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

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Sonic Automotive, Inc. (SAH) reported record financial results for Q4 2020, achieving revenues of $2.8 billion, a 1.8% increase, and income from continuing operations before taxes of $90.4 million, up 48.3%. Adjusted earnings reached $65.8 million ($1.50 per diluted share), up 52.7% year-over-year. For the full year, revenues declined 6.6% to $9.8 billion, with a reported loss from continuing operations of $50.7 million ($1.19 per diluted share). Despite the challenges posed by COVID-19, the company anticipates significant growth for the EchoPark segment, projecting $14 billion in annual revenues by 2025.

Positive
  • All-time record quarterly revenues of $2.8 billion, up 1.8%.
  • All-time record quarterly adjusted earnings of $65.8 million ($1.50 per diluted share), up 52.7%.
  • EchoPark revenues reached $386.9 million, an increase of 25.4%.
  • Strong balance sheet with total liquidity of $526.4 million, up 88.0% year-over-year.
  • Record quarterly F&I gross profit per retail unit at $2,031, up 12.3%.
Negative
  • Full year revenues declined 6.6% to $9.8 billion.
  • Reported loss from continuing operations of $50.7 million compared to earnings of $144.5 million in 2019.
  • New vehicle unit sales volume down 12.9%, affecting overall dealership performance.

Sonic Automotive, Inc. (“Sonic” or the “Company”) (NYSE:SAH), one of the nation’s largest automotive retailers, today reported financial results for the fourth quarter and full year ended December 31, 2020. The financial measures discussed below are results for the fourth quarter of 2020 compared to the fourth quarter of 2019, or full year 2020 compared to full year 2019, as applicable, unless otherwise noted.

Fourth Quarter Highlights

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

Full Year Highlights

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

Commentary

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

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

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

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

Dividend

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

Fourth Quarter 2020 Earnings Conference Call

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

To access the live broadcast of the call over the internet, please go to ir.sonicautomotive.com. For telephone access to this conference call, please register in advance using this link: http://www.directeventreg.com/registration/event/7083166. After registering, you will receive a confirmation email that includes dial-in numbers and unique conference call and registrant passcodes for entry. Registration remains available through the live call, however, to ensure you are connected for the full call we suggest registering at least 10 minutes before the start of the call.

A conference call replay will be available one hour following the call for 14 days at ir.sonicautomotive.com.

About Sonic Automotive

Sonic Automotive, Inc., a Fortune 500 company based in Charlotte, North Carolina, is one of the nation’s largest automotive retailers. Sonic can be reached on the web at www.sonicautomotive.com.

About EchoPark Automotive

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

Forward-Looking Statements

Included herein are forward-looking statements, including statements regarding anticipated future revenue levels, future profitability, projected SG&A expense levels, pre-owned vehicle sales projections and the opening of additional EchoPark points. There are many factors that affect management’s views about future events and trends of the Company’s business. These factors involve risks and uncertainties that could cause actual results or trends to differ materially from management’s views, including, without limitation, economic conditions in the markets in which we operate, new and used vehicle industry sales volume, anticipated future growth in our EchoPark Segment, the success of our operational strategies, the rate and timing of overall economic expansion or contraction, the effect of the COVID-19 pandemic and related government-imposed restrictions on operations, and the risk factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, the Company’s Current Report on Form 8-K filed on February 12, 2021 and other reports and information filed with the Securities and Exchange Commission (the “SEC”). The Company does not undertake any obligation to update forward-looking information, except as required under federal securities laws and the rules and regulations of the SEC.

Non-GAAP Financial Measures

This press release and the attached financial tables contain certain non-GAAP financial measures as defined under SEC rules, such as adjusted earnings from continuing operations, adjusted earnings per diluted share from continuing operations, adjusted SG&A expenses, adjusted SG&A expenses as a percentage of gross profit and adjusted EBITDA. As required by SEC rules, the Company has provided reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures in the schedules included in this press release. The Company believes that these non-GAAP financial measures improve the transparency of the Company’s disclosures and provide a meaningful presentation of the Company’s results.

Sonic Automotive, Inc.

Results of Operations (Unaudited)

 

Results of Operations

 

 

Three Months Ended
December 31,

 

Better /
(Worse)

 

Twelve Months Ended
December 31,

 

Better /
(Worse)

 

2020

 

 

2019

 

 

% Change

 

2020

 

 

2019

 

 

% Change

 

(In thousands, except per share amounts)

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

$

1,323,429

 

 

 

$

1,360,064

 

 

 

(2.7

)

%

 

$

4,281,223

 

 

 

$

4,889,171

 

 

 

(12.4

)

%

Used vehicles

959,875

 

 

 

869,708

 

 

 

10.4

 

%

 

3,564,832

 

 

 

3,489,972

 

 

 

2.1

 

%

Wholesale vehicles

59,156

 

 

 

46,596

 

 

 

27.0

 

%

 

197,378

 

 

 

202,946

 

 

 

(2.7

)

%

Total vehicles

2,342,460

 

 

 

2,276,368

 

 

 

2.9

 

%

 

