Announces Dividend of $0.42 per Share for Third Quarter
MEDFORD,
Ore., Oct. 19, 2022 /PRNewswire/ -- Lithia &
Driveway (NYSE: LAD) today reported the highest third quarter
revenue and earnings per share in company history.
Lithia & Driveway (LAD) Increases
Revenue 18%; Reports Diluted EPS of $11.92 and Shares Outstanding Reduced by
10%
Third quarter 2022 revenue increased 18% to $7.3 billion from $6.2
billion in the third quarter of 2021.
Third quarter 2022 net income attributable to LAD per
diluted share was $11.92, an 18%
increase from $10.11 per diluted
share reported in the third quarter of 2021. Adjusted third quarter
2022 net income attributable to LAD per diluted share was
$11.08, a 1% decrease compared to
$11.21 per diluted share in the same
period of 2021. Foreign currency exchange negatively impacted
earnings per share by $0.54.
Third quarter 2022 net income was $330 million, a 7% increase compared to net
income of $309 million in the same
period of 2021. Adjusted third quarter 2022 net income was
$307 million, a 10% decrease compared
to adjusted net income of $342
million for the same period of 2021.
As shown in the attached non-GAAP reconciliation tables, the
2022 third quarter adjusted results exclude an $0.84 per diluted share net non-core benefit
related to a net gain on the sale of stores and a non-cash
unrealized investment gain, partially offset by acquisition
expenses. The 2021 third quarter adjusted results include a
$1.10 per diluted share net non-core
charge related to a non-cash unrealized investment loss, loss on
redemption of senior notes, acquisition expenses, insurance
reserves, and asset impairment.
Third Quarter-Over-Quarter Comparisons and 2022
Performance Highlights:
- Revenues increased 18.2%
- Gross profit increased 10.5%
- Vehicle gross profit per unit of $6,139, down $36
- Driveway averaged over 2 million monthly unique visitors in
Q3
- Driveway transactions increase by 327%
- Driveway Finance penetration rate rose to over 11% in Q3
- Adjusted SG&A as a percentage of gross profit was
59.6%
"We posted strong results across our business lines this
quarter, while navigating the current environment, integrating
a steady stream of acquisitions and continuing to grow
Driveway and Driveway Finance. Our teams are focused on improving
operating leverage as fundamentals normalize across our industry,"
said Bryan DeBoer, Lithia &
Driveway, President and CEO. "With our size and scale, we are well
positioned with financial flexibility and liquidity to continue
delivering growth with strong returns as we progress toward
achieving our 2025 plan."
For the first nine months of 2022 revenues increased 29% to
$21.2 billion, compared to
$16.5 billion in 2021.
Net income attributable to LAD for the first nine months of 2022
was $35.10 per diluted share,
compared to $26.91 per diluted share
in 2021, an increase of 30%. Adjusted net income attributable to
LAD per diluted share for the first nine months of 2022 increased
24% to $35.30 from $28.52 in the same period of 2021. Foreign
currency exchange negatively impacted earnings per share by
$0.65.
Corporate Development
During the third quarter, LAD acquired six locations, including
five Wilde Automotive Group locations in Wisconsin, expanding presence in the North
Central region, and Elk Grove Ford in Elk
Grove, California. In October, LAD acquired six locations in
the Pacific Northwest with Airstream Adventures. LAD has acquired
over $3.0 billion in annualized
revenues to date in 2022 and $13.3 billion in annualized revenues since
the announcement of the 2025 Plan in July
2020.
Balance Sheet Update
LAD ended the third quarter with approximately $1.6 billion in cash and availability on our
revolving lines of credit. In addition, unfinanced real estate
could provide additional liquidity of approximately $0.4 billion.
Dividend Payment and Share Repurchases
The Board of Directors approved a dividend of $0.42 per share related to third quarter 2022
financial results. The dividend is expected to be paid on
November 18, 2022 to shareholders of record on
November 11, 2022.
In 2022, LAD repurchased approximately 2.3 million shares at a
weighted average price of approximately $281. Under the current share repurchase
authorization, approximately $77
remains available.
