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

Record Second Quarter Results Driven By Strong Franchised Dealership Performance Across All Business Lines

Fourth Consecutive Quarter of Record EchoPark Revenues and Retail Unit Sales Volume

EchoPark Announces Plans To Achieve 2 Million Vehicle Sales Annually At Maturity

Board Announces Review of Strategic Alternatives for EchoPark Business

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 of Operations - Consolidated

 
 

 

Three Months Ended June 30,

 

Better /

(Worse)

 

Six Months Ended June 30,

 

Better /

(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 vehicles

84,807

 

 

33,175

 

 

155.6

%

 

159,614

 

 

81,718

 

 

95.3

%

Total vehicles

2,814,396

 

 

1,742,055

 

 

61.6

%

 

5,135,618

 

 

3,600,140

 

 

42.7

%

Parts, service and collision repair

360,596

 

 

259,058

 

 

39.2

%

 

681,509

 

 

593,738

 

 

14.8

%

Finance, insurance and other, net

177,254

 

 

110,773

 

 

60.0

%

 

321,916

 

 

226,064

 

 

42.4

%

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 vehicles

(80,280

)

 

(33,601

)

 

(138.9

)%

 

(154,240

)

 

(82,303

)

 

(87.4

)%

Total vehicles

(2,656,690

)

 

(1,669,724

)

 

(59.1

)%

 

(4,876,730

)

 

(3,450,421

)

 

(41.3

)%

Parts, service and collision repair

(184,748

)

 

(134,779

)

 

(37.1

)%

 

(350,612

)

 

(311,560

)

 

(12.5

)%

Total cost of sales

(2,841,438

)

 

(1,804,503

)

 

(57.5

)%

 

(5,227,342

)

 

(3,761,981

)

 

(39.0

)%

Gross profit

510,808

 

 

307,383

 

 

66.2

%

 

911,701

 

 

657,961

 

 

38.6

%

Selling, general and administrative expenses

(320,620

)

 

(230,359

)

 

(39.2

)%

 

(609,976

)

 

(512,515

)

 

(19.0

)%

Impairment charges

 

 

(833

)

 

100.0

%

 

 

 

(268,833

)

 

100.0

%

Depreciation and amortization

(24,761

)

 

(22,647

)

 

(9.3

)%

 

(48,448

)

 

(44,944

)

 

(7.8

)%

Operating income (loss)

165,427

 

 

53,544

 

 

209.0

%

 

253,277

 

 

(168,331

)

 

(250.5

)%

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

Interest expense, floor plan

(4,329

)

 

(6,314

)

 

31.4

%

 

(9,441

)

 

(16,822

)

 

43.9

%

Interest expense, other, net

(10,077

)

 

(9,797

)

 

(2.9

)%

 

(20,363

)

 

(20,762

)

 

1.9

%

Other income (expense), net

 

 

 

 

%

 

100

 

 

100

 

 

%

Total other income (expense)

(14,406

)

 

(16,111

)

 

10.6

%

 

(29,704

)

 

(37,484

)

 

20.8

%

Income (loss) from continuing operations before taxes

151,021

 

 

37,433

 

 

303.4

%

 

223,573

 

 

(205,815

)

 

(208.6

)%

Provision for income taxes for continuing operations - benefit (expense)

(37,030

)

 

(6,437

)

 

(475.3

)%

 

(55,893

)

 

37,680

 

 

248.3

%

Income (loss) from continuing operations

113,991

 

 

30,996

 

 

267.8

%

 

167,680

 

 

(168,135

)

 

(199.7

)%

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from discontinued operations before taxes

(204

)

 

(289

)

 

29.4

%

 

516

 

 

(573

)

 

190.1

%

Provision for income taxes for discontinued operations - benefit (expense)

58

 

 

84

 

 

(31.0

)%

 

(129

)

 

166

 

 

(177.7

)%

Income (loss) from discontinued operations

(146

)

 

(205

)

 

28.8

%

 

387

 

 

(407

)

 

195.1

%

Net income (loss)

$

113,845

 

 

$

30,791

 

 

269.7

%

 

$

168,067

 

 

$

(168,542

)

 

(199.7

)%

Basic earnings (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share from continuing operations

$

2.74

 

 

$

0.72

 

 

280.6

%

 

$

4.03

 

 

$

(3.93

)

 

(202.5

)%

Earnings (loss) per share from discontinued operations

 

 

 

 

%

 

0.01

 

 

(0.01

)

 

200.0

%

Earnings (loss) per common share

$

2.74

 

 

