Lithia & Driveway (LAD) Expands in North Central Region, Completes Second Driveway Finance ABS Offering, and Debuts New Driveway Technology

Rhea-AI Summary

Lithia & Driveway (NYSE: LAD) is expanding its footprint by acquiring five stores from Wilde Automotive Group in Wisconsin, projected to generate $625 million in annual revenue. The company also completed a $298 million asset-backed securities issuance for Driveway Finance Corporation, enhancing its financial capacity for growth. With DFC's originations contributing 10% to LAD's business, this is expected to rise to 15% in the coming years, diversifying income streams. Additionally, LAD launched Freeway, a new CRM platform designed to streamline customer interactions.

Positive

• Acquisition of five stores from Wilde Automotive Group expected to generate $625 million in annual revenue.
• Driveway Finance Corporation raised over $298 million through asset-backed securities issuance for growth funding.
• Increased contribution from DFC originations, projected to grow from 10% to 15% of LAD's overall business.
• Launch of Freeway CRM platform to improve customer service and operational efficiency.

Negative

• None.

MEDFORD, Ore., Sept. 20, 2022 /PRNewswire/ -- Lithia & Driveway (NYSE: LAD) announced today they have expanded their north central footprint with the purchase of five stores from the Wilde Automotive Group in Wisconsin.

"We are excited to welcome these high performing teams to our Lithia & Driveway family," said Bryan DeBoer, Lithia & Driveway President and CEO. "Their continuous pursuit of excellence has earned them numerous awards including the President's recognitions for both Honda stores and the Toyota store, as well as excellent reputations for serving their customers and communities."

The Wisconsin group was started by Harold Wilde in 1966 and includes Wilde Toyota, Wilde Subaru, Wilde Honda, Wilde CJDR and East Towne Honda. Together, these stores are projected to generate $625 million in annualized revenue. LAD expects to complete network optimization (divestitures) of approximately $625 million in annualized revenues in 2022. The pipeline of opportunities to continue network expansion remains robust, driving LAD to another banner year of growth.

Driveway Finance Corporation ABS Issuance

Driveway Finance Corporation (DFC) completed its second issuance of securities backed by its originated auto loan portfolio, raising over $298 million of additional capital to fund growth.

"DFC continues to receive favorable pricing and credit ratings," said Chuck Lietz, Vice President, Finance. "We're confident in our ability to fund DFC using a combination of our conduit facilities and securitizations, enabling us to grow DFC in the coming years and support LAD's achievement of more than one dollar in EPS for each billion dollars in revenue."

DFC originations now account for approximately 10% of LAD's overall business and are expected to grow to 15% in the coming years. This growing income stream further diversifies LAD's business model, expands profitability, and enhances consumer loyalty with its stores, and its national Driveway and GreenCars brands.

Launched Freeway, Driveway's New CRM

Driveway activated Freeway, a state-of-the-art customer relationship management (CRM) and workflow platform, empowering its Care Centers to serve customers more seamlessly and efficiently as they buy, finance, sell, and service their vehicles from the comfort of their homes.

"We are excited to deploy Freeway, our latest strategic platform to further fuel the growth of Driveway and omni-channel capabilities at LAD," said George Hines, LAD's Chief Innovation and Technology Officer. "We create competitive advantage by leveraging technology and data to anticipate the needs of our customers. Our Freeway platform empowers our Driveway Care Centers with a unified view of our customer's journey to meet their needs most efficiently."

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
www.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

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SOURCE Lithia Motors, Inc.

FAQ

What recent expansion did Lithia & Driveway (LAD) announce?

Lithia & Driveway announced the acquisition of five stores from Wilde Automotive Group in Wisconsin.

How much revenue is projected from the new stores acquired by LAD?

The newly acquired stores are projected to generate $625 million in annual revenue.

What financial move did Driveway Finance Corporation make?

Driveway Finance Corporation raised over $298 million through its second issuance of asset-backed securities.

What percentage of LAD's business is currently from Driveway Finance Corporation?

Driveway Finance Corporation's originations currently account for approximately 10% of LAD's overall business.

What is the purpose of the Freeway CRM platform launched by LAD?

The Freeway CRM platform aims to enhance customer service by streamlining interactions during vehicle transactions.