Sonic Automotive Reports 2nd Quarter 2020 EPS Growth

Accelerated EchoPark Expansion Expected To Generate Over $10 Billion In Incremental Revenue By 2025

CHARLOTTE, N.C.--(BUSINESS WIRE)-- Sonic Automotive, Inc. (“Sonic” or the “Company”) (NYSE:SAH), one of the nation’s largest automotive retailers, today reported financial results for the second quarter ended June 30, 2020.

Second Quarter Highlights

  • Earnings per diluted share from continuing operations of $0.71 for the second quarter of 2020, compared to $0.62 for the second quarter of 2019 (included in the results for the second quarter of 2020 is a non-recurring tax benefit of $3.2 million, or $0.07 per share)
  • SG&A expenses as a percentage of gross profit were 74.9% for the second quarter of 2020, compared to 77.2% for the second quarter of 2019, a 230-basis point improvement (total SG&A expenses for the second quarter of 2020 decreased $64.2 million, or 22%, compared to the second quarter of 2019)
  • Total Sonic consolidated second quarter 2020 revenues of $2.1 billion and gross profit of $307.4 million
  • EchoPark second quarter 2020 revenues of $315.3 million, up 8% from the second quarter of 2019
  • EchoPark second quarter 2020 retail sales volume of 13,207 units, up 5% from the second quarter of 2019
  • EchoPark segment income of $2.6 million, up 52% from the second quarter of 2019
  • Same store Franchised Dealerships Segment operating results for the second quarter of 2020, compared to the second quarter of 2019:
    • Revenues down 19%, gross profit down 19%
    • New vehicle unit sales volume down 25%; new vehicle gross profit per unit up 9%, to $2,218
    • Retail used vehicle unit sales volume down 12%; retail used vehicle gross profit per unit down 14%, to $1,122
    • Parts, service and collision repair gross profit down 24%; customer pay gross profit down 16%
    • Finance and insurance (“F&I”) gross profit down 8% (all-time record quarterly F&I gross profit per retail unit of $1,946, up 14%, on a total Sonic consolidated basis)

Commentary

David Smith, Sonic’s and EchoPark’s Chief Executive Officer, commented, “Our second quarter results reflect not only a dramatic operating improvement since the onset of COVID-19, but also an all-time record monthly profit in June. The record-setting momentum we saw during the month of June has continued throughout July to date.”

Mr. Smith continued, “We continue to offer our guests a transparent, guest-centric vehicle purchase experience, meeting their individual needs by offering an integrated online and on-site sales experience. To enable guests to choose their preferred buying approach, we are proud to announce an historic strategic partnership with Cox Automotive and Darwin Automotive to develop a first of its kind proprietary e-commerce platform and user interface. This digital retailing partnership will accelerate our EchoPark expansion plans and elevate the online retail guest experience on our franchised dealership websites and EchoPark.com beginning in the fourth quarter of 2020.”

Jeff Dyke, Sonic’s and EchoPark’s President, commented, “I am extremely proud of the way our team has responded to the challenges of the past few months and the positive impact they have had on our business. EchoPark has continued to see a v-shaped recovery in sales volume and improved profitability, surpassing our original pre-pandemic forecasts for the month of June. For the second quarter, EchoPark segment income increased 52%, demonstrating the leverage and profit potential of this model. Based on the significant success of EchoPark, we are accelerating EchoPark’s expansion. We expect EchoPark to sell over half a million vehicles annually by 2025, through a 140-point nationwide distribution network and expanded e-commerce capabilities, generating incremental revenue in excess of $10 billion annually.”

Heath Byrd, Sonic’s and EchoPark’s Chief Financial Officer, commented, “We continue to manage expenses and capital expenditure levels in the short term to bolster our financial flexibility and address the challenges of COVID-19. These actions have been extremely successful in improving operational efficiencies and enhancing our overall profitability. Longer term, we remain committed to increasing revenues and maximizing profitability through further expansion of EchoPark, strategic growth of our franchised dealerships and more aggressive pursuit of new avenues for sales growth through omni-channel selling, including online, on-site and hybrid channels. In addition, we remain committed to reducing SG&A expenses by $84 million annualized, on a go-forward basis, as compared to pre-COVID-19 levels.”

