Announces Dividend of $0.53 per Share for First Quarter

MEDFORD, Ore., April 24, 2024 /PRNewswire/ — Lithia & Driveway (NYSE: LAD) today reported the highest first quarter revenue in company history.

First quarter 2024 revenue increased 23% to $8.6 billion from $7.0 billion in the first quarter of 2023.

First quarter 2024 net income attributable to LAD per diluted share was $5.89, a 29% decrease from $8.30 per diluted share reported in the first quarter of 2023. Adjusted first quarter 2024 net income attributable to LAD per diluted share was $6.11, a 28% decrease compared to $8.44 per diluted share in the same period of 2023. Unrealized foreign currency losses negatively impacted earnings per share by $0.15.

First quarter 2024 net income was $165 million, a 28% decrease compared to net income of $230 million in the same period of 2023. Adjusted first quarter 2024 net income was $171 million, a 27% decrease compared to adjusted net income of $233 million for the same period of 2023.

As shown in the attached non-GAAP reconciliation tables, the 2024 first quarter adjusted results exclude a $0.22 per diluted share impact resulting from non-core items, specifically acquisition expenses. The 2023 first quarter adjusted results exclude a $0.14 per diluted share impact resulting from non-core items, including one-time contract buyouts, acquisition expenses, investment loss, and insurance reserves, partially offset by a net gain on the sale of stores.

First Quarter-Over-Quarter Comparisons and First Quarter 2024 Performance Highlights:

• Total revenues increased 23%
• New vehicle same store units grew by 3.6 %
• Total vehicle gross profit per unit of $4,346, down $1,239
• GreenCars monthly unique visitors (MUVs) increased by 71%
• Driveway Finance Corporation (DFC) originated approximately $493 million in loans
• Service, body, and parts revenues increased 24%
• Driveway and GreenCars burn-rate has been cut in half

“In the first quarter, our teams responded as the industry continued to normalize inventories and profitability. We are committed to driving improvements across our business,” said Bryan DeBoer, President and CEO. “Our model is diversified with our adjacencies maturing and on a path to profitability, as we continue to deliver the best experience for our customers. Responding to market conditions, we are rebalancing our capital allocation from acquisitions toward returns to our shareholders, with the long-term target of delivering $2 in EPS per billion in revenues.”

Corporate Development
During the first quarter, LAD completed the acquisition of Pendragon PLC’s Fleet Management and UK Motor Divisions in the United Kingdom and grew in the North Central region with the purchase of the Carousel Motor Group. Year-to-date, we have acquired over $5.4 billion in annualized revenues.

Balance Sheet Update
LAD ended the first quarter with approximately $1.3 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 $0.3 billion.

Dividend Payment and Share Repurchases
The Board of Directors approved a dividend of $0.53 per share related to first quarter 2024 financial results. The dividend is expected to be paid on May 24, 2024 to shareholders of record on May 10, 2024.

During April 2024, we repurchased approximately 58,000 shares at a weighted average price of $264.42. Under the current share repurchase authorization approximately $451.7 million remains available.

Revenues
New vehicle retail		$ 3,261.0		$ 3,188.7		2.3 %
Used vehicle retail		2,039.6		2,148.0		(5.0)
Finance and insurance		297.7		312.7		(4.8)
Service, body and parts		740.2		717.5		3.2
Total revenues		6,639.8		6,771.1		(1.9)
Gross profit
New vehicle retail		$ 235.7		$ 323.5		(27.1) %
Used vehicle retail		152.6		160.6		(5.0)
Finance and insurance		297.7		312.7		(4.8)
Service, body and parts		409.7		384.4		6.6
Total gross profit		1,094.8		1,180.3		(7.2)
Gross margin
New vehicle retail		7.2 %		10.1 %		(290) bps
Used vehicle retail		7.5		7.5		–
Finance and insurance		100.0		100.0		–
Service, body and parts		55.4		53.6		180
Gross profit margin		16.5		17.4		(90)
Unit sales
New vehicle retail		68,373		65,980		3.6 %
Used vehicle retail		74,710		75,928		(1.6)
Average selling price
New vehicle retail		$ 47,695		$ 48,328		(1.3) %
Used vehicle retail		27,300		28,290		(3.5)
Average gross profit per unit
New vehicle retail		$ 3,448		$ 4,903		(29.7) %
Used vehicle retail		2,043		2,116		(3.4)
Finance and insurance		2,080		2,204		(5.6)
Total vehicle(1)		4,760		5,594		(14.9)
(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 March 31,
		2024
Key Performance by Country		Total Revenue		Total Gross Profit
United States		79.0 %		84.5 %
United Kingdom		18.2 %		13.0 %
Canada		2.8 %		2.5 %

