Sonic Automotive Reports Second Quarter 2024 Financial Results

Rhea-AI Summary

Sonic Automotive (NYSE:SAH) reported mixed Q2 2024 financial results. Total revenues decreased 5% year-over-year to $3.5 billion, while reported net income increased 76% to $41.2 million. The company faced challenges due to a CDK Global software outage, which is estimated to have reduced Q2 GAAP income before taxes by approximately $30 million. Despite this, EchoPark Segment achieved record Q2 adjusted EBITDA, showing progress in used vehicle operations. The Franchised Dealerships Segment experienced margin normalization, with same-store retail new vehicle gross profit per unit down 29%. Sonic maintained its guidance for positive quarterly EchoPark Segment adjusted EBITDA for the remainder of 2024.

Positive

• Reported net income increased 76% year-over-year to $41.2 million
• EchoPark Segment achieved record Q2 adjusted EBITDA of $7.2 million, up 123% year-over-year
• EchoPark Segment total gross profit increased 91% year-over-year to $51.1 million
• Franchised Dealerships Segment same store Fixed Operations gross profit up 2%
• Company maintains $467 million in cash and floor plan deposits, with approximately $885 million of total liquidity

Negative

• Total revenues decreased 5% year-over-year to $3.5 billion
• CDK Global software outage reduced Q2 GAAP income before taxes by approximately $30 million
• Franchised Dealerships Segment same store retail new vehicle gross profit per unit down 29% to $3,590
• EchoPark Segment revenues down 14% year-over-year to $517.3 million
• Powersports Segment revenues down 12% year-over-year to $39.6 million

Insights

Financial Analyst

Sonic Automotive's Q2 2024 results present a mixed picture. While total revenues and gross profit declined 5% year-over-year, the company managed to increase reported net income by 76%. However, this increase was largely due to one-time factors.

The CDK Global software outage had a significant negative impact, reducing GAAP income before taxes by approximately $30 million. Adjusting for this and other one-time items, adjusted net income actually decreased by 22% year-over-year.

On a positive note, the EchoPark segment showed strong improvement, with record Q2 gross profit and adjusted EBITDA. This segment's performance could be a key driver for future growth.

The company's liquidity position remains strong, with $467 million in cash and floor plan deposits and total liquidity of about $885 million. This provides flexibility for strategic investments or navigating market challenges.

Automotive Industry Expert

Sonic's Q2 results reflect broader trends in the automotive retail sector. The normalization of new vehicle margins is evident in the 29% decrease in same-store retail new vehicle gross profit per unit. This aligns with industry-wide trends as inventory levels improve.

The company's focus on used vehicles, particularly through its EchoPark segment, is strategically sound. With a 3% increase in same-store retail used vehicle unit sales volume, Sonic is positioning itself well in a market where consumers may increasingly turn to used vehicles due to affordability concerns.

The growth in Fixed Operations gross profit, especially in customer pay and warranty work, is crucial. This high-margin segment often provides stability during new vehicle sales fluctuations. The 80 basis point improvement in Fixed Operations gross profit margin to 50.4% is particularly noteworthy.

Sonic's inventory management appears prudent, with 59 days' supply of new vehicles and 30 days' supply of used vehicles in the Franchised Dealerships segment, aligning well with current market conditions.

Tech Industry Analyst

The CDK Global software outage highlights the critical role of technology in modern automotive retail operations. This incident, estimated to have reduced Q2 GAAP income before taxes by $30 million, underscores the vulnerability of dealerships to tech disruptions.

While Sonic reports that access to CDK systems has been restored, the ongoing issues with customer lead applications, inventory management and third-party integrations throughout July suggest potential long-term implications. This could lead to increased industry focus on resilient IT infrastructure and potentially accelerate the adoption of more robust, possibly cloud-based solutions.

The incident may also prompt automotive retailers to diversify their technology providers or invest in redundant systems to mitigate similar risks in the future. It's worth noting that such investments could impact operational costs in the short term but may prove important for long-term stability and customer satisfaction.

Sonic's ability to navigate this disruption while still delivering growth in key areas like EchoPark demonstrates operational resilience, but also highlights the need for continuous technological adaptation in the automotive retail sector.

EchoPark Reported Record Second Quarter Adjusted EBITDA*

The CDK Global Software Outage Is Estimated To Have Reduced Second Quarter GAAP Income Before Taxes By Approximately $30.0 Million, Or $0.64 In GAAP Diluted Earnings Per Share

CHARLOTTE, N.C.--(BUSINESS WIRE)-- Sonic Automotive, Inc. (“Sonic Automotive,” “Sonic,” the “Company,” “we” “us” or “our”) (NYSE:SAH), one of the nation’s largest automotive retailers, today reported financial results for the second quarter ended June 30, 2024.

Second Quarter 2024 Financial Summary

• Total revenues of $3.5 billion, down 5% year-over-year; total gross profit of $539.1 million, down 5% year-over-year
• Reported net income of $41.2 million, up 76% year-over-year ($1.18 earnings per diluted share, up 82% year-over-year)
  • Reported net income includes the pre-tax effects of $11.6 million in excess compensation expense related to the CDK outage, a $3.6 million charge related to hail and storm damage, a $1.4 million impairment charge related to real estate held for sale at previously closed EchoPark Segment stores, and $0.7 million in severance expense, offset partially by a $3.6 million gain related to exit of leases and sale of real estate at previously closed EchoPark Segment stores, net of a $3.6 million tax benefit on the above net charges
  • Excluding these items, adjusted net income* was $51.3 million, down 22% year-over-year ($1.47 adjusted earnings per diluted share*, down 20% year-over-year)
• Total reported selling, general and administrative (“SG&A”) expenses as a percentage of gross profit of 72.9% (72.9% on a Franchised Dealerships Segment basis, 72.9% on an EchoPark Segment basis, and 73.7% on a Powersports Segment basis)
  • Total adjusted SG&A expenses as a percentage of gross profit* of 70.7% (69.9% on a Franchised Dealerships Segment basis, 77.7% on an EchoPark Segment basis, and 73.7% on a Powersports Segment basis)
• EchoPark Segment revenues of $517.3 million, down 14% year-over-year; record second quarter EchoPark Segment total gross profit of $51.1 million, up 91% year-over-year; EchoPark Segment retail used vehicle unit sales volume of 16,641, down 3% year-over-year
• Reported EchoPark Segment income of $3.9 million and adjusted EchoPark Segment income* of $1.4 million
• EchoPark Segment adjusted EBITDA* of $7.2 million, up 123% year-over-year
  • Excluding closed stores, EchoPark Segment adjusted EBITDA* was $9.0 million, a 149% improvement year-over-year
• The CDK Global software outage is estimated to have reduced second quarter GAAP income before taxes by approximately $30.0 million, and net income by approximately $22.2 million, or $0.64 in diluted earnings per share
  • Approximately $11.6 million ($0.25 in diluted earnings per share) of the pre-tax CDK impact was related to excess compensation paid to our teammates as a result of the CDK outage, which is included as a reconciling item in the non-GAAP reconciliation tables below

* Represents a non-GAAP financial measure — please refer to the discussion and reconciliation of non-GAAP financial measures below.

Commentary
David Smith, Chairman and Chief Executive Officer of Sonic Automotive, stated, “I'm pleased to report that we continued to make great progress in our EchoPark Segment performance in the second quarter, with record second quarter Adjusted EBITDA* that outpaced our previous projections and sets the stage for continued growth in the second half of 2024 and beyond. Overall, the Sonic Automotive team continued to execute at a high level, despite operational challenges in the last 12 days of the second quarter as a result of the previously announced CDK Global (“CDK”) software outage. As of today, Sonic's access to the information systems provided by CDK has been restored, however we experienced operational disruptions throughout July related to the functionality of certain CDK customer lead applications, inventory management applications and related third-party application integrations with CDK. As a result of the business disruption caused by the CDK outage, we estimate our second quarter GAAP income before taxes was negatively impacted by approximately $30 million, or $0.64 in diluted earnings per share.”

