Lithia & Driveway (LAD) Reports Record Third Quarter Revenue of $8.3 Billion, 13% Increase
Announces Dividend of $0.50 per Share for Third Quarter
MEDFORD, Ore., Oct. 25, 2023 /PRNewswire/ -- Lithia & Driveway (NYSE: LAD) today reported the highest third quarter revenue in company history.
Third quarter 2023 revenue increased 13% to $8.3 billion from $7.3 billion in the third quarter of 2022.
Third quarter 2023 net income attributable to LAD per diluted share was $9.46, a 21% decrease from $11.92 per diluted share reported in the third quarter of 2022. Adjusted third quarter 2023 net income attributable to LAD per diluted share was $9.25, a 17% decrease compared to $11.08 per diluted share in the same period of 2022. Unrealized foreign currency losses negatively impacted earnings per share by $0.28.
Third quarter 2023 net income was $265 million, a 20% decrease compared to net income of $330 million in the same period of 2022. Adjusted third quarter 2023 net income was $259 million, a 16% decrease compared to adjusted net income of $307 million for the same period of 2022.
As shown in the attached non-GAAP reconciliation tables, the 2023 third quarter adjusted results exclude a $0.21 per diluted share impact resulting from non-core items, specifically a net gain on the sale of stores, partially offset by acquisition expenses, insurance reserves, contract buyouts, and non-cash unrealized investment loss. The 2022 third quarter adjusted results exclude a $0.84 per diluted share net non-core charge related to a net gain on the sale of stores, partially offset by acquisition expenses and a non-cash unrealized investment loss.
Third Quarter-Over-Quarter Comparisons and 2023 Performance Highlights:
- Revenues increased 13%
- New and used unit growth was 18% and 9%, respectively
- Total vehicle gross profit per unit of $5,218, down $930
- Driveway averaged over 3.25 million monthly unique visitors in the quarter
- Driveway Finance Corporation (DFC) originated $502 million in loans in Q3
- Service, body, and parts revenues increased 18%
- Adjusted SG&A as a percentage of gross profit was 62.7%
"We continued to make steady progress executing our plan in the third quarter. Our omni-channel solution provides a set of affordable and convenient options for our customers. The experience is convenient, affordable and transparent. This also helped drive the growth of our complementary adjacencies," said Bryan DeBoer, Lithia & Driveway, President and CEO. "Our results highlight our commitment to excellence and consistent expansion, both domestically and internationally. We remain well-financed, continue to diversify and adapt to ever changing market conditions, while delivering on our unique growth strategy."
For the first nine months of 2023 revenues increased 10% to $23.4 billion, compared to $21.2 billion in 2022.
Net income attributable to LAD for the first nine months of 2023 was $28.54 per diluted share, compared to $35.10 per diluted share in 2022, a decrease of 19%. Adjusted net income attributable to LAD per diluted share for the first nine months of 2023 decreased 19% to $28.61 from $35.30 in the same period of 2022. Foreign currency exchange negatively impacted earnings per share by $0.10.
Corporate Development
During the third quarter, LAD acquired a total of four stores across the United States and United Kingdom, which are expected to generate nearly $290 million in annualized revenues. LAD divested four stores, combined they made approximately $180 million in revenues the past year. Year-to-date, we have acquired over $3.8 billion in annualized revenues. Since announcing the 2025 Plan in July 2020, we have acquired over $17.7 billion in annualized revenues.
Balance Sheet Update
LAD ended the third quarter with approximately $1.4 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
The Board of Directors approved a dividend of $0.50 per share related to third quarter 2023 financial results. The dividend is expected to be paid on November 17, 2023 to shareholders of record on November 10, 2023.
