sah-20220428
0001043509FALSE00010435092022-04-282022-04-28

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): April 28, 2022
____________________________________
SONIC AUTOMOTIVE, INC.
(Exact name of registrant as specified in its charter)
 ____________________________________
Delaware
(State or other jurisdiction
of incorporation)
1-1339556-2010790
(Commission
File Number)
(IRS Employer
Identification No.)
4401 Colwick Road
Charlotte,North Carolina28211
(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 classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, par value $0.01 per shareSAHNew 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 April 28, 2022, Sonic Automotive, Inc. (the “Company”) issued a press release announcing its financial results for its fiscal first quarter ended March 31, 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 April 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  
No.
Description
99.1 
99.2 
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.
April 28, 2022By:/s/ STEPHEN K. COSS
Stephen K. Coss
Senior Vice President and General Counsel



Exhibit 99.1

Sonic Automotive Reports Record First Quarter Financial Results

Record First Quarter Revenues and EPS Driven by Strong Demand and Benefits from Strategic Acquisitions
13th Consecutive Quarter of Year-Over-Year EPS Growth

CHARLOTTE, N.C. – April 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 first quarter ended March 31, 2022.

Key Highlights

•All-time record quarterly revenues of $3.6 billion, up 28.7% year-over-year
•Record first quarter income from continuing operations before taxes of $128.9 million, up 77.5% year-over-year
•Record first quarter net income from continuing operations of $97.3 million ($2.33 per diluted share, up 89.4% year-over-year)
•Record low first quarter selling, general and administrative (“SG&A”) expenses as a percentage of gross profit of 67.7% (59.8% on a Franchised Dealerships Segment basis, a decrease of 1,060 basis points year-over-year)
•All-time record quarterly total Finance & Insurance (“F&I”) gross profit per retail unit of $2,495, up 22.0% year-over-year
•Record first quarter EchoPark revenues of $625.3 million, up 23.3% year-over-year
•Since the end of the fourth quarter of 2021, Sonic has repurchased approximately 1.7 million shares of its Class A Common Stock for an aggregate purchase price of approximately $76.1 million

Commentary

David Smith, Chief Executive Officer of Sonic Automotive, commented, “Building on our record performance in 2021, Sonic generated record first quarter revenues and earnings per share, including 89.4% year-over-year EPS growth. These exceptional results were driven by persistent consumer demand, our enhanced digital sales and marketing initiatives as well as the tremendous efforts of our teammates. Despite inventory constraints and inflation due to ongoing supply chain issues, we continue to see solid consumer demand for vehicle sales and parts and services throughout our business. With these favorable trends and our continued focus on executing our long-term strategic growth plan for Sonic and EchoPark, we remain confident in reaching our stated goal of $28 billion in total revenues by 2025.”

Jeff Dyke, President of Sonic Automotive, stated, “In 2022, we have continued the nationwide expansion of the EchoPark Automotive brand, opening locations in three new markets and rolling out the new EchoPark.com to 80% of our EchoPark web traffic nationwide. Early results from our enhanced digital retail platform continue to exceed our expectations, driving higher conversion rates, incremental out-of-market sales volume, and high F&I product attachment rates. Our focus on the guest experience continues to pay dividends, with EchoPark recently achieving the highest guest experience scores in the pre-owned competitive segment. With the continuing evolution of our digital retail offerings and our exceptional guest experience, we believe EchoPark’s omnichannel strategy is well-positioned to grow market share in the highly fragmented used vehicle market. We remain focused on achieving our goal of 90% U.S. population coverage by 2025, delivering 575,000 vehicles and generating $14 billion in annual EchoPark revenues by that time.”

Heath Byrd, Chief Financial Officer of Sonic Automotive, added, “Our consistently strong sales performance, expense management, cash flow generation and balanced capital allocation strategy have all contributed to our solid financial position, allowing Sonic to raise its quarterly cash dividend by 108% in the first quarter. These attributes have also enabled the Company to repurchase approximately 1.7 million shares of its Class A Common Stock for an aggregate purchase price of approximately $76.1 million since the end of 2021. These actions all demonstrate the strength and flexibility of our business model, our positive operating outlook, and our dedication to returning capital to our stockholders.”





First Quarter Segment Highlights

The financial measures discussed below are results for the first quarter of 2022 with comparisons made to the first quarter of 2021, unless otherwise noted.