Jeff Dyke, President of Sonic Automotive, commented, “Despite the short-term operational challenges associated with the CDK outage, our team remains dedicated to delivering an outstanding guest experience and executing our long-term strategic vision. Throughout the second quarter, we made great progress on our net 300 technician hiring initiative and continued to see improvement in our used vehicle business in both the Franchised Dealerships and EchoPark Segments. Given the used vehicle market's continued improvement, we maintain our guidance for positive quarterly EchoPark Segment adjusted EBITDA* for the remainder of 2024, which is expected to help mitigate the continuing effects of margin normalization in our Franchised Dealerships Segment on consolidated earnings potential.”

Heath Byrd, Chief Financial Officer of Sonic Automotive, added, “Our diversified cash flow streams continued to benefit our overall financial position in the second quarter, despite operational disruption from the CDK outage. As of June 30, 2024, we had $467 million in cash and floor plan deposits on hand, and approximately $885 million of total liquidity, before considering unencumbered real estate. We continue to maintain a conservative balance sheet approach, with the ability to deploy capital strategically as market conditions evolve.”

Second Quarter 2024 Segment Highlights
The financial measures discussed below are results for the second quarter of 2024 with comparisons made to the second quarter of 2023, unless otherwise noted.

• Franchised Dealerships Segment operating results include:
  • Same store revenues down 3%; same store gross profit down 9%
  • Same store retail new vehicle unit sales volume down 2%; same store retail new vehicle gross profit per unit down 29%, to $3,590
  • Same store retail used vehicle unit sales volume up 3%; same store retail used vehicle gross profit per unit down 14%, to $1,524
  • Same store parts, service and collision repair (“Fixed Operations”) gross profit up 2%; same store customer pay gross profit up 2%; same store warranty gross profit up 13%; same store Fixed Operations gross profit margin up 80 basis points, to 50.4%
  • Same store finance and insurance ("F&I") gross profit down 5%; same store F&I gross profit per retail unit of $2,380, down 6%
  • On a trailing quarter cost of sales basis, the Franchised Dealerships Segment had 59 days’ supply of new vehicle inventory (including in-transit) and 30 days’ supply of used vehicle inventory
• EchoPark Segment operating results include:
  • Revenues of $517.3 million, down 14%; gross profit of $51.1 million, up 91%
    • On a same market basis (which excludes closed stores), revenues were up 10% and gross profit was up 81%
  • Retail used vehicle unit sales volume of 16,641, down 3%
    • On a same market basis (which excludes closed stores), retail used vehicle unit sales volume was up 23%
  • Reported segment income of $3.9 million, adjusted segment income* of $1.4 million, and adjusted EBITDA* of $7.2 million
    • Reported segment income includes $0.9 million income related to closed stores (closed stores represent a $1.9 million loss on an adjusted segment loss* basis and a $1.8 million loss on an adjusted EBITDA* basis)
    • Excluding closed stores, reported segment income was $3.0 million, adjusted segment income* was $3.3 million, and adjusted EBITDA* was $9.0 million
  • On a trailing quarter cost of sales basis, the EchoPark Segment had 38 days’ supply of used vehicle inventory
• Powersports Segment operating results include:
  • Revenues of $39.6 million, down 12%; gross profit of $10.7 million, down 16%
  • Segment income of $0.5 million and adjusted EBITDA* of $2.3 million

* Represents a non-GAAP financial measure - please refer to the discussion and reconciliation of non-GAAP financial measures below.

Dividend
Sonic’s Board of Directors approved a quarterly cash dividend of $0.30 per share, payable on October 15, 2024 to all stockholders of record on September 13, 2024.

Second Quarter 2024 Earnings Conference Call
Senior management will hold a conference call today at 10:00 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 and select the webcast link at the top of the page. For telephone access to this conference call, please dial (877) 407-8289 (domestic) or +1 (201) 689-8341 (international) and ask to be connected to the Sonic Automotive Second Quarter 2024 Earnings Conference Call. Dial-in access remains available throughout the live call; however, to ensure you are connected for the full call we suggest dialing in at least 10 minutes before the start of the call. A webcast replay will be available 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 diversified automotive retail 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 and powersports retailers in America, we are committed to delivering on this goal while pursuing expansive growth and taking progressive measures to be the leader in these categories. Our new platforms, programs, and people are set to drive the next generation of automotive and powersports 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 most comprehensive retailers of nearly new pre-owned vehicles in America today. Our unique business model offers a best-in-class shopping and utilizes 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. Consumers have responded by putting EchoPark among the top national pre-owned vehicle retailers in products, sales, and service, while receiving the 2023 Consumer Satisfaction Award from DealerRater. EchoPark’s mission is in the name: Every Car, Happy Owner. This drives the 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 the CDK outage, anticipated future EchoPark profitability and anticipated future EchoPark adjusted EBITDA. 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, the ultimate impact of the CDK outage on the Company, economic conditions in the markets in which we operate, supply chain disruptions and manufacturing delays, labor shortages, the impacts of inflation and increases in interest rates, new and used vehicle industry sales volume, future levels of consumer demand for new and used vehicles, anticipated future growth in each of our operating segments, the success of our operational strategies, the rate and timing of overall economic expansion or contraction, the integration of recent or future acquisitions, and the risk factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and other reports and information filed with the United States 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. Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

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 net income, adjusted earnings per diluted share, adjusted SG&A expenses as a percentage of gross profit, adjusted segment income, 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 June 30,								Better / (Worse)			Six Months Ended June 30,								Better / (Worse)
		2024				2023			% Change				2024				2023			% Change
	(In millions, except per share amounts)
Revenues:
Retail new vehicles	$	1,552.6			$	1,608.2			(3	)%		$	3,008.4			$	3,051.0			(1	)%
Fleet new vehicles		26.2				28.3			(7	)%			45.8				47.1			(3	)%
Total new vehicles		1,578.8				1,636.5			(4	)%			3,054.2				3,098.1			(1	)%
Used vehicles		1,186.2				1,305.9			(9	)%			2,401.8				2,650.8			(9	)%
Wholesale vehicles		71.3				91.5			(22	)%			148.6				177.0			(16	)%
Total vehicles		2,836.3				3,033.9			(7	)%			5,604.6				5,925.9			(5	)%
Parts, service and collision repair		444.1				443.7			—	%			890.8				874.2			2	%
Finance, insurance and other, net		172.6				175.3			(2	)%			341.6				344.0			(1	)%
Total revenues		3,453.0				3,652.9			(5	)%			6,837.0				7,144.1			(4	)%
Cost of sales:
Retail new vehicles		(1,454.8	)			(1,466.8	)		1	%			(2,814.2	)			(2,771.5	)		(2	)%
Fleet new vehicles		(25.2	)			(27.0	)		7	%			(44.1	)			(45.0	)		2	%
Total new vehicles		(1,480.0	)			(1,493.8	)		1	%			(2,858.3	)			(2,816.5	)		(1	)%
Used vehicles		(1,141.5	)			(1,274.4	)		10	%			(2,310.1	)			(2,589.3	)		11	%
Wholesale vehicles		(71.9	)			(92.5	)		22	%			(149.9	)			(174.9	)		14	%
Total vehicles		(2,693.4	)			(2,860.7	)		6	%			(5,318.3	)			(5,580.7	)		5	%
Parts, service and collision repair		(220.5	)			(223.3	)		1	%			(443.4	)			(440.9	)		(1	)%
Total cost of sales		(2,913.9	)			(3,084.0	)		6	%			(5,761.7	)			(6,021.6	)		4	%
Gross profit		539.1				568.9			(5	)%			1,075.3				1,122.5			(4	)%
Selling, general and administrative expenses		(393.0	)			(391.9	)		—	%			(785.3	)			(804.7	)		2	%
Impairment charges		(1.4	)			(62.6	)		NM				(2.4	)			(62.6	)		NM
Depreciation and amortization		(37.0	)			(36.1	)		(2	)%			(73.2	)			(70.5	)		(4	)%
Operating income (loss)		107.7				78.3			38	%			214.4				184.7			16	%
Other income (expense):
Interest expense, floor plan		(22.2	)			(17.0	)		(31	)%			(42.5	)			(31.5	)		(35	)%
Interest expense, other, net		(29.3	)			(28.9	)		(1	)%			(58.3	)			(57.3	)		(2	)%
Other income (expense), net		(0.5	)			0.1			NM				(0.4	)			0.2			NM
Total other income (expense)		(52.0	)			(45.8	)		(14	)%			(101.2	)			(88.6	)		(14	)%
Income (loss) before taxes		55.7				32.5			71	%			113.2				96.1			18	%
Provision for income taxes - benefit (expense)		(14.5	)			(9.1	)		(59	)%			(30.0	)			(25.0	)		(20	)%
Net income (loss)	$	41.2			$	23.4			76	%		$	83.2			$	71.1			17	%
Basic earnings (loss) per common share	$	1.21			$	0.66			83	%		$	2.45			$	2.00			23	%
Basic weighted-average common shares outstanding		34.0				35.3			4	%			34.0				35.6			4	%
Diluted earnings (loss) per common share	$	1.18			$	0.65			82	%		$	2.39			$	1.95			23	%
Diluted weighted-average common shares outstanding		34.9				36.0			3	%			34.8				36.5			5	%
Dividends declared per common share	$	0.30			$	0.29			3	%		$	0.60			$	0.57			5	%

