Lithia & Driveway (LAD) Reports Record Third Quarter Revenue of $9.2 billion, an 11% Increase
Announces Dividend of $0.53 per Share for Third Quarter
MEDFORD, Ore., Oct. 23, 2024 /PRNewswire/ -- Lithia & Driveway (NYSE:LAD) today reported the highest third quarter revenue in company history and the second profitable quarter for Financing Operations, which includes Driveway Finance Corporation.
Third quarter 2024 revenue increased 11% to $9.2 billion from $8.3 billion in the third quarter of 2023.
Third quarter 2024 diluted earnings per share attributable to LAD was $7.80, an 18% decrease from $9.46 per share reported in the third quarter of 2023. Third quarter 2024 adjusted diluted earnings per share attributable to LAD was $8.21, an 11% decrease compared to $9.22 per share in the same period of 2023. Unrealized investment gains and foreign currency exchange gains positively impacted diluted earnings per share by $0.11.
Third quarter 2024 net income was $223 million, a 16% decrease compared to net income of $265 million in the same period of 2023. Adjusted third quarter 2024 net income was $222 million, a 14% decrease compared to adjusted net income of $258 million for the same period of 2023.
As shown in the attached non-GAAP reconciliation tables, the 2024 third quarter adjusted results exclude a $0.41 per diluted share impact resulting from non-core items, including a premium paid for the redemption of the remaining non-controlling interest in Pfaff Automotive and acquisition expenses, partially offset by a net gain on the disposal of stores and tax attributes. The 2023 third quarter adjusted results exclude a $0.24 per diluted share impact resulting from non-core items, including a net gain on the disposal of stores, partially offset by acquisition expenses, insurance reserves, and one-time contract buyouts.
Key Third Quarter 2024 Highlights:
- Total revenues increased 11% compared to third quarter 2023
- Aftersales gross profit increased 6.3% on a same-store basis
- Financing operations continued profitability with quarterly income of $1 million
- Driveway Finance Corporation (DFC) originated $518 million in loans, for a total portfolio of $3.8 billion, and priced a $615 million ABS offering in October, our ninth securitization
- Repurchased 0.7% of outstanding shares
"Our third quarter performance was strong and demonstrated the team's ability to grow our business, leveraging size and scale and seizing new opportunities while focusing on operational efficiency. Our core businesses showed consistent growth while delivering substantial cost savings, and our adjacent operations continued building momentum, positioning us well for the future," said Bryan DeBoer, President and CEO. "Our diversified model continues to strengthen our market position, driving shareholder value. We remain committed to creating customer loyalty through exceptional experiences and operational excellence across our omnichannel ecosystem."
For the first nine months of 2024 revenues increased 16% to $27.0 billion, compared to $23.4 billion in 2023.
Diluted earnings per share attributable to LAD for the first nine months of 2024 was $21.54, compared to $28.54 per share in 2023, a decrease of 25%. Adjusted diluted earnings per share attributable to LAD for the first nine months of 2024 decreased 23% to $22.17 from $28.61 in the same period of 2023. Unrealized gain on investments partially offset by foreign currency exchange losses for the first nine months of 2024 positively impacted diluted earnings per share by $0.74.
Corporate Development
During the third quarter, LAD continued to expand its network in the Southeast region with the acquisition of three stores from the Duval Motor Company in Jacksonville and Gainesville, Florida. These additions will strengthen LAD's import and luxury store footprint in Florida and increase the geographic reach of the Company's retail network.Year-to-date, LAD acquired over $5.9 billion in annualized revenues.
Balance Sheet Update
LAD ended the third quarter with approximately $1.1 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 $0.4 billion.
Dividend Payment and Share Repurchases
The Board of Directors approved a dividend of $0.53 per share related to third quarter 2024 financial results. The dividend is expected to be paid on November 15, 2024 to shareholders of record on November 8, 2024.
During 2024, we repurchased approximately 986,000 shares at a weighted average price of $260. Under the current share repurchase authorization approximately $560.9 million remains available.
