Business Wire | Feb 17, 2021 06:55AM EST

Sonic Automotive Reports All-Time Record Quarterly Revenues and Pre-Tax Earnings

Feb. 17, 2021

CHARLOTTE, N.C.--(BUSINESS WIRE)--Feb. 17, 2021--Sonic Automotive, Inc. ("Sonic" or the "Company") (NYSE:SAH), one of the nation's largest automotive retailers, today reported financial results for the fourth quarter and full year ended December 31, 2020. The financial measures discussed below are results for the fourth quarter of 2020 compared to the fourth quarter of 2019, or full year 2020 compared to full year 2019, as applicable, unless otherwise noted.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210217005340/en/

Fourth Quarter Highlights

* All-time record quarterly revenues of $2.8 billion, up 1.8%, and all-time record quarterly income from continuing operations before taxes of $90.4 million, up 48.3% * Reported earnings from continuing operations of $57.5 million ($1.31 per diluted share), compared to $46.3 million ($1.04 per diluted share) for the fourth quarter of 2019 * All-time record quarterly adjusted earnings from continuing operations* of $65.8 million ($1.50 per diluted share), an increase of 52.7% compared to $43.1 million ($0.97 per diluted share) for the fourth quarter of 2019 * Reported selling, general and administrative ("SG&A") expenses as a percentage of gross profit were 66.6%, compared to 66.2% for the fourth quarter of 2019 * All-time record quarterly adjusted SG&A expenses as a percentage of gross profit* of 68.1%, compared to 73.7% for the fourth quarter of 2019, a 560-basis point improvement * All-time record quarterly total Finance & Insurance ("F&I") gross profit per retail unit of $2,031, up 12.3% * Reported EchoPark results include: All-time record quarterly EchoPark revenues of $386.9 million, up 25.4% EchoPark retail sales volume of 14,841, up 17.1% * Same store Franchised Dealerships Segment operating results include: Revenues up 1.5%, gross profit up 1.7% New vehicle unit sales volume down 6.9%; new vehicle gross profit per unit up 31.4%, to all-time record $2,932 Retail used vehicle unit sales volume down 2.9%; retail used vehicle gross profit per unit down 24.2%, to $972 Parts, service and collision repair gross profit down 3.2% (customer pay gross profit down 0.5%); gross margin up 180 basis points, to 50.7% F&I gross profit up 7.8%; all-time record quarterly reported Franchised Dealerships Segment F&I gross profit per retail unit of $1,965, up 14.9%

Full Year Highlights

* Total revenues of $9.8 billion, down 6.6%, and gross profit of $1.4 billion, down 6.4%, * Reported loss from continuing operations of $50.7 million ($1.19 per diluted share), compared to earnings from continuing operations of $144.5 million ($3.31 per diluted share) for full year 2019 * All-time record annual adjusted earnings from continuing operations* of $168.9 million ($3.85 per diluted share), an increase of 45.9% compared to $115.8 million ($2.65 per diluted share) for full year 2019 * Reported SG&A expenses as a percentage of gross profit were 72.3%, compared to 72.3% for full year 2019 * Adjusted SG&A expenses as a percentage of gross profit* were 72.9%, compared to 76.9% for full year 2019, a 400-basis point improvement * All-time record annual total F&I gross profit per retail unit of $1,952, up 12.0% * Reported EchoPark results include: All-time record annual EchoPark revenues of $1.4 billion, up 22.1% All-time record annual EchoPark retail sales volume of 57,161 units, up 15.4% * Same store Franchised Dealerships Segment operating results include: Revenues down 6.4%, gross profit down 3.9% New vehicle sales volume down 12.9%; new vehicle unit gross profit per unit up 19.0%, to all-time record $2,508 Retail used vehicle unit sales volume down 4.4%; retail used vehicle gross profit per unit down 8.8%, to $1,168 Parts, service and collision repair gross profit down 7.7% (customer pay gross profit down 3.6%); gross margin up 100 basis points, to 49.9% F&I gross profit up 1.2%; all-time record annual reported Franchised Dealerships Segment F&I gross profit per retail unit of $1,846, up 14.0%

Commentary

Jeff Dyke, Sonic's and EchoPark's President, commented, "We are extremely proud of our team for all they have accomplished in 2020, driving the highest adjusted earnings from continuing operations* in our Company's history in the face of the challenges of a global pandemic. Our fourth quarter and full year 2020 results reflect the continued strength and resilience of both our EchoPark and franchised dealerships segments, a significant rebound in customer activity and increasing demand for both new and used vehicles during the second half of the year, as well as fundamental improvements in our operating cost structure. These trends have continued into early 2021 and we believe we are well on the path to more than double the Company's total revenues and significantly increase profitability over the next five years."

Mr. Dyke continued, "Our EchoPark business achieved strong top-line growth during the fourth quarter, with record quarterly revenues of $386.9 million, up 25.4% from the prior year period. EchoPark's continued growth demonstrates the significant benefits we offer our guests, who continue to see value in the excellent pricing, inventory selection and buying experience that EchoPark offers. This in-store experience, combined with our hybrid approach between online and on-site, offers consumers a full range of buying options in order to provide their ideal pre-owned vehicle purchase experience. With the opening of four new EchoPark points in the fourth quarter and the recent acquisition of two pre-owned businesses in Maryland and New York, we remain committed to developing our nationwide distribution network, which we continue to expect to retail over half a million pre-owned vehicles annually and drive $14.0 billion in annual EchoPark revenues by 2025."

Heath Byrd, Sonic's and EchoPark's Chief Financial Officer, commented, "In 2020, we took significant steps to improve operating efficiencies and manage expenses throughout our entire organization, which drove record adjusted SG&A expenses as a percentage of gross profit* of 68.1% for the fourth quarter of 2020. Our team met the hurdles of the COVID-19 pandemic head on, initiating cost control measures to meet these challenges and remaining disciplined in this focus even as consumer demand rebounded in the second half of the year. Additionally, our balance sheet position is stronger than it has ever been, with the lowest net debt to adjusted EBITDA* ratio in our Company's history and total available liquidity of $526.4 million as of December 31, 2020, up 88.0% from the beginning of the year."

*Adjusted earnings from continuing operations, adjusted earnings per diluted share from continuing operations, adjusted SG&A expenses, adjusted SG&A expenses as a percentage of gross profit, and adjusted EBITDA are non-GAAP financial measures. The tables included in this press release reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures.