Financial Position

As of June 30, 2020, Sonic’s total available liquidity increased to $455.1 million, up from $311.5 million as of March 31, 2020. Sonic’s liquidity as of June 30, 2020 consists of $115.7 million of cash on hand, $83.9 million of floor plan deposit balances and $255.5 million of availability under our credit facilities. From a debt perspective, Sonic has no significant near-term debt maturities.

Dividend

Sonic’s Board of Directors approved a quarterly cash dividend of $0.10 per share payable on October 15, 2020 to all stockholders of record on September 15, 2020.

Outlook

Sonic expects to provide the next mid-quarter update to its 2020 outlook during the week of September 14th. The COVID-19 pandemic could impact both our outlook and future results depending on its continued evolution.

Second Quarter 2020 Earnings Conference Call

Senior management will host a conference call today at 11:00 A.M. (Eastern) to discuss the quarter’s results. To access the live broadcast of the call over the Internet, please go to ir.sonicautomotive.com. The conference call will also be available live by dialing in 15 minutes prior to the start of the call at:

Domestic: (833) 519-1243
International: (914) 800-3816
Conference ID: 8236339

A conference call replay will be available one hour following the call for 14 days and can be accessed by calling:

Domestic: (855) 859-2056
International: (404) 537-3406
Conference ID: 8236339

Investor presentation and earnings press release materials for the Company’s earnings conference call will be accessible beginning the morning of the conference call on the Company’s website 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 an 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. 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, anticipated future growth in our EchoPark Segment, expected incremental EchoPark revenues, anticipated future EchoPark unit sales volume, expected SG&A expense reductions, economic conditions in the markets in which we operate, new and used vehicle industry sales volume, anticipated liquidity position, expected future capital expenditures, 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, Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 and other reports and information filed with the Securities and Exchange Commission (the “SEC”). The Company does not undertake any obligation to update forward-looking information, except as required under federal securities laws and the rules and regulations of the SEC.

Non-GAAP Financial Measures

This press release and the attached financial tables contain certain non-GAAP financial measures as defined under SEC rules, such as segment income. As required by SEC rules, the Company provides reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures. 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)

 

2020

 

2019

 

% Change

 

2020

 

2019

 

% Change

 

(In thousands, except per share amounts)

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

$

900,003

 

 

$

1,204,754

 

 

(25.3

)%

 

$

1,859,492

 

 

$

2,271,088

 

 

(18.1

)%

Used vehicles

808,877

 

 

885,627

 

 

(8.7

)%

 

1,658,930

 

 

1,705,992

 

 

(2.8

)%

Wholesale vehicles

33,175

 

 

50,039

 

 

(33.7

)%

 

81,718

 

 

104,810

 

 

(22.0

)%

Total vehicles

1,742,055

 

 

2,140,420

 

 

(18.6

)%

 

3,600,140

 

 

4,081,890

 

 

(11.8

)%

Parts, service and collision repair

259,058

 

 

355,312

 

 

(27.1

)%

 

593,738

 

 

696,742

 

 

(14.8

)%

Finance, insurance and other, net

110,773

 

 

118,349

 

 

(6.4

)%

 

226,064

 

 

224,587

 

 

0.7

%

Total revenues

2,111,886

 

 

2,614,081

 

 

(19.2

)%

 

4,419,942

 

 

5,003,219

 

 

(11.7

)%

Cost of Sales:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

(854,617

)

 

(1,148,354

)

 

25.6

%

 

(1,768,690

)

 

(2,160,892

)

 

18.2

%

Used vehicles

(781,506

)

 

(848,898

)

