Announces Dividend of $0.53 per Share for Second Quarter
MEDFORD,
Ore., Aug. 1, 2024 /PRNewswire/ -- Lithia &
Driveway (NYSE: LAD) today reported the highest second quarter
revenue in company history and the first profitable quarter for
Financing Operations, which includes Driveway Finance
Corporation.
Second quarter 2024 revenue increased 14% to $9.2 billion from $8.1
billion in the second quarter of 2023.
Second quarter 2024 net income attributable to LAD per
diluted share was $7.87, a 27%
decrease from $10.78 per diluted
share reported in the second quarter of 2023. Adjusted second
quarter 2024 net income attributable to LAD per diluted share was
$7.87, a 28% decrease compared to
$10.96 per diluted share in the same
period of 2023. Unrealized investment gains partially offset by
foreign currency exchange losses positively impacted earnings per
share by $0.75.
Second quarter 2024 net income was $217 million, a 28% decrease compared to net
income of $301 million in the same
period of 2023. Adjusted second quarter 2024 net income was
$217 million, a 29% decrease compared
to adjusted net income of $306
million for the same period of 2023.
As shown in the attached non-GAAP reconciliation tables, the
2024 second quarter adjusted results had offsetting non-core items
related to insurance reserves, tax attributes, and acquisition
expenses. The 2023 second quarter adjusted results exclude a
$0.18 per diluted share impact
resulting from non-core items, including acquisition expenses and
insurance reserves, partially offset by a net gain on the sale of
stores.
Key Second Quarter 2024 Highlights:
- Total revenues increased 14% compared to second quarter
2023
- Diluted net income per share improved from $6.11 to $7.87, a
29% increase, from first quarter 2024
- Financing operations first profitable quarter with income of
$7 million
- Driveway Finance Corporation (DFC) originated $562 million in loans, total portfolio of
$3.6 billion
- Repurchased 2.9% of outstanding shares
"In the second quarter, our teams focused on operating
efficiency and continuity as we responded to the continued
normalization of margins and the disruption created by the CDK
cyberattack. Our teams demonstrated an impressive effort to quickly
pivot and provide solutions to maintain our ability to stay
operational across our network and support the restoration of our
environment," said Bryan DeBoer,
President and CEO. "Our diversified model demonstrated its
strength, delivering the first quarter of profitability in Driveway
Finance and continuing maturity of our adjacencies as we expand our
omnichannel ecosystem to deliver the best experience for our
customers. We have opportunistically rebalanced our capital
allocation from acquisitions toward returns to our shareholders,
with the long-term target of delivering $2 in EPS per billion in revenues."
For the first six months of 2024 revenues increased 18% to
$17.8 billion, compared to
$15.1 billion in 2023.
Net income attributable to LAD for the first six months of 2024
was $13.75 per diluted share,
compared to $19.08 per diluted share
in 2023, a decrease of 28%. Adjusted net income attributable to LAD
per diluted share for the first six months of 2024 decreased 28% to
$13.97 from $19.38 in the same period of 2023. Unrealized
gain on investments partially offset by foreign currency
exchange losses positively impacted earnings per share by
$0.60.
Corporate Development
During the second quarter, LAD
expanded its network in the Southeast region with the acquisition
of two stores in Tennessee and
added Woodbridge Hyundai in the greater Toronto area. Year-to-date, we have acquired
over $5.6 billion in annualized
revenues.
LAD expanded its omnichannel strategy with the purchase of a
minority stake in Wheels, Inc. in partnership with Marubeni
Corporation. Wheels, Inc. is one of the largest fleet
management companies in North
America with a best-in-class management team and a robust
competitive moat. This investment in a highly profitable
fleet management operator is expected to create transformative
synergies between our retail platform and fleet operations. This
transaction was completed in the third quarter.
Balance Sheet Update
LAD ended the second quarter with
approximately $1.3 billion in cash
and cash equivalents, marketable securities, and availability on
our revolving lines of credit. In addition, unfinanced real estate
could provide additional liquidity of approximately $0.3 billion.
Dividend Payment and Share Repurchases
The Board of
Directors approved a dividend of $0.53 per share related to second quarter 2024
financial results. The dividend is expected to be paid on
August 23, 2024 to shareholders of record on August 9,
2024.
During 2024, we repurchased approximately 793,000 shares at a
weighted average price of $256. Under
the current share repurchase authorization approximately
$613.8 million remains available.
