Lithia & Driveway (LAD) Reports 12% Revenue Increase and Diluted EPS of $10.78
MEDFORD, Ore., July 26, 2023 /PRNewswire/ — Lithia & Driveway (NYSE: LAD) today reported the highest second quarter revenue in company history.
Second quarter 2023 revenue increased 12% to $8.1 billion from $7.2 billion in the second quarter of 2022.
Second quarter 2023 net income attributable to LAD per diluted share was $10.78, a 7% decrease from $11.60 per diluted share reported in the second quarter of 2022. Adjusted second quarter 2023 net income attributable to LAD per diluted share was $10.91, a 10% decrease compared to $12.18 per diluted share in the same period of 2022. Unrealized foreign currency gains positively impacted earnings per share by $0.23.
Second quarter 2023 net income was $301 million, an 11% decrease compared to net income of $338 million in the same period of 2022. Adjusted second quarter 2023 net income was $305 million, a 14% decrease compared to adjusted net income of $355 million for the same period of 2022.
As shown in the attached non-GAAP reconciliation tables, the 2023 second quarter adjusted results exclude a $0.13 per diluted share impact resulting from non-core charges, specifically acquisition expenses and insurance reserves, partially offset by a net gain on the sale of stores and non-cash unrealized investment gain. The 2022 second quarter adjusted results exclude a $0.58 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 sale of stores.
Second Quarter-Over-Quarter Comparisons and 2023 Performance Highlights:
Revenues increased 12%
New and used unit growth was 22% and (1)% , respectively
Total vehicle gross profit per unit of $5,710, down $853
Driveway averaged over 2.7 million monthly unique visitors in the quarter
Driveway Finance Corporation (DFC) originated $558 million in loans in Q2
Service, body, and parts revenues increased 18%
Adjusted SG&A as a percentage of gross profit was 60.4%
“Our second quarter performance was strong across all our business lines and our teams demonstrated strong operating discipline as we continue to build out our adjacencies with consumer optionality and provide products and services fitting all affordability levels,” said Bryan DeBoer, Lithia & Driveway, President and CEO. “Our commitment to improving our operating results through a relentless focus on high performance is demonstrated in our results, allowing us to continue acquiring stores domestically and abroad. We see DFC and our omnichannel footprint enhancing our offering and driving us towards our targets in the 2025 Plan and beyond. We are well capitalized and our free cash flow generation gives us flexibility to deliver on our strategy.”
For the first six months of 2023 revenues increased 8% to $15.1 billion, compared to $13.9 billion in 2022.
Net income attributable to LAD for the first six months of 2023 was $19.08 per diluted share, compared to $23.15 per diluted share in 2022, a decrease of 18%. Adjusted net income attributable to LAD per diluted share for the first six months of 2023 decreased 20% to $19.35 from $24.14 in the same period of 2022. Foreign currency exchange positively impacted earnings per share by $0.18.
During the second quarter, LAD acquired a total of 14 locations across the mid-Atlantic and southeast regions of the United States, which are expected to generate nearly $1.5 billion in annualized revenues. LAD divested three stores, combined they made approximately $70 million in revenues the past year. Year-to-date, we have acquired over $3.5 billion in annualized revenues. Since announcing the 2025 Plan in July 2020, we have acquired over $17.5 billion in annualized revenues.
Balance Sheet Update
LAD ended the second quarter with approximately $1.0 billion in cash and availability on our revolving lines of credit. In addition, unfinanced real estate could provide additional liquidity of approximately $0.5 billion.
The Board of Directors approved a dividend of $0.50 per share related to second quarter 2023 financial results. The dividend is expected to be paid on August 25, 2023 to shareholders of record on August 11, 2023.
Second Quarter Earnings Conference Call and Updated Presentation
About Lithia & Driveway (LAD)
Lithia & Driveway (NYSE: LAD) is a growth company focused on profitably consolidating the largest retail sector globally through providing personal transportation solutions wherever, whenever, and however consumers desire.
By Lithia Investor Relations Press Release