 

7.9

%

 

(1,599,428

)

 

(1,632,256

)

 

2.0

%

Wholesale vehicles

(33,601

)

 

(50,752

)

 

33.8

%

 

(82,303

)

 

(106,789

)

 

22.9

%

Total vehicles

(1,669,724

)

 

(2,048,004

)

 

18.5

%

 

(3,450,421

)

 

(3,899,937

)

 

11.5

%

Parts, service and collision repair

(134,779

)

 

(184,766

)

 

27.1

%

 

(311,560

)

 

(362,960

)

 

14.2

%

Total cost of sales

(1,804,503

)

 

(2,232,770

)

 

19.2

%

 

(3,761,981

)

 

(4,262,897

)

 

11.8

%

Gross profit

307,383

 

 

381,311

 

 

(19.4

)%

 

657,961

 

 

740,322

 

 

(11.1

)%

Selling, general and administrative expenses

(230,359

)

 

(294,532

)

 

21.8

%

 

(512,515

)

 

(541,626

)

 

5.4

%

Impairment charges

(833

)

 

 

 

(100.0

)%

 

(268,833

)

 

(1,952

)

 

(13,672.2

)%

Depreciation and amortization

(22,647

)

 

(23,806

)

 

4.9

%

 

(44,944

)

 

(46,456

)

 

3.3

%

Operating income (loss)

53,544

 

 

62,973

 

 

(15.0

)%

 

(168,331

)

 

150,288

 

 

(212.0

)%

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

Interest expense, floor plan

(6,314

)

 

(12,518

)

 

49.6

%

 

(16,822

)

 

(25,744

)

 

34.7

%

Interest expense, other, net

(9,797

)

 

(13,628

)

 

28.1

%

 

(20,762

)

 

(26,481

)

 

21.6

%

Other income (expense), net

 

 

(5

)

 

100.0

%

 

100

 

 

95

 

 

(5.3

)%

Total other income (expense)

(16,111

)

 

(26,151

)

 

38.4

%

 

(37,484

)

 

(52,130

)

 

28.1

%

Income (loss) from continuing operations before taxes

37,433

 

 

36,822

 

 

1.7

%

 

(205,815

)

 

98,158

 

 

(309.7

)%

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

(6,437

)

 

(10,071

)

 

36.1

%

 

37,680

 

 

(29,058

)

 

229.7

%

Income (loss) from continuing operations

30,996

 

 

26,751

 

 

15.9

%

 

(168,135

)

 

69,100

 

 

(343.3

)%

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from discontinued operations before taxes

(289

)

 

(213

)

 

(35.7

)%

 

(573

)

 

(393

)

 

(45.8

)%

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

84

 

 

61

 

 

37.7

%

 

166

 

 

114

 

 

45.6

%

Income (loss) from discontinued operations

(205

)

 

(152

)

 

(34.9

)%

 

(407

)

 

(279

)

 

(45.9

)%

Net income (loss)

$

30,791

 

 

$

26,599

 

 

15.8

%

 

$

(168,542

)

 

$

68,821

 

 

(344.9

)%

Basic earnings (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share from continuing operations

$

0.72

 

 

$

0.62

 

 

16.1

%

 

$

(3.93

)

 

$

1.61

 

 

(344.1

)%

Earnings (loss) per share from discontinued operations

 

 

 

 

%

 

(0.01

)

 

(0.01

)

 

%

Earnings (loss) per common share

$

0.72

 

 

$

0.62

 

 

16.1

%

 

$

(3.94

)

 

$

1.60

 

 

(346.3

)%

Weighted-average common shares outstanding

42,940

 

 

43,066

 

 

0.3

%

 

42,779

 

 

42,953

 

 

0.4

%

Diluted earnings (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share from continuing operations

$

0.71

 

 

$

0.62

 

 

14.5

%

 

$

(3.93

)

 

$

1.60

 

 

