LAD
$284.52
Lithia Motors
$.65
.23%
Earnings Details
1st Quarter March 2022
Wednesday, April 20, 2022 5:00:00 AM
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Summary

Lithia Motors (LAD) Recent Earnings

Lithia Motors (LAD) reported 1st Quarter March 2022 earnings of $11.96 per share on revenue of $6.7 billion. The consensus earnings estimate was $9.63 per share on revenue of $6.3 billion. Revenue grew 54.4% on a year-over-year basis.

Lithia Motors Inc is an operator of automotive franchises and a retailer of new and used vehicles and related services.

Results
Reported Earnings
$11.96
Earnings Whisper
-
Consensus Estimate
$9.63
Reported Revenue
$6.71 Bil
Revenue Estimate
$6.26 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

LITHIA & DRIVEWAY (LAD) INCREASES REVENUE 54%, EPS 99%, AND ADJUSTED EPS 103%, RECORD FIRST QUARTER PERFORMANCE

INCREASES DIVIDEND TO $0.42 PER SHARE FOR FIRST QUARTER

MEDFORD, Ore., April 20, 2022 /PRNewswire/ -- Lithia & Driveway (NYSE: LAD) today reported the highest first quarter revenue and earnings per share in company history.

First quarter 2022 revenue increased 54% to $6.7 billion from $4.3 billion in the first quarter of 2021.

First quarter 2022 net income attributable to LAD per diluted share was $11.55, a 99% increase from $5.81 per diluted share reported in the first quarter of 2021. Adjusted first quarter 2022 net income attributable to LAD per diluted share was $11.96, a 103% increase compared to $5.89 per diluted share in the same period of 2021.

First quarter 2022 net income was $344 million, a 120% increase compared to net income of $156 million in the same period of 2021. Adjusted first quarter 2022 net income was $356 million, a 125% increase compared to adjusted net income of $158 million for the same period of 2021.

As shown in the attached non-GAAP reconciliation tables, the 2022 first quarter adjusted results exclude a $0.41 per diluted share net non-core charge related to a non-cash unrealized investment loss and acquisition expenses, partially offset by a net gain on the sale of stores. The 2021 first quarter adjusted results include a $0.08 per diluted share net non-core charge related to a non-cash unrealized investment loss, a net loss on the sale of stores, insurance reserves, and acquisition expenses.

First Quarter-over-Quarter Comparisons and Operating Highlights:

  • Revenues increased 54.4%
  • New vehicle retail revenues increased 39.6%
  • Used vehicle retail revenues increased 65.2%
  • Driveway reached 1 million monthly unique visitors
  • Driveway achieved 3,100 transactions in March, quarterly transaction volumes increased over 1,000%
  • Driveway Finance (DFC) became #1 lender to LAD customers with 6.2% penetration rate
  • F&I per unit increased 28.6% to $2,260
  • Service, body, and parts revenues increased 55.4%
  • Total vehicle gross profit per unit increased 55.4% to $6,825
  • Adjusted SG&A as a percentage of gross profit improved by 550 basis points from 62.6% to 57.1%

"Our teams delivered another record quarter with strong results across all channels," said Bryan DeBoer, Lithia & Driveway's President and CEO. "Our highly adaptable model generated significant free cash flows and Driveway and DFC each achieved impressive milestones. Combined with our teams' unique ability to quickly integrate acquired businesses, our path forward to being a diversified, omni-channel retailer has never been clearer."

Corporate Development
LAD recently acquired three Stellantis stores in Las Vegas, diversifying our brand mix in that growing market. Collectively the stores are expected to generate $400 million in annualized revenues. Year-to-date, LAD has acquired $1.1 billion in annualized revenues and since the announcement of the 2025 Plan in July 2020, we have acquired $11.5 billion in annualized revenues.

"Our recent strong performance has provided significant optionality in our execution of the 2025 Plan," said DeBoer. "We have deployed incremental capital to Driveway and DFC while maintaining our accelerated acquisition cadence and providing immediate shareholder return through opportunistic share repurchases. These actions are transforming LAD and bringing us closer to the day when each billion dollars of revenues produces significantly more than a dollar of EPS."

Balance Sheet Update
We ended the first quarter with approximately $1.6 billion in cash and availability on our revolving lines of credit. In addition, our unfinanced real estate could provide additional liquidity of approximately $1.1 billion.