NM = Not Meaningful

Franchised Dealerships Segment - Reported
	Three Months Ended June 30,								Better / (Worse)			Six Months Ended June 30,								Better / (Worse)
		2024				2023			% Change				2024				2023			% Change
	(In millions, except unit and per unit data)
Revenues:
Retail new vehicles	$	1,530.9			$	1,583.3			(3	)%		$	2,970.8			$	3,004.3			(1	)%
Fleet new vehicles		26.2				28.3			(7	)%			45.8				47.1			(3	)%
Total new vehicles		1,557.1				1,611.6			(3	)%			3,016.6				3,051.4			(1	)%
Used vehicles		732.1				774.5			(5	)%			1,461.4				1,542.0			(5	)%
Wholesale vehicles		48.4				55.6			(13	)%			96.9				114.0			(15	)%
Total vehicles		2,337.6				2,441.7			(4	)%			4,574.9				4,707.4			(3	)%
Parts, service and collision repair		434.4				433.4			—	%			874.3				857.2			2	%
Finance, insurance and other, net		124.2				132.2			(6	)%			243.8				249.4			(2	)%
Total revenues		2,896.2				3,007.3			(4	)%			5,693.0				5,814.0			(2	)%
Gross Profit:
Retail new vehicles		94.9				136.9			(31	)%			189.0				270.9			(30	)%
Fleet new vehicles		1.0				1.3			(23	)%			1.7				2.1			(19	)%
Total new vehicles		95.9				138.2			(31	)%			190.7				273.0			(30	)%
Used vehicles		38.7				44.5			(13	)%			79.6				85.3			(7	)%
Wholesale vehicles		(0.5	)			(1.0	)		50	%			(0.7	)			1.0			(170	)%
Total vehicles		134.1				181.7			(26	)%			269.6				359.3			(25	)%
Parts, service and collision repair		219.0				215.4			2	%			439.7				425.0			3	%
Finance, insurance and other, net		124.2				132.2			(6	)%			243.8				249.4			(2	)%
Total gross profit		477.3				529.3			(10	)%			953.1				1,033.7			(8	)%
Selling, general and administrative expenses		(347.9	)			(316.1	)		(10	)%			(686.4	)			(647.3	)		(6	)%
Impairment charges		—				—			NM				(1.0	)			—			NM
Depreciation and amortization		(30.4	)			(27.9	)		(9	)%			(60.2	)			(54.5	)		(10	)%
Operating income (loss)		99.0				185.3			(47	)%			205.5				331.9			(38	)%
Other income (expense):
Interest expense, floor plan		(18.0	)			(11.9	)		(51	)%			(34.0	)			(21.8	)		(56	)%
Interest expense, other, net		(27.8	)			(27.5	)		(1	)%			(55.6	)			(54.4	)		(2	)%
Other income (expense), net		(0.5	)			—			NM				(0.5	)			0.1			NM
Total other income (expense)		(46.3	)			(39.4	)		(18	)%			(90.1	)			(76.1	)		(18	)%
Income (loss) before taxes		52.7				145.9			(64	)%			115.4				255.8			(55	)%
Add: Impairment charges		—				—			NM				1.0				—			NM
Segment income (loss)	$	52.7			$	145.9			(64	)%		$	116.4			$	255.8			(54	)%
Unit Sales Volume:
Retail new vehicles		26,512				27,358			(3	)%			51,809				51,897			—	%
Fleet new vehicles		514				590			(13	)%			893				1,031			(13	)%
Total new vehicles		27,026				27,948			(3	)%			52,702				52,928			—	%
Used vehicles		25,668				25,197			2	%			51,334				50,304			2	%
Wholesale vehicles		5,248				5,516			(5	)%			10,353				10,999			(6	)%
Retail new & used vehicles		52,180				52,555			(1	)%			103,143				102,201			1	%
Used-to-New Ratio		0.97				0.92			5	%			0.99				0.97			2	%
Gross Profit Per Unit:
Retail new vehicles	$	3,579			$	5,003			(28	)%		$	3,649			$	5,221			(30	)%
Fleet new vehicles	$	1,885			$	2,099			(10	)%		$	1,809			$	2,065			(12	)%
New vehicles	$	3,547			$	4,942			(28	)%		$	3,618			$	5,159			(30	)%
Used vehicles	$	1,508			$	1,765			(15	)%		$	1,550			$	1,695			(9	)%
Finance, insurance and other, net	$	2,380			$	2,516			(5	)%		$	2,364			$	2,440			(3	)%

NM = Not Meaningful

Note: Reported Franchised Dealerships Segment results include (i) same store results from the “Franchised Dealerships Segment - Same Store” table below and (ii) the effects of acquisitions, open points, dispositions and holding company impacts for the periods reported. 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 June 30,								Better / (Worse)			Six Months Ended June 30,							Better / (Worse)
		2024				2023			% Change				2024			2023			% Change
	(In millions, except unit and per unit data)
Revenues:
Retail new vehicles	$	1,530.6			$	1,566.5			(2	)%		$	2,964.6			$	2,964.3		—	%
Fleet new vehicles		26.2				28.4			(8	)%			45.8				47.2		(3	)%
Total new vehicles		1,556.8				1,594.9			(2	)%			3,010.4				3,011.5		—	%
Used vehicles		731.9				766.2			(4	)%			1,457.0				1,519.8		(4	)%
Wholesale vehicles		48.3				54.7			(12	)%			96.5				112.1		(14	)%
Total vehicles		2,337.0				2,415.8			(3	)%			4,563.9				4,643.4		(2	)%
Parts, service and collision repair		434.3				430.0			1	%			872.6				847.5		3	%
Finance, insurance and other, net		124.2				130.9			(5	)%			243.4				246.2		(1	)%
Total revenues		2,895.5				2,976.7			(3	)%			5,679.9				5,737.1		(1	)%
Gross Profit:
Retail new vehicles		95.1				135.7			(30	)%			188.8				267.8		(29	)%
Fleet new vehicles		1.0				1.2			(17	)%			1.6				2.1		(24	)%
Total new vehicles		96.1				136.9			(30	)%			190.4				269.9		(29	)%
Used vehicles		39.1				44.3			(12	)%			79.6				84.3		(6	)%
Wholesale vehicles		(0.5	)			(0.5	)		—	%			(0.6	)			1.4		(143	)%
Total vehicles		134.7				180.7			(25	)%			269.4				355.6		(24	)%
Parts, service and collision repair		218.8				213.5			2	%			438.2				419.6		4	%
Finance, insurance and other, net		124.2				130.9			(5	)%			243.4				246.2		(1	)%
Total gross profit	$	477.7			$	525.1			(9	)%		$	951.0			$	1,021.4		(7	)%
Unit Sales Volume:
Retail new vehicles		26,505				26,953			(2	)%			51,688				50,975		1	%
Fleet new vehicles		514				590			(13	)%			893				1,031		(13	)%
Total new vehicles		27,019				27,543			(2	)%			52,581				52,006		1	%
Used vehicles		25,660				24,873			3	%			51,169				49,454		3	%
Wholesale vehicles		5,243				5,430			(3	)%			10,317				10,812		(5	)%
Retail new & used vehicles		52,165				51,826			1	%			102,857				100,429		2	%
Used-to-New Ratio		0.97				0.90			8	%			0.99				0.95		4	%
Gross Profit Per Unit:
Retail new vehicles	$	3,590			$	5,033			(29	)%		$	3,653			$	5,254		(30	)%
Fleet new vehicles	$	1,885			$	2,099			(10	)%		$	1,809			$	2,065		(12	)%
New vehicles	$	3,557			$	4,970			(28	)%		$	3,622			$	5,191		(30	)%
Used vehicles	$	1,524			$	1,779			(14	)%		$	1,555			$	1,705		(9	)%
Finance, insurance and other, net	$	2,380			$	2,526			(6	)%		$	2,366			$	2,451		(3	)%