(345.6

)%

Earnings (loss) per share from discontinued operations

 

 

(0.01

)

 

100.0

%

 

(0.01

)

 

 

 

(100.0

)%

Earnings (loss) per common share

$

0.71

 

 

$

0.61

 

 

16.4

%

 

$

(3.94

)

 

$

1.60

 

 

(346.3

)%

Weighted-average common shares outstanding

43,575

 

 

43,230

 

 

(0.8

)%

 

42,779

 

 

43,060

 

 

0.7

%

Dividends declared per common share

$

0.10

 

 

$

0.10

 

 

%

 

$

0.20

 

 

$

0.20

 

 

%

 

Franchised Dealerships Segment - Reported

 

 

Three Months Ended June 30,

 

Better /
(Worse)

 

Six Months Ended June 30,

 

Better /
(Worse)

 

2020

 

2019

 

% Change

 

2020

 

2019

 

% Change

 

(In thousands, except unit and per unit data)

Revenues:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

$

900,003

 

 

$

1,204,754

 

 

(25.3

)%

 

$

1,859,492

 

 

$

2,271,088

 

 

(18.1

)%

Used vehicles

535,699

 

 

637,090

 

 

(15.9

)%

 

1,102,587

 

 

1,241,039

 

 

(11.2

)%

Wholesale vehicles

28,509

 

 

43,720

 

 

(34.8

)%

 

70,948

 

 

96,253

 

 

(26.3

)%

Total vehicles

1,464,211

 

 

1,885,564

 

 

(22.3

)%

 

3,033,027

 

 

3,608,380

 

 

(15.9

)%

Parts, service and collision repair

251,998

 

 

347,337

 

 

(27.4

)%

 

576,499

 

 

683,563

 

 

(15.7

)%

Finance, insurance and other, net

80,401

 

 

89,507

 

 

(10.2

)%

 

163,429

 

 

170,028

 

 

(3.9

)%

Total revenues

1,796,610

 

 

2,322,408

 

 

(22.6

)%

 

3,772,955

 

 

4,461,971

 

 

(15.4

)%

Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

45,386

 

 

56,400

 

 

(19.5

)%

 

90,802

 

 

110,196

 

 

(17.6

)%

Used vehicles

30,416

 

 

37,454

 

 

(18.8

)%

 

62,730

 

 

74,191

 

 

(15.4

)%

Wholesale vehicles

(357

)

 

(670

)

 

46.7

%

 

(440

)

 

(1,874

)

 

76.5

%

Total vehicles

75,445

 

 

93,184

 

 

(19.0

)%

 

153,092

 

 

182,513

 

 

(16.1

)%

Parts, service and collision repair

124,466

 

 

170,707

 

 

(27.1

)%

 

282,562

 

 

334,154

 

 

(15.4

)%

Finance, insurance and other, net

80,401

 

 

89,507

 

 

(10.2

)%

 

163,429

 

 

170,028

 

 

(3.9

)%

Total gross profit

280,312

 

 

353,398

 

 

(20.7

)%

 

599,083

 

 

686,695

 

 

(12.8

)%

Selling, general and administrative expenses

(209,496

)

 

(272,331

)

 

23.1

%

 

(465,914

)

 

(499,330

)

 

6.7

%

Impairment charges

(833

)

 

 

 

(100.0

)%

 

(268,833

)

 

(26

)

 

NM

Depreciation and amortization

(19,895

)

 

(21,144

)

 

5.9

%

 

(39,484

)

 

(41,381

)

 

4.6

%

Operating income (loss)

50,088

 

 

59,923

 

 

(16.4

)%

 

(175,148

)

 

145,958

 

 

(220.0

)%

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

Interest expense, floor plan

(5,675

)

 

(11,597

)

 

51.1

%

 

(15,283

)

 

(24,102

)

 

36.6

%

Interest expense, other, net

(9,557

)

 

(13,192

)

 

27.6

%

 