Third Quarter Earnings Conference Call and
Updated Presentation
The third 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 third
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 and
any business expansion
- The growth, expansion, make-up and success of our network,
including 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, their synergies and other impacts on
our business and our ability to meet Driveway-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 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 on the national
and local economies in which we operate, our business operations
and consumer demand
- 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
September 30,
|
|
%
|
|
Nine months
ended
September 30,
|
|
%
|
|
|
|
Increase
|
|
|
Increase
|
|
|
2022
|
|
2021
|
|
(Decrease)
|
|
2022
|
|
2021
|
|
(Decrease)
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
$
3,306.9
|
|
$
2,898.2
|
|
14.1 %
|
|
$
9,619.4
|
|
$
8,237.7
|
|
16.8 %
|
Used vehicle
retail
|
|
2,465.8
|
|
2,079.5
|
|
18.6
|
|
7,197.0
|
|
5,236.6
|
|
37.4
|
Used vehicle
wholesale
|
|
363.2
|
|
260.9
|
|
39.2
|
|
1,131.5
|
|
613.5
|
|
84.4
|
Finance and
insurance
|
|
333.3
|
|
297.0
|
|
12.2
|
|
977.0
|
|
765.0
|
|
27.7
|
Service, body and
parts
|
|
712.2
|
|
578.3
|
|
23.2
|
|
2,022.6
|
|
1,503.4
|
|
34.5
|
Fleet and
other
|
|
114.3
|
|
55.9
|
|
104.5
|
|
293.8
|
|
166.0
|
|
77.0
|
Total
revenues
|
|
7,295.7
|
|
6,169.8
|
|
18.2 %
|
|
21,241.3
|
|
16,522.2
|
|
28.6 %
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
2,903.2
|
|
2,548.9
|
|
13.9
|
|
8,403.9
|
|
7,418.0
|
|
13.3
|
Used vehicle
retail
|
|
2,264.5
|
|
1,846.9
|
|
22.6
|
|
6,533.6
|
|
4,635.2
|
|
41.0
|
Used vehicle
wholesale
|
|
374.8
|
|
255.2
|
|
46.9
|
|
1,131.5
|
|
586.8
|
|
92.8
|
Service, body and
parts
|
|
328.0
|
|
275.8
|
|
18.9
|
|
945.9
|
|
704.3
|
|
34.3
|
Fleet and
other
|
|
111.0
|
|
53.9
|
|
105.9
|
|
283.1
|
|
162.7
|
|
74.0
|
Total cost of
sales
|
|
5,981.5
|
|
4,980.7
|
|
20.1
|
|
17,298.0
|
|
13,507.0
|
|
28.1
|
Gross
profit
|
|
1,314.2
|
|
1,189.1
|
|
10.5 %
|
|
3,943.3
|
|
3,015.2
|
|
30.8 %
|
Asset
impairments
|
|
—
|
|
1.9
|
|
(100.0)
|
|
—
|
|
1.9
|
|
(100.0)
|
SG&A
expense
|
|
749.2
|
|
673.3
|
|
11.3
|
|
2,256.8
|
|
1,757.6
|
|
28.4
|
Depreciation and
amortization
|
|
41.9
|
|
34.4
|
|
21.8
|
|
122.1
|
|
91.5
|
|
33.4
|
Income from
operations
|
|
523.1
|
|
479.5
|
|
9.1 %
|
|
1,564.4
|
|
1,164.2
|
|
34.4 %
|
Floor plan interest
expense
|
|
(10.7)
|
|
(3.6)
|
|
197.2
|
|
(19.4)
|
|
(17.0)
|
|
14.1
|
Other interest
expense
|
|
(49.6)
|
|
(28.0)
|
|
77.1
|
|
(114.1)
|
|
(79.6)
|
|
43.3
|
Other income (expense),
net
|
|
(7.1)
|
|
(25.7)
|
|
NM
|
|
(37.0)
|
|
(14.6)
|
|
NM
|
Income before income
taxes
|
|
455.7
|
|
422.2
|
|
7.9 %
|
|
1,393.9
|
|
1,053.0
|
|
32.4 %
|
Income tax
expense
|
|
(125.4)
|
|
(113.2)
|
|
10.8
|
|
(382.1)
|
|
(282.9)
|
|
35.1
|
Income tax
rate
|
|
27.5 %
|
|
26.8 %
|
|
|
|
27.4 %
|
|
26.9 %
|
|
|
Net
income
|
|
$
330.3
|
|
$
309.0
|
|
6.9 %
|
|
$
1,011.8
|
|
$
770.1
|
|
31.4 %
|
Net income attributable
