Business Wire | Oct 28, 2021 06:55AM EDT

Sonic Automotive Reports Record Third Quarter Revenues and Earnings Per Share

Oct. 28, 2021

CHARLOTTE, N.C.--(BUSINESS WIRE)--Oct. 28, 2021--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 third quarter and nine months ended September 30, 2021.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20211028005315/en/

Key Highlights

* Record third quarter revenues of $3.1 billion, up 20.6% year-over-year * Record third quarter income from continuing operations before taxes of $112.2 million, up 39.1% year-over-year * Record third quarter earnings from continuing operations of $84.7 million ($1.96 per diluted share) * Record third quarter selling, general and administrative ("SG&A") expenses as a percentage of gross profit of 68.1% (60.1% on a Franchised Dealerships Segment basis, a decrease of 670 basis points year-over-year) * All-time record quarterly total Finance & Insurance ("F&I") gross profit per retail unit of $2,349, up 21.2% year-over-year * All-time record quarterly EchoPark revenues of $663.3 million, up 72.3% year-over-year * Sonic announced a definitive agreement to acquire RFJ Auto Partners, Inc. ("RFJ Auto"), a top-15 U.S. dealer group by total revenues, which is expected to add $3.2 billion in revenues on an annualized basis * During the third quarter, Sonic repurchased 0.5 million shares of Class A Common Stock for an aggregate purchase price of $24.8 million * In October, the Company amended its credit facilities to increase revolver and floor plan commitments from $1.8 billion to $2.95 billion, in addition to completing an upsized offering of $1.15 billion aggregate principal amount of unsecured senior notes due 2029 and 2031 at a blended rate of 4.73%, with expected use of net proceeds to fund the acquisition of RFJ Auto, the redemption of outstanding notes, and for general corporate purposes, including the repayment of debt

Commentary

David Smith, Chief Executive Officer of Sonic and EchoPark, commented, "I am extremely proud of our team for delivering continued year-over-year growth, in particular against a backdrop of industry-wide inventory headwinds and supply chain disruptions. Our results highlight the operating efficiency of our model, the unwavering dedication of our teammates, and our disciplined focus on driving growth across our franchised dealerships and EchoPark segments. After meeting with much of the RFJ Auto team in recent weeks, we are excited to welcome them into the Sonic family and are grateful for the support of our manufacturer and banking partners for their roles in facilitating this acquisition, which puts us on track to exceed our previously-stated goal of $25 billion in total revenues by 2025. Together, I'm confident that we will continue to strengthen the guest-centric culture that is essential to our brand and the success of our business."

"I'd like to echo that sentiment by recognizing our manufacturer partners and the entire RFJ Auto team for creating the opportunity for this acquisition, which will launch us forward into the next phase of our company's growth plan," said Jeff Dyke, President of Sonic and EchoPark. "As we continue to expand our EchoPark distribution and digital network, adding six locations in four new states since the second quarter, we are well-positioned to achieve our goals of 25% U.S. population coverage by the end of 2021 and 90% U.S. population coverage by 2025. Further supporting our commitment to EchoPark, we recently announced the appointment of Dino Bernacchi as Chief Marketing Officer and Thien Truong as Chief Revenue Officer for EchoPark. With their extensive expertise and diverse backgrounds, they will be instrumental additions in executing the long-term EchoPark strategy."

Heath Byrd, Chief Financial Officer of Sonic and EchoPark, added, "We recently announced an amendment to our credit facilities, increasing total capacity to $2.95 billion, and capitalized on favorable market conditions and an upgraded corporate credit rating by issuing $1.15 billion of unsecured senior notes. This extends our debt maturities, refinances existing debt at a lower cost of capital and provides funding for the pending acquisition of RFJ Auto. I'd like to thank our lender partners and bondholders for recognizing the strength of our balance sheet and favorable operating outlook, which position us to continue to opportunistically evaluate strategic acquisitions, allocate capital to our EchoPark expansion plans and return capital to stockholders through our dividend and share repurchase programs."

Third Quarter Financial Highlights

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

* Record third quarter revenues of $3.1 billion, up 20.6% year-over-year (up 13.7% compared to the third quarter of 2019), and record third quarter income from continuing operations before taxes of $112.2 million, up 39.1% year-over-year (up 176.9% compared to the third quarter of 2019) * Record third quarter earnings from continuing operations of $84.7 million ($1.96 per diluted share), compared to third quarter 2020 reported earnings from continuing operations of $60.0 million ($1.35 per diluted share) and adjusted earnings from continuing operations* of $57.7 million ($1.29 per diluted share) * Record third quarter SG&A expenses as a percentage of gross profit of 68.1%, a 20 basis point decrease from 68.3% in the third quarter of 2020 (a 100 basis point decrease from adjusted SG&A expenses as a percentage of gross profit* of 69.1% in the third quarter of 2020, which excludes a $3.2 million gain on disposal of franchises and real estate) * All-time record quarterly total F&I gross profit per retail unit of $2.349, up 21.2% year-over-year * Franchised Dealerships Segment operating results include: Same store revenues up 11.3%, gross profit up 27.2% (up 5.19% and 30.0%, respectively, compared to the third quarter of 2019) Same store new vehicle unit sales volume down 5.1% (down 19.0% compared to the third quarter of 2019); same store new vehicle gross profit per unit up 93.2%, to $5,051 (up 168.4% compared to the third quarter of 2019) Same store retail used vehicle unit sales volume down 0.3% (down 11.4% compared to the third quarter of 2019); same store retail used vehicle gross profit per unit up 31.9%, to $1,835 (up 45.8% compared to the third quarter of 2019) Same store parts, service and collision repair gross profit up 9.0% (up 4.5% compared to the third quarter of 2019); same store customer pay gross profit up 21.3% (up 19.9% compared to the third quarter of 2019); same store gross margin down 40 basis points, to 50.2% (up 110 basis points compared to the third quarter of 2019) Same store F&I gross profit up 20.8% (up 19.1% compared to the third quarter of 2019); all-time record reported Franchised Dealerships Segment F&I gross profit per retail unit of $2,303, up 27.2% (up 39.9% compared to the third quarter of 2019) Record third quarter Franchised Dealerships Segment SG&A expenses as a percentage of gross profit of 60.1%, a 670 basis point decrease from 66.8% in the third quarter of 2020 (a decrease of 1,680 basis points from 76.9% in the third quarter of 2019) Franchised dealerships new vehicle inventory of approximately 2,400 units, or 10 days' supply, and used vehicle inventory of approximately 8,200 units, or 27 days' supply