(20,156

)

 

(25,606

)

 

21.3

%

Other income (expense), net

 

 

(5

)

 

100.0

%

 

100

 

 

34

 

 

194.1

%

Total other income (expense)

(15,232

)

 

(24,794

)

 

38.6

%

 

(35,339

)

 

(49,674

)

 

28.9

%

Income (loss) before taxes

34,856

 

 

35,129

 

 

(0.8

)%

 

(210,487

)

 

96,284

 

 

(318.6

)%

Add: impairment charges

833

 

 

 

 

(100.0

)%

 

268,833

 

 

26

 

 

NM

Segment income (loss)

$

35,689

 

 

$

35,129

 

 

(1.6

)%

 

$

58,346

 

 

$

96,310

 

 

(39.4

)%

 

 

 

 

 

 

 

 

 

 

 

 

Unit Sales Volume:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

19,891

 

 

28,196

 

 

(29.5

)%

 

41,615

 

 

53,393

 

 

(22.1

)%

Used vehicles

23,973

 

 

28,871

 

 

(17.0

)%

 

50,011

 

 

56,283

 

 

(11.1

)%

Wholesale vehicles

4,827

 

 

6,960

 

 

(30.6

)%

 

11,737

 

 

15,108

 

 

(22.3

)%

Retail new & used vehicles

43,864

 

 

57,067

 

 

(23.1

)%

 

91,626

 

 

109,676

 

 

(16.5

)%

Used:New Ratio

1.21

 

 

1.02

 

 

17.7

%

 

1.20

 

 

1.05

 

 

14.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit Per Unit:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

$

2,282

 

 

$

2,000

 

 

14.1

%

 

$

2,182

 

 

$

2,064

 

 

5.7

%

Used vehicles

$

1,269

 

 

$

1,297

 

 

(2.2

)%

 

$

1,254

 

 

$

1,318

 

 

(4.9

)%

Finance, insurance and other, net

$

1,839

 

 

$

1,581

 

 

16.3

%

 

$

1,798

 

 

$

1,561

 

 

15.2

%

NM = Not Meaningful

 

Franchised Dealerships Segment - Same Store

 

 

Three Months Ended June 30,

 

Better /
(Worse)

 

Six Months Ended June 30,

 

Better /
(Worse)

 

2020

 

2019

 

% Change

 

2020

 

2019

 

% Change

 

(In thousands, except unit and per unit data)

Revenues:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

$

899,655

 

 

$

1,150,601

 

 

(21.8

)%

 

$

1,857,489

 

 

$

2,155,333

 

 

(13.8

)%

Used vehicles

535,252

 

 

609,567

 

 

(12.2

)%

 

1,099,852

 

 

1,183,279

 

 

(7.1

)%

Wholesale vehicles

28,407

 

 

41,795

 

 

(32.0

)%

 

70,720

 

 

91,383

 

 

(22.6

)%

Total vehicles

1,463,314

 

 

1,801,963

 

 

(18.8

)%

 

3,028,061

 

 

3,429,995

 

 

(11.7

)%

Parts, service and collision repair

252,330

 

 

334,300

 

 

(24.5

)%

 

576,297

 

 

653,890

 

 

(11.9

)%

Finance, insurance and other, net

75,558

 

 

82,399

 

 

(8.3

)%

 

154,149

 

 

155,819

 

 

(1.1

)%

Total revenues

$

1,791,202

 

 

$

2,218,662

 

 

(19.3

)%

 

$

3,758,507

 

 

$

4,239,704

 

 

(11.3

)%

Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

$

44,111

 

 

$

53,834

 

 

(18.1

)%

 

$

89,519

 

 

$

105,455

 

 

(15.1

)%

Used vehicles

26,874

 

 

35,182

 

 

(23.6

)%

 

59,153

 

 

67,640

 

 

(12.5

)%

Wholesale vehicles

(317

)

 

(421

)

 

24.7

%

 

