Sonic Automotive Reports Record Third Quarter Revenues

Strategic Adjustments to EchoPark Business Drove Improvements in EchoPark Segment Unit Sales Volume and Profitability in the Third Quarter

Repurchased 1.7 Million Shares of Class A Common Stock During the Third Quarter

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 third quarter ended September 30, 2023.

Third Quarter 2023 Financial Summary

  • Record third quarter revenues of $3.6 billion, up 6% year-over-year; gross profit of $582.2 million, flat year-over-year
  • Reported third quarter net income of $68.4 million, down 22% year-over-year ($1.92 earnings per diluted share, down 14% year-over-year)
    • Adjusted third quarter net income* was $72.0 million, down 18% year-over-year ($2.02 adjusted earnings per diluted share*, down 9% year-over-year)
  • Reported selling, general and administrative (“SG&A”) expenses as a percentage of gross profit of 70.4% (66.5% on a Franchised Dealerships Segment basis)
    • Adjusted SG&A expenses as a percentage of gross profit* of 69.5%
  • EchoPark Segment revenues of $626.7 million, up 6% year-over-year; all-time record quarterly EchoPark Segment gross profit of $52.8 million, up 22% year-over-year; EchoPark Segment retail used vehicle unit sales volume of 19,050, up 25% year-over-year
  • Reported EchoPark Segment loss of $16.9 million, adjusted EchoPark Segment loss* of $12.1 million, and EchoPark Segment adjusted EBITDA* loss of $5.2 million
    • Reiterate previously issued guidance of an expected return to breakeven EchoPark Segment adjusted EBITDA* in the first quarter of 2024
  • During the third quarter, Sonic repurchased approximately 1.7 million shares of its Class A Common Stock for an aggregate purchase price of approximately $86.7 million, totaling approximately 3.3 million shares repurchased year-to-date, or 9% of shares outstanding at December 31, 2022
  • Sonic's Board of Directors approved a 3.4% increase to the Company's quarterly cash dividend, to $0.30 per share, payable on January 12, 2024 to all stockholders of record on December 15, 2023

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

Management Commentary
David Smith, Chairman and Chief Executive Officer of Sonic Automotive, stated, “We are proud of our team’s performance in the third quarter, delivering financial results that reflect our ability to leverage our diversified business model to adapt to changing market dynamics. During the quarter, we realized the expected initial benefits of the strategic adjustments to our EchoPark business model, which combined with our growing powersports platform, provided sequential earnings growth to help offset margin normalization in the franchised dealership segment. We remain confident that we have the right strategy, the right people, and the right culture to continue to grow our business and create long-term value for our stakeholders.”

Jeff Dyke, President of Sonic Automotive, commented, “While consumer affordability and used vehicle sourcing continue to be a challenge, the substantial improvement in our EchoPark results in the third quarter demonstrate our team's valuable industry experience and the adaptability of our innovative EchoPark model. As we expected, despite reducing our EchoPark store footprint by 50%, in the third quarter we retailed 12% more vehicles than the second quarter and reduced our EchoPark adjusted EBITDA loss to $5.2 million, compared to a $31.8 million adjusted EBITDA loss in the second quarter of 2023. Based on recent market trends, we remain confident in our path to breakeven EchoPark segment adjusted EBITDA in the first quarter of 2024, and expect to resume our disciplined long-term growth plans for EchoPark as used vehicle market conditions continue to improve.”

Heath Byrd, Chief Financial Officer of Sonic Automotive, added, “Our diversified cash flow streams continued to benefit our overall financial position in the third quarter, while allowing us to return capital to our stockholders via share repurchases and an increase to our quarterly dividend. As of September 30, 2023, we had $797 million of liquidity, including $335 million in cash and floor plan deposits on hand. Heading into what is historically a seasonally strong fourth quarter for Sonic, we believe we remain well-positioned to adapt to evolving market conditions and position the Company for success in 2024 and beyond.”

Third Quarter 2023 Segment Highlights
The financial measures discussed below are results for the third quarter of 2023 with comparisons made to the third quarter of 2022, unless otherwise noted.

  • Franchised Dealerships Segment operating results include:
    • Same store revenues up 5%; same store gross profit down 3%
    • Same store retail new vehicle unit sales volume up 12%; same store retail new vehicle gross profit per unit down 30%, to $4,678
    • Same store retail used vehicle unit sales volume down 3%; same store retail used vehicle gross profit per unit down 2%, to $1,668
    • Same store parts, service and collision repair (“Fixed Operations”) gross profit up 8%; same store customer pay gross profit up 10%; same store warranty gross profit up 8%; same store Fixed Operations gross profit margin up 10 basis points, to 49.7%
    • Same store finance and insurance ("F&I") gross profit up 3%; same store F&I gross profit per retail unit of $2,407, down 5%
    • On a trailing quarter cost of sales basis, the Franchised Dealerships Segment had 33 days’ supply of new vehicle inventory (including in-transit) and 28 days’ supply of used vehicle inventory
  • EchoPark Segment operating results include:
    • Revenues of $626.7 million, up 6%; gross profit of $52.8 million, up 22%
    • Retail used vehicle unit sales volume of 19,050, up 25%
    • Reported segment loss of $16.9 million, adjusted segment loss* of $12.1 million, and adjusted EBITDA* loss of $5.2 million
      • Reported segment loss includes $6.7 million loss related to the closed EchoPark stores (closed EchoPark stores represent a $1.9 million loss on an adjusted segment loss* basis and a $2.2 million loss on an adjusted EBITDA* basis)
      • Expect ongoing expenses associated with the closed EchoPark stores of approximately $1.5 million to $2.0 million per quarter (excluding any amounts related to potential future exits of leased or owned properties)
    • Retail used vehicle unit sales volume was comprised of 85% 1-4-year-old vehicles and 15% 5-plus-year-old vehicles, with 20% of retail used vehicle unit sales volume sourced from non-auction sources
    • On a trailing quarter cost of sales basis, the EchoPark Segment had 37 days’ supply of used vehicle inventory
  • Powersports Segment operating results include:
    • Revenues of $57.0 million, gross profit of $20.8 million, gross profit margin of 36.5%
    • Segment income of $6.6 million and adjusted EBITDA* of $7.9 million
    • Year-over-year comparative financial results are not meaningful due to the timing of acquisitions (seven stores acquired in August 2022 and five stores acquired in February 2023)

* 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 January 12, 2024 to all stockholders of record on December 15, 2023.

Third Quarter 2023 Earnings Conference Call
Senior management will hold a conference call today at 11:00 A.M. (Eastern). Investor presentation and earnings press release materials will be accessible beginning prior to the conference call on the Company’s website at ir.sonicautomotive.com.

To access the live webcast of the conference call, please go to ir.sonicautomotive.com 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 Third Quarter 2023 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 anticipated future EchoPark profitability, anticipated future EchoPark adjusted EBITDA, and anticipated future expenses related to closed locations. 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, 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, 2022 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.

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 loss, and adjusted EBITDA. As required by SEC rules, the Company has provided reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures in the schedules included in this press release. The Company believes that these non-GAAP financial measures improve the transparency of the Company’s disclosures and provide a meaningful presentation of the Company’s results.

