8-K
SONIC AUTOMOTIVE INC (SAH)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________
FORM 8-K
____________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 28, 2022
____________________________________
SONIC AUTOMOTIVE, INC.
(Exact name of registrant as specified in its charter)
____________________________________
Delaware
(State or other jurisdiction
of incorporation)1-1339556-2010790(CommissionFile Number)(IRS EmployerIdentification No.)
| 4401 Colwick Road | |||
|---|---|---|---|
| Charlotte, | North Carolina | 28211 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (704) 566-2400
Not Applicable
(Former name or former address, if changed since last report.)
____________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Class A Common Stock, par value $0.01 per share | SAH | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On July 28, 2022, Sonic Automotive, Inc. (the “Company”) issued a press release announcing its financial results for its fiscal second quarter ended June 30, 2022 (the “Earnings Press Release”). A copy of the Earnings Press Release is attached hereto as Exhibit 99.1 and a copy of the earnings call presentation materials is attached hereto as Exhibit 99.2.
Item 7.01. Regulation FD Disclosure.
On July 28, 2022, in the Earnings Press Release, the Company announced the approval of a quarterly cash dividend.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit<br><br>No. | Description |
|---|---|
| 99.1 | Press Release of Sonic Automotive, Inc., dated July 28, 2022. |
| 99.2 | Earnings Call Presentation Materials. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
The information in this Current Report on Form 8-K, including Exhibits 99.1 and 99.2 attached hereto, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SONIC AUTOMOTIVE, INC. | ||
|---|---|---|
| July 28, 2022 | By: | /s/ STEPHEN K. COSS |
| Stephen K. Coss | ||
| Senior Vice President and General Counsel |
Document
Exhibit 99.1
Sonic Automotive Reports Second Quarter Financial Results
All-Time Record Quarterly Revenues and Gross Profit
Board of Directors Increases Share Repurchase Authorization by $500 Million for Total Availability of $633 Million
CHARLOTTE, N.C. – July 28, 2022 – Sonic Automotive, Inc. (“Sonic Automotive,” “Sonic” or the “Company”) (NYSE:SAH), one of the nation’s largest automotive retailers, today reported financial results for the second quarter and six months ended June 30, 2022.
Key Second Quarter 2022 Highlights
•All-time record quarterly revenues of $3.7 billion, up 9% year-over-year, all-time record quarterly gross profit of $588.8 million, up 15% year-over-year
•Reported net income from continuing operations of $94.8 million ($2.34 per diluted share)
•Excluding one-time charges, adjusted net income from continuing operations* of $99.2 million ($2.45 per diluted share)
•Reported selling, general and administrative (“SG&A”) expenses as a percentage of gross profit of 68.4% (60.7% on a Franchised Dealerships Segment basis, an increase of 260 basis points year-over-year)
•Excluding one-time charges, adjusted SG&A expenses as a percentage of gross profit* of 67.7% (59.9% on a Franchised Dealerships Segment basis, an increase of 180 basis points year-over-year)
•All-time record quarterly total Finance & Insurance (“F&I”) gross profit per retail unit of $2,503, up 13% year-over-year
•All-time record quarterly EchoPark revenues of $665.6 million, up 12% year-over-year
•During the second quarter of 2022, Sonic repurchased approximately 1.4 million shares of its Class A Common Stock for an aggregate purchase price of approximately $59.4 million
•Sonic’s Board of Directors increased the Company’s share repurchase authorization by $500.0 million, to a total of $633.1 million remaining authorization
* Please refer to the discussion and reconciliation of Non-GAAP Financial Measures below.
Commentary
David Smith, Chief Executive Officer of Sonic Automotive, stated, “Sonic achieved another quarter of record revenues and solid earnings as a result of the continued dedication of our Sonic and EchoPark teams and our strong relationships with our manufacturer and vendor partners. Despite persistent industrywide headwinds that contributed to lower new vehicle sales volume as a result of ongoing supply chain disruptions and inventory constraints, we continued to see strong new vehicle pricing and consumer demand during the second quarter. In addition, we have made significant progress on the integration of the RFJ Auto acquisition and expect to realize meaningful synergies in future periods, further demonstrating the strength of the franchised dealership model and Sonic’s capacity to reinvest in its business for long-term growth and shareholder returns.”
Jeff Dyke, President of Sonic Automotive, commented, “During the second quarter, we further expanded EchoPark’s nationwide geographic and digital network, opening three new locations and completing the rollout of our proprietary, best-in-class ecommerce platform to 100% of our nationwide traffic at EchoPark.com. Our new ecommerce platform accounted for 19% of our EchoPark retail unit sales volume in the second quarter, allowing our guests to shop their way via a modern omnichannel purchase experience or a seamless end-to-end online transaction. In addition, we expanded into new customer segments by adding older model year vehicles to our EchoPark inventory at more affordable prices, driving an increase in our non-auction sourced inventory mix to 25% of sales
volume in the second quarter, up from 7% in the prior year. We continue to adapt our business in the face of ongoing challenges in the used vehicle industry, from inventory procurement to consumer affordability. With the flexibility of the EchoPark model, we remain confident in EchoPark’s long-term prospects and remain on track to reach 90% U.S. population coverage by 2025.”
Heath Byrd, Chief Financial Officer of Sonic Automotive, added, “We are extremely pleased with our team’s ability to produce consistent top-line performance despite ongoing supply chain and affordability headwinds. Additionally, our organization remains focused on maintaining high levels of profitability and cash flows, capitalizing on the enhanced operating efficiencies we realized during the course of the COVID-19 pandemic while implementing additional strategic measures based on the latest industry trends and macroeconomic outlook. We believe our strong balance sheet and balanced capital allocation position Sonic to continue to provide long-term returns for its stockholders.”
Second Quarter 2022 Segment Highlights
The financial measures discussed below are results for the second quarter of 2022 with comparisons made to the second quarter of 2021, unless otherwise noted.
•Franchised Dealerships Segment operating results include:
•Same store revenues down 12%, same store gross profit down 2%
•Same store retail new vehicle unit sales volume down 33%; same store retail new vehicle gross profit per unit up 77%, to $6,905
•Same store retail used vehicle unit sales volume down 17%; same store retail used vehicle gross profit per unit down 15%, to $1,622
•Same store parts, service and collision repair gross profit up 4%; same store customer pay gross profit up 11%; same store warranty gross profit down 10%; same store gross margin down 60 basis points, to 50.0%
•Same store F&I gross profit down 14%; all-time record quarterly reported Franchised Dealerships Segment F&I gross profit per retail unit of $2,472, up 17%
•On a trailing quarter cost of sales basis, Franchised Dealerships Segment new vehicle inventory had approximately 18 days’ supply, and Franchised Dealerships Segment used vehicle inventory had approximately 31 days’ supply
•EchoPark Segment operating results include:
•All-time record quarterly EchoPark revenues of $665.6 million, up 12% year-over-year, all-time record quarterly EchoPark gross profit of $49.5 million, up 37% year-over-year
•EchoPark retail used vehicle unit sales volume of 16,608, down 22% year-over-year
•EchoPark retail used vehicle unit sales volume was comprised of 91% 1-4-year old vehicles and 9% 5-plus-year old vehicles
•EchoPark market share was 2.1% of the 1-4-year old vehicle segment in our current markets (on a same market basis, EchoPark share was 3.0% of the 1-4-year old vehicle segment)
•EchoPark pre-tax loss of $34.9 million and adjusted EBITDA* loss of $27.9 million (including market expansion-related losses of $10.3 million and $9.7 million, respectively)
•On a trailing quarter cost of sales basis, EchoPark Segment used vehicle inventory had approximately 53 days’ supply (including the effect of building up inventory for newly opened and future locations)
Strategic Update
In July 2021, Sonic announced a review process to evaluate potential strategic alternatives for its EchoPark business. After carefully evaluating a range of alternatives, the Company has concluded its review and the Board has determined that timing and current market conditions do not align with the Company’s value creation objectives for the business. Sonic will continue to execute on its expansion plans for EchoPark and will monitor market conditions and periodically consider potential opportunities to maximize long-term shareholder value as they arise. Further, while the Company remains confident in EchoPark’s long-term prospects, the current market environment has caused the Company to adjust EchoPark’s projected revenue growth and push back the achievement of its previously stated financial goals beyond 2025.
Dividend
Sonic’s Board of Directors approved a quarterly cash dividend of $0.25 per share payable on October 14, 2022 to all stockholders of record on September 15, 2022.
Second Quarter 2022 Earnings Conference Call
Senior management will hold a conference call today at 11:00 A.M. (Eastern).
Investor presentation and earnings press release materials will be accessible beginning prior to the conference call on the Company’s website at ir.sonicautomotive.com.
To access the live webcast of the conference call, please go to ir.sonicautomotive.com.
For telephone access to this conference call, please register in advance using this link:
https://ige.netroadshow.com/registration/q4inc/11305/sonic-automotive-second-quarter-2022-earnings-conference-call/
After registering, you will receive a confirmation that includes dial-in numbers and a unique conference call access code and PIN for entry. Registration remains available through the live call, however, to ensure you are connected for the full call we suggest registering at least 10 minutes before the start of the call.
A conference call replay will be available beginning two hours following the call for 14 days at ir.sonicautomotive.com.
About Sonic Automotive
Sonic Automotive, Inc., a Fortune 500 company based in Charlotte, North Carolina, is on a quest to become the most valuable automotive retailer and service brand in America. Our Company culture thrives on creating, innovating, and providing industry-leading guest experiences, driven by strategic investments in technology, teammates, and ideas that ultimately fulfill ownership dreams, enrich lives, and deliver happiness to our guests and teammates. As one of the largest automotive retailers in America, we are committed to delivering on this goal while pursuing expansive growth and taking progressive measures to be the leader in this category. Our new platforms, programs, and people are set to drive the next generation of automotive experiences. More information about Sonic Automotive can be found at www.sonicautomotive.com and ir.sonicautomotive.com.
About EchoPark Automotive
EchoPark Automotive is one of the fastest growing and most comprehensive retailers of nearly new pre-owned vehicles in America today. Our rapid growth plan is expected to bring our unique business model to 90% of the U.S. population by 2025, utilizing one of the most innovative technology-enabled sales strategies in our industry. Our approach provides a personalized and proven guest-centric buying process that consistently delivers award winning guest experiences and superior value to car buyers nationwide, with savings of up to $3,000 versus the competition. EchoPark is already making its mark by earning the 2021 Consumer Satisfaction Award from DealerRater, expanding its Owner Experience Centers, launching its all-new digital ecommerce platform and focusing on
growing its brand nationwide. EchoPark’s mission is in its name: Every Car deserves a Happy Owner. This drives the car buying experience for guests and differentiates EchoPark from the competition. More information about EchoPark Automotive can be found at www.echopark.com.
Forward-Looking Statements
Included herein are forward-looking statements, including statements regarding EchoPark's omnichannel strategy and future U.S. population coverage. There are many factors that affect management’s views about future events and trends of the Company’s business. These factors involve risks and uncertainties that could cause actual results or trends to differ materially from management’s views, including, without limitation, economic conditions in the markets in which we operate, supply chain disruptions and manufacturing delays, labor shortages, the impacts of inflation and increases in interest rates, new and used vehicle industry sales volume, future levels of consumer demand for new and used vehicles, anticipated future growth in our EchoPark Segment, the success of our operational strategies, the rate and timing of overall economic expansion or contraction, the integration of the RFJ Auto acquisition, the effect of the COVID-19 pandemic and related government-imposed restrictions on operations, and the risk factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and other reports and information filed with the United States Securities and Exchange Commission (the “SEC”). The Company does not undertake any obligation to update forward-looking information, except as required under federal securities laws and the rules and regulations of the SEC.