8,043,433

 

 

 

8,582,089

 

 

 

(6.3

)

%

Parts, service and collision repair

319,068

 

 

 

346,514

 

 

 

(7.9

)

%

 

1,233,735

 

 

 

1,395,303

 

 

 

(11.6

)

%

Finance, insurance and other, net

137,026

 

 

 

125,522

 

 

 

9.2

 

%

 

489,874

 

 

 

476,951

 

 

 

2.7

 

%

Total revenues

2,798,554

 

 

 

2,748,404

 

 

 

1.8

 

%

 

9,767,042

 

 

 

10,454,343

 

 

 

(6.6

)

%

Cost of Sales:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

(1,242,818

)

 

 

(1,292,480

)

 

 

3.8

 

%

 

(4,047,132

)

 

 

(4,656,084

)

 

 

13.1

 

%

Used vehicles

(941,413

)

 

 

(832,877

)

 

 

(13.0

)

%

 

(3,458,834

)

 

 

(3,342,576

)

 

 

(3.5

)

%

Wholesale vehicles

(61,988

)

 

 

(47,941

)

 

 

(29.3

)

%

 

(198,249

)

 

 

(207,378

)

 

 

4.4

 

%

Total vehicles

(2,246,219

)

 

 

(2,173,298

)

 

 

(3.4

)

%

 

(7,704,215

)

 

 

(8,206,038

)

 

 

6.1

 

%

Parts, service and collision repair

(163,218

)

 

 

(181,222

)

 

 

9.9

 

%

 

(639,182

)

 

 

(727,288

)

 

 

12.1

 

%

Total cost of sales

(2,409,437

)

 

 

(2,354,520

)

 

 

(2.3

)

%

 

(8,343,397

)

 

 

(8,933,326

)

 

 

6.6

 

%

Gross profit

389,117

 

 

 

393,884

 

 

 

(1.2

)

%

 

1,423,645

 

 

 

1,521,017

 

 

 

(6.4

)

%

Selling, general and administrative expenses

(258,977

)

 

 

(260,921

)

 

 

0.7

 

%

 

(1,028,666

)

 

 

(1,099,374

)

 

 

6.4

 

%

Impairment charges

(1,158

)

 

 

(17,692

)

 

 

93.5

 

%

 

(270,017

)

 

 

(20,768

)

 

 

(1,200.2

)

%

Depreciation and amortization

(23,145

)

 

 

(23,048

)

 

 

(0.4

)

%

 

(91,023

)

 

 

(93,169

)

 

 

2.3

 

%

Operating income (loss)

105,837

 

 

 

92,223

 

 

 

14.8

 

%

 

33,939

 

 

 

307,706

 

 

 

(89.0

)

%

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

Interest expense, floor plan

(5,406

)

 

 

(11,137

)

 

 

51.5

 

%

 

(27,228

)

 

 

(48,519

)

 

 

43.9

 

%

Interest expense, other, net

(10,048

)

 

 

(13,458

)

 

 

25.3

 

%

 

(41,572

)

 

 

(52,953

)

 

 

21.5

 

%

Other income (expense), net

(5

)

 

 

(6,680

)

 

 

99.9

 

%

 

97

 

 

 

(6,589

)

 

 

101.5

 

%

Total other income (expense)

(15,459

)

 

 

(31,275

)

 

 

50.6

 

%

 

(68,703

)

 

 

(108,061

)

 

 

36.4

 

%

Income (loss) from continuing operations before taxes

90,378

 

 

 

60,948

 

 

 

48.3

 

%

 

(34,764

)

 

 

199,645

 

 

 

(117.4

)

%

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

(32,895

)

 

 

(14,676

)

 

 

(124.1

)

%

 

(15,900

)

 

 

(55,108

)

 

 

71.1

 

%

Income (loss) from continuing operations

57,483

 

 

 

46,272

 

 

 

24.2

 

%

 

(50,664

)

 

 

144,537

 

 

 

(135.1

)

%

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from discontinued operations before taxes

(194

)

 

 

62

 

 

 

(412.9

)

%

 

(1,002

)

 

 

(554

)

 

 

(80.9

)

%

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

50

 

 

 

(27

)

 

 

285.2

 

%

 

281

 

 

 

154

 

 

 

82.5

 

%

Income (loss) from discontinued operations

(144

)

 

 

35

 

 

 

(511.4

)

%

 

(721

)

 

 

(400

)

 

 

(80.3

)

%

Net income (loss)

$

57,339

 

 

 

$

46,307

 

 

 

23.8

 

%

 

$

(51,385

)

 

 

$

144,137

 

 

 

(135.7

)

%

Basic earnings (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share from continuing operations

$

1.37

 

 

 

$

1.07

 

 

 

28.0

 

%

 

$

(1.19

)

 

 

$

3.36

 

 

 

(135.4

)

%

Earnings (loss) per share from discontinued operations

 

 

 

 

 

 

 

%

 

(0.02

)

 

 

(0.01

)

 

 

(100.0

)

%

Earnings (loss) per common share

$

1.37

 

 

 

$

1.07

 

 