 
 
 

Sonic Automotive, Inc.
Results of Operations (Unaudited)
 

 

Results of Operations - Consolidated 

 

 

Three Months Ended September 30,

 

Better / (Worse)

 

Nine Months Ended September 30,

 

Better / (Worse)

 

 

2023

 

 

 

2022

 

 

% Change

 

 

2023

 

 

 

2022

 

 

% Change

 

(In millions, except per share amounts)

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Retail new vehicles

$

1,573.5

 

 

$

1,371.8

 

 

15

%

 

$

4,624.4

 

 

$

4,067.4

 

 

14

%

Fleet new vehicles

 

23.2

 

 

 

32.0

 

 

(28

)%

 

 

70.4

 

 

 

70.0

 

 

1

%

Total new vehicles

 

1,596.7

 

 

 

1,403.8

 

 

14

%

 

 

4,694.8

 

 

 

4,137.4

 

 

13

%

Used vehicles

 

1,340.4

 

 

 

1,355.8

 

 

(1

)%

 

 

3,991.2

 

 

 

4,174.4

 

 

(4

)%

Wholesale vehicles

 

79.3

 

 

 

114.7

 

 

(31

)%

 

 

256.3

 

 

 

404.8

 

 

(37

)%

Total vehicles

 

3,016.4

 

 

 

2,874.3

 

 

5

%

 

 

8,942.3

 

 

 

8,716.6

 

 

3

%

Parts, service and collision repair

 

453.4

 

 

 

408.2

 

 

11

%

 

 

1,327.6

 

 

 

1,188.6

 

 

12

%

Finance, insurance and other, net

 

173.7

 

 

 

165.6

 

 

5

%

 

 

517.7

 

 

 

505.3

 

 

2

%

Total revenues

 

3,643.5

 

 

 

3,448.1

 

 

6

%

 

 

10,787.6

 

 

 

10,410.5

 

 

4

%

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

Retail new vehicles

 

(1,442.1

)

 

 

(1,209.6

)

 

(19

)%

 

 

(4,213.5

)

 

 

(3,569.2

)

 

(18

)%

Fleet new vehicles

 

(22.3

)

 

 

(30.7

)

 

27

%

 

 

(67.3

)

 

 

(66.9

)

 

(1

)%

Total new vehicles

 

(1,464.4

)

 

 

(1,240.3

)

 

(18

)%

 

 

(4,280.8

)

 

 

(3,636.1

)

 

(18

)%

Used vehicles

 

(1,288.1

)

 

 

(1,304.9

)

 

1

%

 

 

(3,877.4

)

 

 

(4,029.1

)

 

4

%

Wholesale vehicles

 

(80.7

)

 

 

(116.8

)

 

31

%

 

 

(255.8

)

 

 

(404.2

)

 

37

%

Total vehicles

 

(2,833.2

)

 

 

(2,662.0

)

 

(6

)%

 

 

(8,414.0

)

 

 

(8,069.4

)

 

(4

)%

Parts, service and collision repair

 

(228.1

)

 

 

(205.4

)

 

(11

)%

 

 

(669.0

)

 

 

(600.2

)

 

(11

)%

Total cost of sales

 

(3,061.3

)

 

 

(2,867.4

)

 

(7

)%

 

 

(9,083.0

)

 

 

(8,669.6

)

 

(5

)%

Gross profit

 

582.2

 

 

 

580.7

 

 

%

 

 

1,704.6

 

 

 

1,740.9

 

 

(2

)%

Selling, general and administrative expenses

 

(409.6

)

 

 

(399.0

)

 

(3

)%

 

 

(1,214.2

)

 

 

(1,188.8

)

 

(2

)%

Impairment charges

 

 

 

 

 

 

%

 

 

(62.6

)

 

 

 

 

(100

)%

Depreciation and amortization

 

(35.2

)

 

 

(32.8

)

 

(7

)%

 

 

(105.7

)

 

 

(94.0

)

 

(12

)%

Operating income (loss)

 

137.4

 

 

 

148.9

 

 

(8

)%

 

 

322.1

 

 

 

458.1

 

 

(30

)%

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

Interest expense, floor plan

 

(17.4

)

 

 

(9.6

)

 

(81

)%

 

 

(48.9

)

 

 

(20.6

)

 

(137

)%

Interest expense, other, net

 

(29.0

)

 

 

(22.9

)

 

(27

)%

 

 

(86.2

)

 

 

(65.1

)

 

(32

)%

Other income (expense), net

 

0.2

 

 

 

 

 

100

%

 

 

0.3

 

 

 

0.1

 

 

200

%

Total other income (expense)

 

(46.2

)

 

 

(32.5

)

 

(42

)%

 

 

(134.8

)

 

 

(85.6

)

 

(57

)%

Income (loss) before taxes

 

91.2

 

 

 

116.4

 

 

(22

)%

 

 

187.3

 

 

 

372.5

 

 

(50

)%

Provision for income taxes - benefit (expense)

 

(22.8

)

 

 

(29.1

)

 

22

%

 

 

(47.8

)

 

 

(93.1

)

 

49

%

Net income (loss)

$

68.4

 

 

$

87.3

 

 

(22

)%

 

$

139.5

 

 

$

279.4

 

 

(50

)%

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per common share

$

1.96

 

 

$

2.28

 

 

(14

)%

 

$

3.94

 

 

$

7.09

 

 

(44

)%

Basic weighted-average common shares outstanding

 

34.9

 

 

 

38.3

 

 

9

%

 

 

35.4

 

 

 

39.4

 

 

10

%

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per common share

$

1.92

 

 

$

2.23

 

 

(14

)%

 

$

3.85

 

 

$

6.90

 

 

(44

)%

Diluted weighted-average common shares outstanding

 

35.6

 

 

 

39.2

 

 

9

%

 

 

36.2

 

 

 

40.5

 

 

11

%

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

$

0.30

 

 

$

0.25

 

 

20

%

 

$

0.86

 

 

$

0.62

 

 

39

%

 
 
 
 

Franchised Dealerships Segment - Reported 

 

 

Three Months Ended September 30,

 

Better / (Worse)

 

Nine Months Ended September 30,

 

Better / (Worse)

 

 

2023

 

 

 

2022

 

 

% Change

 

 

2023

 

 

 

2022

 

 

% Change

 

(In millions, except unit and per unit data)

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Retail new vehicles

$

1,546.7

 

 

$

1,359.6

 

 

14

%

 

$

4,550.9

 

 

$

4,047.1

 

 

12

%

Fleet new vehicles

 

23.2

 

 

 

32.0

 

 

(28

)%

 

 

70.4

 

 

 

70.0

 

 

1

%

Total new vehicles

 

1,569.9

 

 

 

1,391.6

 

 

13

%

 

 

4,621.3

 

 

 

4,117.1

 

 

12

%

Used vehicles

 

780.7

 

 

 

842.4

 

 

(7

)%

 

 

2,322.8

 

 

 

2,568.1

 

 

(10

)%

Wholesale vehicles

 

51.4

 

 

 

75.8

 

 

(32

)%

 

 

165.3

 

 

 

261.2

 

 

(37

)%

Total vehicles

 

2,402.0

 

 

 

2,309.8

 

 

4

%

 

 

7,109.4

 

 

 

6,946.4

 

 

2

%

Parts, service and collision repair

 

431.8

 

 

 

404.7

 

 

7

%

 

 

1,289.0

 

 

 

1,183.4

 

 

9

%

Finance, insurance and other, net

 

126.0

 

 

 

125.8

 

 

%

 

 

375.4

 

 

 

382.1

 

 

(2

)%

Total revenues

 

2,959.8

 

 

 

2,840.3

 

 

4

%

 

 

8,773.8

 

 

 

8,511.9

 

 

3

%

Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

Retail new vehicles

 

125.5

 

 

 

160.7

 

 

(22

)%

 

 

396.5

 

 

 

494.5

 

 

(20

)%

Fleet new vehicles

 

0.9

 

 

 

1.3

 

 

(31

)%

 

 

3.1

 

 

 

3.1

 

 

%

Total new vehicles

 

126.4

 

 

 

162.0

 

 

(22

)%

 

 

399.6

 

 

 

497.6

 

 

(20

)%

Used vehicles

 

42.6

 

 

 

45.4

 

 

(6

)%

 

 

127.9

 

 

 

136.0

 

 

(6

)%

Wholesale vehicles

 

(1.5

)

 

 

(2.1

)

 

29

%

 

 

(0.8

)

 

 

(3.0

)

 

73

%

Total vehicles

 

167.5

 

 

 

205.3

 

 

(18

)%

 

 

526.7

 

 

 

630.6

 

 

(16

)%

Parts, service and collision repair

 

215.1

 

 

 

201.0

 

 

7

%

 

 

640.1

 

 

 

585.7

 

 

9

%

Finance, insurance and other, net

 

126.0

 

 

 

125.8

 

 

%

 

 

375.4

 

 

 

382.1

 

 

(2

)%

Total gross profit

 

508.6

 

 

 

532.1

 

 

(4

)%

 

 

1,542.2

 

 

 

1,598.4

 

 

(4

)%

Selling, general and administrative expenses

 

(338.3

)

 

 

(332.0

)

 

(2

)%

 

 

(985.5

)

 

 

(974.9

)