to non-controlling interests
|
|
0.5
|
|
(0.8)
|
|
(162.5) %
|
|
(3.9)
|
|
(0.8)
|
|
387.5 %
|
Net income attributable
to redeemable non-controlling interest
|
|
(1.2)
|
|
(0.3)
|
|
300.0 %
|
|
(4.5)
|
|
(0.3)
|
|
1,400.0 %
|
Net income
attributable to LAD
|
|
$
329.6
|
|
$
307.9
|
|
7.0 %
|
|
$
1,003.4
|
|
$
769.0
|
|
30.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to LAD:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share
|
|
$
11.92
|
|
$
10.11
|
|
17.9 %
|
|
$
35.10
|
|
$
26.91
|
|
30.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares
outstanding
|
|
27.6
|
|
30.5
|
|
(9.5) %
|
|
28.6
|
|
28.6
|
|
— %
|
|
|
|
LAD
|
Key Performance
Metrics (Unaudited)
|
|
|
|
Three months
ended
September 30,
|
|
%
|
|
Nine months
ended
September 30,
|
|
%
|
|
|
|
Increase
|
|
|
Increase
|
|
|
2022
|
|
2021
|
|
(Decrease)
|
|
2022
|
|
2021
|
|
(Decrease)
|
Gross
margin
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
12.2 %
|
|
12.1 %
|
|
10
bps
|
|
12.6 %
|
|
10.0 %
|
|
260
bps
|
Used vehicle
retail
|
|
8.2
|
|
11.2
|
|
(300)
|
|
9.2
|
|
11.5
|
|
(230)
|
Finance and
insurance
|
|
100.0
|
|
100.0
|
|
—
|
|
100.0
|
|
100.0
|
|
—
|
Service, body and
parts
|
|
54.0
|
|
52.3
|
|
170
|
|
53.2
|
|
53.2
|
|
—
|
Gross profit
margin
|
|
18.0
|
|
19.3
|
|
(130)
|
|
18.6
|
|
18.2
|
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unit
sales
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
69,743
|
|
66,894
|
|
4.3 %
|
|
203,437
|
|
195,934
|
|
3.8 %
|
Used vehicle
retail
|
|
81,215
|
|
76,362
|
|
6.4
|
|
235,930
|
|
205,643
|
|
14.7
|
Total retail units
sold
|
|
150,958
|
|
143,256
|
|
5.4
|
|
439,367
|
|
401,577
|
|
9.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average selling
price
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
$
47,416
|
|
$
43,325
|
|
9.4 %
|
|
$
47,284
|
|
$
42,043
|
|
12.5 %
|
Used vehicle
retail
|
|
30,361
|
|
27,233
|
|
11.5
|
|
30,505
|
|
25,464
|
|
19.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average gross profit
per unit
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
$ 5,789
|
|
$ 5,221
|
|
10.9 %
|
|
$
5,975
|
|
$
4,184
|
|
42.8 %
|
Used vehicle
retail
|
|
2,478
|
|
3,046
|
|
(18.6)
|
|
2,812
|
|
2,924
|
|
(3.8)
|
Finance and
insurance
|
|
2,208
|
|
2,074
|
|
6.5
|
|
2,224
|
|
1,905
|
|
16.7
|
Total
vehicle(1)
|
|
6,139
|
|
6,175
|
|
(0.6)
|
|
6,500
|
|
5,510
|
|
18.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
mix
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
45.3 %
|
|
47.0 %
|
|
|
|
45.3 %
|
|
49.9 %
|
|
|
Used vehicle
retail
|
|
33.8
|
|
33.7
|
|
|
|
33.9
|
|
31.7
|
|
|
Used vehicle
wholesale
|
|
5.0
|
|
4.2
|
|
|
|
5.3
|
|
3.7
|
|
|
Finance and insurance,
net
|
|
4.6
|
|
4.8
|
|
|
|
4.6
|
|
4.6
|
|
|
Service, body and
parts
|
|
9.8
|
|
9.4
|
|
|
|
9.5
|
|
9.1
|
|
|
Fleet and
other
|
|
1.5
|
|
0.9
|
|
|
|
1.4
|
|
1.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
Mix
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
30.7 %
|
|
29.4 %
|
|
|
|
30.8 %
|
|
27.2 %
|
|
|
Used vehicle
retail
|
|
15.3