* EchoPark Segment operating results include: All-time record quarterly EchoPark revenues of $663.3 million, up 72.3% year-over-year (up 112.5% compared to the third quarter of 2019) Record third quarter EchoPark retail used vehicle unit sales volume of 21,255, up 40.5% year-over-year (up 60.9% compared to the third quarter of 2019) EchoPark market share increase of 110 basis points, to 3.7% of the 1-4-year old vehicle segment in our current markets EchoPark pre-tax loss of $32.9 million and Adjusted EBITDA* loss of $28.5 million (including market expansion-related losses of $18.0 million and $16.8 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 EchoPark used vehicle inventory of approximately 9,800 units, or 41 days' supply

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

Acquisition of RFJ Auto

The Company recently announced that it entered into a definitive agreement to acquire RFJ Auto. With 33 locations in seven states and a portfolio of 16 automotive brands, the transaction will add six incremental states to Sonic's geographic coverage and five additional brands to its portfolio, including the highest volume Chrysler Dodge Jeep RAM dealer in the world in Dave Smith Motors. RFJ Auto generated $2.8 billion in annual revenues in 2020, making it a top-15 U.S. dealer group by total revenues. This acquisition, which is anticipated to close in December 2021, represents one of the largest transactions in automotive retail history and is expected to propel Sonic Automotive into the top-five largest dealer groups in the U.S. as measured by total revenues. The transaction is expected to add $3.2 billion in annualized revenues, representing incremental revenues above the Company's previously stated target of $25 billion in total revenues by 2025.

EchoPark Strategic Alternatives Review

As previously announced, Sonic's Board of Directors, working together with Lazard and Kirkland & Ellis LLP as financial and legal advisors, respectively, is conducting a review 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.

Dividend

Sonic's Board of Directors approved a quarterly cash dividend of $0.12 per share payable on January 14, 2022 to all stockholders of record on December 15, 2021.

Third Quarter 2021 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/8939/sonic-automotive-inc-q3-2021-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 anticipated acquisitions, expected future revenue from acquisitions, future revenue levels, future profitability, 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 closing and 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, 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 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 of Operations - Consolidated

Three Months Ended September 30, Better / Nine Months Ended September 30, Better / (Worse) (Worse)

2021 2020 % Change 2021 2020 % Change

(In thousands, except per share amounts)

Revenues:

New vehicles $ 1,146,922 $ 1,098,302 4.4 % $ 3,766,133 $ 2,957,794 27.3 %

Used vehicles 1,309,492 946,028 38.4 % 3,666,286 2,604,957 40.7 %

Wholesale 97,087 56,502 71.8 % 256,701 138,221 85.7 %vehicles

Total vehicles 2,553,501 2,100,832 21.5 % 7,689,120 5,700,972 34.9 %

Parts, serviceand collision 355,227 320,929 10.7 % 1,036,736 914,667 13.3 %repair

Finance,insurance and 164,084 126,784 29.4 % 486,000 352,848 37.7 %other, net

Total revenues 3,072,812 2,548,545 20.6 % 9,211,856 6,968,487 32.2 %

Cost of sales:

New vehicles (1,031,476 ) (1,035,624 ) 0.4 % (3,462,795 ) (2,804,314 ) (23.5 ) %

Used vehicles (1,289,772 ) (917,993 ) (40.5 ) (3,580,944 ) (2,517,421 ) (42.2 ) % %

Wholesale (95,832 ) (53,958 ) (77.6 ) (250,072 ) (136,260 ) (83.5 )vehicles % %

Total vehicles (2,417,080 ) (2,007,575 ) (20.4 ) (7,293,811 ) (5,457,995 ) (33.6 ) % %

Parts, service ) )and collision (183,713 ) (164,403 ) (11.7 % (534,325 ) (475,964 ) (12.3 %repair

Total cost of (2,600,793 ) (2,171,978 ) (19.7 ) (7,828,136 ) (5,933,959 ) (31.9 )sales % %

Gross profit 472,019 376,567 25.3 % 1,383,720 1,034,528 33.8 %

Selling, generaland (321,373 ) (257,174 ) (25.0 ) (931,349 ) (769,688 ) (21.0 )administrative % %expenses

Impairment - (26 ) 100.0 % - (268,859 ) 100.0 %charges

Depreciation and (25,239 ) (22,934 ) (10.1 ) (73,687 ) (67,879 ) (8.6 )amortization % %

Operating income 125,407 96,433 30.0 % 378,684 (71,898 ) 626.7 %(loss)

Other income (expense):

Interestexpense, floor (3,340 ) (4,999 ) 33.2 % (12,781 ) (21,821 ) 41.4 %plan

Interestexpense, other, (9,817 ) (10,762 ) 8.8 % (30,180 ) (31,523 ) 4.3 %net

Other income - 1 (100.0 ) 100 100 - %(expense), net %

Total other (13,157 ) (15,760 ) 16.5 % (42,861 ) (53,244 ) 19.5 %income (expense)

Income (loss)from continuing 112,250 80,673 39.1 % 335,823 (125,142 ) 368.4 %operationsbefore taxes

Provision forincome taxes forcontinuing (27,559 ) (20,685 ) (33.2 ) (83,452 ) 16,995 (591.0 )operations - % %benefit(expense)

Income (loss)from continuing 84,691 59,988 41.2 % 252,371 (108,147 ) 333.4 %operations

Discontinued operations:

Income (loss)from )discontinued (275 ) (234 ) (17.5 % 241 (808 ) 129.8 %operationsbefore taxes