$

0.72

 

 

280.6

%

 

$

4.04

 

 

$

(3.94

)

 

(202.5

)%

Weighted-average common shares outstanding

41,581

 

 

42,940

 

 

3.2

%

 

41,561

 

 

42,779

 

 

2.8

%

Diluted earnings (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share from continuing operations

$

2.63

 

 

$

0.71

 

 

270.4

%

 

$

3.86

 

 

$

(3.93

)

 

(198.2

)%

Earnings (loss) per share from discontinued operations

 

 

 

 

%

 

0.01

 

 

(0.01

)

 

200.0

%

Earnings (loss) per common share

$

2.63

 

 

$

0.71

 

 

270.4

%

 

$

3.87

 

 

$

(3.94

)

 

(198.2

)%

Weighted-average common shares outstanding

43,424

 

 

43,575

 

 

0.3

%

 

43,483

 

 

42,779

 

 

(1.6

)%

Dividends declared per common share

$

0.12

 

 

$

0.10

 

 

20.0

%

 

$

0.22

 

 

$

0.20

 

 

10.0

%

 

Franchised Dealerships Segment - Reported

 

Three Months Ended June 30,

 

Better /

(Worse)

 

Six Months Ended June 30,

 

Better /

(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 vehicles

62,956

 

 

28,509

 

 

120.8

%

 

119,160

 

 

70,948

 

 

68.0

%

Total vehicles

2,286,464

 

 

1,464,211

 

 

56.2

%

 

4,160,520

 

 

3,033,027

 

 

37.2

%

Parts, service and collision repair

346,118

 

 

251,998

 

 

37.3

%

 

654,194

 

 

576,499

 

 

13.5

%

Finance, insurance and other, net

124,060

 

 

80,401

 

 

54.3

%

 

221,586

 

 

163,429

 

 

35.6

%

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 vehicles

1,434

 

 

(357

)

 

501.7

%

 

2,172

 

 

(440

)

 

593.6

%

Total vehicles

174,980

 

 

75,445

 

 

131.9

%

 

277,181

 

 

153,092

 

 

81.1

%

Parts, service and collision repair

175,578

 

 

124,465

 

 

41.1

%

 

330,844

 

 

282,561

 

 

17.1

%

Finance, insurance and other, net

124,060

 

 

80,401

 

 

54.3

%

 

221,586

 

 

163,429

 

 

35.6

%

Total gross profit

474,618

 

 

280,311

 

 

69.3

%

 

829,611

 

 

599,082

 

 

38.5

%

Selling, general and administrative expenses

(275,709

)

 

(209,496

)

 

(31.6

)%

 

(525,785

)

 

(465,914

)

 

(12.9

)%

Impairment charges

 

 

(833

)

 

NM

 

 

 

 

(268,833

)

 

NM

 

Depreciation and amortization

(20,616

)

 

(19,895

)

 

(3.6

)%

 

(40,992

)

 

(39,484

)

 

(3.8

)%

Operating income (loss)

178,293

 

 

50,087

 

 

256.0

%

 

262,834

 

 

(175,149

)

 

250.1

%

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

Interest expense, floor plan

(3,155

)

 

(5,675

)

 

44.4

%

 

(7,271

)

 

(15,283

)

 

52.4

%

Interest expense, other, net

(9,721

)

 

(9,556

)

 

(1.7

)%

 

(19,682

)

 

(20,156

)

 

2.4

%

Other income (expense), net

(2

)

 

 

 

(100.0

)%

 

76

 

 

100

 

 

(24.0

)%

Total other income (expense)

(12,878

)

 

(15,231

)

 

15.4

%

 

(26,877

)

 

(35,339

)

 

23.9

%

Income (loss) before taxes

165,415

 

 

34,856

 

 

374.6

%

 

235,957

 

 

(210,488

)

 

(212.1

)%

Add: impairment charges

 

 

833

 

 

NM

 

 

 

 

268,833

 

 

NM

 

Segment income (loss)

$

165,415

 

 

$

35,689

 

 

363.5

%

 

$

235,957

 

 

$

58,346

 

 

304.4

%

 

 

 

 

 

 

 

 

 

 

 

 

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 vehicles

6,753

 

 

4,827

 

 

39.9

%

 

13,585

 

 

11,737

 

 

15.7

%

Retail new & used vehicles

59,038

 

 

43,864

 

 

34.6

%

 

110,632

 

 

91,626

 

 

20.7

%

Used-to-New Ratio

0.94

 

 

1.21

 

 

(22.3

)%

 

1.02

 