 

(1

)%

Depreciation and amortization

 

(28.2

)

 

 

(25.8

)

 

(9

)%

 

 

(82.8

)

 

 

(75.8

)

 

(9

)%

Operating income (loss)

 

142.1

 

 

 

174.3

 

 

(18

)%

 

 

473.9

 

 

 

547.7

 

 

(13

)%

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

Interest expense, floor plan

 

(12.9

)

 

 

(6.6

)

 

(95

)%

 

 

(34.7

)

 

 

(13.9

)

 

(150

)%

Interest expense, other, net

 

(27.9

)

 

 

(21.4

)

 

(30

)%

 

 

(82.2

)

 

 

(61.7

)

 

(33

)%

Other income (expense), net

 

0.2

 

 

 

 

 

100

%

 

 

0.2

 

 

 

0.1

 

 

100

%

Total other income (expense)

 

(40.6

)

 

 

(28.0

)

 

(45

)%

 

 

(116.7

)

 

 

(75.5

)

 

(55

)%

Income (loss) before taxes

 

101.5

 

 

 

146.3

 

 

(31

)%

 

 

357.2

 

 

 

472.2

 

 

(24

)%

Add: Impairment charges

 

 

 

 

 

 

%

 

 

 

 

 

 

 

%

Segment income (loss)

$

101.5

 

 

$

146.3

 

 

(31

)%

 

$

357.2

 

 

$

472.2

 

 

(24

)%

 

 

 

 

 

 

 

 

 

 

 

 

Unit Sales Volume:

 

 

 

 

 

 

 

 

 

 

 

Retail new vehicles

 

26,869

 

 

 

24,241

 

 

11

%

 

 

78,766

 

 

 

73,185

 

 

8

%

Fleet new vehicles

 

469

 

 

 

672

 

 

(30

)%

 

 

1,500

 

 

 

1,454

 

 

3

%

Total new vehicles

 

27,338

 

 

 

24,913

 

 

10

%

 

 

80,266

 

 

 

74,639

 

 

8

%

Used vehicles

 

25,541

 

 

 

26,647

 

 

(4

)%

 

 

75,845

 

 

 

81,881

 

 

(7

)%

Wholesale vehicles

 

5,163

 

 

 

5,813

 

 

(11

)%

 

 

16,162

 

 

 

18,436

 

 

(12

)%

Retail new & used vehicles

 

52,410

 

 

 

50,888

 

 

3

%

 

 

154,611

 

 

 

155,066

 

 

%

Used-to-New Ratio

 

0.95

 

 

 

1.10

 

 

(14

)%

 

 

0.96

 

 

 

1.12

 

 

(14

)%

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit Per Unit:

 

 

 

 

 

 

 

 

 

 

 

Retail new vehicles

$

4,672

 

 

$

6,627

 

 

(30

)%

 

$

5,034

 

 

$

6,757

 

 

(25

)%

Fleet new vehicles

$

2,046

 

 

$

1,955

 

 

5

%

 

$

2,059

 

 

$

2,132

 

 

(3

)%

New vehicles

$

4,627

 

 

$

6,501

 

 

(29

)%

 

$

4,978

 

 

$

6,667

 

 

(25

)%

Used vehicles

$

1,666

 

 

$

1,704

 

 

(2

)%

 

$

1,685

 

 

$

1,661

 

 

1

%

Finance, insurance and other, net

$

2,403

 

 

$

2,473

 

 

(3

)%

 

$

2,428

 

 

$

2,464

 

 

(1

)%

NM = Not Meaningful 

 
 
 
 

Franchised Dealerships Segment - Same Store 

 

 

Three Months Ended September 30,

 

Better / (Worse)

 

Nine Months Ended September 30,

 

Better / (Worse)

 

 

2023

 

 

 

2022

 

 

% Change

 

2023

 

 

2022

 

 

% Change

 

(In millions, except unit and per unit data)

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Retail new vehicles

$

1,538.1

 

 

$

1,341.9

 

 

15

%

 

$

4,491.8

 

$

3,995.7

 

 

12

%

Fleet new vehicles

 

23.2

 

 

 

32.0

 

 

(28

)%

 

 

70.4

 

 

70.0

 

 

1

%

Total new vehicles

 

1,561.3

 

 

 

1,373.9

 

 

14

%

 

 

4,562.2

 

 

4,065.7

 

 

12

%

Used vehicles

 

775.4

 

 

 

829.2

 

 

(6

)%

 

 

2,288.8

 

 

2,524.3

 

 

(9

)%

Wholesale vehicles

 

51.3

 

 

 

75.1

 

 

(32

)%

 

 

163.3

 

 

258.2

 

 

(37

)%

Total vehicles

 

2,388.0

 

 

 

2,278.2

 

 

5

%

 

 

7,014.3

 

 

6,848.2

 

 

2

%

Parts, service and collision repair

 

429.2

 

 

 

399.0

 

 

8

%

 

 

1,272.7

 

 

1,166.9

 

 

9

%

Finance, insurance and other, net

 

125.4

 

 

 

122.2

 

 

3

%

 

 

370.9

 

 

369.7

 

 

%

Total revenues

 

2,942.6

 

 

 

2,799.4

 

 

5

%

 

 

8,657.9

 

 

8,384.8

 

 

3

%

Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

Retail new vehicles

 

125.0

 

 

 

158.8

 

 

(21

)%

 

 

392.2

 

 

488.8

 

 

(20

)%

Fleet new vehicles

 

1.0

 

 

 

1.3

 

 

(23

)%

 

 

3.1

 

 

3.1

 

 

%

Total new vehicles

 

126.0

 

 

 

160.1

 

 

(21

)%

 

 

395.3

 

 

491.9

 

 

(20

)%

Used vehicles

 

42.3

 

 

 

44.5

 

 

(5

)%

 

 

126.4

 

 

133.5

 

 

(5

)%

Wholesale vehicles

 

(1.4

)

 

 

(1.9

)

 

26

%

 

 

 

 

(2.5

)

 

100

%

Total vehicles

 

166.9

 

 

 

202.7

 

 

(18

)%

 

 

521.7

 

 

622.9

 

 

(16

)%

Parts, service and collision repair

 

213.4

 

 

 

198.0

 

 

8

%

 

 

630.9

 

 

577.1

 

 

9

%

Finance, insurance and other, net

 

125.4

 

 

 

122.2

 

 

3

%

 

 

370.9

 

 

369.7

 

 

%

Total gross profit

$

505.7

 

 

$

522.9

 

 

(3

)%

 

$

1,523.5

 

$

1,569.7

 

 

(3

)%

 

 

 

 

 

 

 

 

 

 

 

 

Unit Sales Volume:

 

 

 

 

 

 

 

 

 

 

 

Retail new vehicles

 

26,727

 

 

 

23,816

 

 

12

%

 

 

77,567

 

 

71,986

 

 

8

%

Fleet new vehicles

 

469

 

 

 

672

 

 

(30

)%

 

 

1,500

 

 

1,454

 

 

3

%

Total new vehicles

 

27,196

 

 

 

24,488

 

 

11

%

 

 

79,067

 

 

73,440

 

 

8

%

Used vehicles

 

25,371

 

 

 

26,122

 

 

(3

)%

 

 

74,631

 

 

80,221

 

 

(7

)%

Wholesale vehicles

 

5,131

 

 

 

5,738

 

 

(11

)%

 

 

15,921

 

 

18,164

 

 

(12

)%

Retail new & used vehicles

 

52,098

 

 

 

49,938

 

 

4

%

 

 

152,198

 

 

152,207

 

 

%

Used-to-New Ratio

 

0.95

 

 

 

1.10

 

 

(13

)%

 

 

0.96

 

 

1.11

 

 

(14

)%

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit Per Unit:

 

 

 

 

 

 

 

 

 

 

 

Retail new vehicles

$

4,678

 

 

$

6,666

 

 

(30

)%

 

$

5,056

 

$

6,790

 

 

(26

)%

Fleet new vehicles

$

2,046

 

 

$

1,955

 

 

5

%

 

$

2,059

 

$

2,132

 

 

(3

)%

New vehicles

$

4,633

 

 

$

6,537

 

 

(29

)%

 

$

5,000

 

$

6,698

 

 