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)
		2024				2023			% Change				2024				2023			% Change
	(In millions, except unit and per unit data)
Revenues:
Retail new vehicles	$	—			$	—			—	%		$	—			$	1.0			(100	)%
Used vehicles		448.9				524.0			(14	)%			931.7				1,096.5			(15	)%
Wholesale vehicles		21.9				35.5			(38	)%			50.7				62.5			(19	)%
Total vehicles		470.8				559.5			(16	)%			982.4				1,160.0			(15	)%
Finance, insurance and other, net		46.5				41.1			13	%			94.3				91.1			4	%
Total revenues		517.3				600.6			(14	)%			1,076.7				1,251.1			(14	)%
Gross Profit:
Retail new vehicles		—				—			—	%			—				0.1			(100	)%
Used vehicles		4.7				(14.3	)		133	%			10.0				(26.2	)		138	%
Wholesale vehicles		(0.1	)			—			(100	)%			(0.6	)			1.2			(150	)%
Total vehicles		4.6				(14.3	)		132	%			9.4				(24.9	)		138	%
Finance, insurance and other, net		46.5				41.1			13	%			94.3				91.1			4	%
Total gross profit		51.1				26.8			91	%			103.7				66.2			57	%
Selling, general and administrative expenses		(37.2	)			(66.6	)		44	%			(82.8	)			(140.4	)		41	%
Impairment charges		(1.4	)			(62.6	)		NM				(1.4	)			(62.6	)		NM
Depreciation and amortization		(5.6	)			(7.4	)		24	%			(11.1	)			(14.4	)		23	%
Operating income (loss)		6.9				(109.8	)		106	%			8.4				(151.2	)		106	%
Other income (expense):
Interest expense, floor plan		(3.8	)			(4.8	)		21	%			(7.6	)			(9.3	)		18	%
Interest expense, other, net		(0.7	)			(0.9	)		22	%			(1.3	)			(1.8	)		28	%
Other income (expense), net		0.1				0.1			NM				—				—			NM
Total other income (expense)		4.4				(5.6	)		179	%			8.9				(11.1	)		180	%
Income (loss) before taxes		2.5				(115.4	)		102	%			(0.5	)			(162.3	)		100	%
Add: Impairment charges		1.4				62.6			NM				1.4				62.6			NM
Segment income (loss)	$	3.9			$	(52.8	)		107	%		$	0.9			$	(99.7	)		101	%
Unit Sales Volume:
Retail new vehicles		—				—			—	%			—				11			(100	)%
Used vehicles		16,641				17,084			(3	)%			34,622				37,064			(7	)%
Wholesale vehicles		2,593				3,235			(20	)%			5,587				6,151			(9	)%
Gross Profit Per Unit:
Total used vehicle and F&I	$	3,078			$	1,569			96	%		$	3,014			$	1,750			72	%

NM = Not Meaningful

EchoPark Segment - Same Market
	Three Months Ended June 30,								Better / (Worse)			Six Months Ended June 30,							Better / (Worse)
		2024				2023			% Change			2024				2023			% Change
	(In millions, except unit and per unit data)
Revenues:
Used vehicles	$	448.9			$	410.0			9	%		$	922.1		$	843.7			9	%
Wholesale vehicles		21.9				26.3			(17	)%			47.4			44.2			7	%
Total vehicles		470.8				436.3			8	%			969.5			887.9			9	%
Finance, insurance and other, net		47.3				32.6			45	%			94.8			70.9			34	%
Total revenues		518.1				468.9			10	%			1,064.3			958.8			11	%
Gross Profit:
Used vehicles		4.8				(4.3	)		212	%			10.4			(14.1	)		174	%
Wholesale vehicles		(0.2	)			0.4			(150	)%			—			1.6			(100	)%
Total vehicles		4.6				(3.9	)		218	%			10.4			(12.5	)		183	%
Finance, insurance and other, net		47.3				32.6			45	%			94.8			70.9			34	%
Total gross profit	$	51.9			$	28.7			81	%		$	105.2		$	58.4			80	%
Unit Sales Volume:
Used vehicles		16,641				13,529			23	%			34,259			29,080			18	%
Wholesale vehicles		2,593				2,402			8	%			5,378			4,521			19	%
Gross Profit Per Unit:
Total used vehicle and F&I	$	3,127			$	2,091			50	%		$	3,071		$	1,953			57	%

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.

Powersports Segment - Reported
	Three Months Ended June 30,								Better / (Worse)			Six Months Ended June 30,								Better / (Worse)
		2024				2023			% Change				2024				2023			% Change
	(In millions, except unit and per unit data)
Revenues:
Retail new vehicles	$	21.7			$	24.9			(13	)%		$	37.5			$	45.7			(18	)%
Used vehicles		5.3				7.4			(28	)%			8.7				12.3			(29	)%
Wholesale vehicles		0.9				0.4			125	%			1.1				0.5			120	%
Total vehicles		27.9				32.7			(15	)%			47.3				58.5			(19	)%
Parts, service and collision repair		9.7				10.3			(6	)%			16.5				17.0			(3	)%
Finance, insurance and other, net		2.0				2.0			—	%			3.5				3.5			—	%
Total revenues		39.6				45.0			(12	)%			67.3				79.0			(15	)%
Gross Profit:
Retail new vehicles		2.9				4.5			(36	)%			5.2				8.5			(39	)%
Used vehicles		1.3				1.3			—	%			2.2				2.4			(8	)%
Wholesale vehicles		(0.1	)			—			(100	)%			(0.1	)			(0.1	)		—	%
Total vehicles		4.1				5.8			(29	)%			7.3				10.8			(32	)%
Parts, service and collision repair		4.6				5.0			(8	)%			7.7				8.3			(7	)%
Finance, insurance and other, net		2.0				2.0			—	%			3.5				3.5			—	%
Total gross profit		10.7				12.8			(16	)%			18.5				22.6			(18	)%
Selling, general and administrative expenses		(7.9	)			(9.2	)		14	%			(16.0	)			(17.0	)		6	%
Depreciation and amortization		(1.0	)			(0.8	)		(25	)%			(2.0	)			(1.6	)		(25	)%
Operating income (loss)		1.8				2.8			(36	)%			0.5				4.0			(88	)%
Other income (expense):
Interest expense, floor plan		(0.5	)			(0.3	)		(67	)%			(1.0	)			(0.4	)		(150	)%
Interest expense, other, net		(0.8	)			(0.5	)		(60	)%			(1.3	)			(1.1	)		(18	)%
Other income (expense), net		—				—			NM				0.1				0.1			NM
Total other income (expense)		(1.3	)			(0.8	)		(63	)%			(2.2	)			(1.4	)		(57	)%
Income (loss) before taxes		0.5				2.0			(75	)%			(1.7	)			2.6			(165	)%
Add: Impairment charges		—				—			NM				—				—			NM
Segment income (loss)	$	0.5			$	2.0			(75	)%		$	(1.7	)		$	2.6			(165	)%
Unit Sales Volume:
Retail new vehicles		1,193				1,396			(15	)%			2,038				2,503			(19	)%
Used vehicles		522				691			(24	)%			931				1,135			(18	)%
Wholesale vehicles		18				50			(64	)%			31				57			(46	)%
Gross Profit Per Unit:
Retail new vehicles	$	2,466			$	3,235			(24	)%		$	2,553			$	3,385			(25	)%
Used vehicles	$	2,423			$	1,942			25	%		$	2,318			$	2,093			11	%
Finance, insurance and other, net	$	1,153			$	952			21	%		$	1,172			$	964			22	%