Dividend

Sonic's Board of Directors approved a quarterly cash dividend of $0.10 per share payable on April 15, 2021 to all stockholders of record on March 15, 2021.

Fourth Quarter 2020 Earnings Conference Call

Senior management will hold a conference call on Wednesday, February 17, 2021 at 11:00 A.M. (Eastern). Investor presentation and earnings press release materials will be accessible beginning the morning of the conference call on the Company's website at ir.sonicautomotive.com.

To access the live broadcast of the call over the internet, please go to ir.sonicautomotive.com. For telephone access to this conference call, please register in advance using this link: http://www.directeventreg.com/registration/event/7083166. After registering, you will receive a confirmation email that includes dial-in numbers and unique conference call and registrant passcodes 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 one hour 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 one of the nation's largest automotive retailers. Sonic can be reached on the web at www.sonicautomotive.com.

About EchoPark Automotive

EchoPark Automotive is a growing operating segment within the Company that specializes in pre-owned vehicle sales and provides a unique guest experience unlike traditional used car stores. More information about EchoPark Automotive can be found at www.echopark.com.

Forward-Looking Statements

Included herein are forward-looking statements, including statements regarding anticipated future revenue levels, future profitability, projected SG&A expense levels, pre-owned vehicle sales projections and the opening of additional EchoPark points. 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, new and used vehicle industry sales volume, anticipated future growth in our EchoPark Segment, the success of our operational strategies, the rate and timing of overall economic expansion or contraction, 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, 2019, the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, the Company's Current Report on Form 8-K filed on February 12, 2021 and other reports and information filed with the 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 earnings from continuing operations, adjusted earnings per diluted share from continuing operations, adjusted SG&A expenses, 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.

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Results ofOperations

Three Months Ended Better / Twelve Months Ended Better / December 31, (Worse) December 31, (Worse)

2020 2019 % Change 2020 2019 % Change

(In thousands, except per share amounts)

Revenues:

New vehicles $ 1,323,429 $ 1,360,064 (2.7 ) % $ 4,281,223 $ 4,889,171 (12.4 ) %

Used vehicles 959,875 869,708 10.4 % 3,564,832 3,489,972 2.1 %

Wholesale 59,156 46,596 27.0 % 197,378 202,946 (2.7 ) %vehicles

Total vehicles 2,342,460 2,276,368 2.9 % 8,043,433 8,582,089 (6.3 ) %

Parts, serviceand collision 319,068 346,514 (7.9 ) % 1,233,735 1,395,303 (11.6 ) %repair

Finance,insurance and 137,026 125,522 9.2 % 489,874 476,951 2.7 %other, net

Total revenues 2,798,554 2,748,404 1.8 % 9,767,042 10,454,343 (6.6 ) %

Cost of Sales:

New vehicles (1,242,818 ) (1,292,480 ) 3.8 % (4,047,132 ) (4,656,084 ) 13.1 %

Used vehicles (941,413 ) (832,877 ) (13.0 ) % (3,458,834 ) (3,342,576 ) (3.5 ) %

Wholesale (61,988 ) (47,941 ) (29.3 ) % (198,249 ) (207,378 ) 4.4 %vehicles

Total vehicles (2,246,219 ) (2,173,298 ) (3.4 ) % (7,704,215 ) (8,206,038 ) 6.1 %

Parts, serviceand collision (163,218 ) (181,222 ) 9.9 % (639,182 ) (727,288 ) 12.1 %repair

Total cost of (2,409,437 ) (2,354,520 ) (2.3 ) % (8,343,397 ) (8,933,326 ) 6.6 %sales

Gross profit 389,117 393,884 (1.2 ) % 1,423,645 1,521,017 (6.4 ) %

Selling, generaland (258,977 ) (260,921 ) 0.7 % (1,028,666 ) (1,099,374 ) 6.4 %administrativeexpenses

Impairment (1,158 ) (17,692 ) 93.5 % (270,017 ) (20,768 ) (1,200.2 ) %charges

Depreciation and (23,145 ) (23,048 ) (0.4 ) % (91,023 ) (93,169 ) 2.3 %amortization

Operating income 105,837 92,223 14.8 % 33,939 307,706 (89.0 ) %(loss)

Other income (expense):

Interestexpense, floor (5,406 ) (11,137 ) 51.5 % (27,228 ) (48,519 ) 43.9 %plan

Interestexpense, other, (10,048 ) (13,458 ) 25.3 % (41,572 ) (52,953 ) 21.5 %net

Other income (5 ) (6,680 ) 99.9 % 97 (6,589 ) 101.5 %(expense), net

Total other (15,459 ) (31,275 ) 50.6 % (68,703 ) (108,061 ) 36.4 %income (expense)

Income (loss)from continuing 90,378 60,948 48.3 % (34,764 ) 199,645 (117.4 ) %operationsbefore taxes

Provision forincome taxes forcontinuing (32,895 ) (14,676 ) (124.1 ) % (15,900 ) (55,108 ) 71.1 %operations -benefit(expense)

Income (loss)from continuing 57,483 46,272 24.2 % (50,664 ) 144,537 (135.1 ) %operations

Discontinued operations:

Income (loss)fromdiscontinued (194 ) 62 (412.9 ) % (1,002 ) (554 ) (80.9 ) %operationsbefore taxes

Provision forincome taxes fordiscontinued 50 (27 ) 285.2 % 281 154 82.5 %operations -benefit(expense)

Income (loss)from (144 ) 35 (511.4 ) % (721 ) (400 ) (80.3 ) %discontinuedoperations

Net income $ 57,339 $ 46,307 23.8 % $ (51,385 ) $ 144,137 (135.7 ) %(loss)

Basic earnings(loss) per common share:

Earnings (loss)per share from $ 1.37 $ 1.07 28.0 % $ (1.19 ) $ 3.36 (135.4 ) %continuingoperations

Earnings (loss)per share from - - - % (0.02 ) (0.01 ) (100.0 ) %discontinuedoperations

Earnings (loss) $ 1.37 $ 1.07 28.0 % $ (1.21 ) $ 3.35 (136.1 ) %per common share

Weighted-averagecommon shares 41,874 43,078 2.8 % 42,483 43,016 1.2 %outstanding

Diluted earnings(loss) per common share:

Earnings (loss)per share from $ 1.31 $ 1.04 26.0 % $ (1.19 ) $ 3.31 (136.0 ) %continuingoperations

Earnings (loss)per share from (0.01 ) - (100.0 ) % (0.02 ) (0.01 ) (100.0 ) %discontinuedoperations

Earnings (loss) $ 1.30 $ 1.04 25.0 % $ (1.21 ) $ 3.30 (136.7 ) %per common share

Weighted-averagecommon shares 44,022 44,463 1.0 % 42,483 43,710 2.8 %outstanding^(1)

Dividendsdeclared per $ 0.10 $ 0.10 - % $ 0.40 $ 0.40 - %common share

(1) Basic weighted-average shares used for twelve months ended December 31, 2020 due to net loss on reported GAAP basis.

