Exhibit 99.1


Sonic Automotive Reports EPS of $0.62 for the Second Quarter of 2019;
EchoPark Revenues Up 61.9% and Expected to Exceed $1.1 Billion for 2019

CHARLOTTE, N.C. – July 25, 2019 – Sonic Automotive, Inc. (NYSE: SAH), one of the nation’s largest automotive retailers, today reported financial results for the second quarter of 2019.

•EchoPark revenues of $291.7 million during the second quarter of 2019, up 61.9% from the second quarter of 2018 and on-track to exceed $1.1 billion in full year 2019 revenues.
•EchoPark pre-tax profit improved $29.5 million, or 101.6%, to $1.7 million in the second quarter of 2019, compared to a pre-tax loss of $27.8 million in the second quarter of 2018.
•EchoPark generated positive cash flow (Adjusted EBITDA*) of $4.8 million in the second quarter of 2019, improving by $7.0 million, or 321.7%, from the second quarter of 2018.
•EchoPark retailed 12,587 units during the second quarter of 2019, up 68.7% from the second quarter of 2018.
•Total Sonic consolidated GAAP continuing operations earnings per diluted share of $0.62 in the second quarter of 2019, compared to $0.40 in the second quarter of 2018 (excluding the items of interest detailed below, Adjusted earnings per diluted share from continuing operations* for the second quarter of 2018 were $0.35).
•Total Sonic consolidated all-time quarterly record pre-owned retail unit sales of 41,458 units in the second quarter of 2019.
•Total Sonic same store Fixed Operations gross increased $10.2 million in the second quarter of 2019, up 6.4% from the second quarter of 2018.
•Total Sonic consolidated all-time quarterly record F&I gross profit per retail unit of $1,710 in the second quarter of 2019.
•Total Sonic consolidated all-time quarterly record F&I gross profit of $118.3 million in the second quarter of 2019.
•SG&A to gross profit ratio of 77.2% in the second quarter of 2019, an improvement of 330 basis points compared to the second quarter of 2018 (excluding the items of interest in the second quarter of 2018 detailed below).*

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

Second Quarter 2019 Results

On a GAAP basis, net income from continuing operations for the second quarter of 2019 was $26.8 million, or $0.62 per diluted share. Comparatively, net income from continuing operations for the second quarter of 2018 was $17.1 million, or $0.40 per diluted share.

GAAP results reported for the second quarter of 2018 include the following pre-tax items of interest (there were no such items for the second quarter of 2019):

Income Statement
Line Item
(In millions)Q2 2018
Gain on franchise disposals $38.0 SG&A expenses
Legal and storm damage charges$(3.1)SG&A expenses
Long-term compensation charges$(23.3)SG&A expenses(1)
Impairment charges$(10.3)Impairment expenses
Lease exit adjustments$2.6 SG&A expenses
Note: Amounts in table relate to the Franchised Dealerships Segment unless otherwise noted below.
(1) Relates to EchoPark.



Commentary

David Smith, Sonic’s and EchoPark’s Chief Executive Officer, commented, “We are quite pleased with the results for the quarter. Our franchised stores posted very good results across all revenue lines and our EchoPark operations continued on the growth and profitability path experienced in the prior quarter. We are confident that this momentum will carry into the second half of the year. Even as the new vehicle market started showing signs of weakness, we still had record results in our pre-owned and F&I business lines and grew our fixed operations by 6.4%. This, once again, shows how the dynamic dealer operating model benefits from multiple revenue streams.”

“We are very excited to see the maturity of our current EchoPark locations as illustrated by our most mature market, Denver, Colorado. When we enter a market, we have a clear objective of becoming the market volume leader and achieving that distinction in a profitable manner. It is very exciting to see the results when you focus on the customer and use technology and process to reduce your expenses and simplify the operational model. We believe we will be able to open an additional EchoPark store before the end of 2019 and another shortly thereafter in the first half of 2020. Our current plans include two additional EchoPark store openings in the second half of 2020.”