|
|
19.6
|
|
|
|
16.8
|
|
19.9
|
|
|
Used vehicle
wholesale
|
|
(0.9)
|
|
0.5
|
|
|
|
—
|
|
0.9
|
|
|
Finance and insurance,
net
|
|
25.4
|
|
25.0
|
|
|
|
24.8
|
|
25.4
|
|
|
Service, body and
parts
|
|
29.2
|
|
25.3
|
|
|
|
27.3
|
|
26.5
|
|
|
Fleet and
other
|
|
0.3
|
|
0.2
|
|
|
|
0.3
|
|
0.1
|
|
|
|
|
|
|
Adjusted
|
|
As
reported
|
|
Adjusted
|
|
As
reported
|
|
|
Three months
ended September
30,
|
|
Three months
ended September
30,
|
|
Nine months
ended September
30,
|
|
Nine months
ended September
30,
|
Other
metrics
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
SG&A as a % of
revenue
|
|
10.7 %
|
|
10.8 %
|
|
10.3 %
|
|
10.9 %
|
|
10.8 %
|
|
10.5 %
|
|
10.6 %
|
|
10.6 %
|
SG&A as a % of
gross profit
|
|
59.6
|
|
55.8
|
|
57.0
|
|
56.6
|
|
58.2
|
|
57.4
|
|
57.2
|
|
58.3
|
Operating profit as a %
of revenue
|
|
6.7
|
|
8.0
|
|
7.2
|
|
7.8
|
|
7.2
|
|
7.2
|
|
7.4
|
|
7.0
|
Operating profit as a %
of gross profit
|
|
37.2
|
|
41.3
|
|
39.8
|
|
40.3
|
|
38.7
|
|
39.6
|
|
39.7
|
|
38.6
|
Pretax
margin
|
|
5.8
|
|
7.6
|
|
6.2
|
|
6.8
|
|
6.5
|
|
6.8
|
|
6.6
|
|
6.4
|
Net profit
margin
|
|
4.2
|
|
5.5
|
|
4.5
|
|
5.0
|
|
4.8
|
|
4.9
|
|
4.8
|
|
4.7
|
|
|
(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
September 30,
|
|
%
|
|
Nine months
ended
September 30,
|
|
%
|
|
|
|
Increase
|
|
|
Increase
|
|
|
2022
|
|
2021
|
|
(Decrease)
|
|
2022
|
|
2021
|
|
(Decrease)
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
$
2,770.4
|
|
$
2,824.5
|
|
(1.9) %
|
|
$
7,316.1
|
|
$
7,896.8
|
|
(7.4) %
|
Used vehicle
retail
|
|
2,180.2
|
|
2,033.7
|
|
7.2
|
|
5,908.5
|
|
5,058.5
|
|
16.8
|
Finance and
insurance
|
|
285.7
|
|
289.0
|
|
(1.1)
|
|
762.4
|
|
736.9
|
|
3.5
|
Service, body and
parts
|
|
615.2
|
|
564.6
|
|
9.0
|
|
1,599.7
|
|
1,450.0
|
|
10.3
|
Total
revenues
|
|
6,245.9
|
|
6,021.1
|
|
3.7
|
|
16,585.1
|
|
15,891.5
|
|
4.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
$ 334.6
|
|
$ 342.2
|
|
(2.2) %
|
|
$
922.3
|
|
$
791.5
|
|
16.5 %
|
Used vehicle
retail
|
|
174.9
|
|
228.6
|
|
(23.5)
|
|
534.1
|
|
582.3
|
|
(8.3)
|
Finance and
insurance
|
|
285.7
|
|
289.0
|
|
(1.1)
|
|
762.4
|
|
736.9
|
|
3.5
|
Service, body and
parts
|
|
331.9
|
|
294.5
|
|
12.7
|
|
864.5
|
|
771.6
|
|
12.0
|
Total gross
profit
|
|
1,117.2
|
|
1,161.8
|
|
(3.8)
|
|
3,081.3
|
|
2,912.3
|
|
5.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
12.1 %
|
|
12.1 %
|
|
— bps
|
|
12.6 %
|
|
10.0 %
|
|
260
bps
|
Used vehicle
retail
|
|
8.0
|
|
11.2
|
|
(320)
|
|
9.0
|
|
11.5
|
|
(250)
|
Finance and
insurance
|
|
100.0
|
|
100.0
|
|
—
|
|
100.0
|
|
100.0
|
|
—
|
Service, body and
parts
|
|
53.9
|
|
52.2
|
|
170
|
|
54.0
|
|
53.2
|
|
80
|
Gross profit
margin
|
|
17.9
|
|
19.3
|
|
(140)
|
|
18.6
|
|
18.3
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unit
sales
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
58,086
|
|
64,873
|
|
(10.5) %
|
|
152,689
|
|
187,024
|
|
(18.4) %
|
Used vehicle
retail
|
|
72,292
|
|
74,363
|
|
(2.8)
|
|
194,946
|
|
197,621
|
|
(1.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average selling
