Lithia & Driveway (LAD) Increases Revenue 70%, EPS 47%, And Adjusted EPS 63%, Record Third Quarter Performance
10/20/2021 - 05:00 AM
MEDFORD, Ore. , Oct. 20, 2021 /PRNewswire/ -- Lithia & Driveway (NYSE: LAD) today reported the highest third quarter revenue and earnings per share in company history.
Third quarter 2021 revenue increased 70% to $6.2 billion from $3.6 billion in the third quarter of 2020.
Third quarter 2021 net income attributable to LAD per diluted share was $10.11 , a 47% increase from $6.86 per diluted share reported in the third quarter of 2020. Adjusted third quarter 2021 net income attributable to LAD per diluted share was $11.21 , a 63% increase compared to $6.89 per diluted share in the same period of 2020.
Third quarter 2021 net income was $309 million , a 95% increase compared to net income of $159 million in the same period of 2020. Adjusted third quarter 2021 net income was $342 million , a 115% increase compared to adjusted net income of $160 million for the same period of 2020.
As shown in the attached non-GAAP reconciliation tables, the 2021 third quarter adjusted results exclude a $1.10 per diluted share net non-core charges related to a non-cash unrealized investment loss, the redemption of senior notes, acquisition expenses, an asset impairment, and insurance reserves. The 2020 third quarter adjusted results exclude a $0.03 per diluted share net non-core charge related to insurance reserves and acquisition expenses.
Third Quarter-over-Quarter Comparisons and Operating Highlights:
Revenues increased 70.4% New vehicle retail revenues increased 53.9% Used vehicle retail revenues increased 90.2% 36,600 unit sales generated from Lithia e-commerce platforms, 25% of total retail unit sales (excluding Driveway) Achieved milestone of 1,000 Driveway Shop units F&I per unit increased 25.8% to $2,074 Service, body, and parts revenues increased 60.9% Total vehicle gross profit per unit increased 32.7% to $6,175 Adjusted SG&A as a percentage of gross profit improved by 380 basis points from 59.6% to 55.8% "Our third quarter results demonstrate the dynamism of LAD's model," said Bryan DeBoer , Lithia & Driveway's President and CEO. "We excelled at procuring used vehicles during the challenging environment, enabling us to offer consumers the most diverse inventory available, driving same store volume increases while continuing to increase margins. In addition, Driveway and our store e-commerce offerings are positioned to gain incremental market share as consumers seek out a more transparent and frictionless buying experience."
For the first nine months of 2021 revenues increased 80% to $16.5 billion , compared to $9.2 billion in 2020.
Net income attributable to LAD for the first nine months of 2021 was $26.91 per diluted share, compared to $12.18 per diluted share in 2020, an increase of 121% . Adjusted net income attributable to LAD per diluted share for the first nine months of 2021 increased 127% to $28.52 from $12.59 in the same period of 2020.
Corporate Development During the quarter, we completed several acquisitions expected to contribute $1.7 billion in annualized revenue, including partnering with Pfaff Automotive to enter Canada , our first international acquisition, and expanding our United States footprint into new markets.
"Year-to-date we have acquired $6.2 billion in annualized revenue and are pacing ahead of schedule toward our goal of achieving $50 billion in revenue and $50 of earnings per share by 2025," said DeBoer. "The pipeline is robust and we continue to identify accretive deals that strategically expand our network while meeting our disciplined return thresholds."
Balance Sheet Update We ended the third quarter with approximately $1.7 billion in cash and availability on our revolving lines of credit. In addition, our unfinanced real estate could provide additional liquidity of approximately $729 million .
Dividend Payment Our Board of Directors approved a dividend of $0.35 per share related to third quarter 2021 financial results. We expect to pay the dividend on November 19, 2021 to shareholders of record on November 12, 2021.