Non-GAAP Financial Measures
This press release and the attached financial tables contain certain non-GAAP financial measures as defined under SEC rules, such as adjusted net income from continuing operations and related earnings per diluted share, adjusted SG&A expenses as a percentage of gross profit, and adjusted EBITDA. As required by SEC rules, the Company has provided reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures in the schedules included in this press release. The Company believes that these non-GAAP financial measures improve the transparency of the Company’s disclosures and provide a meaningful presentation of the Company’s results.
Company Contacts
Investor Inquiries:
Heath Byrd, Executive Vice President and Chief Financial Officer (704) 566-2400
Danny Wieland, Vice President, Investor Relations & Financial Reporting (704) 927-3462
ir@sonicautomotive.com
Press Inquiries:
Danielle DeVoren / Joshua Greenwald
212-896-1272 / 646-379-7971
ddevoren@kcsa.com/jgreenwald@kcsa.com
Sonic Automotive, Inc.
Results of Operations (Unaudited)
Results of Operations - Consolidated
| Three Months Ended June 30, | Better / (Worse) | Six Months Ended June 30, | Better / (Worse) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||
| (In millions, except per share amounts) | ||||||||||||
| Revenues: | ||||||||||||
| Retail new vehicles | $ | 1,344.3 | $ | 1,453.2 | (7) | % | $ | 2,695.6 | $ | 2,587.2 | 4 | % |
| Fleet new vehicles | 166.4 | 9.7 | NM | 315.0 | 32.0 | 884 | % | |||||
| Total new vehicles | 1,510.7 | 1,462.9 | 3 | % | 3,010.6 | 2,619.2 | 15 | % | ||||
| Used vehicles | 1,449.4 | 1,281.2 | 13 | % | 2,820.2 | 2,384.1 | 18 | % | ||||
| Wholesale vehicles | 121.4 | 84.8 | 43 | % | 290.2 | 159.6 | 82 | % | ||||
| Total vehicles | 3,081.5 | 2,828.9 | 9 | % | 6,121.0 | 5,162.9 | 19 | % | ||||
| Parts, service and collision repair | 398.1 | 346.1 | 15 | % | 778.7 | 654.2 | 19 | % | ||||
| Finance, insurance and other, net | 173.2 | 177.2 | (2) | % | 339.7 | 321.9 | 6 | % | ||||
| Total revenues | 3,652.8 | 3,352.2 | 9 | % | 7,239.4 | 6,139.0 | 18 | % | ||||
| Cost of sales: | ||||||||||||
| Retail new vehicles | (1,176.0) | (1,335.1) | 12 | % | (2,359.6) | (2,399.9) | 2 | % | ||||
| Fleet new vehicles | (165.5) | (9.4) | NM | (313.2) | (31.4) | (897) | % | |||||
| Total new vehicles | (1,341.5) | (1,344.5) | — | % | (2,672.8) | (2,431.3) | (10) | % | ||||
| Used vehicles | (1,402.3) | (1,246.1) | (13) | % | (2,725.0) | (2,318.4) | (18) | % | ||||
| Wholesale vehicles | (120.2) | (80.3) | (50) | % | (287.6) | (154.2) | (87) | % | ||||
| Total vehicles | (2,864.0) | (2,670.9) | (7) | % | (5,685.4) | (4,903.9) | (16) | % | ||||
| Parts, service and collision repair | (200.0) | (170.5) | (17) | % | (393.9) | (323.4) | (22) | % | ||||
| Total cost of sales | (3,064.0) | (2,841.4) | (8) | % | (6,079.3) | (5,227.3) | (16) | % | ||||
| Gross profit | 588.8 | 510.8 | 15 | % | 1,160.1 | 911.7 | 27 | % | ||||
| Selling, general and administrative expenses | (402.8) | (320.6) | (26) | % | (789.8) | (610.0) | (29) | % | ||||
| Depreciation and amortization | (31.2) | (24.8) | (26) | % | (61.1) | (48.4) | (26) | % | ||||
| Operating income (loss) | 154.8 | 165.4 | (6) | % | 309.2 | 253.3 | 22 | % | ||||
| Other income (expense): | ||||||||||||
| Interest expense, floor plan | (6.1) | (4.3) | (42) | % | (11.1) | (9.4) | (18) | % | ||||
| Interest expense, other, net | (21.3) | (10.1) | (111) | % | (42.1) | (20.4) | (106) | % | ||||
| Other income (expense), net | (0.2) | — | (100) | % | 0.1 | 0.1 | — | % | ||||
| Total other income (expense) | (27.6) | (14.4) | (92) | % | (53.1) | (29.7) | (79) | % | ||||
| Income (loss) from continuing operations before taxes | 127.2 | 151.0 | (16) | % | 256.1 | 223.6 | 15 | % | ||||
| Provision for income taxes for continuing operations - benefit (expense) | (32.4) | (37.0) | 12 | % | (64.0) | (55.9) | (14) | % | ||||
| Income (loss) from continuing operations | 94.8 | 114.0 | (17) | % | 192.1 | 167.7 | 15 | % | ||||
| Discontinued operations: | ||||||||||||
| Income (loss) from discontinued operations before taxes | — | (0.2) | 100 | % | — | 0.5 | (100) | % | ||||
| Provision for income taxes for discontinued operations - benefit (expense) | — | — | — | % | — | (0.1) | 100 | % | ||||
| Income (loss) from discontinued operations | — | (0.2) | 100 | % | — | 0.4 | (100) | % | ||||
| Net income (loss) | $ | 94.8 | $ | 113.8 | (17) | % | $ | 192.1 | $ | 168.1 | 14 | % |
| Basic earnings (loss) per common share: | ||||||||||||
| Earnings (loss) per share from continuing operations | $ | 2.40 | $ | 2.74 | (12) | % | $ | 4.81 | $ | 4.03 | 19 | % |
| Earnings (loss) per share from discontinued operations | — | — | — | % | — | 0.01 | (100) | % | ||||
| Earnings (loss) per common share | $ | 2.40 | $ | 2.74 | (12) | % | $ | 4.81 | $ | 4.04 | 19 | % |
| Weighted-average common shares outstanding | 39.5 | 41.6 | 5 | % | 40.0 | 41.6 | 4 | % | ||||
| Diluted earnings (loss) per common share: | ||||||||||||
| Earnings (loss) per share from continuing operations | $ | 2.34 | $ | 2.63 | (11) | % | $ | 4.67 | $ | 3.86 | 21 | % |
| Earnings (loss) per share from discontinued operations | — | — | — | % | — | 0.01 | (100) | % | ||||
| Earnings (loss) per common share | $ | 2.34 | $ | 2.63 | (11) | % | $ | 4.67 | $ | 3.87 | 21 | % |
| Weighted-average common shares outstanding | 40.5 | 43.4 | 7 | % | 41.2 | 43.5 | 5 | % | ||||
| Dividends declared per common share | $ | 0.25 | $ | 0.12 | 108 | % | $ | 0.50 | $ | 0.22 | 127 | % |
NM = Not Meaningful
Franchised Dealerships Segment - Reported
| Three Months Ended June 30, | Better / (Worse) | Six Months Ended June 30, | Better / (Worse) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||
| (In millions, except unit and per unit data) | ||||||||||||
| Revenues: | ||||||||||||
| Retail new vehicles | $ | 1,341.7 | $ | 1,452.3 | (8) | % | $ | 2,687.4 | $ | 2,586.3 | 4 | % |
| Fleet new vehicles | 166.5 | 9.7 | NM | 315.0 | 32.0 | 884 | % | |||||
| Total new vehicles | 1,508.2 | 1,462.0 | 3 | % | 3,002.4 | 2,618.3 | 15 | % | ||||
| Used vehicles | 871.9 | 761.5 | 14 | % | 1,725.7 | 1,423.1 | 21 | % | ||||
| Wholesale vehicles | 79.2 | 63.0 | 26 | % | 185.5 | 119.1 | 56 | % | ||||
| Total vehicles | 2,459.3 | 2,286.5 | 8 | % | 4,913.6 | 4,160.5 | 18 | % | ||||
| Parts, service and collision repair | 398.1 | 346.1 | 15 | % | 778.7 | 654.2 | 19 | % | ||||
| Finance, insurance and other, net | 129.8 | 124.0 | 5 | % | 256.2 | 221.6 | 16 | % | ||||
| Total revenues | 2,987.2 | 2,756.6 | 8 | % | 5,948.5 | 5,036.3 | 18 | % | ||||
| Gross Profit: | ||||||||||||
| Retail new vehicles | 167.3 | 118.0 | 42 | % | 333.8 | 187.2 | 78 | % | ||||
| Fleet new vehicles | 0.9 | 0.3 | 200 | % | 1.8 | 0.6 | 200 | % | ||||
| Total new vehicles | 168.2 | 118.3 | 42 | % | 335.6 | 187.8 | 79 | % | ||||
| Used vehicles | 43.7 | 55.2 | (21) | % | 90.6 | 87.2 | 4 | % | ||||
| Wholesale vehicles | (0.5) | 1.5 | (133) | % | (0.9) | 2.2 | (141) | % | ||||
| Total vehicles | 211.4 | 175.0 | 21 | % | 425.3 | 277.2 | 53 | % | ||||
| Parts, service and collision repair | 198.1 | 175.6 | 13 | % | 384.8 | 330.8 | 16 | % | ||||
| Finance, insurance and other, net | 129.8 | 124.0 | 5 | % | 256.2 | 221.6 | 16 | % | ||||
| Total gross profit | 539.3 | 474.6 | 14 | % | 1,066.3 | 829.6 | 29 | % | ||||
| Selling, general and administrative expenses | (327.5) | (275.7) | (19) | % | (642.8) | (525.8) | (22) | % | ||||
| Depreciation and amortization | (25.3) | (20.6) | (23) | % | (50.1) | (41.0) | (22) | % | ||||
| Operating income (loss) | 186.5 | 178.3 | 5 | % | 373.4 | 262.8 | 42 | % | ||||
| Other income (expense): | ||||||||||||
| Interest expense, floor plan | (3.9) | (3.2) | (22) | % | (7.2) | (7.3) | 1 | % | ||||
| Interest expense, other, net | (20.2) | (9.7) | (108) | % | (40.3) | (19.7) | (105) | % | ||||
| Other income (expense), net | (0.3) | — | (100) | % | 0.1 | 0.2 | (50) | % | ||||
| Total other income (expense) | (24.4) | (12.9) | (89) | % | (47.4) | (26.8) | (77) | % | ||||
| Income (loss) before taxes | 162.1 | 165.4 | (2) | % | 326.0 | 236.0 | 38 | % | ||||
| Add: impairment charges | — | — | NM | — | — | NM | ||||||
| Segment income (loss) | $ | 162.1 | $ | 165.4 | (2) | % | $ | 326.0 | $ | 236.0 | 38 | % |
| Unit Sales Volume: | ||||||||||||
| Retail new vehicles | 24,342 | 30,243 | (20) | % | 48,944 | 54,060 | (9) | % | ||||
| Fleet new vehicles | 4,638 | 245 | NM | 9,019 | 786 | NM | ||||||
| Total new vehicles | 28,980 | 30,488 | (5) | % | 57,963 | 54,846 | 6 | % | ||||
