Exhibit 99.1

Sonic Automotive, Inc. Reports Second Quarter Results -
EchoPark Grows Revenue 267%
CHARLOTTE, N.C. – July 27, 2018 – Sonic Automotive, Inc. (NYSE: SAH), one of the nation’s largest automotive retailers, today reported financial results for the second quarter of 2018.

•
Second quarter record revenue and gross profit of $2.5 billion and $362.4 million, respectively
•
All-time record quarterly pre-owned retail unit sales of 35,779 units
•
All-time record quarterly F&I gross profit per retail unit of $1,572
•
All-time record quarterly F&I gross of $104.1 million
•
EchoPark stores retailed 7,459 units during the quarter, up 35.2% sequentially from first quarter 2018

Second Quarter 2018 Results

GAAP Basis

Net income from continuing operations for the second quarter of 2018 was $17.1 million, or $0.40 per diluted share. Comparatively, net income from continuing operations for the second quarter of 2017 was $12.3 million, or $0.27 per diluted share.

Adjusted Basis

Adjusted net income from continuing operations and related earnings per diluted share 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.

Adjusted net income from continuing operations for the second quarter of 2018 was $14.8 million, or $0.35 per diluted share. The adjustments in the second quarter of 2018 relate to impairment charges, legal and storm damage charges and long-term compensation related charges, offset partially by gains on the disposal of franchises and adjustments to lease exit accruals. Adjusted net income from continuing operations for the second quarter of 2017 was $17.9 million, or $0.40 per diluted share. The adjustments in the second quarter of 2017 relate to fixed asset impairments, weather-related physical damage costs, legal matters and lease exit charges.
 
Commentary
Heath Byrd, the Company’s Chief Financial Officer, noted, “The second quarter of 2018 fell short of our expectations as we experienced new vehicle gross compression in several of our more significant brands. We anticipate this compression to carry into the third quarter of 2018.”

“We remain committed to our pre-owned EchoPark brand and continue to see improvements in that segment’s operating performance. Based on current performance, we will continue to expand the EchoPark brand with new stores opening in Charlotte, North Carolina and Houston, Texas in the fourth quarter of this year.”

“As a result of our performance thus far during 2018 and the current operating environment, we expect full year 2018 GAAP diluted earnings per share from continuing operations to be between $1.65 and $1.75. On an adjusted basis, we expect full year earnings per share from continuing operations to be between $1.90 and $2.00. The full year adjusted earnings per share range exclude items such as impairment charges, legal and storm damage charges, long-term compensation-related charges and lease exit adjustments, offset partially by gains from the disposal of franchises.”

Dividend

Sonic’s Board of Directors approved a quarterly dividend of $0.06 per share payable in cash for our stockholders of record on September 14, 2018. The dividend will be payable on October 15, 2018.

Second Quarter 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 go to: www.sonicautomotive.com, then click on “Our Company,” then “Investor Relations,” then “Earnings Conference Calls.”


Presentation materials for the conference call can be accessed on the Company’s website at www.sonicautomotive.com by clicking on the “Investor Relations” tab under “Our Company” and choosing “Webcasts & Presentations.”
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: 2348946

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: 2348946

Presentation materials for the Company’s earnings conference call will be accessible beginning the morning of the conference call on the Company’s website at www.sonicautomotive.com by clicking on “Our Company,” then “Investor Relations,” then “Webcasts & Presentations.”

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, including statements with respect to our 2018 earnings expectations, EchoPark brand expansion and new vehicle gross margin performance in the latter half of 2018. There are many factors that affect management’s views about future events and trends of the Company’s business. These factors involve risks and uncertainties that could cause actual results or trends to differ materially from management’s views, including without limitation, economic conditions in the markets in which we operate, new and used vehicle industry sales volume, 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, 2017. 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 Securities and Exchange Commission (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 from continuing operations and related earnings per diluted share, which exclude certain items disclosed in the attached financial tables. 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 disclosure, provide a meaningful presentation of the Company’s results from its core business operations excluding the impact of items not related to the Company’s ongoing core business operations, and improve the period-to-period comparability of the Company’s results from its core business operations.









Sonic Automotive, Inc.
Results of Operations (Unaudited)
Results of Operations
 
Three Months Ended June 30,
 
Six Months Ended June 30, 2018
 
2018
 
2017
 
2018
 
2017
 
(Dollars and shares in thousands, except per share amounts)
Revenues:
 
 
 
 
 
 
 
New vehicles
$
1,238,571

 
$
1,275,069

 
$
2,419,416

 
$
2,447,001

Used vehicles
762,572

 
641,891

 
1,471,618

 
1,276,364

Wholesale vehicles
53,748

 
40,765

 
119,148

 
87,076

Total vehicles
2,054,891

 
1,957,725

 
4,010,182

 
3,810,441

Parts, service and collision repair
346,754

 
361,113

 
698,512

 
713,156

Finance, insurance and other, net
104,104

 
86,908

 
197,829

 
169,971

Total revenues
2,505,749

 
2,405,746

 
4,906,523

 
4,693,568

Cost of Sales:
 