Second Quarter Earnings Conference Call and Updated
Presentation
The second quarter 2024 conference call may be
accessed at 10:00 a.m. ET today by
telephone at 877-407-8029. An updated presentation highlighting the
second quarter 2024 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. Simple, convenient, and
transparent experiences are offered through our comprehensive
network of physical locations, e-commerce platforms, captive
finance solutions, fleet management offerings, 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 our achieving our
long-term EPS and other financial 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
June 30,
|
|
%
|
|
Six months ended
June 30,
|
|
%
|
|
|
Favorable
|
|
|
Favorable
|
|
2024
|
|
2023
|
|
(Unfavorable)
|
|
2024
|
|
2023
|
|
(Unfavorable)
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
$
4,403.7
|
|
$
4,014.7
|
|
9.7 %
|
|
$
8,417.8
|
|
$
7,293.6
|
|
15.4 %
|
Used vehicle
retail
|
2,986.0
|
|
2,455.1
|
|
21.6
|
|
5,786.8
|
|
4,682.6
|
|
23.6
|
Used vehicle
wholesale
|
289.5
|
|
403.9
|
|
(28.3)
|
|
627.2
|
|
766.3
|
|
(18.2)
|
Finance and
insurance
|
360.9
|
|
337.9
|
|
6.8
|
|
701.5
|
|
656.2
|
|
6.9
|
Service, body and
parts
|
950.7
|
|
804.4
|
|
18.2
|
|
1,863.5
|
|
1,540.8
|
|
20.9
|
Fleet and
other
|
241.0
|
|
95.5
|
|
152.4
|
|
396.8
|
|
151.5
|
|
161.9
|
Total
revenues
|
9,231.8
|
|
8,111.5
|
|
13.8 %
|
|
17,793.6
|
|
15,091.0
|
|
17.9 %
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
4,082.9
|
|
3,627.6
|
|
12.6
|
|
7,801.7
|
|
6,572.6
|
|
18.7
|
Used vehicle
retail
|
2,790.4
|
|
2,242.4
|
|
24.4
|
|
5,408.5
|
|
4,304.3
|
|
25.7
|
Used vehicle
wholesale
|
289.0
|
|
404.6
|
|
(28.6)
|
|
627.7
|
|
769.8
|
|
(18.5)
|
Service, body and
parts
|
421.3
|
|
360.5
|
|
16.9
|
|
832.1
|
|
702.5
|
|
18.4
|
Fleet and
other
|
224.3
|
|
91.3
|
|
145.7
|
|
364.5
|
|
145.5
|
|
150.5
|
Total cost of
sales
|
7,807.9
|
|
6,726.4
|
|
16.1
|
|
15,034.5
|
|
12,494.7
|
|
20.3
|
Gross
profit
|
1,423.9
|
|
1,385.1
|
|
2.8 %
|
|
2,759.1
|
|
2,596.3
|
|
6.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance operations
income (loss)
|
7.2
|
|
(18.7)
|
|
138.5 %
|
|
5.4
|
|
(39.5)
|
|
113.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
SG&A
expense
|
975.2
|
|
842.2
|
|
15.8
|
|
1,909.5
|
|
1,606.6
|
|
18.9
|
Depreciation and
amortization
|
62.3
|
|
48.4
|
|
28.7
|
|
120.0
|
|
95.6
|
|
25.5
|
Income from
operations
|
393.6
|
|
475.8
|
|
(17.3) %
|
|
735.0
|
|
854.6
|
|
(14.0) %
|
Floor plan interest
expense
|
(76.6)
|
|
(34.7)
|
|
(120.7)
|
|
(137.3)
|
|
(62.3)
|
|
(120.4)
|
Other interest
expense
|
(61.2)
|
|
(43.9)
|
|
(39.4)
|
|
(124.8)
|
|
(83.0)
|
|
(50.4)
|
Other income
|
27.0
|
|
9.8
|
|
175.5
|
|
30.4
|
|
12.0
|
|
153.3
|
Income before income
taxes
|
282.8
|
|
407.0
|
|
(30.5) %
|
|
503.3
|
|
721.3
|
|
(30.2) %
|
Income tax
expense
|
(66.2)
|
|
(105.9)
|
|
37.5
|
|
(121.8)
|
|
(190.6)
|
|
36.1
|
Income tax
rate
|
23.4 %
|
|
26.0 %
|
|
|
|
24.2 %
|
|
26.4 %
|
|
|
Net
income
|
$
216.6
|
|
$
301.1
|
|
(28.1) %
|
|
$
381.5
|
|
$
530.7
|
|
(28.1) %
|
Net income attributable
to non-controlling
interests
|
(1.0)
|
|
(1.8)
|
|
44.4 %
|
|
(2.5)
|
|
(2.5)
|
|
— %
|
Net income attributable
to redeemable non-