| Used vehicles | 28,156 | 28,550 | (1) | % | 55,234 | 55,786 | (1) | % | ||||
| Wholesale vehicles | 5,851 | 6,753 | (13) | % | 12,623 | 13,585 | (7) | % | ||||
| Retail new & used vehicles | 52,498 | 58,793 | (11) | % | 104,178 | 109,846 | (5) | % | ||||
| Used-to-New Ratio | 0.97 | 0.94 | 4 | % | 0.95 | 1.02 | (6) | % | ||||
| Gross Profit Per Unit: | ||||||||||||
| Retail new vehicles | $ | 6,871 | $ | 3,902 | 76 | % | $ | 6,821 | $ | 3,463 | 97 | % |
| Fleet new vehicles | $ | 203 | $ | 1,319 | (85) | % | $ | 198 | $ | 727 | (73) | % |
| Total new vehicles | $ | 5,804 | $ | 3,881 | 50 | % | $ | 5,790 | $ | 3,424 | 69 | % |
| Used vehicles | $ | 1,553 | $ | 1,934 | (20) | % | $ | 1,640 | $ | 1,563 | 5 | % |
| Finance, insurance and other, net | $ | 2,472 | $ | 2,110 | 17 | % | $ | 2,460 | $ | 2,017 | 22 | % |
NM = Not Meaningful
Franchised Dealerships Segment - Same Store
| Three Months Ended June 30, | Better / (Worse) | Six Months Ended June 30, | Better / (Worse) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||
| (In millions, except unit and per unit data) | ||||||||||||
| Revenues: | ||||||||||||
| Retail new vehicles | $ | 1,126.3 | $ | 1,447.5 | (22) | % | $ | 2,236.0 | $ | 2,578.2 | (13) | % |
| Fleet new vehicles | 17.5 | 9.7 | 80 | % | 31.0 | 32.0 | (3) | % | ||||
| Total new vehicles | 1,143.8 | 1,457.2 | (22) | % | $ | 2,267.0 | $ | 2,610.2 | (13) | % | ||
| Used vehicles | 751.5 | 758.8 | (1) | % | 1,474.5 | 1,417.9 | 4 | % | ||||
| Wholesale vehicles | 55.4 | 62.7 | (12) | % | 138.1 | 118.7 | 16 | % | ||||
| Total vehicles | 1,950.7 | 2,278.7 | (14) | % | 3,879.6 | 4,146.8 | (6) | % | ||||
| Parts, service and collision repair | 362.1 | 344.9 | 5 | % | 706.8 | 651.8 | 8 | % | ||||
| Finance, insurance and other, net | 106.6 | 123.7 | (14) | % | 209.1 | 221.0 | (5) | % | ||||
| Total revenues | 2,419.4 | 2,747.3 | (12) | % | 4,795.5 | 5,019.6 | (4) | % | ||||
| Gross Profit: | ||||||||||||
| Retail new vehicles | 139.0 | 117.4 | 18 | % | 276.9 | 186.2 | 49 | % | ||||
| Fleet new vehicles | 0.8 | 0.3 | 167 | % | 1.4 | 0.6 | 133 | % | ||||
| Total new vehicles | 139.8 | 117.7 | 19 | % | 278.3 | 186.8 | 49 | % | ||||
| Used vehicles | 38.2 | 54.5 | (30) | % | 77.5 | 89.0 | (13) | % | ||||
| Wholesale vehicles | (0.4) | 4.1 | (110) | % | (0.8) | 4.9 | (116) | % | ||||
| Total vehicles | 177.6 | 176.3 | 1 | % | 355.0 | 280.7 | 26 | % | ||||
| Parts, service and collision repair | 181.2 | 174.5 | 4 | % | 350.9 | 328.8 | 7 | % | ||||
| Finance, insurance and other, net | 106.6 | 123.7 | (14) | % | 209.1 | 221.0 | (5) | % | ||||
| Total gross profit | $ | 465.4 | $ | 474.5 | (2) | % | $ | 915.0 | $ | 830.5 | 10 | % |
| Unit Sales Volume: | ||||||||||||
| Retail new vehicles | 20,135 | 30,129 | (33) | % | 40,418 | 53,865 | (25) | % | ||||
| Fleet new vehicles | 381 | 245 | 56 | % | 658 | 786 | (16) | % | ||||
| Total new vehicles | 20,516 | 30,374 | (32) | % | 41,076 | 54,651 | (25) | % | ||||
| Used vehicles | 23,555 | 28,429 | (17) | % | 46,272 | 55,549 | (17) | % | ||||
| Wholesale vehicles | 4,313 | 6,729 | (36) | % | 9,675 | 13,532 | (29) | % | ||||
| Retail new & used vehicles | 43,690 | 58,558 | (25) | % | 86,690 | 109,414 | (21) | % | ||||
| Used-to-New Ratio | 1.15 | 0.94 | 23 | % | 1.13 | 1.02 | 11 | % | ||||
| Gross Profit Per Unit: | ||||||||||||
| Retail new vehicles | $ | 6,905 | $ | 3,897 | 77 | % | $ | 6,851 | $ | 3,458 | 98 | % |
| Fleet new vehicles | $ | 1,973 | $ | 1,319 | 50 | % | $ | 2,130 | $ | 727 | 193 | % |
| New vehicles | $ | 6,813 | $ | 3,876 | 76 | % | $ | 6,775 | $ | 3,418 | 98 | % |
| Used vehicles | $ | 1,622 | $ | 1,915 | (15) | % | $ | 1,674 | $ | 1,602 | 4 | % |
| Finance, insurance and other, net | $ | 2,440 | $ | 2,113 | 15 | % | $ | 2,412 | $ | 2,020 | 19 | % |
NM = Not Meaningful
Note: All currently operating franchised dealership stores are included within the same store group as of the first full month following the first anniversary of the store’s opening or acquisition.
EchoPark Segment - Reported
| Three Months Ended June 30, | Better / (Worse) | Six Months Ended June 30, | Better / (Worse) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||
| (In millions, except unit and per unit data) | ||||||||||||
| Revenues: | ||||||||||||
| Retail new vehicles | $ | 2.5 | $ | 0.9 | 178 | % | $ | 8.2 | $ | 0.9 | 811 | % |
| Used vehicles | 577.5 | 519.7 | 11 | % | 1,094.5 | 961.0 | 14 | % | ||||
| Wholesale vehicles | 42.2 | 21.8 | 94 | % | 104.7 | 40.5 | 159 | % | ||||
| Total vehicles | 622.2 | 542.4 | 15 | % | 1,207.4 | 1,002.4 | 20 | % | ||||
| Finance, insurance and other, net | 43.4 | 53.2 | (18) | % | 83.5 | 100.3 | (17) | % | ||||
| Total revenues | 665.6 | 595.6 | 12 | % | 1,290.9 | 1,102.7 | 17 | % | ||||
| Gross Profit: | ||||||||||||
| Retail new vehicles | 1.0 | — | 100 | % | 2.2 | 0.1 | NM | |||||
| Used vehicles | 3.4 | (20.1) | 117 | % | 4.6 | (21.4) | 121 | % | ||||
| Wholesale vehicles | 1.7 | 3.0 | (43) | % | 3.5 | 3.2 | 9 | % | ||||
| Total vehicles | 6.1 | (17.1) | 136 | % | 10.3 | (18.1) | 157 | % | ||||
| Finance, insurance and other, net | 43.4 | 53.2 | (18) | % | 83.5 | 100.3 | (17) | % | ||||
| Total gross profit | 49.5 | 36.2 | 37 | % | 93.8 | 82.2 | 14 | % | ||||
| Selling, general and administrative expenses | (75.3) | (44.9) | (68) | % | (147.0) | (84.2) | (75) | % | ||||
| Depreciation and amortization | (5.9) | (4.2) | (40) | % | (11.0) | (7.4) | (49) | % | ||||
| Operating income (loss) | (31.7) | (12.9) | (146) | % | (64.2) | (9.4) | (583) | % | ||||
| Other income (expense): | ||||||||||||
| Interest expense, floor plan | (2.2) | (1.1) | (100) | % | (3.9) | (2.1) | (86) | % | ||||
| Interest expense, other, net | (1.1) | (0.4) | (175) | % | (1.8) | (0.7) | (157) | % | ||||
| Other income (expense), net | 0.1 | — | 100 | % | — | (0.1) | 100 | % | ||||
| Total other income (expense) | (3.2) | (1.5) | (113) | % | (5.7) | (2.9) | (97) | % | ||||
| Income (loss) before taxes | (34.9) | (14.4) | (142) | % | (69.9) | (12.4) | (464) | % | ||||
| Add: impairment charges | — | — | NM | — | — | NM | ||||||
| Segment income (loss) | $ | (34.9) | $ | (14.4) | (142) | % | $ | (69.9) | $ | (12.4) | (464) | % |
| Unit Sales Volume: | ||||||||||||
| Retail new vehicles | 85 | 14 | 507 | % | 170 | 14 | NM | |||||
| Used vehicles | 16,608 | 21,261 | (22) | % | 31,603 | 40,931 | (23) | % | ||||
| Wholesale vehicles | 2,694 | 2,878 | (6) | % | 6,343 | 5,739 | 11 | % | ||||
| Gross Profit Per Unit: | ||||||||||||
| Total used vehicle and F&I | $ | 2,804 | $ | 1,537 | 82 | % | $ | 2,774 | $ | 1,922 | 44 | % |
NM = Not Meaningful
EchoPark Segment - Same Market
| Three Months Ended June 30, | Better / (Worse) | Six Months Ended June 30, | Better / (Worse) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||
| (In millions, except unit and per unit data) | ||||||||||||
| Revenues: | ||||||||||||
| Retail new vehicles | $ | 2.9 | $ | 0.9 | 222 | % | $ | 7.0 | $ | 0.9 | 678 | % |
| Used vehicles | 406.3 | 518.6 | (22) | % | $ | 768.4 | $ | 960.1 | (20) | % | ||
| Wholesale vehicles | 35.0 | 21.9 | 60 | % | 89.3 | 40.5 | 120 | % | ||||
| Total vehicles | 444.2 | 541.4 | (18) | % | 864.7 | 1,001.5 | (14) | % | ||||
| Finance, insurance and other, net | 30.8 | 53.3 | (42) | % | 59.4 | 99.9 | (41) | % | ||||
| Total revenues | 475.0 | 594.7 | (20) | % | 924.1 | 1,101.4 | (16) | % | ||||
| Gross Profit: | ||||||||||||
| Retail new vehicles | 0.3 | 0.1 | 200 | % | 0.7 | 0.1 | 200 | % | ||||
| Used vehicles | (3.6) | (20.3) | 82 | % | (10.4) | (21.6) | 52 | % | ||||
| Wholesale vehicles | 1.5 | 2.8 | (46) | % | 3.5 | 3.1 | 13 | % | ||||
| Total vehicles | (1.8) | (17.4) | 90 | % | (6.2) | (18.4) | 66 | % | ||||
| Finance, insurance and other, net | 30.8 | 53.3 | (42) | % | 59.4 | 99.9 | (41) | % | ||||
| Total gross profit | $ | 29.0 | $ | 35.9 | (19) | % | $ | 53.2 | $ | 81.5 | (35) | % |
| Unit Sales Volume: | ||||||||||||
| Retail new vehicles | 37 | 14 | 164 | % | 81 | 14 | 479 | % | ||||
| Used vehicles | 12,440 | 21,222 | (41) | % | 23,830 | 40,892 | (42) | % | ||||
| Wholesale vehicles | 2,286 | 2,878 | (21) | % | 5,393 | 5,739 | (6) | % | ||||
| Gross Profit Per Unit: | ||||||||||||
| Total used vehicle and F&I | $ | 2,171 | $ | 1,538 | 41 | % | $ | 2,048 | $ | 1,914 | 7 | % |
NM = Not Meaningful
Note: All currently operating EchoPark stores in a local geographic market are included within the same market group as of the first full month following the first anniversary of the market's opening.