 

1.20

 

 

(15.4

)%

 

 

 

 

 

 

 

 

 

 

 

 

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 other, net

$

2,110

 

 

$

1,839

 

 

14.7

%

 

$

2,017

 

 

$

1,798

 

 

12.2

%

 

NM = Not Meaningful

 

 

Franchised Dealerships Segment - Same Store

 

 

Three Months Ended June 30,

 

Better /

(Worse)

 

Six Months Ended June 30,

 

Better /

(Worse)

 

2021

 

2020

 

% Change

 

2021

 

2020

 

% Change

 

(In thousands, except unit and per unit data)

Revenues:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

$

1,461,984

 

 

$

892,958

 

 

63.7

%

 

$

2,618,301

 

 

$

1,843,548

 

 

42.0

%

Used vehicles

761,524

 

 

531,335

 

 

43.3

%

 

1,423,059

 

 

1,092,131

 

 

30.3

%

Wholesale vehicles

62,956

 

 

28,236

 

 

123.0

%

 

119,160

 

 

70,339

 

 

69.4

%

Total vehicles

2,286,464

 

 

1,452,529

 

 

57.4

%

 

4,160,520

 

 

3,006,018

 

 

38.4

%

Parts, service and collision repair

343,441

 

 

247,134

 

 

39.0

%

 

649,631

 

 

568,429

 

 

14.3

%

Finance, insurance and other, net

116,657

 

 

74,522

 

 

56.5

%

 

208,903

 

 

152,213

 

 

37.2

%

Total revenues

2,746,562

 

 

1,774,185

 

 

54.8

%

 

5,019,054

 

 

3,726,660

 

 

34.7

%

Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

116,692

 

 

43,811

 

 

166.4

%

 

185,648

 

 

88,926

 

 

108.8

%

Used vehicles

52,647

 

 

26,759

 

 

96.7

%

 

82,920

 

 

58,900

 

 

40.8

%

Wholesale vehicles

4,199

 

 

(289

)

 

1,552.9

%

 

4,935

 

 

(338

)

 

1,560.1

%

Total vehicles

173,538

 

 

70,281

 

 

146.9

%

 

273,503

 

 

147,488

 

 

85.4

%

Parts, service and collision repair

173,900

 

 

121,946

 

 

42.6

%

 

327,583

 

 

278,411

 

 

17.7

%

Finance, insurance and other, net

116,657

 

 

74,522

 

 

56.5

%

 

208,903

 

 

152,213

 

 

37.2

%

Total gross profit

$

464,095

 

 

$

266,749

 

 

74.0

%

 

$

809,989

 

 

$

578,112

 

 

40.1

%

 

 

 

 

 

 

 

 

 

 

 

 

Unit Sales Volume:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

30,488

 

 

19,631

 

 

55.3

%

 

54,846

 

 

41,041

 

 

33.6

%

Used vehicles

28,550

 

 

23,701

 

 

20.5

%

 

55,786

 

 

49,336

 

 

13.1

%

Wholesale vehicles

6,753

 

 

4,773

 

 

41.5

%

 

13,585

 

 

11,611

 

 

17.0

%

Retail new & used vehicles

59,038

 

 

43,332

 

 

36.2

%

 

110,632

 

 

90,377

 

 

22.4

%

Used-to-New Ratio

0.94

 

 

1.21

 

 

(22.4

)%

 

1.02

 

 

1.20

 

 

(15.4

)%

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit Per Unit:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

$

3,827

 

 

$

2,232

 

 

71.5

%

 

$

3,385

 

 

$

2,167

 

 

56.2

%

Used vehicles

$

1,844

 

 

$

1,129

 

 

63.3

%

 

$

1,486

 

 

$

1,194

 

 

24.5

%

Finance, insurance and other, net

$

1,984

 

 

$

1,726

 

 

14.9

%

 

$

1,902

 

 

$

1,698

 

 

12.0

%

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

 

EchoPark Segment - Reported

 

 

Three Months Ended June 30,

 

Better /

(Worse)

 

Six Months Ended June 30,

 

Better /

(Worse)

 

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 vehicles

21,851

 

 

4,666

 

 

368.3

%

 

40,454

 

 

10,770

 

 

275.6

%

Total vehicles

527,932

 

 

277,844

 

 

90.0

%

 

975,098

 

 

567,113

 

 

71.9

%

Parts, service and collision repair

14,478

 

 

7,060

 

 

105.1

%

 

27,315

 

 

17,239

 

 

58.4

%

Finance, insurance and other, net

53,194

 