(25

)%

Used vehicles

$

1,668

 

 

$

1,704

 

 

(2

)%

 

$

1,694

 

$

1,664

 

 

2

%

Finance, insurance and other, net

$

2,407

 

 

$

2,525

 

 

(5

)%

 

$

2,437

 

$

2,429

 

 

%

NM = Not Meaningful 

 

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 September 30,

 

Better / (Worse)

 

Nine Months Ended September 30,

 

Better / (Worse)

 

 

2023

 

 

 

2022

 

 

% Change

 

 

2023

 

 

 

2022

 

 

% Change

 

(In millions, except unit and per unit data)

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Retail new vehicles

$

 

 

$

1.6

 

 

(100

)%

 

$

1.0

 

 

$

7.3

 

 

(86

)%

Used vehicles

 

554.8

 

 

 

511.4

 

 

9

%

 

 

1,651.3

 

 

 

1,601.3

 

 

3

%

Wholesale vehicles

 

26.6

 

 

 

38.9

 

 

(32

)%

 

 

89.1

 

 

 

143.3

 

 

(38

)%

Total vehicles

 

581.4

 

 

 

551.9

 

 

5

%

 

 

1,741.4

 

 

 

1,751.9

 

 

(1

)%

Finance, insurance and other, net

 

45.3

 

 

 

38.9

 

 

17

%

 

 

136.4

 

 

 

121.8

 

 

12

%

Total revenues

 

626.7

 

 

 

590.8

 

 

6

%

 

 

1,877.8

 

 

 

1,873.7

 

 

%

Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

Retail new vehicles

 

 

 

 

(0.6

)

 

100

%

 

 

0.1

 

 

 

1.0

 

 

(90

)%

Used vehicles

 

7.3

 

 

 

4.9

 

 

49

%

 

 

(18.8

)

 

 

7.9

 

 

(338

)%

Wholesale vehicles

 

0.2

 

 

 

 

 

100

%

 

 

1.3

 

 

 

3.6

 

 

(64

)%

Total vehicles

 

7.5

 

 

 

4.3

 

 

74

%

 

 

(17.4

)

 

 

12.5

 

 

(239

)%

Finance, insurance and other, net

 

45.3

 

 

 

38.9

 

 

17

%

 

 

136.4

 

 

 

121.8

 

 

12

%

Total gross profit

 

52.8

 

 

 

43.2

 

 

22

%

 

 

119.0

 

 

 

134.3

 

 

(11

)%

Selling, general and administrative expenses

 

(58.6

)

 

 

(63.4

)

 

8

%

 

 

(199.0

)

 

 

(207.5

)

 

4

%

Impairment charges

 

 

 

 

 

 

%

 

 

(62.6

)

 

 

 

 

(100

)%

Depreciation and amortization

 

(6.1

)

 

 

(6.8

)

 

10

%

 

 

(20.4

)

 

 

(17.7

)

 

(15

)%

Operating income (loss)

 

(11.9

)

 

 

(27.0

)

 

56

%

 

 

(163.0

)

 

 

(90.9

)

 

(79

)%

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

Interest expense, floor plan

 

(4.3

)

 

 

(3.0

)

 

(43

)%

 

 

(13.6

)

 

 

(6.7

)

 

(103

)%

Interest expense, other, net

 

(0.7

)

 

 

(1.1

)

 

36

%

 

 

(2.5

)

 

 

(3.0

)

 

17

%

Total other income (expense)

 

(5.0

)

 

 

(4.1

)

 

(22

)%

 

 

(16.1

)

 

 

(9.7

)

 

(66

)%

Income (loss) before taxes

 

(16.9

)

 

 

(31.1

)

 

46

%

 

 

(179.1

)

 

 

(100.6

)

 

(78

)%

Add: Impairment charges

 

 

 

 

 

 

%

 

 

62.6

 

 

 

 

 

100

%

Segment income (loss)

$

(16.9

)

 

$

(31.1

)

 

46

%

 

$

(116.5

)

 

$

(100.6

)

 

(16

)%

 

 

 

 

 

 

 

 

 

 

 

 

Unit Sales Volume:

 

 

 

 

 

 

 

 

 

 

 

Retail new vehicles

 

 

 

 

45

 

 

(100

)%

 

 

11

 

 

 

126

 

 

(91

)%

Used vehicles

 

19,050

 

 

 

15,245

 

 

25

%

 

 

56,114

 

 

 

46,672

 

 

20

%

Wholesale vehicles

 

2,740

 

 

 

2,449

 

 

12

%

 

 

8,891

 

 

 

8,792

 

 

1

%

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit Per Unit:

 

 

 

 

 

 

 

 

 

 

 

Total used vehicle and F&I

$

2,767

 

 

$

2,868

 

 

(4

)%

 

$

2,095

 

 

$

2,775

 

 

(25

)%

NM = Not Meaningful 

 
 
 
 

EchoPark Segment - Same Market 

 

 

Three Months Ended September 30,

 

Better / (Worse)

 

Nine Months Ended September 30,

 

Better / (Worse)

 

2023

 

 

2022

 

 

% Change

 

 

2023

 

 

 

2022

 

 

% Change

 

(In millions, except unit and per unit data)

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Used vehicles

$

469.9

 

$

268.0

 

 

75

%

 

$

1,274.1

 

 

$

818.6

 

 

56

%

Wholesale vehicles

 

16.0

 

 

14.8

 

 

8

%

 

 

56.4

 

 

 

73.0

 

 

(23

)%

Total vehicles

 

486.0

 

 

282.8

 

 

72

%

 

 

1,330.5

 

 

 

891.6

 

 

49

%

Finance, insurance and other, net

 

41.7

 

 

22.8

 

 

83

%

 

 

114.9

 

 

 

70.0

 

 

64

%

Total revenues

 

527.7

 

 

305.6

 

 

73

%

 

 

1,445.4

 

 

 

961.6

 

 

50

%

Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

Used vehicles

 

5.0

 

 

(2.0

)

 

350

%

 

 

(4.3

)

 

 

(13.7

)

 

69

%

Wholesale vehicles

 

 

 

(0.1

)

 

100

%

 

 

1.1

 

 

 

2.0

 

 

(45

)%

Total vehicles

 

5.0

 

 

(2.1

)

 

338

%

 

 

(3.2

)

 

 

(11.7

)

 

73

%

Finance, insurance and other, net

 

41.7

 

 

22.8

 

 

83

%

 

 

114.9

 

 

 

70.0

 

 

64

%

Total gross profit

$

46.7

 

$

20.7

 

 

126

%

 

$

111.7

 

 

$

58.3

 

 

92

%

 

 

 

 

 

 

 

 

 

 

 

 

Unit Sales Volume:

 

 

 

 

 

 

 

 

 

 

 

Used vehicles

 

17,480

 

 

9,412

 

 

86

%

 

 

46,997

 

 

 

27,911

 

 

68

%

Wholesale vehicles

 

2,305

 

 

1,495

 

 

54

%

 

 

7,010

 

 

 

5,828

 

 

20

%

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit Per Unit:

 

 

 

 

 

 

 

 

 

 

 

Total used vehicle and F&I

$

2,672

 

$

2,209

 

 

21

%

 

$

2,352

 

 

$

2,015

 

 

17

%

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 September 30,

 

Better / (Worse)

 

Nine Months Ended September 30,

 

Better / (Worse)

 

 

2023

 

 

 

2022

 

 

% Change

 

 

2023

 

 

 

2022

 

 

% Change

 

(In millions, except unit and per unit data)

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Retail new vehicles

$

26.8

 

 

$

10.6

 

 

153

%

 

$

72.5

 

 

$

13.0

 

 

458

%

Used vehicles

 

4.9

 

 

 

2.0

 

 

145

%

 

 

17.1

 

 

 

5.0

 

 

242

%

Wholesale vehicles

 

1.3

 

 

 

 

 

100

%

 

 

1.9

 

 

 

0.3

 

 

533

%

Total vehicles

 

33.0

 

 

 

12.6

 

 

162

%

 

 

91.5

 

 

 

18.3

 

 

400

%

Parts, service and collision repair

 

21.6

 

 

 

3.5

 

 

517

%

 

 

38.6

 

 

 

5.2

 

 

642

%

Finance, insurance and other, net

 