 

28.0

 

%

 

$

(1.21

)

 

 

$

3.35

 

 

 

(136.1

)

%

Weighted-average common shares outstanding

41,874

 

 

 

43,078

 

 

 

2.8

 

%

 

42,483

 

 

 

43,016

 

 

 

1.2

 

%

Diluted earnings (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share from continuing operations

$

1.31

 

 

 

$

1.04

 

 

 

26.0

 

%

 

$

(1.19

)

 

 

$

3.31

 

 

 

(136.0

)

%

Earnings (loss) per share from discontinued operations

(0.01

)

 

 

 

 

 

(100.0

)

%

 

(0.02

)

 

 

(0.01

)

 

 

(100.0

)

%

Earnings (loss) per common share

$

1.30

 

 

 

$

1.04

 

 

 

25.0

 

%

 

$

(1.21

)

 

 

$

3.30

 

 

 

(136.7

)

%

Weighted-average common shares outstanding(1)

44,022

 

 

 

44,463

 

 

 

1.0

 

%

 

42,483

 

 

 

43,710

 

 

 

2.8

 

%

Dividends declared per common share

$

0.10

 

 

 

$

0.10

 

 

 

 

%

 

$

0.40

 

 

 

$

0.40

 

 

 

 

%

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

Franchised Dealerships Segment - Reported

 

 

Three Months Ended
December 31,

 

Better /
(Worse)

 

Twelve Months Ended
December 31,

 

Better /
(Worse)

 

2020

 

 

2019

 

 

% Change

 

2020

 

 

2019

 

 

% Change

 

(In thousands, except unit and per unit data)

Revenues:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

$

1,323,429

 

 

 

$

1,360,064

 

 

 

(2.7

)

%

 

$

4,281,223

 

 

 

$

4,889,171

 

 

 

(12.4

)

%

Used vehicles

627,786

 

 

 

604,422

 

 

 

3.9

 

%

 

2,345,936

 

 

 

2,493,467

 

 

 

(5.9

)

%

Wholesale vehicles

49,181

 

 

 

39,250

 

 

 

25.3

 

%

 

168,655

 

 

 

180,020

 

 

 

(6.3

)

%

Total vehicles

2,000,396

 

 

 

2,003,736

 

 

 

(0.2

)

%

 

6,795,814

 

 

 

7,562,658

 

 

 

(10.1

)

%

Parts, service and collision repair

307,861

 

 

 

339,168

 

 

 

(9.2

)

%

 

1,194,394

 

 

 

1,366,550

 

 

 

(12.6

)

%

Finance, insurance and other, net

103,383

 

 

 

96,947

 

 

 

6.6

 

%

 

357,848

 

 

 

363,117

 

 

 

(1.5

)

%

Total revenues

2,411,640

 

 

 

2,439,851

 

 

 

(1.2

)

%

 

8,348,056

 

 

 

9,292,325

 

 

 

(10.2

)

%

Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

80,611

 

 

 

67,583

 

 

 

19.3

 

%

 

234,091

 

 

 

233,087

 

 

 

0.4

 

%

Used vehicles

25,834

 

 

 

35,727

 

 

 

(27.7

)

%

 

122,948

 

 

 

147,541

 

 

 

(16.7

)

%

Wholesale vehicles

(2,905

)

 

 

(1,254

)

 

 

(131.7

)

%

 

(789

)

 

 

(4,100

)

 

 

80.8

 

%

Total vehicles

103,540

 

 

 

102,056

 

 

 

1.5

 

%

 

356,250

 

 

 

376,528

 

 

 

(5.4

)

%

Parts, service and collision repair

156,070

 

 

 

165,647

 

 

 

(5.8

)

%

 

595,342

 

 

 

668,958

 

 

 

(11.0

)

%

Finance, insurance and other, net

103,383

 

 

 

96,947

 

 

 

6.6

 

%

 

357,848

 

 

 

363,117

 

 

 

(1.5

)

%

Total gross profit

362,993

 

 

 

364,650

 

 

 

(0.5

)

%

 

1,309,440

 

 

 

1,408,603

 

 

 

(7.0

)

%

Selling, general and administrative expenses

(235,941

)

 

 

(237,849

)

 

 

0.8

 

%

 

(933,738

)

 

 

(1,011,763

)

 

 

7.7

 

%

Impairment charges

(1,158

)

 

 

(1,075

)

 

 

(7.7

)

%

 

(270,017

)

 

 

(1,101

)

 

 

NM

 

Depreciation and amortization

(20,275

)

 

 

(20,288

)

 

 

0.1

 

%

 

(79,929

)

 

 

(82,636

)

 

 

3.3

 

%

Operating income (loss)

105,619

 

 

 

105,438

 

 

 

0.2

 

%

 

25,756

 

 

 

313,103

 

 

 

(91.8

)

%

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

Interest expense, floor plan

(4,549

)

 

 

(10,275

)

 

 

55.7

 

%

 

(24,066

)

 

 

(45,055

)

 

 

46.6

 

%

Interest expense, other, net

(9,853

)

 

 

(13,019

)

 