•Franchised Dealerships Segment operating results include:
◦Same store revenues up 4.6%, same store gross profit up 26.9%
◦Same store retail new vehicle unit sales volume down 14.5%; same store retail new vehicle gross profit per unit up 134.4%, to $6,799
◦Same store retail used vehicle unit sales volume down 16.2%; same store retail used vehicle gross profit per unit up 35.7%, to $1,728
◦Same store parts, service and collision repair gross profit up 10.0%; same store customer pay gross profit up 20.6%; same store warranty gross profit down 3.6%; same store gross margin down 110 basis points, to 49.2%
◦Same store F&I gross profit up 6.6%; all-time record quarterly reported Franchised Dealerships Segment F&I gross profit per retail unit of $2,448, up 28.2%
◦On a trailing quarter cost of sales basis, Franchised Dealerships Segment new vehicle inventory had approximately 15 days’ supply, and Franchised Dealerships Segment used vehicle inventory had approximately 33 days’ supply

•EchoPark Segment operating results include:
◦Record first quarter EchoPark revenues of $625.3 million, up 23.3% year-over-year
◦First quarter EchoPark retail used vehicle unit sales volume of 14,995, down 23.8% year-over-year
◦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 3.2% of the 1-4-year old vehicle segment)
◦EchoPark reported pre-tax loss of $34.9 million and adjusted EBITDA* loss of $29.0 million (including market expansion-related losses of $11.8 million and $11.1 million, respectively)
◦On a trailing quarter cost of sales basis, EchoPark Segment used vehicle inventory had approximately 57 days’ supply (including the effect of building up inventory for newly opened and future locations)

* Please refer to the discussion and reconciliation of Non-GAAP Financial Measures below.

Dividend

Sonic’s Board of Directors approved a quarterly cash dividend of $0.25 per share payable on July 15, 2022 to all stockholders of record on June 15, 2022.

First 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://www.incommglobalevents.com/registration/q4inc/10643/sonic-automotive-q1-2022-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. We believe EchoPark is on pace to become the #1 retailer in the nearly new pre-owned vehicle market by 2025, and is already making its mark by earning the 2021 Consumer Satisfaction Award from DealerRater, expanding its Owner Experience Centers, developing an 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 expected future revenue levels, EchoPark's omnichannel strategy, and future 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 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 March 31,Better / (Worse)
20222021% Change
(In millions, except per share amounts)
Revenues:
Retail new vehicles$1,351.3 $1,134.0 19.2 %
Fleet new vehicles148.6 22.3 566.4 %
Total new vehicles1,499.9 1,156.3 29.7 %
Used vehicles1,370.9 1,090.1 25.8 %
Wholesale vehicles168.7 74.8 125.5 %
Total vehicles3,039.5 2,321.2 30.9 %
Parts, service and collision repair380.5 320.9 18.6 %
Finance, insurance and other, net166.6 144.7 15.1 %
Total revenues3,586.6 2,786.8 28.7 %
Cost of sales:
Retail new vehicles(1,183.6)(1,064.8)(11.2)%
Fleet new vehicles(147.8)(22.1)(568.8)%
Total new vehicles(1,331.4)(1,086.9)(22.5)%
Used vehicles(1,322.7)(1,059.2)(24.9)%
Wholesale vehicles(167.3)(73.9)(126.4)%
Total vehicles(2,821.4)(2,220.0)(27.1)%
Parts, service and collision repair(193.9)(165.9)(16.9)%
Total cost of sales(3,015.3)(2,385.9)(26.4)%
Gross profit571.3 400.9 42.5 %
Selling, general and administrative expenses(387.0)(289.4)(33.7)%
Impairment charges— — — %
Depreciation and amortization(29.9)(23.6)(26.7)%
Operating income (loss)154.4 87.9 75.7 %
Other income (expense):
Interest expense, floor plan(5.0)(5.1)2.0 %
Interest expense, other, net(20.8)(10.3)(101.9)%
Other income (expense), net0.3 0.1 200.0 %
Total other income (expense)(25.5)(15.3)(66.7)%
Income (loss) from continuing operations before taxes128.9 72.6 77.5 %
Provision for income taxes for continuing operations - benefit (expense)(31.6)(18.9)(67.2)%
Income (loss) from continuing operations97.3 53.7 81.2 %
Discontinued operations:
Income (loss) from discontinued operations before taxes— 0.7 (100.0)%
Provision for income taxes for discontinued operations - benefit (expense)— (0.2)100.0 %
Income (loss) from discontinued operations— 0.5 (100.0)%
Net income (loss)$97.3 $54.2 79.5 %
Basic earnings (loss) per common share:
Earnings (loss) per share from continuing operations$2.41 $1.29 86.8 %
Earnings (loss) per share from discontinued operations— 0.02 (100.0)%
Earnings (loss) per common share$2.41 $1.31 84.0 %
Weighted-average common shares outstanding40.4 41.5 2.6 %
Diluted earnings (loss) per common share:
Earnings (loss) per share from continuing operations$2.33 $1.23 89.4 %
Earnings (loss) per share from discontinued operations— 0.02 (100.0)%
Earnings (loss) per common share$2.33 $1.25 86.4 %
Weighted-average common shares outstanding41.8 43.5 3.9 %
Dividends declared per common share$0.25 $0.10 150.0 %