Third Quarter Earnings Conference Call and Updated Presentation
The third 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 third 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://x.com/lithiamotors
https://x.com/DrivewayHQ
https://x.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 that meet our target valuations and acquiring additional stores
- Annualized revenues from acquired stores or achieving target returns
- 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, which may include adjusted net income and adjusted 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 | ||||||||||
2024 | 2023 | (Decrease) | 2024 | 2023 | (Decrease) | ||||||
Revenues: | |||||||||||
New vehicle retail | $ 4,430.0 | $ 3,885.8 | 14.0 % | $ 12,847.9 | $ 11,179.5 | 14.9 % | |||||
Used vehicle retail | 2,843.3 | 2,620.2 | 8.5 | 8,630.1 | 7,302.8 | 18.2 | |||||
Used vehicle wholesale | 390.9 | 316.1 | 23.7 | 1,018.1 | 1,082.4 | (5.9) | |||||
Finance and insurance | 360.4 | 349.4 | 3.1 | 1,061.9 | 1,005.6 | 5.6 | |||||
Aftersales | 1,012.8 | 838.0 | 20.9 | 2,876.3 | 2,378.8 | 20.9 | |||||
Fleet and other | 183.6 | 267.5 | (31.4) | 580.4 | 418.9 | 38.6 | |||||
Total revenues | 9,221.0 | 8,277.0 | 11.4 % | 27,014.7 | 23,368.0 | 15.6 % | |||||
Cost of sales: | |||||||||||
New vehicle retail | 4,123.6 | 3,526.9 | 16.9 | 11,925.4 | 10,099.6 | 18.1 | |||||
Used vehicle retail | 2,654.4 | 2,431.2 | 9.2 | 8,062.9 | 6,735.4 | 19.7 | |||||
Used vehicle wholesale | 393.0 | 322.1 | 22.0 | 1,020.7 | 1,091.9 | (6.5) | |||||
Aftersales | 453.0 | 375.2 | 20.7 | 1,285.1 | 1,077.7 | 19.2 | |||||
Fleet and other | 166.6 | 250.3 | (33.4) | 531.1 | 395.2 | 34.4 | |||||
Total cost of sales | 7,790.6 | 6,905.7 | 12.8 | 22,825.2 | 19,399.8 | 17.7 | |||||
Gross profit | 1,430.4 | 1,371.3 | 4.3 % | 4,189.5 | 3,968.2 | 5.6 % | |||||
Finance operations income (loss) | 0.9 | (4.4) | NM | 6.4 | (43.8) | NM | |||||
SG&A expense | 943.6 | 850.8 | 10.9 | 2,853.0 | 2,458.1 | 16.1 | |||||
Depreciation and amortization | 63.5 | 50.8 | 25.0 | 183.6 | 146.4 | 25.4 | |||||
Income from operations | 424.2 | 465.3 | (8.8) % | 1,159.3 | 1,319.9 | (12.2) % | |||||
Floor plan interest expense | (76.6) | (40.2) | 90.5 | (214.0) | (102.6) | 108.6 | |||||
Other interest expense | (64.5) | (58.5) | 10.3 | (189.3) | (141.5) | 33.8 | |||||
Other income (expense) | 5.1 | (5.3) | 196.2 | 35.4 | 6.8 | 420.6 | |||||
Income before income taxes | 288.2 | 361.3 | (20.2) % | 791.4 | 1,082.6 | (26.9) % | |||||
Income tax expense | (65.3) | (96.4) | (32.3) | (187.0) | (287.0) | (34.8) | |||||
Income tax rate | 22.7 % | 26.7 % | 23.6 % | 26.5 % | |||||||
Net income | $ 222.9 | $ 264.9 | (15.9) % | $ 604.4 | $ 795.6 | (24.0) % | |||||
Net income attributable to non-controlling | (1.2) | (2.1) | (42.9) % | (3.8) | (4.7) | (19.1) % | |||||
Net income attributable to redeemable non- | (12.6) | (1.3) | 869.2 % | (14.8) | (3.6) | 311.1 % | |||||