Jeff Dyke, Sonic’s and EchoPark’s President, commented, “During the second quarter, EchoPark continued to grow consistent with our expectations. The combination of a 68.7% increase in unit volume and an increase of combined front-end and F&I gross per unit of 22.3% significantly contributed to the $13.4 million increase in total gross profit in the second quarter of 2019. This represents an increase of 92.5% over the prior year quarter. At the store operating level, all of our stores improved their performance over the prior year quarter except for one, which was relocated during the current year quarter. Our team continues managing inventory levels, inventory costs and retail pricing which we believe give us a competitive advantage to the overall pre-owned industry. We believe our technology, training and execution will allow us to scale at a level that will continue to help us significantly grow revenue while remaining profitable as we add rooftops in the coming years. We continue to be very excited about our EchoPark business model as we realize and believe that the opportunity in the pre-owned market is massive.”

“Equally as exciting, our franchised stores did an excellent job during the quarter. Collectively, our new car business increased local market share and improved gross per unit on a same store basis by 4.1%. Our franchised stores also really pushed pre-owned volume during the quarter. Same store used vehicle gross profit increased nearly one percent, driven by an increase in pre-owned units sold of 6.1%, offset slightly by a $67 decline in gross per unit. Pre-owned volume also supported higher same store F&I gross profit for the second quarter, which increased 5.9% to $86.7 million. Additionally, the results of our fixed operations business were fantastic. Same store franchise fixed operations gross for the second quarter of 2019 increased 6.8%, or $10.9 million, compared to the prior year quarter. This included an increase of 7.9% in same store customer pay gross profit. Total gross profit from the franchised stores on a same store basis increased $19.7 million in the second quarter, up 6.0% from the prior year quarter. Cost controls were also in play during the quarter for the franchised store group which improved its same store SG&A to gross ratio by 30 basis points, down to 76.3% for the quarter.”

“Consolidated SG&A to gross during the second quarter of 2019 was 77.2%. This compares to an adjusted ratio of 80.5% in the prior year quarter. We continue to look at the business critically to ensure resources are allocated to those functions that are core to our operating strategy.”

Dividend

Sonic’s Board of Directors approved a quarterly dividend of $0.10 per share payable in cash for our stockholders of record on September 13, 2019. The dividend will be payable on October 15, 2019.

Second Quarter 2019 Earnings Conference Call

Senior management will host a conference call today at 10:00 A.M. (Eastern) to discuss the quarter’s results. To access the live broadcast of the call over the Internet go to: www.sonicautomotive.com, then click on “Our Company,” then “Investor Relations,” then the “Earnings Conference Calls” link at the bottom of the page.

Presentation materials for the conference call will be accessible beginning the morning of the conference call on the Company’s website at www.sonicautomotive.com by clicking on the “Investor Relations” tab under “Our Company” and choosing the “Webcasts & Presentations” link at the bottom of the page.




The conference call will also be available live by dialing in 10 minutes prior to the start of the call at:

Domestic: (877) 450-3867
International: (706) 643-0958
Conference ID: 7589142

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

Domestic: (855) 859-2056
International: (404) 537-3406
Conference ID: 7589142

About Sonic Automotive

Sonic Automotive, Inc., a Fortune 500 company based in Charlotte, N.C., is one of the nation’s largest automotive retailers. Sonic can be reached on the web at www.sonicautomotive.com. 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, EchoPark revenue estimates, EchoPark unit sales volume, EchoPark profit estimates, economic conditions in the markets in which we operate, new and used vehicle industry sales volume, the success of our operational strategies, the rate and timing of overall economic recovery or decline, and the risk factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 and the Company’s other periodic reports and information filed with the Securities and Exchange Commission (the “SEC”). The Company does not undertake any obligation to update forward-looking information, except as required under federal securities laws and the rules and regulations of the SEC.