Third Quarter Earnings Conference Call and Updated Presentation
The third quarter 2023 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 2023 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)
Lithia & Driveway (NYSE: LAD) is one of the largest global automotive retailers providing a wide array of products and services throughout the vehicle ownership lifecycle. Convenient and hassle-free experiences are offered through our comprehensive network of physical locations, e-commerce platforms, captive finance solutions and other synergistic adjacencies. We deliver consistent, profitable growth in a massive and unconsolidated industry. Our highly diversified and competitively differentiated design provides us the flexibility and scale to pursue our vision to modernize 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 achieving our 2025 Plan and related targets
- The growth, expansion, make-up and success of our network, including our 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 Corporation (DFC), their synergies and other impacts on our business and our ability to meet Driveway and DFC-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 facilities, unfinanced real estate and other financing sources
- Our continuing to purchase shares under our share repurchase program
- Our compliance with financial and restrictive covenants in our credit facilities and other debt agreements
- Our programs and initiatives for employee recruitment, training, and retention
- Our strategies and targets for customer retention, growth, market position, operations, 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 regional or global public health issues, 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 |
% |
Nine months ended |
% |
|||||||||
Increase |
Increase |
|||||||||||
2023 |
2022 |
(Decrease) |
2023 |
2022 |
(Decrease) |
|||||||
Revenues: |
||||||||||||
New vehicle retail |
$ 3,885.8 |
$ 3,306.9 |
17.5 % |
$ 11,179.5 |
$ 9,619.4 |
16.2 % |
||||||
Used vehicle retail |
2,620.2 |
2,465.8 |
6.3 |
7,302.8 |
7,197.0 |
1.5 |
||||||
Used vehicle wholesale |
316.1 |
363.2 |
(13.0) |
1,082.4 |
1,131.5 |
(4.3) |
||||||
Finance and insurance |
349.4 |
333.3 |
4.8 |
1,005.6 |
977.0 |
2.9 |
||||||
Service, body and parts |
838.0 |
712.2 |
17.7 |
2,378.8 |
2,022.6 |
17.6 |
||||||
Fleet and other |
267.5 |
114.3 |
134.0 |
418.9 |
293.8 |
42.6 |
||||||
Total revenues |
8,277.0 |
7,295.7 |
13.5 % |
23,368.0 |
21,241.3 |
10.0 % |
||||||
Cost of sales: |
||||||||||||
New vehicle retail |
3,526.9 |
2,903.2 |
21.5 |
10,099.6 |
8,403.9 |
20.2 |
||||||
Used vehicle retail |
2,431.2 |
2,264.5 |
7.4 |
6,735.4 |
6,533.6 |
3.1 |
||||||
Used vehicle wholesale |
322.1 |
374.8 |
(14.1) |
1,091.9 |
1,131.5 |
(3.5) |
||||||
Service, body and parts |
375.2 |
328.0 |
14.4 |
1,077.7 |
945.9 |
13.9 |
||||||
Fleet and other |
250.3 |
111.0 |
125.5 |
395.2 |
283.1 |
39.6 |
||||||
Total cost of sales |
6,905.7 |
5,981.5 |