Consolidated Selling, General and Administrative ("SG&A") Expenses - Non-GAAP Reconciliation
| Three Months Ended June 30, | Better / (Worse) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | Change | % Change | ||||||||
| (In millions) | |||||||||||
| Reported: | |||||||||||
| Compensation | $ | 266.4 | $ | 213.8 | $ | (52.6) | (25) | % | |||
| Advertising | 25.6 | 15.3 | (10.3) | (67) | % | ||||||
| Rent | 13.7 | 13.7 | — | — | % | ||||||
| Other | 97.1 | 77.8 | (19.3) | (25) | % | ||||||
| Total SG&A expenses | $ | 402.8 | $ | 320.6 | $ | (82.2) | (26) | % | |||
| Items of interest: | |||||||||||
| Long term compensation charges | $ | (4.4) | $ | — | |||||||
| Total SG&A adjustments | $ | (4.4) | $ | — | |||||||
| Adjusted: | |||||||||||
| Total adjusted SG&A expenses | $ | 398.4 | $ | 320.6 | $ | (77.8) | (24) | % | |||
| Reported: | |||||||||||
| SG&A expenses as a % of gross profit: | |||||||||||
| Compensation | 45.2 | % | 41.9 | % | (330) | bps | |||||
| Advertising | 4.3 | % | 3.0 | % | (130) | bps | |||||
| Rent | 2.3 | % | 2.7 | % | 40 | bps | |||||
| Other | 16.6 | % | 15.2 | % | (140) | bps | |||||
| Total SG&A expenses as a % of gross profit | 68.4 | % | 62.8 | % | (560) | bps | |||||
| Items of interest: | |||||||||||
| Long term compensation charges | (0.7) | % | — | % | |||||||
| Total effect of adjustments | (0.7) | % | — | % | |||||||
| Adjusted: | |||||||||||
| Total adjusted SG&A expenses as a % of gross profit | 67.7 | % | 62.8 | % | (490) | bps |
Consolidated - SG&A Expenses - Non-GAAP Reconciliation (Continued)
| Six Months Ended June 30, | Better / (Worse) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | Change | % Change | ||||||||
| (In millions) | |||||||||||
| Reported: | |||||||||||
| Compensation | $ | 518.9 | $ | 402.3 | $ | (116.6) | (29) | % | |||
| Advertising | 51.7 | 27.5 | (24.2) | (88) | % | ||||||
| Rent | 26.4 | 27.4 | 1.0 | 4 | % | ||||||
| Other | 192.8 | 152.8 | (40.0) | (26) | % | ||||||
| Total SG&A expenses | $ | 789.8 | $ | 610.0 | $ | (179.8) | (29) | % | |||
| Items of interest: | |||||||||||
| Long term compensation charges | (4.4) | $ | — | ||||||||
| Total SG&A adjustments | $ | (4.4) | $ | — | |||||||
| Adjusted: | |||||||||||
| Total adjusted SG&A expenses | $ | 785.4 | $ | 610.0 | $ | (175.4) | (29) | % | |||
| Reported: | |||||||||||
| SG&A expenses as a % of gross profit: | |||||||||||
| Compensation | 44.7 | % | 44.1 | % | (60) | bps | |||||
| Advertising | 4.5 | % | 3.0 | % | (150) | bps | |||||
| Rent | 2.3 | % | 3.0 | % | 70 | bps | |||||
| Other | 16.6 | % | 16.8 | % | 20 | bps | |||||
| Total SG&A expenses as a % of gross profit | 68.1 | % | 66.9 | % | (120) | bps | |||||
| Items of interest: | |||||||||||
| Long term compensation charges | (0.4) | % | — | % | |||||||
| Total effect of adjustments | (0.4) | % | — | % | |||||||
| Adjusted: | |||||||||||
| Total adjusted SG&A expenses as a % of gross profit | 67.7 | % | 66.9 | % | (80) | bps |
Franchised Dealerships Segment - SG&A Expenses - Non-GAAP Reconciliation
| Three Months Ended June 30, | Better / (Worse) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | Change | % Change | ||||||||
| (In millions) | |||||||||||
| Reported: | |||||||||||
| Compensation | $ | 225.9 | $ | 187.8 | $ | (38.1) | (20) | % | |||
| Advertising | 7.8 | 7.5 | (0.3) | (4) | % | ||||||
| Rent | 11.0 | 12.1 | 1.1 | 9 | % | ||||||
| Other | 82.9 | 68.3 | (14.6) | (21) | % | ||||||
| Total SG&A expenses | $ | 327.6 | $ | 275.7 | $ | (51.9) | (19) | % | |||
| Items of interest: | |||||||||||
| Long term compensation charges | $ | (4.4) | $ | — | |||||||
| Total SG&A adjustments | $ | (4.4) | $ | — | |||||||
| Adjusted: | |||||||||||
| Total adjusted SG&A expenses | $ | 323.2 | $ | 275.7 | $ | (47.5) | (17) | % | |||
| Reported: | |||||||||||
| SG&A expenses as a % of gross profit: | |||||||||||
| Compensation | 41.9 | % | 39.6 | % | (230) | bps | |||||
| Advertising | 1.4 | % | 1.6 | % | 20 | bps | |||||
| Rent | 2.0 | % | 2.5 | % | 50 | bps | |||||
| Other | 15.4 | % | 14.4 | % | (100) | bps | |||||
| Total SG&A expenses as a % of gross profit | 60.7 | % | 58.1 | % | (260) | bps | |||||
| Items of interest: | |||||||||||
| Long term compensation charges | (0.8) | % | — | % | |||||||
| Total effect of adjustments | (0.8) | % | — | % | |||||||
| Adjusted: | |||||||||||
| Total adjusted SG&A expenses as a % of gross profit | 59.9 | % | 58.1 | % | (180) | bps |
Franchised Dealerships Segment - SG&A Expenses - Non-GAAP Reconciliation (Continued)
| Six Months Ended June 30, | Better / (Worse) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | Change | % Change | ||||||||
| (In millions) | |||||||||||
| Reported: | |||||||||||
| Compensation | $ | 441.0 | $ | 353.2 | $ | (87.8) | (25) | % | |||
| Advertising | 15.6 | 13.3 | (2.3) | (17) | % | ||||||
| Rent | 21.9 | 24.2 | 2.3 | 10 | % | ||||||
| Other | 164.3 | 135.1 | (29.2) | (22) | % | ||||||
| Total SG&A expenses | $ | 642.8 | $ | 525.8 | $ | (117.0) | (22) | % | |||
| Items of interest: | |||||||||||
| Long term compensation charges | $ | (4.4) | $ | — | |||||||
| Total SG&A adjustments | $ | (4.4) | $ | — | |||||||
| Adjusted: | |||||||||||
| Total adjusted SG&A expenses | $ | 638.4 | $ | 525.8 | $ | (112.6) | (21) | % | |||
| Reported: | |||||||||||
| SG&A expenses as a % of gross profit: | |||||||||||
| Compensation | 41.4 | % | 42.6 | % | 120 | bps | |||||
| Advertising | 1.5 | % | 1.6 | % | 10 | bps | |||||
| Rent | 2.1 | % | 2.9 | % | 80 | bps | |||||
| Other | 15.3 | % | 16.3 | % | 100 | bps | |||||
| Total SG&A expenses as a % of gross profit | 60.3 | % | 63.4 | % | 310 | bps | |||||
| Items of interest: | |||||||||||
| Long term compensation charges | (0.4) | % | — | % | |||||||
| Total effect of adjustments | (0.4) | % | — | % | |||||||
| Adjusted: | |||||||||||
| Total adjusted SG&A expenses as a % of gross profit | 59.9 | % | 63.4 | % | 350 | bps |
EchoPark Segment - SG&A Expenses
| Three Months Ended June 30, | Better / (Worse) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | Change | % Change | ||||||||
| (In millions) | |||||||||||
| Reported: | |||||||||||
| Compensation | $ | 40.5 | $ | 26.0 | $ | (14.5) | (56) | % | |||
| Advertising | 17.8 | 7.8 | (10.0) | (128) | % | ||||||
| Rent | 2.7 | 1.6 | (1.1) | (69) | % | ||||||
| Other | 14.2 | 9.5 | (4.7) | (49) | % | ||||||
| Total SG&A expenses | $ | 75.2 | $ | 44.9 | $ | (30.3) | (67) | % | |||
| Reported: | |||||||||||
| SG&A expenses as a % of gross profit: | |||||||||||
| Compensation | 81.8 | % | 71.8 | % | (1,000) | bps | |||||
| Advertising | 36.0 | % | 21.5 | % | (1,450) | bps | |||||
| Rent | 5.5 | % | 4.4 | % | (110) | bps | |||||
| Other | 28.6 | % | 26.3 | % | (230) | bps | |||||
| Total SG&A expenses as a % of gross profit | 151.9 | % | 124.0 | % | (2,790) | bps | |||||
| Six Months Ended June 30, | Better / (Worse) | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2022 | 2021 | Change | % Change | ||||||||
| (In millions) | |||||||||||
| Reported: | |||||||||||
| Compensation | $ | 77.9 | $ | 49.1 | $ | (28.8) | (59) | % | |||
| Advertising | 36.1 | 14.2 | (21.9) | (154) | % | ||||||
| Rent | 4.5 | 3.2 | (1.3) | (41) | % | ||||||
| Other | 28.5 | 17.7 | (10.8) | (61) | % | ||||||
| Total SG&A expenses | $ | 147.0 | $ | 84.2 | $ | (62.8) | (75) | % | |||
| Reported: | |||||||||||
| SG&A expenses as a % of gross profit: | |||||||||||
| Compensation | 83.0 | % | 59.8 | % | (2,320) | bps | |||||
| Advertising | 38.5 | % | 17.3 | % | (2,120) | bps | |||||
| Rent | 4.8 | % | 3.9 | % | (90) | bps | |||||
| Other | 30.4 | % | 21.6 | % | (880) | bps | |||||
| Total SG&A expenses as a % of gross profit | 156.7 | % | 102.6 | % | (5,410) | bps |
Earnings Per Share from Continuing Operations - Non-GAAP Reconciliation
| Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Weighted-<br>Average<br>Shares | Amount | Per<br>Share<br>Amount | Weighted-<br>Average<br>Shares | Amount | Per<br>Share<br>Amount | |||||
| (In millions, except per share amounts) | ||||||||||
| Diluted earnings (loss) and shares from continuing operations | 40.5 | $ | 94.8 | $ | 2.34 | 43.4 | $ | 114.0 | $ | 2.63 |
| Pre-tax items of interest: | ||||||||||
| Long term compensation charges | $ | 4.4 | $ | — | ||||||
| Total pre-tax items of interest | $ | 4.4 | $ | — | ||||||
| Adjusted diluted earnings (loss) and shares from continuing operations | 40.5 | $ | 99.2 | $ | 2.45 | 43.4 | $ | 114.0 | $ | 2.63 |
| Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Weighted-<br>Average<br>Shares | Amount | Per<br>Share<br>Amount | Weighted-<br>Average<br>Shares | Amount | Per<br>Share<br>Amount | |||||
| (In millions, except per share amounts) | ||||||||||
| Diluted earnings (loss) and shares from continuing operations | 41.2 | $ | 192.1 | $ | 4.67 | 43.5 | $ | 167.7 | $ | 3.86 |
| Pre-tax items of interest: | ||||||||||
| Long term compensation charges | $ | 4.4 | $ | — | ||||||
| Total pre-tax items of interest | $ | 4.4 | $ | — | ||||||
| Adjusted diluted earnings (loss) and shares from continuing operations | 41.2 | $ | 196.5 | $ | 4.77 | 43.5 | $ | 167.7 | $ | 3.86 |
Adjusted EBITDA - Non-GAAP Reconciliation
| Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Franchised Dealerships Segment | EchoPark Segment | Discontinued Operations | Total | Franchised Dealerships Segment | EchoPark Segment | Discontinued Operations | Total | |||||||||
| (In millions) | ||||||||||||||||
| Net income (loss) | $ | 94.8 | $ | 113.8 | ||||||||||||
| Provision for income taxes | 32.4 | 37.0 | ||||||||||||||
| Income (loss) before taxes | $ | 162.1 | $ | (34.9) | $ | — | $ | 127.2 | $ | 165.4 | $ | (14.4) | $ | (0.2) | $ | 150.8 |