(1) Basic weighted-average shares used for twelve months ended December 31,2020 due to net loss on reported GAAP basis.

Franchised Dealerships Segment - Reported

Three Months EndedDecember 31,

Better / (Worse)

Twelve Months EndedDecember 31,

Better / (Worse)

2020

2019

% Change

2020

2019

% Change

(In thousands, except unit and per unit data)

Revenues:

New vehicles

$

1,323,429

$

1,360,064

(2.7

)

%

$

4,281,223

$

4,889,171

(12.4

)

%

Used vehicles

627,786

604,422

3.9

%

2,345,936

2,493,467

(5.9

)

%

Wholesale vehicles

49,181

39,250

25.3

%

168,655

180,020

(6.3

)

%

Total vehicles

2,000,396

2,003,736

(0.2

)

%

6,795,814

7,562,658

(10.1

)

%

Parts, service and collision repair

307,861

339,168

(9.2

)

%

1,194,394

1,366,550

(12.6

)

%

Finance, insurance and other, net

103,383

96,947

6.6

%

357,848

363,117

(1.5

)

%

Total revenues

2,411,640

2,439,851

(1.2

)

%

8,348,056

9,292,325

(10.2

)

%

Gross Profit:

New vehicles

80,611

67,583

19.3

%

234,091

233,087

0.4

%

Used vehicles

25,834

35,727

(27.7

)

%

122,948

147,541

(16.7

)

%

Wholesale vehicles

(2,905

)

(1,254

)

(131.7

)

%

(789

)

(4,100

)

80.8

%

Total vehicles

103,540

102,056

1.5

%

356,250

376,528

(5.4

)

%

Parts, service and collision repair

156,070

165,647

(5.8

)

%

595,342

668,958

(11.0

)

%

Finance, insurance and other, net

103,383

96,947

6.6

%

357,848

363,117

(1.5

)

%

Total gross profit

362,993

364,650

(0.5

)

%

1,309,440

1,408,603

(7.0

)

%

Selling, general and administrative expenses

(235,941

)

(237,849

)

0.8

%

(933,738

)

(1,011,763

)

7.7

%

Impairment charges

(1,158

)

(1,075

)

(7.7

)

%

(270,017

)

(1,101

)

NM

Depreciation and amortization

(20,275

)

(20,288

)

0.1

%

(79,929

)

(82,636

)

3.3

%

Operating income (loss)

105,619

105,438

0.2

%

25,756

313,103

(91.8

)

%

Other income (expense):

Interest expense, floor plan

(4,549

)

(10,275

)

55.7

%

(24,066

)

(45,055

)

46.6

%

Interest expense, other, net

(9,853

)

(13,019

)

24.3

%

(40,624

)

(51,231

)

20.7

%

Other income (expense), net

(5

)

(6,680

)

99.9

%

92

(6,651

)

101.4

%

Total other income (expense)

(14,407

)

(29,974

)

51.9

%

(64,598

)

(102,937

)

37.2

%

Income (loss) before taxes

91,212

75,464

20.9

%

(38,842

)

210,166

(118.5

)

%

Add: impairment charges

1,158

1,075

NM

270,017

1,101

NM

Segment income (loss)

$

92,370

$

76,539

20.7

%

$

231,175

$

211,267

9.4

%

Unit Sales Volume:

New vehicles

27,566

30,591

(9.9

)

%

93,281

114,131

(18.3

)

%

Used vehicles

25,490

27,099

(5.9

)

%

101,864

112,629

(9.6

)

%

Wholesale vehicles

6,463

6,148

5.1

%

24,879

28,379

(12.3

)

%

Retail new & used vehicles

53,056

57,690

(8.0

)

%

195,145

226,760

(13.9

)

%

Used:New Ratio

0.92

0.89

4.4

%

1.09

0.99

10.7

%

Gross Profit Per Unit:

New vehicles

$

2,924

$

2,209

32.4

%

$

2,510

$

2,042

22.9

%

Used vehicles

$

1,014

$

1,318

(23.1

)

%

$

1,207

$

1,310

(7.9

)

%

Finance, insurance and other, net

$

1,965

$

1,710

14.9

%

$

1,846

$

1,620

14.0

%

NM = Not Meaningful

Franchised Dealerships Segment - Reported

Three Months Ended Better / Twelve Months Ended Better / December 31, (Worse) December 31, (Worse)

2020 2019 % Change 2020 2019 % Change

(In thousands, except unit and per unit data)

Revenues:

New vehicles $ 1,323,429 $ 1,360,064 (2.7 ) % $ 4,281,223 $ 4,889,171 (12.4 ) %

Used vehicles 627,786 604,422 3.9 % 2,345,936 2,493,467 (5.9 ) %

Wholesale 49,181 39,250 25.3 % 168,655 180,020 (6.3 ) %vehicles

Total vehicles 2,000,396 2,003,736 (0.2 ) % 6,795,814 7,562,658 (10.1 ) %

Parts, serviceand collision 307,861 339,168 (9.2 ) % 1,194,394 1,366,550 (12.6 ) %repair

Finance,insurance and 103,383 96,947 6.6 % 357,848 363,117 (1.5 ) %other, net

Total revenues 2,411,640 2,439,851 (1.2 ) % 8,348,056 9,292,325 (10.2 ) %

Gross Profit:

New vehicles 80,611 67,583 19.3 % 234,091 233,087 0.4 %

Used vehicles 25,834 35,727 (27.7 ) % 122,948 147,541 (16.7 ) %

Wholesale (2,905 ) (1,254 ) (131.7 ) % (789 ) (4,100 ) 80.8 %vehicles

Total vehicles 103,540 102,056 1.5 % 356,250 376,528 (5.4 ) %

Parts, serviceand collision 156,070 165,647 (5.8 ) % 595,342 668,958 (11.0 ) %repair

