INVESTOR PRESENTATION
JULY 2021
DISCLOSURE
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 orother comparable terms. Examples of forward-looking statements in this presentation include, among others, statements regarding:
▪ | Future market conditions, including anticipated car sales levels; | |||
▪ | Anticipated impacts of the continued COVID-19 pandemic on the U.S. and local economies | in which we operate, our business operations and consumer demand; | ||
▪ | Continuation of our sales and services, including in-store appointments and home deliveries; | |||
▪ | Expected | growth from our e-commerce home | solutions and digital strategies; | |
▪ | Expected | operating results, such as improved | store performance; continued improvement | of selling, general and administrative expenses ("SG&A") as a percentage of gross profit and all projections; |
- Anticipated integration, success and growth of acquired stores;
- Anticipated ability to capture additional market share;
- Anticipated ability to find accretive acquisitions;
- Expected revenues from acquired stores;
▪ | Anticipated | synergies, ability to monetize our investment in digital innovation; | |
▪ | Anticipated | additions | of dealership locations to our portfolio in the future; |
▪ | Anticipated | financial | condition and liquidity, including from our cash, availability on our credit facility and unfinanced real estate; |
- Anticipated use of proceeds from our financings;
▪ Anticipated allocations, uses and levels of capital expenditures in the future;
▪ Expectations regarding compliance with financial and restrictive covenants in our credit facility and other debt agreements;
▪ Statements regarding furloughed employees and cost reductions;
▪ Expectations regarding programs and initiatives for employee recruitment, training, and retention; and
- Our strategies for customer retention, growth, market position, 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 liquidityand 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 economic and financial conditions (both nationally | and locally], including as a result of the COVID-19 pandemic; | |||||
▪ | Changes in customer demand, | our relationship with, and the financial and operational stability of, vehicle manufacturers and other suppliers; | |||||
▪ | Risks associated with our indebtedness (including available borrowing capacity, compliance with financial covenants and ability to refinance or repay indebtedness on favorable terms); | ||||||
▪ | The adequacy of our cash flow and earnings and other conditions | which may affect our ability to pay our quarterly dividend at the planned level; | |||||
▪ | Disruptions to our technology | network including computer | systems | and software, as well as natural events such as severe weather, fires, floods and earthquakes or man-made or other | disruptions of our operating systems, structures, facilities or | ||
equipment; | and | ||||||
▪ | Government | regulations and legislation, and other risks set forth throughout "Part 11, 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, adjusting 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, wereview 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 thesemeasures 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.
2 NYSE:LAD
LITHIA & DRIVEWAY
The pragmatic disruptor, with a proven multifaceted success strategy, uniquely and competitively leading the modernization of personal transportation
by providing consumers solutions wherever, whenever, and however they desire.
NYSE: LAD
* 10-year CAGRs and TSR through December 31, 2020.
- Diverse synergistic portfolio of businesses
- Complete ownership lifecycle attachment
- 100% participation in $2 trillion market
- #231 in 2021
- #12 10-year revenue growth, 20% CAGR*
- #3 10-year Total Shareholder Return, 37% CAGR*
- #2 10-year EPS Growth, 43% CAGR*
- 100% national coverage
- Proven expansion execution
- Highly profitable with significant cash flows
3 NYSE:LAD
KEY STRATEGIC HIGHLIGHTS
$50 billion in revenues, $50 EPS in 5 years
Largest Retail Industry | Omni-channel Approach | Data and Innovation |
in Early Innings of | Combination of E-commerce | Creates Unique Opportunities to |
Consolidation and | Home Solutions and Expansive | Capitalize on Innovation of New |
Modernization | Physical Network with | Products and Services |
Adjacencies |
Customer-Centric | Proven M&A Track Record | Growth, Scale, and Profitability |
Business Model with Solutions | of Valuation Creation Driving | Operational Excellence, Significant |
Throughout the Consumer | Continued Scale | Competitive Advantages, and |
Lifecycle | Considerable Barriers to Entry |
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FRAGMENTED $2 TRILLION REVENUE INDUSTRY
Maximizes Addressable Market
TRADITIONAL | PUBLIC USED | ||||||||
NEW FRANCHISE | ONLY AUTO | ||||||||
RETAILERS | RETAILERS | ||||||||
$2,000 | ~$2.0T | $400 | |||||||
$1,750 | $400B | ~$350B | |||||||
$1,500 | $300 | PROFT GROSS | |||||||
(in billions) | $1,250 | $175B | |||||||
$700B | $200B | ||||||||
$1,000 | $200 | ||||||||
REVENUE | billions) (in | ||||||||
$100B | |||||||||
$750 | |||||||||
$60B | $700B | ||||||||
$500 | $100 | ||||||||
$800B | $60B | ||||||||
$250 | $100B | $500B | |||||||
$300B | $50B | $65B | |||||||
$0 | $0 | ||||||||
Revenue | Gross Profit | Revenue | Gross Profit | Revenue | Gross Profit | ||||
Serv ice | New Vehicles | Used Vehicles* |
Greater gross profit opportunities allowing
for maximum flexibility.
- ~$350B industry gross profit opportunity
- Largest participant <1.5% market share
*Used vehicles: Assumes New Vehicle Dealers target 0-5 year old used vehicles; Public Used Auto Dealers target 0-10 year old used vehicles. Source: IHS Markit 2019 vehicle registrations, Auto Care Association
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Disclaimer
Lithia Motors Inc. published this content on 21 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 July 2021 10:50:06 UTC.