| Non-floor plan interest | 19.1 | 1.0 | — | 20.1 | 8.9 | 0.3 | — | 9.2 | ||||||||
| Depreciation and amortization | 26.4 | 6.0 | — | 32.4 | 21.4 | 4.2 | — | 25.6 | ||||||||
| Stock-based compensation expense | 4.2 | — | — | 4.2 | 4.0 | — | — | 4.0 | ||||||||
| Long-term compensation charges | 4.4 | — | — | 4.4 | — | 0.5 | — | 0.5 | ||||||||
| Loss (gain) on franchise and real estate disposals | 0.1 | — | — | 0.1 | (0.4) | — | — | (0.4) | ||||||||
| Adjusted EBITDA | $ | 216.3 | $ | (27.9) | $ | — | $ | 188.4 | $ | 199.3 | $ | (9.4) | $ | (0.2) | $ | 189.7 |
| Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Franchised Dealerships Segment | EchoPark Segment | Discontinued Operations | Total | Franchised Dealerships Segment | EchoPark Segment | Discontinued Operations | Total | |||||||||
| (In millions) | ||||||||||||||||
| Net income (loss) | $ | 192.1 | $ | 168.1 | ||||||||||||
| Provision for income taxes | 64.0 | 56.0 | ||||||||||||||
| Income (loss) before taxes | $ | 326.0 | $ | (69.9) | $ | — | $ | 256.1 | $ | 236.0 | $ | (12.4) | $ | 0.5 | $ | 224.1 |
| Non-floor plan interest | 38.1 | 1.7 | — | 39.8 | 18.0 | 0.7 | — | 18.7 | ||||||||
| Depreciation & amortization | 52.3 | 11.2 | — | 63.5 | 42.7 | 7.5 | — | 50.2 | ||||||||
| Stock-based compensation expense | 8.6 | — | — | 8.6 | 7.5 | — | — | 7.5 | ||||||||
| Long-term compensation charges | 4.4 | — | — | 4.4 | — | 1.0 | — | 1.0 | ||||||||
| Loss (gain) on franchise and real estate disposals | (1.0) | — | — | (1.0) | (0.5) | — | — | (0.5) | ||||||||
| Adjusted EBITDA | $ | 428.4 | $ | (57.0) | $ | — | $ | 371.4 | $ | 303.7 | $ | (3.2) | $ | 0.5 | $ | 301.0 |
q220228kexhibit992
® Sonic Automotive – Investor Presentation July 2022 Updated July 28, 2022
2 Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events, are not historical facts and are based on our current expectations and assumptions regarding our business, the economy and other future conditions. These statements can generally be identified by lead-in words such as “may,” “will,” “should,” “could,” “believe,” “expect,” “estimate,” “anticipate,” “intend,” “plan,” “project,” “foresee” and other similar words or phrases. Statements that describe our Company’s objectives, plans or goals are also forward-looking statements. Examples of such forward- looking information we may be discussing in this presentation include, without limitation, the effects of COVID-19 and new variants of the virus on operations, our anticipated future new vehicle unit sales volume, revenues and profitability, our anticipated future used vehicle unit sales volume, revenues and profitability, future levels of consumer demand for new and used vehicles, our anticipated future parts, service and collision repair (“Fixed Operations”) gross profit, our anticipated expense reductions, long-term annual revenue and profitability targets, anticipated future growth capital expenditures, profitability and pricing expectations in our EchoPark Segment, EchoPark’s omnichannel strategy, anticipated future EchoPark population coverage, anticipated future EchoPark revenue and unit sales volume, anticipated future performance and growth of our Franchised Dealerships Segment, anticipated liquidity positions, anticipated industry new vehicle sales volume, the implementation of growth and operating strategies, including acquisitions of dealerships and properties, anticipated future acquisition synergies, the integration of the RFJ Auto acquisition, the return of capital to stockholders, anticipated future success and impacts from the implementation of our strategic initiatives, and earnings per share expectations. You are cautioned that these forward-looking statements are not guarantees of future performance, involve risks and uncertainties and actual results may differ materially from those projected in the forward-looking statements as a result of various factors. These risks and uncertainties include, without limitation, economic conditions in the markets in which we operate, supply chain disruptions and manufacturing delays, labor shortages, the impacts of inflation and increases in interest rates, new and used vehicle industry sales volume, the success of our operational strategies, the rate and timing of overall economic expansion or contraction, and the risk factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and other reports and information filed with the United States Securities and Exchange Commission (the “SEC”). These forward-looking statements, risks, uncertainties and additional factors speak only as of the date of this presentation. We undertake no obligation to update any such statements, except as required under federal securities laws and the rules and regulations of the SEC.
3 Company Overview
4 ® Sonic Automotive: Who We Are QUICK FACTS (NYSE: SAH) a Fortune 500 Company and One of the Nation’s Largest Automotive Retailers 161 25+ 23 17 $12.4 Billion $1.9 Billion 103K New Vehicles Sold 183K Total Revenues Automotive Brands Locations Used Vehicles Sold Collision Centers States Gross Profit Note: Location Counts As Of July 28, 2022. Revenues, Gross Profit, New & Used Vehicles Sold are for FY 2021 Our Core Franchised Dealerships Segment is a Full-Service Automotive Retail Business With Strategic Growth Levers Across Multiple Business Lines with a Diversified Brand Portfolio Our High Growth EchoPark Segment Offers a Unique Approach to Pre-Owned Vehicle and F&I Sales Below-Market Pricing with a No Haggle Purchase Experience Drives Industry-Leading Used Vehicle Volume Throughput
5 Investment Highlights Multiple Growth And Profit Drivers For Franchised Dealerships Segment Unique, High Return EchoPark Business Model Broad Revenue Stream Diversification Complementary Relationship – Sonic Franchised Dealerships And EchoPark Disciplined Capital Allocation To Accelerate EchoPark Growth Focused On Expense Control And Maintaining Strong Balance Sheet
6 Revenue Composition BY GEOGRAPHY TX 25% CA 21% CO 8% ID 7% TN 6% FL 5% AL 5% IN 5% NC 4% GA 4% VA 2% MD 2% All Others 6% Broad Geographic Distribution Geographic Footprint, Revenue Streams and Brand Mix Offer Attractive Diversification Across the Automotive Retail Space Note: Percentages are Percent of Total Revenue for Six Months Ended June 30, 2022
7 Revenue Composition – Diversified Revenue Streams Note: Percentages are Percent of Total for the Six Months Ended June 30, 2022 5% 29% 11% 33% 43% 8% 41% 30% Revenue Gross Profit New Vehicle Used Vehicle (Including Wholesale) Parts, Service & Collision Repair ("Fixed Operations") Finance & Insurance ("F&I") Brand Distribution Note: Percentages are Percent of Total Revenue for the Six Months Ended June 30, 2022 Brand % of Revenue Franchise Brand % of Revenue BMW 19% Mercedes 10% Audi 5% Lexus 4% Porsche 3% Land Rover 2% Cadillac 2% Volvo 1% Other Luxury (1) 2% Honda 8% Toyota 7% Volkswagen 1% Hyundai 1% Nissan 1% Other Import (2) <1% EchoPark 17% Non-Franchise 17% Ford 8% Chrysler Dodge Jeep RAM 6% Chevrolet GMC Buick 3% Luxury 48% 18%Import Domestic 17% (1) Includes Alfa Romeo, Infiniti, Jaguar, Maserati and MINI (2) Includes Mazda and Subaru Business Line Mix Majority Of Gross Profit Driven By Stable Business Lines
8 ® EchoPark Automotive – A Unique Growth Story Growing Nationwide Distribution Network Unique, High Return Business Model Focus On High Quality Pre-Owned Vehicles, In-Store or Online Expect To Reach 90% Of U.S. Population By 2025 Priced Up To $3,000 Below Market With Simplified, Easy Purchase Experience Focus On Pre-Owned Market – 2.5x Larger & More Stable Than New Vehicle Market The New Car Alternative™ Price. Quality. Experience. Note: Expected U.S. population reach is a projection, actual results may differ. See “Forward-Looking Statements.”
9 Franchised Dealerships ® ® Complementary Relationship Between Segments • Thrives When New Vehicle Industry Is Healthy, Particularly Where Luxury Brands Are Strong • Diversified Revenue Streams • Relatively Low Fixed Costs And Multiple Strategic Levers • Further Growth Opportunities: Parts And Service Business Used Vehicles F&I Penetration Expense Leverage Strategic Acquisitions • Strong Secular Growth Phase Due To: Focus On Highly Fragmented Pre-Owned Vehicle Market Below-Market Pricing Strategy Simplified, Easy Purchase Experience • In A Declining Pre-Owned Vehicle Price Environment, EchoPark Should: Benefit From Rapid Inventory Turns, Creating An Even Greater Pricing Advantage Over Competitors To Drive Additional Unit Sales Volume
10 Strategic Direction • Continued Growth Opportunity In Parts & Service, F&I Per Unit • Ongoing Profitability Enhancement Through SG&A Expense Control, Inventory Management • Pursue Strategic Acquisition Opportunities As Market Evolves • Utilize Existing Infrastructure To Support Omnichannel Distribution Network • Early-Stage Strong Secular Growth Phase • Targeting 50% U.S. Population Coverage By End Of 2022, Expect 90% Coverage By 2025 • Growing eCommerce Presence Offers Scalable Incremental Reach • Addressable Market Opportunity Of 2 Million Vehicles Annually At Maturity • Invest In Proprietary Digital Retail Platform To Accelerate Growth • Focus On Guest Experience To Drive Market Share Gains • Balanced Capital Allocation Strategy Prioritizes Highest Return on Investment • Return Of Capital To Shareholders Via Dividend And Share Repurchase Program ($633 Million In Remaining Repurchase Authorization) Franchised Dealerships EchoParkStrategic Drivers Note: Profitability, unit sales volume and population coverage projections are estimates of future results. Actual results may differ. See “Forward-Looking Statements.”