Non-GAAP Financial Measures

This press release and the attached financial tables contain certain non-GAAP financial measures as defined under SEC rules, such as Adjusted EBITDA, Adjusted earnings per diluted share from continuing operations and Adjusted SG&A to gross profit ratio. 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.

Contact:Heath Byrd, Executive Vice President and Chief Financial Officer (704) 566-2400
C.G. Saffer, Vice President and Chief Accounting Officer (704) 566-2439



Sonic Automotive, Inc.
Results of Operations (Unaudited)

Results of Operations
Three Months Ended June 30,Six Months Ended June 30,
2019201820192018
(Dollars and shares in thousands, except per share amounts)
Revenues:
New vehicles$1,204,754 $1,238,571 $2,271,088 $2,419,416 
Used vehicles885,627 762,572 1,705,992 1,471,618 
Wholesale vehicles50,039 53,748 104,810 119,148 
Total vehicles2,140,420 2,054,891 4,081,890 4,010,182 
Parts, service and collision repair355,312 346,754 696,742 698,512 
Finance, insurance and other, net118,349 104,104 224,587 197,829 
Total revenues2,614,081 2,505,749 5,003,219 4,906,523 
Cost of Sales:
New vehicles(1,148,354)(1,181,303)(2,160,892)(2,305,349)
Used vehicles(848,898)(725,263)(1,632,256)(1,397,538)
Wholesale vehicles(50,752)(57,105)(106,789)(126,929)
Total vehicles(2,048,004)(1,963,671)(3,899,937)(3,829,816)
Parts, service and collision repair(184,766)(179,703)(362,960)(361,833)
Total cost of sales(2,232,770)(2,143,374)(4,262,897)(4,191,649)
Gross profit381,311 362,375 740,322 714,874 
Selling, general and administrative expenses(294,532)(277,462)(541,626)(582,387)
Impairment charges— (10,317)(1,952)(13,960)
Depreciation and amortization(23,806)(23,949)(46,456)(47,692)
Operating income (loss)62,973 50,647 150,288 70,835 
Other income (expense):
Interest expense, floor plan(12,518)(11,945)(25,744)(22,622)
Interest expense, other, net(13,628)(13,375)(26,481)(26,831)
Other income (expense), net(5)17 95 106 
Total other income (expense)(26,151)(25,303)(52,130)(49,347)
Income (loss) from continuing operations before taxes36,822 25,344 98,158 21,488 
Provision for income taxes for continuing operations - benefit (expense)(10,071)(8,222)(29,058)(6,380)
Income (loss) from continuing operations26,751 17,122 69,100 15,108 
Discontinued operations:
Income (loss) from discontinued operations before taxes(213)(297)(393)(545)
Provision for income taxes for discontinued operations - benefit (expense)61 80 114 148 
Income (loss) from discontinued operations(152)(217)(279)(397)
Net income (loss)$26,599 $16,905 $68,821 $14,711 
Basic earnings (loss) per common share:
Earnings (loss) per share from continuing operations$0.62 $0.40 $1.61 $0.35 
Earnings (loss) per share from discontinued operations— — (0.01)(0.01)
Earnings (loss) per common share$0.62 $0.40 $1.60 $0.34 
Weighted-average common shares outstanding43,066 42,662 42,953 42,725 
Diluted earnings (loss) per common share:
Earnings (loss) per share from continuing operations$0.62 $0.40 $1.60 $0.35 
Earnings (loss) per share from discontinued operations(0.01)(0.01)— (0.01)
Earnings (loss) per common share$0.61 $0.39 $1.60 $0.34 
Weighted-average common shares outstanding43,230 42,920 43,060 42,948 
Dividends declared per common share$0.10 $0.06 $0.20 $0.12 