Franchised Dealerships Segment - Reported
Three Months Ended March 31,Better / (Worse)
20222021% Change
(In millions, except unit and per unit data)
Revenues:
Retail new vehicles$1,345.7 $1,134.0 18.7 %
Fleet new vehicles148.6 22.3 566.4 %
Total new vehicles1,494.3 1,156.3 29.2 %
Used vehicles853.7 661.5 29.1 %
Wholesale vehicles106.3 56.2 89.1 %
Total vehicles2,454.3 1,874.0 31.0 %
Parts, service and collision repair380.5 308.1 23.5 %
Finance, insurance and other, net126.5 97.6 29.6 %
Total revenues2,961.3 2,279.7 29.9 %
Gross Profit:
Retail new vehicles166.6 69.2 140.8 %
Fleet new vehicles0.8 0.3 166.7 %
Total new vehicles167.4 69.5 140.9 %
Used vehicles46.9 32.0 46.6 %
Wholesale vehicles(0.4)0.7 (157.1)%
Total vehicles213.9 102.2 109.3 %
Parts, service and collision repair186.6 155.3 20.2 %
Finance, insurance and other, net126.5 97.5 29.7 %
Total gross profit527.0 355.0 48.5 %
Selling, general and administrative expenses(315.2)(250.1)(26.0)%
Impairment charges— — NM
Depreciation and amortization(24.9)(20.4)(22.2)%
Operating income (loss)186.9 84.5 121.1 %
Other income (expense):
Interest expense, floor plan(3.3)(4.1)19.5 %
Interest expense, other, net(20.0)(10.0)(100.0)%
Other income (expense), net0.2 0.2 — %
Total other income (expense)(23.1)(13.9)(66.2)%
Income (loss) before taxes163.8 70.6 132.0 %
Add: impairment charges— — NM
Segment income (loss)$163.8 $70.6 132.0 %
Unit Sales Volume:
Retail new vehicles24,602 23,817 3.3 %
Fleet new vehicles4,381 541 709.8 %
Total new vehicles28,983 24,358 19.0 %
Used vehicles27,078 27,236 (0.6)%
Wholesale vehicles6,772 6,832 (0.9)%
Retail new & used vehicles51,680 51,053 1.2 %
Used-to-New Ratio0.93 1.12 17.0 %
Gross Profit Per Unit:
Retail new vehicles$6,771 $2,906 133.0 %
Fleet new vehicles$193 $459 (58.0)%
Total new vehicles$5,777 $2,852 102.6 %
Used vehicles$1,731 $1,175 47.3 %
Finance, insurance and other, net$2,448 $1,910 28.2 %
NM = Not Meaningful