Net income attributable to LAD | $ 209.1 | $ 261.5 | (20.0) % | $ 585.8 | $ 787.3 | (25.6) % | |||||
Diluted earnings per share attributable | |||||||||||
Net income per share | $ 7.80 | $ 9.46 | (17.5) % | $ 21.54 | $ 28.54 | (24.5) % | |||||
Diluted shares outstanding | 26.8 | 27.6 | (2.9) % | 27.2 | 27.6 | (1.4) % | |||||
NM - not meaningful |
LAD | |||||||||||
Key Performance Metrics (Unaudited) | |||||||||||
Three months ended | % | Nine months ended | % | ||||||||
Increase | Increase | ||||||||||
2024 | 2023 | (Decrease) | 2024 | 2023 | (Decrease) | ||||||
Gross margin | |||||||||||
New vehicle retail | 6.9 % | 9.2 % | (230) bps | 7.2 % | 9.7 % | (250) bps | |||||
Used vehicle retail | 6.6 | 7.2 | (60) | 6.6 | 7.8 | (120) | |||||
Finance and insurance | 100.0 | 100.0 | — | 100.0 | 100.0 | — | |||||
Aftersales | 55.3 | 55.2 | 10 | 55.3 | 54.7 | 60 | |||||
Gross profit margin | 15.5 | 16.6 | (110) | 15.5 | 17.0 | (150) | |||||
Unit sales | |||||||||||
New vehicle retail | 94,964 | 82,188 | 15.5 % | 273,154 | 233,521 | 17.0 % | |||||
Used vehicle retail | 104,898 | 88,625 | 18.4 | 316,583 | 247,340 | 28.0 | |||||
Average selling price | |||||||||||
New vehicle retail | $ 46,649 | $ 47,279 | (1.3) % | $ 47,035 | $ 47,874 | (1.8) % | |||||
Used vehicle retail | 27,105 | 29,565 | (8.3) | 27,260 | 29,525 | (7.7) | |||||
Average gross profit per unit | |||||||||||
New vehicle retail | $ 3,226 | $ 4,367 | (26.1) % | $ 3,377 | $ 4,624 | (27.0) % | |||||
Used vehicle retail | 1,801 | 2,132 | (15.5) | 1,792 | 2,294 | (21.9) | |||||
Finance and insurance | 1,803 | 2,045 | (11.8) | 1,801 | 2,091 | (13.9) | |||||
Total vehicle(1) | 4,271 | 5,218 | (18.1) | 4,322 | 5,497 | (21.4) | |||||
Revenue mix | |||||||||||
New vehicle retail | 48.0 % | 46.9 % | 47.6 % | 47.8 % | |||||||
Used vehicle retail | 30.8 | 31.7 | 31.9 | 31.3 | |||||||
Used vehicle wholesale | 4.2 | 3.8 | 3.8 | 4.6 | |||||||
Finance and insurance, net | 3.9 | 4.2 | 3.9 | 4.3 | |||||||
Aftersales | 11.0 | 10.1 | 10.6 | 10.2 | |||||||
Fleet and other | 2.1 | 3.3 | 2.2 | 1.8 | |||||||
Gross Profit Mix | |||||||||||
New vehicle retail | 21.4 % | 26.2 % | 22.0 % | 27.2 % | |||||||
Used vehicle retail | 13.2 | 13.8 | 13.5 | 14.3 | |||||||
Used vehicle wholesale | (0.1) | (0.4) | (0.1) | (0.2) | |||||||
Finance and insurance, net | 25.2 | 25.5 | 25.3 | 25.3 | |||||||
Aftersales | 39.1 | 33.6 | 38.1 | 32.8 | |||||||
Fleet and other | 1.2 | 1.3 | 1.2 | 0.6 | |||||||
Adjusted | As reported | Adjusted | As reported | ||||||||||||
Three months | Three months | Nine months | Nine months | ||||||||||||
Other metrics | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |||||||
SG&A as a % of revenue | 10.2 % | 10.4 % | 10.2 % | 10.3 % | 10.5 % | 10.5 % | 10.6 % | 10.5 % | |||||||
SG&A as a % of gross profit | 66.0 | 62.7 | 66.0 | 62.0 | 67.7 | 61.9 | 68.1 | 61.9 | |||||||
Operating profit as a % of revenue | 4.6 | 5.5 | 4.6 | 5.6 | 4.3 | 5.7 | 4.3 | 5.6 | |||||||