NM = Not Meaningful

Powersports Segment - Same Store
	Three Months Ended June 30,							Better / (Worse)			Six Months Ended June 30,								Better / (Worse)
		2024			2023			% Change				2024				2023			% Change
	(In millions, except unit and per unit data)
Revenues:
Retail new vehicles	$	21.7			$	24.9		(13	)%		$	37.0			$	45.5			(19	)%
Used vehicles		5.3				7.4		(28	)%			8.0				11.8			(32	)%
Wholesale vehicles		0.9				0.4		125	%			1.2				0.5			140	%
Total vehicles		27.9				32.7		(15	)%			46.2				57.8			(20	)%
Parts, service and collision repair		9.7				10.3		(6	)%			15.8				16.7			(5	)%
Finance, insurance and other, net		2.0				2.0		—	%			3.4				3.5			(3	)%
Total revenues		39.6				45.0		(12	)%			65.4				78.0			(16	)%
Gross Profit:
Retail new vehicles		2.9				4.5		(36	)%			5.1				8.4			(39	)%
Used vehicles		1.3				1.3		—	%			2.0				2.3			(13	)%
Wholesale vehicles		(0.1	)			—		(100	)%			(0.1	)			(0.1	)		—	%
Total vehicles		4.1				5.8		(29	)%			7.0				10.6			(34	)%
Parts, service and collision repair		4.6				5.0		(8	)%			7.4				8.2			(10	)%
Finance, insurance and other, net		2.0				2.0		—	%			3.4				3.5			(3	)%
Total gross profit	$	10.7			$	12.8		(16	)%		$	17.8			$	22.3			(20	)%
Unit Sales Volume:
Retail new vehicles		1,193				1,396		(15	)%			2,021				2,496			(19	)%
Used vehicles		522				691		(24	)%			858				1,092			(21	)%
Wholesale vehicles		18				50		(64	)%			28				56			(50	)%
Retail new & used vehicles		1,715				2,087		(18	)%			2,879				3,588			(20	)%
Used-to-New Ratio		0.44				0.49		(10	)%			0.42				0.44			(5	)%
Gross Profit Per Unit:
Retail new vehicles	$	2,466			$	3,235		(24	)%		$	2,502			$	3,373			(26	)%
Used vehicles	$	2,423			$	1,942		25	%		$	2,336			$	2,064			13	%
Finance, insurance and other, net	$	1,153			$	952		21	%		$	1,182			$	964			23	%

Note: All currently operating powersports 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.

Non-GAAP Reconciliation - Consolidated - SG&A Expenses
	Three Months Ended June 30,								Better / (Worse)
		2024				2023			Change				% Change
	(In millions)
Reported:
Compensation	$	250.9			$	261.0			$	10.1			4	%
Advertising		21.6				22.8				1.2			5	%
Rent		7.7				11.5				3.8			33	%
Other		112.8				96.6				(16.2	)		(17	)%
Total SG&A expenses	$	393.0			$	391.9			$	(1.1	)		—	%
Adjustments:
Acquisition and disposition-related gain (loss)	$	0.6			$	20.7
Excess compensation related to CDK outage		(9.6	)			—
Hail and storm damage charges		(3.6	)			(1.9	)
Gain (loss) on exit of leased dealerships		3.0				(0.4	)
Severance and long-term compensation charges		(0.7	)			(2.2	)
Total SG&A adjustments	$	(10.3	)		$	16.2
Adjusted:
Total adjusted SG&A expenses	$	382.7			$	408.1			$	25.4			6	%
Reported:
SG&A expenses as a % of gross profit:
Compensation		46.5	%			45.9	%			(60	)	bps
Advertising		4.0	%			4.0	%			—		bps
Rent		1.4	%			2.0	%			60		bps
Other		21.0	%			17.0	%			(400	)	bps
Total SG&A expenses as a % of gross profit		72.9	%			68.9	%			(400	)	bps
Adjustments:
Acquisition and disposition-related gain (loss)		0.1	%			2.0	%
Excess compensation related to CDK outage		(2.1	)%			—	%
Hail and storm damage charges		(0.7	)%			(0.2	)%
Gain (loss) on exit of leased dealerships		0.6	%			—	%
Severance and long-term compensation charges		(0.1	)%			(0.2	)%
Total effect of adjustments		(2.2	)%			1.6	%
Adjusted:
Total adjusted SG&A expenses as a % of gross profit		70.7	%			70.5	%			(20	)	bps
Reported:
Total gross profit	$	539.1			$	568.9			$	(29.8	)		(5	)%
Adjustments:
Excess compensation related to CDK outage	$	2.0			$	—
Used vehicle inventory valuation adjustment		—				10.0
Total adjustments	$	2.0			$	10.0
Adjusted:
Total adjusted gross profit	$	541.1			$	578.9			$	(37.8	)		(7	)%

Non-GAAP Reconciliation - Consolidated - SG&A Expenses (Continued)
	Six Months Ended June 30,								Better / (Worse)
		2024				2023			Change				% Change
	(In millions)
Reported:
Compensation	$	498.1			$	519.7			$	21.6			4	%
Advertising		43.9				48.9				5.0			10	%
Rent		17.1				22.8				5.7			25	%
Other		226.2				213.3				(12.9	)		(6	)%
Total SG&A expenses	$	785.3			$	804.7			$	19.4			2	%
Adjustments:
Acquisition and disposition-related gain (loss)	$	0.6			$	20.7
Closed store accrued expenses		(2.1	)			—
Excess compensation related to CDK outage		(9.6	)			—
Hail and storm damage charges		(3.6	)			(1.9	)
Gain (loss) on exit of leased dealerships		3.0				(0.4	)
Severance and long-term compensation charges		(5.0	)			(4.2	)
Total SG&A adjustments	$	(16.7	)		$	14.2
Adjusted:
Total adjusted SG&A expenses	$	768.6			$	818.9			$	50.3			6	%
Reported:
SG&A expenses as a % of gross profit:
Compensation		46.3	%			46.3	%			—		bps
Advertising		4.1	%			4.4	%			30		bps
Rent		1.6	%			2.0	%			40		bps
Other		21.0	%			19.0	%			(200	)	bps
Total SG&A expenses as a % of gross profit		73.0	%			71.7	%			(130	)	bps
Adjustments:
Acquisition and disposition-related gain (loss)		0.1	%			0.9	%
Closed store accrued expenses		(0.2	)%			—	%
Excess compensation related to CDK outage		(1.0	)%			—	%
Hail and storm damage charges		(0.4	)%			(0.1	)%
Gain (loss) on exit of leased dealerships		0.3	%			—	%
Severance and long-term compensation charges		(0.5	)%			(0.2	)%
Total effect of adjustments		(1.7	)%			0.6	%
Adjusted:
Total adjusted SG&A expenses as a % of gross profit		71.3	%			72.3	%			80		bps
Reported:
Total gross profit	$	1,075.3			$	1,122.5			$	(47.2	)		(4	)%
Adjustments:
Excess compensation related to CDK outage	$	2.0			$	—
Used vehicle inventory valuation adjustment		—				10.0
Total adjustments	$	2.0			$	10.0
Adjusted:
Total adjusted gross profit	$	1,077.3			$	1,132.5			$	(55.2	)		(5	)%

Non-GAAP Reconciliation - Franchised Dealerships Segment - SG&A Expenses
	Three Months Ended June 30,								Better / (Worse)
		2024				2023			Change				% Change
	(In millions)
Reported:
Compensation	$	221.9			$	219.0			$	(2.9	)		(1	)%
Advertising		14.3				8.7				(5.6	)		(64	)%
Rent		10.3				9.4				(0.9	)		(10	)%
Other		101.4				79.0				(22.4	)		(28	)%
Total SG&A expenses	$	347.9			$	316.1			$	(31.8	)		(10	)%
Adjustments:
Acquisition and disposition-related gain (loss)	$	—			$	20.9
Excess compensation related to CDK outage		(9.2	)			—
Hail and storm damage charges		(3.6	)			(1.9	)
Total SG&A adjustments	$	(12.8	)		$	19.0
Adjusted:
Total adjusted SG&A expenses	$	335.1			$	335.1			$	—			—	%
Reported:
SG&A expenses as a % of gross profit:
Compensation		46.5	%			41.4	%			(510	)	bps
Advertising		3.0	%			1.6	%			(140	)	bps
Rent		2.2	%			1.8	%			(40	)	bps
Other		21.2	%			14.9	%			(630	)	bps
Total SG&A expenses as a % of gross profit		72.9	%			59.7	%			(1,320	)	bps
Adjustments:
Acquisition and disposition-related gain (loss)		—	%			4.0	%
Excess compensation related to CDK outage		(2.2	)%			—	%
Hail and storm damage charges		(0.8	)%			(0.4	)%
Total effect of adjustments		(3.0	)%			3.6	%
Adjusted:
Total adjusted SG&A expenses as a % of gross profit		69.9	%			63.3	%			(660	)	bps
Reported:
Total gross profit	$	477.3			$	529.3			$	(52.0	)		(10	)%
Adjustments:
Excess compensation related to CDK outage	$	2.0			$	—
Total adjustments	$	2.0			$	—
Adjusted:
Total adjusted gross profit	$	479.3			$	529.3			$	(50.0	)		(9	)%