15.5 |
19,399.8 |
17,298.0 |
12.2 |
||||||
Gross profit |
1,371.3 |
1,314.2 |
4.3 % |
3,968.2 |
3,943.3 |
0.6 % |
||||||
Financing operations (loss) income |
(4.4) |
(4.6) |
(4.3) % |
(43.8) |
3.7 |
(1,283.8) % |
||||||
SG&A expense |
850.8 |
754.2 |
12.8 |
2,458.1 |
2,291.3 |
7.3 |
||||||
Depreciation and amortization |
50.8 |
40.5 |
25.4 |
146.4 |
115.0 |
27.3 |
||||||
Income from operations |
465.3 |
514.9 |
(9.6) % |
1,319.9 |
1,540.7 |
(14.3) % |
||||||
Floor plan interest expense |
(40.2) |
(10.7) |
275.7 |
(102.6) |
(19.4) |
428.9 |
||||||
Other interest expense |
(58.5) |
(36.3) |
61.2 |
(141.5) |
(90.8) |
55.8 |
||||||
Other income (expense), net |
(5.3) |
(12.2) |
NM |
6.8 |
(36.6) |
NM |
||||||
Income before income taxes |
361.3 |
455.7 |
(20.7) % |
1,082.6 |
1,393.9 |
(22.3) % |
||||||
Income tax expense |
(96.4) |
(125.4) |
(23.1) |
(287.0) |
(382.1) |
(24.9) |
||||||
Income tax rate |
26.7 % |
27.5 % |
26.5 % |
27.4 % |
||||||||
Net income |
$ 264.9 |
$ 330.3 |
(19.8) % |
$ 795.6 |
$ 1,011.8 |
(21.4) % |
||||||
Net income attributable to non-controlling interests |
(2.1) |
0.5 |
(520.0) % |
(4.7) |
(3.9) |
20.5 % |
||||||
Net income attributable to redeemable non-controlling interest |
(1.3) |
(1.2) |
8.3 % |
(3.6) |
(4.5) |
(20.0) % |
||||||
Net income attributable to LAD |
$ 261.5 |
$ 329.6 |
(20.7) % |
$ 787.3 |
$ 1,003.4 |
(21.5) % |
||||||
Diluted earnings per share attributable to LAD: |
||||||||||||
Net income per share |
$ 9.46 |
$ 11.92 |
(20.6) % |
$ 28.54 |
$ 35.10 |
(18.7) % |
||||||
Diluted shares outstanding |
27.6 |
27.6 |
— % |
27.6 |
28.6 |
(3.5) % |
||||||
NM - not meaningful |
||||||||||||
LAD |
||||||||||||
Three months ended |
% |
Nine months ended |
% |
|||||||||
Increase |
Increase |
|||||||||||
2023 |
2022 |
(Decrease) |
2023 |
2022 |
(Decrease) |
|||||||
Gross margin |
||||||||||||
New vehicle retail |
9.2 % |
12.2 % |
(300) bps |
9.7 % |
12.6 % |
(290) bps |
||||||
Used vehicle retail |
7.2 |
8.2 |
(100) |
7.8 |
9.2 |
(140) |
||||||
Finance and insurance |
100.0 |
100.0 |
— |
100.0 |
100.0 |
— |
||||||
Service, body and parts |
55.2 |
54.0 |
120 |
54.7 |
53.2 |
150 |
||||||
Gross profit margin |
16.6 |
18.0 |
(140) |
17.0 |
18.6 |
(160) |
||||||
Unit sales |
||||||||||||
New vehicle retail |
82,188 |
69,573 |
18.1 % |
233,521 |
203,437 |
14.8 % |
||||||
Used vehicle retail |
88,625 |
81,173 |
9.2 |
247,340 |
235,930 |
4.8 |
||||||
Average selling price |
||||||||||||
New vehicle retail |
$ 47,279 |
$ 47,531 |
(0.5) % |
$ 47,874 |
$ 47,284 |
1.2 % |
||||||
Used vehicle retail |
29,565 |
30,377 |
(2.7) |
29,525 |
30,505 |
(3.2) |
||||||
Average gross profit per unit |
||||||||||||
New vehicle retail |
$ 4,367 |
$ 5,803 |
(24.7) % |
$ 4,624 |
$ 5,975 |
(22.6) % |
||||||
Used vehicle retail |
2,132 |
2,479 |
(14.0) |
2,294 |
2,812 |
(18.4) |
||||||
Finance and insurance |
2,045 |
2,211 |
(7.5) |
2,091 |
2,224 |
(6.0) |
||||||
Total vehicle(1) |
5,218 |
6,148 |
