Business Wire | Jul 29, 2021 06:55AM EDT

Sonic Automotive Reports All-Time Record Quarterly Revenues and Earnings Per Share

Jul. 29, 2021

CHARLOTTE, N.C.--(BUSINESS WIRE)--Jul. 29, 2021--Sonic Automotive, Inc. ("Sonic" or the "Company") (NYSE:SAH), one of the nation's largest automotive retailers, today reported financial results for the second quarter and six months ended June 30, 2021.

Key Highlights

* All-time record quarterly revenues of $3.4 billion, up 58.7% year-over-year * All-time record quarterly income from continuing operations before taxes of $151.0 million, up 303.4% year-over-year * All-time record quarterly earnings from continuing operations of $114.0 million ($2.63 per diluted share) * All-time record quarterly selling, general and administrative ("SG&A") expenses as a percentage of gross profit of 62.8% * All-time record quarterly Adjusted EBITDA margin* of 5.7%, up 220 basis points year-over-year * All-time record quarterly total Finance & Insurance ("F&I") gross profit per retail unit of $2,214, up 13.8% year-over-year * All-time record quarterly EchoPark revenues of $595.6 million, up 88.9% year-over-year * All-time record quarterly EchoPark retail sales volume of 21,261, up 61.0% year-over-year

Commentary

David Smith, Sonic's and EchoPark's Chief Executive Officer, commented, "During the second quarter, our team continued to execute at a high level, driving record performance in our franchised dealerships and a fourth consecutive quarter of record revenue and retail unit sales volume for our EchoPark business. Given the increasing consumer demand we've experienced, our success in maximizing operating efficiency at our franchised dealerships and continued expansion of the EchoPark brand, we believe we can sustain our strong operating performance throughout the balance of 2021 and well into 2022. Longer-term, we're confident of attaining our goal of more than doubling total revenues to $25 billion by 2025 while continuing to significantly increase profitability."

Jeff Dyke, Sonic's and EchoPark's President, commented, "We are pleased to report that we are halfway through our nationwide EchoPark distribution network & digital expansion plan for 2021, and expect to achieve 25% population coverage by the end of 2021 and 90% population coverage by 2025. At 10% share of our segment of the market, which we already exceed in our more mature markets, this represents a 2 million vehicle annual sales opportunity at maturity. Complementing this, we are making excellent progress with our new, proprietary digital retail platform and are on track for a fourth quarter 2021 launch. In the meantime, our guest-centric EchoPark buying experience continues to drive market share gains and we anticipate our market penetration and brand recognition will continue to grow rapidly in tandem with our nationwide network."

Second Quarter Financial Highlights

The financial measures discussed below are results for the second quarter of 2021 with comparisons made to the second quarter of 2020, unless otherwise noted. Certain metrics are also compared to the second quarter of 2019 to exclude the effects of the onset of the COVID-19 pandemic on comparative results.