Dividend Payment and Share Repurchases
Our Board of Directors approved a dividend of $0.42 per share related to first quarter 2022 financial results. We expect to pay the dividend on May 27, 2022 to shareholders of record on May 13, 2022.

Year-to-date, we have repurchased 515,130 shares at a weighted average price of $292.80. Approximately $572 million remains  available under our authorization.

First Quarter Earnings Conference Call and Updated Presentation
The first 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 first 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 (or "50/50" Plan) and any business expansion
  • The growth, expansion, make-up and success of our network, including our acquiring additional and accretive 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 realizing Driveway and Driveway Finance-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
  • Future expected operating and financial results, such as projections of improved store performance and generation of future revenue or earnings
  • 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
  • Our compliance with financial and restrictive covenants in our credit facility and other debt agreements
  • Our programs and initiatives for employee recruitment, training, and retention
  • Our strategies for customer retention, growth, market position, financial results and risk management

Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Forward-looking statements are not guarantees of future performance, and our actual results of operations, financial condition and liquidity and development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements in this presentation. Therefore, you should not rely on any of these forward-looking statements. The risks and uncertainties that could cause actual results to differ materially from estimated or projected results include, without limitation:

  • Future national and local economic and financial conditions, including as a result of the COVID-19 pandemic, inflation and governmental programs and spending
  • The market for dealerships, including the availability of stores to us for an acceptable price
  • Changes in customer demand, our relationship with, and the financial and operational stability of, OEMs and other suppliers
  • Changes in the competitive landscape, including through technology and our ability to deliver new products, services and customer experiences and a portfolio of in-demand and available vehicles
  • Risks associated with our indebtedness, including available borrowing capacity, interest rates, compliance with financial covenants and ability to refinance or repay indebtedness on favorable terms
  • The adequacy of our cash flows and other conditions which may affect our ability to fund capital expenditures, obtain favorable financing and pay our quarterly dividend at planned levels
  • Disruptions to our technology network including computer systems, as well as natural events such as severe weather or man-made or other disruptions of our operating systems, facilities or equipment
  • Government regulations and legislation
  • The risks set forth throughout "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and in "Part I, Item 1A. Risk Factors" of our most recent Annual Report on Form 10-K, and in "Part II, Item 1A. Risk Factors" of our Quarterly Reports on Form 10-Q, and from time to time in our other filings with the SEC.

Any forward-looking statement made by us in this presentation is based only on information currently available to us and speaks only as of the date on which it is made. Except as required by law, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Non-GAAP Financial Measures
This presentation contains non-GAAP financial measures such as adjusted net income and diluted earnings per share, adjusted SG&A as a percentage of revenue and gross profit, adjusted operating margin, adjusted operating profit as a percentage of revenue and gross profit, adjusted pre-tax margin and net profit margin, EBITDA, adjusted EBITDA, leveraged EBITDA and adjusted total debt. Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not comparable to similarly titled measures used by other companies. As a result, we review any non-GAAP financial measures in connection with a review of the most directly comparable measures calculated in accordance with GAAP. We caution you not to place undue reliance on such non-GAAP measures, but also to consider them with the most directly comparable GAAP measures. We present cash flows from operations in the attached tables, adjusted to include the change in non-trade floor plan debt to improve the visibility of cash flows related to vehicle financing. As required by SEC rules, we have reconciled these measures to the most directly comparable GAAP measures in the attachments to this release. We believe the non-GAAP financial measures we present improve the transparency of our disclosures; provide a meaningful presentation of our results from core business operations, because they exclude items not related to core business operations and other non-cash items; and improve the period-to-period comparability of our results from core business operations. These presentations should not be considered an alternative to GAAP measures.