New Vehicles
Three Months Ended June 30,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported new vehicle:
Revenue$1,204,754 $1,238,571 $(33,817)(2.7)%
Gross profit$56,400 $57,268 $(868)(1.5)%
Unit sales28,196 30,877 (2,681)(8.7)%
Revenue per unit$42,728 $40,113 $2,615 6.5 %
Gross profit per unit$2,000 $1,855 $145 7.8 %
Gross profit as a % of revenue4.7 %4.6 %10 bps
Six Months Ended June 30,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported new vehicle:
Revenue$2,271,088 $2,419,416 $(148,328)(6.1)%
Gross profit$110,196 $114,067 $(3,871)(3.4)%
Unit sales53,393 60,377 (6,984)(11.6)%
Revenue per unit$42,535 $40,072 $2,463 6.1 %
Gross profit per unit$2,064 $1,889 $175 9.3 %
Gross profit as a % of revenue4.9 %4.7 %20 bps
Three Months Ended June 30,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store new vehicle:
Revenue$1,200,352 $1,170,278 $30,074 2.6 %
Gross profit$55,803 $54,904 $899 1.6 %
Unit sales28,134 28,826 (692)(2.4)%
Revenue per unit$42,666 $40,598 $2,068 5.1 %
Gross profit per unit$1,983 $1,905 $78 4.1 %
Gross profit as a % of revenue4.6 %4.7 %(10)bps
Six Months Ended June 30,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store new vehicle:
Revenue$2,248,029 $2,267,998 $(19,969)(0.9)%
Gross profit$108,763 $109,282 $(519)(0.5)%
Unit sales52,829 55,736 (2,907)(5.2)%
Revenue per unit$42,553 $40,692 $1,861 4.6 %
Gross profit per unit$2,059 $1,961 $98 5.0 %
Gross profit as a % of revenue4.8 %4.8 %— bps












Used Vehicles
Three Months Ended June 30,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported used vehicle:
Revenue$885,627 $762,572 $123,055 16.1 %
Gross profit$36,729 $37,309 $(580)(1.6)%
Unit sales41,458 35,779 5,679 15.9 %
Revenue per unit$21,362 $21,313 $49 0.2 %
Gross profit per unit$886 $1,043 $(157)(15.1)%
Gross profit as a % of revenue4.1 %4.9 %(80)bps
Six Months Ended June 30,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported used vehicle:
Revenue$1,705,992 $1,471,618 $234,374 15.9 %
Gross profit$73,736 $74,080 $(344)(0.5)%
Unit sales79,921 69,518 10,403 15.0 %
Revenue per unit$21,346 $21,169 $177 0.8 %
Gross profit per unit$923 $1,066 $(143)(13.4)%
Gross profit as a % of revenue4.3 %5.0 %(70)bps
Three Months Ended June 30,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store used vehicle:
Revenue$826,666 $728,393 $98,273 13.5 %
Gross profit$34,540 $34,677 $(137)(0.4)%
Unit sales38,517 33,930 4,587 13.5 %
Revenue per unit$21,462 $21,468 $(6)—%
Gross profit per unit$897 $1,022 $(125)(12.2)%
Gross profit as a % of revenue4.2 %4.8 %(60)bps
Six Months Ended June 30,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store used vehicle:
Revenue$1,591,287 $1,394,490 $196,797 14.1 %
Gross profit$68,263 $67,477 $786 1.2 %
Unit sales74,126 65,293 8,833 13.5 %
Revenue per unit$21,467 $21,357 $110 0.5 %
Gross profit per unit$921 $1,033 $(112)(10.8)%
Gross profit as a % of revenue4.3 %4.8 %(50)bps

