price
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
$
47,695
|
|
$
43,540
|
|
9.5 %
|
|
$
47,915
|
|
$
42,224
|
|
13.5 %
|
Used vehicle
retail
|
|
30,158
|
|
27,348
|
|
10.3
|
|
30,308
|
|
25,597
|
|
18.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average gross profit
per unit
|
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
|
$ 5,761
|
|
$ 5,275
|
|
9.2 %
|
|
$
6,040
|
|
$
4,232
|
|
42.7 %
|
Used vehicle
retail
|
|
2,419
|
|
3,074
|
|
(21.3)
|
|
2,740
|
|
2,947
|
|
(7.0)
|
Finance and
insurance
|
|
2,191
|
|
2,075
|
|
5.6
|
|
2,193
|
|
1,916
|
|
14.5
|
Total
vehicle(1)
|
|
6,007
|
|
6,215
|
|
(3.3)
|
|
6,356
|
|
5,557
|
|
14.4
|
|
|
(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
|
|
September
30,
|
|
December
31,
|
|
September
30,
|
|
2022
|
|
2021
|
|
2021
|
Days
Supply(1)
|
|
|
|
|
|
New vehicle
inventory
|
39
|
|
24
|
|
24
|
Used vehicle
inventory
|
65
|
|
61
|
|
48
|
|
|
(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 September 30,
2022
|
Fixed charge coverage
ratio
|
Not less than 1.20 to
1
|
|
2.24 to 1
|
Leverage
ratio
|
Not more than 5.75 to
1
|
|
1.50 to 1
|
|
|
|
LAD
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
(In
millions)
|
|
|
|
September 30,
2022
|
|
December 31,
2021
|
Cash, restricted cash,
and cash equivalents
|
|
$
233.0
|
|
$
174.8
|
Trade receivables,
net
|
|
1,009.1
|
|
910.0
|
Inventories,
net
|
|
3,309.3
|
|
2,385.5
|
Other current
assets
|
|
135.4
|
|
63.0
|
Total current
assets
|
|
$
4,686.8
|
|
$
3,533.3
|
|
|
|
|
|
Property and equipment,
net
|
|
3,473.0
|
|
3,052.6
|
Intangibles
|
|
3,329.9
|
|
1,776.4
|
Other non-current
assets
|
|
2,584.8
|
|
2,784.6
|
Total
assets
|
|
$
14,074.5
|
|
$
11,146.9
|
|
|
|
|
|
Floor plan notes
payable
|
|
1,662.9
|
|
1,190.1
|
Other current
liabilities
|
|
1,163.7
|
|
1,212.7
|
Total current
liabilities
|
|
$
2,826.6
|
|
$
2,402.8
|
|
|
|
|
|
Long-term
debt
|
|
5,222.3
|
|
3,185.7
|
Other long-term
liabilities and deferred revenue
|
|
997.4
|
|
895.2
|
Total
liabilities
|
|
$
9,046.3
|
|
$
6,483.7
|
|
|
|
|
|
Equity
|
|
5,028.2
|
|
4,663.2
|
Total liabilities
& equity
|
|
$
14,074.5
|
|
$
11,146.9
|
|
|
|
LAD
|
Summarized Cash Flow
from Operations (Unaudited)
|
(In
millions)
|
|
|
|
Nine months ended
September 30,
|
|
|
2022
|
|
2021
|
Net income
|
|
$
1,011.8
|
|
$
770.1
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Asset
impairments
|
|
—
|
|
1.9
|
Depreciation and
amortization
|
|
122.1
|
|
91.5
|
Stock-based
compensation
|
|
31.7
|
|
25.6
|
Loss on redemption of
senior notes
|
|
—
|
|
10.3
|
Gain on disposal of
assets
|
|
(0.4)
|
|
(2.5)
|
Loss (gain) on sale of
franchises
|
|
(49.6)
|
|
5.2
|
Unrealized investment
loss (gain)
|
|
32.6
|
|
22.3
|
Deferred income
taxes
|
|
63.5
|
|
25.6
|
Amortization of
operating lease right-of-use assets
|
|
37.6
|
|
27.0
|
(Increase)
decrease:
|
|
|
|
|
Trade receivables,
net
|
|
(54.0)
|
|
(85.0)
|
Inventories
|
|
(852.4)
|
|
1,003.2
|
Other
assets
|
|
(1,032.5)
|
|
(338.4)
|
Increase:
|
|
|
|
|
Floor plan notes
payable, net
|
|