2.4

 

 

 

0.9

 

 

167

%

 

 

5.9

 

 

 

1.4

 

 

321

%

Total revenues

 

57.0

 

 

 

17.0

 

 

235

%

 

 

136.0

 

 

 

24.9

 

 

446

%

Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

Retail new vehicles

 

5.9

 

 

 

2.1

 

 

181

%

 

 

14.3

 

 

 

2.7

 

 

430

%

Used vehicles

 

2.4

 

 

 

0.6

 

 

300

%

 

 

4.7

 

 

 

1.4

 

 

236

%

Wholesale vehicles

 

(0.1

)

 

 

 

 

(100

)%

 

 

 

 

 

 

 

%

Total vehicles

 

8.2

 

 

 

2.7

 

 

204

%

 

 

19.0

 

 

 

4.1

 

 

363

%

Parts, service and collision repair

 

10.2

 

 

 

1.8

 

 

467

%

 

 

18.5

 

 

 

2.7

 

 

585

%

Finance, insurance and other, net

 

2.4

 

 

 

0.9

 

 

167

%

 

 

5.9

 

 

 

1.4

 

 

321

%

Total gross profit

 

20.8

 

 

 

5.4

 

 

285

%

 

 

43.4

 

 

 

8.2

 

 

429

%

Selling, general and administrative expenses

 

(12.7

)

 

 

(3.6

)

 

(253

)%

 

 

(29.7

)

 

 

(6.4

)

 

(364

)%

Depreciation and amortization

 

(0.9

)

 

 

(0.2

)

 

(350

)%

 

 

(2.5

)

 

 

(0.5

)

 

(400

)%

Operating income (loss)

 

7.2

 

 

 

1.6

 

 

350

%

 

 

11.2

 

 

 

1.3

 

 

762

%

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

Interest expense, floor plan

 

(0.2

)

 

 

 

 

100

%

 

 

(0.6

)

 

 

 

 

100

%

Interest expense, other, net

 

(0.4

)

 

 

(0.4

)

 

%

 

 

(1.5

)

 

 

(0.4

)

 

(275

)%

Other income (expense), net

 

 

 

 

 

 

%

 

 

0.1

 

 

 

 

 

(100

)%

Total other income (expense)

 

(0.6

)

 

 

(0.4

)

 

(50

)%

 

 

(2.0

)

 

 

(0.4

)

 

(400

)%

Income (loss) before taxes

 

6.6

 

 

 

1.2

 

 

450

%

 

 

9.2

 

 

 

0.9

 

 

NM

 

Add: Impairment charges

 

 

 

 

 

 

%

 

 

 

 

 

 

 

%

Segment income (loss)

$

6.6

 

 

$

1.2

 

 

450

%

 

$

9.2

 

 

$

0.9

 

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

Unit Sales Volume:

 

 

 

 

 

 

 

 

 

 

 

Retail new vehicles

 

1,391

 

 

 

490

 

 

184

%

 

 

3,894

 

 

 

579

 

 

573

%

Used vehicles

 

837

 

 

 

177

 

 

373

%

 

 

1,972

 

 

 

353

 

 

459

%

Wholesale vehicles

 

93

 

 

 

9

 

 

NM

 

 

 

150

 

 

 

29

 

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit Per Unit:

 

 

 

 

 

 

 

 

 

 

 

Retail new vehicles

$

4,213

 

 

$

4,304

 

 

(2

)%

 

$

3,680

 

 

$

4,742

 

 

(22

)%

Used vehicles

$

2,833

 

 

$

3,328

 

 

(15

)%

 

$

2,407

 

 

$

3,677

 

 

(35

)%

Finance, insurance and other, net

$

1,075

 

 

$

1,297

 

 

(17

)%

 

$

1,006

 

 

$

1,445

 

 

(30

)%

NM = Not Meaningful 

 
 
 
 

Non-GAAP Reconciliation - Consolidated - SG&A Expenses 

 

 

Three Months Ended September 30,

 

Better / (Worse)

 

 

2023

 

 

 

2022

 

 

Change

 

% Change

 

(In millions)

Reported:

 

 

 

 

 

 

 

Compensation

$

256.0

 

 

$

255.2

 

 

$

(0.8

)

 

%

Advertising

 

22.5

 

 

 

21.1

 

 

 

(1.4

)

 

(7

)%

Rent

 

11.7

 

 

 

11.9

 

 

 

0.2

 

 

2

%

Other

 

119.4

 

 

 

110.8

 

 

 

(8.6

)

 

(8

)%

Total SG&A expenses

$

409.6

 

 

$

399.0

 

 

$

(10.6

)

 

(3

)%

Adjustments:

 

 

 

 

 

 

 

Lease exit charges

$

(3.9

)

 

$

 

 

 

 

 

Severance and long-term compensation charges

 

(0.9

)

 

 

 

 

 

 

 

Total SG&A adjustments

$

(4.8

)

 

$

 

 

 

 

 

Adjusted:

 

 

 

 

 

 

 

Total adjusted SG&A expenses

$

404.8

 

 

$

399.0

 

 

$

(5.8

)

 

(1

)%

 

 

 

 

 

 

 

 

Reported:

 

 

 

 

 

 

 

SG&A expenses as a % of gross profit:

 

 

 

 

 

 

 

Compensation

 

44.0

%

 

 

43.9

%

 

 

(10

)

bps

Advertising

 

3.9

%

 

 

3.6

%

 

 

(30

)

bps

Rent

 

2.0

%

 

 

2.1

%

 

 

10

 

bps

Other

 

20.5

%

 

 

19.1

%

 

 

(140

)

bps

Total SG&A expenses as a % of gross profit

 

70.4

%

 

 

68.7

%

 

 

(170

)

bps

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

Lease exit charges

 

(0.7

)%

 

 

%

 

 

 

Severance and long-term compensation charges

 

(0.2

)%

 

 

%

 

 

 

Total effect of adjustments

 

(0.9

)%

 

 

%

 

 

 

Adjusted:

 

 

 

 

 

 

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

 

69.5

%

 

 

68.7

%

 

 

(80

)

bps

 

 

 

 

 

 

 

 

Reported:

 

 

 

 

 

 

 

Total gross profit

$

582.2

 

 

$

580.7

 

 

$

1.5

 

 

%

 
 
 
 

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

 

 

Nine Months Ended September 30,

 

Better / (Worse)

 

 

2023

 

 

 

2022

 

 

Change

 

% Change

 

(In millions)

Reported:

 

 

 

 

 

 

 

Compensation

$

775.8

 

 

$

774.1

 

 

$

(1.7

)

 

%

Advertising

 

71.4

 

 

 

72.8

 

 

 

1.4

 

 

2

%

Rent

 

34.5

 

 

 

38.3

 

 

 

3.8

 

 

10

%

Other

 

332.5

 

 

 

303.6

 

 

 

(28.9

)

 

(10

)%

Total SG&A expenses

$

1,214.2

 

 

$

1,188.8

 

 

$

(25.4

)

 

(2

)%

Adjustments:

 

 

 

 

 

 

 

Acquisition and disposition-related gain (loss)

$

20.7

 

 

$

 

 

 

 

 

Hail and storm damage charges

 

(1.9

)

 

 

 

 

 

 

 

Lease exit charges

 

(4.3

)

 

 

 

 

 

 

 

Severance and long-term compensation charges

 

(5.1

)

 

 

(4.4

)

 

 

 

 

Total SG&A adjustments

$

9.4

 

 

$

(4.4

)

 

 

 

 

Adjusted:

 

 

 

 

 

 

 

Total adjusted SG&A expenses

$

1,223.6

 

 

$

1,184.4

 

 

$

(39.2

)

 

(3

)%

 

 

 

 

 

 

 

 

Reported:

 

 

 

 

 

 

 

SG&A expenses as a % of gross profit:

 

 

 

 

 

 

 

Compensation

 

45.5

%

 

 

44.5

%

 

 

(100

)

bps

Advertising

 

4.2

%

 

 

4.2

%

 

 

 

bps

Rent

 

2.0

%

 

 

2.2

%

 

 

20

 

bps

Other

 

19.5

%

 

 

17.4

%

 

 

(210

)

bps

Total SG&A expenses as a % of gross profit

 