Franchised Dealerships Segment - Same Store
Three Months Ended March 31,Better / (Worse)
20222021% Change
(In millions, except unit and per unit data)
Revenues:
Retail new vehicles$1,109.7 $1,130.7 (1.9)%
Fleet new vehicles13.6 22.3 (39.0)%
Total new vehicles1,123.3 1,153.0 (2.6)%
Used vehicles723.1 659.1 9.7 %
Wholesale vehicles82.5 56.0 47.3 %
Total vehicles1,928.9 1,868.1 3.3 %
Parts, service and collision repair344.7 306.9 12.3 %
Finance, insurance and other, net98.1 92.0 6.6 %
Total revenues2,371.7 2,267.0 4.6 %
Gross Profit:
Retail new vehicles137.9 68.8 100.4 %
Fleet new vehicles0.7 0.3 133.3 %
Total new vehicles138.6 69.1 100.6 %
Used vehicles39.2 34.5 13.6 %
Wholesale vehicles(0.4)0.8 (150.0)%
Total vehicles177.4 104.4 69.9 %
Parts, service and collision repair169.7 154.3 10.0 %
Finance, insurance and other, net98.1 92.0 6.6 %
Total gross profit$445.2 $350.7 26.9 %
Unit Sales Volume:
Retail new vehicles20,283 23,736 (14.5)%
Fleet new vehicles277 541 (48.8)%
Total new vehicles20,560 24,277 (15.3)%
Used vehicles22,717 27,120 (16.2)%
Wholesale vehicles5,362 6,803 (21.2)%
Retail new & used vehicles43,000 50,856 (15.4)%
Used-to-New Ratio1.10 1.12 (1.1)%
Gross Profit Per Unit:
Retail new vehicles$6,799 $2,900 134.4 %
Fleet new vehicles$2,348 $459 411.5 %
New vehicles$6,739 $2,846 136.9 %
Used vehicles$1,728 $1,273 35.7 %
Finance, insurance and other, net$2,280 $1,808 26.1 %

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 March 31,Better / (Worse)
20222021% Change
(In millions, except unit and per unit data)
Revenues:
Retail new vehicles$5.6 $— 100.0 %
Used vehicles517.2 441.4 17.2 %
Wholesale vehicles62.4 18.6 235.5 %
Total vehicles585.2 460.0 27.2 %
Finance, insurance and other, net40.1 47.1 (14.5)%
Total revenues625.3 507.1 23.3 %
Gross Profit:
Retail new vehicles1.1 — 100.0 %
Used vehicles1.3 (1.4)192.9 %
Wholesale vehicles1.8 0.2 800.0 %
Total vehicles4.2 (1.2)450.0 %
Finance, insurance and other, net40.1 46.9 (14.5)%
Total gross profit44.3 45.9 (3.5)%
Selling, general and administrative expenses(71.8)(39.3)(82.6)%
Impairment charges— — — %
Depreciation and amortization(5.0)(3.2)(56.3)%
Operating income (loss)(32.5)3.4 NM
Other income (expense):
Interest expense, floor plan(1.7)(1.0)(70.0)%
Interest expense, other, net(0.8)(0.3)(166.7)%
Other income (expense), net0.1 (0.1)200.0 %
Total other income (expense)(2.4)(1.4)(71.4)%
Income (loss) before taxes(34.9)2.0 NM
Add: impairment charges— — NM
Segment income (loss)$(34.9)$2.0 NM
Unit Sales Volume:
Retail new vehicles85 — 100.0 %
Used vehicles14,995 19,670 (23.8)%
Wholesale vehicles3,649 2,861 27.5 %
Gross Profit Per Unit:
Total used vehicle and F&I $2,755 $2,318 18.8 %

NM = Not Meaningful



EchoPark Segment - Same Market
Three Months Ended March 31,Better / (Worse)
20222021% Change
(In millions, except unit and per unit data)
Revenues:
Retail new vehicles$4.0 $— 100.0 %
Used vehicles293.4 391.7 (25.1)%
Wholesale vehicles45.4 16.6 173.5 %
Total vehicles342.8 408.3 (16.0)%
Finance, insurance and other, net22.4 41.9 (46.5)%
Total revenues365.2 450.2 (18.9)%
Gross Profit:
Retail new vehicles0.4 — 100.0 %
Used vehicles(3.9)(1.6)(143.8)%
Wholesale vehicles1.8 0.1 NM
Total vehicles(1.7)(1.5)(13.3)%
Parts, service and collision repair— — — %
Finance, insurance and other, net22.4 41.9 (46.5)%
Total gross profit$20.7 $40.4 (48.8)%
Unit Sales Volume:
Retail new vehicles44 — 100.0 %
Used vehicles8,984 17,358 (48.2)%
Wholesale vehicles2,438 2,501 (2.5)%
Gross Profit Per Unit:
Total used vehicle and F&I$2,064 $2,327 (11.3)%
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