 

24.3

 

%

 

(40,624

)

 

 

(51,231

)

 

 

20.7

 

%

Other income (expense), net

(5

)

 

 

(6,680

)

 

 

99.9

 

%

 

92

 

 

 

(6,651

)

 

 

101.4

 

%

Total other income (expense)

(14,407

)

 

 

(29,974

)

 

 

51.9

 

%

 

(64,598

)

 

 

(102,937

)

 

 

37.2

 

%

Income (loss) before taxes

91,212

 

 

 

75,464

 

 

 

20.9

 

%

 

(38,842

)

 

 

210,166

 

 

 

(118.5

)

%

Add: impairment charges

1,158

 

 

 

1,075

 

 

 

NM

 

 

270,017

 

 

 

1,101

 

 

 

NM

 

Segment income (loss)

$

92,370

 

 

 

$

76,539

 

 

 

20.7

 

%

 

$

231,175

 

 

 

$

211,267

 

 

 

9.4

 

%

 

 

 

 

 

 

 

 

 

 

 

 

Unit Sales Volume:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

27,566

 

 

 

30,591

 

 

 

(9.9

)

%

 

93,281

 

 

 

114,131

 

 

 

(18.3

)

%

Used vehicles

25,490

 

 

 

27,099

 

 

 

(5.9

)

%

 

101,864

 

 

 

112,629

 

 

 

(9.6

)

%

Wholesale vehicles

6,463

 

 

 

6,148

 

 

 

5.1

 

%

 

24,879

 

 

 

28,379

 

 

 

(12.3

)

%

Retail new & used vehicles

53,056

 

 

 

57,690

 

 

 

(8.0

)

%

 

195,145

 

 

 

226,760

 

 

 

(13.9

)

%

Used:New Ratio

0.92

 

 

 

0.89

 

 

 

4.4

 

%

 

1.09

 

 

 

0.99

 

 

 

10.7

 

%

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit Per Unit:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

$

2,924

 

 

 

$

2,209

 

 

 

32.4

 

%

 

$

2,510

 

 

 

$

2,042

 

 

 

22.9

 

%

Used vehicles

$

1,014

 

 

 

$

1,318

 

 

 

(23.1

)

%

 

$

1,207

 

 

 

$

1,310

 

 

 

(7.9

)

%

Finance, insurance and other, net

$

1,965

 

 

 

$

1,710

 

 

 

14.9

 

%

 

$

1,846

 

 

 

$

1,620

 

 

 

14.0

 

%

NM = Not Meaningful

Franchised Dealerships Segment - Same Store

 

 

Three Months Ended
December 31,

 

Better /
(Worse)

 

Twelve Months Ended
December 31,

 

Better /
(Worse)

 

2020

 

 

2019

 

 

% Change

 

2020

 

 

2019

 

 

% Change

 

(In thousands, except unit and per unit data)

Revenues:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

$

1,322,958

 

 

 

$

1,326,947

 

 

 

(0.3

)%

 

$

4,258,098

 

 

 

$

4,654,982

 

 

 

(8.5

)%

Used vehicles

627,656

 

 

 

582,582

 

 

 

7.7

%

 

2,332,150

 

 

 

2,376,141

 

 

 

(1.9

)%

Wholesale vehicles

49,165

 

 

 

38,419

 

 

 

28.0

%

 

167,794

 

 

 

172,306

 

 

 

(2.6

)%

Total vehicles

1,999,779

 

 

 

1,947,948

 

 

 

2.7

%

 

6,758,042

 

 

 

7,203,429

 

 

 

(6.2

)%

Parts, service and collision repair

308,098

 

 

 

330,337

 

 

 

(6.7

)%

 

1,184,428

 

 

 

1,309,201

 

 

 

(9.5

)%

Finance, insurance and other, net

97,570

 

 

 

90,550

 

 

 

7.8

%

 

335,695

 

 

 

331,860

 

 

 

1.2

%

Total revenues

$

2,405,447

 

 

 

$

2,368,835

 

 

 

1.5

%

 

$

8,278,165

 

 

 

$

8,844,490

 

 

 

(6.4

)%

Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

$

80,776

 

 

 

$

66,011

 

 

 

22.4

%

 

$

231,871

 

 

 

$

223,661

 

 

 

3.7

%

Used vehicles

24,768

 

 

 

33,646

 

 

 

(26.4

)%

 

117,903

 

 

 

135,259

 

 

 

(12.8

)%

Wholesale vehicles

(2,868

)

 

 

(1,255

)

 

 

(128.5

)%

 

(520

)

 

 

(3,382

)

 

 

84.6

%

Total vehicles

102,676

 

 

 

98,402

 

 

 

4.3

%

 

349,254

 

 

 

355,538

 

 

 

(1.8

)%

Parts, service and collision repair

156,321

 

 

 

161,500

 

 

 

(3.2

)%

 

590,946

 

 

 

640,015

 

 

 

(7.7

)%

Finance, insurance and other, net

97,570

 

 

 

90,550

 

 

 

7.8

%

 

335,695

 

 

 

331,860

 

 

 