(375

)

 

(1,421

)

 

73.6

%

Total vehicles

70,668

 

 

88,595

 

 

(20.2

)%

 

148,297

 

 

171,674

 

 

(13.6

)%

Parts, service and collision repair

124,019

 

 

164,061

 

 

(24.4

)%

 

281,803

 

 

318,774

 

 

(11.6

)%

Finance, insurance and other, net

75,558

 

 

82,399

 

 

(8.3

)%

 

154,149

 

 

155,819

 

 

(1.1

)%

Total gross profit

$

270,245

 

 

$

335,055

 

 

(19.3

)%

 

$

584,249

 

 

$

646,267

 

 

(9.6

)%

 

 

 

 

 

 

 

 

 

 

 

 

Unit Sales Volume:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

19,884

 

 

26,359

 

 

(24.6

)%

 

41,575

 

 

49,450

 

 

(15.9

)%

Used vehicles

23,949

 

 

27,110

 

 

(11.7

)%

 

49,871

 

 

52,601

 

 

(5.2

)%

Wholesale vehicles

4,811

 

 

6,362

 

 

(24.4

)%

 

11,703

 

 

13,807

 

 

(15.2

)%

Retail new & used vehicles

43,833

 

 

53,469

 

 

(18.0

)%

 

91,446

 

 

102,051

 

 

(10.4

)%

Used:New Ratio

1.20

 

 

1.03

 

 

17.1

%

 

1.20

 

 

1.06

 

 

12.8

%

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit Per Unit:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

$

2,218

 

 

$

2,042

 

 

8.6

%

 

$

2,153

 

 

$

2,133

 

 

0.9

%

Used vehicles

$

1,122

 

 

$

1,298

 

 

(13.6

)%

 

$

1,186

 

 

$

1,286

 

 

(7.8

)%

Finance, insurance and other, net

$

1,730

 

 

$

1,554

 

 

11.3

%

 

$

1,699

 

 

$

1,538

 

 

10.5

%

 

EchoPark Segment - Reported

 

 

Three Months Ended June 30,

 

Better /
(Worse)

 

Six Months Ended June 30,

 

Better /
(Worse)

 

2020

 

2019

 

% Change

 

2020

 

2019

 

% Change

 

(In thousands, except unit and per unit data)

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Used vehicles

$

273,178

 

 

$

248,537

 

 

9.9

%

 

$

556,343

 

 

$

464,953

 

 

19.7

%

Wholesale vehicles

4,666

 

 

6,319

 

 

(26.2

)%

 

10,770

 

 

8,557

 

 

25.9

%

Total vehicles

277,844

 

 

254,856

 

 

9.0

%

 

567,113

 

 

473,510

 

 

19.8

%

Parts, service and collision repair

7,060

 

 

7,975

 

 

(11.5

)%

 

17,239

 

 

13,179

 

 

30.8

%

Finance, insurance and other, net

30,372

 

 

28,842

 

 

5.3

%

 

62,635

 

 

54,559

 

 

14.8

%

Total revenues

315,276

 

 

291,673

 

 

8.1

%

 

646,987

 

 

541,248

 

 

19.5

%

Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

Used vehicles

(3,045

)

 

(725

)

 

(320.0

)%

 

(3,228

)

 

(455

)

 

(609.5

)%

Wholesale vehicles

(70

)

 

(42

)

 

(60.5

)%

 

(146

)

 

(105

)

 

(38.1

)%

Total vehicles

(3,115

)

 

(767

)

 

306.1

%

 

(3,374

)

 

(560

)

 

502.5

%

Parts, service and collision repair

(186

)

 

(162

)

 

(14.8

)%

 

(383

)

 

(372

)

 

(3.0

)%

Finance, insurance and other, net

30,372

 

 

28,842

 

 

5.3

%

 

62,635

 

 

54,559

 

 

14.8

%

Total gross profit

27,071

 

 

27,913

 

 