Third Quarter Earnings Conference Call and Updated Presentation The third quarter 2021 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 2021 results has been added to our investor relations website. To listen live on our website or for replay, visit www.lithiainvestorrelations.com and click on webcasts.
About Lithia & Driveway (LAD) LAD is a growth company powered by people and innovation with a plan to profitably consolidate the largest retail sector in North America. As the leading provider of personal transportation solutions in North America, LAD is among the fastest-growing companies in the Fortune 500 and is currently ranked #231 (#2 on 10-Year EPS Growth, #3 on 10-Year TSR and #12 on 10-year Revenue growth in 2021). By providing a wide array of products and services for the entire vehicle ownership lifecycle through various consumer channels, LAD builds magnetic brand loyalty. Operational excellence is achieved by focusing the business on convenient and transparent consumer experiences supported by proprietary data science to improve market share, consumer loyalty and profitability. LAD's omni-channel strategy will continue to pragmatically disrupt the industry by leveraging experienced teams, vast owned inventories, technology, and physical network. LAD continues to lead the industry's consolidation, and this combined with Driveway's e-commerce in-home experiences, further accelerates the massive regenerating capital engine. Together, these endeavors create a unique and compelling high-growth strategy that provides transportation solutions wherever, whenever, and however consumers desire.
Sites www.lithia.com www.lithiainvestorrelations.com www.lithiacareers.com www.driveway.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
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 sales levels; Anticipated impacts of the continued COVID-19 pandemic on the national and local economies in which we operate, our business operations and consumer demand; Continuation of our sales and services, including in-store appointments and home deliveries; Expected growth from our e-commerce home solutions and digital strategies; Expected operating results, such as improved store performance; continued improvement of selling, general and administrative expenses ("SG&A") as a percentage of gross profit and all projections; Anticipated integration, success and growth of acquired stores; Anticipated ability to capture additional market share; Anticipated ability to find accretive acquisitions; Expected revenues from acquired stores; Anticipated synergies, ability to monetize our investment in digital innovation; Anticipated additions of dealership locations to our portfolio in the future; Anticipated financial condition and liquidity, including from our cash, availability on our credit facility and unfinanced real estate; Anticipated use of proceeds from our financings; Anticipated allocations, uses and levels of capital expenditures in the future; Expectations regarding compliance with financial and restrictive covenants in our credit facility and other debt agreements; Statements regarding furloughed employees and cost reductions; Expectations regarding programs and initiatives for employee recruitment, training, and retention; and 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 economic