1.2

%

Total gross profit

$

356,567

 

 

 

$

350,452

 

 

 

1.7

%

 

$

1,275,895

 

 

 

$

1,327,413

 

 

 

(3.9

)%

 

 

 

 

 

 

 

 

 

 

 

 

Unit Sales Volume:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

27,552

 

 

 

29,586

 

 

 

(6.9

)%

 

92,445

 

 

 

106,170

 

 

 

(12.9

)%

Used vehicles

25,479

 

 

 

26,251

 

 

 

(2.9

)%

 

100,983

 

 

 

105,639

 

 

 

(4.4

)%

Wholesale vehicles

6,460

 

 

 

5,871

 

 

 

10.0

%

 

24,701

 

 

 

26,114

 

 

 

(5.4

)%

Retail new & used vehicles

53,031

 

 

 

55,837

 

 

 

(5.0

)%

 

193,428

 

 

 

211,809

 

 

 

(8.7

)%

Used:New Ratio

0.92

 

 

 

0.89

 

 

 

4.2

%

 

1.09

 

 

 

0.99

 

 

 

9.8

%

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit Per Unit:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

$

2,932

 

 

 

$

2,231

 

 

 

31.4

%

 

$

2,508

 

 

 

$

2,107

 

 

 

19.0

%

Used vehicles

$

972

 

 

 

$

1,282

 

 

 

(24.2

)%

 

$

1,168

 

 

 

$

1,280

 

 

 

(8.8

)%

Finance, insurance and other, net

$

1,855

 

 

 

$

1,650

 

 

 

12.4

%

 

$

1,748

 

 

 

$

1,587

 

 

 

10.1

%

EchoPark Segment - Reported

 

 

Three Months Ended
December 31,

 

Better /
(Worse)

 

Twelve Months Ended
December 31,

 

Better /
(Worse)

 

2020

 

 

2019

 

 

% Change

 

2020

 

 

2019

 

 

% Change

 

(In thousands, except unit and per unit data)

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Used vehicles

$

332,089

 

 

 

$

265,286

 

 

 

25.2

 

%

 

$

1,218,896

 

 

 

$

996,505

 

 

 

22.3

 

%

Wholesale vehicles

9,975

 

 

 

7,346

 

 

 

35.8

 

%

 

28,723

 

 

 

22,926

 

 

 

25.3

 

%

Total vehicles

342,064

 

 

 

272,632

 

 

 

25.5

 

%

 

1,247,619

 

 

 

1,019,431

 

 

 

22.4

 

%

Parts, service and collision repair

11,207

 

 

 

7,346

 

 

 

52.6

 

%

 

39,341

 

 

 

28,753

 

 

 

36.8

 

%

Finance, insurance and other, net

33,643

 

 

 

28,575

 

 

 

17.7

 

%

 

132,026

 

 

 

113,834

 

 

 

16.0

 

%

Total revenues

386,914

 

 

 

308,553

 

 

 

25.4

 

%

 

1,418,986

 

 

 

1,162,018

 

 

 

22.1

 

%

Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

Used

(7,372

)

 

 

1,104

 

 

 

(767.8

)

%

 

(16,950

)

 

 

(145

)

 

 

(11,589.7

)

%

Wholesale

73

 

 

 

(92

)

 

 

179.3

 

%

 

(82

)

 

 

(332

)

 

 

75.3

 

%

Total vehicles

(7,299

)

 

 

1,012

 

 

 

(821.2

)

%

 

(17,032

)

 

 

(477

)

 

 

(3,470.6

)

%

Parts, service and collision repair

(220

)

 

 

(354

)

 

 

37.9

 

%

 

(789

)

 

 

(943

)

 

 

16.3

 

%

Finance & insurance

33,643

 

 

 

28,576

 

 

 

17.7

 

%

 

132,026

 

 

 

113,834

 

 

 

16.0

 

%

Total gross profit

26,124

 

 

 

29,234

 

 

 

(10.6

)

%

 

114,205

 

 

 

112,414

 

 

 

1.6

 

%

SG&A

(23,036

)

 

 

(23,072

)

 

 

0.2

 

%

 

(94,928

)

 

 

(87,611

)

 

 

(8.4

)

%

Impairment

 

 

 

(16,617

)

 

 

100.0

 

%

 

 

 

 

(19,667

)

 

 

100.0

 

%

Depreciation

(2,870

)

 

 

(2,760

)

 

 

(4.0

)

%

 

(11,094

)

 

 

(10,533

)

 

 

(5.3

)

%

Operating income

218

 

 

 

(13,215

)

 

 

101.6

 

%

 

8,183

 

 

 

(5,397

)

 

 

251.6

 

%

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

Interest floor plan

(857

)

 

 

(862

)

 

 

0.6

 

%

 

(3,162

)

 

 

(3,464

)

 

 

8.7

 

%

Interest other

(195

)

 

 

(439

)

 

 

55.6

 

%

 

(948

)

 

 

(1,722

)

 

 

44.9

 

%

Other income (expense)

 

 

 

 

 

 

 

%

 

5

 

 

 

62

 