controlling interest
|
(1.4)
|
|
(2.1)
|
|
33.3 %
|
|
(2.3)
|
|
(2.3)
|
|
— %
|
Net income
attributable to LAD
|
$
214.2
|
|
$
297.2
|
|
(27.9) %
|
|
$
376.7
|
|
$
525.9
|
|
(28.4) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable
to LAD:
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share
|
$ 7.87
|
|
$
10.78
|
|
(27.0) %
|
|
$
13.75
|
|
$
19.08
|
|
(27.9) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares
outstanding
|
27.2
|
|
27.6
|
|
(1.4) %
|
|
27.4
|
|
27.6
|
|
(0.7) %
|
LAD
|
Key Performance
Metrics (Unaudited)
|
|
|
Three months
ended
June 30,
|
|
%
|
|
Six months ended
June 30,
|
|
%
|
|
|
Favorable
|
|
|
Favorable
|
|
2024
|
|
2023
|
|
(Unfavorable)
|
|
2024
|
|
2023
|
|
(Unfavorable)
|
Gross
margin
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
7.3 %
|
|
9.6 %
|
|
(230) bps
|
|
7.3 %
|
|
9.9 %
|
|
(260) bps
|
Used vehicle
retail
|
6.5
|
|
8.7
|
|
(220)
|
|
6.5
|
|
8.1
|
|
(160)
|
Finance and
insurance
|
100.0
|
|
100.0
|
|
—
|
|
100.0
|
|
100.0
|
|
—
|
Service, body and
parts
|
55.7
|
|
55.2
|
|
50
|
|
55.3
|
|
54.4
|
|
90
|
Gross profit
margin
|
15.4
|
|
17.1
|
|
(170)
|
|
15.5
|
|
17.2
|
|
(170)
|
|
|
|
|
|
|
|
|
|
|
|
|
Unit
sales
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
92,508
|
|
83,539
|
|
10.7 %
|
|
178,191
|
|
151,334
|
|
17.7 %
|
Used vehicle
retail
|
109,249
|
|
80,573
|
|
35.6
|
|
211,685
|
|
158,715
|
|
33.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Average selling
price
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
$
47,603
|
|
$
48,058
|
|
(0.9) %
|
|
$
47,240
|
|
$
48,195
|
|
(2.0) %
|
Used vehicle
retail
|
27,332
|
|
30,471
|
|
(10.3)
|
|
27,337
|
|
29,503
|
|
(7.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Average gross profit
per unit
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
$ 3,467
|
|
$ 4,635
|
|
(25.2) %
|
|
$
3,457
|
|
$
4,764
|
|
(27.4) %
|
Used vehicle
retail
|
1,790
|
|
2,640
|
|
(32.2)
|
|
1,787
|
|
2,384
|
|
(25.0)
|
Finance and
insurance
|
1,789
|
|
2,059
|
|
(13.1)
|
|
1,799
|
|
2,117
|
|
(15.0)
|
Total
vehicle(1)
|
4,351
|
|
5,710
|
|
(23.8)
|
|
4,348
|
|
5,651
|
|
(23.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
mix
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
47.7 %
|
|
49.5 %
|
|
|
|
47.3 %
|
|
48.3 %
|
|
|
Used vehicle
retail
|
32.3
|
|
30.3
|
|
|
|
32.5
|
|
31.0
|
|
|
Used vehicle
wholesale
|
3.1
|
|
5.0
|
|
|
|
3.5
|
|
5.1
|
|
|
Finance and insurance,
net
|
3.9
|
|
4.2
|
|
|
|
3.9
|
|
4.3
|
|
|
Service, body and
parts
|
10.3
|
|
9.9
|
|
|
|
10.5
|
|
10.2
|
|
|
Fleet and
other
|
2.7
|
|
1.1
|
|
|
|
2.3
|
|
1.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
Mix
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
22.5 %
|
|
28.0 %
|
|
|
|
22.3 %
|
|
27.8 %
|
|
|
Used vehicle
retail
|
13.7
|
|
15.4
|
|
|
|
13.7
|
|
14.6
|
|
|
Used vehicle
wholesale
|
—
|
|
—
|
|
|
|
—
|
|
(0.1)
|
|
|
Finance and insurance,
net
|
25.3
|
|
24.4
|
|
|
|
25.4
|
|
25.3
|
|
|
Service, body and
parts
|
37.3
|
|
31.9
|
|
|
|
37.4
|
|
32.2
|
|
|
Fleet and
other
|
1.2
|
|
0.3
|
|
|
|
1.2
|
|
0.2
|
|
|
|
Adjusted
|
|
As
reported
|
|
Adjusted
|
|
As
reported
|
|
Three months
ended June 30,
|
|
Three months
ended June 30,
|
|
Six