(3.0

)%

 

58,878

 

 

53,627

 

 

9.8

%

Selling, general and administrative expenses

(20,863

)

 

(22,201

)

 

6.0

%

 

(46,601

)

 

(42,296

)

 

(10.2

)%

Impairment charges

 

 

 

 

%

 

 

 

(1,926

)

 

100.0

%

Depreciation and amortization

(2,752

)

 

(2,662

)

 

(3.4

)%

 

(5,460

)

 

(5,075

)

 

(7.6

)%

Operating income (loss)

3,456

 

 

3,050

 

 

13.3

%

 

6,817

 

 

4,330

 

 

57.4

%

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

Interest expense, floor plan

(639

)

 

(921

)

 

30.6

%

 

(1,539

)

 

(1,642

)

 

6.3

%

Interest expense, other, net

(240

)

 

(436

)

 

45.0

%

 

(606

)

 

(875

)

 

30.7

%

Other income (expense), net

 

 

 

 

%

 

 

 

61

 

 

(100.0

)%

Total other income (expense)

(879

)

 

(1,357

)

 

35.2

%

 

(2,145

)

 

(2,456

)

 

12.7

%

Income (loss) before taxes

2,577

 

 

1,693

 

 

52.2

%

 

4,672

 

 

1,874

 

 

149.3

%

Add: impairment charges

 

 

 

 

%

 

 

 

(1,926

)

 

100.0

%

Segment income (loss)

$

2,577

 

 

$

1,693

 

 

52.2

%

 

$

4,672

 

 

$

3,800

 

 

22.9

%

 

 

 

 

 

 

 

 

 

 

 

 

Unit Sales Volume:

 

 

 

 

 

 

 

 

 

 

 

Used vehicles

13,207

 

 

12,587

 

 

4.9

%

 

27,193

 

 

23,638

 

 

15.0

%

Wholesale vehicles

1,454

 

 

1,686

 

 

4.8

%

 

3,219

 

 

2,185

 

 

47.3

%

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit Per Unit:

 

 

 

 

 

 

 

 

 

 

 

Total used vehicle and F&I

$

2,069

 

 

$

2,234

 

 

(7.4

)%

 

$

2,185

 

 

$

2,289

 

 

(4.5

)%

 

EchoPark Segment - Same Store

 

 

Three Months Ended June 30,

 

Better /
(Worse)

 

Six Months Ended June 30,

 

Better /
(Worse)

 

2020

 

2019

 

% Change

 

2020

 

2019

 

% Change

 

(In thousands, except unit and per unit data)

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Used vehicles

$

243,043

 

 

$

248,536

 

 

(2.2

)%

 

$

508,343

 

 

$

464,953

 

 

9.3

%

Wholesale vehicles

4,349

 

 

6,320

 

 

(31.2

)%

 

10,223

 

 

8,556

 

 

19.5

%

Total vehicles

247,392

 

 

254,856

 

 

(2.9

)%

 

518,566

 

 

473,509

 

 

9.5

%

Parts, service and collision repair

6,277

 

 

7,974

 

 

(21.3

)%

 

15,852

 

 

13,179

 

 

20.3

%

Finance, insurance and other, net

27,049

 

 

28,605

 

 

(5.4

)%

 

57,273

 

 

54,252

 

 

5.6

%

Total revenues

$

280,718

 

 

$

291,435

 

 

(3.7

)%

 

$

591,691

 

 

$

540,940

 

 

9.4

%

Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

Used vehicles

$

(3,988

)

 

$

(2,464

)

 

(61.9

)%

 

$

(5,832

)

 

$

(2,721

)

 

(114.3

)%

Wholesale vehicles

(69

)

 

(42

)

 

(64.3

)%

 

(139

)

 

(105

)

 

(32.4

)%

Total vehicles

(4,057

)

 

(2,506

)

 

61.9

%

 

(5,971

)

 

(2,826

)

 