11 Strong Balance Sheet And Liquidity June 30, 2022 December 31, 2021 (In Millions) Cash and cash equivalents 327.1$ 299.4$ Availability under the 2021 Revolving Credit Facility 274.9 281.4 Availability under the 2019 Mortgage Facility 27.7 22.2 Floor plan deposit balance 125.5 99.8 Total available liquidity resources 755.2$ 702.8$ Covenant Requirement* June 30, 2022 December 31, 2021 Liquidity ratio >= 1.05 1.27 1.26 Fixed charge coverage ratio >= 1.20 2.62 2.69 Total lease adjusted leverage ratio <= 5.75 2.17 2.46 Net debt to Adjusted EBITDA ratio(1) 1.52 1.80 * As Defined In The 2021 Revolving Credit Facility and 2019 Mortgage Facility (1) Refer To Appendix For Calculation And Reconciliation of Adjusted EBITDA (A Non-GAAP Measure) and Net Debt To Adjusted EBITDA Ratio (A Non-GAAP Measure) $53M Increase in Cash And Deposits Current Leverage Ratios Are Within Internal Target Range
12 EchoPark
13 EchoPark – Brand Promise Up To 40% Below New Vehicle Price Up To $3,000 Below Used Vehicle Market Price High Quality Pre-Owned Vehicles With Available Warranty Transparent Guest-Centric Experience New Car Feel Without The New Car Price Complete Purchase In Under An Hour Free CARFAX Report With Every Vehicle Buy & Sell Your Way – On-Site Or Online P r i c e . Q u a l i t y. E x p e r i e n c e . L o w C o s t O m n i c h a n n e l M o d e l
14 EchoPark – Developing Nationwide Distribution Network Approaching 50% Population Coverage To Date Target 90% Population Coverage By 2025 Note: Future locations and U.S. population coverage are based on projections. Actual results may differ. See “Forward-Looking Statements.” Existing Delivery Center Future Delivery Center Coverage Area Existing Retail Hub Future Market Opportunities
15 EchoPark – Addressable Market Opportunity * Share Of Vehicles That Fit 1-4-Year-Old Model In Existing EchoPark Markets Target 90% Population Coverage By 2025 With Growing Nationwide Distribution Network Target 10% Market Share Already Achieving This Share* In Most Mature Market Priced Up to $3,000 Below Market Price Competes On Price vs. Older Vehicles, Consumer Can Buy Newer Vehicle For Same Price Pricing Up To 40% Below New Converts Prospective New Car Buyers 2 MILLION Opportunity 15+ MILLION 1–4-Year-Old Vehicles 6+ MILLION 5–6-Year- Old Vehicles 13+ MILLION New Vehicles 2.1% Q2 2022 Average Market Share* (3.0% Excluding New Markets) Most Mature Market Had 11.3% Share* In Q2 2022 Annual Retail Vehicle Sales Volume
16 EchoPark – Delivery Center Model Existing Retail Hub Example Delivery Center Market Coverage Opportunity Delivery Center Model • Utilize Nearby Retail Hub For Inventory Storage And Reconditioning (Asset Light Expansion) • Advertise Inventory Online In Surrounding Markets • Drive Incremental eCommerce Sales In New Markets • Inspect & Buy Vehicles From Guests After Online Appraisal And Firm Purchase Offer • Arrange Vehicle Transport To Delivery Center • Guest Picks Up Vehicle At EchoPark Delivery Center Nearest Their Home (i.e. Next-To-Last-Mile Delivery) Strategic Advantages • Accelerates Entry Into New Markets With Minimal Capital Expenditures Or Overhead Costs • Same Guest-Centric Purchase Experience And Convenience • Blend Of Brick And Mortar And eCommerce Distribution Network Creates Operating Leverage Delivery Center Markets • Expect To Support 3 To 4 Delivery Centers Per Retail Hub At Maturity • Target Adjacent Secondary Markets Or Large Metro Markets Where Traditional Dealership Real Estate Is Unavailable Or Cost Prohibitive
17 EchoPark – Industry Headwinds & Action Plan Industry Headwinds • Supply Chain Disruption Continues To Suppress New Vehicle Production And Inventory Levels, Increasing Demand For Used Vehicles At Auction • Rental Car Companies Cannot Source Sufficient New Vehicles Directly, Turned To Used Vehicle Auction Market To Supply Their Fleet, Driving Used Vehicle Prices To All-Time Highs • Used Price As A Percentage Of New Price At Nearly 70% (Typically In 55-60% Range) Negatively Impacts Affordability • July To Date, 3-Year Old Vehicle Manheim Prices Decreased 3.0%, Auction “No-Sells” Climbed To ~55% Of Listings In July (Indicator Of Wholesale Demand Slowing, Risk Of Price Declines In Near Term) EchoPark Action Plan • Expanding Inventory To Include 5+ Year Old Vehicles At Lower Inventory Acquisition Cost And Lower Retail Selling Price, Expanding Customer Segments While Benefiting Consumer Affordability And Gross Profit Per Unit (“GPU”) • Implemented Marketing Strategy To Source More Vehicles From Non-Auction Sources (Historically Less Than 10% Of Inventory) • Piloting Enhanced Guest Experience In Select Delivery Center Markets • Launched New EchoPark.com To Modernize eCommerce Offering And Drive Improved Sales Efficiency And Volume Throughput • EchoPark Brand Launch – Increase Consumer Awareness And Advertising Reach Beyond Being The Low Price Leader • Targeted Expense Reductions At EchoPark Are Expected To Drive Profitability Improvement In The Second Half Of 2022 EchoPark Initial Results • Improved Non-Auction Sourcing Mix From 7% In Q2 2021 To 25% Of Sales In Q2 2022 – Continues To Improve In Q3 To Date • Sourced 57% Of Inventory From Non-Auction Sources In July To Date • Older Model Year Cohort Vehicles (5+ Years) Represented 9% of Q2 2022 EchoPark Unit Sales Volume, Average 30% Lower Selling Price And Generate $2,200 More In Total GPU Compared To 1-4-Year Old Vehicles • New EchoPark.com eCommerce Results For Q2 2022 (Launched To 100% Of Web Traffic In June) • Accounted For 19% Of EchoPark Retail Unit Volume In Q2 2022, With 7% Of EchoPark Volume Sold End-to-End Online • 69% Of Units Sold Were Shipped Out Of Market • Online F&I Attachment Continues To Exceed Expectations, Averaging $2,250 Per Unit • Continued Focus On Maintaining Highest Reputation Scores In The Pre-Owned Competitive Segment
18 EchoPark – Initial Results In Houston Market $(1,500) $(1,300) $(1,100) $(900) $(700) $(500) $(300) ($ In T ho us an ds ) Used Retail Unit Volume Pre-Tax Profit (Loss) Beginning In Mid-April, Houston Market Piloted Expansion Of Inventory To Include 5+ Year Old Vehicles, Benefiting Non-Auction Sourcing Mix, Volume And Profitability 11% 46% % Non-Auction Sourced Inventory 13% Of Vehicle Sales 5+ Years Old 32% Of Vehicle Sales 5+ Years Old1% Of Vehicle Sales 5+ Years Old
19 EchoPark – Growth Path 212 660 881 920 764 941 1,136 1,585 1,685 1,673 2,049 2,400 4,496 5,518 7,459 7,698 8,762 11,051 12,587 13,206 12,676 13,986 13,207 15,127 14,841 19,670 21,261 21,255 15,649 14,995 16,608 $- $100 $200 $300 $400 $500 $600 $700 (In M illi on s) Quarterly Used Retail Units Quarterly Revenue Lower Unit Volume Beginning Q4 2021 A Result Of Strategic Price Adjustments To Manage Inventory Levels And Mitigate Operating Losses Amid Ongoing Challenges In Used Vehicle Price Environment
20 EchoPark – Adjusted EBITDA Trend ($2.8) ($1.1) ($3.4) ($2.2) ($3.0) ($2.1) $5.0 $4.8 $6.4 $5.3 $5.2 $5.6 $3.1 ($2.9) $6.2 ($9.4) ($28.5) ($14.6) ($29.0) ($27.9) $6.1 $6.2 $6.8 $4.8 $(0.3) $6.7 $(4.0) $(11.7) $(6.1) $(17.9)$(18.2) $(30) $(25) $(20) $(15) $(10) $(5) $- $5 $10 Adjusted EBITDA Less Impact of New Stores (In M illi on s) Current Headcount And SG&A Structure Is Based On Higher Unit Sales Volume Projections Expected Once Transitory Used Pricing Environment Normalizes Refer To Appendix For Calculation And Reconciliation of Adjusted EBITDA (A Non-GAAP Measure) Adjusted EBITDA by Month Apr 2022 May 2022 Jun 2022 Q2 2022 Total EchoPark $ (8.8) $(10.8) $ (8.3) $ (27.9) Impact of Stores Open <12 Months $ (3.2) $ (3.3) $ (3.2) $ (9.7) Net of New Store Impact $ (5.6) $ (7.5) $ (5.1) $ (18.2) Used Retail Unit Volume 5,533 5,553 5,522 16,608
21 Franchised Dealerships
22 New & Used Vehicle Sales Parts & Service (P&S) Finance & Insurance (F&I) ® Franchised Dealerships Franchised Dealerships111 Brands, Luxury Weighted25+ Diversified Revenue Streams • New & Used Vehicle Sales • Parts Service (P S) • Finance & Insurance (F&I) Collision Repair Centers17 18 States Stable Business With Organic And Acquisition Growth Opportunities Resilient And Flexible Business Model Through Economic Cycles
23 Franchised Dealerships – Geographic Footprint Diversified Geographic Market Platform 111 Stores, 25+ Brands, 17 Collision Repair Centers
24 Franchised Dealerships – Strategic Growth Levers Mature Cash Flows + Multiple Growth Drivers Pursue Strategic Acquisitions Opportunities Grow Parts and Service Retention Maximize F&I Penetration High Used Vehicle Volume Throughput Data-Driven Inventory Management Apply EchoPark Learnings Develop Omnichannel Platform SG&A Expense Discipline Realize Synergies From Acquisitions
25 Omnichannel Strategy
26 Full Omnichannel Infrastructure Guest Experience Managers Centralized Appraisals, Inventory Sourcing, Pricing Centralized Call Support Centralized F&I Digital Interface People Proprietary Technology Centralized Marketing Develop & Launch eCommerce Platform B u y & S e l l Yo u r Wa y Proprietary Ability to Buy a Car A to Z Online or Any Step In Between Utilize SIMS, Python Analytics, Robotic Process Automation, Hyper-Intelligence Technology ON-SITE ONLINE Se am le ss G ue st E xp er ie nc e