Non-GAAP Reconciliation - Franchised Dealerships Segment - SG&A Expenses (Continued)
	Six Months Ended June 30,								Better / (Worse)
		2024				2023			Change				% Change
	(In millions)
Reported:
Compensation	$	438.3			$	432.8			$	(5.5	)		(1	)%
Advertising		29.6				18.6				(11.0	)		(59	)%
Rent		20.4				19.5				(0.9	)		(5	)%
Other		198.1				176.4				(21.7	)		(12	)%
Total SG&A expenses	$	686.4			$	647.3			$	(39.1	)		(6	)%
Adjustments:
Acquisition and disposition-related gain (loss)	$	—			$	20.9
Excess compensation related to CDK outage		(9.2	)			—
Hail and storm damage charges		(3.6	)			(1.9	)
Severance and long-term compensation charges		(2.2	)			—
Total SG&A adjustments	$	(15.0	)		$	19.0
Adjusted:
Total adjusted SG&A expenses	$	671.4			$	666.3			$	(5.1	)		(1	)%
Reported:
SG&A expenses as a % of gross profit:
Compensation		46.0	%			41.9	%			(410	)	bps
Advertising		3.1	%			1.8	%			(130	)	bps
Rent		2.1	%			1.9	%			(20	)	bps
Other		20.8	%			17.0	%			(380	)	bps
Total SG&A expenses as a % of gross profit		72.0	%			62.6	%			(940	)	bps
Adjustments:
Acquisition and disposition-related gain (loss)		—	%			2.1	%
Excess compensation related to CDK outage		(1.1	)%			—	%
Hail and storm damage charges		(0.4	)%			(0.2	)%
Severance and long-term compensation charges		(0.2	)%			—	%
Total effect of adjustments		(1.7	)%			1.9	%
Adjusted:
Total adjusted SG&A expenses as a % of gross profit		70.3	%			64.5	%			(580	)	bps
Reported:
Total gross profit	$	953.1			$	1,033.7			$	(80.6	)		(8	)%
Adjustments:
Excess compensation related to CDK outage	$	2.0			$	—
Total adjustments	$	2.0			$	—
Adjusted:
Total adjusted gross profit	$	955.1			$	1,033.7			$	(78.6	)		(8	)%

Non-GAAP Reconciliation - EchoPark Segment - SG&A Expenses
	Three Months Ended June 30,								Better / (Worse)
		2024				2023			Change			% Change
	(In millions)
Reported:
Compensation	$	23.3			$	35.4			$	12.1		34	%
Advertising		7.0				13.7				6.7		49	%
Rent		(2.7	)			2.1				4.8		229	%
Other		9.6				15.4				5.8		38	%
Total SG&A expenses	$	37.2			$	66.6			$	29.4		44	%
Adjustments:
Acquisition and disposition-related gain (loss)	$	0.6			$	(0.2	)
Excess compensation related to CDK outage		(0.4	)			—
Gain (loss) on exit of leased dealerships		3.0				(0.4	)
Severance and long-term compensation charges		(0.7	)			(2.2	)
Total SG&A adjustments	$	2.5			$	(2.8	)
Adjusted:
Total adjusted SG&A expenses	$	39.7			$	63.8			$	24.1		38	%
Reported:
SG&A expenses as a % of gross profit:
Compensation		45.6	%			132.2	%			8,660	bps
Advertising		13.6	%			51.2	%			3,760	bps
Rent		(5.2	)%			8.0	%			1,320	bps
Other		18.9	%			57.1	%			3,820	bps
Total SG&A expenses as a % of gross profit		72.9	%			248.5	%			17,560	bps
Adjustments:
Acquisition and disposition-related gain (loss)		1.2	%			(5.4	)%
Excess compensation related to CDK outage		(0.8	)%			—	%
Gain (loss) on exit of leased dealerships		5.7	%			(10.7	)%
Severance and long-term compensation charges		(1.3	)%			(58.9	)%
Total effect of adjustments		4.8	%			(75.0	)%
Adjusted:
Total adjusted SG&A expenses as a % of gross profit		77.7	%			173.5	%			9,580	bps
Reported:
Total gross profit	$	51.1			$	26.8			$	24.3		91	%
Adjustments:
Used vehicle inventory valuation adjustment	$	—			$	10.0
Total adjustments	$	—			$	10.0
Adjusted:
Total adjusted gross profit	$	51.1			$	36.8			$	14.3		39	%

Non-GAAP Reconciliation - EchoPark Segment - SG&A Expenses (Continued)
	Six Months Ended June 30,								Better / (Worse)
		2024				2023			Change			% Change
	(In millions)
Reported:
Compensation	$	48.5			$	75.1			$	26.6		35	%
Advertising		13.6				29.5				15.9		54	%
Rent		(3.4	)			3.2				6.6		206	%
Other		24.1				32.6				8.5		26	%
Total SG&A expenses	$	82.8			$	140.4			$	57.6		41	%
Adjustments:
Acquisition and disposition-related gain (loss)	$	0.6			$	(0.2	)
Closed store accrued expenses		(2.1	)			—
Excess compensation related to CDK outage		(0.4	)			—
Gain (loss) on exit of leased dealerships		3.0				(0.4	)
Severance and long-term compensation charges		(2.8	)			(4.2	)
Total SG&A adjustments	$	(1.7	)		$	(4.8	)
Adjusted:
Total adjusted SG&A expenses	$	81.1			$	135.6			$	54.5		40	%
Reported:
SG&A expenses as a % of gross profit:
Compensation		46.7	%			113.4	%			6,670	bps
Advertising		13.1	%			44.5	%			3,140	bps
Rent		(3.3	)%			4.9	%			820	bps
Other		23.4	%			49.2	%			2,580	bps
Total SG&A expenses as a % of gross profit		79.9	%			212.0	%			13,210	bps
Adjustments:
Acquisition and disposition-related gain (loss)		0.6	%			(1.4	)%
Closed store accrued expenses		(2.1	)%			—	%
Excess compensation related to CDK outage		(0.4	)%			—	%
Gain (loss) on exit of leased dealerships		3.0	%			(2.8	)%
Severance and long-term compensation charges		(2.8	)%			(29.9	)%
Total effect of adjustments		(1.7	)%			(34.1	)%
Adjusted:
Total adjusted SG&A expenses as a % of gross profit		78.2	%			177.9	%			9,970	bps
Reported:
Total gross profit	$	103.7			$	66.2			$	37.5		57	%
Adjustments:
Used vehicle inventory valuation adjustment	$	—			$	10.0
Total adjustments	$	—			$	10.0
Adjusted:
Total adjusted gross profit	$	103.7			$	76.2			$	27.5		36	%

Non-GAAP Reconciliation - Powersports Segment - SG&A Expenses
	Three Months Ended June 30,								Better / (Worse)
		2024				2023			Change				% Change
	(In millions)
Reported:
Compensation	$	5.7			$	6.6			$	0.9			14	%
Advertising		0.4				0.4				—			—	%
Rent		0.1				—				(0.1	)		—	%
Other		1.7				2.2				0.5			23	%
Total SG&A expenses	$	7.9			$	9.2			$	1.3			14	%
Reported:
SG&A expenses as a % of gross profit:
Compensation		53.2	%			51.3	%			(190	)	bps
Advertising		3.8	%			2.9	%			(90	)	bps
Rent		0.9	%			0.2	%			(70	)	bps
Other		15.8	%			17.2	%			140		bps
Total SG&A expenses as a % of gross profit		73.7	%			71.6	%			(210	)	bps
Reported:
Total gross profit	$	10.7			$	12.8			$	(2.1	)		(16	)%