Operating profit as a % of gross profit | 29.6 | 33.2 | 29.7 | 33.9 | 28.0 | 33.3 | 27.7 | 33.3 | |||||||
Pretax margin | 3.1 | 4.3 | 3.1 | 4.4 | 3.0 | 4.6 | 2.9 | 4.6 | |||||||
Net profit margin | 2.4 | 3.1 | 2.4 | 3.2 | 2.3 | 3.4 | 2.2 | 3.4 | |||||||
(1) | Includes the sales and gross profit related to new, used retail, used wholesale and finance and insurance and unit sales for new and used retail |
LAD | |||||||||||
Same Store Operating Highlights (Unaudited) | |||||||||||
Three months ended | % | Nine months ended | % | ||||||||
Increase | Increase | ||||||||||
2024 | 2023 | (Decrease) | 2024 | 2023 | (Decrease) | ||||||
Revenues | |||||||||||
New vehicle retail | $ 3,900.9 | $ 3,851.6 | 1.3 % | $ 10,946.7 | $ 10,959.3 | (0.1) % | |||||
Used vehicle retail | 2,213.1 | 2,592.5 | (14.6) | 6,488.8 | 7,135.6 | (9.1) | |||||
Finance and insurance | 322.0 | 345.1 | (6.7) | 931.6 | 986.6 | (5.6) | |||||
Aftersales | 871.6 | 829.3 | 5.1 | 2,382.0 | 2,327.2 | 2.4 | |||||
Total revenues | 7,690.6 | 8,199.1 | (6.2) | 21,754.2 | 22,881.9 | (4.9) | |||||
Gross profit | |||||||||||
New vehicle retail | $ 265.2 | $ 356.9 | (25.7) % | $ 764.5 | $ 1,058.7 | (27.8) % | |||||
Used vehicle retail | 169.4 | 187.2 | (9.5) | 491.4 | 554.9 | (11.4) | |||||
Finance and insurance | 322.0 | 345.1 | (6.7) | 931.6 | 986.6 | (5.6) | |||||
Aftersales | 487.8 | 458.9 | 6.3 | 1,332.5 | 1,276.6 | 4.4 | |||||
Total gross profit | 1,250.3 | 1,359.4 | (8.0) | 3,532.3 | 3,891.1 | (9.2) | |||||
Gross margin | |||||||||||
New vehicle retail | 6.8 % | 9.3 % | (250) bps | 7.0 % | 9.7 % | (270) bps | |||||
Used vehicle retail | 7.7 | 7.2 | 50 | 7.6 | 7.8 | (20) | |||||
Finance and insurance | 100.0 | 100.0 | — | 100.0 | 100.0 | — | |||||
Aftersales | 56.0 | 55.3 | 70 | 55.9 | 54.9 | 100 | |||||
Gross profit margin | 16.3 | 16.6 | (30) | 16.2 | 17.0 | (80) | |||||
Unit sales | |||||||||||
New vehicle retail | 83,177 | 81,520 | 2.0 % | 229,520 | 229,145 | 0.2 % | |||||
Used vehicle retail | 79,297 | 87,672 | (9.6) | 231,665 | 242,017 | (4.3) | |||||
Average selling price | |||||||||||
New vehicle retail | $ 46,898 | $ 47,248 | (0.7) % | $ 47,694 | $ 47,827 | (0.3) % | |||||
Used vehicle retail | 27,909 | 29,571 | (5.6) | 28,009 | 29,484 | (5.0) | |||||
Average gross profit per unit | |||||||||||
New vehicle retail | $ 3,188 | $ 4,377 | (27.2) % | $ 3,331 | $ 4,620 | (27.9) % | |||||
Used vehicle retail | 2,136 | 2,135 | — | 2,121 | 2,293 | (7.5) | |||||
Finance and insurance | 1,982 | 2,040 | (2.8) | 2,020 | 2,094 | (3.5) | |||||
Total vehicle(1) | 4,631 | 5,221 | (11.3) | 4,719 | 5,499 | (14.2) | |||||
(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 September 30, | Nine months ended September 30, | ||||||
2024 | 2024 | ||||||
Key Performance by Country | Total Revenue | Total Gross Profit | Total Revenue | Total Gross Profit | |||
United States | 76.6 % | 83.1 % | 77.5 % | 83.4 % | |||
United Kingdom | 20.2 % | 14.3 % | 19.3 % | 13.9 % | |||