 

 

(91.9

)

%

Total other income (expense)

(1,052

)

 

 

(1,301

)

 

 

19.1

 

%

 

(4,105

)

 

 

(5,124

)

 

 

19.9

 

%

Income (loss) before taxes

(834

)

 

 

(14,516

)

 

 

94.3

 

%

 

4,078

 

 

 

(10,521

)

 

 

138.8

 

%

Less: impairment charges

 

 

 

(16,617

)

 

 

NM

 

 

 

 

 

(19,667

)

 

 

NM

 

Segment income (loss)

$

(834

)

 

 

$

2,101

 

 

 

(139.7

)

%

 

$

4,078

 

 

 

$

9,146

 

 

 

(55.4

)

%

 

 

 

 

 

 

 

 

 

 

 

 

Unit Sales Volume:

 

 

 

 

 

 

 

 

 

 

 

Used vehicles

14,841

 

 

 

12,676

 

 

 

17.1

 

%

 

57,161

 

 

 

49,520

 

 

 

15.4

 

%

Wholesale vehicles

2,004

 

 

 

1,751

 

 

 

14.4

 

%

 

7,178

 

 

 

5,774

 

 

 

24.3

 

%

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit Per Unit:

 

 

 

 

 

 

 

 

 

 

 

Total used vehicle and F&I

$

1,770

 

 

 

$

2,341

 

 

 

(24.4

)

%

 

$

2,013

 

 

 

$

2,296

 

 

 

(12.3

)

%

NM = Not Meaningful

EchoPark Segment - Same Store

 

 

Three Months Ended
December 31,

 

Better /
(Worse)

 

Twelve Months Ended
December 31,

 

Better /
(Worse)

 

2020

 

2019

 

% Change

 

2020

 

2019

 

% Change

 

(In thousands, except unit and per unit data)

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Used vehicles

$

236,074

 

 

$

262,913

 

 

(10.2)

%

 

$

1,026,377

 

 

$

994,131

 

 

3.2

%

Wholesale vehicles

7,319

 

 

7,346

 

 

(0.4)

%

 

24,737

 

 

22,927

 

 

7.9

%

Total vehicles

243,393

 

 

270,259

 

 

(9.9)

%

 

1,051,114

 

 

1,017,058

 

 

3.3

%

Parts, service and collision repair

9,243

 

 

7,104

 

 

30.1

%

 

34,768

 

 

28,510

 

 

22.0

%

Finance, insurance and other, net

24,607

 

 

28,052

 

 

(12.3)

%

 

112,403

 

 

112,891

 

 

(0.4)

%

Total revenues

$

277,243

 

 

$

305,415

 

 

(9.2)

%

 

$

1,198,285

 

 

$

1,158,459

 

 

3.4

%

Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

Used vehicles

$

(6,785)

 

 

$

(609)

 

 

(1,014.1)

%

 

$

(19,983)

 

 

$

(5,831)

 

 

(242.7)

%

Wholesale vehicles

(2)

 

 

(92)

 

 

97.8

%

 

(158)

 

 

(332)

 

 

52.4

%

Total vehicles

(6,787)

 

 

(701)

 

 

(868.2)

%

 

(20,141)

 

 

(6,163)

 

 

(226.8)

%

Parts, service and collision repair

(138)

 

 

(325)

 

 

57.5

%

 

(533)

 

 

(894)

 

 

40.4

%

Finance, insurance and other, net

24,607

 

 

28,052

 

 

(12.3)

%

 

112,403

 

 

112,891

 

 

(0.4)

%

Total gross profit

$

17,682

 

 

$

27,026

 

 

(34.6)

%

 

$

91,729

 

 

$

105,834

 

 

(13.3)

%

 

 

 

 

 

 

 

 

 

 

 

 

Unit Sales Volume:

 

 

 

 

 

 

 

 

 

 

 

Used vehicles

10,794

 

 

12,548

 

 

(14.0)

%

 

48,446

 

 

49,392

 

 

(1.9)

%

Wholesale vehicles

1,673

 

 

1,751

 

 

(4.5)

%

 

6,388

 

 

5,774

 

 

10.6

%

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit Per Unit:

 

 

 

 

 

 

 

 

 

 

 

Total used vehicle and F&I

$

1,651

 

 

$

2,187

 

 

(24.5)

%

 

$

1,908

 

 

$

2,168

 

 

(12.0)

%

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

 

 

Three Months Ended December 31,

 

Better / (Worse)

 

2020

 

2019

 

Change

 

% Change

 

(In thousands)

Reported:

 

 

 

 

 

 

 

Compensation

$

176,050

 

 

$

184,455

 

 

$

8,405

 

 

4.6

%

Advertising

10,509

 

 

14,522

 

 

4,013

 

 

27.6

%

Rent

13,560

 

 

13,303

 

 

(257)

 

 

(1.9)

%

Other

58,858

 

 

48,641

 

 

(10,217)

 

 

(21.0)

%

Total SG&A expenses

$

258,977

 

 

$

260,921

 

 

$

1,944

 

 

0.7

%

Items of interest:

 

 