	As of
	March 31,		December 31,		March 31,
	2024		2023		2023
Days Supply(1)
New vehicle inventory	60		65		51
Used vehicle inventory	58		64		53
(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 March 31,
($ in millions)	2024		% (1)		2023		% (1)
Interest margin:
Interest and fee income	$ 77.3		9.0		$ 49.3		8.1
Interest expense	(47.8)		(5.6)		(37.5)		(6.2)
Total interest margin	$ 29.5		3.5		$ 11.8		1.9
Lease income	22.4				4.6
Depreciation and amortization	(18.0)				(2.3)
Lease income, net	4.4				2.3
Selling, general and administrative	(10.6)				(8.6)
Provision expense	(25.0)		(2.9)		(26.3)		(4.3)
Financing operations loss	$ (1.7)				$ (20.8)
Total average managed finance receivables	$ 3,436.6				$ 2,461.9
Ending funded managed receivables	$ 3,106.3				$ 2,247.9
% of ending managed receivables	88.1 %				84.3 %
(1) Annualized percentage of total average managed finance receivables

LAD Condensed Consolidated Balance Sheets (Unaudited) (In millions)
		March 31, 2024		December 31, 2023
Cash, restricted cash, and cash equivalents		$ 404.6		$ 941.4
Trade receivables, net		1,249.3		1,123.1
Inventories, net		5,861.9		4,753.9
Other current assets		217.4		136.8
Total current assets		$ 7,733.2		$ 6,955.2
Property and equipment, net		4,502.0		3,981.4
Finance receivables, net		3,412.5		3,242.3
Intangibles		4,619.7		4,332.8
Other non-current assets		1,912.6		1,120.8
Total assets		$ 22,180.0		$ 19,632.5
Floor plan notes payable		4,962.0		3,635.5
Other current liabilities		1,629.5		1,296.7
Total current liabilities		$ 6,591.5		$ 4,932.2
Long-term debt, less current maturities		5,662.4		5,483.7
Non-recourse notes payable, less current maturities		1,803.9		1,671.7
Other long-term liabilities and deferred revenue		1,700.6		1,262.0
Total liabilities		$ 15,758.4		$ 13,349.6
Redeemable non-controlling interest and equity		6,421.6		6,282.9
Total liabilities, redeemable non-controlling interest, and equity		$ 22,180.0		$ 19,632.5

LAD Condensed Consolidated Statements of Cash Flows (Unaudited) (In millions)
		Three months ended March 31,
Cash flows from operating activities:		2024		2023
Net income		$ 165.0		$ 229.6
Adjustments to reconcile net income to net cash used in operating activities		127.0		82.3
Changes in:
Inventories		(183.3)		(56.9)
Finance receivables, net		(173.8)		(397.0)
Floor plan notes payable, net		327.7		38.9
Other operating activities		29.8		54.1
Net cash provided by (used in) operating activities		292.4		(49.0)
Cash flows from investing activities:
Capital expenditures		(79.6)		(38.9)
Cash paid for acquisitions, net of cash acquired		(1,074.4)		(387.4)
Proceeds from sales of stores		6.4		22.7
Other investing activities		(118.3)		(10.3)
Net cash used in investing activities		(1,265.9)		(413.9)
Cash flows from financing activities:
Net borrowings on floor plan notes payable, non-trade		156.1		187.6
Net borrowings non-recourse notes payable		125.9		403.2
Net borrowings (repayments) of other debt and finance lease liabilities		201.8		(42.1)
Proceeds from issuance of common stock		5.7		6.1
Repurchase of common stock		(15.0)		(14.4)
Dividends paid		(13.8)		(11.5)
Other financing activity		(15.7)		(19.0)
Net cash provided by financing activities		445.0		509.9
Effect of exchange rate changes on cash and restricted cash		(3.0)		6.2
Change in cash, restricted cash, and cash equivalents		(531.5)		53.2
Cash, restricted cash, and cash equivalents at beginning of period		972.0		271.5
Cash, restricted cash, and cash equivalents at end of period		440.5		324.7

LAD Reconciliation of Non-GAAP Cash Flow from Operations (Unaudited) (In millions)
		Three months ended March 31,
Net cash provided by operating activities		2024		2023
As reported		$ 292.4		$ (49.0)
Floor plan notes payable, non-trade, net		156.1		187.6
Adjust: finance receivables activity		173.8		397.0
Less: Borrowings on floor plan notes payable, non-trade associated with acquired new vehicle inventory		(71.7)		(3.7)
Adjusted		$ 550.6		$ 531.9