* All-time record quarterly revenues of $3.4 billion, up 58.7% year-over-year (up 28.2% compared to the second quarter of 2019), and all-time record quarterly income from continuing operations before taxes of $151.0 million, up 303.4% (up 310.1% compared to the second quarter of 2019) * All-time record quarterly earnings from continuing operations of $114.0 million ($2.63 per diluted share), compared to second quarter 2020 reported earnings from continuing operations of $31.0 million ($0.71 per diluted share) and adjusted earnings from continuing operations* of $27.8 million ($0.64 per diluted share) * All-time record quarterly selling, general and administrative ("SG&A") expenses as a percentage of gross profit of 62.8%, a 1,210 basis-point decrease from 74.9% in the second quarter of 2020 * All-time record quarterly total Finance & Insurance ("F&I") gross profit per retail unit of $2,214, up 13.8% * Franchised Dealerships Segment operating results include: Same store revenues up 54.8%, gross profit up 74.0% (up 24.9% and 39.6%, respectively, compared to the second quarter of 2019) Same store new vehicle unit sales volume up 55.3% (up 17.6% compared to the second quarter of 2019); new vehicle gross profit per unit up 71.5%, to $3,827 (up 85.2% compared to the second quarter of 2019) Same store retail used vehicle unit sales volume up 20.5% (up 6.6% compared to the second quarter of 2019); retail used vehicle gross profit per unit up 63.3%, to $1,844 (up 41.4% compared to the second quarter of 2019) Same store parts, service and collision repair gross profit up 42.6% (up 6.9% compared to the second quarter of 2019); customer pay gross profit up 41.7% (up 16.6% compared to the second quarter of 2019); gross margin up 130 basis points, to 50.6% (up 150 basis points compared to the second quarter of 2019) Same store F&I gross profit up 56.5% (up 43.0% compared to the second quarter of 2019); all-time record reported Franchised Dealerships Segment F&I gross profit per retail unit of $2,110, up 14.7% (up 33.5% compared to the second quarter of 2019) All-time record Franchised Dealerships Segment SG&A expenses as a percentage of gross profit of 58.1%, a 1,660 basis-point decrease from 74.7% in the second quarter of 2020 (a decrease of 1,900 basis points from 77.1% in the second quarter of 2019) * EchoPark Segment operating results include: All-time record quarterly EchoPark revenues of $595.6 million, up 88.9% (up 104.2% compared to the second quarter of 2019) All-time record quarterly EchoPark retail sales volume of 21,261, up 61.0% (up 68.9% compared to the second quarter of 2019) EchoPark market share increase of 90 basis points, to 5.0% of the 1-4-year old vehicle segment in our current markets EchoPark pre-tax loss of $14.4 million and Adjusted EBITDA* loss of $9.4 million (including market expansion-related losses of $6.6 million and $5.4 million, respectively) EchoPark loss reflects expansion-related losses and the effect of strategic price management to grow top line sales and market share amidst temporary used market pricing inversion

Board Announces Review of Strategic Alternatives for EchoPark

As a result of the success of the EchoPark strategy and our confidence in our runway for continued expansion, Sonic's Board of Directors, working together with financial and legal advisors, has initiated a review process to evaluate potential strategic alternatives for its EchoPark business. The Company is considering a full range of potential alternatives with respect to its EchoPark business. No timetable has been established for the completion of the review, and the review may not result in any transaction. The Company does not intend to disclose further developments with respect to its review process unless and until its Board approves a specific action or otherwise concludes the review.

Lazard and Kirkland & Ellis LLP are acting as financial and legal advisors to the Company, respectively, in connection with the review.

Dividend

Sonic's Board of Directors approved a quarterly cash dividend of $0.12 per share payable on October 15, 2021 to all stockholders of record on September 15, 2021.

Second Quarter 2021 Earnings Conference Call

Senior management will hold a conference call on Thursday, July 29, 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 webcast, 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/6951789. 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 rapidly growing operating segment within the Company that specializes in pre-owned vehicle sales, utilizing technology to provide a unique, guest-centric buying experience and deliver superior value to customers. 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, pre-owned vehicle sales projections, the opening of additional EchoPark markets, 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, 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, 2020 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 EBITDA and Adjusted EBITDA margin. 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.

*Adjusted earnings from continuing operations, adjusted earnings per diluted share from continuing operations, Adjusted EBITDA and Adjusted EBITDA margin 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.

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Results ofOperations - Consolidated

Three Months Ended June 30, Better / Six Months Ended June 30, Better / (Worse) (Worse)

2021 2020 % Change 2021 2020 % Change

(In thousands, except per share amounts)

Revenues:

New vehicles $ 1,462,893 $ 900,003 62.5 % $ 2,619,210 $ 1,859,492 40.9 %

Used vehicles 1,266,696 808,877 56.6 % 2,356,794 1,658,930 42.1 %

Wholesale 84,807 33,175 155.6 % 159,614 81,718 95.3 %vehicles

Total vehicles 2,814,396 1,742,055 61.6 % 5,135,618 3,600,140 42.7 %

Parts, serviceand collision 360,596 259,058 39.2 % 681,509 593,738 14.8 %repair

Finance,insurance and 177,254 110,773 60.0 % 321,916 226,064 42.4 %other, net

Total revenues 3,352,246 2,111,886 58.7 % 6,139,043 4,419,942 38.9 %

Cost of sales:

New vehicles (1,344,467 ) (854,617 ) (57.3 ) (2,431,319 ) (1,768,690 ) (37.5 ) % %

Used vehicles (1,231,943 ) (781,506 ) (57.6 ) (2,291,171 ) (1,599,428 ) (43.2 ) % %

Wholesale (80,280 ) (33,601 ) (138.9 ) (154,240 ) (82,303 ) (87.4 )vehicles % %

Total vehicles (2,656,690 ) (1,669,724 ) (59.1 ) (4,876,730 ) (3,450,421 ) (41.3 ) % %

Parts, service ) )and collision (184,748 ) (134,779 ) (37.1 % (350,612 ) (311,560 ) (12.5 %repair

Total cost of (2,841,438 ) (1,804,503 ) (57.5 ) (5,227,342 ) (3,761,981 ) (39.0 )sales % %

Gross profit 510,808 307,383 66.2 % 911,701 657,961 38.6 %

Selling, generaland (320,620 ) (230,359 ) (39.2 ) (609,976 ) (512,515 ) (19.0 )administrative % %expenses

Impairment - (833 ) 100.0 % - (268,833 ) 100.0 %charges

Depreciation and (24,761 ) (22,647 ) (9.3 ) (48,448 ) (44,944 ) (7.8 )amortization % %

Operating income 165,427 53,544 209.0 % 253,277 (168,331 ) (250.5 )(loss) %

Other income (expense):

Interestexpense, floor (4,329 ) (6,314 ) 31.4 % (9,441 ) (16,822 ) 43.9 %plan

Interest )expense, other, (10,077 ) (9,797 ) (2.9 % (20,363 ) (20,762 ) 1.9 %net

Other income - - - % 100 100 - %(expense), net

Total other (14,406 ) (16,111 ) 10.6 % (29,704 ) (37,484 ) 20.8 %income (expense)

Income (loss)from continuing 151,021 37,433 303.4 % 223,573 (205,815 ) (208.6 )operations %before taxes

Provision forincome taxes forcontinuing (37,030 ) (6,437 ) (475.3 ) (55,893 ) 37,680 248.3 %operations - %benefit(expense)

Income (loss) )from continuing 113,991 30,996 267.8 % 167,680 (168,135 ) (199.7 %operations

Discontinued operations:

Income (loss)fromdiscontinued (204 ) (289 ) 29.4 % 516 (573 ) 190.1 %operationsbefore taxes

Provision forincome taxes fordiscontinued 58 84 (31.0 ) (129 ) 166 (177.7 )operations - % %benefit(expense)

Income (loss)from (146 ) (205 ) 28.8 % 387 (407 ) 195.1 %discontinuedoperations

Net income $ 113,845 $ 30,791 269.7 % $ 168,067 $ (168,542 ) (199.7 )(loss) %

Basic earnings(loss) per common share:

Earnings (loss)per share from $ 2.74 $ 0.72 280.6 % $ 4.03 $ (3.93 ) (202.5 )continuing %operations

Earnings (loss)per share from - - - % 0.01 (0.01 ) 200.0 %discontinuedoperations

Earnings (loss) $ 2.74 $ 0.72 280.6 % $ 4.04 $ (3.94 ) (202.5 )per common share %

Weighted-averagecommon shares 41,581 42,940 3.2 % 41,561 42,779 2.8 %outstanding

Diluted earnings(loss) per common share:

Earnings (loss)per share from $ 2.63 $ 0.71 270.4 % $ 3.86 $ (3.93 ) (198.2 )continuing %operations