Three Months Ended March 31,Better / (Worse)
20222021Change% Change
(In millions)
Reported:
Compensation$252.5 $188.5 $(64.0)(34.0)%
Advertising26.2 12.2 (14.0)(114.8)%
Rent12.7 13.7 1.0 7.3 %
Other95.6 75.0 (20.6)(27.5)%
Total SG&A expenses$387.0 $289.4 $(97.6)(33.7)%
Reported:
SG&A expenses as a % of gross profit:
Compensation44.2 %47.0 %280 bps
Advertising4.6 %3.0 %(160)bps
Rent2.2 %3.4 %120 bps
Other16.7 %18.8 %210 bps
Total SG&A expenses as a % of gross profit67.7 %72.2 %450 bps


Franchised Dealerships Segment - SG&A Expenses

Three Months Ended March 31,Better / (Worse)
20222021Change% Change
(In millions)
Reported:
Compensation$215.1 $165.4 $(49.7)(30.0)%
Advertising7.9 5.8 (2.1)(36.2)%
Rent10.9 12.1 1.2 9.9 %
Other81.3 66.8 (14.5)(21.7)%
Total SG&A expenses$315.2 $250.1 $(65.1)(26.0)%
Reported:
SG&A expenses as a % of gross profit:
Compensation40.8 %46.6 %580 bps
Advertising1.5 %1.6 %10 bps
Rent2.1 %3.4 %130 bps
Other15.4 %18.8 %340 bps
Total SG&A expenses as a % of gross profit59.8 %70.4 %1,060 bps



EchoPark Segment - SG&A Expenses

Three Months Ended March 31,Better / (Worse)
20222021Change% Change
(In millions)
Reported:
Compensation$37.4 $23.1 $(14.3)(61.9)%
Advertising18.3 6.4 (11.9)(185.9)%
Rent1.8 1.6 (0.2)(12.5)%
Other14.3 8.2 (6.1)(74.4)%
Total SG&A expenses$71.8 $39.3 $(32.5)(82.7)%
Reported:
SG&A expenses as a % of gross profit:
Compensation84.4 %50.3 %(3,410)bps
Advertising41.3 %13.9 %(2,740)bps
Rent4.1 %3.5 %(60)bps
Other32.3 %17.9 %(1,440)bps
Total SG&A expenses as a % of gross profit162.1 %85.6 %(7,650)bps




Adjusted EBITDA - Non-GAAP Reconciliation
Three Months Ended March 31, 2022Three Months Ended March 31, 2021
Franchised Dealerships SegmentEchoPark SegmentDiscontinued OperationsTotalFranchised Dealerships SegmentEchoPark SegmentDiscontinued OperationsTotal
(In millions)
Net income (loss)$97.3 $54.2 
Provision for income taxes31.6 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 amortization25.9 5.2 — 31.1 21.2 3.3 — 24.5 
Stock-based compensation expense4.4 — — 4.4 3.5 — — 3.5 
Long-term compensation charges— — — — — 0.5 — 0.5 
Loss (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 



® Sonic Automotive – Investor Presentation April 2022 Updated April 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,” “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 160 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 April 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 Segment Unique, High Return EchoPark Business Model Broad Revenue Stream Diversification Complementary Relationship – Sonic Franchised And EchoPark Disciplined Capital Allocation To Accelerate EchoPark Growth Focused On Expense Control And Maintaining Strong Balance Sheet Expect To Grow Total Revenue To $28 Billion By 2025 Note: Total revenue projection is estimate of future results. Actual results may differ. Anticipated 2025 revenue includes $3.2 billion in annual revenues expected from the RFJ Auto acquisition completed in December 2021. See “Forward-Looking Statements.”

 
6 Revenue Composition BY GEOGRAPHY TX 28% CA 24% CO 9% TN 8% FL 7% AL 5% GA 4% NC 4% MD 2% SC 2% VA 2% NV 2% All Others 3% 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 FY 2021

 
7 Revenue Composition – Diversified Revenue Streams Note: Percentages are Percent of Total for FY 2021 5% 33% 11% 35% 42% 7% 42% 25% 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 FY 2021 Brand % of Revenue Franchise Brand % of Revenue BMW 21% Mercedes 10% Audi 5% Lexus 4% Land Rover 3% Porsche 3% Cadillac 2% Volvo 1% Other Luxury (1) 3% Honda 10% Toyota 6% Volkswagen 1% Hyundai 1% Nissan 1% Other Import (2) 1% EchoPark 18% Non-Franchise 18% Ford 5% Chevrolet GMC Buick 4% Luxury 52% 20%Import Domestic 10% (1) Includes MINI, Maserati, Jaguar, Infiniti, Acura and Alfa Romeo (2) Includes Subaru and Mazda Business Line Mix Majority Of Gross Profit Driven By Stable Business Lines