Finance,insurance and 103,383 96,947 6.6 % 357,848 363,117 (1.5 ) %other, net

Total gross 362,993 364,650 (0.5 ) % 1,309,440 1,408,603 (7.0 ) %profit

Selling, generaland (235,941 ) (237,849 ) 0.8 % (933,738 ) (1,011,763 ) 7.7 %administrativeexpenses

Impairment (1,158 ) (1,075 ) (7.7 ) % (270,017 ) (1,101 ) NM charges

Depreciation and (20,275 ) (20,288 ) 0.1 % (79,929 ) (82,636 ) 3.3 %amortization

Operating income 105,619 105,438 0.2 % 25,756 313,103 (91.8 ) %(loss)

Other income (expense):

Interest expense, (4,549 ) (10,275 ) 55.7 % (24,066 ) (45,055 ) 46.6 %floor plan

Interest expense, (9,853 ) (13,019 ) 24.3 % (40,624 ) (51,231 ) 20.7 %other, net

Other income (5 ) (6,680 ) 99.9 % 92 (6,651 ) 101.4 %(expense), net

Total other (14,407 ) (29,974 ) 51.9 % (64,598 ) (102,937 ) 37.2 %income (expense)

Income (loss) 91,212 75,464 20.9 % (38,842 ) 210,166 (118.5 ) %before taxes

Add: impairment 1,158 1,075 NM 270,017 1,101 NM charges

Segment income $ 92,370 $ 76,539 20.7 % $ 231,175 $ 211,267 9.4 %(loss)



Unit Sales Volume:

New vehicles 27,566 30,591 (9.9 ) % 93,281 114,131 (18.3 ) %

Used vehicles 25,490 27,099 (5.9 ) % 101,864 112,629 (9.6 ) %

Wholesale 6,463 6,148 5.1 % 24,879 28,379 (12.3 ) %vehicles

Retail new & used 53,056 57,690 (8.0 ) % 195,145 226,760 (13.9 ) %vehicles

Used:New Ratio 0.92 0.89 4.4 % 1.09 0.99 10.7 %



Gross Profit Per Unit:

New vehicles $ 2,924 $ 2,209 32.4 % $ 2,510 $ 2,042 22.9 %

Used vehicles $ 1,014 $ 1,318 (23.1 ) % $ 1,207 $ 1,310 (7.9 ) %

Finance,insurance and $ 1,965 $ 1,710 14.9 % $ 1,846 $ 1,620 14.0 %other, net

NM = Not Meaningful

Franchised Dealerships Segment - Same Store

Three Months EndedDecember 31,

Better / (Worse)

Twelve Months EndedDecember 31,

Better / (Worse)

2020

2019

% Change

2020

2019

% Change

(In thousands, except unit and per unit data)

Revenues:

New vehicles

$

1,322,958

$

1,326,947

(0.3

)%

$

4,258,098

$

4,654,982

(8.5

)%

Used vehicles

627,656

582,582

7.7

%

2,332,150

2,376,141

(1.9

)%

Wholesale vehicles

49,165

38,419

28.0

%

167,794

172,306

(2.6

)%

Total vehicles

1,999,779

1,947,948

2.7

%

6,758,042

7,203,429

(6.2

)%

Parts, service and collision repair

308,098

330,337

(6.7

)%

1,184,428

1,309,201

(9.5

)%

Finance, insurance and other, net

97,570

90,550

7.8

%

335,695

331,860

1.2

%

Total revenues

$

2,405,447

$

2,368,835

1.5

%

$

8,278,165

$

8,844,490

(6.4

)%

Gross Profit:

New vehicles

$

80,776

$

66,011

22.4

%

$

231,871

$

223,661

3.7

%

Used vehicles

24,768

33,646

(26.4

)%

117,903

135,259

(12.8

)%

Wholesale vehicles

(2,868

)

(1,255

)

(128.5

)%

(520

)

(3,382

)

84.6

%

Total vehicles

102,676

98,402

4.3

%

349,254

355,538

(1.8

)%

Parts, service and collision repair

156,321

161,500

(3.2

)%

590,946

640,015

(7.7

)%

Finance, insurance and other, net

97,570

90,550

7.8

%

335,695

331,860

1.2

%

Total gross profit

$

356,567

$

350,452

1.7

%

$

1,275,895

$

1,327,413

(3.9

)%

Unit Sales Volume:

New vehicles

27,552

29,586

(6.9

)%

92,445

106,170

(12.9

)%

Used vehicles

25,479

26,251

(2.9

)%

100,983

105,639

(4.4

)%

Wholesale vehicles

6,460

5,871

10.0

%

24,701

26,114

(5.4

)%

Retail new & used vehicles

53,031

55,837

(5.0

)%

193,428

211,809

(8.7

)%

Used:New Ratio

0.92

0.89

4.2

%

1.09

0.99

9.8

%

Gross Profit Per Unit:

New vehicles

$

2,932

$

2,231

31.4

%

$

2,508

$

2,107

19.0

%

Used vehicles

$

972

$

1,282

(24.2

)%

$

1,168

$

1,280

(8.8

)%

Finance, insurance and other, net

$

1,855

$

1,650

12.4

%

$

1,748

$

1,587

10.1

%

Franchised Dealerships Segment - Same Store

Three Months Ended Better / Twelve Months Ended Better December 31, (Worse) December 31, / (Worse)

2020 2019 % Change 2020 2019 % Change

(In thousands, except unit and per unit data)

Revenues:

New vehicles $ 1,322,958 $ 1,326,947 (0.3 ) $ 4,258,098 $ 4,654,982 (8.5 ) % %

Used 627,656 582,582 7.7 % 2,332,150 2,376,141 (1.9 )vehicles %

Wholesale 49,165 38,419 28.0 % 167,794 172,306 (2.6 )vehicles %

Total 1,999,779 1,947,948 2.7 % 6,758,042 7,203,429 (6.2 )vehicles %

Parts,service and 308,098 330,337 (6.7 ) 1,184,428 1,309,201 (9.5 )collision % %repair

Finance,insurance 97,570 90,550 7.8 % 335,695 331,860 1.2 %and other,net

Total $ 2,405,447 $ 2,368,835 1.5 % $ 8,278,165 $ 8,844,490 (6.4 )revenues %

Gross Profit:

New vehicles $ 80,776 $ 66,011 22.4 % $ 231,871 $ 223,661 3.7 %

Used 24,768 33,646 (26.4 ) 117,903 135,259 (12.8 )vehicles % %

Wholesale (2,868 ) (1,255 ) (128.5 ) (520 ) (3,382 ) 84.6 %vehicles %

Total 102,676 98,402 4.3 % 349,254 355,538 (1.8 )vehicles %

Parts,service and 156,321 161,500 (3.2 ) 590,946 640,015 (7.7 )collision % %repair

Finance,insurance 97,570 90,550 7.8 % 335,695 331,860 1.2 %and other,net

Total gross $ 356,567 $ 350,452 1.7 % $ 1,275,895 $ 1,327,413 (3.9 )profit %



Unit Sales Volume:

New vehicles 27,552 29,586 (6.9 ) 92,445 106,170 (12.9 ) % %

Used 25,479 26,251 (2.9 ) 100,983 105,639 (4.4 )vehicles % %

Wholesale 6,460 5,871 10.0 % 24,701 26,114 (5.4 )vehicles %

Retail new & ) )used 53,031 55,837 (5.0 % 193,428 211,809 (8.7 %vehicles

Used:New 0.92 0.89 4.2 % 1.09 0.99 9.8 %Ratio



Gross Profit Per Unit:

New vehicles $ 2,932 $ 2,231 31.4 % $ 2,508 $ 2,107 19.0 %

Used $ 972 $ 1,282 (24.2 ) $ 1,168 $ 1,280 (8.8 )vehicles % %

Finance,insurance $ 1,855 $ 1,650 12.4 % $ 1,748 $ 1,587 10.1 %and other,net

EchoPark Segment - Reported

Three Months EndedDecember 31,

Better / (Worse)

Twelve Months EndedDecember 31,

Better / (Worse)

2020

2019

% Change

2020

2019

% Change

(In thousands, except unit and per unit data)

Revenues:

Used vehicles

$

332,089

$

265,286

25.2

%

$

1,218,896

$

996,505

22.3

%

Wholesale vehicles

9,975

7,346

35.8

%

28,723

22,926

25.3

%

Total vehicles

342,064

272,632

25.5

%

1,247,619

1,019,431

22.4

%

Parts, service and collision repair

11,207

7,346

52.6

%

39,341

28,753

36.8

%

Finance, insurance and other, net

33,643

28,575

17.7

%

132,026

113,834

16.0

%

Total revenues

386,914

308,553

25.4

%

1,418,986

1,162,018

22.1

%

Gross Profit:

Used

(7,372

)

1,104

(767.8

)

%

(16,950

)

(145

)

(11,589.7

)

%

Wholesale

73

(92

)

179.3

%

(82

)

(332

)

75.3

%

Total vehicles

(7,299

)

1,012

(821.2

)

%

(17,032

)

(477

)

(3,470.6

)

%

Parts, service and collision repair

(220

)

(354

)

37.9

%

(789

)

(943

)

16.3

%

Finance & insurance

33,643

28,576

17.7

%

132,026

113,834

16.0

%

Total gross profit

26,124

29,234

(10.6

)

%

114,205

112,414

1.6

%

SG&A

(23,036

)

(23,072

)

0.2

%

(94,928

)

(87,611

)

(8.4

)

%

Impairment

-

(16,617

)

100.0

%

-

(19,667

)

100.0

%

Depreciation

(2,870

)

(2,760

)

(4.0

)

%

(11,094

)

(10,533

)

(5.3

)

%

Operating income

218

(13,215

)

101.6

%

8,183

(5,397

)

251.6

%

Other income (expense):

Interest floor plan

(857

)

(862

)

0.6

%

(3,162

)

(3,464

)

8.7

%

Interest other

(195

)

(439

)

55.6

%

(948

)

(1,722

)

44.9

%

Other income (expense)

-

-

-

%

5

62

(91.9

)

%

Total other income (expense)

(1,052

)

(1,301

)

19.1

%

(4,105

)

(5,124

)

19.9

%

Income (loss) before taxes

(834

)

(14,516

)

94.3

%

4,078

(10,521

)

138.8

%

Less: impairment charges

-

(16,617

)

NM

-

(19,667

)

NM

Segment income (loss)

$

(834

)

$

2,101

(139.7

)

%

$

4,078

$

9,146

(55.4

)

%

Unit Sales Volume:

Used vehicles

14,841

12,676

17.1

%

57,161

49,520

15.4

%

Wholesale vehicles

2,004

1,751

14.4

%

7,178

5,774

24.3

%

Gross Profit Per Unit:

Total used vehicle and F&I

$

1,770

$

2,341

(24.4

)

%

$

2,013

$

2,296

(12.3

)

%

NM = Not Meaningful

EchoPark Segment - Reported

Three Months Ended Better / Twelve Months Ended Better / December 31, (Worse) December 31, (Worse)

2020 2019 % Change 2020 2019 % Change

(In thousands, except unit and per unit data)

Revenues:

Used vehicles $ 332,089 $ 265,286 25.2 % $ 1,218,896 $ 996,505 22.3 %

Wholesale 9,975 7,346 35.8 % 28,723 22,926 25.3 %vehicles

Total vehicles 342,064 272,632 25.5 % 1,247,619 1,019,431 22.4 %

Parts, serviceand collision 11,207 7,346 52.6 % 39,341 28,753 36.8 %repair

Finance,insurance and 33,643 28,575 17.7 % 132,026 113,834 16.0 %other, net

Total revenues 386,914 308,553 25.4 % 1,418,986 1,162,018 22.1 %

Gross Profit:

Used (7,372 ) 1,104 (767.8 ) % (16,950 ) (145 ) (11,589.7 ) %

Wholesale 73 (92 ) 179.3 % (82 ) (332 ) 75.3 %

Total vehicles (7,299 ) 1,012 (821.2 ) % (17,032 ) (477 ) (3,470.6 ) %

Parts, serviceand collision (220 ) (354 ) 37.9 % (789 ) (943 ) 16.3 %repair

Finance & 33,643 28,576 17.7 % 132,026 113,834 16.0 %insurance

Total gross 26,124 29,234 (10.6 ) % 114,205 112,414 1.6 %profit

SG&A (23,036 ) (23,072 ) 0.2 % (94,928 ) (87,611 ) (8.4 ) %

Impairment - (16,617 ) 100.0 % - (19,667 ) 100.0 %

Depreciation (2,870 ) (2,760 ) (4.0 ) % (11,094 ) (10,533 ) (5.3 ) %

Operating 218 (13,215 ) 101.6 % 8,183 (5,397 ) 251.6 %income

Other income (expense):