Earnings (loss)per share from - - - % 0.01 (0.01 ) 200.0 %discontinuedoperations

Earnings (loss) $ 2.63 $ 0.71 270.4 % $ 3.87 $ (3.94 ) (198.2 )per common share %

Weighted-average )common shares 43,424 43,575 0.3 % 43,483 42,779 (1.6 %outstanding

Dividendsdeclared per $ 0.12 $ 0.10 20.0 % $ 0.22 $ 0.20 10.0 %common share

Franchised Dealerships Segment - Reported

Three Months Ended June 30, Better / Six Months Ended June 30, Better / (Worse) (Worse)

2021 2020 % Change 2021 2020 % Change

(In thousands, except unit and per unit data)

Revenues:

New vehicles $ 1,461,984 $ 900,003 62.4 % $ 2,618,301 $ 1,859,492 40.8 %

Used vehicles 761,524 535,699 42.2 % 1,423,059 1,102,587 29.1 %

Wholesale 62,956 28,509 120.8 % 119,160 70,948 68.0 %vehicles

Total vehicles 2,286,464 1,464,211 56.2 % 4,160,520 3,033,027 37.2 %

Parts, serviceand collision 346,118 251,998 37.3 % 654,194 576,499 13.5 %repair

Finance,insurance and 124,060 80,401 54.3 % 221,586 163,429 35.6 %other, net

Total revenues 2,756,642 1,796,610 53.4 % 5,036,300 3,772,955 33.5 %

Gross Profit:

New vehicles 118,326 45,386 160.7 % 187,790 90,802 106.8 %

Used vehicles 55,220 30,416 81.5 % 87,219 62,730 39.0 %

Wholesale 1,434 (357 ) 501.7 % 2,172 (440 ) 593.6 %vehicles

Total vehicles 174,980 75,445 131.9 % 277,181 153,092 81.1 %

Parts, serviceand collision 175,578 124,465 41.1 % 330,844 282,561 17.1 %repair

Finance,insurance and 124,060 80,401 54.3 % 221,586 163,429 35.6 %other, net

Total gross 474,618 280,311 69.3 % 829,611 599,082 38.5 %profit

Selling,general and (275,709 ) (209,496 ) (31.6 ) (525,785 ) (465,914 ) (12.9 )administrative % %expenses

Impairment - (833 ) NM - (268,833 ) NM charges

Depreciation ) )and (20,616 ) (19,895 ) (3.6 % (40,992 ) (39,484 ) (3.8 %amortization

Operating 178,293 50,087 256.0 % 262,834 (175,149 ) 250.1 %income (loss)

Other income (expense):

Interestexpense, floor (3,155 ) (5,675 ) 44.4 % (7,271 ) (15,283 ) 52.4 %plan

Interest )expense, (9,721 ) (9,556 ) (1.7 % (19,682 ) (20,156 ) 2.4 %other, net

Other income (2 ) - (100.0 ) 76 100 (24.0 )(expense), net % %

Total otherincome (12,878 ) (15,231 ) 15.4 % (26,877 ) (35,339 ) 23.9 %(expense)

Income (loss) 165,415 34,856 374.6 % 235,957 (210,488 ) (212.1 )before taxes %

Add:impairment - 833 NM - 268,833 NM charges

Segment income $ 165,415 $ 35,689 363.5 % $ 235,957 $ 58,346 304.4 %(loss)



Unit Sales Volume:

New vehicles 30,488 19,891 53.3 % 54,846 41,615 31.8 %

Used vehicles 28,550 23,973 19.1 % 55,786 50,011 11.5 %

Wholesale 6,753 4,827 39.9 % 13,585 11,737 15.7 %vehicles

Retail new & 59,038 43,864 34.6 % 110,632 91,626 20.7 %used vehicles

Used-to-New 0.94 1.21 (22.3 ) 1.02 1.20 (15.4 )Ratio % %



Gross Profit Per Unit:

New vehicles $ 3,881 $ 2,282 70.1 % $ 3,424 $ 2,182 56.9 %

Used vehicles $ 1,934 $ 1,269 52.4 % $ 1,563 $ 1,254 24.6 %

Finance,insurance and $ 2,110 $ 1,839 14.7 % $ 2,017 $ 1,798 12.2 %other, net

NM = NotMeaningful

Franchised Dealerships Segment - Same Store

Three Months Ended June 30, Better / Six Months Ended June 30, Better / (Worse) (Worse)

2021 2020 % Change 2021 2020 % Change

(In thousands, except unit and per unit data)

Revenues:

New $ 1,461,984 $ 892,958 63.7 % $ 2,618,301 $ 1,843,548 42.0 %vehicles

Used 761,524 531,335 43.3 % 1,423,059 1,092,131 30.3 %vehicles

Wholesale 62,956 28,236 123.0 % 119,160 70,339 69.4 %vehicles

Total 2,286,464 1,452,529 57.4 % 4,160,520 3,006,018 38.4 %vehicles

Parts,service and 343,441 247,134 39.0 % 649,631 568,429 14.3 %collisionrepair

Finance,insurance 116,657 74,522 56.5 % 208,903 152,213 37.2 %and other,net

Total 2,746,562 1,774,185 54.8 % 5,019,054 3,726,660 34.7 %revenues

Gross Profit:

New 116,692 43,811 166.4 % 185,648 88,926 108.8 %vehicles

Used 52,647 26,759 96.7 % 82,920 58,900 40.8 %vehicles

Wholesale 4,199 (289 ) 1,552.9 % 4,935 (338 ) 1,560.1 %vehicles

Total 173,538 70,281 146.9 % 273,503 147,488 85.4 %vehicles

Parts,service and 173,900 121,946 42.6 % 327,583 278,411 17.7 %collisionrepair

Finance,insurance 116,657 74,522 56.5 % 208,903 152,213 37.2 %and other,net

Total gross $ 464,095 $ 266,749 74.0 % $ 809,989 $ 578,112 40.1 %profit



Unit Sales Volume:

New 30,488 19,631 55.3 % 54,846 41,041 33.6 %vehicles

Used 28,550 23,701 20.5 % 55,786 49,336 13.1 %vehicles

Wholesale 6,753 4,773 41.5 % 13,585 11,611 17.0 %vehicles

Retail new& used 59,038 43,332 36.2 % 110,632 90,377 22.4 %vehicles

Used-to-New 0.94 1.21 (22.4 ) 1.02 1.20 (15.4 )Ratio % %



GrossProfit Per Unit:

New $ 3,827 $ 2,232 71.5 % $ 3,385 $ 2,167 56.2 %vehicles

Used $ 1,844 $ 1,129 63.3 % $ 1,486 $ 1,194 24.5 %vehicles

Finance,insurance $ 1,984 $ 1,726 14.9 % $ 1,902 $ 1,698 12.0 %and other,net

Note: All currently operating franchised dealership stores are included withinthe same store group as of the first full month following the first anniversaryof the store's opening or acquisition.

EchoPark Segment - Reported

Three Months Ended June Better / Six Months Ended June Better / 30, (Worse) 30, (Worse)

2021 2020 % Change 2021 2020 % Change

(In thousands, except unit and per unit data)

Revenues:

New vehicles $ 909 $ - 100.0 % $ 909 $ - 100.0 %

Used vehicles 505,172 273,178 84.9 % 933,735 556,343 67.8 %

Wholesale 21,851 4,666 368.3 % 40,454 10,770 275.6 %vehicles

Total vehicles 527,932 277,844 90.0 % 975,098 567,113 71.9 %

Parts, serviceand collision 14,478 7,060 105.1 % 27,315 17,239 58.4 %repair

Finance,insurance and 53,194 30,372 75.1 % 100,330 62,635 60.2 %other, net

Total revenues 595,604 315,276 88.9 % 1,102,743 646,987 70.4 %

Gross Profit:

New vehicles 100 - 100.0 % 100 - 100.0 %

Used vehicles (20,467 ) (3,045 ) (572.2 ) (21,596 ) (3,228 ) (569.0 ) % %

Wholesale 3,093 (69 ) 4,582.6 % 3,202 (145 ) 2,308.3 %vehicles

Total vehicles (17,274 ) (3,114 ) (454.7 ) (18,294 ) (3,373 ) 442.4 % %

Parts, serviceand collision 270 (186 ) 245.2 % 54 (383 ) 113.8 %repair

Finance,insurance and 53,194 30,372 75.1 % 100,330 62,635 60.2 %other, net

Total gross 36,190 27,072 33.7 % 82,090 58,879 39.4 %profit

Selling,general and (44,911 ) (20,863 ) (115.3 ) (84,191 ) (46,601 ) (80.7 )administrative % %expenses

Impairment - - - % - - - %charges

Depreciation ) )and (4,145 ) (2,752 ) (50.6 % (7,456 ) (5,460 ) (36.6 %amortization

Operating (12,866 ) 3,457 (472.2 ) (9,557 ) 6,818 (240.2 )income (loss) % %

Other income (expense):

Interest ) )expense, floor (1,174 ) (639 ) (83.7 % (2,170 ) (1,539 ) (41.0 %plan

Interest ) )expense, (356 ) (241 ) (47.7 % (681 ) (606 ) (12.4 %other, net

Other income 2 - 100.0 % 24 - 100.0 %(expense), net

Total other ) )income (1,528 ) (880 ) (73.6 % (2,827 ) (2,145 ) (31.8 %(expense)

Income (loss) (14,394 ) 2,577 (658.6 ) (12,384 ) 4,673 (365.0 )before taxes % %

Add:impairment - - NM - - NM charges

Segment income $ (14,394 ) $ 2,577 (658.6 ) $ (12,384 ) $ 4,672 (365.1 )(loss) % %



Unit Sales Volume:

New vehicles 14 - 100.0 % 14 - 100.0 %

Used vehicles 21,261 13,207 61.0 % 40,931 27,193 50.5 %

Wholesale 2,878 1,454 97.9 % 5,739 3,219 78.3 %vehicles



Gross Profit Per Unit:

Total used ) )vehicle and F& $ 1,539 $ 2,069 (25.6 % $ 1,924 $ 2,185 (11.9 %I

NM = NotMeaningful

EchoPark Segment - Same Market

Three Months Ended June Better / Six Months Ended June 30, Better / 30, (Worse) (Worse)

2021 2020 % Change 2021 2020 % Change

(In thousands, except unit and per unit data)

Revenues:

Used $ 368,857 $ 273,178 35.0 % $ 716,654 $ 556,353 28.8 %vehicles

Wholesale 14,951 4,666 220.4 % 30,722 10,770 185.3 %vehicles

Total 383,808 277,844 38.1 % 747,376 567,123 31.8 %vehicles

Parts,serviceand 10,602 7,060 50.2 % 21,248 17,205 23.5 %collisionrepair

Finance,insuranceand 39,007 30,259 28.9 % 77,473 62,430 24.1 %other,net

Total 433,417 315,163 37.5 % 846,097 646,758 30.8 %revenues

Gross Profit:

Used (17,118 ) (6,545 ) (161.5 ) (18,633 ) (10,703 ) (74.1 )vehicles % %

Wholesale 2,288 (69 ) 3,415.9 % 2,410 (145 ) 1,762.1 %vehicles

Total (14,830 ) (6,614 ) (124.2 ) (16,223 ) (10,848 ) 49.5 %vehicles %

Parts,serviceand (4 ) (186 ) 97.8 % (27 ) (383 ) 93.0 %collisionrepair

Finance,insuranceand 39,007 30,259 28.9 % 77,473 62,430 24.1 %other,net

Totalgross $ 24,173 $ 23,459 3.0 % $ 61,223 $ 51,199 19.6 %profit



UnitSales Volume:

Used 15,382 13,207 16.5 % 31,189 27,193 14.7 %vehicles

Wholesale 1,847 1,454 27.0 % 4,151 3,219 29.0 %vehicles



GrossProfit Per Unit:

Totalused $ 1,423 $ 1,796 (20.8 ) $ 1,887 $ 1,902 (0.8 )vehicle % %and F&I

Note: All currently operating EchoPark stores in a local geographic market areincluded within the same market group as of the first full month following thefirst anniversary of the market's opening.