 
8 ® EchoPark Automotive – A Unique Growth Story Growing Nationwide Distribution Network Expected To Reach 90% Of Population By 2025 Unique, High Return Business Model Focus On High Quality 1 to 4-Year-Old Nearly New Vehicles Wide Reach – 30% of Guests Travel More Than 30 Minutes To Shop Our Inventory 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.

 
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 • Achieved >30% U.S. Population Coverage By End Of 2021, Expect 90% Coverage By 2025 • Nationwide Distribution Network Expected To Deliver 575,000 Unit Sales And $14 Billion In Annual Revenues By 2025 • Addressable Market Opportunity Of 2 Million Vehicles • 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 Franchised Dealerships EchoParkStrategic Drivers Note: Profitability, unit sales volume, revenue, and population coverage projections are estimates of future results. Actual results may differ. See “Forward-Looking Statements.”

 
11 Strong Balance Sheet And Liquidity March 31, 2022 December 31, 2021 (In Millions) Cash and cash equivalents 360.2$ 299.4$ Availability under the 2021 Revolving Credit Facility 274.0 281.4 Availability under the 2019 Mortgage Facility 24.9 22.2 Floor plan deposit balance 125.5 99.8 Total available liquidity resources 784.6$ 702.8$ Covenant Requirement* March 31, 2022 December 31, 2021 Liquidity ratio >= 1.05 1.26 1.26 Fixed charge coverage ratio >= 1.20 2.66 2.69 Total lease adjusted leverage ratio <= 5.75 2.11 2.46 Net debt to Adjusted EBITDA ratio(1) 1.48 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) Current Leverage Ratios Are Within Internal Target Range $87M Increase in Cash And Deposits

 
12 EchoPark

 
13 EchoPark – Brand Promise Up To 40% Below New Vehicle Price Up To $3,000 Below Used Vehicle Market Price High Quality, Low Mileage Vehicles 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 Over 30% 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 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 Multiple Markets Priced Up to $3,000 Below Used Competes On Price vs. 5 to 6-Year-Old Vehicles, Consumer Can Buy Newer Vehicle For Same Price Priced 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% Q1 2022 Average Market Share* (3.2% Excluding New Markets) Most Mature Market Had 10.9% Share In Q1 2022 Annual Retail Vehicle Sales Volume

 
16 EchoPark – Growth Forecast 77,835 575,000 FY 2021 FY 2025E Retail Unit Sales Volume FY 2021 FY 2025E $2.3 $14.0 Total Revenues (In Billions) 56% CAGR $(65.6) $220.0 FY 2021* FY 2025E Adjusted Pre-Tax Profit (Loss) (In Millions) $(46.3) $260.0 FY 2021* FY 2025E Adjusted EBITDA (In Millions) Growth Drivers • Reached >30% Of U.S. Population By End Of 2021, Expect 90% By 2025 • Population Coverage, Market Density Growth And Continued Market Share Gains Drive Long-Term Opportunity To Achieve 2 Million Retail Unit Sales Annually • Existing Markets Generate ~400,000 Unique Leads On An Annualized Basis • Expand Through Mix Of Medium/Large Retail Hubs And Delivery Centers Supporting Growing eCommerce Distribution Network • See 4-Wall Model On Next Slide Note: Amounts are estimates of future results used for modeling purposes. Actual results may differ materially. * Refer To Appendix For Calculation And Reconciliation of Adjusted Pre-Tax Profit (Loss) and Adjusted EBITDA (Non-GAAP Measures)