101.1
|
|
91.3
|
Trade
payables
|
|
9.3
|
|
97.2
|
Accrued
liabilities
|
|
19.1
|
|
236.9
|
Other long-term
liabilities and deferred revenue
|
|
42.6
|
|
19.7
|
Net cash provided by
(used in) operating activities
|
|
$
(517.5)
|
|
$
2,001.9
|
|
|
|
LAD
|
Reconciliation of
Non-GAAP Cash Flow from Operations (Unaudited)
|
(In
millions)
|
|
|
|
Nine months ended
September 30,
|
Net cash provided by
operating activities
|
|
2022
|
|
2021
|
As reported
|
|
$
(517.5)
|
|
$
2,001.9
|
Floor plan notes
payable, non-trade, net
|
|
429.6
|
|
(840.9)
|
Non-recourse notes
payable, net
|
|
419.4
|
|
236.0
|
Less: Borrowings on
floor plan notes payable, non-trade associated with acquired new
vehicle inventory
|
|
(72.4)
|
|
(271.5)
|
Adjusted
|
|
$
259.1
|
|
$
1,125.5
|
|
|
|
LAD
|
Reconciliation of
Certain Non-GAAP Financial Measures (Unaudited)
|
(In millions, except
for per share data)
|
|
|
|
Three Months Ended
September 30, 2022
|
|
|
As
reported
|
|
Net disposal
gain on sale
of stores
|
|
Investment
gain
|
|
Acquisition
expenses
|
|
Adjusted
|
Selling, general and
administrative
|
|
$
749.2
|
|
$
36.5
|
|
$
—
|
|
$
(2.0)
|
|
$
783.7
|
Operating
income
|
|
523.1
|
|
(36.5)
|
|
—
|
|
2.0
|
|
488.6
|
Other income (expense),
net
|
|
(7.1)
|
|
—
|
|
(0.3)
|
|
—
|
|
(7.4)
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
455.7
|
|
(36.5)
|
|
(0.3)
|
|
2.0
|
|
420.9
|
Income tax (provision)
benefit
|
|
(125.4)
|
|
9.8
|
|
—
|
|
1.9
|
|
(113.7)
|
Net income
|
|
$
330.3
|
|
$
(26.7)
|
|
$
(0.3)
|
|
$
3.9
|
|
$
307.2
|
Net income attributable
to non-controlling interests
|
|
0.5
|
|
—
|
|
—
|
|
—
|
|
0.5
|
Net income attributable
to redeemable non-controlling interest
|
|
(1.2)
|
|
—
|
|
—
|
|
—
|
|
(1.2)
|
Net income attributable
to LAD
|
|
$
329.6
|
|
$
(26.7)
|
|
$
(0.3)
|
|
$
3.9
|
|
$
306.5
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to LAD
|
|
$
11.92
|
|
$
(0.97)
|
|
$
(0.01)
|
|
$
0.14
|
|
$
11.08
|
Diluted share
count
|
|
27.6
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2021
|
|
|
As
reported
|
|
Asset
impairment
|
|
Investment
loss
|
|
Insurance
reserves
|
|
Acquisition
expenses
|
|
Loss on
redemption
of senior
notes
|
|
Adjusted
|
Asset
impairments
|
|
$
1.9
|
|
$
(1.9)
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
Selling, general and
administrative
|
|
673.3
|
|
—
|
|
—
|
|
(3.4)
|
|
(6.3)
|
|
—
|
|
663.6
|
Operating
income
|
|
479.5
|
|
1.9
|
|
—
|
|
3.4
|
|
6.3
|
|
—
|
|
491.1
|
Other income (expense),
net
|
|
(25.7)
|
|
—
|
|
23.2
|
|
—
|
|
—
|
|
10.3
|
|
7.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
422.2
|
|
1.9
|
|
23.2
|
|
3.4
|
|
6.3
|
|
10.3
|
|
467.3
|
Income tax (provision)
benefit
|
|
(113.2)
|
|
(0.5)
|
|
(6.2)
|
|
(0.9)
|
|
(1.4)
|
|
(2.7)
|
|
(124.9)
|
Net income
|
|
$
309.0
|
|
$
1.4
|
|
$
17.0
|
|
$
2.5
|
|
$
4.9
|
|
$
7.6
|
|
$
342.3
|
Net income attributable
to non-controlling interests
|
|
$
(0.8)
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
(0.8)
|
Net income attributable
to redeemable non-controlling interest
|
|
$
(0.3)