Wholesale Vehicles
Three Months Ended June 30,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported wholesale vehicle:
Revenue$50,039 $53,748 $(3,709)(6.9)%
Gross profit (loss) $(713)$(3,357)$2,644 78.8 %
Unit sales8,646 8,442 204 2.4 %
Revenue per unit$5,788 $6,367 $(579)(9.1)%
Gross profit (loss) per unit$(82)$(398)$316 79.4 %
Gross profit (loss) as a % of revenue(1.4)%(6.2)%480 bps
Six Months Ended June 30,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported wholesale vehicle:
Revenue$104,810 $119,148 $(14,338)(12.0)%
Gross profit (loss)$(1,979)$(7,781)$5,802 74.6 %
Unit sales17,293 18,122 (829)(4.6)%
Revenue per unit$6,061 $6,575 $(514)(7.8)%
Gross profit (loss) per unit$(114)$(429)$315 73.4 %
Gross profit (loss) as a % of revenue(1.9)%(6.5)%460 bps
Three Months Ended June 30,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store wholesale vehicle:
Revenue$48,270 $48,127 $143 0.3 %
Gross profit (loss)$(631)$(3,074)$2,443 79.5 %
Unit sales8,230 7,460 770 10.3 %
Revenue per unit$5,865 $6,451 $(586)(9.1)%
Gross profit (loss) per unit$(77)$(412)$335 81.3 %
Gross profit (loss) as a % of revenue(1.3)%(6.4)%510 bps
Six Months Ended June 30,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store wholesale vehicle:
Revenue$101,394 $108,446 $(7,052)(6.5)%
Gross profit (loss)$(1,773)$(6,955)$5,182 74.5 %
Unit sales16,618 16,327 291 1.8 %
Revenue per unit$6,101 $6,642 $(541)(8.1)%
Gross profit (loss) per unit$(107)$(426)$319 74.9 %
Gross profit (loss) as a % of revenue(1.7)%(6.4)%470 bps















Parts, Service and Collision Repair (“Fixed Operations”)
Three Months Ended June 30,Better / (Worse)
20192018Change% Change
(In thousands)
Reported:
Revenue
Customer pay$142,113 $140,351 $1,762 1.3 %
Warranty69,809 63,888 5,921 9.3 %
Wholesale parts40,027 40,844 (817)(2.0)%
Internal, sublet and other103,363 101,671 1,692 1.7 %
Total$355,312 $346,754 $8,558 2.5 %
Gross profit
Customer pay$77,652 $75,100 $2,552 3.4 %
Warranty39,039 35,871 3,168 8.8 %
Wholesale parts6,872 6,900 (28)(0.4)%
Internal, sublet and other46,983 49,180 (2,197)(4.5)%
Total$170,546 $167,051 $3,495 2.1 %
Gross profit as a % of revenue
Customer pay54.6 %53.5 %110 bps
Warranty55.9 %56.1 %(20)bps
Wholesale parts17.2 %16.9 %30 bps
Internal, sublet and other45.5 %48.4 %(290)bps
Total48.0 %48.2 %(20)bps
Six Months Ended June 30,Better / (Worse)
20192018Change% Change
(In thousands)
Reported:
Revenue
Customer pay$279,834 $282,706 $(2,872)(1.0)%
Warranty138,782 131,489 7,293 5.5 %
Wholesale parts79,325 83,345 (4,020)(4.8)%
Internal, sublet and other198,801 200,972 (2,171)(1.1)%
Total$696,742 $698,512 $(1,770)(0.3)%
Gross profit
Customer pay$151,978 $151,449 $529 0.3 %
Warranty77,447 73,772 3,675 5.0 %
Wholesale parts13,668 14,165 (497)(3.5)%
Internal, sublet and other90,689 97,293 (6,604)(6.8)%
Total$333,782 $336,679 $(2,897)(0.9)%
Gross profit as a % of revenue
Customer pay54.3 %53.6 %70 bps
Warranty55.8 %56.1 %(30)bps
Wholesale parts17.2 %17.0 %20 bps
Internal, sublet and other45.6 %48.4 %(280)bps
Total47.9 %48.2 %(30)bps