Provision forincome taxes fordiscontinued 69 64 7.8 % (60 ) 231 (126.0 )operations - %benefit(expense)

Income (loss)from (206 ) (170 ) (21.2 ) 181 (577 ) 131.4 %discontinued %operations

Net income $ 84,485 $ 59,818 41.2 % $ 252,552 $ (108,724 ) 332.3 %(loss)

Basic earnings(loss) per common share:

Earnings (loss)per share from $ 2.04 $ 1.41 44.7 % $ 6.07 $ (2.53 ) 339.9 %continuingoperations

Earnings (loss)per share from (0.01 ) - (100.0 ) 0.01 (0.02 ) 150.0 %discontinued %operations

Earnings (loss) $ 2.03 $ 1.41 44.0 % $ 6.08 $ (2.55 ) 338.4 %per common share

Weighted-averagecommon shares 41,561 42,510 2.2 % 41,561 42,687 2.6 %outstanding

Diluted earnings(loss) per common share:

Earnings (loss)per share from $ 1.96 $ 1.35 45.2 % $ 5.81 $ (2.53 ) 329.6 %continuingoperations

Earnings (loss)per share from (0.01 ) (0.01 ) - % 0.01 (0.02 ) 150.0 %discontinuedoperations

Earnings (loss) $ 1.95 $ 1.34 45.5 % $ 5.82 $ (2.55 ) 328.2 %per common share

Weighted-average )common shares 43,285 44,577 2.9 % 43,416 42,687 (1.7 %outstanding

Dividendsdeclared per $ 0.12 $ 0.10 20.0 % $ 0.34 $ 0.30 13.3 %common share

Franchised Dealerships Segment - Reported

Three Months Ended September 30,

Better / (Worse)

Nine Months Ended September 30,

Better / (Worse)

2021

2020

% Change

2021

2020

% Change

(In thousands, except unit and per unit data)

Revenues:

New vehicles

$

1,143,416

$

1,098,302

4.1

%

$

3,761,718

$

2,957,794

27.2

%

Used vehicles

750,263

615,565

21.9

%

2,173,322

1,718,151

26.5

%

Wholesale vehicles

64,052

48,526

32.0

%

183,212

119,474

53.3

%

Total vehicles

1,957,731

1,762,393

11.1

%

6,118,252

4,795,419

27.6

%

Parts, service and collision repair

339,930

310,035

9.6

%

994,125

886,534

12.1

%

Finance, insurance and other, net

111,808

91,035

22.8

%

333,394

254,465

31.0

%

Total revenues

2,409,469

2,163,463

11.4

%

7,445,771

5,936,418

25.4

%

Gross Profit:

New vehicles

115,204

62,678

83.8

%

302,994

153,480

97.4

%

Used vehicles

50,104

34,385

45.7

%

137,321

97,114

41.4

%

Wholesale vehicles

(1,986

)

2,556

(177.7

)%

186

2,116

(91.2

)%

Total vehicles

163,322

99,619

63.9

%

440,501

252,710

74.3

%

Parts, service and collision repair

171,064

156,711

9.2

%

501,908

439,272

14.3

%

Finance, insurance and other, net

111,808

91,035

22.8

%

333,394

254,465

31.0

%

Total gross profit

446,194

347,365

28.5

%

1,275,803

946,447

34.8

%

Selling, general and administrative expenses

(268,337

)

(231,882

)

(15.7

)%

(794,123

)

(697,796

)

(13.8

)%

Impairment charges

-

(26

)

NM

-

(268,859

)

NM

Depreciation and amortization

(21,266

)

(20,170

)

(5.4

)%

(62,258

)

(59,654

)

(4.4

)%

Operating income (loss)

156,591

95,287

64.3

%

419,422

(79,862

)

625.2

%

Other income (expense):

Interest expense, floor plan

(1,973

)

(4,234

)

53.4

%

(9,243

)

(19,517

)

52.6

%

Interest expense, other, net

(9,477

)

(10,615

)

10.7

%

(29,158

)

(30,771

)

5.2

%

Other income (expense), net

(4

)

(4

)

-

%

73

96

(24.0

)%

Total other income (expense)

(11,454

)

(14,853

)

22.9

%

(38,328

)

(50,192

)

23.6

%

Income (loss) before taxes

145,137

80,434

80.4

%

381,094

(130,054

)

393.0

%

Add: impairment charges

-

26

NM

-

268,859

NM

Segment income (loss)

$

145,137

$

80,460

80.4

%

$

381,094

$

138,805

174.6

%

Unit Sales Volume:

New vehicles

22,791

24,100

(5.4

)%

77,637

65,715

18.1

%

Used vehicles

26,274

26,363

(0.3

)%

82,060

76,374

7.4

%

Wholesale vehicles

6,119

6,679

(8.4

)%

19,704

18,416

7.0

%

Retail new & used vehicles

48,554

50,297

(3.5

)%

158,400

141,188

12.2

%

Used-to-New Ratio

1.15

1.09

5.4

%

1.06

1.16

(9.1

)%

Gross Profit Per Unit:

New vehicles

$

5,055

$

2,601

94.3

%

$

3,903

$

2,336

67.1

%

Used vehicles

$

1,907

$

1,304

46.2

%

$

1,673

$

1,272

31.5

%

Finance, insurance and other, net

$

2,303

$

1,810

27.2

%

$

2,105

$

1,802

16.8

%

NM = Not Meaningful

Franchised Dealerships Segment - Reported

Better / Better Three Months Ended September 30, (Worse) Nine Months Ended September 30, / (Worse)

2021 2020 % Change 2021 2020 % Change

(In thousands, except unit and per unit data)

Revenues:

New vehicles $ 1,143,416 $ 1,098,302 4.1 % $ 3,761,718 $ 2,957,794 27.2 %

Used vehicles 750,263 615,565 21.9 % 2,173,322 1,718,151 26.5 %

Wholesale 64,052 48,526 32.0 % 183,212 119,474 53.3 %vehicles

Total vehicles 1,957,731 1,762,393 11.1 % 6,118,252 4,795,419 27.6 %

Parts, serviceand collision 339,930 310,035 9.6 % 994,125 886,534 12.1 %repair

Finance,insurance and 111,808 91,035 22.8 % 333,394 254,465 31.0 %other, net

Total revenues 2,409,469 2,163,463 11.4 % 7,445,771 5,936,418 25.4 %

Gross Profit:

New vehicles 115,204 62,678 83.8 % 302,994 153,480 97.4 %

Used vehicles 50,104 34,385 45.7 % 137,321 97,114 41.4 %

Wholesale (1,986 ) 2,556 (177.7 ) 186 2,116 (91.2 )vehicles % %

Total vehicles 163,322 99,619 63.9 % 440,501 252,710 74.3 %

Parts, serviceand collision 171,064 156,711 9.2 % 501,908 439,272 14.3 %repair

Finance,insurance and 111,808 91,035 22.8 % 333,394 254,465 31.0 %other, net

Total gross 446,194 347,365 28.5 % 1,275,803 946,447 34.8 %profit

Selling,general and (268,337 ) (231,882 ) (15.7 ) (794,123 ) (697,796 ) (13.8 )administrative % %expenses

Impairment - (26 ) NM - (268,859 ) NMcharges

Depreciation ) )and (21,266 ) (20,170 ) (5.4 % (62,258 ) (59,654 ) (4.4 %amortization

Operating 156,591 95,287 64.3 % 419,422 (79,862 ) 625.2 %income (loss)

Other income (expense):

Interestexpense, floor (1,973 ) (4,234 ) 53.4 % (9,243 ) (19,517 ) 52.6 %plan

Interestexpense, (9,477 ) (10,615 ) 10.7 % (29,158 ) (30,771 ) 5.2 %other, net

Other income (4 ) (4 ) - % 73 96 (24.0 )(expense), net %

Total otherincome (11,454 ) (14,853 ) 22.9 % (38,328 ) (50,192 ) 23.6 %(expense)

Income (loss) 145,137 80,434 80.4 % 381,094 (130,054 ) 393.0 %before taxes

Add:impairment - 26 NM - 268,859 NMcharges

Segment income $ 145,137 $ 80,460 80.4 % $ 381,094 $ 138,805 174.6 %(loss)



Unit Sales Volume:

New vehicles 22,791 24,100 (5.4 ) 77,637 65,715 18.1 % %

Used vehicles 26,274 26,363 (0.3 ) 82,060 76,374 7.4 % %

Wholesale 6,119 6,679 (8.4 ) 19,704 18,416 7.0 %vehicles %

Retail new & 48,554 50,297 (3.5 ) 158,400 141,188 12.2 %used vehicles %

Used-to-New 1.15 1.09 5.4 % 1.06 1.16 (9.1 )Ratio %



Gross Profit Per Unit:

New vehicles $ 5,055 $ 2,601 94.3 % $ 3,903 $ 2,336 67.1 %

Used vehicles $ 1,907 $ 1,304 46.2 % $ 1,673 $ 1,272 31.5 %

Finance,insurance and $ 2,303 $ 1,810 27.2 % $ 2,105 $ 1,802 16.8 %other, net

NM = Not Meaningful

Franchised Dealerships Segment - Same Store

Three Months Ended September 30,

Better / (Worse)

Nine Months Ended September 30,

Better / (Worse)

2021

2020

% Change

2021

2020

% Change

(In thousands, except unit and per unit data)

Revenues:

New vehicles

$

1,137,465

$

1,091,592

4.2

%

$

3,755,766

$

2,935,140

28.0

%

Used vehicles

745,754

612,363

21.8

%

2,168,814

1,704,494

27.2

%

Wholesale vehicles

63,886

48,290

32.3

%

183,047

118,629

54.3

%

Total vehicles

1,947,105

1,752,245

11.1

%

6,107,627

4,758,263

28.4

%

Parts, service and collision repair

338,141

307,614

9.9

%

992,291

874,636

13.5

%

Finance, insurance and other, net

103,746

85,911

20.8

%

312,649

238,125

31.3

%

Total revenues

2,388,992

2,145,770

11.3

%

7,412,567

5,871,024

26.3

%

Gross Profit:

New vehicles

114,308

62,360

83.3

%

301,616

152,487

97.8

%

Used vehicles

47,860

36,411

31.4

%

137,158

101,259

35.5

%

Wholesale vehicles

770

2,686

(71.3

)%

5,705

2,348

143.0

%

Total vehicles

162,938

101,457

60.6

%

444,479

256,094

73.6

%

Parts, service and collision repair

169,700

155,682

9.0

%

499,714

433,629

15.2

%

Finance, insurance and other, net

103,746

85,911

20.8

%

312,649

238,125

31.3

%

Total gross profit

$

436,384

$

343,050

27.2

%

$

1,256,842

$

927,848

35.5

%

Unit Sales Volume:

New vehicles

22,631

23,852

(5.1

)%

77,477

64,893

19.4

%

Used vehicles

26,084

26,168

(0.3

)%

81,870

75,504

8.4

%

Wholesale vehicles

6,095

6,630

(8.1

)%

19,680

18,241

7.9

%

Retail new & used vehicles

48,204

49,854

(3.3

)%

158,050

139,496

13.3

%

Used-to-New Ratio

1.15

1.10

5.1

%

1.06

1.16

(9.2

)%

Gross Profit Per Unit:

New vehicles

$

5,051

$

2,614

93.2

%

$

3,893

$

2,350

65.7

%

Used vehicles

$

1,835

$

1,391

31.9

%

$

1,675

$

1,341

24.9

%

Finance, insurance and other, net

$

2,152

$

1,723

24.9

%

$

1,978

$

1,707

15.9

%

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.