111.3

%

Parts, service and collision repair

(141

)

 

(141

)

 

%

 

(299

)

 

(351

)

 

14.8

%

Finance, insurance and other, net

27,049

 

 

28,605

 

 

(5.4

)%

 

57,273

 

 

54,252

 

 

5.6

%

Total gross profit

$

22,851

 

 

$

25,958

 

 

(12.0

)%

 

$

51,003

 

 

$

51,075

 

 

(0.1

)%

 

 

 

 

 

 

 

 

 

 

 

 

Unit Sales Volume:

 

 

 

 

 

 

 

 

 

 

 

Used vehicles

11,716

 

 

12,587

 

 

(6.9

)%

 

24,783

 

 

23,638

 

 

4.8

%

Wholesale vehicles

1,319

 

 

1,686

 

 

(21.8

)%

 

2,995

 

 

2,185

 

 

37.1

%

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit Per Unit:

 

 

 

 

 

 

 

 

 

 

 

Total used vehicle and F&I

$

1,968

 

 

$

2,077

 

 

(5.2

)%

 

$

2,076

 

 

$

2,180

 

 

(4.8

)%

 

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

 

 

Three Months Ended June 30,

 

Better / (Worse)

 

2020

 

2019

 

Change

 

% Change

 

(In thousands)

Reported:

 

 

 

 

 

 

 

Compensation

$

140,266

 

 

$

181,197

 

 

$

40,931

 

 

22.6

%

Advertising

8,087

 

 

15,402

 

 

7,315

 

 

47.5

%

Rent

13,223

 

 

13,336

 

 

113

 

 

0.8

%

Other

68,783

 

 

84,597

 

 

15,814

 

 

18.7

%

Total SG&A expenses

$

230,359

 

 

$

294,532

 

 

$

64,173

 

 

21.8

%

 

 

 

 

 

 

 

 

Reported:

 

 

 

 

 

 

 

SG&A expenses as a % of gross profit:

 

 

 

 

 

 

 

Compensation

45.6

%

 

47.5

%

 

190

 

bps

Advertising

2.6

%

 

4.0

%

 

140

 

bps

Rent

4.3

%

 

3.5

%

 

(80

bps

Other

22.4

%

 

22.2

%

 

(20

bps

Total SG&A expenses as a % of gross profit

74.9

%

 

77.2

%

 

230

 

bps

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

Better / (Worse)

 

2020

 

2019

 

Change

 

% Change

 

(In thousands)

Reported:

 

 

 

 

 

 

 

Compensation

$

314,688

 

 

$

365,381

 

 

$

50,693

 

 

13.9

%

Advertising

22,222

 

 

30,453

 

 

8,231

 

 

27.0

%

Rent

27,088

 

 

28,586

 

 

1,498

 

 

5.2

%

Other

148,517

 

 

117,206

 

 

(31,311

 

(26.7

)%

Total SG&A expenses

$

512,515

 

 

$

541,626

 

 

$

29,111

 

 

5.4

%

 

 

 

 

 

 

 

 

Reported:

 

 

 

 

 

 

 

SG&A expenses as a % of gross profit:

 

 

 

 

 

 

 

Compensation

47.8

%

 

49.4

%

 

160

 

bps

Advertising

3.4

%

 

4.1

%

 

70

 

bps

Rent

4.1

%

 

3.9

%

 

(20

bps

Other

22.6

%

 

15.8

%

 

(680

bps

Total SG&A expenses as a % of gross profit

77.9

%

 

73.2

%

 

(470

bps

 

Investor Inquiries:
Heath Byrd, Executive Vice President and Chief Financial Officer (704) 566-2400
Danny Wieland, Investor Relations (704) 927-3462

Press Inquiries:
Danielle DeVoren / Anthony Feldman
212-896-1272 / 347-487-6194
ddevoren@kcsa.com/afeldman@kcsa.com

Source: Sonic Automotive, Inc.