71.2

%

 

 

68.3

%

 

 

(290

)

bps

Adjustments:

 

 

 

 

 

 

Acquisition and disposition-related gain (loss)

 

0.4

%

 

 

%

 

 

 

Hail and storm damage charges

 

%

 

 

%

 

 

 

 

Lease exit charges

 

(0.1

)%

 

 

%

 

 

 

Severance and long-term compensation charges

 

(0.1

)%

 

 

(0.3

)%

 

 

 

Total effect of adjustments

 

0.2

%

 

 

(0.3

)%

 

 

 

Adjusted:

 

 

 

 

 

 

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

 

71.4

%

 

 

68.0

%

 

 

(340

)

bps

 

 

 

 

 

 

 

 

Reported:

 

 

 

 

 

 

 

Total gross profit

$

1,704.6

 

 

$

1,740.9

 

 

$

(36.3

)

 

(2

)%

Adjustments:

 

 

 

 

 

 

 

Used vehicle inventory valuation adjustment

$

10.0

 

 

$

 

 

 

 

 

Total adjustments

$

10.0

 

 

$

 

 

 

 

 

Adjusted:

 

 

 

 

 

 

 

Total adjusted gross profit

$

1,714.6

 

 

$

1,740.9

 

 

$

(26.3

)

 

(2

)%

 
 
 
 

Non-GAAP Reconciliation - Franchised Dealerships Segment - SG&A Expenses 

 

 

Three Months Ended September 30,

 

Better / (Worse)

 

 

2023

 

 

 

2022

 

 

Change

 

% Change

 

(In millions)

Reported:

 

 

 

 

 

 

 

Compensation

$

216.9

 

 

$

216.2

 

 

$

(0.7

)

 

%

Advertising

 

11.0

 

 

 

10.5

 

 

 

(0.5

)

 

(5

)%

Rent

 

10.2

 

 

 

10.1

 

 

 

(0.1

)

 

(1

)%

Other

 

100.2

 

 

 

95.2

 

 

 

(5.0

)

 

(5

)%

Total SG&A expenses

$

338.3

 

 

$

332.0

 

 

$

(6.3

)

 

(2

)%

 

 

 

 

 

 

 

 

Reported:

 

 

 

 

 

 

 

SG&A expenses as a % of gross profit:

 

 

 

 

 

 

 

Compensation

 

42.6

%

 

 

40.6

%

 

 

(200

)

bps

Advertising

 

2.2

%

 

 

2.0

%

 

 

(20

)

bps

Rent

 

2.0

%

 

 

1.9

%

 

 

(10

)

bps

Other

 

19.7

%

 

 

17.9

%

 

 

(180

)

bps

Total SG&A expenses as a % of gross profit

 

66.5

%

 

 

62.4

%

 

 

(410

)

bps

 

 

 

 

 

 

 

 

Reported:

 

 

 

 

 

 

 

Total gross profit

$

508.6

 

 

$

532.1

 

 

$

(23.5

)

 

(4

)%

 
 
 
 

Non-GAAP Reconciliation - Franchised Dealerships Segment - SG&A Expenses (Continued) 

 

 

Nine Months Ended September 30,

 

Better / (Worse)

 

 

2023

 

 

 

2022

 

 

Change

 

% Change

 

(In millions)

Reported:

 

 

 

 

 

 

 

Compensation

$

649.7

 

 

$

657.2

 

 

$

7.5

 

 

1

%

Advertising

 

29.7

 

 

 

26.2

 

 

 

(3.5

)

 

(13

)%

Rent

 

29.8

 

 

 

31.9

 

 

 

2.1

 

 

7

%

Other

 

276.4

 

 

 

259.6

 

 

 

(16.8

)

 

(6

)%

Total SG&A expenses

$

985.5

 

 

$

974.9

 

 

$

(10.6

)

 

(1

)%

Adjustments:

 

 

 

 

 

 

 

Acquisition and disposition-related gain (loss)

$

20.9

 

 

$

 

 

 

 

 

Hail and storm damage charges

 

(1.9

)

 

 

 

 

 

 

 

Long-term compensation charges

 

 

 

 

(4.4

)

 

 

 

 

Total SG&A adjustments

$

19.0

 

 

$

(4.4

)

 

 

 

 

Adjusted:

 

 

 

 

 

 

 

Total adjusted SG&A expenses

$

1,004.5

 

 

$

970.5

 

 

$

(34.0

)

 

(4

)%

 

 

 

 

 

 

 

 

Reported:

 

 

 

 

 

 

 

SG&A expenses as a % of gross profit:

 

 

 

 

 

 

 

Compensation

 

42.1

%

 

 

41.1

%

 

 

(100

)

bps

Advertising

 

1.9

%

 

 

1.6

%

 

 

(30

)

bps

Rent

 

1.9

%

 

 

2.0

%

 

 

10

 

bps

Other

 

18.0

%

 

 

16.3

%

 

 

(170

)

bps

Total SG&A expenses as a % of gross profit

 

63.9

%

 

 

61.0

%

 

 

(290

)

bps

Adjustments:

 

 

 

 

 

 

Acquisition and disposition-related gain (loss)

 

1.3

%

 

 

%

 

 

 

Hail and storm damage charges

 

(0.1

)%

 

 

%

 

 

 

 

Long-term compensation charges

 

%

 

 

(0.3

)%

 

 

 

Total effect of adjustments

 

1.2

%

 

 

(0.3

)%

 

 

 

Adjusted:

 

 

 

 

 

 

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

 

65.1

%

 

 

60.7

%

 

 

(440

)

bps

 

 

 

 

 

 

 

 

Reported:

 

 

 

 

 

 

 

Total gross profit

$

1,542.2

 

 

$

1,598.4

 

 

$

(56.2

)

 

(4

)%

 
 
 
 

Non-GAAP Reconciliation - EchoPark Segment - SG&A Expenses 

 

 

Three Months Ended September 30,

 

Better / (Worse)

 

 

2023

 

 

 

2022

 

 

Change

 

% Change

 

(In millions)

Reported:

 

 

 

 

 

 

 

Compensation

$

30.0

 

 

$

36.5

 

 

$

6.5

 

 

18

%

Advertising

 

10.9

 

 

 

10.4

 

 

 

(0.5

)

 

(5

)%

Rent

 

2.1

 

 

 

1.8

 

 

 

(0.3

)

 

(17

)%

Other

 

15.6

 

 

 

14.7

 

 

 

(0.9

)

 

(6

)%

Total SG&A expenses

$

58.6

 

 

$

63.4

 

 

$

4.8

 

 

8

%

Adjustments:

 

 

 

 

 

 

 

Lease exit charges

$

(3.9

)

 

$

 

 

 

 

 

Severance charges

 

(0.9

)

 

 

 

 

 

 

 

Total SG&A adjustments

$

(4.8

)

 

$

 

 

 

 

 

Adjusted:

 

 

 

 

 

 

 

Total adjusted SG&A expenses

$

53.8

 

 

$

63.4

 

 

$

9.6

 

 

15.1

%

 

 

 

 

 

 

 

 

Reported:

 

 

 

 

 

 

 

SG&A expenses as a % of gross profit:

 

 

 

 

 

 

 

Compensation

 

56.9

%

 

 

84.4

%

 

 

NM

 

 

Advertising

 

20.5

%

 

 

24.0

%

 

 

35

 

bps

Rent

 

3.9

%

 

 

4.2

%

 

 

30

 

bps

Other

 

29.8

%

 

 

34.2

%

 

 

440

 

bps

Total SG&A expenses as a % of gross profit

 

111.1

%

 

 

146.8

%

 

 

NM

 

 

Adjustments:

 

 

 

 

 

 

Lease exit charges

 

(7.5

)%

 

 

%

 

 

 

Severance charges

 

(1.7

)%

 

 

%

 

 

 

Total effect of adjustments

 

(9.2

)%

 

 

%

 

 

 

Adjusted:

 

 

 

 

 

 

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

 

101.9

%

 

 

146.8

%

 

 

NM

 

 

 

 

 

 

 

 

 

 

Reported:

 

 

 

 

 

 

 

Total gross profit

$

52.8

 

 

$

43.2

 

 

$

9.6

 

 

22

%

NM = Not Meaningful 

 
 