 
 
 
 
 
 
New vehicles
(1,181,303
)
 
(1,212,547
)
 
(2,305,349
)
 
(2,326,201
)
Used vehicles
(725,263
)
 
(601,856
)
 
(1,397,538
)
 
(1,195,497
)
Wholesale vehicles
(57,105
)
 
(42,682
)
 
(126,929
)
 
(90,163
)
Total vehicles
(1,963,671
)
 
(1,857,085
)
 
(3,829,816
)
 
(3,611,861
)
Parts, service and collision repair
(179,703
)
 
(188,043
)
 
(361,833
)
 
(370,742
)
Total cost of sales
(2,143,374
)
 
(2,045,128
)
 
(4,191,649
)
 
(3,982,603
)
Gross profit
362,375

 
360,618

 
714,874

 
710,965

Selling, general and administrative expenses
(277,462
)
 
(293,931
)
 
(582,387
)
 
(586,165
)
Impairment charges
(10,317
)
 
(2,605
)
 
(13,960
)
 
(3,115
)
Depreciation and amortization
(23,949
)
 
(21,911
)
 
(47,692
)
 
(43,065
)
Operating income (loss)
50,647

 
42,171

 
70,835

 
78,620

Other income (expense):
 
 
 
 
 
 
 
Interest expense, floor plan
(11,945
)
 
(9,144
)
 
(22,622
)
 
(17,531
)
Interest expense, other, net
(13,375
)
 
(12,764
)
 
(26,831
)
 
(26,172
)
Other income (expense), net
17

 
7

 
106

 
(14,495
)
Total other income (expense)
(25,303
)
 
(21,901
)
 
(49,347
)
 
(58,198
)
Income (loss) from continuing operations before taxes
25,344

 
20,270

 
21,488

 
20,422

Provision for income taxes for continuing operations - benefit (expense)
(8,222
)
 
(7,956
)
 
(6,380
)
 
(8,128
)
Income (loss) from continuing operations
17,122

 
12,314

 
15,108

 
12,294

Discontinued operations:
 
 
 
 
 
 
 
Income (loss) from discontinued operations before taxes
(297
)
 
(301
)
 
(545
)
 
(1,168
)
Provision for income taxes for discontinued operations - benefit (expense)
80

 
119

 
148

 
465

Income (loss) from discontinued operations
(217
)
 
(182
)
 
(397
)
 
(703
)
Net income (loss)
$
16,905

 
$
12,132

 
$
14,711

 
$
11,591

Basic earnings (loss) per common share:
 
 
 
 
 
 
 
Earnings (loss) per share from continuing operations
$
0.40

 
$
0.28

 
$
0.35

 
$
0.27

Earnings (loss) per share from discontinued operations
—

 
(0.01
)
 
(0.01
)
 
(0.01
)
Earnings (loss) per common share
$
0.40

 
$
0.27

 
$
0.34

 
$
0.26

Weighted average common shares outstanding
42,662

 
44,570

 
42,725

 
44,680

Diluted earnings (loss) per common share:
 
 
 
 
 
 
 
Earnings (loss) per share from continuing operations
$
0.40

 
$
0.27

 
$
0.35

 
$
0.27

Earnings (loss) per share from discontinued operations
(0.01
)
 
—

 
(0.01
)
 
(0.01
)
Earnings (loss) per common share
$
0.39

 
$
0.27

 
$
0.34

 
$
0.26

Weighted average common shares outstanding
42,920

 
44,810

 
42,948

 
44,976

Dividends declared per common share
$
0.06

 
$
0.05

 
$
0.12

 
$
0.10





Sonic Automotive, Inc.
Results of Operations (Unaudited)
 
Per Share Data
 
Three Months Ended June 30, 2018
 
 
 
Income (Loss)
 
Income (Loss)
 
 
 
 
 
 
 
From Continuing
Operations
 
From Discontinued
Operations
 
Net
Income (Loss)
 
Weighted
Average
Shares
 
Amount
 
Per
Share
Amount
 
Amount
 
Per
Share
Amount
 
Amount
 
Per
Share
Amount
 
(In thousands, except per share amounts)
Reported:
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings (loss) and shares
42,662

 
$
17,122

 

 
$
(217
)
 

 
$
16,905

 

Effect of participating securities:

 

 

 

 

 

 

Non-vested restricted stock

 
(3
)
 

 
—

 

 
(3
)
 

Basic earnings (loss) and shares
42,662

 
$
17,119

 
$
0.40

 
$
(217
)
 
$
—

 
$
16,902

 
$
0.40

Effect of dilutive securities:

 

 

 

 

 

 

Stock compensation plans
258

 

 

 

 

 

 

Diluted earnings (loss) and shares
42,920

 
$
17,119

 
$
0.40

 
$
(217
)
 
$
(0.01
)
 
$
16,902

 
$
0.39

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
Impairment charges
 
 
$
10,315

 
 
 
$
—

 
 
 
$
10,315

 
 
Legal and storm damage charges
 
 
3,064

 
 