 

30,372

 

 

75.1

%

 

100,330

 

 

62,635

 

 

60.2

%

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 vehicles

3,093

 

 

(69

)

 

4,582.6

%

 

3,202

 

 

(145

)

 

2,308.3

%

Total vehicles

(17,274

)

 

(3,114

)

 

(454.7

)%

 

(18,294

)

 

(3,373

)

 

442.4

%

Parts, service and collision repair

270

 

 

(186

)

 

245.2

%

 

54

 

 

(383

)

 

113.8

%

Finance, insurance and other, net

53,194

 

 

30,372

 

 

75.1

%

 

100,330

 

 

62,635

 

 

60.2

%

Total gross profit

36,190

 

 

27,072

 

 

33.7

%

 

82,090

 

 

58,879

 

 

39.4

%

Selling, general and administrative expenses

(44,911

)

 

(20,863

)

 

(115.3

)%

 

(84,191

)

 

(46,601

)

 

(80.7

)%

Impairment charges

 

 

 

 

%

 

 

 

 

 

%

Depreciation and amortization

(4,145

)

 

(2,752

)

 

(50.6

)%

 

(7,456

)

 

(5,460

)

 

(36.6

)%

Operating income (loss)

(12,866

)

 

3,457

 

 

(472.2

)%

 

(9,557

)

 

6,818

 

 

(240.2

)%

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

Interest expense, floor plan

(1,174

)

 

(639

)

 

(83.7

)%

 

(2,170

)

 

(1,539

)

 

(41.0

)%

Interest expense, other, net

(356

)

 

(241

)

 

(47.7

)%

 

(681

)

 

(606

)

 

(12.4

)%

Other income (expense), net

2

 

 

 

 

100.0

%

 

24

 

 

 

 

100.0

%

Total other income (expense)

(1,528

)

 

(880

)

 

(73.6

)%

 

(2,827

)

 

(2,145

)

 

(31.8

)%

Income (loss) before taxes

(14,394

)

 

2,577

 

 

(658.6

)%

 

(12,384

)

 

4,673

 

 

(365.0

)%

Add: impairment charges

 

 

 

 

NM

 

 

 

 

 

 

NM

 

Segment income (loss)

$

(14,394

)

 

$

2,577

 

 

(658.6

)%

 

$

(12,384

)

 

$

4,672

 

 

(365.1

)%

 

 

 

 

 

 

 

 

 

 

 

 

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 vehicles

2,878

 

 

1,454

 

 

97.9

%

 

5,739

 

 

3,219

 

 

78.3

%

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit Per Unit:

 

 

 

 

 

 

 

 

 

 

 

Total used vehicle and F&I

$

1,539

 

 

$

2,069

 

 

(25.6

)%

 

$

1,924

 

 

$

2,185

 

 

(11.9

)%

 

NM = Not Meaningful

 

 

EchoPark Segment - Same Market

 

 

Three Months Ended June 30,

 

Better /

(Worse)

 

Six Months Ended June 30,

 

Better /

(Worse)

 

2021

 

2020

 

% Change

 

2021

 

2020

 

% Change

 

(In thousands, except unit and per unit data)

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Used vehicles

$

368,857

 

 

$

273,178

 

 

35.0

%

 

$

716,654

 

 

$

556,353

 

 

28.8

%

Wholesale vehicles

14,951

 

 

4,666

 

 

220.4

%

 

30,722

 

 

10,770

 

 

185.3

%

Total vehicles

383,808

 

 

277,844

 

 

38.1

%

 

747,376

 

 

567,123

 

 

31.8

%

Parts, service and collision repair

10,602

 

 

7,060

 

 

50.2

%

 

21,248

 

 

17,205

 

 

23.5

%

Finance, insurance and other, net

39,007

 

 

30,259

 

 

28.9

%

 

77,473

 

 

62,430

 

 

24.1

%

Total revenues

433,417

 

 

315,163

 

 

37.5

%

 

846,097

 

 

646,758

 

 

30.8

%

Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

Used vehicles

(17,118

)

 

(6,545

)

 

(161.5

)%

 

(18,633

)

 

(10,703

)

 

(74.1

)%

Wholesale vehicles

2,288

 

 

(69

)

 

3,415.9

%

 

2,410

 

 

(145

)

 

1,762.1

%

Total vehicles

(14,830

)

 

(6,614

)

 

(124.2

)%

 

(16,223

)

 

(10,848

)

 

49.5

%

Parts, service and collision repair

(4

)

 

(186

)

 

97.8

%

 

(27

)