and financial conditions (both nationally and locally), including as a result of the COVID-19 pandemic; Changes in customer demand, our relationship with, and the financial and operational stability of, vehicle manufacturers and other suppliers; Risks associated with our indebtedness (including available borrowing capacity, compliance with financial covenants and ability to refinance or repay indebtedness on favorable terms); The adequacy of our cash flow and earnings and other conditions which may affect our ability to pay our quarterly dividend at the planned level; Disruptions to our technology network including computer systems and software, as well as natural events such as severe weather, fires, floods and earthquakes or man-made or other disruptions of our operating systems, structures, facilities or equipment; and Government regulations and legislation, and other 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
2021
2020
(Decrease)
2021
2020
(Decrease)
Revenues:
New vehicle retail
$
2,898.2
$
1,883.3
53.9
%
$
8,237.7
$
4,624.6
78.1
%
Used vehicle retail
2,079.5
1,093.2
90.2
5,236.6
2,889.7
81.2
Used vehicle wholesale
260.9
98.8
164.1
613.5
216.8
183.0
Finance and insurance
297.0
160.5
85.0
765.0
407.2
87.9
Service, body and parts
578.3
359.5
60.9
1,503.4
964.9
55.8
Fleet and other
55.9
24.9
124.5
166.0
79.3
109.3
Total revenues
6,169.8
3,620.2
70.4
%
16,522.2
9,182.5
79.9
%
Cost of sales:
New vehicle retail
2,548.9
1,743.2
46.2
7,418.0
4,314.2
71.9
Used vehicle retail
1,846.9
948.4
94.7
4,635.2
2,556.8
81.3
Used vehicle wholesale
255.2
91.2
179.8
586.8
206.5
184.2
Service, body and parts
275.8
163.6
68.6
704.3
456.5
54.3
Fleet and other
53.9
22.2
142.8
162.7
71.6
127.2
Total cost of sales
4,980.7
2,968.6
67.8
13,507.0
7,605.6
77.6
Gross profit
1,189.1
651.6
82.5
%
3,015.2
1,576.9
91.2
%
Asset impairments
1.9
—
NM
1.9
7.9
NM
SG&A expense
673.3
389.1
73.0
1,757.6
1,039.6
69.1
Depreciation and amortization
34.4
22.9
50.2
91.5
67.3
36.0
Income from operations
479.5
239.6
100.1
%
1,164.2
462.1
151.9
%
Floor plan interest expense
(3.6)
(6.1)
(41.0)
(16.9)
(28.3)
(40.3)
Other interest expense
(28.0)
(16.6)
68.7
(79.6)
(50.4)
57.9
Other income, net
(25.7)
2.2
NM
(14.6)
8.2
NM
Income before income taxes
422.2
219.1
92.7
%
1,053.0
391.6
168.9
%
Income tax expense
(113.2)
(60.3)
87.7
(282.9)
(108.9)
159.8
Income tax rate
26.8
%
27.5
%
26.9
%
27.8
%
Net income
$
309.0
$
158.8
94.6
%
$
770.1
$
282.7
172.4
%
Net income attributable to non-controlling interests
(1.1)
—
NM
(1.1)
—
NM
Net income attributable to LAD
$
307.9
$
158.8
93.9
%
$
769.0
$
282.7
172.0
%
Diluted earnings per share attributable to LAD:
Net income per share
$
10.11
$
6.86
47.4
%
$
26.91
$
12.18
120.9
%
Diluted shares outstanding
30.5
23.1
32.0
%
28.6
23.2
23.3
%
NM - not meaningful
LAD
Key Performance Metrics (Unaudited)
Three months ended September 30,
%
Nine months ended September 30,
%
Increase
Increase
2021
2020
(Decrease)
2021
2020
(Decrease)
Gross margin
New vehicle retail
12.1
%
7.4
%
470
bps
10.0
%
6.7
%
330
bps
Used vehicle retail
11.2
13.2
(200)
11.5
11.5
—
Finance and insurance
100.0
100.0
—
100.0
100.0
—
Service, body and parts
52.3
54.5
(220)
53.2
52.7
50
Gross profit margin
19.3
18.0
130
18.2
17.2
100
Unit sales
New vehicle retail
66,894
47,923
39.6
%
195,934
118,699
65.1
%
Used vehicle retail
76,362
49,363
54.7