27 Buy & Sell Your Way • Complete A Traditional Vehicle Purchase Experience With A Modern, Technology- Enabled Approach • Can Be Completed In Under An Hour • Research Online, Utilize Chat, Text, Phone, Zoom To Reduce In-Person Process • Review And Select Insurance Products And Financing Options • Includes Online Trade-In Appraisal And Firm Purchase Offer • Complete A Full eCommerce Transaction In Minutes • Conveniently Test Drive And Finalize Purchase At Franchised Dealership, EchoPark Retail Hub Or EchoPark Delivery Center Buy & Sell Your Way Start Online, Finish On-Site Or Buy Completely Online Buy On-Site • Our Blend Of Brick And Mortar And eCommerce Strategies Allows Guests To Choose Their Preferred Buying Approach • A Flexible, Guest- Centric Experience With Options • Will Be Seamless To The Guest, Regardless Of Which Path They Choose Represents 19% Of Q2 2022 EchoPark Unit Sales Volume
28 New EchoPark.com Results to Date Rolled Out To 100% Of National Web Traffic In June 2022 Conversion Rate 30% Higher Compared To Old Website F&I of $2,250 Per Unit Exceeding Projections For End-To-End Online F&I Product Sales Nearly 70% Of Vehicles Sold Out Of Market, Driving Incremental Reach Technical Site Improvements – Bounce Rate 91% Better, Time On Site 33% Better, Pages Per Session 32% Better Than Old Website
29 Appendix
30 Non-GAAP Reconciliation – Segment Income – QTD Franchised Dealerships Segment EchoPark Segment Consolidated (In millions, except unit data) Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021 Revenues 2,987.2$ 2,756.6$ 665.6$ 595.6$ 3,652.8$ 3,352.2$ Gross profit 539.3$ 474.6$ 49.5$ 36.2$ 588.8$ 510.8$ SG&A expenses 327.5$ 275.7$ 75.3$ 44.9$ 402.8$ 320.6$ Adjusted segment income 166.5$ 165.4$ (34.9)$ (14.4)$ 131.6$ 151.0$ Long-term compensation charges (4.4) - - - (4.4) - Segment income 162.1$ 165.4$ (34.9)$ (14.4)$ 127.2$ 151.0$ Impairment charges - - - - - - Earnings (loss) from continuing operations before taxes 162.1$ 165.4$ (34.9)$ (14.4)$ 127.2$ 151.0$ Adjusted earnings (loss) from continuing operations before taxes 166.5$ 165.4$ (34.9)$ (14.4)$ 131.6$ 151.0$ Long-term compensation charges (4.4) - - - (4.4) - Earnings (loss) from continuing operations before taxes 162.1$ 165.4$ (34.9)$ (14.4)$ 127.2$ 151.0$ Adjusted net income (loss) from continuing operations 99.2$ 114.0$ Long-term compensation charges (before taxes) (4.4) - Tax effect of items of interest and non-recurring tax items - - Net income (loss) from continuing operations 94.8$ 114.0$ Retail new vehicle unit sales volume 24,342 30,243 85 14 24,427 30,257 Fleet new vehicle unit sales volume 4,638 245 - - 4,638 245 Retail used vehicle unit sales volume 28,156 28,550 16,608 21,261 44,764 49,811 Wholesale used vehicle unit sales volume 5,851 6,753 2,694 2,878 8,545 9,631 Note: Segment Income (Loss) Defined As Earnings (Loss) From Continuing Operations Before Taxes And Impairment Charges
31 Non-GAAP Reconciliation – Segment Income – YTD Franchised Dealerships Segment EchoPark Segment Consolidated (In millions, except unit data) YTD Q2 2022 YTD Q2 2021 YTD Q2 2022 YTD Q2 2021 YTD Q2 2022 YTD Q2 2021 Revenues 5,948.5$ 5,036.3$ 1,290.9$ 1,102.7$ 7,239.4$ 6,139.0$ Gross profit 1,066.3$ 829.5$ 93.8$ 82.2$ 1,160.1$ 911.7$ SG&A expenses 642.8$ 525.8$ 147.0$ 84.2$ 789.8$ 610.0$ Adjusted segment income 330.4$ 236.0$ (69.9)$ (12.4)$ 260.5$ 223.6$ Long-term compensation charges (4.4) - - - (4.4) - Segment income 326.0$ 236.0$ (69.9)$ (12.4)$ 256.1$ 223.6$ Impairment charges - - - - - - Earnings (loss) from continuing operations before taxes 326.0$ 236.0$ (69.9)$ (12.4)$ 256.1$ 223.6$ Adjusted earnings (loss) from continuing operations before taxes 330.4$ 236.0$ (69.9)$ (12.4)$ 260.5$ 223.6$ Long-term compensation charges (4.4) - - - (4.4) - Earnings (loss) from continuing operations before taxes 326.0$ 236.0$ (69.9)$ (12.4)$ 256.1$ 223.6$ Adjusted net income (loss) from continuing operations 196.5$ 167.7$ Long-term compensation charges (before taxes) (4.4) - Tax effect of items of interest and non-recurring tax items - - Net income (loss) from continuing operations 192.1$ 167.7$ Retail new vehicle unit sales volume 48,944 54,060 170 14 49,114 54,074 Fleet new vehicle unit sales volume 9,019 786 - - 9,019 786 Retail used vehicle unit sales volume 55,234 55,786 31,603 40,931 86,837 96,717 Wholesale used vehicle unit sales volume 12,623 13,585 6,343 5,739 18,966 19,324 Note: Segment Income (Loss) Defined As Earnings (Loss) From Continuing Operations Before Taxes And Impairment Charges
32 Non-GAAP Reconciliation – Segment Income – Prior FY Franchised Dealerships Segment EchoPark Segment Consolidated (In millions, except unit data) FY 2021 FY 2020 FY 2021 FY 2020 FY 2021 FY 2020 Revenues 10,051.1$ 8,348.0$ 2,345.3$ 1,419.0$ 12,396.4$ 9,767.0$ Gross profit 1,765.6$ 1,309.4$ 148.8$ 114.0$ 1,914.3$ 1,423.6$ SG&A expenses 1,076.9$ 933.7$ 197.8$ 94.9$ 1,274.7$ 1,028.7$ Adjusted segment income 547.1$ 227.2$ (65.5)$ (1.2)$ 481.6$ 226.0$ Acquisition and disposition-related gain (loss) (1.2) 4.0 - 5.2 (1.2) 9.2 Long-term compensation charges - - (6.5) - (6.5) - Loss on extinguishment of debt (15.6) - - - (15.6) - Segment income 530.3$ 231.2$ (72.0)$ 4.0$ 458.3$ 235.2$ Impairment charges - (270.0) (0.1) - (0.1) (270.0) Earnings (loss) from continuing operations before taxes 530.3$ (38.8)$ (72.1)$ 4.0$ 458.2$ (34.8)$ Adjusted earnings (loss) from continuing operations before taxes 547.1$ 226.4$ (65.6)$ (1.2)$ 481.5$ 225.2$ Acquisition and disposition-related gain (loss) (1.2) 4.0 - 5.2 (1.2) 9.2 Long-term compensation charges - - (6.5) - (6.5) - Loss on extinguishment of debt (15.6) - - - (15.6) - Impairment charges - (269.2) - - - (269.2) Earnings (loss) from continuing operations before taxes 530.3$ (38.8)$ (72.1)$ 4.0$ 458.2$ (34.8)$ Adjusted net income (loss) from continuing operations 366.3$ 168.9$ Acquisition and disposition-related gain (loss) (before taxes) (1.2) 9.2 Long-term compensation charges (before taxes) (6.5) - Loss on extinguishment of debt (before taxes) (15.6) - Impairment charges (before taxes) - (269.2) Tax effect of items of interest and non-recurring tax items 5.9 40.4 Net income (loss) from continuing operations 348.9$ (50.7)$ New vehicle unit sales volume 103,358 93,281 128 - 103,486 93,281 Retail used vehicle unit sales volume 105,457 101,864 77,835 57,161 183,292 159,025 Note: Segment Income (Loss) Defined As Earnings (Loss) From Continuing Operations Before Taxes And Impairment Charges
33 Non-GAAP Reconciliation – Adjusted EBITDA Note – Balance Sheet Amounts Are As Of December 31 For The FY Then Ended. For The LTM Q2 2022 Period, Balance Sheet Amounts Are As Of June 30, 2022. (In millions) FY 2018 FY 2019 FY 2020 FY 2021 LTM Q2 2022 Net Income (Loss) 51.7$ 144.1$ (51.4)$ 348.9$ 373.0$ Provision For Income Taxes 22.6 55.0 15.6 109.3 117.2 Income (Loss) Before Taxes 74.3$ 199.1$ (35.8)$ 458.2$ 490.2$ Non-Floor Plan Interest 52.0 50.5 38.7 44.7 65.8 Depreciation and Amortization 96.7 95.6 93.9 104.3 117.7 Stock-Based Compensation Expense 11.9 10.8 11.7 15.0 16.1 Loss (Gain) On Exit Of Leased Dealerships 1.7 (0.2) - - - Impairment Charges 29.5 20.8 270.0 0.1 0.1 Loss (Gain) On Debt Extinguishment - 6.7 - 15.6 15.6 Long-Term Compensation Charges 32.5 - - 8.0 11.4 Acquisition and Disposition-Related (Gain) Loss (39.3) (74.8) (8.2) (0.4) (1.0) Adjusted EBITDA 259.3$ 308.5$ 370.3$ 645.5$ 715.9$ Long-Term Debt (Including Current Portion) 945.1$ 706.9$ 720.1$ 1,561.2$ 1,538.5$ Cash and Equivalents (5.9) (29.1) (170.3) (299.4) (327.1) Floor Plan Deposit Balance - - (73.2) (99.8) (125.5) Net Debt 939.2$ 677.8$ 476.6$ 1,162.0$ 1,085.9$ Net Debt To Adjusted EBITDA Ratio 3.62 2.20 1.29 1.80 1.52 Long-Term Debt (Including Current Portion) To Adjusted EBITDA Ratio 3.64 2.29 1.94 2.42 2.15
34 Non-GAAP Reconciliation – Adjusted EBITDA By Segment Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 97.3 $ 54.2 Provision For Income Taxes 31.6 19.1 Income (Loss) Before Taxes $ 163.8 $ (34.9) $ - $ 128.9 $ 70.6 $ 2.0 $ 0.7 $ 73.3 Non-Floor Plan Interest 19.0 0.7 - 19.7 9.1 0.4 - 9.5 Depreciation And Amortization 25.9 5.2 - 31.1 21.2 3.3 - 24.5 Stock-Based Compensation Expense 4.4 - - 4.4 3.5 - - 3.5 Long-Term Compensation Charges - - - - - 0.5 - 0.5 Gain On Franchise And Real Estate Disposals (1.1) - - (1.1) - - - - Adjusted EBITDA $ 212.0 $ (29.0) $ - $ 183.0 $ 104.4 $ 6.2 $ 0.7 $ 111.3 Q1 2022 Q1 2021 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) 94.8$ 113.8$ Provision For Income Taxes 32.4 37.0 Income (Loss) Before Taxes 162.1$ (34.9)$ -$ 127.2$ 165.4$ (14.4)$ (0.2)$ 150.8$ Non-Floor Plan Interest 19.1 1.0 - 20.1 8.9 0.3 - 9.2 Depreciation And Amortization 26.4 6.0 - 32.4 21.4 4.2 - 25.6 Stock-Based Compensation Expense 4.2 - - 4.2 4.0 - - 4.0 Long-Term Compensation Charges 4.4 - - 4.4 - 0.5 - 0.5 Gain On Franchise And Real Estate Disposals 0.1 - - 0.1 (0.4) - - (0.4) Adjusted EBITDA 216.3$ (27.9)$ -$ 188.4$ 199.3$ (9.4)$ (0.2)$ 189.7$ Q2 2022 Q2 2021