Canada | 3.2 % | 2.6 % | 3.2 % | 2.7 % | |||
As of | |||||
September 30, | December 31, | September 30, | |||
Days Supply(1) | 2024 | 2023 | 2023 | ||
New vehicle inventory | 68 | 65 | 55 | ||
Used vehicle inventory | 68 | 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 September 30, | Nine months ended September 30, | ||||||||||||||
($ in millions) | 2024 | % (1) | 2023 | % (1) | 2024 | % (1) | 2023 | % (1) | |||||||
Interest margin: | |||||||||||||||
Interest and fee income | $ 91.1 | 9.5 | $ 67.5 | 8.7 | $ 252.2 | 9.3 | $ 176.2 | 8.6 | |||||||
Interest expense | (51.2) | (5.3) | (42.5) | (5.4) | (146.0) | (5.4) | (125.5) | (6.1) | |||||||
Total interest margin | $ 39.9 | 4.1 | $ 25.0 | 3.2 | $ 106.2 | 3.9 | $ 50.7 | 2.5 | |||||||
Lease income | 25.6 | 4.9 | 61.2 | 14.1 | |||||||||||
Lease costs | (21.6) | (2.0) | (51.0) | (6.3) | |||||||||||
Lease income, net | 4.0 | 2.9 | 10.2 | 7.8 | |||||||||||
Selling, general and administrative | (11.2) | (9.2) | (33.0) | (27.3) | |||||||||||
Provision expense | (31.8) | (3.3) | (23.1) | (3.0) | (77.0) | (2.8) | (75.0) | (3.7) | |||||||
Finance operations income (loss) | $ 0.9 | $ (4.4) | $ 6.4 | $ (43.8) | |||||||||||
Total average managed finance receivables | $ 3,812.8 | $ 3,092.4 | $ 3,617.4 | $ 2,731.0 | |||||||||||
(1) Annualized percentage of total average managed finance receivables |
LAD | |||
Condensed Consolidated Balance Sheets (Unaudited) | |||
(In millions) | |||
September 30, 2024 | December 31, 2023 | ||
Cash, restricted cash, and cash equivalents | $ 359.5 | $ 941.4 | |
Trade receivables, net | 1,209.4 | 1,123.1 | |
Inventories, net | 6,100.2 | 4,753.9 | |
Other current assets | 224.0 | 136.8 | |
Total current assets | $ 7,893.1 | $ 6,955.2 | |
Property and equipment, net | 4,664.0 | 3,981.4 | |
Finance receivables, net | 3,765.5 | 3,242.3 | |
Intangibles | 4,701.5 | 4,332.8 | |
Other non-current assets | 2,237.4 | 1,120.8 | |
Total assets | $ 23,261.5 | $ 19,632.5 | |
Floor plan notes payable | 5,119.6 | 3,635.5 | |
Other current liabilities | 1,544.5 | 1,296.7 | |
Total current liabilities | $ 6,664.1 | $ 4,932.2 | |
Long-term debt, less current maturities | 6,399.8 | 5,483.7 | |
Non-recourse notes payable, less current maturities | 1,772.7 | 1,671.7 | |
Other long-term liabilities and deferred revenue | 1,796.7 | 1,262.0 | |
Total liabilities | $ 16,633.3 | $ 13,349.6 | |
Equity and redeemable non-controlling interest | 6,628.2 | 6,282.9 | |
Total liabilities, equity, and redeemable non-controlling interest | $ 23,261.5 | $ 19,632.5 | |
LAD | |||
Condensed Consolidated Statements of Cash Flows (Unaudited) | |||
(In millions) | |||
Nine months ended September 30, | |||
Cash flows from operating activities: | 2024 | 2023 | |
Net income | $ 604.4 | $ 795.6 | |
Adjustments to reconcile net income to net cash used in operating activities | 397.2 | 250.2 | |
Changes in: | |||
Inventories | (324.3) | (498.2) | |