	Six Months Ended June 30,								Better / (Worse)
		2024				2023			Change				% Change
	(In millions)
Reported:
Compensation	$	11.4			$	11.8			$	0.4			3	%
Advertising		0.8				0.8				—			—	%
Rent		0.1				0.1				—			—	%
Other		3.7				4.3				0.6			14	%
Total SG&A expenses	$	16.0			$	17.0			$	1.0			6	%
Reported:
SG&A expenses as a % of gross profit:
Compensation		61.4	%			52.4	%			(900	)	bps
Advertising		4.3	%			3.5	%			(80	)	bps
Rent		0.7	%			0.3	%			(40	)	bps
Other		20.3	%			19.0	%			(130	)	bps
Total SG&A expenses as a % of gross profit		86.7	%			75.2	%			(1,150	)	bps
Reported:
Total gross profit	$	18.5			$	22.6			$	(4.1	)		(18	)%

Non-GAAP Reconciliation - Franchised Dealerships Segment - Income (Loss) Before Taxes and Segment Income (Loss)
	Three Months Ended June 30,										Six Months Ended June 30,
	2024				2023			% Change			2024				2023			% Change
	(In millions)
Reported:
Income (loss) before taxes	$	52.7		$	145.9			(64	)%		$	115.4		$	255.8			(55	)%
Add: Impairment charges		—			—							1.0			—
Segment income (loss)	$	52.7		$	145.9			(64	)%		$	116.4		$	255.8			(54	)%
Adjustments:
Acquisition and disposition-related (gain) loss	$	—		$	(20.9	)					$	—		$	(20.9	)
Excess compensation related to CDK outage		11.2			—							11.2			—
Hail and storm damage charges		3.6			1.9							3.6			1.9
Severance and long-term compensation charges		—			—							2.2			—
Total pre-tax adjustments	$	14.8		$	(19.0	)					$	17.0		$	(19.0	)
Adjusted:
Segment income (loss)	$	67.5		$	126.9			(47	)%		$	133.4		$	236.8			(44	)%

Non-GAAP Reconciliation - EchoPark Segment - Income (Loss) Before Taxes and Segment Income (Loss)
	Three Months Ended June 30,											Six Months Ended June 30,
		2024				2023			% Change				2024				2023			% Change
	(In millions)
Reported:
Income (loss) before taxes	$	2.5			$	(115.4	)		102	%		$	(0.5	)		$	(162.3	)		100	%
Add: Impairment charges		1.4				62.6							1.4				62.6
Segment income (loss)	$	3.9			$	(52.8	)		107	%		$	0.9			$	(99.7	)		101	%
Adjustments:
Acquisition and disposition-related (gain) loss	$	(0.6	)		$	0.2						$	(0.6	)		$	0.2
Closed store accrued expenses		—				—							2.1				—
Excess compensation related to CDK outage		0.4				—							0.4				—
Loss (gain) on exit of leased dealerships		(3.0	)			0.4							(3.0	)			0.4
Severance and long-term compensation charges		0.7				2.2							2.8				4.2
Used vehicle inventory valuation adjustment		—				10.0							—				10.0
Total pre-tax adjustments	$	(2.5	)		$	12.8						$	1.7			$	14.8
Adjusted:
Segment income (loss)	$	1.4			$	(40.0	)		104	%		$	2.6			$	(84.9	)		103	%

Non-GAAP Reconciliation - Powersports Segment - Income (Loss) Before Taxes and Segment Income (Loss)
	Three Months Ended June 30,									Six Months Ended June 30,
	2024			2023			% Change				2024			2023			% Change
	(In millions)
Reported:
Income (loss) before taxes	$	0.5		$	2.0		(75	)%		$	(1.7	)		$	2.6		(165	)%
Add: Impairment charges		—			—						—				—
Segment income (loss)	$	0.5		$	2.0		(75	)%		$	(1.7	)		$	2.6		(165	)%

Non-GAAP Reconciliation - Consolidated - Net Income (Loss) and Diluted Earnings (Loss) Per Share
	Three Months Ended June 30, 2024									Three Months Ended June 30, 2023
	Weighted- Average Shares		Amount				Per Share Amount			Weighted- Average Shares		Amount				Per Share Amount
	(In millions, except per share amounts)
Reported net income (loss), diluted shares, and diluted earnings (loss) per share	34.9		$	41.2			$	1.18		36.0		$	23.4			$	0.65
Adjustments:
Acquisition and disposition-related gain (loss)			$	(0.6	)							$	(20.7	)
Excess compensation related to CDK outage				11.6									—
Hail and storm damage charges				3.6									1.9
Impairment charges				1.4									62.6
Loss (gain) on exit of leased dealerships				(3.0	)								0.4
Severance and long-term compensation charges				0.7									2.2
Used vehicle inventory valuation adjustment				—									10.0
Total pre-tax adjustments			$	13.7								$	56.4
Tax effect of above items				(3.6	)								(13.8	)
Adjusted net income (loss), diluted shares, and diluted earnings (loss) per share	34.9		$	51.3			$	1.47		36.0		$	66.0			$	1.83

	Six Months Ended June 30, 2024									Six Months Ended June 30, 2023
	Weighted- Average Shares		Net Income (Loss)				Per Share Amount			Weighted- Average Shares		Net Income (Loss)				Per Share Amount
	(In millions, except per share amounts)
Reported net income (loss), diluted shares, and diluted earnings (loss) per share	34.8		$	83.2			$	2.39		36.5		$	71.1			$	1.95
Adjustments:
Acquisition and disposition-related gain (loss)			$	(0.6	)							$	(20.7	)
Closed store accrued expenses				2.1									—
Excess compensation related to CDK outage				11.6									—
Hail and storm damage charges				3.6									1.9
Impairment charges				2.4									62.6
Loss (gain) on exit of leased dealerships				(3.0	)								0.4
Severance and long-term compensation charges				5.0									4.2
Used vehicle inventory valuation adjustment				—									10.0
Total pre-tax adjustments			$	21.1								$	58.4
Tax effect of above items				(5.6	)								(14.3	)
Adjusted net income (loss), diluted shares, and diluted earnings (loss) per share	34.8		$	98.7			$	2.84		36.5		$	115.2			$	3.16

Non-GAAP Reconciliation - Adjusted EBITDA
	Three Months Ended June 30, 2024															Three Months Ended June 30, 2023
	Franchised Dealerships Segment				EchoPark Segment				Powersports Segment			Total				Franchised Dealerships Segment				EchoPark Segment				Powersports Segment			Total
	(In millions)
Net income (loss)												$	41.2														$	23.4
Provision for income taxes													14.5															9.1
Income (loss) before taxes	$	52.7			$	2.5			$	0.5		$	55.7			$	145.9			$	(115.4	)		$	2.0		$	32.5
Non-floor plan interest (1)		26.5				0.7				0.8			28.0				25.8				0.8				0.6			27.2
Depreciation and amortization (2)		31.6				5.4				1.0			38.0				29.5				7.4				0.8			37.7
Stock-based compensation expense		5.9				—				—			5.9				5.6				—				—			5.6
Loss (gain) on exit of leased dealerships		—				(3.0	)			—			(3.0	)			—				0.4				—			0.4
Impairment charges		—				1.4				—			1.4				—				62.6				—			62.6
Loss on debt extinguishment		0.6				—				—			0.6				—				—				—			—
Severance and long-term compensation charges		—				0.8				—			0.8				—				2.2				—			2.2
Excess compensation related to CDK outage		11.2				0.4				—			11.6				—				—				—			—
Acquisition and disposition related (gain) loss		(0.3	)			(1.0	)			—			(1.3	)			(20.9	)			0.2				—			(20.7	)
Hail and storm damage charges		3.6				—				—			3.6				1.9				—				—			1.9
Used vehicle inventory valuation adjustment		—				—				—			—				—				10.0				—			10.0
Adjusted EBITDA	$	131.8			$	7.2			$	2.3		$	141.3			$	187.8			$	(31.8	)		$	3.4		$	159.4