35 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 96.3 $ 57.3 Provision For Income Taxes 25.8 32.8 Income (Loss) Before Taxes $ 148.9 $ (26.8) $ - $ 122.1 $ 90.6 $ (0.8) $ 0.3 $ 90.1 Non-Floor Plan Interest 16.2 0.7 - 16.9 9.0 0.2 - 9.2 Depreciation And Amortization 23.4 4.9 - 28.3 21.1 2.9 - 24.0 Stock-Based Compensation Expense 3.8 - - 3.8 3.2 - - 3.2 Impairment Charges - 0.1 - 0.1 1.2 - - 1.2 Loss On Debt Extinguishment 15.6 - - 15.6 - - - - Long-Term Compensation Charges - 6.5 - 6.5 - - - - Acquisition and Disposition-Related (Gain) Loss 0.5 - - 0.5 (0.8) (5.2) - (6.0) Adjusted EBITDA $ 208.4 $ (14.6) $ - $ 193.8 $ 124.3 $ (2.9) $ 0.3 $ 121.7 Q4 2021 Q4 2020 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 84.6 $ 59.8 Provision For Income Taxes 27.4 20.6 Income (Loss) Before Taxes $ 145.1 $ (32.9) $ (0.2) $ 112.0 $ 80.4 $ 0.2 $ (0.2) $ 80.4 Non-Floor Plan Interest 8.8 0.3 - 9.1 9.8 0.1 - 9.9 Depreciation And Amortization 21.9 4.0 - 25.9 21.0 2.8 - 23.8 Stock-Based Compensation Expense 3.7 - - 3.7 3.2 - - 3.2 Impairment Charges - - - - - - - - Long-Term Compensation Charges - 0.5 - 0.5 - - - - Gain On Franchise And Real Estate Disposals (0.1) (0.4) - (0.5) (3.4) - - (3.4) Adjusted EBITDA $ 179.4 $ (28.5) $ (0.2) $ 150.7 $ 111.0 $ 3.1 $ (0.2) $ 113.9 Q3 2021 Q3 2020 Non-GAAP Reconciliation – Adjusted EBITDA By Segment
36 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 113.8 $ 30.8 Provision For Income Taxes 37.0 6.3 Income (Loss) Before Taxes $ 165.4 $ (14.4) $ (0.2) $ 150.8 $ 34.8 $ 2.6 $ (0.3) $ 37.1 Non-Floor Plan Interest 8.9 0.3 - 9.2 9.0 0.2 - 9.2 Depreciation And Amortization 21.4 4.2 - 25.6 20.5 2.8 - 23.3 Stock-Based Compensation Expense 4.0 - - 4.0 3.0 - - 3.0 Impairment Charges - - - - 0.8 - - 0.8 Long-Term Compensation Charges - 0.5 - 0.5 - - - - Gain On Franchise And Real Estate Disposals (0.4) - - (0.4) 1.1 - - 1.1 Adjusted EBITDA $ 199.3 $ (9.4) $ (0.2) $ 189.7 $ 69.2 $ 5.6 $ (0.3) $ 74.5 Q2 2021 Q2 2020 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 54.2 $ (199.3) Provision For Income Taxes 19.1 (44.2) Income (Loss) Before Taxes $ 70.5 $ 2.0 $ 0.8 $ 73.3 $ (245.3) $ 2.1 $ (0.3) $ (243.5) Non-Floor Plan Interest 9.1 0.4 - 9.5 10.0 0.4 - 10.4 Depreciation And Amortization 21.2 3.3 - 24.5 20.1 2.7 - 22.8 Stock-Based Compensation Expense 3.5 - - 3.5 2.4 - - 2.4 Impairment Charges - - - - 268.0 - - 268.0 Long-Term Compensation Charges - 0.5 - 0.5 - - - - Gain On Franchise And Real Estate Disposals - - - - - - - - Adjusted EBITDA $ 104.3 $ 6.2 $ 0.8 $ 111.3 $ 55.2 $ 5.2 $ (0.3) $ 60.1 Q1 2021 Q1 2020 Non-GAAP Reconciliation – Adjusted EBITDA By Segment
37 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 57.3 $ 46.3 Provision For Income Taxes 32.8 14.7 Income (Loss) Before Taxes $ 90.6 $ (0.8) $ 0.3 $ 90.1 $ 75.5 $ (14.5) $ - $ 61.0 Non-Floor Plan Interest 9.0 0.2 - 9.2 12.2 0.4 - 12.6 Depreciation And Amortization 21.1 2.9 - 24.0 21.0 2.8 - 23.8 Stock-Based Compensation Expense 3.2 - - 3.2 2.7 - - 2.7 Impairment Charges 1.2 - - 1.2 1.1 16.6 - 17.7 Loss On Debt Extinguishment - - - - 6.7 - - 6.7 Gain On Franchise And Real Estate Disposals (0.8) (5.2) - (6.0) (29.2) - - (29.2) Adjusted EBITDA $ 124.3 $ (2.9) $ 0.3 $ 121.7 $ 90.0 $ 5.3 $ - $ 95.3 Q4 2020 Q4 2019 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 59.8 $ 29.0 Provision For Income Taxes 20.6 11.3 Income (Loss) Before Taxes $ 80.4 $ 0.2 $ (0.2) $ 80.4 $ 38.4 $ 2.1 $ (0.2) $ 40.3 Non-Floor Plan Interest 9.8 0.1 - 9.9 11.9 0.5 - 12.4 Depreciation And Amortization 21.0 2.8 - 23.8 21.6 2.7 - 24.3 Stock-Based Compensation Expense 3.2 - - 3.2 2.7 - - 2.7 Impairment Charges - - - - - 1.1 - 1.1 Gain On Franchise Disposals (3.4) - - (3.4) 0.8 - - 0.8 Adjusted EBITDA $ 111.0 $ 3.1 $ (0.2) $ 113.9 $ 75.4 $ 6.4 $ (0.2) $ 81.6 Q3 2020 Q3 2019 Non-GAAP Reconciliation – Adjusted EBITDA By Segment
38 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 30.8 $ 26.6 Provision For Income Taxes 6.3 10.0 Income (Loss) Before Taxes $ 34.8 $ 2.6 $ (0.3) $ 37.1 $ 35.1 $ 1.7 $ (0.2) $ 36.6 Non-Floor Plan Interest 9.0 0.2 - 9.2 12.6 0.4 - 13.0 Depreciation And Amortization 20.5 2.8 - 23.3 21.7 2.7 - 24.4 Stock-Based Compensation Expense 3.0 - - 3.0 2.6 - - 2.6 Impairment Charges 0.8 - - 0.8 - - - - Gain On Franchise Disposals 1.1 - - 1.1 0.4 - - 0.4 Adjusted EBITDA $ 69.2 $ 5.6 $ (0.3) $ 74.5 $ 72.4 $ 4.8 $ (0.2) $ 77.0 Q2 2020 Q2 2019 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ (199.3) $ 42.2 Provision For Income Taxes (44.2) 19.0 Income (Loss) Before Taxes $ (245.3) $ 2.1 $ (0.3) $ (243.5) $ 61.2 $ 0.2 $ (0.2) $ 61.2 Non-Floor Plan Interest 10.0 0.4 - 10.4 11.8 0.5 - 12.3 Depreciation And Amortization 20.1 2.7 - 22.8 20.8 2.4 - 23.2 Stock-Based Compensation Expense 2.4 - - 2.4 2.8 - - 2.8 Loss (Gain) On Exit Of Leased Dealerships - - - - (0.2) - - (0.2) Impairment Charges 268.0 - - 268.0 - 1.9 - 1.9 Gain On Franchise Disposals - - - - (46.7) - - (46.7) Adjusted EBITDA $ 55.2 $ 5.2 $ (0.3) $ 60.1 $ 49.7 $ 5.0 $ (0.2) $ 54.5 Q1 2020 Q1 2019 Non-GAAP Reconciliation – Adjusted EBITDA By Segment
39 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 46.3 $ 21.8 Provision For Income Taxes 14.7 9.2 Income (Loss) Before Taxes $ 75.5 $ (14.5) $ - $ 61.0 $ 37.4 $ (6.2) $ (0.2) $ 31.0 Non-Floor Plan Interest 12.2 0.4 - 12.6 12.9 0.4 0.1 13.4 Depreciation And Amortization 21.0 2.8 - 23.8 21.1 2.2 - 23.3 Stock-Based Compensation Expense 2.7 - - 2.7 1.3 - - 1.3 Loss (Gain) On Exit Of Leased Dealerships - - - - (1.1) - 0.1 (1.0) Impairment Charges 1.1 16.6 - 17.7 14.1 1.5 - 15.6 Loss On Debt Extinguishment 6.7 - - 6.7 - - - - Gain On Franchise Disposals (29.2) - - (29.2) (0.2) - - (0.2) Adjusted EBITDA $ 90.0 $ 5.3 $ - $ 95.3 $ 85.5 $ (2.1) $ - $ 83.4 Q4 2019 Q4 2018 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 29.0 $ 15.1 Provision For Income Taxes $ 11.3 7.3 Income (Loss) Before Taxes $ 38.4 $ 2.1 $ (0.2) $ 40.3 $ 28.1 $ (5.5) $ (0.2) $ 22.4 Non-Floor Plan Interest $ 11.9 $ 0.5 - 12.4 12.3 0.5 0.1 12.9 Depreciation And Amortization $ 21.6 $ 2.7 - 24.3 22.1 2.0 - 24.1 Stock-Based Compensation Expense $ 2.7 - - 2.7 4.6 - - 4.6 Loss (Gain) On Exit Of Leased Dealerships - - - - - - 0.1 0.1 Impairment Charges - $ 1.1 - 1.1 - - - - Gain On Franchise Disposals $ 0.8 - - 0.8 - - - - Adjusted EBITDA $ 75.4 $ 6.4 $ (0.2) $ 81.6 $ 67.1 $ (3.0) $ (0.0) $ 64.1 Q3 2019 Q3 2018 Non-GAAP Reconciliation – Adjusted EBITDA By Segment
40 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 42.2 $ (2.2) Provision For Income Taxes 19.0 (1.9) Income (Loss) Before Taxes $ 61.2 $ 0.2 $ (0.2) $ 61.2 $ 10.8 $ (14.7) $ (0.2) $ (4.1) Non-Floor Plan Interest 11.8 0.5 - 12.3 12.4 0.3 0.1 12.8 Depreciation And Amortization 20.8 2.4 - 23.2 22.8 1.7 - 24.5 Stock-Based Compensation Expense 2.8 - - 2.8 3.0 - - 3.0 Loss (Gain) On Exit Of Leased Dealerships (0.2) - - (0.2) 5.0 - 0.1 5.1 Impairment Charges - 1.9 - 1.9 3.6 0.1 - 3.7 Long-Term Compensation Charges - - - - - 9.2 - 9.2 Gain On Franchise Disposals (46.7) - - (46.7) (1.2) - - (1.2) Adjusted EBITDA $ 49.7 $ 5.0 $ (0.2) $ 54.5 $ 56.4 $ (3.4) $ - $ 53.0 Q1 2019 Q1 2018 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 26.6 $ 16.9 Provision For Income Taxes $ 10.0 8.1 Income (Loss) Before Taxes $ 35.1 $ 1.7 $ (0.2) $ 36.6 $ 53.2 $ (27.8) $ (0.4) $ 25.0 Non-Floor Plan Interest $ 12.6 $ 0.4 - 13.0 12.3 0.4 0.1 12.8 Depreciation And Amortization $ 21.7 $ 2.7 - 24.4 22.8 1.9 - 24.7 Stock-Based Compensation Expense $ 2.6 - - 2.6 3.0 - - 3.0 Loss (Gain) On Exit Of Leased Dealerships - - - - (2.6) - 0.1 (2.5) Impairment Charges - - - - 10.3 - - 10.3 Long-Term Compensation Charges - - - - - 23.3 - 23.3 Gain On Franchise Disposals $ 0.4 - - 0.4 (38.0) - - (38.0) Adjusted EBITDA $ 72.4 $ 4.8 $ (0.2) $ 77.0 $ 61.0 $ (2.2) $ (0.2) $ 58.6 Q2 2019 Q2 2018 Non-GAAP Reconciliation – Adjusted EBITDA By Segment
41 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 21.8 $ 62.0 Provision For Income Taxes 9.2 (8.4) Income (Loss) Before Taxes $ 37.4 $ (6.2) $ (0.2) $ 31.0 $ 57.8 $ (4.0) $ (0.2) $ 53.6 Non-Floor Plan Interest 12.9 0.4 0.1 13.4 12.4 0.3 0.1 12.8 Depreciation And Amortization 21.1 2.2 - 23.3 22.6 1.3 - 23.9 Stock-Based Compensation Expense 1.3 - - 1.3 2.2 - - 2.2 Loss (Gain) On Exit Of Leased Dealerships (1.1) - 0.1 (1.0) - - 0.1 0.1 Impairment Charges 14.1 1.5 - 15.6 6.1 - - 6.1 Long-Term Compensation Charges - - - - - 1.3 - 1.3 Gain On Franchise Disposals (0.2) - - (0.2) (1.5) - - (1.5) Adjusted EBITDA $ 85.5 $ (2.1) $ - $ 83.4 $ 99.6 $ (1.1) $ 0.0 $ 98.5 Q4 2018 Q4 2017 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 15.1 $ 19.4 Provision For Income Taxes 7.3 13.9 Income (Loss) Before Taxes $ 28.1 $ (5.5) $ (0.2) $ 22.4 $ 38.2 $ (4.4) $ (0.5) $ 33.3 Non-Floor Plan Interest 12.3 0.5 0.1 12.9 12.1 0.3 0.1 12.5 Depreciation And Amortization 22.1 2.0 - 24.1 22.2 1.3 - 23.5 Stock-Based Compensation Expense 4.6 - - 4.6 3.2 - - 3.2 Loss (Gain) On Exit Of Leased Dealerships - - 0.1 0.1 (0.2) - 0.4 0.2 Impairment Charges - - - - 0.2 - - 0.2 Gain On Franchise Disposals - - - - (8.5) - - (8.5) Adjusted EBITDA $ 67.1 $ (3.0) $ (0.0) $ 64.1 $ 67.2 $ (2.8) $ - $ 64.4 Q3 2018 Q3 2017 Non-GAAP Reconciliation – Adjusted EBITDA By Segment
® Investor Relations Contacts: Sonic Automotive Inc. (NYSE: SAH) Danny Wieland, Vice President, Investor Relations & Financial Reporting ir@sonicautomotive.com (704) 927-3462 KCSA Strategic Communications David Hanover / Scott Eckstein sonic@kcsa.com (212) 896-1220