Finance receivables | (526.5) | (907.0) | |
Floor plan notes payable | 325.0 | 292.0 | |
Other operating activities | (112.5) | (109.8) | |
Net cash provided by (used in) operating activities | 363.3 | (177.2) | |
Cash flows from investing activities: | |||
Capital expenditures | (271.9) | (163.7) | |
Cash paid for acquisitions, net of cash acquired | (1,247.0) | (1,204.7) | |
Proceeds from sales of stores | 21.9 | 136.1 | |
Other investing activities | (323.8) | (8.0) | |
Net cash used in investing activities | (1,820.8) | (1,240.3) | |
Cash flows from financing activities: | |||
Net borrowings on floor plan notes payable, non-trade | 280.1 | 426.7 | |
Net borrowings non-recourse notes payable | 77.4 | 1,047.7 | |
Net borrowings of other debt and finance lease liabilities | 900.7 | (5.7) | |
Proceeds from issuance of common stock | 21.3 | 23.0 | |
Repurchase of common stock | (273.2) | (14.5) | |
Dividends paid | (42.4) | (39.1) | |
Other financing activity | (83.7) | (11.1) | |
Net cash provided by financing activities | 880.2 | 1,427.0 | |
Effect of exchange rate changes on cash and restricted cash | 3.9 | 5.7 | |
Change in cash, restricted cash, and cash equivalents | (573.4) | 15.2 | |
Cash, restricted cash, and cash equivalents at beginning of period | 972.0 | 271.5 | |
Cash, restricted cash, and cash equivalents at end of period | 398.6 | 286.7 | |
LAD | |||
Reconciliation of Non-GAAP Cash Flow from Operations (Unaudited) | |||
(In millions) | |||
Nine months ended September 30, | |||
Net cash provided by operating activities | 2024 | 2023 | |
As reported | $ 363.3 | $ (177.2) | |
Floor plan notes payable, non-trade, net | 280.1 | 426.7 | |
Adjust: finance receivables activity | 526.5 | 907.0 | |
Less: Borrowings on floor plan notes payable, non-trade associated with | (105.5) | (110.6) | |
Adjusted | $ 1,064.4 | $ 1,045.9 | |
LAD | |||||||||||
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited) | |||||||||||
(In millions, except for per share data) | |||||||||||
Three Months Ended September 30, 2024 | |||||||||||
As reported | Net gain | Acquisition | Premium on | Tax attribute | Adjusted | ||||||
Selling, general and administrative | $ 943.6 | $ 0.3 | $ (0.2) | $ — | $ — | $ 943.7 | |||||
Operating income | 424.2 | (0.3) | 0.2 | — | — | 424.1 | |||||
Income before income taxes | 288.2 | (0.3) | 0.2 | — | — | 288.1 | |||||
Income tax (provision) benefit | (65.3) | 0.1 | (0.1) | — | (0.5) | (65.8) | |||||
Net income | $ 222.9 | $ (0.2) | $ 0.1 | $ — | $ (0.5) | $ 222.3 | |||||
Net income attributable to non-controlling | (1.2) | — | — | — | — | (1.2) | |||||
Net income attributable to redeemable non- | (12.6) | — | — | 11.6 | — | (1.0) | |||||
Net income attributable to LAD | $ 209.1 | $ (0.2) | $ 0.1 | $ 11.6 | $ (0.5) | $ 220.1 | |||||
Diluted earnings per share attributable to LAD | $ 7.80 | $ (0.01) | $ — | $ 0.43 | $ (0.01) | $ 8.21 | |||||