Franchised Dealerships Segment - Same Store

Three Months Ended September Better Nine Months Ended September Better 30, / 30, / (Worse) (Worse)

2021 2020 % 2021 2020 % Change Change

(In thousands, except unit and per unit data)

Revenues:

New $ 1,137,465 $ 1,091,592 4.2 % $ 3,755,766 $ 2,935,140 28.0 %vehicles

Used 745,754 612,363 21.8 % 2,168,814 1,704,494 27.2 %vehicles

Wholesale 63,886 48,290 32.3 % 183,047 118,629 54.3 %vehicles

Total 1,947,105 1,752,245 11.1 % 6,107,627 4,758,263 28.4 %vehicles

Parts,service and 338,141 307,614 9.9 % 992,291 874,636 13.5 %collisionrepair

Finance,insurance 103,746 85,911 20.8 % 312,649 238,125 31.3 %and other,net

Total 2,388,992 2,145,770 11.3 % 7,412,567 5,871,024 26.3 %revenues

Gross Profit:

New 114,308 62,360 83.3 % 301,616 152,487 97.8 %vehicles

Used 47,860 36,411 31.4 % 137,158 101,259 35.5 %vehicles

Wholesale 770 2,686 (71.3 ) 5,705 2,348 143.0 %vehicles %

Total 162,938 101,457 60.6 % 444,479 256,094 73.6 %vehicles

Parts,service and 169,700 155,682 9.0 % 499,714 433,629 15.2 %collisionrepair

Finance,insurance 103,746 85,911 20.8 % 312,649 238,125 31.3 %and other,net

Total gross $ 436,384 $ 343,050 27.2 % $ 1,256,842 $ 927,848 35.5 %profit



Unit Sales Volume:

New 22,631 23,852 (5.1 ) 77,477 64,893 19.4 %vehicles %

Used 26,084 26,168 (0.3 ) 81,870 75,504 8.4 %vehicles %

Wholesale 6,095 6,630 (8.1 ) 19,680 18,241 7.9 %vehicles %

Retail new )& used 48,204 49,854 (3.3 % 158,050 139,496 13.3 %vehicles

Used-to-New 1.15 1.10 5.1 % 1.06 1.16 (9.2 )Ratio %



GrossProfit Per Unit:

New $ 5,051 $ 2,614 93.2 % $ 3,893 $ 2,350 65.7 %vehicles

Used $ 1,835 $ 1,391 31.9 % $ 1,675 $ 1,341 24.9 %vehicles

Finance,insurance $ 2,152 $ 1,723 24.9 % $ 1,978 $ 1,707 15.9 %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 September 30,

Better / (Worse)

Nine Months Ended September 30,

Better / (Worse)

2021

2020

% Change

2021

2020

% Change

(In thousands, except unit and per unit data)

Revenues:

New vehicles

$

3,506

$

-

100.0

%

$

4,415

$

-

100.0

%

Used vehicles

559,229

330,463

69.2

%

1,492,964

886,806

68.4

%

Wholesale vehicles

33,035

7,976

314.2

%

73,489

18,747

292.0

%

Total vehicles

595,770

338,439

76.0

%

1,570,868

905,553

73.5

%

Parts, service and collision repair

15,297

10,894

40.4

%

42,611

28,133

51.5

%

Finance, insurance and other, net

52,276

35,749

46.2

%

152,606

98,383

55.1

%

Total revenues

663,343

385,082

72.3

%

1,766,085

1,032,069

71.1

%

Gross Profit:

New vehicles

243

-

100.0

%

343

-

100.0

%

Used vehicles

(30,384

)

(6,350

)

(378.5

)%

(51,979

)

(9,578

)

(442.7

)%

Wholesale vehicles

3,241

(12

)

NM

6,443

(155

)

NM

Total vehicles

(26,900

)

(6,362

)

(322.8

)%

(45,193

)

(9,733

)

(364.3

)%

Parts, service and collision repair

449

(185

)

342.7

%

504

(569

)

188.4

%

Finance, insurance and other, net

52,276

35,749

46.2

%

152,606

98,383

55.1

%

Total gross profit

25,825

29,202

(11.6

)%

107,917

88,081

22.5

%

Selling, general and administrative expenses

(53,036

)

(25,292

)

(109.7

)%

(137,226

)

(71,892

)

(90.9

)%

Impairment charges

-

-

-

%

-

-

-

%

Depreciation and amortization

(3,973

)

(2,764

)

(43.7

)%

(11,429

)

(8,225

)

(39.0

)%

Operating income (loss)

(31,184

)

1,146

(2,821.1

)%

(40,738

)

7,964

(611.5

)%

Other income (expense):

Interest expense, floor plan

(1,367

)

(765

)

(78.7

)%

(3,538

)

(2,304

)

(53.6

)%

Interest expense, other, net

(340

)

(147

)

(131.3

)%

(1,022

)

(752

)

(35.9

)%

Other income (expense), net

4

5

(20.0

)%

27

4

575.0

%

Total other income (expense)

(1,703

)

(907

)

(87.8

)%

(4,533

)

(3,052

)

(48.5

)%

Income (loss) before taxes

(32,887

)

239

NM

(45,271

)

4,912

NM

Add: impairment charges

-

-

NM

-

-

NM

Segment income (loss)

$

(32,887

)

$

239

NM

$

(45,271

)

$

4,912

NM

Unit Sales Volume:

New vehicles

55

-

100.0

%

69

-

100.0

%

Used vehicles

21,255

15,127

40.5

%

62,186

42,320

46.9

%

Wholesale vehicles

3,492

1,955

78.6

%

9,231

5,174

78.4

%

Gross Profit Per Unit:

Total used vehicle and F&I

$

1,030

$

1,943

(47.0

)%

$

1,618

$

2,098

(22.9

)%

NM = Not Meaningful

EchoPark Segment - Reported

Three Months Ended Better / Nine Months Ended September Better / September 30, (Worse) 30, (Worse)

2021 2020 % Change 2021 2020 % Change

(In thousands, except unit and per unit data)

Revenues:

New vehicles $ 3,506 $ - 100.0 % $ 4,415 $ - 100.0 %

Used vehicles 559,229 330,463 69.2 % 1,492,964 886,806 68.4 %

Wholesale 33,035 7,976 314.2 % 73,489 18,747 292.0 %vehicles

Total vehicles 595,770 338,439 76.0 % 1,570,868 905,553 73.5 %

Parts, serviceand collision 15,297 10,894 40.4 % 42,611 28,133 51.5 %repair

Finance,insurance and 52,276 35,749 46.2 % 152,606 98,383 55.1 %other, net

Total revenues 663,343 385,082 72.3 % 1,766,085 1,032,069 71.1 %

Gross Profit:

New vehicles 243 - 100.0 % 343 - 100.0 %

Used vehicles (30,384 ) (6,350 ) (378.5 ) (51,979 ) (9,578 ) (442.7 ) % %

Wholesale 3,241 (12 ) NM 6,443 (155 ) NMvehicles

Total vehicles (26,900 ) (6,362 ) (322.8 ) (45,193 ) (9,733 ) (364.3 ) % %

Parts, serviceand collision 449 (185 ) 342.7 % 504 (569 ) 188.4 %repair

Finance,insurance and 52,276 35,749 46.2 % 152,606 98,383 55.1 %other, net

Total gross 25,825 29,202 (11.6 ) 107,917 88,081 22.5 %profit %

Selling,general and (53,036 ) (25,292 ) (109.7 ) (137,226 ) (71,892 ) (90.9 )administrative % %expenses

Impairment - - - % - - - %charges

Depreciation ) )and (3,973 ) (2,764 ) (43.7 % (11,429 ) (8,225 ) (39.0 %amortization

Operating (31,184 ) 1,146 (2,821.1 ) (40,738 ) 7,964 (611.5 )income (loss) % %

Other income (expense):

Interest ) )expense, floor (1,367 ) (765 ) (78.7 % (3,538 ) (2,304 ) (53.6 %plan

Interest ) )expense, (340 ) (147 ) (131.3 % (1,022 ) (752 ) (35.9 %other, net

Other income 4 5 (20.0 ) 27 4 575.0 %(expense), net %

Total other ) )income (1,703 ) (907 ) (87.8 % (4,533 ) (3,052 ) (48.5 %(expense)

Income (loss) (32,887 ) 239 NM (45,271 ) 4,912 NMbefore taxes

Add:impairment - - NM - - NMcharges

Segment income $ (32,887 ) $ 239 NM $ (45,271 ) $ 4,912 NM(loss)



Unit Sales Volume:

New vehicles 55 - 100.0 % 69 - 100.0 %

Used vehicles 21,255 15,127 40.5 % 62,186 42,320 46.9 %

Wholesale 3,492 1,955 78.6 % 9,231 5,174 78.4 %vehicles



Gross Profit Per Unit:

Total used ) )vehicle and F& $ 1,030 $ 1,943 (47.0 % $ 1,618 $ 2,098 (22.9 %I

NM = NotMeaningful

EchoPark Segment - Same Market

Three Months Ended September 30,

Better / (Worse)

Nine Months Ended September 30,

Better / (Worse)

2021

2020

% Change

2021

2020

% Change

(In thousands, except unit and per unit data)

Revenues:

Used vehicles

$

400,050

$

330,520

21.0

%

$

1,139,032

$

886,873

28.4

%

Wholesale vehicles

24,186

7,977

203.2

%

55,275

18,747

194.8

%

Total vehicles

424,236

338,497

25.3

%

1,194,307

905,620

31.9

%

Parts, service and collision repair

11,866

10,858

9.3

%

33,714

28,064

20.1

%

Finance, insurance and other, net

37,045

35,669

3.9

%

116,003

98,099

18.3

%

Total revenues

473,147

385,024

22.9

%

1,344,024

1,031,783

30.3

%

Gross Profit:

Used vehicles

(20,015

)

(12,115

)

(65.2

)%

(38,344

)

(22,818

)

(68.0

)%

Wholesale vehicles

2,328

(13

)

NM

4,768

(157

)

NM

Total vehicles

(17,687

)

(12,128

)

(45.8

)%

(33,576

)

(22,975

)

(46.1

)%

Parts, service and collision repair

593

(168

)

453.0

%

947

(553

)

271.2

%

Finance, insurance and other, net

37,045

35,669

3.9

%

116,003

98,099

18.3

%

Total gross profit

$

19,951

$

23,373

(14.6

)%

$

83,374

$

74,571

11.8

%

Unit Sales Volume:

Used vehicles

14,828

15,127

(2.0

)%

46,864

42,320

10.7

%

Wholesale vehicles

2,226

1,955

13.9

%

6,386

5,174

23.4

%

Gross Profit Per Unit:

Total used vehicle and F&I

$

1,149

$

1,557

(26.2

)%

$

1,657

$

1,779

(6.9

)%

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.

EchoPark Segment - Same Market

Three Months Ended September Better Better 30, / Nine Months Ended September 30, / (Worse) (Worse)

2021 2020 % 2021 2020 % Change Change

(In thousands, except unit and per unit data)

Revenues:

Used $ 400,050 $ 330,520 21.0 % $ 1,139,032 $ 886,873 28.4 %vehicles

Wholesale 24,186 7,977 203.2 % 55,275 18,747 194.8 %vehicles

Total 424,236 338,497 25.3 % 1,194,307 905,620 31.9 %vehicles

Parts,serviceand 11,866 10,858 9.3 % 33,714 28,064 20.1 %collisionrepair

Finance,insuranceand 37,045 35,669 3.9 % 116,003 98,099 18.3 %other,net

Total 473,147 385,024 22.9 % 1,344,024 1,031,783 30.3 %revenues

Gross Profit:

Used (20,015 ) (12,115 ) (65.2 ) (38,344 ) (22,818 ) (68.0 )vehicles % %

Wholesale 2,328 (13 ) NM 4,768 (157 ) NMvehicles

Total (17,687 ) (12,128 ) (45.8 ) (33,576 ) (22,975 ) (46.1 )vehicles % %

Parts,serviceand 593 (168 ) 453.0 % 947 (553 ) 271.2 %collisionrepair

Finance,insuranceand 37,045 35,669 3.9 % 116,003 98,099 18.3 %other,net

Total )gross $ 19,951 $ 23,373 (14.6 % $ 83,374 $ 74,571 11.8 %profit



UnitSales Volume:

Used 14,828 15,127 (2.0 ) 46,864 42,320 10.7 %vehicles %

Wholesale 2,226 1,955 13.9 % 6,386 5,174 23.4 %vehicles



GrossProfit Per Unit:

Totalused $ 1,149 $ 1,557 (26.2 ) $ 1,657 $ 1,779 (6.9 )vehicle % %and F&I

NM = Not Meaningful

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 September 30,

Better / (Worse)

2021

2020

Change

% Change

(In thousands)

Reported:

Compensation

$

206,205

$

169,097

$

(37,108

)

(21.9

)%

Advertising

16,715

9,455

(7,260

)

(76.8

)%

Rent

13,781

13,846

65

0.5

%

Other

84,672

64,776

(19,896

)

(30.7

)%

Total SG&A expenses

$

321,373

$

257,174

$

(64,199

)

(25.0

)%

Items of interest:

Gain (loss) on franchise disposals

$

-

$

3,150

Total SG&A adjustments

$

-

$

3,150

Adjusted:

Total adjusted SG&A expenses

$

321,373

$

260,324

$

(61,049

)

(23.5

)%

Reported:

SG&A expenses as a % of gross profit:

Compensation

43.7

%

44.9

%

120

bps

Advertising

3.5

%

2.5

%

(100

)

bps

Rent

2.9

%

3.7

%

80

bps

Other

18.0

%

17.2

%

(80

)

bps

Total SG&A expenses as a % of gross profit

68.1

%

68.3

%

20

bps

Items of interest:

Gain (loss) on franchise disposals

-

%

0.8

%

Total effect of adjustments

-

%

0.8

%

Adjusted:

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

68.1

%

69.1

%

100

bps

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

Three Months Ended Better / (Worse) September 30,

2021 2020 Change % Change

(In thousands)

Reported:

Compensation $ 206,205 $ 169,097 $ (37,108 ) (21.9 ) %

Advertising 16,715 9,455 (7,260 ) (76.8 ) %

Rent 13,781 13,846 65 0.5 %

Other 84,672 64,776 (19,896 ) (30.7 ) %

Total SG&A expenses $ 321,373 $ 257,174 $ (64,199 ) (25.0 ) %

Items of interest:

Gain (loss) on franchise $ - $ 3,150 disposals

Total SG&A adjustments $ - $ 3,150

Adjusted:

Total adjusted SG&A $ 321,373 $ 260,324 $ (61,049 ) (23.5 )expenses %



Reported:

SG&A expenses as a % of gross profit:

Compensation 43.7 % 44.9 % 120 bps

Advertising 3.5 % 2.5 % (100 ) bps

Rent 2.9 % 3.7 % 80 bps

Other 18.0 % 17.2 % (80 ) bps

Total SG&A expenses as a % 68.1 % 68.3 % 20 bpsof gross profit

Items of interest:

Gain (loss) on franchise - % 0.8 % disposals

Total effect of adjustments - % 0.8 %

Adjusted:

Total adjusted SG&Aexpenses as a % of gross 68.1 % 69.1 % 100 bpsprofit

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

Nine Months Ended September 30,

Better / (Worse)

2021

2020

Change

% Change

(In thousands)

Reported:

Compensation

$

608,539

$

483,784

$

(124,755

)

(25.8

)%

Advertising

44,229

31,677

(12,552

)

(39.6

)%

Rent

41,190

40,934

(256

)

(0.6

)%

Other

237,391

213,293

(24,098

)

(11.3

)%

Total SG&A expenses

$

931,349

$

769,688

$

(161,661

)

(21.0

)%

Items of interest:

Gain (loss) on franchise disposals

$

-

$

3,150

Total SG&A adjustments

$

-

$

3,150

Adjusted:

Total adjusted SG&A expenses

$

931,349

$

772,838

$

(158,511

)

(20.5

)%

Reported:

SG&A expenses as a % of gross profit:

Compensation

44.0

%

46.8

%

280

bps

Advertising

3.2

%

3.1

%

(10

)

bps

Rent

3.0

%

4.0

%

100

bps

Other

17.1

%

20.5

%

340

bps

Total SG&A expenses as a % of gross profit

67.3

%

74.4

%

710

bps

Items of interest:

Gain (loss) on franchise disposals

-

%

0.3

%

Total effect of adjustments

-

%

0.3

%

Adjusted:

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

67.3

%

74.7

%

740

bps

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



Nine Months Ended Better / (Worse) September 30,

2021 2020 Change % Change

(In thousands)

Reported:

Compensation $ 608,539 $ 483,784 $ (124,755 ) (25.8 ) %

Advertising 44,229 31,677 (12,552 ) (39.6 ) %

Rent 41,190 40,934 (256 ) (0.6 ) %

Other 237,391 213,293 (24,098 ) (11.3 ) %

Total SG&A expenses $ 931,349 $ 769,688 $ (161,661 ) (21.0 ) %

Items of interest:

Gain (loss) on franchise $ - $ 3,150 disposals

Total SG&A adjustments $ - $ 3,150

Adjusted:

Total adjusted SG&A $ 931,349 $ 772,838 $ (158,511 ) (20.5 )expenses %



Reported:

SG&A expenses as a % of gross profit:

Compensation 44.0 % 46.8 % 280 bps

Advertising 3.2 % 3.1 % (10 ) bps

Rent 3.0 % 4.0 % 100 bps

Other 17.1 % 20.5 % 340 bps

Total SG&A expenses as a % 67.3 % 74.4 % 710 bpsof gross profit

Items of interest:

Gain (loss) on franchise - % 0.3 % disposals

Total effect of - % 0.3 % adjustments

Adjusted:

Total adjusted SG&Aexpenses as a % of gross 67.3 % 74.7 % 740 bpsprofit

Earnings Per Share from Continuing Operations - Non-GAAP Reconciliation

Three Months Ended September 30, 2021

Three Months Ended September 30, 2020

Weighted-AverageShares

Amount

PerShareAmount

Weighted-AverageShares

Amount

PerShareAmount

(In thousands, except per share amounts)