Parts, Service and Collision Repair (“Fixed Operations”)
Three Months Ended June 30,Better / (Worse)
20192018Change% Change
(In thousands)
Same Store:
Revenue
Customer pay$141,061 $134,096 $6,965 5.2 %
Warranty70,283 62,323 7,960 12.8 %
Wholesale parts39,696 39,057 639 1.6 %
Internal, sublet and other101,345 96,806 4,539 4.7 %
Total$352,385 $332,282 $20,103 6.0 %
Gross profit
Customer pay$77,079 $71,426 $5,653 7.9 %
Warranty39,247 34,874 4,373 12.5 %
Wholesale parts6,813 6,557 256 3.9 %
Internal, sublet and other46,655 46,720 (65)(0.1)%
Total$169,794 $159,577 $10,217 6.4 %
Gross profit as a % of revenue
Customer pay54.6 %53.3 %130 bps
Warranty55.8 %56.0 %(20)bps
Wholesale parts17.2 %16.8 %40 bps
Internal, sublet and other46.0 %48.3 %(230)bps
Total48.2 %48.0 %20 bps
Six Months Ended June 30,Better / (Worse)
20192018Change% Change
(In thousands)
Same Store:
Revenue
Customer pay$277,155 $264,824 $12,331 4.7 %
Warranty137,720 126,537 11,183 8.8 %
Wholesale parts78,277 79,069 (792)(1.0)%
Internal, sublet and other194,421 189,409 5,012 2.6 %
Total$687,573 $659,839 $27,734 4.2 %
Gross profit
Customer pay$150,513 $141,236 $9,277 6.6 %
Warranty76,859 70,778 6,081 8.6 %
Wholesale parts13,449 13,347 102 0.8 %
Internal, sublet and other88,981 91,086 (2,105)(2.3)%
Total$329,802 $316,447 $13,355 4.2 %
Gross profit as a % of revenue
Customer pay54.3 %53.3 %100 bps
Warranty55.8 %55.9 %(10)bps
Wholesale parts17.2 %16.9 %30 bps
Internal, sublet and other45.8 %48.1 %(230)bps
Total48.0 %48.0 %— bps












Finance, Insurance and Other, Net (“F&I”)    
Three Months Ended June 30,Better / (Worse)
20192018Change% Change
(In thousands, except per unit data)
Reported:
Revenue$118,349 $104,104 $14,245 13.7 %
Unit sales69,213 66,238 2,975 4.5 %
Gross profit per retail unit (excludes fleet)$1,710 $1,572 $138 8.8 %
Six Months Ended June 30,Better / (Worse)
20192018Change% Change
(In thousands, except per unit data)
Reported:
Revenue$224,587 $197,829 $26,758 13.5 %
Unit sales 132,594 129,154 3,440 2.7 %
Gross profit per retail unit (excludes fleet)$1,694 $1,532 $162 10.6 %
Three Months Ended June 30,Better / (Worse)
20192018Change% Change
(In thousands, except per unit data)
Same Store:
Revenue$108,818 $95,816 $13,002 13.6 %
Unit sales66,210 62,363 3,847 6.2 %
Gross profit per retail unit (excludes fleet)$1,644 $1,536 $108 7.0 %
Six Months Ended June 30,Better / (Worse)
20192018Change% Change
(In thousands, except per unit data)
Same Store:
Revenue$205,936 $180,977 $24,959 13.8 %
Unit sales126,235 120,333 5,902 4.9 %
Gross profit per retail unit (excludes fleet)$1,631 $1,504 $127 8.4 %





