(15.1) |
5,497 |
6,500 |
(15.4) |
||||||
Revenue mix |
||||||||||||
New vehicle retail |
46.9 % |
45.3 % |
47.8 % |
45.3 % |
||||||||
Used vehicle retail |
31.7 |
33.8 |
31.3 |
33.9 |
||||||||
Used vehicle wholesale |
3.8 |
5.0 |
4.6 |
5.3 |
||||||||
Finance and insurance, net |
4.2 |
4.6 |
4.3 |
4.6 |
||||||||
Service, body and parts |
10.1 |
9.8 |
10.2 |
9.5 |
||||||||
Fleet and other |
3.3 |
1.5 |
1.8 |
1.4 |
||||||||
Gross Profit Mix |
||||||||||||
New vehicle retail |
26.2 % |
30.7 % |
27.2 % |
30.8 % |
||||||||
Used vehicle retail |
13.8 |
15.3 |
14.3 |
16.8 |
||||||||
Used vehicle wholesale |
(0.4) |
(0.9) |
(0.2) |
— |
||||||||
Finance and insurance, net |
25.5 |
25.4 |
25.3 |
24.8 |
||||||||
Service, body and parts |
33.6 |
29.2 |
32.8 |
27.3 |
||||||||
Fleet and other |
1.3 |
0.3 |
0.6 |
0.3 |
||||||||
Adjusted |
As reported |
Adjusted |
As reported |
|||||||||||||
Three months ended |
Three months ended |
Nine months ended |
Nine months ended |
|||||||||||||
Other metrics |
2023 |
2022 |
2023 |
2022 |
2023 |
2022 |
2023 |
2022 |
||||||||
SG&A as a % of revenue |
10.4 % |
10.8 % |
10.3 % |
10.3 % |
10.5 % |
11.0 % |
10.5 % |
10.8 % |
||||||||
SG&A as a % of gross profit |
62.7 |
60.0 |
62.0 |
57.4 |
61.9 |
59.1 |
61.9 |
58.1 |
||||||||
Operating profit as a % of revenue |
5.5 |
6.6 |
5.6 |
7.1 |
5.7 |
7.1 |
5.6 |
7.3 |
||||||||
Operating profit as a % of gross profit |
33.2 |
36.6 |
33.9 |
39.2 |
33.3 |
38.1 |
33.3 |
39.1 |
||||||||
Pretax margin |
4.3 |
5.8 |
4.4 |
6.2 |
4.6 |
6.5 |
4.6 |
6.6 |
||||||||
Net profit margin |
3.1 |
4.2 |
3.2 |
4.5 |
3.4 |
4.8 |
3.4 |
4.8 |
||||||||
(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 |
||||||||||||
Three months ended |
% |
Nine months ended |
% |
|||||||||
Increase |
Increase |
|||||||||||
2023 |
2022 |
(Decrease) |
2023 |
2022 |
(Decrease) |
|||||||
Revenues |
||||||||||||
New vehicle retail |
$ 3,403.7 |
$ 3,226.2 |
5.5 % |
$ 9,672.4 |
$ 9,370.7 |
3.2 % |
||||||
Used vehicle retail |
2,215.6 |
2,410.3 |
(8.1) |
6,237.0 |
7,012.3 |
(11.1) |
||||||
Finance and insurance |
315.0 |
325.9 |
(3.3) |
897.0 |
951.3 |
(5.7) |
||||||
Service, body and parts |
720.8 |
691.2 |
4.3 |
2,082.7 |
1,956.9 |
6.4 |
||||||
Total revenues |
7,045.6 |
7,122.8 |
(1.1) |
20,052.1 |
20,679.1 |
(3.0) |
||||||
Gross profit |
||||||||||||
New vehicle retail |
$ 306.6 |
$ 394.4 |
(22.3) % |
$ 927.0 |
$ 1,185.5 |
(21.8) % |
||||||
Used vehicle retail |
158.7 |
195.4 |
(18.8) |
480.4 |
643.2 |
(25.3) |
||||||
Finance and insurance |
315.0 |
325.9 |
(3.3) |
897.0 |
951.3 |
(5.7) |
||||||
Service, body and parts |
398.8 |
374.0 |
6.6 |
1,135.3 |
1,044.5 |
8.7 |
||||||
Total gross profit |
1,176.3 |
1,281.0 |
(8.2) |
3,438.7 |
3,834.0 |
(10.3) |
||||||
Gross margin |
||||||||||||
New vehicle retail |
9.0 % |
12.2 % |
(320) bps |
9.6 % |
12.7 % |
(310) bps |
||||||
Used vehicle retail |
7.2 |
8.1 |
(90) |
7.7 |
9.2 |
(150) |
||||||
Finance and insurance |
100.0 |
100.0 |