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
(0.3)
|
Net income attributable
to LAD
|
|
$
307.9
|
|
$
1.4
|
|
$
17.0
|
|
$
2.5
|
|
$
4.9
|
|
$
7.6
|
|
$
341.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to LAD
|
|
$
10.11
|
|
$
0.05
|
|
$
0.56
|
|
$
0.08
|
|
$
0.16
|
|
$
0.25
|
|
$
11.21
|
Diluted share
count
|
|
30.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LAD
|
Reconciliation of
Certain Non-GAAP Financial Measures (Unaudited)
|
(In millions, except
for per share data)
|
|
|
|
Nine Months Ended
September 30, 2022
|
|
|
As
reported
|
|
Net disposal
gain on sale
of stores
|
|
Investment
loss
|
|
Acquisition
expenses
|
|
Adjusted
|
Selling, general and
administrative
|
|
$
2,256.8
|
|
$
49.6
|
|
$
—
|
|
$
(10.1)
|
|
$
2,296.3
|
Operating
income
|
|
1,564.4
|
|
(49.6)
|
|
—
|
|
10.1
|
|
1,524.9
|
Other income (expense),
net
|
|
(37.0)
|
|
—
|
|
32.6
|
|
—
|
|
(4.4)
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
1,393.9
|
|
(49.6)
|
|
32.6
|
|
10.1
|
|
1,387.0
|
Income tax (provision)
benefit
|
|
(382.1)
|
|
13.2
|
|
—
|
|
(0.5)
|
|
(369.4)
|
Net income
|
|
$
1,011.8
|
|
$
(36.4)
|
|
$
32.6
|
|
$
9.6
|
|
$
1,017.6
|
Net income attributable
to non-controlling interests
|
|
(3.9)
|
|
—
|
|
—
|
|
—
|
|
(3.9)
|
Net income attributable
to redeemable non-controlling interest
|
|
(4.5)
|
|
—
|
|
—
|
|
—
|
|
(4.5)
|
Net income attributable
to LAD
|
|
$
1,003.4
|
|
$
(36.4)
|
|
$
32.6
|
|
$
9.6
|
|
$
1,009.2
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to LAD
|
|
$
35.10
|
|
$
(1.27)
|
|
$
1.14
|
|
$
0.33
|
|
$
35.30
|
Diluted share
count
|
|
28.6
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2021
|
|
|
As
reported
|
|
Net disposal
loss on sale
of stores
|
|
Asset
impairment
|
|
Investment
loss
|
|
Insurance
reserves
|
|
Acquisition
expenses
|
|
Loss on
redemption
of senior
notes
|
|
Adjusted
|
Asset
impairments
|
|
$
1.9
|
|
$
—
|
|
$
(1.9)
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
Selling, general and
administrative
|
|
1,757.6
|
|
(5.2)
|
|
—
|
|
—
|
|
(5.0)
|
|
(17.9)
|
|
—
|
|
1,729.5
|
Operating
income
|
|
1,164.2
|
|
5.2
|
|
1.9
|
|
—
|
|
5.0
|
|
17.9
|
|
—
|
|
1,194.2
|
Other income (expense),
net
|
|
(14.6)
|
|
—
|
|
—
|
|
22.3
|
|
—
|
|
—
|
|
10.3
|
|
18.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
1,053.0
|
|
5.2
|
|
1.9
|
|
22.3
|
|
5.0
|
|
17.9
|
|
10.3
|
|
1,115.6
|
Income tax (provision)
benefit
|
|
(282.9)
|
|
(1.4)
|
|
(0.5)
|
|
(6.0)
|
|
(1.4)
|
|
(4.5)
|
|
(2.7)
|
|
(299.4)
|
Net income
|
|
$
770.1
|
|
$
3.8
|
|
$
1.4
|
|
$
16.3
|
|
$
3.6
|
|
$
13.4
|
|
$
7.6
|
|
$
816.2
|
Net income attributable
to non-controlling interests
|
|
(0.8)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(0.8)
|
Net income attributable
to redeemable non-controlling interest
|
|
(0.3)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(0.3)
|
Net income attributable
to LAD
|
|
$
769.0
|
|
$
3.8
|
|
$
1.4
|
|
$
16.3
|
|
$
3.6
|
|
$
13.4
|
|
$
7.6
|
|
$
815.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to LAD
|
|
$
26.91
|
|
$
0.13
|
|
$
0.05
|
|
$
0.57
|
|