Selling, General and Administrative ("SG&A") Expenses - Consolidated

Three Months Ended June Better / (Worse) 30,

2021 2020 Change % Change

(In thousands)

Reported:

Compensation $ 213,842 $ 140,266 $ (73,576 ) (52.5 ) %

Advertising 15,345 8,087 (7,258 ) (89.7 ) %

Rent 13,665 13,223 (442 ) (3.3 ) %

Other 77,768 68,783 (8,985 ) (13.1 ) %

Total SG&A expenses $ 320,620 $ 230,359 $ (90,261 ) (39.2 ) %



Reported:

SG&A expenses as a % of gross profit:

Compensation 41.9 % 45.6 % 370 bps

Advertising 3.0 % 2.6 % (40 ) bps

Rent 2.7 % 4.3 % 160 bps

Other 15.2 % 22.4 % 720 bps

Total SG&A expenses as a % of 62.8 % 74.9 % 1,210 bpsgross profit

Six Months Ended June 30,

Better / (Worse)

2021

2020

Change

% Change

(In thousands)

Reported:

Compensation

$

402,333

$

314,688

$

(87,645

)

(27.9

)%

Advertising

27,515

22,222

(5,293

)

(23.8

)%

Rent

27,409

27,088

(321

)

(1.2

)%

Other

152,719

148,517

(4,202

)

(2.8

)%

Total SG&A expenses

$

609,976

$

512,515

$

(97,461

)

(19.0

)%

Reported:

SG&A expenses as a % of gross profit:

Compensation

44.1

%

47.8

%

370

bps

Advertising

3.0

%

3.4

%

40

bps

Rent

3.0

%

4.1

%

110

bps

Other

16.8

%

22.6

%

580

bps

Total SG&A expenses as a % of gross profit

66.9

%

77.9

%

1,100

bps



Six Months Ended June 30, Better / (Worse)

2021 2020 Change % Change

(In thousands)

Reported:

Compensation $ 402,333 $ 314,688 $ (87,645 ) (27.9 ) %

Advertising 27,515 22,222 (5,293 ) (23.8 ) %

Rent 27,409 27,088 (321 ) (1.2 ) %

Other 152,719 148,517 (4,202 ) (2.8 ) %

Total SG&A expenses $ 609,976 $ 512,515 $ (97,461 ) (19.0 ) %



Reported:

SG&A expenses as a % of gross profit:

Compensation 44.1 % 47.8 % 370 bps

Advertising 3.0 % 3.4 % 40 bps

Rent 3.0 % 4.1 % 110 bps

Other 16.8 % 22.6 % 580 bps

Total SG&A expenses as a % of 66.9 % 77.9 % 1,100 bpsgross profit

Earnings Per Share from Continuing Operations - Non-GAAP Reconciliation

Three Months Ended June 30, 2021 Three Months Ended June 30, 2020

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

(In thousands, except per share amounts)

Dilutedearnings(loss) and 43,424 $ 113,991 $ 2.63 43,575 $ 30,996 $ 0.71 shares fromcontinuingoperations

Pre-tax items of interest:

Non-recurring $ - $ (3,175 ) tax items

Adjusteddilutedearnings(loss) and 43,424 $ 113,991 $ 2.63 43,575 $ 27,821 $ 0.64 shares fromcontinuingoperations

Six Months Ended June 30, 2021

Six Months Ended June 30, 2020

Weighted-AverageShares

Amount

PerShareAmount

Weighted-AverageShares

Amount

PerShareAmount

(In thousands, except per share amounts)