— |
100.0 |
100.0 |
— |
||||||
Service, body and parts |
55.3 |
54.1 |
120 |
54.5 |
53.4 |
110 |
||||||
Gross profit margin |
16.7 |
18.0 |
(130) |
17.1 |
18.5 |
(140) |
||||||
Unit sales |
||||||||||||
New vehicle retail |
71,169 |
67,776 |
5.0 % |
199,430 |
197,812 |
0.8 % |
||||||
Used vehicle retail |
77,434 |
79,124 |
(2.1) |
216,487 |
229,183 |
(5.5) |
||||||
Average selling price |
||||||||||||
New vehicle retail |
$ 47,825 |
$ 47,601 |
0.5 % |
$ 48,500 |
$ 47,372 |
2.4 % |
||||||
Used vehicle retail |
28,613 |
30,463 |
(6.1) |
28,810 |
30,597 |
(5.8) |
||||||
Average gross profit per unit |
||||||||||||
New vehicle retail |
$ 4,308 |
$ 5,818 |
(26.0) % |
$ 4,648 |
$ 5,993 |
(22.4) % |
||||||
Used vehicle retail |
2,049 |
2,469 |
(17.0) |
2,219 |
2,807 |
(20.9) |
||||||
Finance and insurance |
2,120 |
2,218 |
(4.4) |
2,157 |
2,228 |
(3.2) |
||||||
Total vehicle(1) |
5,208 |
6,155 |
(15.4) |
5,516 |
6,511 |
(15.3) |
||||||
(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 |
|||||
As of |
|||||
September 30, |
December 31, |
September 30, |
|||
2023 |
2022 |
2022 |
|||
Days Supply(1) |
|||||
New vehicle inventory |
55 |
47 |
39 |
||
Used vehicle inventory |
58 |
55 |
65 |
||
(1) Days supply calculated based on current inventory levels, including in-transit vehicles, and a 30-day historical cost of sales level. |
|||||
Selected Financing Operations Financial Information
Three months ended September 30, |
Nine months ended September 30, |
||||||||||||||
($ in millions) |
2023 |
% (1) |
2022 |
% (1) |
2023 |
% (1) |
2022 |
% (1) |
|||||||
Interest margin: |
|||||||||||||||
Interest, fee, and lease income |
$ 72.4 |
9.3 |
$ 32.8 |
8.0 |
$ 190.3 |
9.3 |
$ 82.2 |
8.3 |
|||||||
Interest expense |
(42.5) |
(5.4) |
(13.3) |
(3.3) |
(125.5) |
(6.1) |
(23.3) |
(2.4) |
|||||||
Total interest margin |
$ 29.9 |
3.8 |
$ 19.5 |
4.8 |
$ 64.8 |
3.2 |
$ 58.9 |
5.9 |
|||||||
Provision expense |
$ (23.1) |
(3.0) |
$ (14.5) |
(3.6) |
$ (75.0) |
(3.7) |
$ (25.5) |
(2.6) |
|||||||
Financing operations income (loss) |
$ (4.4) |
(0.6) |
$ (4.6) |
(1.1) |
$ (43.8) |
(2.1) |
$ 3.7 |
0.4 |
|||||||
Total average managed finance receivables |
$ 3,092.4 |
$ 1,616.8 |
$ 2,731.0 |
$ 1,324.9 |
|||||||||||
Ending funded managed receivables |
$ 2,701.7 |
$ 1,501.3 |
$ 2,701.7 |
$ 1,501.3 |
|||||||||||
% of ending managed receivables |
84.3 % |
82.4 % |
84.3 % |
82.4 % |
|||||||||||
(1) Annualized percentage of total average managed finance receivables |
|||||||||||||||
LAD |
||||
September 30, 2023 |
December 31, 2022 |
|||
Cash and restricted cash |
$ 256.2 |
$ 246.7 |
||
Trade receivables, net |
999.3 |
813.1 |
||
Inventories, net |
4,404.5 |
3,409.4 |
||
Other current assets |
158.2 |
161.7 |
||
Total current assets |
$ 5,818.2 |
$ 4,630.9 |
||
Property and equipment, net |
3,947.7 |
3,574.6 |
||
Finance receivables, net |
3,102.1 |
2,187.6 |
||
Intangibles |
3,873.3 |
3,316.9 |
||
Other non-current assets |
1,528.5 |