 

 

 

 

 

Gain on franchise and real estate disposals

$

6,039

 

 

$

29,303

 

 

 

 

 

Total SG&A adjustments

$

6,039

 

 

$

29,303

 

 

 

 

 

Adjusted:

 

 

 

 

 

 

 

Total adjusted SG&A expenses

$

265,016

 

 

$

290,224

 

 

$

25,208

 

 

8.7

%

Reported:

 

 

 

 

 

 

 

SG&A expenses as a % of gross profit:

 

 

 

 

 

 

 

Compensation

45.2

%

 

46.8

%

 

160

 

bps

Advertising

2.7

%

 

3.7

%

 

100

 

bps

Rent

3.5

%

 

3.4

%

 

(10)

 

bps

Other

15.2

%

 

12.3

%

 

(290)

 

bps

Total SG&A expenses as a % of gross profit

66.6

%

 

66.2

%

 

(40)

 

bps

Items of interest:

 

 

 

 

 

 

Gain on franchise and real estate disposals

1.5

%

 

7.5

%

 

 

 

Total effect of adjustments

1.5

%

 

7.5

%

 

 

 

Adjusted:

 

 

 

 

 

 

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

68.1

%

 

73.7

%

 

560

 

bps

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

 

 

Twelve Months Ended December 31,

 

Better / (Worse)

 

2020

 

2019

 

Change

 

% Change

 

(In thousands)

Reported:

 

 

 

 

 

 

 

Compensation

$

659,834

 

 

$

733,925

 

 

$

74,091

 

 

10.1

%

Advertising

42,186

 

 

60,831

 

 

18,645

 

 

30.7

%

Rent

54,494

 

 

54,611

 

 

117

 

 

0.2

%

Other

272,152

 

 

250,007

 

 

(22,145)

 

 

(8.9)

%

Total SG&A expenses

$

1,028,666

 

 

$

1,099,374

 

 

$

70,708

 

 

6.4

%

Items of interest:

 

 

 

 

 

 

 

Executive transition costs

$

 

 

$

(6,264)

 

 

 

 

 

Gain on franchise and real estate disposals

9,188

 

 

75,983

 

 

 

 

 

Total SG&A adjustments

$

9,188

 

 

$

69,719

 

 

 

 

 

Adjusted:

 

 

 

 

 

 

 

Total adjusted SG&A expenses

$

1,037,854

 

 

$

1,169,093

 

 

$

131,239

 

 

11.2

%

Reported:

 

 

 

 

 

 

 

SG&A expenses as a % of gross profit:

 

 

 

 

 

 

 

Compensation

46.3

%

 

48.3

%

 

200

 

bps

Advertising

3.0

%

 

4.0

%

 

100

 

bps

Rent

3.8

%

 

3.6

%

 

(20)

 

bps

Other

19.2

%

 

16.4

%

 

(280)

 

bps

Total SG&A expenses as a % of gross profit

72.3

%

 

72.3

%

 

 

bps

Items of interest:

 

 

 

 

 

 

Executive transition costs

%

 

(0.4)

%

 

 

 

 

Gain on franchise and real estate disposals

0.6

%

 

5.0

%

 

 

 

Total effect of adjustments

0.6

%

 

4.6

%

 

 

 

Adjusted:

 

 

 

 

 

 

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

72.9

%

 

76.9

%

 

400

 

bps

Earnings Per Share from Continuing Operations - Non-GAAP Reconciliation

 

 

Three Months Ended December 31, 2020

 

Three Months Ended December 31, 2019

 

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

44,022

 

 

$

57,483

 

 

 

$

1.31

 

 

44,463

 

 

$

46,272

 

 

 

$

1.04

 

Pre-tax items of interest:

 

 

 

 

 

 

 

 

 

 

 

Gain on franchise and real estate disposals

 

 

$

(6,039

)

 

 

 

 

 

 

$

(29,303

)

 

 

 

Loss on debt extinguishment

 

 

 

 

 

 

 

 

 

7,157

 

 

 

 

Impairment charges

 

 

1,158

 

 

 

 

 

 

 

17,692

 

 

 

 

Total pre-tax items of interest

 

 

$

(4,881

)

 

 

 

 

 

 

$

(4,454

)

 

 

 

Tax effect of above items

 

 

1,281

 

 

 

 

 

 

 

1,292

 

 

 

 

Non-recurring tax items

 

 

11,941

 

 

 

 

 

 

 

 

 

 

 

Adjusted diluted earnings (loss) and shares from continuing operations

44,022

 

 

$

65,824

 

 

 

$

1.50

 

 

44,463

 

 

$

43,110

 

 

 

$

0.97

 

 

Twelve Months Ended December 31, 2020

 

Twelve Months Ended December 31, 2019

 

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)

42,483

 

 

$

(50,664

)

 

 

$

(1.19

)

 

 

43,710

 

 

$

144,537

 

 

 

$

3.31

 

Pre-tax items of interest:

 

 

 

 

 

 

 

 

 

 

 

Gain on franchise and real estate disposals

 

 

$

(9,188

)

 

 

 

 