 

LAD

Consolidated Statements of Operations (Unaudited)

(In millions except per share data)



Three months ended
March 31,


%




Increase



2022


2021


(Decrease)

Revenues:







New vehicle retail


$ 3,061.8


$ 2,193.2


39.6%

Used vehicle retail


2,234.5


1,352.2


65.2

Used vehicle wholesale


385.8


135.2


185.4

Finance and insurance


313.2


198.4


57.9

Service, body and parts


627.8


404.0


55.4

Fleet and other


82.2


60.0


37.0

     Total revenues


6,705.3


4,343.0


54.4%

Cost of sales:







New vehicle retail


2,660.5


2,036.5


30.6

Used vehicle retail


2,010.7


1,216.0


65.4

Used vehicle wholesale


378.1


130.6


189.5

Service, body and parts


298.8


185.8


60.8

Fleet and other


79.1


58.6


35.0

     Total cost of sales


5,427.2


3,627.5


49.6

Gross profit


1,278.1


715.5


78.6%

SG&A expense


726.1


450.4


61.2

Depreciation and amortization


39.2


26.8


46.3

Income from operations


512.8


238.3


115.2%

Floor plan interest expense


(4.9)


(6.8)


(27.9)

Other interest expense


(30.1)


(23.5)


28.1

Other income (expense), net


(8.0)


3.4


NM

Income before income taxes


469.8


211.4


122.2%

Income tax expense


(126.2)


(55.2)


128.6

Income tax rate


26.9%


26.1%



Net income


$  343.6


$  156.2


120.0%

Net income attributable to non-controlling interests


(0.5)



NM

Net income attributable to redeemable non-controlling interest


(0.9)



NM

Net income attributable to LAD


$  342.2


$  156.2


119.1%








Diluted earnings per share attributable to LAD:







Net income per share


$  11.55


$    5.81


98.8%








Diluted shares outstanding


29.6


26.9


10.0%

NM - not meaningful

 

LAD

Key Performance Metrics (Unaudited)



Three months ended
March 31,


%




Increase



2022


2021


(Decrease)

Gross margin







New vehicle retail


13.1%


7.1%


      600 bps

Used vehicle retail


10.0


10.1


(10)

Finance and insurance


100.0


100.0


Service, body and parts


52.4


54.0


(160)

Gross profit margin


19.1


16.5


260








Unit sales







New vehicle retail


64,942


53,864


20.6   %

Used vehicle retail


73,689


59,027


24.8

Total retail units sold


138,631


112,891


22.8








Average selling price







New vehicle retail


$ 47,146


$ 40,718


15.8%

Used vehicle retail


30,323


22,907


32.4








Average gross profit per unit







New vehicle retail


$  6,179


$  2,910


112.3%

Used vehicle retail


3,037


2,307


31.6

Finance and insurance


2,260


1,757


28.6

Total vehicle(1)


6,825


4,392


55.4








Revenue mix







New vehicle retail


45.7%


50.5%



Used vehicle retail


33.3


31.1



Used vehicle wholesale


5.8


3.1



Finance and insurance, net


4.7


4.6



Service, body and parts


9.4


9.3



Fleet and other


1.1


1.4










Gross Profit Mix







New vehicle retail


31.4 %


21.9 %



Used vehicle retail


17.5


19.0



Used vehicle wholesale


0.6


0.6



Finance and insurance, net


24.5


27.7



Service, body and parts


25.8


30.6



Fleet and other


0.2


0.2



 



Adjusted


As reported



Three months
ended March 31,


Three months
ended March 31,

Other metrics


2022


2021


2022


2021

SG&A as a % of revenue


10.9%


10.3%


10.8%


10.4%

SG&A as a % of gross profit


57.1


62.6


56.8


62.9

Operating profit as a % of revenue


7.6


5.6


7.6


5.5

Operating profit as a % of gross profit


39.9


33.7


40.1


33.3

Pretax margin


7.2


4.9


7.0


4.9

Net profit margin


5.3


3.6


5.1


3.6

(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
March 31,


%




Increase



2022


2021


(Decrease)

Revenues







New vehicle retail


$ 2,022.3


$ 2,076.6


(2.6) %

Used vehicle retail


1,654.1


1,266.8


30.6

Finance and insurance


218.4


187.3


16.6

Service, body and parts


437.4


386.0


13.3

Total revenues


4,584.0


4,103.6


11.7








Gross profit







New vehicle retail


$  272.5


$  149.3


82.5   %

Used vehicle retail


163.5


127.5


28.2

Finance and insurance


218.4


187.3


16.6

Service, body and parts


238.6


208.9


14.2

Total gross profit


897.2


678.8


32.2








Gross margin







New vehicle retail


13.5%


7.2%


      630 bps

Used vehicle retail


9.9


10.1


(20)

Finance and insurance


100.0


100.0


Service, body and parts


54.6


54.1


50

Gross profit margin


19.6


16.5


310








Unit sales







New vehicle retail


42,232


51,145


(17.4) %

Used vehicle retail


54,813


55,304


(0.9)