Interest floor (857 ) (862 ) 0.6 % (3,162 ) (3,464 ) 8.7 %plan

Interest other (195 ) (439 ) 55.6 % (948 ) (1,722 ) 44.9 %

Other income - - - % 5 62 (91.9 ) %(expense)

Total otherincome (1,052 ) (1,301 ) 19.1 % (4,105 ) (5,124 ) 19.9 %(expense)

Income (loss) (834 ) (14,516 ) 94.3 % 4,078 (10,521 ) 138.8 %before taxes

Less:impairment - (16,617 ) NM - (19,667 ) NM charges

Segment income $ (834 ) $ 2,101 (139.7 ) % $ 4,078 $ 9,146 (55.4 ) %(loss)



Unit Sales Volume:

Used vehicles 14,841 12,676 17.1 % 57,161 49,520 15.4 %

Wholesale 2,004 1,751 14.4 % 7,178 5,774 24.3 %vehicles



Gross Profit Per Unit:

Total used $ 1,770 $ 2,341 (24.4 ) % $ 2,013 $ 2,296 (12.3 ) %vehicle and F&I

NM = Not Meaningful

EchoPark Segment - Same Store

Three Months EndedDecember 31,

Better / (Worse)

Twelve Months EndedDecember 31,

Better / (Worse)

2020

2019

% Change

2020

2019

% Change

(In thousands, except unit and per unit data)

Revenues:

Used vehicles

$

236,074

$

262,913

(10.2)

%

$

1,026,377

$

994,131

3.2

%

Wholesale vehicles

7,319

7,346

(0.4)

%

24,737

22,927

7.9

%

Total vehicles

243,393

270,259

(9.9)

%

1,051,114

1,017,058

3.3

%

Parts, service and collision repair

9,243

7,104

30.1

%

34,768

28,510

22.0

%

Finance, insurance and other, net

24,607

28,052

(12.3)

%

112,403

112,891

(0.4)

%

Total revenues

$

277,243

$

305,415

(9.2)

%

$

1,198,285

$

1,158,459

3.4

%

Gross Profit:

Used vehicles

$

(6,785)

$

(609)

(1,014.1)

%

$

(19,983)

$

(5,831)

(242.7)

%

Wholesale vehicles

(2)

(92)

97.8

%

(158)

(332)

52.4

%

Total vehicles

(6,787)

(701)

(868.2)

%

(20,141)

(6,163)

(226.8)

%

Parts, service and collision repair

(138)

(325)

57.5

%

(533)

(894)

40.4

%

Finance, insurance and other, net

24,607

28,052

(12.3)

%

112,403

112,891

(0.4)

%

Total gross profit

$

17,682

$

27,026

(34.6)

%

$

91,729

$

105,834

(13.3)

%

Unit Sales Volume:

Used vehicles

10,794

12,548

(14.0)

%

48,446

49,392

(1.9)

%

Wholesale vehicles

1,673

1,751

(4.5)

%

6,388

5,774

10.6

%

Gross Profit Per Unit:

Total used vehicle and F&I

$

1,651

$

2,187

(24.5)

%

$

1,908

$

2,168

(12.0)

%

EchoPark Segment - Same Store

Three Months Ended Better / Twelve Months Ended Better / December 31, (Worse) December 31, (Worse)

2020 2019 % Change 2020 2019 % Change

(In thousands, except unit and per unit data)

Revenues:

Used $ 236,074 $ 262,913 (10.2) % $ 1,026,377 $ 994,131 3.2 %vehicles

Wholesale 7,319 7,346 (0.4) % 24,737 22,927 7.9 %vehicles

Total 243,393 270,259 (9.9) % 1,051,114 1,017,058 3.3 %vehicles

Parts,service and 9,243 7,104 30.1 % 34,768 28,510 22.0 %collisionrepair

Finance,insurance 24,607 28,052 (12.3) % 112,403 112,891 (0.4) %and other,net

Total $ 277,243 $ 305,415 (9.2) % $ 1,198,285 $ 1,158,459 3.4 %revenues

Gross Profit:

Used $ (6,785) $ (609) (1,014.1) % $ (19,983) $ (5,831) (242.7) %vehicles

Wholesale (2) (92) 97.8 % (158) (332) 52.4 %vehicles

Total (6,787) (701) (868.2) % (20,141) (6,163) (226.8) %vehicles

Parts,service and (138) (325) 57.5 % (533) (894) 40.4 %collisionrepair

Finance,insurance 24,607 28,052 (12.3) % 112,403 112,891 (0.4) %and other,net

Total gross $ 17,682 $ 27,026 (34.6) % $ 91,729 $ 105,834 (13.3) %profit



Unit Sales Volume:

Used 10,794 12,548 (14.0) % 48,446 49,392 (1.9) %vehicles

Wholesale 1,673 1,751 (4.5) % 6,388 5,774 10.6 %vehicles



GrossProfit Per Unit:

Total usedvehicle and $ 1,651 $ 2,187 (24.5) % $ 1,908 $ 2,168 (12.0) %F&I

Selling, General and Administrative ("SG&A") Expenses - Non-GAAP Reconciliation

Three Months Ended December 31,

Better / (Worse)

2020

2019

Change

% Change

(In thousands)

Reported:

Compensation

$

176,050

$

184,455

$

8,405

4.6

%

Advertising

10,509

14,522

4,013

27.6

%

Rent

13,560

13,303

(257)

(1.9)

%

Other

58,858

48,641

(10,217)

(21.0)

%

Total SG&A expenses

$

258,977

$

260,921

$

1,944

0.7

%

Items of interest:

Gain on franchise and real estate disposals

$

6,039

$

29,303

Total SG&A adjustments

$

6,039

$

29,303

Adjusted:

Total adjusted SG&A expenses

$

265,016

$

290,224

$

25,208

8.7

%

Reported:

SG&A expenses as a % of gross profit:

Compensation

45.2

%

46.8

%

160

bps

Advertising

2.7

%

3.7

%

100

bps

Rent

3.5

%

3.4

%

(10)

bps

Other

15.2

%

12.3

%

(290)

bps

Total SG&A expenses as a % of gross profit

66.6

%

66.2

%

(40)

bps

Items of interest:

Gain on franchise and real estate disposals

1.5

%

7.5

%

Total effect of adjustments

1.5

%

7.5

%

Adjusted:

Total adjusted SG&A expenses as a % of gross profit

68.1

%

73.7

%

560

bps

Selling, General and Administrative ("SG&A") Expenses - Non-GAAP Reconciliation

Three Months Ended Better / (Worse) December 31,

2020 2019 Change % Change

(In thousands)

Reported:

Compensation $ 176,050 $ 184,455 $ 8,405 4.6 %

Advertising 10,509 14,522 4,013 27.6 %

Rent 13,560 13,303 (257) (1.9) %

Other 58,858 48,641 (10,217) (21.0) %

Total SG&A expenses $ 258,977 $ 260,921 $ 1,944 0.7 %

Items of interest:

Gain on franchise and real $ 6,039 $ 29,303 estate disposals

Total SG&A adjustments $ 6,039 $ 29,303

Adjusted:

Total adjusted SG&A expenses $ 265,016 $ 290,224 $ 25,208 8.7 %

Reported:

SG&A expenses as a % of gross profit:

Compensation 45.2 % 46.8 % 160 bps

Advertising 2.7 % 3.7 % 100 bps

Rent 3.5 % 3.4 % (10) bps

Other 15.2 % 12.3 % (290) bps

Total SG&A expenses as a % of 66.6 % 66.2 % (40) bpsgross profit

Items of interest:

Gain on franchise and real 1.5 % 7.5 % estate disposals

Total effect of adjustments 1.5 % 7.5 %

Adjusted:

Total adjusted SG&A expenses 68.1 % 73.7 % 560 bpsas a % of gross profit

SG&A Expenses - Non-GAAP Reconciliation (Continued)

Twelve Months Ended December 31,

Better / (Worse)

2020

2019

Change

% Change

(In thousands)

Reported:

Compensation

$

659,834

$

733,925

$

74,091

10.1

%

Advertising

42,186

60,831

18,645

30.7

%

Rent

54,494

54,611

117

0.2

%

Other

272,152

250,007

(22,145)

(8.9)

%

Total SG&A expenses

$

1,028,666

$

1,099,374

$

70,708

6.4

%

Items of interest:

Executive transition costs

$

-

$

(6,264)

Gain on franchise and real estate disposals

9,188

75,983

Total SG&A adjustments

$

9,188

$

69,719

Adjusted:

Total adjusted SG&A expenses

$

1,037,854

$

1,169,093

$

131,239

11.2

%

Reported:

SG&A expenses as a % of gross profit:

Compensation

46.3

%

48.3

%

200

bps

Advertising

3.0

%

4.0

%

100

bps

Rent

3.8

%

3.6

%

(20)

bps

Other

19.2

%

16.4

%

(280)

bps

Total SG&A expenses as a % of gross profit

72.3

%

72.3

%

-

bps

Items of interest:

Executive transition costs

-

%

(0.4)

%

Gain on franchise and real estate disposals

0.6

%

5.0

%

Total effect of adjustments

0.6

%

4.6

%

Adjusted:

Total adjusted SG&A expenses as a % of gross profit

72.9

%

76.9

%

400

bps

SG&A Expenses - Non-GAAP Reconciliation (Continued)

Twelve Months Ended December Better / (Worse) 31,

2020 2019 Change % Change

(In thousands)

Reported:

Compensation $ 659,834 $ 733,925 $ 74,091 10.1 %

Advertising 42,186 60,831 18,645 30.7 %

Rent 54,494 54,611 117 0.2 %

Other 272,152 250,007 (22,145) (8.9) %

Total SG&A expenses $ 1,028,666 $ 1,099,374 $ 70,708 6.4 %

Items of interest:

Executive transition $ - $ (6,264) costs

Gain on franchise and 9,188 75,983 real estate disposals

Total SG&A adjustments $ 9,188 $ 69,719

Adjusted:

Total adjusted SG&A $ 1,037,854 $ 1,169,093 $ 131,239 11.2 %expenses

Reported:

SG&A expenses as a % of gross profit:

Compensation 46.3 % 48.3 % 200 bps

Advertising 3.0 % 4.0 % 100 bps

Rent 3.8 % 3.6 % (20) bps

Other 19.2 % 16.4 % (280) bps

Total SG&A expenses as a 72.3 % 72.3 % - bps% of gross profit

Items of interest:

Executive transition - % (0.4) % costs

Gain on franchise and 0.6 % 5.0 % real estate disposals

Total effect of 0.6 % 4.6 % adjustments

Adjusted:

Total adjusted SG&Aexpenses as a % of gross 72.9 % 76.9 % 400 bpsprofit

Earnings Per Share from Continuing Operations - Non-GAAP Reconciliation

Three Months Ended December 31, 2020

Three Months Ended December 31, 2019

Weighted-AverageShares

Amount

PerShareAmount

Weighted-AverageShares

Amount

PerShareAmount

(In thousands, except per share amounts)

Diluted earnings (loss) and shares from continuing operations

44,022

$

57,483

$

1.31

44,463

$

46,272

$

1.04

Pre-tax items of interest:

Gain on franchise and real estate disposals

$

(6,039

)

$

(29,303

)

Loss on debt extinguishment

-

7,157

Impairment charges

1,158

17,692

Total pre-tax items of interest

$

(4,881

)

$

(4,454

)

Tax effect of above items

1,281

1,292

Non-recurring tax items

11,941

-

Adjusted diluted earnings (loss) and shares from continuing operations

44,022

$

65,824

$

1.50

44,463

$

43,110

$

0.97

Earnings Per Share from Continuing Operations - Non-GAAP Reconciliation

Three Months Ended December 31, Three Months Ended December 31, 2019 2020

Weighted- Per Weighted- Per Average Amount Share Average Amount Share Shares Amount Shares Amount

(In thousands, except per share amounts)

Dilutedearnings(loss) and 44,022 $ 57,483 $ 1.31 44,463 $ 46,272 $ 1.04 shares fromcontinuingoperations

Pre-tax items of interest:

Gain onfranchise and $ (6,039 ) $ (29,303 ) real estatedisposals

Loss on debt - 7,157 extinguishment

Impairment 1,158 17,692 charges

Total pre-taxitems of $ (4,881 ) $ (4,454 ) interest

Tax effect of 1,281 1,292 above items

Non-recurring 11,941 - tax items

Adjusteddilutedearnings(loss) and 44,022 $ 65,824 $ 1.50 44,463 $ 43,110 $ 0.97 shares fromcontinuingoperations

Twelve Months Ended December 31, 2020

Twelve Months Ended December 31, 2019

Weighted-AverageShares

Amount

PerShareAmount

Weighted-AverageShares

Amount

PerShareAmount

(In thousands, except per share amounts)

Diluted earnings (loss) and shares from continuing operations(1)

42,483

$

(50,664

)

$

(1.19

)

43,710

$

144,537

$

3.31

Pre-tax items of interest:

Gain on franchise and real estate disposals

$

(9,188

)

$

(75,983

)

Executive transition costs

-

6,264

Loss on debt extinguishment

-

7,157

Impairment charges

269,158

19,618

Total pre-tax items of interest

$

259,970

$

(42,944

)

Tax effect of above items

(40,421

)

14,193

Adjusted diluted earnings (loss) and shares from continuing operations

43,903

$

168,885

$

3.85

43,710

$

115,786

$

2.65

Twelve Months Ended December 31, 2020 Twelve Months Ended December 31, 2019

Weighted- Per Weighted- Per Average Amount Share Average Amount Share Shares Amount Shares Amount

(In thousands, except per share amounts)

Dilutedearnings(loss) and 42,483 $ (50,664 ) $ (1.19 ) 43,710 $ 144,537 $ 3.31 shares fromcontinuingoperations^(1)

Pre-tax items of interest:

Gain onfranchise and $ (9,188 ) $ (75,983 ) real estatedisposals

Executivetransition - 6,264 costs

Loss on debt - 7,157 extinguishment

Impairment 269,158 19,618 charges

Total pre-taxitems of $ 259,970 $ (42,944 ) interest

Tax effect of (40,421 ) 14,193 above items

Adjusteddilutedearnings(loss) and 43,903 $ 168,885 $ 3.85 43,710 $ 115,786 $ 2.65 shares fromcontinuingoperations



(1) Basic weighted-average shares used for twelve months ended December 31, 2020 due to net loss on reported GAAP basis.

(1) Basic weighted-average shares used for twelve months ended December 31,2020 due to net loss on reported GAAP basis.

Adjusted EBITDA - Non-GAAP Reconciliation

Twelve Months Ended December 31, 2020

Twelve Months Ended December 31, 2019

Franchised Dealerships Segment

EchoPark Segment

Discontinued Operations

Total

Franchised Dealerships Segment

EchoPark Segment

Discontinued Operations

Total

(In thousands)

Net income (loss)

$

(51,385

)

$

144,137

Provision for income taxes

15,619

54,954

Income (loss) before taxes

$

(38,842

)

$

4,078

$

(1,002

)

$

(35,766

)

$

210,167

$

(10,522

)

$

(554

)

$

199,091

Non-floor plan interest (1)

37,746

926

-

38,672

48,774

1,701

-

50,475

Depreciation and amortization (2)

82,807

11,115

-

93,922

85,093

10,553

-

95,646

Stock-based compensation expense

11,704

-

-

11,704

10,797

-

-

10,797

Loss (gain) on exit of leased dealerships

-

-

-

-

(170

)

-

-

(170

)

Asset impairment charges

270,017

-

-

270,017

1,101

19,667

-

20,768

Loss (gain) on debt extinguishment

-

-

-

-

6,690

-

-

6,690

Loss (gain) on franchise and real estate disposals

(3,095

)

(5,152

)

-

(8,247

)

(74,812

)

-

-

(74,812

)

Adjusted EBITDA

$

360,337

$

10,967

$

(1,002

)

$

370,302

$

287,640

$

21,399

$

(554

)

$

308,485

Long-term debt (including current portion)

$

720,067

$

706,886

Cash and equivalents

(170,313

)

(29,103

)

Floor plan deposit balance

(73,180

)

-

Net debt

$

476,574

$

677,783

Net debt to adjusted EBITDA ratio

1.29

2.20

Adjusted EBITDA - Non-GAAP Reconciliation

Twelve Months Ended December 31, 2020 Twelve Months Ended December 31, 2019

Franchised EchoPark Discontinued Franchised EchoPark Discontinued Dealerships Segment Operations Total Dealerships Segment Operations Total Segment Segment

(In thousands)

Net income $ (51,385 ) $ 144,137 (loss)

Provision for 15,619 54,954 income taxes

Income (loss) $ (38,842 ) $ 4,078 $ (1,002 ) $ (35,766 ) $ 210,167 $ (10,522 ) $ (554 ) $ 199,091 before taxes

Non-floor plan 37,746 926 - 38,672 48,774 1,701 - 50,475 interest (1)

Depreciationand 82,807 11,115 - 93,922 85,093 10,553 - 95,646 amortization(2)

Stock-basedcompensation 11,704 - - 11,704 10,797 - - 10,797 expense

Loss (gain) onexit of leased - - - - (170 ) - - (170 ) dealerships

Assetimpairment 270,017 - - 270,017 1,101 19,667 - 20,768 charges

Loss (gain) ondebt - - - - 6,690 - - 6,690 extinguishment

Loss (gain) onfranchise and (3,095 ) (5,152 ) - (8,247 ) (74,812 ) - - (74,812 ) real estatedisposals

Adjusted $ 360,337 $ 10,967 $ (1,002 ) $ 370,302 $ 287,640 $ 21,399 $ (554 ) $ 308,485 EBITDA

Long-term debt(including $ 720,067 $ 706,886 currentportion)

Cash and (170,313 ) (29,103 ) equivalents

Floor plandeposit (73,180 ) - balance

Net debt $ 476,574 $ 677,783

Net debt toadjusted 1.29 2.20 EBITDA ratio

(1)

Includes interest expense, other, net in the accompanying consolidated statements of operations, net of any amortization of debt issuance costs or net debt discount/premium included in (2) below.

(2)

Includes the following line items from the accompanying consolidated statements of cash flows: depreciation and amortization of property and equipment; debt issuance cost amortization; and debt discount amortization, net of premium amortization.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210217005340/en/

CONTACT: 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 / Anthony Feldman 212-896-1272 / 347-487-6194 ddevoren@kcsa.com/afeldman@kcsa.com