$
0.13
|
|
$
0.47
|
|
$
0.26
|
|
$
28.52
|
Diluted share
count
|
|
28.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LAD
|
Adjusted EBITDA and
Net Debt to Adjusted EBITDA (Unaudited)
|
(In
millions)
|
|
|
|
Three months
ended
September 30,
|
|
%
|
|
Nine months
ended
September 30,
|
|
%
|
|
|
|
Increase
|
|
|
Increase
|
|
|
2022
|
|
2021
|
|
(Decrease)
|
|
2022
|
|
2021
|
|
(Decrease)
|
EBITDA and Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$ 330.3
|
|
$ 309.0
|
|
6.9 %
|
|
$
1,011.8
|
|
$ 770.1
|
|
31.4 %
|
Flooring interest
expense
|
|
10.7
|
|
3.6
|
|
197.2
|
|
19.4
|
|
17.0
|
|
14.1
|
Other interest
expense
|
|
49.6
|
|
28.0
|
|
77.1
|
|
114.1
|
|
79.6
|
|
43.3
|
Income tax
expense
|
|
125.4
|
|
113.2
|
|
10.8
|
|
382.1
|
|
282.9
|
|
35.1
|
Depreciation and
amortization
|
|
41.9
|
|
34.4
|
|
21.8
|
|
122.1
|
|
91.5
|
|
33.4
|
EBITDA
|
|
$ 557.9
|
|
$ 488.2
|
|
14.3 %
|
|
$
1,649.5
|
|
$
1,241.1
|
|
32.9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: flooring interest
expense
|
|
$ (10.7)
|
|
$
(3.6)
|
|
197.2
|
|
$
(19.4)
|
|
$ (17.0)
|
|
14.1
|
Less: used vehicle line
of credit interest
|
|
(2.6)
|
|
—
|
|
NM
|
|
(4.8)
|
|
—
|
|
NM
|
Add: acquisition
expenses
|
|
2.0
|
|
6.3
|
|
(68.3)
|
|
10.1
|
|
17.9
|
|
(43.6)
|
Add: loss (gain) on
divestitures
|
|
(36.5)
|
|
—
|
|
NM
|
|
(49.6)
|
|
5.2
|
|
NM
|
Add: investment loss
(gain)
|
|
(0.3)
|
|
23.2
|
|
(101.3)
|
|
32.6
|
|
22.3
|
|
NM
|
Add: insurance
reserves
|
|
—
|
|
3.4
|
|
NM
|
|
—
|
|
5.0
|
|
NM
|
Add: loss on redemption
of senior notes
|
|
—
|
|
10.3
|
|
NM
|
|
—
|
|
10.3
|
|
NM
|
Add: asset
impairment
|
|
—
|
|
1.9
|
|
NM
|
|
—
|
|
1.9
|
|
NM
|
Adjusted
EBITDA
|
|
$
509.8
|
|
$
529.7
|
|
(3.8) %
|
|
$
1,618.4
|
|
$
1,286.7
|
|
25.8 %
|
|
|
As of
|
|
%
|
|
|
September
30,
|
|
Increase
|
Net Debt to Adjusted
EBITDA
|
|
2022
|
|
2021
|
|
(Decrease)
|
Floor plan notes
payable: non-trade
|
|
$ 1,208.1
|
|
$
688.9
|
|
75.4 %
|
Floor plan notes
payable
|
|
454.8
|
|
329.4
|
|
38.1
|
Used and service loaner
vehicle inventory financing facility
|
|
1,061.8
|
|
—
|
|
NM
|
Revolving lines of
credit
|
|
1,396.0
|
|
404.8
|
|
244.9
|
Real estate
mortgages
|
|
545.3
|
|
606.0
|
|
(10.0)
|
Finance lease
obligations
|
|
113.8
|
|
54.1
|
|
110.4
|
Asset backed
notes
|
|
494.1
|
|
—
|
|
NM
|
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
|
|
1.5
|
|
2.1
|
|
(28.6)
|
Unamortized debt
issuance costs
|
|
(26.8)
|
|
(24.0)
|
|
11.7
|
Total debt
|
|
$
6,998.6
|
|
$
3,811.3
|
|
83.6 %
|
|
|
|
|
|
|
|
Less: Floor plan
related debt
|
|
$
(2,724.7)
|
|
$
(1,018.3)
|
|
167.6 %
|
Less: Cash, restricted
cash, and cash equivalents
|
|
(233.0)
|
|
(152.8)
|
|
52.5
|
Less: Availability on
used vehicle and service loaner financing facilities
|
|
(34.3)
|
|
(707.1)
|
|
(95.1)
|
Net
Debt
|
|
$
4,006.6
|
|
$
1,933.1
|
|
107.3 %
|
|
|
|
|
|
|
|
TTM Adjusted
EBITDA
|
|
$
2,150.9
|
|
$
1,552.0
|
|
38.6 %
|
|
|
|
|
|
|
|
Net debt to Adjusted
EBITDA
|
|
1.86
x
|
|
1.25
x
|
|
|
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SOURCE Lithia Motors, Inc.