Earlier today, we reported the highest adjusted second quarter earnings in Company history at $11.12 per share, a 199% increase over last year, including the impact of the two recent equity offerings.
Record revenues of $6 billion were driven by robust consumer demand and an acceleration of acquisitions to produce strong operational performance across all business lines and channels.
During the quarter, total revenue grew 87% over 2019, while total gross profit increased to 125% compared to 2019.
On a same store basis, compared to 2019, we recorded a 20% increase in new vehicle revenues, 49% increase in used vehicle revenues, 39% increase in F&I income, and 3% increase in service body and parts revenues.
Reflecting back on the first year of our five-year plan, we are considerably ahead of schedule and have the required capital to carry us to and beyond $50 in earnings per share and $50 billion in revenue.
At $8 billion in added revenues since planned inception, we have acquired 40% of our targeted $20 billion in annualized revenues.
Despite the cost of the acquisition integration and Driveway's development and expansion, our SG&A as a percentage of gross profit was 55.7% during the quarter.
Our 50/50 plan, which is a base case, assumes mid to low 60% SG&A, though our management team is constructively focused on greater aspirations.
Our past few decades have yielded a $1 of earnings per share for every $1 billion in revenue.
We believe that there is significant potential in increasing profitability and constructively changing the calculus, so that $1 billion of revenue can produce more than $1 of EPS.
To follow on some thoughts on just how much more than $50 in earnings per share can be generated from $50 billion in revenue.
In the recently released Fortune 500, we jumped considerably to number 231.
We were number 12 in 10-year annual growth in revenues of 19.9%.
LAD was number two in 10-year annual growth in earnings per share with 43.7% growth, more than double what we achieved in revenues, demonstrating our ability to integrate and increase profitability.
And finally, we were number three in 10-year total return to shareholders, reflecting a 36.7% return rate, which speaks for the ability to transform and execute.
This growth continues as our current annual run rate is approximately $21 billion as compared to $12 billion in the base year of our plan.
In May, we raised $1.3 billion in equity and $500 million in net additional debt, and plan to deploy this over the next two to four quarters.
Together, we generated approximately $492 million of adjusted EBITDA in the second quarter.
Our unique high-growth strategy with a massive regenerating capital engine is speeding toward our goal of $50 billion in revenue and over $50 in EPS.
We can now market and deliver our 57,000 vehicle inventory to the entire country under a single brand name and negotiation-free experience.
We are on target to achieve an annual run rate of 15,000 Driveway shop and sell transactions in the month of December.
Driveway generated over 350,000 monthly unique visitors in June.
Driveway eclipsed the 500 unit milestone with 550 transactions in June, only six months after launch.
98% of our Driveway customers during our second quarter were incremental and have never done business with Lithia or Driveway before.
95% of our dealership network is actively participating in Driveway with reconditioning, logistics, transaction fulfillment, inventory procurement and last mile delivery.
We continue to build on our online reputation, with an average Google review score of 4.98 stars out of 5.
In addition, our Driveway Google Domain Authority score, which ranks online search, is now at 57, which is higher than all three used only e-commerce competitors, who have also been in operation for a significantly longer than Driveway.
Remember that over 80% of customers purchase a vehicle based on monthly payment, and this provides them upfront transparency and allows customers to focus their search.
While our entire inventory is available nationwide, we are currently reaching approximately 25% of the population with Driveway advertising that we are far from saturating these markets.
Today, our team of Driveway engineers, data scientists, procurement specialist, care center associates and Driveway Finance associate number over 300, and are growing rapidly to mirror the exponential growth in consumer demand.
For decades, we have demonstrated the ability to successfully purchase and integrate acquisitions with an over 80% success rate of exceeding our 15% return threshold and actual after tax returns averaging 25%.
During the quarter, we completed acquisitions, which are expected to generate $3.7 billion in annualized revenues, and year-to-date, we have acquired $4.4 billion.
We expanded our national footprint, entering the Detroit, Las Vegas and Jackson, Mississippi markets, substantially increasing our density and reach in North Central Region 3, Southwest Region 2 and Southeast Regions 6.
Despite a slightly more competitive environment, we continue to successfully target after-tax returns of 15% plus, investments of 15% to 30% of revenues, and three to seven times EBITDA.
Even with our pace being well ahead of schedule, we continue to replenish our more than $2 billion under LOI, and the more than $15 billion pipeline of potential acquisitions that we believe are priced to meet our return thresholds.
With our technology poised for rapid scalability across our existing and future network, we are positioned to lead Lithia & Driveway's progress toward $50 billion in revenue to produce more than $50 of EPS, the first leg of our journey.
As we live our mission of Growth Powered by People, we are once again humbled by our extraordinary team of almost 20,000 associates that, in the second quarter, more than doubled our previous earnings records.
Each day, our leaders are rising to the challenge of achieving or exceeding our 50/50 plan, evolving their skills, growing their teams and navigating the unprecedented operating environment experienced in the first half of 2021.
For the three months ended June 30, 2021, total same store sales increased 26% over 2019.
These increases were driven by a 20% increase in new vehicle sales, a 49% increase in used vehicle sales, a 39% increase in F&I revenue and the 3% increase in service body and parts revenues.
