Lithia & Driveway (LAD) Increases Revenue 18%; Reports Diluted EPS of $11.92 and Shares Outstanding Reduced by 10% (2024)

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% (1)

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 circ*mstances 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


- %

NM - not meaningful




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 %


NM - not meaningful





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




NM - not meaningful

Lithia & Driveway (LAD) Increases Revenue 18%; Reports Diluted EPS of $11.92 and Shares Outstanding Reduced by 10% (2) View original content to download multimedia:https://www.prnewswire.com/news-releases/lithia--driveway-lad-increases-revenue-18-reports-diluted-eps-of-11-92-and-shares-outstanding-reduced-by-10-301653153.html

SOURCE Lithia Motors, Inc.

Lithia & Driveway (LAD) Increases Revenue 18%; Reports Diluted EPS of $11.92 and Shares Outstanding Reduced by 10% (2024)
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