Diluted share count | 26.8 | ||||||||||
Three Months Ended September 30, 2023 | |||||||||||
As reported | Net gain | 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 | |||||
Income before income taxes | 361.3 | (23.1) | 4.6 | 4.8 | 4.2 | 351.8 | |||||
Income tax (provision) benefit | (96.4) | 6.1 | (1.2) | (0.8) | (1.1) | (93.4) | |||||
Net income | $ 264.9 | $ (17.0) | $ 3.4 | $ 4.0 | $ 3.1 | $ 258.4 | |||||
Net income attributable to non-controlling | $ (2.1) | $ — | $ — | $ — | $ — | $ (2.1) | |||||
Net income attributable to redeemable non- | $ (1.3) | $ — | $ — | $ — | $ — | $ (1.3) | |||||
Net income attributable to LAD | $ 261.5 | $ (17.0) | $ 3.4 | $ 4.0 | $ 3.1 | $ 255.0 | |||||
Diluted earnings per share attributable to LAD | $ 9.46 | $ (0.62) | $ 0.12 | $ 0.15 | $ 0.11 | $ 9.22 | |||||
Diluted share count | 27.6 | ||||||||||
LAD | |||||||||||||
Reconciliation of Certain Non-GAAP Financial Measures (Unaudited) | |||||||||||||
(In millions, except for per share data) | |||||||||||||
Nine Months Ended September 30, 2024 | |||||||||||||
As reported | Net gain on | Insurance | Acquisition | Premium on | Tax attribute | Adjusted | |||||||
Selling, general and administrative | $ 2,853.0 | $ 0.3 | $ (6.0) | $ (9.7) | $ — | $ — | $ 2,837.6 | ||||||
Operating income | 1,159.3 | (0.3) | 6.0 | 9.7 | — | — | 1,174.7 | ||||||
Income before income taxes | 791.4 | (0.3) | 6.0 | 9.7 | — | — | 806.8 | ||||||
Income tax (provision) benefit | (187.0) | 0.1 | (1.5) | (0.5) | — | (8.0) | (196.9) | ||||||
Net income | $ 604.4 | $ (0.2) | $ 4.5 | $ 9.2 | $ — | $ (8.0) | $ 609.9 | ||||||
Net income attributable to non-controlling | (3.8) | — | — | — | — | — | (3.8) | ||||||
Net income attributable to redeemable non- | (14.8) | — | — | — | 11.6 | — | (3.2) | ||||||
Net income attributable to LAD | $ 585.8 | $ (0.2) | $ 4.5 | $ 9.2 | $ 11.6 | $ (8.0) | $ 602.9 | ||||||
Diluted earnings per share attributable to LAD | $ 21.54 | $ (0.01) | $ 0.17 | $ 0.34 | $ 0.43 | $ (0.30) | $ 22.17 | ||||||
Diluted share count | 27.2 | ||||||||||||
Nine Months Ended September 30, 2023 | |||||||||||||
As reported | Net gain on | 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 | |||||||
Income before income taxes | 1,082.6 | (31.4) | 7.1 | 10.5 | 14.4 | 1,083.2 | |||||||
Income tax (provision) benefit | (287.0) | 8.5 | (1.9) | (1.5) | (3.9) | (285.8) | |||||||
Net income | $ 795.6 | $ (22.9) | $ 5.2 | $ 9.0 | $ 10.5 | $ 797.4 | |||||||
Net income attributable to non-controlling | (4.7) | — | — | — | — | (4.7) | |||||||
Net income attributable to redeemable non- | (3.6) | — | — | — | — | (3.6) | |||||||
Net income attributable to LAD | $ 787.3 | $ (22.9) | $ 5.2 | $ 9.0 | $ 10.5 | $ 789.1 | |||||||
Diluted earnings per share attributable to LAD | $ 28.54 | $ (0.83) | $ 0.19 | $ 0.33 | $ 0.38 | $ 28.61 | |||||||
Diluted share count | 27.6 | ||||||||||||
LAD | |||||||||||
Adjusted EBITDA and Net Debt to Adjusted EBITDA (Unaudited) | |||||||||||