For the quarter, our new vehicle average selling price increased 13% and unit sales increased 6% over 2019.
Total gross profit per unit, including F&I, was $6,123, an increase of $2,463 per unit or 67%.
Excluding F&I, we are in $4,266 of gross profit per unit, a 10.1% margin.
For used vehicles, total gross profit per unit, including F&I, was $5,227, an increase of $1,658 or 46%.
Our used vehicle sales mix in the quarter was 19% certified, 60% core or vehicles three to seven years old, and 21% value auto or vehicles older than eight years.
With over 60% of the 40 million used vehicle sold in the U.S. being nine years and older, our continued strategy of selling deeper into the used vehicle age spectrum and our ability to procure the right scarce vehicles remain the catalyst for future success and growth of Lithia & Driveway.
In the quarter, our average used units per rooftop was 96 units, a strong push toward our goal of 100 units per rooftop that we raised in 2020.
We had 21,000 new vehicle units, a 23-day supply, and 36,000 used vehicle units, a 58-day supply.
Our 900 used vehicle procurement specialists have been working diligently to enable us to navigate the current demand environment, with their focus on procuring scarce high-demand used vehicles through the most profitable channels.
In the second quarter, only 14% of our used vehicles were acquired through the auction and over 50% of our inventory came from passive channels only available to new car dealers.
New and used vehicle sales are supported by our experienced financing specialists that help match the complexity of our consumers' financial position with lending options at over 180 financial institutions, including Driveway Financial.
In the quarter, our finance and insurance business line continued to show a substantial improvement, averaging $1,818 per retail unit compared to $1,458 per unit in 2019, an increase of $360.
We continue to monitor this through the growth of our total gross profit per unit, which was $5,778 this quarter, an increase of $2,118 per unit or 58% over 2019.
Our stores remain focused on the highest margin business lines, service body and parts, which increased 3.4% in revenue and 11% in gross profit, as consumers returned to work and travelled the roads in the comfort and safety of their vehicle.
The recovery was driven by an 11% increase in customer pay, and a 6% increase in wholesale parts, offset by a 10% decrease in warranty and an 8% decrease in body shop revenue.
As a reminder, our service body and parts business see over 5 million paying consumers and brand impressions annually, which generate over 50% margins and remain a huge competitive advantage for Lithia & Driveway.
Same-store SG&A to gross profit was 56.4% in the quarter, an improvement of 1,440 basis points over 2019.
While we expect SG&A to gross profit to normalize as new vehicle supply and gross margins bounce back to historical levels, we continue to benefit from the permanent headcount reductions of 20% or almost 300 basis points of SG&A, and other efficiency measures implemented last year.
Given these improvements to our model and the realization that our highest performing stores consistently maintain in SG&A to gross profit metric in the mid 50%s pre-pandemic, we believe that we are well on our way to exceeding our five-year plan and look to improve beyond our top quartile.
Driveway's financing solutions, which include new vehicle leasing and captive OEM finance options, now represent 29 lenders that are fully integrated with Driveway technology and are available to consumers with approvals they can occur in a matter of seconds.
We anticipate expanding our Driveway support teams 10 times by the end of 2022 to support expected demand.
During the quarter, LAD's fintech arm, Driveway Finance Corporation, originated over 1,500 loans per month, resulting in a 400% increase in business over 2020.
At quarter end, our loan portfolio exceeded $370 million.
We continue to see Driveway's fintech platform elevating the experience for consumers and our goal over the next five years is to scale Driveway Finance to capture 20% of all vehicle sales transactions.
We are focused on our five-year plan to achieve $50 billion in revenue and exceed $50 of earnings per share.
For the quarter, we generated over $492 million of adjusted EBITDA, an increase of 284% compared to 2019, and $282 million of free cash flow, defined as adjusted EBITDA plus stock-based compensation, less the following items paid in cash: interest, income taxes, dividends and capital expenditures.
As a result, we ended the quarter with $2.6 billion in cash and available credit.
In addition, our unfinanced real estate could provide additional liquidity of approximately $655 million for a combined nearly $3.3 billion of liquidity.
As of June 30th, we had $4.3 billion outstanding in debt, of which $1.3 billion was floor plan, used vehicle and service loaner financing.
The remaining portion of our debt is primarily related to senior notes and financed real estate, as we own over 85% of our physical network.
The current environment offers attractive returns on lending, and to expand our reach, last month, we increased the financing available on our ABS warehouse line from $150 million to $300 million with the ability to expand the line to $400 million.
On adjusted, our total debt to EBITDA is overstated at 3.37 times.
Adjusted to treat these items as an operating expense, our net debt to adjusted EBITDA is 1.25 times.
We target 65% investment in acquisitions, 25% internal investment, including capital expenditures, modernization and diversification, and 10% in shareholder returns in the form of dividends and share repurchases.
Combined with a robust balance sheet, we are well positioned to be the leader in consolidating this massive industry, all while progressing toward our five-year plan of achieving $50 billion in revenue and exceeding $50 in earnings per share.

Summary:
Earlier today, we reported the highest adjusted second quarter earnings in Company history at $11.12 per share, a 199% increase over last year, including the impact of the two recent equity offerings.