
|
Other non-current
assets
|
|
2,773.6
|
|
2,784.6
|
Total
assets
|
|
$
13,007.7
|
|
$
11,146.9
|
|
|
|
|
|
Floor plan notes
payable
|
|
1,471.0
|
|
1,190.1
|
Other current
liabilities
|
|
1,143.4
|
|
1,212.7
|
Total current
liabilities
|
|
$
2,614.4
|
|
$
2,402.8
|
|
|
|
|
|
Long-term
debt
|
|
4,721.7
|
|
3,185.7
|
Other long-term
liabilities and deferred revenue
|
|
933.8
|
|
895.2
|
Total
liabilities
|
|
$
8,269.9
|
|
$
6,483.7
|
|
|
|
|
|
Equity
|
|
4,737.8
|
|
4,663.2
|
Total liabilities
& equity
|
|
$
13,007.7
|
|
$
11,146.9
|
LAD
Summarized Cash Flow
from Operations (Unaudited)
(In
millions)
|
|
|
|
Six months ended
June 30,
|
|
|
2022
|
|
2021
|
Net income
|
|
$
681.3
|
|
$
461.1
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
80.2
|
|
57.1
|
Stock-based
compensation
|
|
23.1
|
|
17.2
|
Gain on disposal of
assets
|
|
(0.6)
|
|
0.1
|
Loss (gain) on sale of
franchises
|
|
(13.1)
|
|
5.2
|
Unrealized investment
loss (gain)
|
|
33.0
|
|
(0.9)
|
Deferred income
taxes
|
|
16.6
|
|
31.8
|
Amortization of
operating lease right-of-use assets
|
|
19.3
|
|
16.5
|
(Increase)
decrease:
|
|
|
|
|
Trade receivables,
net
|
|
(76.4)
|
|
(185.0)
|
Inventories
|
|
(507.0)
|
|
663.1
|
Other
assets
|
|
(628.3)
|
|
(95.5)
|
Increase
(decrease):
|
|
|
|
|
Floor plan notes
payable, net
|
|
56.9
|
|
47.0
|
Trade
payables
|
|
32.6
|
|
97.4
|
Accrued
liabilities
|
|
(16.8)
|
|
144.3
|
Other long-term
liabilities and deferred revenue
|
|
36.1
|
|
11.6
|
Net cash provided by
operating activities
|
|
$
(263.1)
|
|
$
1,271.0
|
LAD
Reconciliation of
Non-GAAP Cash Flow from Operations (Unaudited)
(In
millions)
|
|
|
Six months ended
June 30,
|
Net cash provided by
operating activities
|
|
2022
|
|
2021
|
As reported
|
|
$ (263.1)
|
|
$ 1,271.0
|
Floor plan notes
payable, non-trade, net
|
|
243.5
|
|
(571.6)
|
Less: Borrowings on
floor plan notes payable, non-trade associated with acquired new
vehicle inventory
|
|
(63.1)
|
|
(271.5)
|
Adjusted
|
|
$
(82.7)
|
|
$
427.9
|
LAD
Reconciliation of
Certain Non-GAAP Financial Measures (Unaudited)
(In millions, except
for per share data)
|
|
|
|
Three Months Ended
June 30, 2022
|
|
|
As
reported
|
|
Net disposal
gain on sale
of stores
|
|
Investment
loss
|
|
Acquisition
expenses
|
|
Adjusted
|
Selling, general and
administrative
|
|
$
781.5
|
|
$ 3.1
|
|
$
—
|
|
$
(1.5)
|
|
$
783.1
|
Operating
income
|
|
528.3
|
|
(3.1)
|
|
—
|
|
1.5
|
|
526.7
|
Other income (expense),
net
|
|
(21.9)
|
|
—
|
|
18.1
|
|
—
|
|
(3.8)
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2021
|
|
|
As
reported
|
|
Net disposal
