Lithia & Driveway (LAD) Increases Revenue 18%; Reports Diluted EPS of $11.92 and Shares Outstanding Reduced by 10%
10/19/2022 - 05:00 AM
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.