1,296.6 |
||
Total assets |
$ 18,269.8 |
$ 15,006.6 |
||
Floor plan notes payable |
3,124.6 |
2,116.6 |
||
Other current liabilities |
1,250.7 |
1,061.6 |
||
Total current liabilities |
$ 4,375.3 |
$ 3,178.2 |
||
Long-term debt, less current maturities |
5,152.8 |
5,088.3 |
||
Non-recourse notes payable, less current maturities |
1,435.9 |
422.2 |
||
Other long-term liabilities and deferred revenue |
1,239.0 |
1,066.8 |
||
Total liabilities |
$ 12,203.0 |
$ 9,755.5 |
||
Equity |
6,066.8 |
5,251.1 |
||
Total liabilities & equity |
$ 18,269.8 |
$ 15,006.6 |
||
LAD |
||||
Nine months ended September 30, |
||||
Cash flows from operating activities: |
2023 |
2022 |
||
Net income |
$ 795.6 |
$ 1,011.8 |
||
Adjustments to reconcile net income to net cash used in operating activities |
250.2 |
237.5 |
||
Changes in: |
||||
Inventories |
(498.2) |
(852.4) |
||
Finance receivables, net |
(907.0) |
(946.7) |
||
Floor plan notes payable, net |
292.0 |
101.1 |
||
Other operating activities |
(109.8) |
(68.8) |
||
Net cash used in operating activities |
(177.2) |
(517.5) |
||
Cash flows from investing activities: |
||||
Capital expenditures |
(163.7) |
(209.8) |
||
Cash paid for acquisitions, net of cash acquired |
(1,204.7) |
(962.6) |
||
Proceeds from sales of stores |
136.1 |
148.0 |
||
Other investing activities |
(8.0) |
7.1 |
||
Net cash used in investing activities |
(1,240.3) |
(1,017.3) |
||
Cash flows from financing activities: |
||||
Net borrowings on floor plan notes payable, non-trade |
426.7 |
429.6 |
||
Net borrowings non-recourse notes payable |
1,047.7 |
159.5 |
||
Net borrowings (repayments) of other debt and finance lease liabilities |
(5.7) |
1,675.6 |
||
Proceeds from issuance of common stock |
23.0 |
28.1 |
||
Repurchase of common stock |
(14.5) |
(644.4) |
||
Dividends paid |
(39.1) |
(33.8) |
||
Other financing activity |
(11.1) |
(14.6) |
||
Net cash provided by financing activities |
1,427.0 |
1,600.0 |
||
Effect of exchange rate changes on cash and restricted cash |
5.7 |
(3.3) |
||
Change in cash and restricted cash |
15.2 |
61.9 |
||
Cash and restricted cash at beginning of period |
271.5 |
178.4 |
||
Cash and restricted cash at end of period |
286.7 |
240.3 |
||
LAD |
||||
Nine months ended September 30, |
||||
Net cash provided by operating activities |
2023 |
2022 |
||
As reported |
$ (177.2) |
$ (517.5) |
||
Floor plan notes payable, non-trade, net |
426.7 |
429.6 |
||
Adjust: finance receivables activity |
907.0 |
946.7 |
||
Less: Borrowings on floor plan notes payable, non-trade associated with acquired new vehicle inventory |
(110.6) |
(72.4) |
||
Adjusted |
$ 1,045.9 |
$ 786.4 |
||
LAD |
|||||||||||||
Three Months Ended September 30, 2023 |
|||||||||||||
As reported |
Net disposal |
Investment |
Insurance |
Acquisition |
Contract |
Adjusted |
|||||||
Selling, general and administrative |
$ 850.8 |
$ 23.1 |
$ — |
$ (4.6) |
$ (4.8) |
$ (4.2) |
$ 860.3 |
||||||
Operating income |