months ended
June 30,
|
|
Six
months ended
June 30,
|
Other
metrics
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
SG&A as a % of
revenue
|
10.5 %
|
|
10.3 %
|
|
10.6 %
|
|
10.4 %
|
|
10.6 %
|
|
10.6 %
|
|
10.7 %
|
|
10.6 %
|
SG&A as a % of
gross profit
|
67.9
|
|
60.4
|
|
68.5
|
|
60.8
|
|
68.6
|
|
61.5
|
|
69.2
|
|
61.9
|
Operating profit as a %
of revenue
|
4.3
|
|
5.9
|
|
4.3
|
|
5.9
|
|
4.2
|
|
5.7
|
|
4.1
|
|
5.7
|
Operating profit as a %
of gross profit
|
28.2
|
|
34.8
|
|
27.6
|
|
34.4
|
|
27.2
|
|
33.3
|
|
26.6
|
|
32.9
|
Pretax
margin
|
3.1
|
|
5.1
|
|
3.1
|
|
5.0
|
|
2.9
|
|
4.8
|
|
2.8
|
|
4.8
|
Net profit
margin
|
2.3
|
|
3.8
|
|
2.3
|
|
3.7
|
|
2.2
|
|
3.6
|
|
2.1
|
|
3.5
|
|
|
(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
June 30,
|
|
%
|
|
Six months ended
June 30,
|
|
%
|
|
|
Favorable
|
|
|
Favorable
|
|
2024
|
|
2023
|
|
(Unfavorable)
|
|
2024
|
|
2023
|
|
(Unfavorable)
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
$
3,810.0
|
|
$
3,954.6
|
|
(3.7) %
|
|
$
7,069.5
|
|
$
7,140.6
|
|
(1.0) %
|
Used vehicle
retail
|
2,254.0
|
|
2,417.9
|
|
(6.8)
|
|
4,291.3
|
|
4,562.6
|
|
(5.9)
|
Finance and
insurance
|
313.6
|
|
332.5
|
|
(5.7)
|
|
611.2
|
|
643.6
|
|
(5.0)
|
Service, body and
parts
|
778.1
|
|
789.5
|
|
(1.4)
|
|
1,517.7
|
|
1,506.3
|
|
0.8
|
Total
revenues
|
7,478.6
|
|
7,986.2
|
|
(6.4)
|
|
14,113.5
|
|
14,748.5
|
|
(4.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
$ 265.1
|
|
$ 381.5
|
|
(30.5) %
|
|
$
500.8
|
|
$
704.8
|
|
(28.9) %
|
Used vehicle
retail
|
169.5
|
|
209.1
|
|
(18.9)
|
|
322.2
|
|
369.5
|
|
(12.8)
|
Finance and
insurance
|
313.6
|
|
332.5
|
|
(5.7)
|
|
611.2
|
|
643.6
|
|
(5.0)
|
Service, body and
parts
|
438.0
|
|
437.3
|
|
0.2
|
|
847.4
|
|
821.3
|
|
3.2
|
Total gross
profit
|
1,193.5
|
|
1,364.2
|
|
(12.5)
|
|
2,287.9
|
|
2,542.2
|
|
(10.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
7.0 %
|
|
9.6 %
|
|
(260) bps
|
|
7.1 %
|
|
9.9 %
|
|
(280) bps
|
Used vehicle
retail
|
7.5
|
|
8.6
|
|
(110)
|
|
7.5
|
|
8.1
|
|
(60)
|
Finance and
insurance
|
100.0
|
|
100.0
|
|
—
|
|
100.0
|
|
100.0
|
|
—
|
Service, body and
parts
|
56.3
|
|
55.4
|
|
90
|
|
55.8
|
|
54.5
|
|
130
|
Gross profit
margin
|
16.0
|
|
17.1
|
|
(110)
|
|
16.2
|
|
17.2
|
|
(100)
|
|
|
|
|
|
|
|
|
|
|
|
|
Unit
sales
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
78,487
|
|
82,330
|
|
(4.7) %
|
|
146,830
|
|
148,262
|
|
(1.0) %
|
Used vehicle
retail
|
78,223
|
|
79,201
|
|
(1.2)
|
|
152,867
|
|
155,024
|
|
(1.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
Average selling
price
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
$
48,543
|
|
$
48,033
|
|
1.1 %
|
|
$
48,147
|
|
$
48,162
|
|
— %
|
Used vehicle
retail
|
28,816
|
|
30,529
|
|
(5.6)
|
|
28,072
|
|
29,432
|
|
(4.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
Average gross profit
per unit
|
|
|
|
|
|
|
|
|
|
|
|
New vehicle
retail
|
$ 3,378
|
|
$ 4,634
|
|
(27.1) %
|
|
$
3,411
|
|
$
4,754
|
|
(28.2) %
|
Used vehicle
retail
|
2,167
|
|
2,640
|
|
(17.9)
|
|
2,107
|
|
2,383
|
|
(11.6)
|
Finance and
insurance
|
2,001
|
|
2,059
|
|
(2.8)
|
|
2,039
|
|
2,122
|
|
(3.9)
|
Total
vehicle(1)
|
4,762
|
|
5,712
|
|
(16.6)
|
|
4,762
|
|
5,653
|
|