205,643
135,499
51.8
Total retail units sold
143,256
97,286
47.3
401,577
254,198
58.0
Average selling price
New vehicle retail
$
43,325
$
39,298
10.2
%
$
42,043
$
38,960
7.9
%
Used vehicle retail
27,233
22,145
23.0
25,464
21,326
19.4
Average gross profit per unit
New vehicle retail
$
5,221
$
2,922
78.7
%
$
4,184
$
2,615
60.0
%
Used vehicle retail
3,046
2,932
3.9
2,924
2,457
19.0
Finance and insurance
2,074
1,649
25.8
1,905
1,602
18.9
Total vehicle(1)
6,175
4,655
32.7
5,510
4,173
32.0
Revenue mix
New vehicle retail
47.0
%
52.0
%
49.9
%
50.4
%
Used vehicle retail
33.7
30.2
31.7
31.5
Used vehicle wholesale
4.2
2.7
3.7
2.4
Finance and insurance, net
4.8
4.4
4.6
4.4
Service, body and parts
9.4
9.9
9.1
10.5
Fleet and other
0.9
0.8
1.0
0.8
Gross Profit Mix
New vehicle retail
29.4
%
21.5
%
27.2
%
19.7
%
Used vehicle retail
19.6
22.2
19.9
21.1
Used vehicle wholesale
0.5
1.2
0.9
0.7
Finance and insurance, net
25.0
24.6
25.4
25.8
Service, body and parts
25.3
30.1
26.5
32.2
Fleet and other
0.2
0.4
0.1
0.5
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
2021
2020
2021
2020
2021
2020
2021
2020
SG&A as a % of revenue
10.8
%
10.7
%
10.9
%
10.7
%
10.5
%
11.3
%
10.6
%
11.3
%
SG&A as a % of gross profit
55.8
59.6
56.6
59.7
57.4
65.5
58.3
65.9
Operating profit as a % of revenue
8.0
6.6
7.8
6.6
7.2
5.2
7.0
5.0
Operating profit as a % of gross profit
41.3
36.9
40.3
36.8
39.6
30.2
38.6
29.3
Pretax margin
7.6
6.1
6.8
6.1
6.8
4.4
6.4
4.3
Net profit margin
5.5
4.4
5.0
4.4
4.9
3.2
4.7
3.1
(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
2021
2020
(Decrease)
2021
2020
(Decrease)
Revenues
New vehicle retail
$
1,765.0
$
1,822.6
(3.2)
%
$
5,566.6
$
4,494.5
23.9
%
Used vehicle retail
1,485.8
1,062.4
39.9
3,948.0
2,813.8
40.3
Finance and insurance
189.2
154.9
22.1
526.4
396.0
32.9
Service, body and parts
374.3
349.0
7.2
1,042.6
938.1
11.1
Total revenues
3,978.2
3,509.1
13.4
11,574.8
8,931.0
29.6
Gross profit
New vehicle retail
$
213.9
$
136.5
56.7
%
$
550.4
$
302.9
81.7
%
Used vehicle retail
172.0
141.5
21.6
472.1
327.0
44.4
Finance and insurance
189.2
154.9
22.1
526.4
396.0
32.9
Service, body and parts
201.5
189.5
6.3
563.7
493.8
14.2
Total gross profit
779.3
632.5
23.2
2,130.1
1,537.4
38.6
Gross margin
New vehicle retail
12.1
%
7.5
%
460
bps
9.9
%
6.7
%
320
bps
Used vehicle retail
11.6
13.3
(170)
12.0
11.6
40
Finance and insurance
100.0
100.0
—
100.0
100.0
—
Service, body and parts
53.8
54.3
(50)
54.1
52.6
150
Gross profit margin
19.6
18.0
160
18.4
17.2
120
Unit sales
New vehicle retail
39,886
46,161
(13.6)
%
131,478
115,031
14.3
%
Used vehicle retail
54,300
47,863
13.4
155,375
131,686
18.0
Average selling price
New vehicle retail
$
44,251
$
39,484
12.1
%
$
42,339
$
39,072
8.4
%
Used vehicle retail
27,362
22,196
23.3
25,409
21,368
18.9
Average gross profit per unit
New vehicle retail
$
5,362
$
2,956
81.4
%
$
4,186
$
2,633
59.0
%
Used vehicle retail
3,167
2,956
7.1
3,039
2,483
22.4
Finance and insurance
2,009
1,647
22.0
1,835
1,605
14.3
Total vehicle(1)
6,130
4,681
31.0
5,452
4,200
29.8
(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
September 30,
December 31,
September 30,
2021
2020
2020
Days Supply (1)
New vehicle inventory
24
50
50
Used vehicle inventory
48
65
64
(1)
Days supply calculated based on current inventory levels, excluding in-transit vehicles, and a 30-day historical cost of sales level.