LAD Reconciliation of Certain Non-GAAP Financial Measures (Unaudited) (In millions, except for per share data)
	Three Months Ended March 31, 2024
	As reported		Acquisition expenses		Adjusted
Selling, general and administrative	$ 934.3		$ (7.7)		$ 926.6
Operating income	341.4		7.7		349.1
Income before income taxes	220.6		7.7		228.3
Income tax provision	(55.6)		(1.6)		(57.2)
Net income	$ 165.0		$ 6.1		$ 171.1
Net income attributable to non-controlling interests	(1.5)		–		(1.5)
Net income attributable to redeemable non-controlling interest	(0.9)		–		(0.9)
Net income attributable to LAD	$ 162.6		$ 6.1		$ 168.7
Diluted earnings per share attributable to LAD	$ 5.89		$ 0.22		$ 6.11
Diluted share count	27.6

	Three Months Ended March 31, 2023
	As reported		Net disposal gain on sale of stores		Investment loss		Insurance reserves		Acquisition expenses		Contract buyouts		Adjusted
Selling, general and administrative	$ 764.4		$ 7.2		$ –		$ (0.1)		$ (1.3)		$ (10.1)		$ 760.1
Operating income	379.0		(7.2)		–		0.1		1.3		10.1		383.3
Other income (expense), net	2.0		–		0.5		–		–		–		2.5
Income before income taxes	314.3		(7.2)		0.5		0.1		1.3		10.1		319.1
Income tax (provision) benefit	(84.7)		1.9		–		–		(0.2)		(2.7)		(85.7)
Net income	$ 229.6		$ (5.3)		$ 0.5		$ 0.1		$ 1.1		$ 7.4		$ 233.4
Net income attributable to non- controlling interests	(0.7)		–		–		–		–		–		(0.7)
Net income attributable to redeemable non-controlling interest	(0.2)		–		–		–		–		–		(0.2)
Net income attributable to LAD	$ 228.7		$ (5.3)		$ 0.5		$ 0.1		$ 1.1		$ 7.4		$ 232.5
Diluted earnings per share attributable to LAD	$ 8.30		$ (0.19)		$ 0.02		$ –		$ 0.04		$ 0.27		$ 8.44
Diluted share count	27.5

LAD Adjusted EBITDA and Net Debt to Adjusted EBITDA (Unaudited) (In millions)
		Three months ended March 31,				%
						Increase
		2024		2023		(Decrease)
EBITDA and Adjusted EBITDA
Net income		$ 165.0		$ 229.6		(28.1) %
Flooring interest expense		60.7		27.7		119.1
Other interest expense		63.6		39.0		63.1
Financing operations interest expense		47.8		37.5		27.5
Income tax expense		55.6		84.7		(34.4)
Depreciation and amortization		57.8		47.3		22.2
Financing operations depreciation expense		18.0		2.3		682.6 %
EBITDA		$ 468.5		$ 468.1		0.1 %
Other adjustments:
Less: flooring interest expense		$ (60.7)		$ (27.7)		119.1
Less: financing operations interest expense		(47.8)		(37.5)		27.5
Less: used vehicle line of credit interest		(6.2)		(1.5)		313.3
Add: acquisition expenses		7.7		1.3		492.3
Less: loss (gain) on divestitures		–		(7.2)		NM
Add: investment loss		–		0.5		NM
Add: insurance reserves		–		0.1		NM
Add: contract buyouts		–		10.1		NM
Adjusted EBITDA		$ 361.5		$ 406.2		(11.0) %
NM – not meaningful

		As of				%
		March 31,				Increase
Net Debt to Adjusted EBITDA		2024		2023		(Decrease)
Floor plan notes payable: non-trade		$ 2,428.7		$ 1,664.9		45.9 %
Floor plan notes payable		2,533.3		999.3		153.5
Used and service loaner vehicle inventory financing facility		912.7		843.6		8.2
Revolving lines of credit		1,610.5		1,012.4		59.1
Warehouse facilities		636.0		875.0		(27.3)
Non-recourse notes payable		1,831.5		825.4		121.9
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		880.6		651.5		35.2
Unamortized debt issuance costs		(30.2)		(30.6)		(1.3)
Total debt		$ 12,553.1		$ 8,591.5		46.1 %
Less: Floor plan related debt		$ (5,874.7)		$ (3,507.8)		67.5 %
Less: Financing operations related debt		(2,467.5)		(1,700.4)		45.1
Less: Unrestricted cash and cash equivalents		(264.4)		(184.9)		43.0
Less: Marketable securities		(49.9)		–		–
Less: Availability on used vehicle and service loaner financing facilities		(31.7)		(5.9)		437.3
Net Debt		$ 3,864.9		$ 3,192.5		21.1 %
TTM Adjusted EBITDA		$ 1,721.4		$ 1,875.0		(8.2) %
Net debt to Adjusted EBITDA		2.25 x		1.70 x
NM – not meaningful

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SOURCE Lithia Motors, Inc.