loss on sale
of stores
|
|
Investment
gain
|
|
Insurance
reserves
|
|
Acquisition
expenses
|
|
Adjusted
|
Selling, general and
administrative
|
|
$
634.0
|
|
$
(4.5)
|
|
$
—
|
|
$
(0.8)
|
|
$
(10.4)
|
|
$
618.3
|
Operating
income
|
|
446.3
|
|
4.5
|
|
—
|
|
0.8
|
|
10.4
|
|
462.0
|
Other income (expense),
net
|
|
7.6
|
|
—
|
|
(1.2)
|
|
—
|
|
—
|
|
6.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
419.4
|
|
4.5
|
|
(1.2)
|
|
0.8
|
|
10.4
|
|
433.9
|
Income tax (provision)
benefit
|
|
(114.5)
|
|
(1.2)
|
|
0.3
|
|
(0.2)
|
|
(2.8)
|
|
(118.4)
|
Net income attributable
to LAD
|
|
$
304.9
|
|
$
3.3
|
|
$
(0.9)
|
|
$
0.6
|
|
$
7.6
|
|
$
315.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to LAD
|
|
$
10.75
|
|
$
0.12
|
|
$ (0.03)
|
|
$
0.02
|
|
$
0.26
|
|
$
11.12
|
Diluted share
count
|
|
28.4
|
|
|
|
|
|
|
|
|
|
|
LAD
Reconciliation of
Certain Non-GAAP Financial Measures (Unaudited)
(In millions, except
for per share data)
|
|
|
Six Months Ended
June 30, 2022
|
|
|
As
reported
|
|
Net disposal
gain on sale
of stores
|
|
Investment
loss
|
|
Acquisition
expenses
|
|
Adjusted
|
Selling, general and
administrative
|
|
$
1,507.6
|
|
$
13.1
|
|
$
—
|
|
$
(8.1)
|
|
$
1,512.6
|
Operating
income
|
|
1,041.1
|
|
(13.1)
|
|
—
|
|
8.1
|
|
1,036.1
|
Other income (expense),
net
|
|
(29.9)
|
|
—
|
|
33.0
|
|
—
|
|
3.1
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2021
|
|
|
As
reported
|
|
Net disposal
loss on sale
of stores
|
|
Investment
gain
|
|
Insurance
reserves
|
|
Acquisition
expenses
|
|
Adjusted
|
Selling, general and
administrative
|
|
$
1,084.2
|
|
$
(5.2)
|
|
$
—
|
|
$
(1.6)
|
|
$
(11.6)
|
|
$
1,065.8
|
Operating
income
|
|
684.7
|
|
5.2
|
|
—
|
|
1.6
|
|
11.6
|
|
703.1
|
Other income (expense),
net
|
|
11.1
|
|
—
|
|
(1.0)
|
|
—
|
|
—
|
|
10.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
630.9
|
|
5.2
|
|
(1.0)
|
|
1.6
|
|
11.6
|
|
648.3
|
Income tax (provision)
benefit
|
|
(169.8)
|
|
(1.4)
|
|
0.3
|
|
(0.4)
|
|
(3.1)
|
|
(174.4)
|
Net income attributable
to LAD
|
|
$
461.1
|
|
$
3.8
|
|
$
(0.7)
|
|
$
1.2
|
|
$
8.5
|
|
$
473.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to LAD
|
|
$
16.69
|
|
$
0.14
|
|
$
(0.03)
|
|
$
0.04
|
|
$
0.31
|
|
$
17.15
|
Diluted share
count
|
|
27.6
|
|
|
|
|
|
|
|
|
|
|
LAD
Adjusted EBITDA and
Net Debt to Adjusted EBITDA (Unaudited)
(In
millions)
|
|
|
Three months
ended
June 30,
|
|
%
|
|
Six months ended
June 30,
|
|
%
|
|
|
|
Increase
|
|
|
Increase
|
|
|
2022
|
|
2021
|
|
(Decrease)
|
|
2022
|
|
2021
|
|
(Decrease)
|
EBITDA and Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$ 337.6