Average selling price







New vehicle retail


$ 47,885


$ 40,602


17.9%

Used vehicle retail


30,177


22,906


31.7








Average gross profit per unit







New vehicle retail


$  6,453


$  2,919


121.1%

Used vehicle retail


2,983


2,305


29.4

Finance and insurance


2,251


1,759


28.0

Total vehicle(1)


6,767


4,401


53.8

(1) Includes the sales and gross profit related to new, used retail, used wholesale and finance and insurance and unit sales for new and used retail 

 

LAD

Other Highlights (Unaudited)


As of


March 31,


December 31,


2022


2021

Days Supply(1)




New vehicle inventory

27


24

Used vehicle inventory

50


61

(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 March 31, 2022

Current ratio

Not less than 1.10 to 1


1.60 to 1

Fixed charge coverage ratio

Not less than 1.20 to 1


5.19 to 1

Leverage ratio

Not more than 5.75 to 1


1.16 to 1

 

LAD

Condensed Consolidated Balance Sheets (Unaudited)

(In millions)



March 31, 2022


December 31, 2021

Cash, restricted cash, and cash equivalents


$                        161.4


$                        174.8

Trade receivables, net


923.8


910.0

Inventories, net


2,697.3


2,385.5

Other current assets


102.1


63.0

Total current assets


$                     3,884.6


$                     3,533.3






Property and equipment, net


3,244.5


3,052.6

Intangibles


1,976.0


1,776.4

Other non-current assets


2,975.7


2,784.6

Total assets


$                   12,080.8


$                   11,146.9






Floor plan notes payable


1,391.0


1,190.1

Other current liabilities


1,434.1


1,212.7

Total current liabilities


$                     2,825.1


$                     2,402.8






Long-term debt


3,395.2


3,185.7

Other long-term liabilities and deferred revenue


917.9


895.2

Total liabilities


$                     7,138.2


$                     6,483.7






Equity


4,942.6


4,663.2

Total liabilities & equity


$                   12,080.8


$                   11,146.9

 

LAD

Summarized Cash Flow from Operations (Unaudited)

(In millions)



Three months ended March 31,



2022


2021

Net income


$                        343.7


$                        156.2

Adjustments to reconcile net income to net cash provided by operating activities:





Depreciation and amortization


39.2


26.8

Stock-based compensation


10.5


8.0

Gain on disposal of assets


0.9


0.3

Loss (gain) on sale of franchises


(10.0)


0.7

Unrealized investment loss (gain)


14.9


0.3

Deferred income taxes


11.3


10.4

Amortization of operating lease right-of-use assets


3.6


8.2

(Increase) decrease:





     Trade receivables, net


(80.4)


(126.7)

     Inventories


(244.9)


244.6

     Other assets


(256.6)


(59.0)

Increase (decrease):





     Floor plan notes payable, net


33.7


107.3

     Trade payables


26.0


47.8

     Accrued liabilities


111.5


76.7

     Other long-term liabilities and deferred revenue


22.9


(2.1)

Net cash provided by operating activities


$                          26.3


$                        499.5

 

LAD

Reconciliation of Non-GAAP Cash Flow from Operations (Unaudited)

(In millions)



Three months ended March 31,

Net cash provided by operating activities


2022


2021

As reported


$                          26.3


$                        499.5

     Floor plan notes payable, non-trade, net


177.1


(74.8)

     Less: Borrowings on floor plan notes payable, non-trade associated with acquired new vehicle inventory


(47.6)


(69.3)

Adjusted


$                        155.8


$                        355.4

 

LAD

Reconciliation of Certain Non-GAAP Financial Measures (Unaudited)

(In millions, except for per share data)



Three Months Ended March 31, 2022



As reported


Net disposal gain on sale of stores


Investment loss


Acquisition expenses


Adjusted

Asset impairments


$           —


$           —


$           —


$           —


$           —

Selling, general and administrative


$      726.1


$        10.0


$           —


$         (6.6)


$      729.5

Operating income


512.8


(10.0)



6.6


509.4

Other income (expense), net


(8.0)



14.9



6.9












Income before income taxes


469.8


(10.0)


14.9


6.6


481.3

Income tax (provision) benefit


(126.2)