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

43,483

$

167,680

$

3.86

42,779

$

(168,135

)

$

(3.93

)

Pre-tax items of interest:

Impairment charges

$

-

$

268,000

Total pre-tax items of interest

$

-

$

268,000

Tax effect of above items

-

(51,295

)

Non-recurring tax items

-

(3,175

)

Adjusted diluted earnings (loss) and shares from continuing operations

43,483

$

167,680

$

3.86

42,779

$

45,395

$

1.06

(1) Basic weighted-average shares used for six months ended June 30, 2020 due to net loss on GAAP basis.



Six Months Ended June 30, 2021 Six Months Ended June 30, 2020

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

(In thousands, except per share amounts)

Dilutedearnings(loss) andshares from 43,483 $ 167,680 $ 3.86 42,779 $ (168,135 ) $ (3.93 )continuingoperations^(1)

Pre-tax items of interest:

Impairment $ - $ 268,000 charges

Total pre-taxitems of $ - $ 268,000 interest

Tax effect of - (51,295 ) above items

Non-recurring - (3,175 ) tax items

Adjusteddilutedearnings(loss) and 43,483 $ 167,680 $ 3.86 42,779 $ 45,395 $ 1.06 shares fromcontinuingoperations

(1) Basic weighted-average shares used for six months ended June 30, 2020 dueto net loss on GAAP basis.

Adjusted EBITDA - Non-GAAP Reconciliation

Three Months Ended June 30, 2021 Three Months Ended June 30, 2020

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

(In thousands)

Net income $ 113,845 $ 30,791 (loss)

Provisionfor income 36,972 6,353 taxes

Income(loss) $ 165,415 $ (14,394) $ (204) $ 150,817 $ 34,856 $ 2,577 $ (289) $ 37,144 before taxes

Non-floorplan 8,895 348 - 9,243 8,938 234 - 9,172 interest

Depreciationand 21,444 4,152 - 25,596 20,514 2,758 - 23,272 amortization

Stock-basedcompensation 3,989 - - 3,989 2,971 - - 2,971 expense

Assetimpairment - - - - 833 - - 833 charges

Long-termcompensation - 500 - 500 - - - - charges

Loss (gain)on franchiseand real (400) (23) - (423) 1,117 - - 1,117 estatedisposals

Adjusted $ 199,343 $ (9,417) $ (204) $ 189,722 $ 69,229 $ 5,569 $ (289) $ 74,509 EBITDA



Six Months Ended June 30, 2021

Six Months Ended June 30, 2020

Franchised Dealerships Segment

EchoPark Segment

Discontinued Operations

Total

Franchised Dealerships Segment

EchoPark Segment

Discontinued Operations

Total

(In thousands)

Net income (loss)

$

168,067

$

(168,542)

Provision for income taxes

56,022

(37,846)

Income (loss) before taxes

$

235,957

$

(12,384)

$

516

$

224,089

$

(210,487)

$

4,672

$

(573)

$

(206,388)

Non-floor plan interest

18,022

682

-

18,704

18,981

599

-

19,580

Depreciation & amortization

42,650

7,456

-

50,106

40,658

5,466

-

46,124

Stock-based compensation expense

7,474

-

-

7,474

5,398

-

-

5,398

Asset impairment charges

-

-

-

-

268,833

-

-

268,833

Long-term compensation charges

-

1,000

-

1,000

-

-

-

-

Loss (gain) on franchise disposals

(421)

(9)

-

(430)

1,117

-

-

1,117

Adjusted EBITDA

$

303,682

$

(3,255)

$

516

$

300,943

$

124,500

$

10,737

$

(573)

$

134,664

View source version on businesswire.com: https://www.businesswire.com/news/home/20210729005270/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

CONTACT: Press Inquiries: Danielle DeVoren / Joshua Greenwald 212-896-1272 / 646-379-7971 ddevoren@kcsa.com/jgreenwald@kcsa.com