(15.8)
|
|
|
(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)
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
2024
|
|
2024
|
Key Performance by
Country
|
Total
Revenue
|
|
Total Gross
Profit
|
|
Total
Revenue
|
|
Total Gross
Profit
|
United
States
|
77.0 %
|
|
82.7 %
|
|
77.9 %
|
|
83.6 %
|
United
Kingdom
|
19.5 %
|
|
14.3 %
|
|
18.9 %
|
|
13.7 %
|
Canada
|
3.5 %
|
|
3.0 %
|
|
3.2 %
|
|
2.7 %
|
|
As of
|
|
June
30,
|
|
December
31,
|
|
June
30,
|
|
2024
|
|
2023
|
|
2023
|
Days
Supply(1)
|
|
|
|
|
|
New vehicle
inventory
|
87
|
|
65
|
|
51
|
Used vehicle
inventory
|
65
|
|
64
|
|
58
|
|
|
(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
June 30,
|
|
Six months ended
June 30,
|
($ in
millions)
|
2024
|
|
% (1)
|
|
2023
|
|
% (1)
|
|
2024
|
|
% (1)
|
|
2023
|
|
% (1)
|
Interest
margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fee
income
|
$
83.8
|
|
9.3
|
|
$
59.4
|
|
8.4
|
|
$
161.1
|
|
9.1
|
|
$
108.7
|
|
8.4
|
Interest
expense
|
(47.0)
|
|
(5.2)
|
|
(45.6)
|
|
(6.5)
|
|
(94.8)
|
|
(5.4)
|
|
(83.1)
|
|
(6.4)
|
Total interest
margin
|
$
36.8
|
|
4.1
|
|
$
13.8
|
|
2.0
|
|
$
66.3
|
|
3.8
|
|
$
25.6
|
|
2.0
|
Lease income
|
29.0
|
|
|
|
4.6
|
|
|
|
51.4
|
|
|
|
9.2
|
|
|
Depreciation and
amortization
|
(27.3)
|
|
|
|
(2.0)
|
|
|
|
(45.3)
|
|
|
|
(4.4)
|
|
|
Lease income,
net
|
1.7
|
|
|
|
2.6
|
|
|
|
6.1
|
|
|
|
4.8
|
|
|
Selling, general and
administrative
|
(11.1)
|
|
|
|
(9.3)
|
|
|
|
(21.8)
|
|
|
|
(17.9)
|
|
|
Provision
expense
|
(20.2)
|
|
(2.2)
|
|
(25.8)
|
|
(3.6)
|
|
(45.2)
|
|
(2.6)
|
|
(52.0)
|
|
(4.0)
|
Finance operations
income (loss)
|
$
7.2
|
|
|
|
$
(18.7)
|
|
|
|
$
5.4
|
|
|
|
$
(39.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total average managed
finance receivables
|
$
3,632.0
|
|
|
|
$
2,823.3
|
|
|
|
$
3,544.2
|
|
|
|
$
2,618.2
|
|
|
|
|
(1)
|
Annualized percentage
of total average managed finance receivables
|
LAD
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
(In
millions)
|
|
|
June 30,
2024
|
|
December 31,
2023
|
Cash, restricted cash,
and cash equivalents
|
$
674.7
|
|
$
941.4
|
Trade receivables,
net
|
1,205.0
|
|
1,123.1
|
Inventories,
net
|
6,242.9
|
|
4,753.9
|
Other current
assets
|
194.8
|
|
136.8
|
Total current
assets
|
$
8,317.4
|
|
$
6,955.2
|
|
|
|
|
Property and equipment,
net
|
4,615.2
|
|
3,981.4
|
Finance receivables,
net
|
3,623.9
|
|
3,242.3
|
Intangibles
|
4,686.2
|
|
4,332.8
|
Other non-current
assets
|
1,924.5
|
|
1,120.8
|
Total
assets
|
$
23,167.2
|
|
$
19,632.5
|
|
|
|
|
Floor plan notes
payable
|
5,287.5
|
|
3,635.5
|
Other current
liabilities
|
1,693.0
|
|
1,296.7
|
Total current
liabilities
|
$
6,980.5
|
|
$
4,932.2
|
|
|
|
|
Long-term debt, less
current maturities
|
6,071.4
|
|
5,483.7
|
Non-recourse notes
payable, less current maturities
|
1,962.4
|
|
1,671.7
|
Other long-term
liabilities and deferred revenue
|
1,712.8
|
|
1,262.0
|
Total
liabilities
|
$
16,727.1
|
|
$
13,349.6
|
|
|
|
|
Redeemable
non-controlling interest and equity
|
6,440.1
|
|
6,282.9
|
Total liabilities,
redeemable non-controlling interest, and equity
|
$
23,167.2
|
|
$
19,632.5
|
LAD
|
Condensed
Consolidated Statements of Cash
Flows (Unaudited)
|
(In
millions)
|
|
|
Six months ended