 
 

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

 

 

Nine Months Ended September 30,

 

Better / (Worse)

 

 

2023

 

 

 

2022

 

 

Change

 

% Change

 

(In millions)

Reported:

 

 

 

 

 

 

 

Compensation

$

105.1

 

 

$

112.2

 

 

$

7.1

 

 

6

%

Advertising

 

40.3

 

 

 

46.4

 

 

 

6.1

 

 

13

%

Rent

 

5.3

 

 

 

6.2

 

 

 

0.9

 

 

15

%

Other

 

48.3

 

 

 

42.7

 

 

 

(5.6

)

 

(13

)%

Total SG&A expenses

$

199.0

 

 

$

207.5

 

 

$

8.5

 

 

4

%

Adjustments:

 

 

 

 

 

 

 

Acquisition and disposition-related gain (loss)

$

(0.3

)

 

$

 

 

 

 

 

Lease exit charges

 

(4.3

)

 

 

 

 

 

 

 

Severance and long-term compensation charges

 

(5.1

)

 

 

 

 

 

 

 

Total SG&A adjustments

$

(9.7

)

 

$

 

 

 

 

 

Adjusted:

 

 

 

 

 

 

 

Total adjusted SG&A expenses

$

189.3

 

 

$

207.5

 

 

$

18.2

 

 

8.8

%

 

 

 

 

 

 

 

 

Reported:

 

 

 

 

 

 

 

SG&A expenses as a % of gross profit:

 

 

 

 

 

 

 

Compensation

 

88.4

%

 

 

83.5

%

 

 

(490

)

bps

Advertising

 

33.9

%

 

 

34.6

%

 

 

70

 

bps

Rent

 

4.4

%

 

 

4.7

%

 

 

30

 

bps

Other

 

40.5

%

 

 

31.7

%

 

 

(880

)

bps

Total SG&A expenses as a % of gross profit

 

167.2

%

 

 

154.5

%

 

 

NM

 

 

Adjustments:

 

 

 

 

 

 

Acquisition and disposition-related gain (loss)

 

(0.6

)%

 

 

%

 

 

 

Hail and storm damage charges

 

%

 

 

%

 

 

 

 

Lease exit charges

 

(9.0

)%

 

 

%

 

 

 

Severance and long-term compensation charges

 

(10.7

)%

 

 

%

 

 

 

Total effect of adjustments

 

(20.4

)%

 

 

%

 

 

 

Adjusted:

 

 

 

 

 

 

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

 

146.8

%

 

 

154.5

%

 

 

NM

 

 

 

 

 

 

 

 

 

 

Reported:

 

 

 

 

 

 

 

Total gross profit

$

119.0

 

 

$

134.3

 

 

$

(15.3

)

 

(11

)%

Adjustments:

 

 

 

 

 

 

 

Used vehicle inventory valuation adjustment

$

10.0

 

 

$

 

 

 

 

 

Total adjustments

$

10.0

 

 

$

 

 

 

 

 

Adjusted:

 

 

 

 

 

 

 

Total adjusted gross profit

$

129.0

 

 

$

134.3

 

 

$

(5.3

)

 

(4

)%

NM = Not Meaningful 

 
 
 
 

Non-GAAP Reconciliation - Powersports Segment - SG&A Expenses 

 

 

Three Months Ended September 30,

 

Better / (Worse)

 

 

2023

 

 

 

2022

 

 

Change

 

% Change

 

(In millions)

Reported:

 

 

 

 

 

 

 

Compensation

$

9.1

 

 

$

2.5

 

 

$

(6.6

)

 

(264

)%

Advertising

 

0.6

 

 

 

0.2

 

 

 

(0.4

)

 

(200

)%

Rent

 

(0.6

)

 

 

 

 

 

0.6

 

 

%

Other

 

3.6

 

 

 

0.9

 

 

 

(2.7

)

 

(300

)%

Total SG&A expenses

$

12.7

 

 

$

3.6

 

 

$

(9.1

)

 

(253

)%

 

 

 

 

 

 

 

 

Reported:

 

 

 

 

 

 

 

SG&A expenses as a % of gross profit:

 

 

 

 

 

 

 

Compensation

 

44.0

%

 

 

47.2

%

 

 

320

 

bps

Advertising

 

2.9

%

 

 

3.1

%

 

 

20

 

bps

Rent

 

(2.9

)%

 

 

0.2

%

 

 

310

 

bps

Other

 

17.1

%

 

 

15.7

%

 

 

(140

)

bps

Total SG&A expenses as a % of gross profit

 

61.1

%

 

 

66.2

%

 

 

510

 

bps

 

 

 

 

 

 

 

 

Reported:

 

 

 

 

 

 

 

Total gross profit

$

20.8

 

 

$

5.4

 

 

$

15.4

 

 

285

%

NM = Not Meaningful 

 

 

Nine Months Ended September 30,

 

Better / (Worse)

 

 

2023

 

 

 

2022

 

 

Change

 

% Change

 

(In millions)

Reported:

 

 

 

 

 

 

 

Compensation

$

21.0

 

 

$

4.7

 

 

$

(16.3

)

 

(347

)%

Advertising

 

1.4

 

 

 

0.2

 

 

 

(1.2

)

 

(600

)%

Rent

 

(0.6

)

 

 

 

 

 

0.6

 

 

%

Other

 

7.8

 

 

 

1.5

 

 

 

(6.3

)

 

(420

)%

Total SG&A expenses

$

29.7

 

 

$

6.4

 

 

$

(23.3

)

 

(364

)%

 

 

 

 

 

 

 

 

Reported:

 

 

 

 

 

 

 

SG&A expenses as a % of gross profit:

 

 

 

 

 

 

 

Compensation

 

48.4

%

 

 

58.3

%

 

 

NM

 

 

Advertising

 

3.2

%

 

 

2.8

%

 

 

(40

)

bps

Rent

 

(1.2

)%

 

 

0.1

%

 

 

130

 

bps

Other

 

18.1

%

 

 

17.6

%

 

 

(50

)

bps

Total SG&A expenses as a % of gross profit

 

68.5

%

 

 

78.8

%

 

 

NM

 

 

 

 

 

 

 

 

 

 

Reported:

 

 

 

 

 

 

 

Total gross profit

$

43.4

 

 

$

8.2

 

 

$

35.2

 

 

429

%

NM = Not Meaningful 

 
 
 
 

Non-GAAP Reconciliation - Franchised Dealerships Segment - Income (Loss) Before Taxes and Segment Income (Loss) 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2023

 

2022

 

% Change

 

2023

 

2022

 

% Change

 

(In millions)

Reported:

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before taxes

$

101.5

 

$

146.3

 

(31

)%

 

$

357.2

 

 

$

472.2

 

(24

)%

Add: Impairment charges

 

 

 

 

 

 

 

 

 

 

 

 

Segment income (loss)

$

101.5

 

$

146.3

 

(31

)%

 

$

357.2

 

 

$

472.2

 

(24

)%

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Acquisition and disposition-related (gain) loss

$

 

$

 

 

 

$

(20.9

)

 

$

 

 

Hail and storm damage charges

 

 

 

 

 

 

 

1.9

 

 

 

 

 

Long-term compensation charges

 

 

 

 

 

 

 

 

 

 

4.4

 

 

Total pre-tax adjustments

$

 

$

 

 

 

$

(19.0

)

 

$

4.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted:

 

 

 

 

 

 

 

 

 

 

 

Segment income (loss)

$

101.5

 

$

146.3

 

(31

)%

 

$

338.2

 

 

$

476.6

 

(29

)%

 
 
 
 

Non-GAAP Reconciliation - EchoPark Segment - Income (Loss) Before Taxes and Segment Income (Loss) 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2023

 

 

 

2022

 

 

% Change

 

 

2023

 

 

 

2022

 

 

% Change

 

(In millions)

Reported:

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before taxes

$

(16.9

)

 

$

(31.1

)

 

46

%

 

$

(179.1

)

 

$

(100.6

)

 

(78

)%

Add: Impairment charges

 

 

 

 

 

 

 

 

 

62.6

 

 

 

 

 

 

Segment income (loss)

$

(16.9

)

 

$

(31.1

)

 

46

%

 

$

(116.5

)