465.3 |
(23.1) |
— |
4.6 |
4.8 |
4.2 |
455.8 |
||||||
Other income (expense), net |
(5.3) |
— |
0.7 |
— |
— |
— |
(4.6) |
||||||
Income before income taxes |
361.3 |
(23.1) |
0.7 |
4.6 |
4.8 |
4.2 |
352.5 |
||||||
Income tax (provision) benefit |
(96.4) |
6.1 |
— |
(1.2) |
(0.8) |
(1.1) |
(93.4) |
||||||
Net income |
$ 264.9 |
$ (17.0) |
$ 0.7 |
$ 3.4 |
$ 4.0 |
$ 3.1 |
$ 259.1 |
||||||
Net income attributable to non-controlling interests |
(2.1) |
— |
— |
— |
— |
— |
(2.1) |
||||||
Net income attributable to redeemable non-controlling interest |
(1.3) |
— |
— |
— |
— |
— |
(1.3) |
||||||
Net income attributable to LAD |
$ 261.5 |
$ (17.0) |
$ 0.7 |
$ 3.4 |
$ 4.0 |
$ 3.1 |
$ 255.7 |
||||||
Diluted earnings per share attributable to LAD |
$ 9.46 |
$ (0.62) |
$ 0.03 |
$ 0.12 |
$ 0.15 |
$ 0.11 |
$ 9.25 |
||||||
Diluted share count |
27.6 |
||||||||||||
Three Months Ended September 30, 2022 |
|||||||||
As reported |
Net disposal |
Investment |
Acquisition |
Adjusted |
|||||
Selling, general and administrative |
$ 754.2 |
$ 36.5 |
$ — |
$ (2.0) |
$ 788.7 |
||||
Operating income |
514.9 |
(36.5) |
— |
2.0 |
480.4 |
||||
Other income (expense), net |
(12.2) |
— |
(0.3) |
— |
(12.5) |
||||
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 |
||||||||
LAD |
|||||||||||||
Nine Months Ended September 30, 2023 |
|||||||||||||
As reported |
Net disposal |
Investment |
Insurance |
Acquisition |
Contract |
Adjusted |
|||||||
Selling, general and administrative |
$ 2,458.1 |
$ 31.4 |
$ — |
$ (7.1) |
$ (10.5) |
$ (14.4) |
$ 2,457.5 |
||||||
Operating income |
1,319.9 |
(31.4) |
— |
7.1 |
10.5 |
14.4 |
1,320.5 |
||||||
Other income (expense), net |
6.8 |
— |
(0.2) |
— |
— |
— |
6.6 |
||||||
Income before income taxes |
1,082.6 |
(31.4) |
(0.2) |
7.1 |
10.5 |
14.4 |
1,083.0 |
||||||
Income tax (provision) benefit |
(287.0) |
8.5 |
— |
(1.9) |
(1.5) |
(3.9) |
(285.8) |
||||||
Net income |
$ 795.6 |
$ (22.9) |
$ (0.2) |
$ 5.2 |
$ 9.0 |
$ 10.5 |
$ 797.2 |
||||||
Net income attributable to non-controlling interests |
(4.7) |
— |
— |
— |
— |
— |
(4.7) |
||||||
Net income attributable to redeemable non-controlling interest |
(3.6) |
— |
— |
— |
— |
— |
(3.6) |
||||||
Net income attributable to LAD |
$ 787.3 |
$ (22.9) |
$ (0.2) |
$ 5.2 |
$ 9.0 |
$ 10.5 |
$ 788.9 |
||||||
Diluted earnings per share attributable to LAD |
$ 28.54 |
$ (0.83) |
$ — |
$ 0.19 |
$ 0.33 |
$ 0.38 |
$ 28.61 |
||||||
Diluted share count |
27.6 |
||||||||||||
Nine Months Ended September 30, 2022 |
|||||||||
As reported |
Net disposal |
Investment |
Acquisition |
Adjusted |
|||||
Selling, general and administrative |
$ 2,291.3 |
$ 49.6 |
$ — |
$ (10.1) |
$ 2,330.8 |
||||
Operating income |
1,540.7 |
(49.6) |
— |
10.1 |
1,501.2 |
||||
Other income (expense), net |
(36.6) |
— |
32.6 |
— |
(4.0) |
||||
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 |
||||||||
LAD |
||||||||||||
Three months ended |
% |
Nine months ended |
% |
|||||||||
Increase |