Financial covenants
Requirement
As of September 30, 2021
Current ratio
Not less than 1.10 to 1
1.91 to 1
Fixed charge coverage ratio
Not less than 1.20 to 1
6.91 to 1
Leverage ratio
Not more than 5.75 to 1
1.51 to 1
LAD
Condensed Consolidated Balance Sheets (Unaudited)
(In millions)
September 30, 2021
December 31, 2020
Cash and cash equivalents
$
137.8
$
160.1
Trade receivables, net
812.6
614.0
Inventories, net
2,012.6
2,492.9
Other current assets
112.5
70.6
Total current assets
$
3,075.5
$
3,337.6
Property and equipment, net
2,352.9
2,197.5
Intangibles
1,348.7
943.2
Other non-current assets
3,427.5
1,423.8
Total assets
$
10,204.6
$
7,902.1
Floor plan notes payable
1,018.3
1,797.2
Other current liabilities
1,163.5
682.5
Total current liabilities
$
2,181.8
$
2,479.7
Long-term debt
2,586.1
2,064.7
Other long-term liabilities and deferred revenue
858.9
696.2
Total liabilities
$
5,626.8
$
5,240.6
Stockholder's Equity
4,577.8
2,661.5
Total liabilities & stockholders' equity
$
10,204.6
$
7,902.1
LAD
Summarized Cash Flow from Operations (Unaudited)
(In millions)
Nine months ended September 30,
2021
2020
Net income
$
770.1
$
282.7
Adjustments to reconcile net income to net cash provided by operating activities:
Asset impairments
1.9
7.9
Depreciation and amortization
91.5
67.3
Stock-based compensation
25.6
17.2
Loss on redemption of senior notes
10.3
—
Loss on disposal of assets
(2.5)
(0.5)
Loss (gain) on sale of franchises
5.2
(1.4)
Unrealized investment loss
22.3
—
Deferred income taxes
25.6
6.8
Amortization of operating lease right-of-use assets
27.0
20.8
(Increase) decrease:
Trade receivables, net
(85.0)
(11.3)
Inventories
1,003.2
457.0
Other assets
(351.1)
(36.4)
Increase (decrease):
Floor plan notes payable, net
91.3
(128.0)
Trade payables
97.2
25.0
Accrued liabilities
236.9
66.8
Other long-term liabilities and deferred revenue
19.7
26.7
Net cash provided by operating activities
$
1,989.2
$
800.6
LAD
Reconciliation of Non-GAAP Cash Flow from Operations (Unaudited)
(In millions)
Nine months ended September 30,
Net cash provided by operating activities
2021
2020
As reported
$
1,989.2
$
800.6
Floor plan notes payable, non-trade, net
(840.9)
(317.8)
Less: Borrowings on floor plan notes payable, non-trade associated with acquired new vehicle inventory
(317.1)
(133.6)
Adjusted
$
831.2
$
349.2
LAD
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)
(In millions, except for per share data)
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
$
342.4
Net income attributable to non-controlling interests
(1.1)
—
—
—
—
—
(1.1)
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
Three Months Ended September 30, 2020
As reported
Insurance reserves
Acquisition expenses
Adjusted
Selling, general and administrative
$
389.1
$
(0.3)
$
(0.6)
$
388.2
Operating income
239.6
0.3
0.6
240.5
Income before income taxes
219.1
0.3
0.6
220.0
Income tax (provision) benefit
(60.3)
—
(0.1)
(60.4)
Net income
$
158.8
$
0.3
$
0.5
$
159.6
Diluted earnings per share
$
6.86
$
0.01
$
0.02
$
6.89
Diluted share count
23.1
LAD