 
17 EchoPark – Modeled 4-Wall Economics At Maturity (Modeled Metrics Assume 100% Maturity) Delivery Center Medium Retail Hub Large Retail Hub Average Monthly Retail Unit Volume 300 750 1,500 Average Vehicle Selling Price 20,500$ 20,500$ 20,500$ Total Annual Revenues 82,000,000$ 205,000,000$ 410,000,000$ Total Combined Gross Profit Per Unit Retailed ("GPU") 1,700$ 2,150$ 2,150$ Target SG&A Expenses as % of Gross Profit 65% 60% 60% Annual Pre-Tax Profit 2,100,000$ 7,200,000$ 14,400,000$ Average Compensation Per Employee (with Fringe) 68,000$ 78,000$ 78,000$ Total Headcount 7 105 170 Sales Experience Guide ("EG") Headcount N/A 25 50 Average Retail Unit Sales Per EG Per Month N/A 30 30 Target Inventory Days' Supply N/A 30 Days 30 Days Working Capital Investment -$ 15,000,000$ 31,000,000$ Inventory Floor Plan Financing -$ (15,000,000)$ (31,000,000)$ Capital Expenditures, Including Land (Varies By Market) $1-2 Million $7-12 Million $20-25 Million Estimated Months to Breakeven 3-6 Months 6-9 Months 6-9 Months Estimated Years to Maturity 2 Years 4 Years 5 Years Expected Pre-Tax Return On Investment 55%+ 35% - 50% 28% - 33% Note: Assuming target GPU above, estimated average pre-tax losses of $1.5 to $2.0 million per new medium or large retail hub opening in normal used vehicle pricing environment (Approximately ~40% incurred in 3 months prior to opening, ~60% incurred post-opening prior to targeted breakeven). Pre-tax losses for new Delivery Center locations are expected to be approximately $0.2 million per location prior to targeted breakeven in normal used vehicle pricing environment. Note: Amounts are estimates of future results used for comparative modeling purposes. Actual store results may differ. See “Forward-Looking Statements.”

 
18 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 • Target Adjacent Secondary Markets Or Large Metro Markets Where Traditional Dealership Real Estate Is Unavailable Or Cost Prohibitive

 
19 EchoPark – High Volume Model Drives Superior Returns Gross Profit Per Unit (“GPU”) Franchised Used EchoPark Better / (Worse) Front-End Used Vehicle GPU $1,300 $(100) F&I GPU $1,800 $2,250 Parts and Service Reconditioning GPU $500 - Total Used-Related GPU $3,600 $2,150 ($1,450) Volume Differential Factor x1 X5 Pro Forma Comparative Used-Related Gross Profit $3,600 $10,750 $7,150 Ultra-Low Pricing Attractive F&I High Volume Throughput Below-Market Pricing Drives High Customer Lead Volume Higher Penetration Rates On F&I Products vs. Industry Average 5X Volume Throughput Per Retail Hub vs. Sonic Franchised Stores Note: Amounts are normalized estimates of future results used for comparative modeling purposes. Actual results may differ.

 
20 EchoPark – Industry Headwinds & Action Plan Industry Headwinds • Supply Chain Disruption Driving Low 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 EchoPark Action Plan • Expanding Inventory To Include 5-8 Year Old Vehicles At Lower Inventory Acquisition Cost And Lower Retail Selling Price, Improving Consumer Affordability And Gross Profit Per Unit • Implemented Marketing Strategy To Source More Vehicles From Consumers • Piloting Enhanced Guest Experience In Select Delivery Center Markets • Launching New EchoPark.com To Modernize eCommerce Offering And Drive Improved Sales Efficiency And Volume Throughput • EchoPark Brand Launch Coming Soon – Will Increase Consumer Awareness And Advertising Reach Beyond Being A Low Price Leader Initial Results • Improved Non-Auction Sourcing Mix From 7% In Q1 2021 To 23% In Q1 2022 • Denver Hub Location Returned To Profitability In March, Tracking Similarly For April • New EchoPark.com Site Rolled Out To 80% Of National Web Traffic • Achieved Highest Reputation Scores In The Pre-Owned Competitive Segment $30,665 $44,767 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 NADA New and Used Vehicle Prices Used New 68.5% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Used Vehicle Price as a % of New Vehicle Price

 
21 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 $- $100 $200 $300 $400 $500 $600 $700 (In M illi on s) Quarterly Used Retail Units Quarterly Revenue Lower Unit Volume In Q4 2021 And Q1 2022 A Result Of Strategic Price Adjustments To Manage Inventory Levels And Mitigate Operating Losses Amid Ongoing Challenges In Used Vehicle Price Environment

