Lithia & Driveway (LAD) Increases Revenue 70%, EPS 47%, And Adjusted EPS 63%, Record Third Quarter Performance
Lithia & Driveway (NYSE: LAD) today (Oct. 20, 2021) reported the highest third quarter revenue and earnings per share in company history.
Third quarter 2021 revenue increased 70% to $6.2 billion from $3.6 billion in the third quarter of 2020.
Third quarter 2021 net income attributable to LAD per diluted share was $10.11, a 47% increase from $6.86 per diluted share reported in the third quarter of 2020. Adjusted third quarter 2021 net income attributable to LAD per diluted share was $11.21, a 63% increase compared to $6.89 per diluted share in the same period of 2020.
Third quarter 2021 net income was $309 million, a 95% increase compared to net income of $159 million in the same period of 2020. Adjusted third quarter 2021 net income was $342 million, a 115% increase compared to adjusted net income of $160 million for the same period of 2020.
As shown in the attached non-GAAP reconciliation tables, the 2021 third quarter adjusted results exclude a $1.10 per diluted share net non-core charges related to a non-cash unrealized investment loss, the redemption of senior notes, acquisition expenses, an asset impairment, and insurance reserves. The 2020 third quarter adjusted results exclude a $0.03 per diluted share net non-core charge related to insurance reserves and acquisition expenses.
Third Quarter-over-Quarter Comparisons and Operating Highlights:
- Revenues increased 70.4%
- New vehicle retail revenues increased 53.9%
- Used vehicle retail revenues increased 90.2%
- 36,600 unit sales generated from Lithia e-commerce platforms, 25% of total retail unit sales (excluding Driveway)
- Achieved milestone of 1,000 Driveway Shop units
- F&I per unit increased 25.8% to $2,074
- Service, body, and parts revenues increased 60.9%
- Total vehicle gross profit per unit increased 32.7% to $6,175
- Adjusted SG&A as a percentage of gross profit improved by 380 basis points from 59.6% to 55.8%
“Our third quarter results demonstrate the dynamism of LAD’s model,” said Bryan DeBoer, Lithia & Driveway’s President and CEO. “We excelled at procuring used vehicles during the challenging environment, enabling us to offer consumers the most diverse inventory available, driving same store volume increases while continuing to increase margins. In addition, Driveway and our store e-commerce offerings are positioned to gain incremental market share as consumers seek out a more transparent and frictionless buying experience.”
For the first nine months of 2021 revenues increased 80% to $16.5 billion, compared to $9.2 billion in 2020.
Net income attributable to LAD for the first nine months of 2021 was $26.91 per diluted share, compared to $12.18 per diluted share in 2020, an increase of 121%. Adjusted net income attributable to LAD per diluted share for the first nine months of 2021 increased 127% to $28.52 from $12.59 in the same period of 2020.
During the quarter, we completed several acquisitions expected to contribute $1.7 billion in annualized revenue, including partnering with Pfaff Automotive to enter Canada, our first international acquisition, and expanding our United States footprint into new markets.
“Year-to-date we have acquired $6.2 billion in annualized revenue and are pacing ahead of schedule toward our goal of achieving $50 billion in revenue and $50 of earnings per share by 2025,” said DeBoer. “The pipeline is robust and we continue to identify accretive deals that strategically expand our network while meeting our disciplined return thresholds.”
Balance Sheet Update
We ended the third quarter with approximately $1.7 billion in cash and availability on our revolving lines of credit. In addition, our unfinanced real estate could provide additional liquidity of approximately $729 million.
Our Board of Directors approved a dividend of $0.35 per share related to third quarter 2021 financial results. We expect to pay the dividend on November 19, 2021 to shareholders of record on November 12, 2021.
About Lithia & Driveway (LAD)
LAD is a growth company powered by people and innovation with a plan to profitably consolidate the largest retail sector in North America. As the leading provider of personal transportation solutions in North America, LAD is among the fastest-growing companies in the Fortune 500 and is currently ranked #231 (#2 on 10-Year EPS Growth, #3 on 10-Year TSR and #12 on 10-year Revenue growth in 2021). By providing a wide array of products and services for the entire vehicle ownership lifecycle through various consumer channels, LAD builds magnetic brand loyalty. Operational excellence is achieved by focusing the business on convenient and transparent consumer experiences supported by proprietary data science to improve market share, consumer loyalty and profitability. LAD’s omni-channel strategy will continue to pragmatically disrupt the industry by leveraging experienced teams, vast owned inventories, technology, and physical network. LAD continues to lead the industry’s consolidation, and this combined with Driveway’s e-commerce in-home experiences, further accelerates the massive regenerating capital engine. Together, these endeavors create a unique and compelling high-growth strategy that provides transportation solutions wherever, whenever, and however consumers desire.