2.6



(1.9)


(125.5)

Net income


$      343.6


$         (7.4)


$        14.9


$          4.7


$      355.8

Net income attributable to non-controlling interests


(0.5)





(0.5)

Net income attributable to redeemable non-controlling interest


(0.9)





(0.9)

Net income attributable to LAD


$      342.2


$         (7.4)


$        14.9


$          4.7


$      354.4












Diluted earnings per share attributable to LAD


$      11.55


$       (0.25)


$        0.50


$        0.16


$      11.96

Diluted share count


29.6









 



Three Months Ended March 31, 2021



As reported


Net disposal loss on sale of stores


Investment loss


Insurance reserves


Acquisition expenses


Adjusted

Asset impairments


$           —


$           —


$           —


$           —


$           —


$           —

Selling, general and administrative


$      450.4


$         (0.7)


$           —


$         (0.8)


$         (1.3)


$      447.6

Operating income


238.3


0.7



0.8


1.3


241.1

Other income (expense), net


3.4



0.3




3.7














Income before income taxes


211.4


0.7


0.3


0.8


1.3


214.5

Income tax (provision) benefit


(55.2)


(0.2)


(0.1)


(0.2)


(0.4)


(56.1)

Net income attributable to LAD


$      156.2


$          0.5


$          0.2


$          0.6


$          0.9


$      158.4














Diluted earnings per share attributable to LAD


$        5.81


$        0.02


$        0.01


$        0.02


$        0.03


$        5.89

Diluted share count


26.9











 

LAD

Adjusted EBITDA and Net Debt to Adjusted EBITDA (Unaudited)

(In millions)



Three months ended
March 31,


%




Increase



2022


2021


(Decrease)

EBITDA and Adjusted EBITDA







Net income


$      343.6


$      156.2


120.0 %

Flooring interest expense


4.9


6.8


(27.9)

Other interest expense


30.1


23.5


28.1

Income tax expense


126.2


55.2


128.6

Depreciation and amortization


39.2


26.8


46.3

EBITDA


$      544.0


$      268.5


102.6 %








Other adjustments:







Less: flooring interest expense


$        (4.9)


$        (6.8)


(27.9)

Less: used vehicle line of credit interest


(0.2)



NM

Add: acquisition expenses


6.6


1.3


407.7

Add: loss (gain) on divestitures


(10.0)


0.7


NM

Add: investment loss


14.9


0.3


NM

Add: insurance reserves



0.8


(100.0)

Adjusted EBITDA


$      550.4


$      264.8


107.9%

NM - not meaningful 

 



As of


%



March 31,


Increase

Net Debt to Adjusted EBITDA


2022


2021


(Decrease)

Floor plan notes payable: non-trade


$ 1,002.8


$ 1,480.7


(32.3)%

Floor plan notes payable


388.2


341.5


13.7

Used and service loaner vehicle inventory financing facility


730.0



NM

Revolving lines of credit


257.1


100.0


157.1

Real estate mortgages


573.8


604.7


(5.1)

Finance lease obligations


112.1


245.0


(54.2)

Asset backed notes


278.3



NM

5.250% Senior notes due 2025



300.0


(100.0)

4.625% Senior notes due 2027


400.0


400.0


4.375% Senior notes due 2031


550.0


550.0


3.875% Senior notes due 2029


800.0



NM

Other debt


1.7


2.3


(26.1)

Unamortized debt issuance costs


(25.2)


(17.7)


42.4

Total debt


$ 5,068.8


$ 4,006.5


26.5%








Less: Floor plan related debt


$ (2,121.0)


$ (1,822.2)


16.4%

Less: Cash, restricted cash, and cash equivalents


(161.4)


(175.7)


(8.1)

Less: Availability on used vehicle and service loaner financing facilities


(55.2)


(455.5)


(87.9)

Net Debt


$ 2,731.2


$ 1,553.1


75.9%








TTM Adjusted EBITDA


$ 2,018.0


$    999.7


101.9%








Net debt to Adjusted EBITDA


        1.35 x


        1.55 x



NM - not meaningful 

 

 

Cision View original content:https://www.prnewswire.com/news-releases/lithia--driveway-lad-increases-revenue-54-eps-99-and-adjusted-eps-103-record-first-quarter-performance-301528656.html

SOURCE Lithia Motors, Inc.