 

$

(100.6

)

 

(16

)%

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Acquisition and disposition-related (gain) loss

$

 

 

$

 

 

 

 

$

0.3

 

 

$

 

 

 

Lease exit charges

 

3.9

 

 

 

 

 

 

 

 

4.3

 

 

 

 

 

 

Severance and long-term compensation charges

 

0.9

 

 

 

 

 

 

 

 

5.1

 

 

 

 

 

 

Used vehicle inventory valuation adjustment

 

 

 

 

 

 

 

 

 

10.0

 

 

 

 

 

 

Total pre-tax adjustments

$

4.8

 

 

$

 

 

 

 

$

19.7

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted:

 

 

 

 

 

 

 

 

 

 

 

Segment income (loss)

$

(12.1

)

 

$

(31.1

)

 

61

%

 

$

(96.8

)

 

$

(100.6

)

 

4

%

 
 
 
 

Non-GAAP Reconciliation - Powersports Segment - Income (Loss) Before Taxes and Segment Income (Loss) 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2023

 

2022

 

% Change

 

2023

 

2022

 

% Change

 

(In millions)

Reported:

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before taxes

$

6.6

 

$

1.2

 

450

%

 

$

9.2

 

$

0.9

 

NM

Add: Impairment charges

 

 

 

 

 

 

 

 

 

 

 

Segment income (loss)

$

6.6

 

$

1.2

 

450

%

 

 

9.2

 

 

0.9

 

NM

NM = Not Meaningful 

 
 
 
 

Non-GAAP Reconciliation - Consolidated - Net Income (Loss) and Diluted Earnings (Loss) Per Share 

 

 

Three Months Ended September 30, 2023

 

Three Months Ended September 30, 2022

 

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

35.6

 

$

68.4

 

 

$

1.92

 

39.2

 

$

87.3

 

$

2.23

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Lease exit charges

 

 

$

3.9

 

 

 

 

 

 

$

 

 

Severance and long-term compensation charges

 

 

 

0.9

 

 

 

 

 

 

 

 

 

Total pre-tax items of interest

 

 

$

4.8

 

 

 

 

 

 

$

 

 

Tax effect of above items

 

 

 

(1.2

)

 

 

 

 

 

 

 

 

Adjusted net income (loss), diluted shares, and diluted earnings (loss) per share

35.6

 

$

72.0

 

 

$

2.02

 

39.2

 

$

87.3

 

$

2.23

 
 
 

Nine Months Ended September 30, 2023

 

Nine Months Ended September 30, 2022

 

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

36.2

 

$

139.5

 

 

$

3.85

 

40.5

 

$

279.4

 

$

6.90

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Acquisition and disposition-related gain (loss)

 

 

$

(20.7

)

 

 

 

 

 

$

 

 

Hail and storm damage charges

 

 

 

1.9

 

 

 

 

 

 

 

 

 

Impairment charges

 

 

 

62.6

 

 

 

 

 

 

 

 

 

Lease exit charges

 

 

 

4.3

 

 

 

 

 

 

 

 

 

Severance and long-term compensation charges

 

 

 

5.1

 

 

 

 

 

 

 

4.4

 

 

Used vehicle inventory valuation adjustment

 

 

 

10.0

 

 

 

 

 

 

 

 

 

Total pre-tax items of interest

 

 

$

63.2

 

 

 

 

 

 

$

4.4

 

 

Tax effect of above items

 

 

 

(15.6

)

 

 

 

 

 

 

 

 

Adjusted net income (loss), diluted shares, and diluted earnings (loss) per share

36.2

 

$

187.1

 

 

$

5.17

 

40.5

 

$

283.8

 

$

7.01

 
 
 
 

Non-GAAP Reconciliation - Adjusted EBITDA 

 

 

Three Months Ended September 30, 2023

 

Three Months Ended September 30, 2022

 

Franchised

Dealerships

Segment

 

EchoPark

Segment

 

Powersports

Segment

 

Total

 

Franchised

Dealerships

Segment

 

EchoPark

Segment

 

Powersports

Segment

 

Total

 

(In millions)

Net income (loss)

 

 

 

 

 

 

$

68.4

 

 

 

 

 

 

 

$

87.3

Provision for income taxes

 

 

 

 

 

 

 

22.8

 

 

 

 

 

 

 

 

29.1

Income (loss) before taxes

$

101.5

 

$

(16.9

)

 

$

6.6

 

$

91.2

 

$

146.3

 

$

(31.1

)

 

$

1.2

 

$

116.4

Non-floor plan interest (1)

 

26.2

 

 

0.7

 

 

 

0.4

 

 

27.3

 

 

19.9

 

 

1.1

 

 

 

0.4

 

 

21.4

Depreciation and amortization (2)

 

29.9

 

 

6.1

 

 

 

0.9

 

 

36.9

 

 

27.3

 

 

6.7

 

 

 

0.3

 

 

34.3

Stock-based compensation expense

 

6.7

 

 

 

 

 

 

 

6.7

 

 

3.8

 

 

 

 

 

 

 

3.8

Loss (gain) on exit of leased dealerships

 

 

 

3.9

 

 

 

 

 

3.9

 

 

 

 

 

 

 

 

 

Severance and long-term compensation charges

 

 

 

0.9

 

 

 

 

 

0.9

 

 

 

 

 

 

 

 

 

Acquisition and disposition related (gain) loss

 

0.2

 

 

0.1

 

 

 

 

 

0.3

 

 

0.5

 

 

 

 

 

 

 

0.5

Adjusted EBITDA

$

164.5

 

$

(5.2

)

 

$

7.9

 

$

167.2

 

$

197.8

 

$

(23.3

)

 

$

1.9

 

$

176.4

 
 

 

Nine Months Ended September 30, 2023

 

Nine Months Ended September 30, 2022

 

Franchised

Dealerships

Segment

 

EchoPark

Segment

 

Powersports

Segment

 

Total

 

Franchised

Dealerships

Segment

 

EchoPark

Segment

 

Powersports

Segment

 

Total

 

(In millions)

Net income (loss)

 

 

 

 

 

 

$

139.5

 

 

 

 

 

 

 

 

$

279.4

 

Provision for income taxes

 

 

 

 

 

 

 

47.8

 

 

 

 

 

 

 

 

 

93.1

 

Income (loss) before taxes

$

357.2

 

 

$

(179.1

)

 

$

9.2

 

$

187.3

 

 

$

472.2

 

 

$

(100.6

)

 

$

0.9

 

$

372.5

 

Non-floor plan interest (1)

 

77.4

 

 

 

2.5

 

 

 

1.6

 

 

81.5

 

 

 

58.0

 

 

 

3.0

 

 

 

0.2

 

 

61.2

 

Depreciation & amortization (2)

 

87.6

 

 

 

20.4

 

 

 

2.4

 

 

110.4

 

 

 

79.6

 

 

 

17.6

 

 

 

0.5

 

 

97.7

 

Stock-based compensation expense

 

17.3

 

 

 

 

 

 

 

 

17.3

 

 

 

12.4

 

 

 

 

 

 

 

 

12.4

 

Loss (gain) on exit of leased dealerships

 

 

 

 

4.3

 

 

 

 

 

4.3

 

 

 

 

 

 

 

 

 

 

 

 

Impairment charges

 

 

 

 

62.6

 

 

 

 

 

62.6

 

 

 

 

 

 

 

 

 

 

 

 

Severance and long-term compensation charges

 

 

 

 

5.1

 

 

 

 

 

5.1

 

 

 

4.4

 

 

 

 

 

 

 

 

4.4

 

Acquisition and disposition related (gain) loss

 

(20.7

)

 

 

0.3

 

 

 

 

 

(20.4

)

 

 

(0.5

)

 

 

 

 

 

 

 

(0.5

)

Hail and storm damage charges

 

1.9

 

 

 

 

 

 

 

 

1.9

 

 

 

 

 

 

 

 

 

 

 

 

Used vehicle inventory valuation adjustment

 

 

 

 

10.0

 

 

 

 

 

10.0

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

520.7

 

 

$

(73.9

)

 

$

13.2

 

$

460.0

 

 

$

626.1

 

 

$

(80.0

)

 

$

1.6

 

$

547.7

 

(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. 

 

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.