June 30,
|
Cash flows from
operating activities:
|
2024
|
|
2023
|
Net income
|
$
381.5
|
|
$
530.7
|
Adjustments to
reconcile net income to net cash used in operating
activities
|
253.3
|
|
174.3
|
Changes in:
|
|
|
|
Inventories
|
(544.1)
|
|
(350.2)
|
Finance receivables,
net
|
(386.9)
|
|
(684.6)
|
Floor plan notes
payable, net
|
384.4
|
|
58.4
|
Other operating
activities
|
55.8
|
|
(27.3)
|
Net cash provided
by (used in) operating activities
|
144.0
|
|
(298.7)
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(209.7)
|
|
(97.1)
|
Cash paid for
acquisitions, net of cash acquired
|
(1,169.5)
|
|
(978.5)
|
Proceeds from sales of
stores
|
6.9
|
|
85.7
|
Other investing
activities
|
(142.8)
|
|
(10.3)
|
Net cash used in
investing activities
|
(1,515.1)
|
|
(1,000.2)
|
Cash flows from
financing activities:
|
|
|
|
Net borrowings on floor
plan notes payable, non-trade
|
444.5
|
|
223.5
|
Net borrowings
non-recourse notes payable
|
320.2
|
|
824.9
|
Net borrowings of other
debt and finance lease liabilities
|
604.5
|
|
249.6
|
Proceeds from issuance
of common stock
|
13.8
|
|
14.9
|
Repurchase of common
stock
|
(217.2)
|
|
(14.5)
|
Dividends
paid
|
(28.2)
|
|
(25.4)
|
Other financing
activity
|
(20.0)
|
|
(24.5)
|
Net cash provided
by financing activities
|
1,117.6
|
|
1,248.5
|
Effect of exchange
rate changes on cash and restricted cash
|
(3.1)
|
|
8.1
|
Change in cash,
restricted cash, and cash equivalents
|
(256.6)
|
|
(42.3)
|
Cash, restricted
cash, and cash equivalents at beginning of period
|
972.0
|
|
271.5
|
Cash, restricted
cash, and cash equivalents at end of period
|
715.4
|
|
229.2
|
LAD
|
Reconciliation of
Non-GAAP Cash Flow from Operations (Unaudited)
|
(In
millions)
|
|
|
Six months ended
June 30,
|
Net cash provided by
operating activities
|
2024
|
|
2023
|
As reported
|
$
144.0
|
|
$
(298.7)
|
Floor plan notes
payable, non-trade, net
|
444.5
|
|
223.5
|
Adjust: finance
receivables activity
|
386.9
|
|
684.6
|
Less: Borrowings on
floor plan notes payable, non-trade associated with
acquired new vehicle inventory
|
(22.7)
|
|
(109.7)
|
Adjusted
|
$
952.7
|
|
$
499.7
|
LAD
|
Reconciliation of
Certain Non-GAAP Financial Measures (Unaudited)
|
(In millions, except
for per share data)
|
|
|
Three Months Ended
June 30, 2024
|
|
As
reported
|
|
Insurance
reserves
|
|
Acquisition
expenses
|
|
Tax
attribute
|
|
Adjusted
|
Selling, general and
administrative
|
$
975.2
|
|
$
(6.0)
|
|
$
(1.8)
|
|
$
—
|
|
$
967.4
|
Operating
income
|
393.6
|
|
6.0
|
|
1.8
|
|
—
|
|
401.4
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
282.8
|
|
6.0
|
|
1.8
|
|
—
|
|
290.6
|
Income tax (provision)
benefit
|
(66.2)
|
|
(1.5)
|
|
1.3
|
|
(7.6)
|
|
(74.0)
|
Net income
|
$
216.6
|
|
$
4.5
|
|
$
3.1
|
|
$
(7.6)
|
|
$
216.6
|
Net income attributable
to non-controlling interests
|
(1.0)
|
|
—
|
|
—
|
|
—
|
|
(1.0)
|
Net income attributable
to redeemable non-controlling
interest
|
(1.4)
|
|
—
|
|
—
|
|
—
|
|
(1.4)
|
Net income attributable
to LAD
|
$
214.2
|
|
$
4.5
|
|
$
3.1
|
|
$
(7.6)
|
|
$
214.2
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to LAD
|
$
7.87
|
|
$
0.17
|
|
$
0.11
|
|
$
(0.28)
|
|
$
7.87
|
Diluted share
count
|
27.2
