Lithia & Driveway (LAD) Reports Record Second Quarter Revenue of $9.2 billion, a 14% Increase, and the First Profitable Quarter for Financing Operations
Lithia & Driveway (LAD) reported record second quarter revenue of $9.2 billion, a 14% increase from the previous year. The company achieved its first profitable quarter for Financing Operations, including Driveway Finance However, net income decreased by 28% to $217 million, with diluted earnings per share at $7.87, down 27% from Q2 2023. LAD expanded its network through acquisitions and invested in Wheels, Inc. to enhance its omnichannel strategy. The company ended Q2 with approximately $1.3 billion in cash and available credit. LAD's Board approved a dividend of $0.53 per share for Q2 2024 and continued its share repurchase program, buying back 793,000 shares at an average price of $256.
Lithia & Driveway (LAD) ha riportato un fatturato record di 9,2 miliardi di dollari nel secondo trimestre, con un aumento del 14% rispetto all'anno precedente. L'azienda ha raggiunto il suo primo trimestre redditizio nelle Operazioni di Finanziamento, inclusa Driveway Finance. Tuttavia, l'utile netto è diminuito del 28% a 217 milioni di dollari, con utili diluiti per azione a 7,87 dollari, in calo del 27% rispetto al secondo trimestre del 2023. LAD ha ampliato la sua rete attraverso acquisizioni e ha investito in Wheels, Inc. per migliorare la sua strategia omnicanale. Alla fine del secondo trimestre, LAD ha mantenuto circa 1,3 miliardi di dollari in contante e credito disponibile. Il Consiglio di LAD ha approvato un dividendo di 0,53 dollari per azione per il secondo trimestre del 2024 e ha continuato il suo programma di riacquisto di azioni, riacquistando 793.000 azioni a un prezzo medio di 256 dollari.
Lithia & Driveway (LAD) reportó unos ingresos récord de 9.2 mil millones de dólares en el segundo trimestre, lo que representa un aumento del 14% con respecto al año anterior. La compañía alcanzó su primer trimestre rentable en Operaciones de Financiamiento, incluida Driveway Finance. Sin embargo, el ingreso neto disminuyó un 28% a 217 millones de dólares, con ganancias diluidas por acción de 7.87 dólares, lo que representa una disminución del 27% en comparación con el segundo trimestre de 2023. LAD expandió su red a través de adquisiciones e invirtió en Wheels, Inc. para mejorar su estrategia omnicanal. Al final del segundo trimestre, LAD tenía aproximadamente 1.3 mil millones de dólares en efectivo y crédito disponible. La Junta de LAD aprobó un dividendo de 0.53 dólares por acción para el segundo trimestre de 2024 y continuó su programa de recompra de acciones, comprando 793,000 acciones a un precio promedio de 256 dólares.
Lithia & Driveway (LAD)는 2분기 수익이 92억 달러로 사상 최고치를 기록했으며, 이는 지난해 대비 14% 증가한 수치입니다. 회사는 Driveway Finance를 포함한 재무 운영에서 첫 번째 수익성 분기를 달성했습니다. 그러나 순이익은 28% 감소하여 2억 1,700만 달러로 줄어들었고, 희석 주당 순이익은 7.87달러로 2023년 2분기 대비 27% 하락했습니다. LAD는 인수를 통해 네트워크를 확장하고 Wheels, Inc.에 투자하여 옴니채널 전략을 강화했습니다. 2분기 말 LAD는 약 13억 달러의 현금과 이용 가능한 신용을 보유하고 있었습니다. LAD의 이사회는 2024년 2분기 주당 0.53달러의 배당금을 승인하고, 평균 256달러에 793,000주를 매입하며 자사주 매입 프로그램을 계속했습니다.
Lithia & Driveway (LAD) a rapporté un chiffre d'affaires record de 9,2 milliards de dollars au cours du deuxième trimestre, soit une augmentation de 14 % par rapport à l'année précédente. L'entreprise a réalisé son premier trimestre bénéficiaire pour les opérations de financement, y compris Driveway Finance. Cependant, le revenu net a diminué de 28 % pour s'établir à 217 millions de dollars, avec un bénéfice dilué par action de 7,87 dollars, en baisse de 27 % par rapport au T2 2023. LAD a élargi son réseau grâce à des acquisitions et a investi dans Wheels, Inc. pour améliorer sa stratégie omnicanale. À la fin du T2, LAD avait environ 1,3 milliard de dollars en espèces et en crédit disponible. Le conseil d'administration de LAD a approuvé un dividende de 0,53 dollar par action pour le T2 2024 et a poursuivi son programme de rachat d'actions, rachetant 793 000 actions à un prix moyen de 256 dollars.