	Six Months Ended June 30, 2024																Six Months Ended June 30, 2023
	Franchised Dealerships Segment				EchoPark Segment				Powersports Segment				Total				Franchised Dealerships Segment				EchoPark Segment				Powersports Segment			Total
	(In millions)
Net income (loss)													$	83.2														$	71.1
Provision for income taxes														30.0															25.0
Income (loss) before taxes	$	115.4			$	(0.5	)		$	(1.7	)		$	113.2			$	255.8			$	(162.3	)		$	2.6		$	96.1
Non-floor plan interest (1)		52.8				1.3				1.3				55.4				51.2				1.7				1.2			54.1
Depreciation & amortization (2)		63.1				10.8				2.0				75.9				57.7				14.4				1.5			73.6
Stock-based compensation expense		10.3				—				—				10.3				10.6				—				—			10.6
Loss (gain) on exit of leased dealerships		—				(3.0	)			—				(3.0	)			—				0.4				—			0.4
Impairment charges		1.0				1.4				—				2.4				—				62.6				—			62.6
Loss on debt extinguishment		0.6				—				—				0.6				—				—				—			—
Severance and long-term compensation charges		2.2				2.9				—				5.1				—				4.2				—			4.2
Excess compensation related to CDK outage		11.2				0.4				—				11.6				—				—				—			—
Acquisition and disposition related (gain) loss		(0.3	)			(1.0	)			—				(1.3	)			(20.9	)			0.2				—			(20.7	)
Hail and storm damage charges		3.6				—				—				3.6				1.9				—				—			1.9
Used vehicle inventory valuation adjustment		—				—				—				—				—				10.0				—			10.0
Closed store accrued expenses	$	—			$	2.1			$	—			$	2.1			$	—			$	—			$	—		$	—
Adjusted EBITDA	$	259.9			$	14.4			$	1.6			$	275.9			$	356.3			$	(68.8	)		$	5.3		$	292.8

(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.

Non-GAAP Reconciliation - EchoPark Segment Operations and Closed Stores
	Three Months Ended June 30, 2024											Three Months Ended June 30, 2023												Better / (Worse) % Change
	EchoPark Operations			Closed Stores				Total EchoPark Segment				EchoPark Operations				Closed Stores				Total EchoPark Segment				EchoPark Operations			Closed Stores			Total EchoPark Segment
	(In millions, except unit and per unit data)
Total revenues	$	518.1		$	(0.8	)		$	517.3			$	468.9			$	131.7			$	600.6			10	%		(101	)%		(14	)%
Total gross profit	$	51.9		$	(0.8	)		$	51.1			$	18.8			$	8.0			$	26.8			176	%		(110	)%		91	%
Income (loss) before taxes	$	2.7		$	(0.2	)		$	2.5			$	(32.0	)		$	(83.4	)		$	(115.4	)		108	%		100	%		102	%
Non-floor plan interest (1)		0.9			(0.2	)			0.7				0.4				0.4				0.8			NM			NM			NM
Depreciation and amortization (2)		5.4			—				5.4				5.5				1.9				7.4			NM			NM			NM
Acquisition and disposition-related (gain) loss		—			(1.0	)			(1.0	)			—				0.2				0.2			NM			NM			NM
Impairment charges		—			1.4				1.4				—				62.6				62.6			NM			NM			NM
Loss (gain) on exit of leased dealerships		—			(3.0	)			(3.0	)			—				0.4				0.4			NM			NM			NM
Severance and long-term compensation charges		—			0.8				0.8				—				2.2				2.2			NM			NM			NM
Excess compensation related to CDK outage					0.4				0.4				—				—				—			NM			NM			NM
Used vehicle inventory valuation adjustment		—			—				—				7.7				2.3				10.0			NM			NM			NM
Adjusted EBITDA	$	9.0		$	(1.8	)		$	7.2			$	(18.4	)		$	(13.4	)		$	(31.8	)		149	%		87	%		123	%
Used vehicle unit sales volume		16,641			—				16,641				13,529				3,555				17,084			23	%		(100	)%		(3	)%
Total used vehicle and F&I gross profit per unit	$	3,127		$	—			$	3,078			$	2,091			$	2,387			$	1,569			50	%		(100	)%		96	%

NM = Not Meaningful

Non-GAAP Reconciliation - EchoPark Segment Operations and Closed Stores (Continued)
	Six Months Ended June 30, 2024											Six Months Ended June 30, 2023												Better / (Worse) % Change
	EchoPark Operations			Closed Stores				Total EchoPark Segment				EchoPark Operations				Closed Stores				Total EchoPark Segment				EchoPark Operations			Closed Stores			Total EchoPark Segment
	(In millions, except unit and per unit data)
Total revenues	$	1,064.3		$	12.4			$	1,076.7			$	958.8			$	292.3			$	1,251.1			11	%		(96	)%		(14	)%
Total gross profit	$	105.0		$	(1.3	)		$	103.7			$	47.9			$	18.3			$	66.2			119	%		(107	)%		57	%
Income (loss) before taxes	$	6.0		$	(6.5	)		$	(0.5	)		$	(60.1	)		$	(102.2	)		$	(162.3	)		110	%		94	%		100	%
Non-floor plan interest (1)		1.1			0.2				1.3				1.0				0.7				1.7			NM			NM			NM
Depreciation and amortization (2)		10.8			—				10.8				10.8				3.6				14.4			NM			NM			NM
Acquisition and disposition-related (gain) loss		—			(1.0	)			(1.0	)			—				0.2				0.2			NM			NM			NM
Closed store accrued expenses		—			2.1				2.1				—				—				—			NM			NM			NM
Impairment charges		—			1.4				1.4				—				62.6				62.6			NM			NM			NM
Loss (gain) on exit of leased dealerships		—			(3.0	)			(3.0	)			—				0.4				0.4			NM			NM			NM
Severance and long-term compensation charges		—			2.9				2.9				—				4.2				4.2			NM			NM			NM
Excess compensation related to CDK outage		0.4			—				0.4				—				—				—			NM			NM			NM
Used vehicle inventory valuation adjustment		—			—				—				7.7				2.3				10.0			NM			NM			NM
Adjusted EBITDA	$	18.3		$	(3.9	)		$	14.4			$	(40.6	)		$	(28.2	)		$	(68.8	)		145	%		86	%		121	%
Used vehicle unit sales volume		34,259			363				34,622				29,080				7,984				37,064			18	%		(95	)%		(7	)%
Total used vehicle and F&I gross profit per unit	$	3,071		$	(1,954	)		$	3,014			$	1,953			$	2,333			$	1,750			57	%		(184	)%		72	%

NM = Not Meaningful
(1)	Includes interest expense, other, net in the accompanying consolidated statements of operations, net of any amortization of debt issuance costs or net debt discount/premium included in (2) below.
(2)	Includes the following line items from the accompanying consolidated statements of cash flows: depreciation and amortization of property and equipment; debt issuance cost amortization; and debt discount amortization, net of premium amortization.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240805559507/en/

Company Contacts

Investor Inquiries:

Heath Byrd, Executive Vice President and Chief Financial Officer

Danny Wieland, Vice President, Investor Relations & Financial Reporting

ir@sonicautomotive.com

Press Inquiries:

Sonic Automotive Media Relations

media.relations@sonicautomotive.com

Source: Sonic Automotive, Inc.

FAQ

What was Sonic Automotive's (SAH) total revenue for Q2 2024?

Sonic Automotive (SAH) reported total revenues of $3.5 billion for Q2 2024, down 5% year-over-year.

How did the CDK Global software outage affect Sonic Automotive's (SAH) Q2 2024 results?

The CDK Global software outage is estimated to have reduced Sonic Automotive's (SAH) Q2 2024 GAAP income before taxes by approximately $30 million, or $0.64 in diluted earnings per share.

What was EchoPark Segment's performance in Q2 2024 for Sonic Automotive (SAH)?

EchoPark Segment achieved record Q2 adjusted EBITDA of $7.2 million, up 123% year-over-year, with total gross profit increasing 91% to $51.1 million for Sonic Automotive (SAH).

How did Sonic Automotive's (SAH) Franchised Dealerships Segment perform in Q2 2024?

Sonic Automotive's (SAH) Franchised Dealerships Segment experienced margin normalization, with same-store retail new vehicle gross profit per unit down 29% to $3,590 in Q2 2024.