|
|
$ 304.9
|
|
10.7 %
|
|
$ 681.3
|
|
$ 461.1
|
|
47.8 %
|
Flooring interest
expense
|
|
3.8
|
|
6.4
|
|
(40.6)
|
|
8.7
|
|
13.3
|
|
(34.6)
|
Other interest
expense
|
|
34.4
|
|
28.1
|
|
22.4
|
|
64.5
|
|
51.6
|
|
25.0
|
Income tax
expense
|
|
130.6
|
|
114.5
|
|
14.1
|
|
256.7
|
|
169.8
|
|
51.2
|
Depreciation and
amortization
|
|
40.9
|
|
30.3
|
|
35.0
|
|
80.2
|
|
57.2
|
|
40.2
|
EBITDA
|
|
$ 547.3
|
|
$ 484.2
|
|
13.0 %
|
|
$
1,091.4
|
|
$ 753.0
|
|
44.9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: flooring interest
expense
|
|
$
(3.8)
|
|
$
(6.4)
|
|
(40.6)
|
|
$
(8.7)
|
|
$
(13.3)
|
|
(34.6)
|
Less: used vehicle line
of credit interest
|
|
(2.0)
|
|
—
|
|
NM
|
|
(2.2)
|
|
—
|
|
NM
|
Add: acquisition
expenses
|
|
1.5
|
|
10.4
|
|
(85.6)
|
|
8.1
|
|
11.6
|
|
(30.2)
|
Add: loss (gain) on
divestitures
|
|
(3.1)
|
|
4.5
|
|
(168.9)
|
|
(13.1)
|
|
5.2
|
|
NM
|
Add: investment
loss
|
|
18.1
|
|
(1.2)
|
|
(1,608.3)
|
|
33.0
|
|
(1.0)
|
|
NM
|
Add: insurance
reserves
|
|
—
|
|
0.8
|
|
(100.0)
|
|
—
|
|
1.6
|
|
(100.0)
|
Adjusted
EBITDA
|
|
$
558.0
|
|
$
492.3
|
|
13.3 %
|
|
$
1,108.5
|
|
$
757.1
|
|
46.4 %
|
|
|
NM - not
meaningful
|
|
|
As of
|
|
%
|
|
|
June
30,
|
|
Increase
|
Net Debt to Adjusted
EBITDA
|
|
2022
|
|
2021
|
|
(Decrease)
|
Floor plan notes
payable: non-trade
|
|
$ 1,060.2
|
|
$
966.9
|
|
9.6 %
|
Floor plan notes
payable
|
|
410.8
|
|
285.1
|
|
44.1
|
Used and service loaner
vehicle inventory financing facility
|
|
1,063.3
|
|
—
|
|
NM
|
Revolving lines of
credit
|
|
1,158.5
|
|
200.0
|
|
479.3
|
Real estate
mortgages
|
|
560.3
|
|
612.8
|
|
(8.6)
|
Finance lease
obligations
|
|
96.1
|
|
170.2
|
|
(43.5)
|
Asset backed
notes
|
|
237.4
|
|
—
|
|
NM
|
5.250% Senior notes due
2025
|
|
—
|
|
300.0
|
|
(100.0)
|
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
|
|
—
|
Other debt
|
|
1.6
|
|
2.2
|
|
(27.3)
|
Unamortized debt
issuance costs
|
|
(25.2)
|
|
(27.2)
|
|
(7.4)
|
Total debt
|
|
$ 6,313.0
|
|
$ 4,260.0
|
|
48.2 %
|
|
|
|
|
|
|
|
Less: Floor plan
related debt
|
|
$
(2,534.3)
|
|
$
(1,252.0)
|
|
102.4 %
|
Less: Cash, restricted
cash, and cash equivalents
|
|
(113.2)
|
|
(790.7)
|
|
(85.7)
|
Less: Availability on
used vehicle and service loaner financing facilities
|
|
(30.7)
|
|
(653.4)
|
|
(95.3)
|
Net
Debt
|
|
$
3,634.8
|
|
$
1,563.9
|
|
132.4 %
|
|
|
|
|
|
|
|
TTM Adjusted
EBITDA
|
|
$ 2,176.4
|
|
$ 1,263.5
|
|
72.3 %
|
|
|
|
|
|
|
|
Net debt to Adjusted
EBITDA
|
|
1.67
x
|
|
1.24
x
|
|
|
|
|
NM - not
meaningful
|
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SOURCE Lithia Motors, Inc.