Diluted earnings (loss) and shares from continuing operations

43,285

$

84,691

$

1.96

44,577

$

59,988

$

1.35

Pre-tax items of interest:

(Gain) loss on franchise disposals

$

-

$

(3,150

)

Total pre-tax items of interest

$

-

$

(3,150

)

Tax effect of above items

-

827

Adjusted diluted earnings (loss) and shares from continuing operations

43,285

$

84,691

$

1.96

44,577

$

57,665

$

1.29

Earnings Per Share from Continuing Operations - Non-GAAP Reconciliation

Three Months Ended September 30, Three Months Ended September 30, 2021 2020

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

(In thousands, except per share amounts)

Dilutedearnings(loss) andshares 43,285 $ 84,691 $ 1.96 44,577 $ 59,988 $ 1.35 fromcontinuingoperations

Pre-taxitems of interest:

(Gain)loss on $ - $ (3,150 ) franchisedisposals

Totalpre-tax $ - $ (3,150 ) items ofinterest

Tax effectof above - 827 items

Adjusteddilutedearnings(loss) and 43,285 $ 84,691 $ 1.96 44,577 $ 57,665 $ 1.29 sharesfromcontinuingoperations

Nine Months Ended September 30, 2021

Nine Months Ended September 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)

43,416

$

252,371

$

5.81

42,687

$

(108,147

)

$

(2.53

)

Pre-tax items of interest:

(Gain) loss on franchise disposals

$

-

$

(3,150

)

Impairment charges

-

268,000

Total pre-tax items of interest

$

-

$

264,850

Tax effect of above items

-

(53,643

)

Adjusted diluted earnings (loss) and shares from continuing operations

43,416

$

252,371

$

5.81

43,864

$

103,060

$

2.35

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



Nine Months Ended September 30, Nine Months Ended September 30, 2020 2021

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

(In thousands, except per share amounts)

Dilutedearnings(loss) andshares 43,416 $ 252,371 $ 5.81 42,687 $ (108,147 ) $ (2.53 ) fromcontinuingoperations^ (1)

Pre-taxitems of interest:

(Gain)loss on $ - $ (3,150 ) franchisedisposals

Impairment - 268,000 charges

Totalpre-tax $ - $ 264,850 items ofinterest

Tax effectof above - (53,643 ) items

Adjusteddilutedearnings(loss) and 43,416 $ 252,371 $ 5.81 43,864 $ 103,060 $ 2.35 sharesfromcontinuingoperations

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

Adjusted EBITDA - Non-GAAP Reconciliation

Three Months Ended September 30, 2021

Three Months Ended September 30, 2020

Franchised Dealerships Segment

EchoPark Segment

Discontinued Operations

Total

Franchised Dealerships Segment

EchoPark Segment

Discontinued Operations

Total

(In thousands)

Net income (loss)

$

84,485

$

59,818

Provision for income taxes

27,490

20,620

Income (loss) before taxes

$

145,138

$

(32,888

)

$

(275

)

$

111,975

$

80,434

$

239

$

(235

)

$

80,438

Non-floor plan interest

8,799

333

-

9,132

9,781

147

-

9,928

Depreciation and amortization

21,943

3,980

-

25,923

21,004

2,763

-

23,767

Stock-based compensation expense

3,681

-

-

3,681

3,153

-

-

3,153

Asset impairment charges

-

-

-

-

26

-

-

26

Long-term compensation charges

-

500

-

500

-

-

-

-

Loss (gain) on franchise and real estate disposals

(12

)

(423

)

-

(435

)

(3,388

)

-

(3,388

)

Adjusted EBITDA

$

179,549

$

(28,498

)

$

(275

)

$

150,776

$

111,010

$

3,149

$

(235

)

$

113,924

Adjusted EBITDA - Non-GAAP Reconciliation

Three Months Ended September 30, 2021 Three Months Ended September 30, 2020

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

(In thousands)

Net income $ 84,485 $ 59,818 (loss)

Provisionfor income 27,490 20,620 taxes

Income(loss) $ 145,138 $ (32,888 ) $ (275 ) $ 111,975 $ 80,434 $ 239 $ (235 ) $ 80,438 before taxes

Non-floorplan 8,799 333 - 9,132 9,781 147 - 9,928 interest

Depreciationand 21,943 3,980 - 25,923 21,004 2,763 - 23,767 amortization

Stock-basedcompensation 3,681 - - 3,681 3,153 - - 3,153 expense

Assetimpairment - - - - 26 - - 26 charges

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

Loss (gain)on franchiseand real (12 ) (423 ) - (435 ) (3,388 ) - (3,388 ) estatedisposals

Adjusted $ 179,549 $ (28,498 ) $ (275 ) $ 150,776 $ 111,010 $ 3,149 $ (235 ) $ 113,924 EBITDA



Nine Months Ended September 30, 2021

Nine Months Ended September 30, 2020

Franchised Dealerships Segment

EchoPark Segment

Discontinued Operations

Total

Franchised Dealerships Segment

EchoPark Segment

Discontinued Operations

Total

(In thousands)

Net income (loss)

$

252,552

$

(108,724

)

Provision for income taxes

83,512

(17,226

)

Income (loss) before taxes

$

381,094

$

(45,271

)

$

241

$

336,064

$

(130,054

)

$

4,912

$

(808

)

$

(125,950

)

Non-floor plan interest

26,821

1,015

-

27,836

28,762

746

-

29,508

Depreciation & amortization

64,593

11,436

-

76,029

61,662

8,229

-

69,891

Stock-based compensation expense

11,155

-

-

11,155

8,551

-

-

8,551

Asset impairment charges

-

-

-

-

268,859

-

-

268,859

Long-term compensation charges

-

1,500

-

1,500

-

-

-

-

Loss (gain) on franchise and real estate disposals

(433

)

(432

)

-

(865

)

(2,271

)

-

-

(2,271

)

Adjusted EBITDA

$

483,230

$

(31,752

)

$

241

$

451,719

$

235,509

$

13,887

$

(808

)

$

248,588

View source version on businesswire.com: https://www.businesswire.com/news/home/20211028005315/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