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2023
|
|
As
reported
|
|
Net disposal
gain on sale
of stores
|
|
Insurance
reserves
|
|
Acquisition
expenses
|
|
Adjusted
|
Selling, general and
administrative
|
$
842.2
|
|
$
1.0
|
|
$
(2.4)
|
|
$
(4.5)
|
|
$
836.3
|
Operating
income
|
475.8
|
|
(1.0)
|
|
2.4
|
|
4.5
|
|
481.7
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
407.0
|
|
(1.0)
|
|
2.4
|
|
4.5
|
|
412.9
|
Income tax (provision)
benefit
|
(105.9)
|
|
0.4
|
|
(0.6)
|
|
(0.5)
|
|
(106.6)
|
Net income
|
$
301.1
|
|
$
(0.6)
|
|
$
1.8
|
|
$
4.0
|
|
$
306.3
|
Net income attributable
to non-controlling interests
|
$
(1.8)
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
(1.8)
|
Net income attributable
to redeemable non-controlling
interest
|
$
(2.1)
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
(2.1)
|
Net income attributable
to LAD
|
$
297.2
|
|
$
(0.6)
|
|
$
1.8
|
|
$
4.0
|
|
$
302.4
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to LAD
|
$
10.78
|
|
$
(0.02)
|
|
$
0.06
|
|
$
0.14
|
|
$
10.96
|
Diluted share
count
|
27.6
|
|
|
|
|
|
|
|
|
LAD
|
Reconciliation of
Certain Non-GAAP Financial Measures (Unaudited)
|
(In millions, except
for per share data)
|
|
|
Six Months Ended
June 30, 2024
|
|
As
reported
|
|
Insurance
reserves
|
|
Acquisition
expenses
|
|
Tax
attribute
|
|
Adjusted
|
Selling, general and
administrative
|
$
1,909.5
|
|
$
(6.0)
|
|
$
(9.5)
|
|
$
—
|
|
$
1,894.0
|
Operating
income
|
735.0
|
|
6.0
|
|
9.5
|
|
—
|
|
750.5
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
503.3
|
|
6.0
|
|
9.5
|
|
—
|
|
518.8
|
Income tax
provision
|
(121.8)
|
|
(1.5)
|
|
(0.3)
|
|
(7.6)
|
|
(131.2)
|
Net income
|
$
381.5
|
|
$
4.5
|
|
$
9.2
|
|
$
(7.6)
|
|
$
387.6
|
Net income attributable
to non-controlling interests
|
(2.5)
|
|
—
|
|
—
|
|
—
|
|
(2.5)
|
Net income attributable
to redeemable non-controlling interest
|
(2.3)
|
|
—
|
|
—
|
|
—
|
|
(2.3)
|
Net income attributable
to LAD
|
$
376.7
|
|
$
4.5
|
|
$
9.2
|
|
$
(7.6)
|
|
$
382.8
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to LAD
|
$
13.75
|
|
$
0.17
|
|
$
0.33
|
|
$
(0.28)
|
|
$
13.97
|
Diluted share
count
|
27.4
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2023
|
|
As
reported
|
|
Net disposal
gain on sale
of stores
|
|
Insurance
reserves
|
|
Acquisition
expenses
|
|
Contract
buyouts
|
|
Adjusted
|
Selling, general and
administrative
|
$
1,606.6
|
|
$
8.2
|
|
$
(2.5)
|
|
$
(5.7)
|
|
$
(10.1)
|
|
$
1,596.5
|
Operating
income
|
854.6
|
|
(8.2)
|
|
2.5
|
|
5.7
|
|
10.1
|
|
864.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
721.3
|
|
(8.2)
|
|
2.5
|
|
5.7
|
|
10.1
|
|
731.4
|
Income tax (provision)
benefit
|
(190.6)
|
|
2.4
|
|
(0.7)
|
|
(0.7)
|
|
(2.7)
|
|
(192.3)
|
Net income
|
$
530.7
|
|
$
(5.8)
|
|
$
1.8
|
|
$
5.0
|
|
$
7.4
|
|
$
539.1
|
Net income attributable
to non-controlling interests
|
(2.5)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2.5)
|
Net income attributable
to redeemable non-
controlling interest
|
(2.3)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2.3)
|
Net income attributable
to LAD
|
$
525.9
|
|
$
(5.8)
|
|
$
1.8
|
|
$
5.0
|
|
$
7.4
|
|
$
534.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to LAD
|
$
19.08
|
|
$
(0.21)
|