 

 

$

(75,983

)

 

 

 

Executive transition costs

 

 

 

 

 

 

 

 

 

6,264

 

 

 

 

Loss on debt extinguishment

 

 

 

 

 

 

 

 

 

7,157

 

 

 

Impairment charges

 

 

269,158

 

 

 

 

 

 

 

19,618

 

 

 

Total pre-tax items of interest

 

 

$

259,970

 

 

 

 

 

 

 

$

(42,944

)

 

 

 

Tax effect of above items

 

 

(40,421

)

 

 

 

 

 

 

14,193

 

 

 

 

Adjusted diluted earnings (loss) and shares from continuing operations

43,903

 

 

$

168,885

 

 

 

$

3.85

 

 

 

43,710

 

 

$

115,786

 

 

 

$

2.65

 

 

 

 

 

 

 

 

 

 

 

 

 

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

Adjusted EBITDA - Non-GAAP Reconciliation

 

 

Twelve Months Ended December 31, 2020

 

Twelve Months Ended December 31, 2019

 

Franchised
Dealerships
Segment

 

EchoPark
Segment

 

Discontinued
Operations

 

Total

 

Franchised
Dealerships
Segment

 

EchoPark
Segment

 

Discontinued
Operations

 

Total

 

(In thousands)

Net income (loss)

 

 

 

 

 

 

$

(51,385

)

 

 

 

 

 

 

 

 

$

144,137

 

 

Provision for income taxes

 

 

 

 

 

 

15,619

 

 

 

 

 

 

 

 

 

54,954

 

 

Income (loss) before taxes

$

(38,842

)

 

 

$

4,078

 

 

 

$

(1,002

)

 

 

$

(35,766

)

 

 

$

210,167

 

 

 

$

(10,522

)

 

 

$

(554

)

 

 

$

199,091

 

 

Non-floor plan interest (1)

37,746

 

 

 

926

 

 

 

 

 

 

38,672

 

 

 

48,774

 

 

 

1,701

 

 

 

 

 

 

50,475

 

 

Depreciation and amortization (2)

82,807

 

 

 

11,115

 

 

 

 

 

 

93,922

 

 

 

85,093

 

 

 

10,553

 

 

 

 

 

 

95,646

 

 

Stock-based compensation expense

11,704

 

 

 

 

 

 

 

 

 

11,704

 

 

 

10,797

 

 

 

 

 

 

 

 

 

10,797

 

 

Loss (gain) on exit of leased dealerships

 

 

 

 

 

 

 

 

 

 

 

 

(170

)

 

 

 

 

 

 

 

 

(170

)

 

Asset impairment charges

270,017

 

 

 

 

 

 

 

 

 

270,017

 

 

 

1,101

 

 

 

19,667

 

 

 

 

 

 

20,768

 

 

Loss (gain) on debt extinguishment

 

 

 

 

 

 

 

 

 

 

 

 

6,690

 

 

 

 

 

 

 

 

 

6,690

 

 

Loss (gain) on franchise and real estate disposals

(3,095

)

 

 

(5,152

)

 

 

 

 

 

(8,247

)

 

 

(74,812

)

 

 

 

 

 

 

 

 

(74,812

)

 

Adjusted EBITDA

$

360,337

 

 

 

$

10,967

 

 

 

$

(1,002

)

 

 

$

370,302

 

 

 

$

287,640

 

 

 

$

21,399

 

 

 

$

(554

)

 

 

$

308,485

 

 

Long-term debt (including current portion)

 

 

 

 

 

 

$

720,067

 

 

 

 

 

 

 

 

 

$

706,886

 

 

Cash and equivalents

 

 

 

 

 

 

(170,313

)

 

 

 

 

 

 

 

 

(29,103

)

 

Floor plan deposit balance

 

 

 

 

 

 

(73,180

)

 

 

 

 

 

 

 

 

 

 

Net debt

 

 

 

 

 

 

$

476,574

 

 

 

 

 

 

 

 

 

$

677,783

 

 

Net debt to adjusted EBITDA ratio

 

 

 

 

 

 

1.29

 

 

 

 

 

 

 

 

 

2.20

 

 

(1)

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

(2)

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

 

FAQ

What were Sonic Automotive's Q4 2020 earnings from continuing operations?

Sonic Automotive reported earnings from continuing operations of $57.5 million ($1.31 per diluted share) for Q4 2020.

How much did Sonic Automotive's revenues decrease in the full year 2020?

Sonic Automotive's total revenues decreased by 6.6% to $9.8 billion for the full year 2020.

What is Sonic Automotive's projected revenue for EchoPark by 2025?

Sonic Automotive projects that EchoPark will drive $14 billion in annual revenues by 2025.

What was the adjusted SG&A expense percentage for Sonic Automotive in Q4 2020?

Sonic Automotive reported adjusted SG&A expenses as a percentage of gross profit at 68.1% for Q4 2020.

When will Sonic Automotive pay its next dividend?

Sonic Automotive's next quarterly cash dividend of $0.10 per share will be payable on April 15, 2021.

Sonic Automotive, Inc.

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