Lithia & Driveway (LAD) berichtete von Rekordumsätzen von 9,2 Milliarden Dollar im zweiten Quartal, was einem Anstieg von 14% im Vergleich zum Vorjahr entspricht. Das Unternehmen erreichte sein erstes profitables Quartal im Finanzierungsbetrieb, einschließlich Driveway Finance. Allerdings sank der Nettogewinn um 28% auf 217 Millionen Dollar, während die verwässerten Erträge pro Aktie bei 7,87 Dollar lagen, ein Rückgang von 27% im Vergleich zum Q2 2023. LAD erweiterte sein Netzwerk durch Akquisitionen und investierte in Wheels, Inc., um seine Omnichannel-Strategie zu verbessern. Zum Ende des Q2 verfügte LAD über etwa 1,3 Milliarden Dollar in Bargeld und verfügbarem Kredit. Der Vorstand von LAD genehmigte eine
- Record second quarter revenue of $9.2 billion, up 14% year-over-year
- First profitable quarter for Financing Operations, with $7 million income
- Driveway Finance originated $562 million in loans, with a total portfolio of $3.6 billion
- Acquired businesses with $5.6 billion in annualized revenues year-to-date
- Strong liquidity position with $1.3 billion in cash, cash equivalents, and available credit
- Net income decreased by 28% to $217 million compared to Q2 2023
- Diluted earnings per share decreased by 27% to $7.87 from $10.78 in Q2 2023
- Adjusted net income per diluted share decreased by 28% compared to Q2 2023
Lithia & Driveway's Q2 2024 results present a mixed picture. While the company achieved record revenue of
The
A bright spot is the first profitable quarter for Financing Operations, including Driveway Finance , which originated
The company's share repurchase program, buying back
The
Overall, while Lithia & Driveway is showing resilience in a challenging market, the significant decline in profitability despite revenue growth is concerning and may indicate structural changes in the industry that require careful navigation.
Lithia & Driveway's Q2 results offer intriguing insights into the evolving automotive retail landscape. The
However, the
- Increased competition in the automotive retail space
- Rising costs of inventory acquisition
- Investments in digital infrastructure and omnichannel capabilities
- Potential impact of inflationary pressures on operational costs
The company's expansion into fleet management through the investment in Wheels, Inc. is a strategic move to diversify revenue streams and capitalize on the growing trend of fleet electrification. This could provide a competitive edge and new growth avenues in the medium to long term.
The CDK cyberattack mentioned in the report highlights the increasing importance of cybersecurity in the automotive retail sector. As dealerships become more digitized, robust IT infrastructure and security measures will be important for maintaining operational continuity and customer trust.
Lastly, the shift in capital allocation from acquisitions to shareholder returns suggests management's focus on near-term shareholder value. While this may boost investor confidence in the short term, it could potentially limit the company's ability to capitalize on market consolidation opportunities in a rapidly evolving industry landscape.
Announces Dividend of
Second quarter 2024 revenue increased
Second quarter 2024 net income attributable to LAD per diluted share was
Second quarter 2024 net income was
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
Key Second Quarter 2024 Highlights:
- Total revenues increased
14% compared to second quarter 2023 - Diluted net income per share improved from
$6.11 $7.87 29% increase, from first quarter 2024 - Financing operations first profitable quarter with income of
$7 million - Driveway Finance Corporation (DFC) originated
$562 million $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
For the first six months of 2024 revenues increased
Net income attributable to LAD for the first six months of 2024 was
Corporate Development
During the second quarter, LAD expanded its network in the Southeast region with the acquisition of two stores in
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
Balance Sheet Update
LAD ended the second quarter with approximately
Dividend Payment and Share Repurchases
The Board of Directors approved a dividend of
During 2024, we repurchased approximately 793,000 shares at a weighted average price of
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 | % | Six months ended | % | ||||||||
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 | (1.0) | (1.8) | 44.4 % | (2.5) | (2.5) | — % | |||||
Net income attributable to redeemable non- | (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 | |||||||||||
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) % | |||||
NM - not meaningful |
LAD | |||||||||||
Key Performance Metrics (Unaudited) | |||||||||||
Three months ended | % | Six months ended | % | ||||||||
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 | (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 | Three months | Six months ended | Six months ended | ||||||||||||
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 | % | Six months ended | % | ||||||||
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 | (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 | (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 | |||
77.0 % | 82.7 % | 77.9 % | 83.6 % | ||||
19.5 % | 14.3 % | 18.9 % | 13.7 % | ||||
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 | (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 | Acquisition | 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 | (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 | Insurance | Acquisition | 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 | $ (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 | Acquisition | 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 | Insurance | Acquisition | Contract | 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- | (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 | % | Six months ended | % | ||||||||
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) % | |||||
NM - not meaningful |
As of | % | ||||
June 30, | Increase | ||||
Net Debt to Adjusted EBITDA | 2024 | 2023 | (Decrease) | ||
Floor plan notes payable: non-trade | 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 | ||
400.0 | 400.0 | — | |||
550.0 | 550.0 | — | |||
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 | 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 | 3.4 % | ||||
TTM Adjusted EBITDA | (9.3) % | ||||
Net debt to Adjusted EBITDA | 2.33 x | 2.05 x | |||
NM - not meaningful |
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SOURCE Lithia Motors, Inc.
FAQ
What was Lithia & Driveway's (LAD) revenue for Q2 2024?
How did LAD's net income change in Q2 2024 compared to Q2 2023?
What dividend did Lithia & Driveway (LAD) announce for Q2 2024?
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