|
$
0.06
|
|
$
0.18
|
|
$
0.27
|
|
$
19.38
|
Diluted share
count
|
27.6
|
|
|
|
|
|
|
|
|
|
|
LAD
|
Adjusted EBITDA and
Net Debt to Adjusted EBITDA (Unaudited)
|
(In
millions)
|
|
|
Three months
ended
June 30,
|
|
%
|
|
Six months ended
June 30,
|
|
%
|
|
|
Favorable
|
|
|
Favorable
|
|
2024
|
|
2023
|
|
(Unfavorable)
|
|
2024
|
|
2023
|
|
(Unfavorable)
|
EBITDA and Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$ 216.6
|
|
$ 301.1
|
|
(28.1) %
|
|
$ 381.5
|
|
$ 530.7
|
|
(28.1) %
|
Flooring interest
expense
|
76.6
|
|
34.7
|
|
120.7
|
|
137.3
|
|
62.3
|
|
120.4
|
Other interest
expense
|
61.2
|
|
43.9
|
|
39.4
|
|
124.8
|
|
83.0
|
|
50.4
|
Financing operations
interest expense
|
47.0
|
|
45.6
|
|
3.1
|
|
94.8
|
|
83.1
|
|
14.1
|
Income tax
expense
|
66.2
|
|
105.9
|
|
(37.5)
|
|
121.8
|
|
190.6
|
|
(36.1)
|
Depreciation and
amortization
|
62.3
|
|
48.4
|
|
28.7
|
|
120.0
|
|
95.6
|
|
25.5
|
Financing operations
depreciation expense
|
27.3
|
|
2.0
|
|
1,265.0 %
|
|
45.3
|
|
4.4
|
|
929.5 %
|
EBITDA
|
$ 557.2
|
|
$ 581.6
|
|
(4.2) %
|
|
$
1,025.5
|
|
$
1,049.7
|
|
(2.3) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Less: flooring interest
expense
|
$ (76.6)
|
|
$ (34.7)
|
|
(120.7)
|
|
$
(137.3)
|
|
$ (62.3)
|
|
(120.4)
|
Less: financing
operations interest expense
|
(47.0)
|
|
(45.6)
|
|
(3.1)
|
|
(94.8)
|
|
(83.1)
|
|
(14.1)
|
Less: used vehicle line
of credit interest
|
(6.0)
|
|
(3.3)
|
|
(81.8)
|
|
(12.1)
|
|
(4.8)
|
|
(152.1)
|
Add: acquisition
expenses
|
1.8
|
|
4.5
|
|
(60.0)
|
|
9.5
|
|
5.7
|
|
66.7
|
Less: loss (gain) on
divestitures
|
—
|
|
(1.0)
|
|
NM
|
|
—
|
|
(8.2)
|
|
NM
|
Add: insurance
reserves
|
6.0
|
|
2.4
|
|
NM
|
|
6.0
|
|
2.5
|
|
NM
|
Add: contract
buyouts
|
—
|
|
—
|
|
NM
|
|
—
|
|
10.1
|
|
NM
|
Adjusted
EBITDA
|
$
435.4
|
|
$
503.9
|
|
(13.6) %
|
|
$
796.8
|
|
$
909.6
|
|
(12.4) %
|
|
As of
|
|
%
|
|
June
30,
|
|
Increase
|
Net Debt to Adjusted
EBITDA
|
2024
|
|
2023
|
|
(Decrease)
|
Floor plan notes
payable: non-trade
|
$ 2,697.4
|
|
$ 1,708.8
|
|
57.9 %
|
Floor plan notes
payable
|
2,590.1
|
|
1,107.9
|
|
133.8
|
Used and service loaner
vehicle inventory financing facility
|
1,014.8
|
|
876.0
|
|
15.8
|
Revolving lines of
credit
|
1,848.5
|
|
1,453.6
|
|
27.2
|
Warehouse
facilities
|
701.0
|
|
705.0
|
|
(0.6)
|
Non-recourse notes
payable
|
2,025.8
|
|
1,247.1
|
|
62.4
|
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
|
876.4
|
|
687.8
|
|
27.4
|
Unamortized debt
issuance costs
|
(28.3)
|
|
(31.4)
|
|
(9.9)
|
Total debt
|
$
13,475.7
|
|
$ 9,504.8
|
|
41.8 %
|
|
|
|
|
|
|
Less: Floor plan
related debt
|
$
(6,302.3)
|
|
$
(3,692.7)
|
|
70.7 %
|
Less: Financing
operations related debt
|
(2,726.8)
|
|
(1,952.1)
|
|
39.7
|
Less: Unrestricted cash
and cash equivalents
|
(516.4)
|
|
(88.7)
|
|
482.2
|
Less: Marketable
securities
|
(51.4)
|
|
—
|
|
—
|
Less: Availability on
used vehicle and service loaner financing facilities
|
(30.4)
|
|
(48.7)
|
|
(37.6)
|
Net
Debt
|
$
3,848.4
|
|
$
3,722.6
|
|
3.4 %
|
|
|
|
|
|
|
TTM Adjusted
EBITDA
|
$
1,651.1
|
|
$
1,820.3
|
|
(9.3) %
|
|
|
|
|
|
|
Net debt to Adjusted
EBITDA
|
2.33
x
|
|
2.05
x
|
|
|
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SOURCE Lithia Motors, Inc.