 
22 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) $6.1 $6.2 $6.8 $4.8 $(0.3) $6.7 $(4.0) $(11.7) $(6.1) $(17.9) $(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 Jan 2022 Feb 2022 Mar 2022 Q1 2022 Total EchoPark $ (9.4) $(11.6) $ (8.0) $ (29.0) Impact of New Stores $ (4.2) $ (3.8) $ (3.1) $ (11.1) Impact of Stores Open >12 Months $ (5.2) $ (7.8) $ (4.9) $ (17.9) Used Retail Unit Volume 4,776 4,385 5,834 14,995

 
23 Franchised Dealerships

 
24 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

 
25 Franchised Dealerships – Geographic Footprint Diversified Geographic Market Platform 111 Stores, 25+ Brands, 17 Collision Repair Centers RFJ Auto Acquisition Closed In December 2021 • 22 Franchised Locations In 6 States, 16 New Vehicle Brands • Added 5 New States, 5 New Brands To Portfolio

 
26 Franchised Dealerships – Strategic Growth Levers 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

 
27 Omnichannel Strategy

 
28 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

 
29 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 ~10% Of Q1 2022 Vehicle Sales Transactions

 
30 New EchoPark.com Results to Date Rolled Out To 80% Of National Traffic With 100% Roll-Out Planned For Q2 2022 Conversion Rate 30% Higher Compared To Old Website F&I of $2,325 Per Unit Exceeding Projections For Online F&I Product Sales Over 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

 
31 Appendix

 
32 Non-GAAP Reconciliation – Segment Income Franchised Dealerships Segment EchoPark Segment Consolidated (In millions, except unit data) Q1 2022 Q1 2021 Q1 2022 Q1 2021 Q1 2022 Q1 2021 Revenues 2,961.3$ 2,279.7$ 625.3$ 507.1$ 3,586.6$ 2,786.8$ Gross profit 527.0$ 355.0$ 44.4$ 45.9$ 571.3$ 400.9$ SG&A expenses 315.2$ 250.1$ 71.8$ 39.3$ 387.0$ 289.4$ Segment income 163.8$ 70.6$ (34.9)$ 2.0$ 128.9$ 72.6$ Impairment charges - - - - - - Earnings (loss) from continuing operations before taxes 163.8$ 70.6$ (34.9)$ 2.0$ 128.9$ 72.6$ New vehicle unit sales volume 28,983 24,358 85 - 29,068 24,358 Retail used vehicle unit sales volume 27,078 27,236 14,995 19,670 42,073 46,906 Note: Segment Income (Loss) Defined As Earnings (Loss) From Continuing Operations Before Taxes And Impairment Charges

 
33 Non-GAAP Reconciliation – Segment Income 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

 
34 Non-GAAP Reconciliation – Adjusted EBITDA Note – Balance Sheet Amounts Are As Of December 31 For The FY Then Ended And As Of March 31, 2022 For The LTM Q1 2022 Period. (In millions) FY 2018 FY 2019 FY 2020 FY 2021 LTM Q1 2022 Net Income (Loss) 51.7$ 144.1$ (51.4)$ 348.9$ 392.0$ Provision For Income Taxes 22.6 55.0 15.6 109.3 121.8 Income (Loss) Before Taxes 74.3$ 199.1$ (35.8)$ 458.2$ 513.8$ Non-Floor Plan Interest 52.0 50.5 38.7 44.7 54.9 Depreciation and Amortization 96.7 95.6 93.9 104.3 110.9 Stock-Based Compensation Expense 11.9 10.8 11.7 15.0 15.9 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 7.5 Acquisition and Disposition-Related (Gain) Loss (39.3) (74.8) (8.2) (0.4) (1.5) Adjusted EBITDA 259.3$ 308.5$ 370.3$ 645.5$ 717.2$ Long-Term Debt (Including Current Portion) 945.1$ 706.9$ 720.1$ 1,561.2$ 1,546.3$ Cash and Equivalents (5.9) (29.1) (170.3) (299.4) (360.2) Floor Plan Deposit Balance - - (73.2) (99.8) (125.5) Net Debt 939.2$ 677.8$ 476.6$ 1,162.0$ 1,060.6$ Net Debt To Adjusted EBITDA Ratio 3.62 2.20 1.29 1.80 1.48 Long-Term Debt (Including Current Portion) To Adjusted EBITDA Ratio 3.64 2.29 1.94 2.42 2.16

 
35 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

 
36 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

 
37 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

 
38 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

 
39 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

 
40 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

 
41 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

 
42 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