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)
(In millions, except for per share data)
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
(1.1)
—
—
—
—
—
—
(1.1)
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
Nine Months Ended September 30, 2020
As reported
Net disposal gain on sale of stores
Asset impairment
Insurance reserves
Acquisition expenses
Tax attribute
Adjusted
Asset impairments
$
7.9
$
—
$
(7.9)
$
—
$
—
$
—
$
—
Selling, general and administrative
1,039.6
1.4
—
(6.1)
(1.6)
—
1,033.3
Operating income
462.1
(1.4)
7.9
6.1
1.6
—
476.3
Income before income taxes
391.6
(1.4)
7.9
6.1
1.6
—
405.8
Income tax (provision) benefit
(108.9)
0.4
(2.3)
(1.6)
(0.4)
(0.8)
(113.6)
Net income
$
282.7
$
(1.0)
$
5.6
$
4.5
$
1.2
$
(0.8)
$
292.2
Diluted earnings per share
$
12.18
$
(0.04)
$
0.24
$
0.19
$
0.05
$
(0.03)
$
12.59
Diluted share count
23.2
LAD
Adjusted EBITDA and Net Debt to Adjusted EBITDA (Unaudited)
(In millions)
Three months ended September 30,
%
Nine months ended September 30,
%
Increase
Increase
2021
2020
(Decrease)
2021
2020
(Decrease)
EBITDA and Adjusted EBITDA
Net income
$
309.0
$
158.8
94.6
%
$
770.1
$
282.7
172.4
%
Flooring interest expense
3.6
6.1
(41.0)
16.9
28.3
(40.3)
Other interest expense
28.0
16.6
68.7
79.6
50.4
57.9
Income tax expense
113.2
60.3
87.7
282.9
108.9
159.8
Depreciation and amortization
34.4
22.9
50.2
91.5
67.3
36.0
EBITDA
$
488.2
$
264.7
84.4
%
$
1,241.0
$
537.6
130.8
%
Other adjustments:
Less: flooring interest expense
$
(3.6)
$
(6.1)
(41.0)
$
(16.9)
$
(28.3)
(40.3)
Less: used vehicle line of credit interest
—
(0.1)
(100.0)
—
(0.5)
(100.0)
Add: acquisition expenses
6.3
0.6
950.0
17.9
1.6
1,018.8
Add: loss (gain) on divestitures
—
—
NM
5.2
(1.4)
NM
Add: investment loss
23.2
—
NM
22.3
—
NM
Add: insurance reserves
3.4
0.3
1,033.3
5.0
6.1
(18.0)
Add: loss on redemption of senior notes
10.3
—
NM
10.3
—
NM
Add: asset impairment
1.9
—
NM
1.9
7.9
NM
Adjusted EBITDA
$
529.7
$
259.4
104.2
%
$
1,286.7
$
523.0
146.0
%
NM - not meaningful
As of
%
September 30,
Increase
Net Debt to Adjusted EBITDA
2021
2020
(Decrease)
Floor plan notes payable: non-trade
$
688.9
$
1,293.2
(46.7)
%
Floor plan notes payable
329.4
310.3
6.2
Used and service loaner vehicle inventory financing facility
—
357.0
(100.0)
Revolving lines of credit
404.8
47.5
752.2
Real estate mortgages
606.0
628.8
(3.6)
Finance lease obligations
54.1
132.4
(59.1)
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
—
NM
3.875% Senior notes due 2029
800.0
—
NM
Other debt
10.0
2.6
284.6
Unamortized debt issuance costs
(31.9)
(12.8)
149.2
Total debt
$
3,811.3
$
3,459.0
10.2
%
Less: Floor plan related debt
$
(1,018.3)
$
(1,960.5)
(48.1)
%
Less: Investment in floorplan offset accounts
(24.8)
—
—
Less: Cash and cash equivalents
(137.8)
(57.1)
141.3
Less: Availability on used vehicle and service loaner financing facilities
(707.1)
(72.0)
882.1
Net Debt
$
1,923.3
$
1,369.4
40.4
%
TTM Adjusted EBITDA
$
1,533.8
$
655.3
134.1
%
Net debt to Adjusted EBITDA
1.25
x
2.09
x
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SOURCE Lithia Motors, Inc.