Selling, General and Administrative (“SG&A”) Expenses

Three Months Ended June 30,Better / (Worse)
20192018Change% Change
(In thousands)
Reported:
Compensation$181,197 $197,641 $16,444 8.3 %
Advertising15,402 16,270 868 5.3 %
Rent13,336 13,702 366 2.7 %
Other84,597 49,849 (34,748)(69.7)%
Total SG&A expenses$294,532 $277,462 $(17,070)(6.2)%
Adjustments:
Gain on franchise disposals$— $38,048 
Legal and storm damage charges— (3,064)
Long-term compensation charges— (23,333)
Lease exit charges— 2,579 
Total SG&A adjustments$— $14,230 
Adjusted:
Total adjusted SG&A expenses$294,532 $291,692 $(2,840)(1.0)%
Reported:
SG&A expenses as a % of gross profit:
Compensation47.5 %54.5 %700 bps
Advertising4.0 %4.5 %50 bps
Rent3.5 %3.8 %30 bps
Other22.2 %13.8 %(840)bps
Total SG&A expenses as a % of gross profit77.2 %76.6 %(60)bps
Adjustments:
Gain on franchise disposals— %10.5 %
Legal and storm damage charges— %(0.8)%
Long-term compensation charges— %(6.5)%
Lease exit charges— %0.7 %
Total effect of adjustments— %3.9 %
Adjusted:
Total adjusted SG&A expenses as a % of gross profit77.2 %80.5 %330 bps



Six Months Ended June 30,Better / (Worse)
20192018Change% Change
(In thousands)
Reported:
Compensation$365,381 $382,678 $17,297 4.5 %
Advertising30,453 32,287 1,834 5.7 %
Rent28,586 35,570 6,984 19.6 %
Other117,206 131,852 14,646 11.1 %
Total SG&A expenses$541,626 $582,387 $40,761 7.0 %
Adjustments:
Gain on franchise disposals$46,680 $39,239 
Legal and storm damage charges— (4,564)
Long-term compensation charges(6,264)(32,522)
Lease exit charges— (2,235)
Total SG&A adjustments$40,416 $(82)
Adjusted:
Total adjusted SG&A expenses$582,042 $582,305 $263 — %
Reported:
SG&A expenses as a % of gross profit:
Compensation49.4 %53.5 %410 bps
Advertising4.1 %4.5 %40 bps
Rent3.9 %5.0 %110 bps
Other15.8 %18.5 %270 bps
Total SG&A expenses as a % of gross profit73.2 %81.5 %830 bps
Adjustments:
Gain on franchise disposals6.3 %5.5 %
Legal and storm damage charges— %(0.7)%
Long-term compensation charges(0.9)%(4.5)%
Lease exit charges— %(0.3)%
Total effect of adjustments5.4 %—%
Adjusted:
Total adjusted SG&A expenses as a % of gross profit78.6 %81.5 %290 bps





Non-GAAP Continuing Operations EPS Reconciliation

Three Months Ended June 30, 2019Three Months Ended June 30, 2018
Weighted-
Average
Shares		AmountPer
Share
Amount		Weighted-
Average
Shares		AmountPer
Share
Amount
(In thousands, except per share amounts) 
Diluted earnings (loss) and shares from continuing operations43,230 $26,751 $0.62 42,920 $17,122 $0.40 
Pre-tax items of interest:
Gain on franchise disposals$— $(38,048)
Legal and storm damage charges — 3,064
Long-term compensation charges— 23,333 
Impairment charges— 10,315
Lease exit charges— (2,579)
Tax effect of above items— 1,617 
Adjusted diluted earnings (loss) and shares from continuing operations43,230 $26,751 $0.62 42,920 $14,824 $0.35 



Six Months Ended June 30, 2019Six Months Ended June 30, 2018
Weighted-
Average
Shares		AmountPer
Share
Amount		Weighted-
Average
Shares		AmountPer
Share
Amount
(In thousands, except per share amounts) 
Diluted earnings (loss) and shares from continuing operations43,060 $69,100 $1.60 42,948 $15,108 $0.35 
Pre-tax items of interest:
Gain on franchise disposals$(46,680)$(39,239)
Legal and storm damage charges— 4,564 
Long-term compensation charges— 32,522 
Executive transition costs6,264 — 
Impairment charges1,926 13,958
Lease exit charges— 2,235
Tax effect of above items12,902 (3,276)
Adjusted diluted earnings (loss) and shares from continuing operations43,060 $43,512 $1.01 42,948 $25,872 $0.60