 

(383

)

 

93.0

%

Finance, insurance and other, net

39,007

 

 

30,259

 

 

28.9

%

 

77,473

 

 

62,430

 

 

24.1

%

Total gross profit

$

24,173

 

 

$

23,459

 

 

3.0

%

 

$

61,223

 

 

$

51,199

 

 

19.6

%

 

 

 

 

 

 

 

 

 

 

 

 

Unit Sales Volume:

 

 

 

 

 

 

 

 

 

 

 

Used vehicles

15,382

 

 

13,207

 

 

16.5

%

 

31,189

 

 

27,193

 

 

14.7

%

Wholesale vehicles

1,847

 

 

1,454

 

 

27.0

%

 

4,151

 

 

3,219

 

 

29.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit Per Unit:

 

 

 

 

 

 

 

 

 

 

 

Total used vehicle and F&I

$

1,423

 

 

$

1,796

 

 

(20.8

)%

 

$

1,887

 

 

$

1,902

 

 

(0.8

)%

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.

 

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

 

 

Three Months Ended June 30,

 

Better / (Worse)

 

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 gross profit

62.8

%

 

74.9

%

 

1,210

 

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 gross profit

66.9

%

 

77.9

%

 

1,100

 

bps

 

Earnings Per Share from Continuing Operations - Non-GAAP Reconciliation

 

 

Three Months Ended June 30, 2021

 

Three Months Ended June 30, 2020

 

Weighted-

Average

Shares

 

Amount

 

Per

Share

Amount

 

Weighted-

Average

Shares

 

Amount

 

Per

Share

Amount

 

(In thousands, except per share amounts)

Diluted earnings (loss) and shares from continuing operations

43,424

 

 

$

113,991

 

 

$

2.63

 

 

43,575

 

 

$

30,996

 

 

$

0.71

 

Pre-tax items of interest:

 

 

 

 

 

 

 

 

 

 

 

Non-recurring tax items

 

 

$

 

 

 

 

 

 

$

(3,175

)

 

 

Adjusted diluted earnings (loss) and shares from continuing operations

43,424

 

 

$

113,991

 

 

$

2.63

 

 

43,575

 

 

$

27,821

 

 

$

0.64

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2021

 

Six Months Ended June 30, 2020

 

Weighted-

Average

Shares

 

Amount

 

Per

Share

Amount

 

Weighted-

Average

Shares

 

Amount

 

Per

Share

Amount

 

(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.

 

Adjusted EBITDA - Non-GAAP Reconciliation

 

 

Three Months Ended June 30, 2021

 

Three 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)

 

 

 

 

 

 

$

113,845

 

 

 

 

 

 

 

 

$

30,791

 

Provision for income taxes

 

 

 

 

 

 

36,972

 

 

 

 

 

 

 

 

6,353

 

Income (loss) before taxes

$

165,415

 

 

$

(14,394)

 

 

$

(204)

 

 

$

150,817

 

 

$

34,856

 

 

$

2,577

 

 

$

(289)

 

 

$

37,144

 

Non-floor plan interest

8,895

 

 

348

 

 

 

 

9,243

 

 

8,938

 

 

234

 

 

 

 

9,172

 

Depreciation and amortization

21,444

 

 

4,152

 

 

 

 

25,596

 

 

20,514

 

 

2,758

 

 

 

 

23,272

 

Stock-based compensation expense

3,989

 

 

 

 

 

 

3,989

 

 

2,971

 

 

 

 

 

 

2,971

 

Asset impairment charges

 

 

 

 

 

 

 

 

833

 

 

 

 

 

 

833

 

Long-term compensation charges

 

 

500

 

 

 

 

500

 

 

 

 

 

 

 

 

 

Loss (gain) on franchise and real estate disposals

(400)

 

 

(23)

 

 

 

 

(423)

 

 

1,117

 

 

 

 

 

 

1,117

 

Adjusted EBITDA

$

199,343

 

 

$

(9,417)

 

 

$

(204)

 

 

$

189,722

 

 

$

69,229

 

 

$

5,569

 

 

$

(289)

 

 

$

74,509

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

Contacts

Investor Inquiries:

Heath Byrd, Executive Vice President and Chief Financial Officer (704) 566-2400

Danny Wieland, Vice President, Investor Relations & Financial Reporting (704) 927-3462

ir@sonicautomotive.com

Press Inquiries:

Danielle DeVoren / Joshua Greenwald

212-896-1272 / 646-379-7971

ddevoren@kcsa.com/jgreenwald@kcsa.com

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