Increase |
|||||||||||
2023 |
2022 |
(Decrease) |
2023 |
2022 |
(Decrease) |
|||||||
EBITDA and Adjusted EBITDA |
||||||||||||
Net income |
$ 264.9 |
$ 330.3 |
(19.8) % |
$ 795.6 |
$ 1,011.8 |
(21.4) % |
||||||
Flooring interest expense |
40.2 |
10.7 |
275.7 |
102.6 |
19.4 |
428.9 |
||||||
Other interest expense |
58.5 |
36.3 |
61.2 |
141.5 |
90.8 |
55.8 |
||||||
Financing operations interest expense |
42.5 |
13.3 |
219.5 |
125.5 |
23.3 |
438.6 |
||||||
Income tax expense |
96.4 |
125.4 |
(23.1) |
287.0 |
382.1 |
(24.9) |
||||||
Depreciation and amortization |
50.8 |
40.5 |
25.4 |
146.4 |
115.0 |
27.3 |
||||||
Financing operations depreciation expense |
2.0 |
1.5 |
33.3 % |
6.3 |
7.1 |
(11.3) % |
||||||
EBITDA |
$ 555.3 |
$ 558.0 |
(0.5) % |
$ 1,604.9 |
$ 1,649.5 |
(2.7) % |
||||||
Other adjustments: |
||||||||||||
Less: flooring interest expense |
$ (40.2) |
$ (10.7) |
275.7 |
$ (102.6) |
$ (19.4) |
428.9 |
||||||
Less: financing operations interest expense |
(42.5) |
(13.3) |
219.5 |
(125.5) |
(23.3) |
438.6 |
||||||
Less: used vehicle line of credit interest |
(6.4) |
(2.6) |
146.2 |
(11.2) |
(4.8) |
133.3 |
||||||
Add: acquisition expenses |
4.8 |
2.0 |
140.0 |
10.5 |
10.1 |
4.0 |
||||||
Less: gain on divestitures |
(23.1) |
(36.5) |
NM |
(31.4) |
(49.6) |
NM |
||||||
Add: investment loss (gain) |
0.7 |
(0.3) |
NM |
(0.2) |
32.6 |
NM |
||||||
Add: insurance reserves |
4.6 |
— |
NM |
7.1 |
— |
NM |
||||||
Add: contract buyouts |
4.2 |
— |
NM |
14.4 |
— |
NM |
||||||
Adjusted EBITDA |
$ 457.4 |
$ 496.6 |
(7.9) % |
$ 1,366.0 |
$ 1,595.1 |
(14.4) % |
||||||
NM - not meaningful |
||||||||||||
As of |
% |
|||||
September 30, |
Increase |
|||||
Net Debt to Adjusted EBITDA |
2023 |
2022 |
(Decrease) |
|||
Floor plan notes payable: non-trade |
$ 1,863.4 |
$ 1,208.1 |
54.2 % |
|||
Floor plan notes payable |
1,261.2 |
454.8 |
177.3 |
|||
Used and service loaner vehicle inventory financing facility |
860.2 |
1,061.8 |
(19.0) |
|||
Revolving lines of credit |
1,281.4 |
1,046.0 |
22.5 |
|||
Warehouse facilities |
585.0 |
350.0 |
67.1 |
|||
Non-recourse notes payable |
1,469.9 |
477.0 |
208.2 |
|||
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 |
— |
|||
Finance leases and other debt |
746.8 |
677.7 |
10.2 |
|||
Unamortized debt issuance costs |
(33.4) |
(26.8) |
24.6 |
|||
Total debt |
$ 9,784.5 |
$ 6,998.6 |
39.8 % |
|||
Less: Floor plan related debt |
$ (3,984.8) |
$ (2,724.7) |
46.2 % |
|||
Less: Financing operations related debt |
(2,054.9) |
(827.0) |
148.5 |
|||
Less: Unrestricted cash |
(146.9) |
(172.7) |
(14.9) |
|||
Less: Availability on used vehicle and service loaner financing facilities |
(66.8) |
(42.5) |
57.2 |
|||
Net Debt |
$ 3,531.1 |
$ 3,231.7 |
9.3 % |
|||
TTM Adjusted EBITDA |
$ 1,786.5 |
$ 2,131.2 |
(16.2) % |
|||
Net debt to Adjusted EBITDA |
1.98 x |
1.52 x |
||||
NM - not meaningful |
||||||
SOURCE Lithia Motors, Inc.
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