MEDFORD, Ore., Nov. 30, 2021 /PRNewswire/ -- Lithia & Driveway (NYSE:LAD) announced today an increase of $750 million to its share repurchase authorization by its Board of Directors, bringing total funds available today for future repurchases to approximately $885 million.
"As discussed in our last earnings call, strong earnings have generated greater than expected free cash flows, which allows us to return capital to our shareholders through share repurchases, while preserving the liquidity necessary to achieve our 2025 Plan," said Bryan DeBoer, Lithia & Driveway President and CEO. "Our capital allocation remains focused on acquisitions and internal investments, such as Driveway and Driveway Finance, to generate the highest long-term return for shareholders."
Inaugural Asset-Backed Securities (ABS) Offering for Driveway Finance
Driveway Finance completed its inaugural issuance of securities backed by its originated auto loan portfolio, raising $344 million of additional capital to fund the rapid growth of its auto loan portfolio and network development.
"Driveway Finance received better than expected pricing and credit ratings, which was exciting for our first issuance," said DeBoer. "Planned future reoccurring ABS issuances, will enable us to more quickly ramp the volume of originations and accelerate the profit contributed by Driveway Finance in the coming years as we seek to derive more than $1 dollar in EPS for each billion dollars in revenue."
Driveway Finance originations now account for approximately 5% of LAD's overall business and is 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 Lithia stores, Driveway and GreenCars brands.
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.
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SOURCE Lithia Motors, Inc.