(In millions) | |||||||||||
Three months ended | % | Nine months ended | % | ||||||||
Increase | Increase | ||||||||||
2024 | 2023 | (Decrease) | 2024 | 2023 | (Decrease) | ||||||
EBITDA and Adjusted EBITDA | |||||||||||
Net income | $ 222.9 | $ 264.9 | (15.9) % | $ 604.4 | $ 795.6 | (24.0) % | |||||
Flooring interest expense | 76.6 | 40.2 | 90.5 | 214.0 | 102.6 | 108.6 | |||||
Other interest expense | 64.5 | 58.5 | 10.3 | 189.3 | 141.5 | 33.8 | |||||
Financing operations interest expense | 51.2 | 42.5 | 20.5 | 146.0 | 125.5 | 16.3 | |||||
Income tax expense | 65.3 | 96.4 | (32.3) | 187.0 | 287.0 | (34.8) | |||||
Depreciation and amortization | 63.5 | 50.8 | 25.0 | 183.6 | 146.4 | 25.4 | |||||
Financing operations depreciation expense | 12.7 | 2.0 | 535.0 | 37.3 | 6.3 | 492.1 | |||||
EBITDA | $ 556.7 | $ 555.3 | 0.3 % | $ 1,561.6 | $ 1,604.9 | (2.7) % | |||||
Other adjustments: | |||||||||||
Less: flooring interest expense | $ (76.6) | $ (40.2) | 90.5 | $ (214.0) | $ (102.6) | 108.6 | |||||
Less: financing operations interest expense | (51.2) | (42.5) | 20.5 | (146.0) | (125.5) | 16.3 | |||||
Less: used vehicle line of credit interest | (7.4) | (6.4) | 15.6 | (19.5) | (11.2) | 74.1 | |||||
Add: acquisition expenses | 0.2 | 4.8 | (95.8) | 9.7 | 10.5 | (7.6) | |||||
Less: loss (gain) on disposal of stores | (0.3) | (23.1) | NM | (0.3) | (31.4) | NM | |||||
Add: insurance reserves | — | 4.6 | NM | 6.0 | 7.1 | NM | |||||
Add: contract buyouts | — | 4.2 | NM | — | 14.4 | NM | |||||
Adjusted EBITDA | $ 421.4 | $ 456.7 | (7.7) % | $ 1,197.5 | $ 1,366.2 | (12.3) % | |||||
NM - not meaningful |
As of | % | |||
September 30, | Increase | |||
Net Debt to Adjusted EBITDA | 2024 | 2023 | (Decrease) | |
Floor plan notes payable: non-trade | $ 2,516.7 | $ 1,863.4 | 35.1 % | |
Floor plan notes payable | 2,602.9 | 1,261.2 | 106.4 | |
Used and service loaner vehicle inventory financing facility | 925.7 | 860.2 | 7.6 | |
Revolving lines of credit | 1,848.2 | 1,281.4 | 44.2 | |
Warehouse facilities | 1,035.0 | 585.0 | 76.9 | |
Non-recourse notes payable | 1,783.0 | 1,469.9 | 21.3 | |
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 | 980.5 | 746.8 | 31.3 | |
Unamortized debt issuance costs | (26.4) | (33.4) | (21.0) | |
Total debt | $ 13,415.6 | $ 9,784.5 | 37.1 % | |
Less: Floor plan related debt | $ (6,045.3) | $ (3,984.8) | 51.7 % | |
Less: Financing operations related debt | (2,818.0) | (2,054.9) | 37.1 | |
Less: Unrestricted cash and cash equivalents | (209.8) | (146.9) | 42.8 | |
Less: Marketable securities | (53.9) | — | — | |
Less: Availability on used vehicle and service loaner financing facilities | (9.8) | (66.8) | (85.3) | |
Net Debt | $ 4,278.8 | $ 3,531.1 | 21.2 % | |
TTM Adjusted EBITDA | $ 1,594.2 | $ 1,780.1 | (10.4) % | |
Net debt to Adjusted EBITDA | 2.68 x | 1.98 x | ||
NM - not meaningful |
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SOURCE Lithia Motors, Inc.