 
—

 
 
 
3,064

 
 
Long-term compensation-related charges
 
 
23,333

 
 
 
—

 
 
 
23,333

 
 
Lease exit adjustments
 
 
(2,579
)
 
 
 
—

 
 
 
(2,579
)
 
 
Gain on disposal of franchises
 
 
(38,048
)
 
 
 
—

 
 
 
(38,048
)
 
 
Total adjustments before taxes
 
 
(3,915
)
 
 
 
—

 
 
 
(3,915
)
 
 
Income tax effect of adjustments
 
 
1,067

 
 
 
—

 
 
 
1,067

 
 
Non-recurring tax items
 
 
550

 
 
 
—

 
 
 
550

 
 
Effect of adjustments, net of income taxes
 
 
$
(2,298
)
 
(0.05
)
 
$
—

 
$
—

 
$
(2,298
)
 
$
(0.05
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted:
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings (loss) and diluted earnings (loss) per share (1)
 
 
$
14,824

 
$
0.35

 
$
(217
)
 
$
(0.01
)
 
$
14,607

 
$
0.34

(1)
Net loss attributable to Pre-Owned Stores operations was $0.07 per fully diluted share in the three months ended June 30, 2018.
 
Three Months Ended June 30, 2017
 
 
 
Income (Loss)
 
Income (Loss)
 
 
 
 
 
 
 
From Continuing
Operations
 
From Discontinued
Operations
 
Net
Income (Loss)
 
Weighted
Average
Shares
 
Amount
 
Per
Share
Amount
 
Amount
 
Per
Share
Amount
 
Amount
 
Per
Share
Amount
 
(In thousands, except per share amounts)
Reported:
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings (loss) and shares
44,570

 
$
12,314

 

 
$
(182
)
 

 
$
12,132

 

Effect of participating securities:

 

 

 

 

 

 

Non-vested restricted stock

 
(9
)
 

 
—

 

 
(9
)
 

Basic earnings (loss) and shares
44,570

 
$
12,305

 
$
0.28

 
$
(182
)
 
$
(0.01
)
 
$
12,123

 
$
0.27

Effect of dilutive securities:

 

 

 

 

 

 

Stock compensation plans
240

 

 

 

 

 

 

Diluted earnings (loss) and shares
44,810

 
$
12,305

 
$
0.27

 
$
(182
)
 
$
—

 
$
12,123

 
$
0.27

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
Impairment charges
 
 
$
2,605

 
 
 
$
—

 
 
 
$
2,605

 
 
Legal and storm damage charges
 
 
5,618

 
 
 
—

 
 
 
5,618

 
 
Lease exit adjustments
 
 
992

 
 
 
—

 
 
 
992

 
 
Total adjustments before taxes
 
 
9,215

 
 
 
—

 
 
 
9,215

 
 
Income tax effect of adjustments
 
 
(2,982
)
 
 
 
 
 
 
 
$
(2,982
)
 
 
Effect of adjustments, net of income taxes
 
 
$
6,233

 
$
0.13

 
$
—

 
$
—

 
$
6,233

 
$
0.13

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted:
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings (loss) and diluted earnings (loss) per share (2)
 
 
$
18,547

 
$
0.40

 
$
(182
)
 
$
—

 
$
18,365

 
$
0.40

(2)
Net loss attributable to Pre-Owned Stores operations was $0.07 per fully diluted share in the three months ended June 30, 2017.


 
Six Months Ended June 30, 2018
 
 
 
Income (Loss)
 
Income (Loss)
 
 
 
 
 
 
 
From Continuing
Operations
 
From Discontinued
Operations
 
Net
Income (Loss)
 
Weighted
Average
Shares
 
Amount
 
Per
Share
Amount
 
Amount
 
Per
Share
Amount
 
Amount
 
Per
Share
Amount
 
(In thousands, except per share amounts)
Reported:
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings (loss) and shares
42,725

 
$
15,108

 

 
$
(397
)
 

 
$
14,711

 

Effect of participating securities:

 

 

 

 

 

 

Non-vested restricted stock

 
(5
)
 

 
—

 

 
(5
)
 

Basic earnings (loss) and shares
42,725

 
$
15,103

 
$
0.35

 
$
(397
)
 
$
(0.01
)
 
$
14,706

 
$
0.34

Effect of dilutive securities:

 

 

 

 

 

 

Stock compensation plans
223

 

 

 

 

 

 

Diluted earnings (loss) and shares
42,948

 
$
15,103

 
$
0.35

 
$
(397
)
 
$
(0.01
)
 
$
14,706

 
$
0.34

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
Impairment charges
 
 
$
13,958

 
 
 
$
—

 
 
 
$
13,958

 
 
Legal and storm damage charges
 
 
4,564

 
 
 
—

 
 
 
4,564

 
 
Lease exit adjustments
 
 
2,235

 
 
 
—

 
 
 
2,235

 
 
Gain on disposal of franchises
 
 
(39,239
)
 
 
 
—

 
 
 
(39,239
)
 
 
Long-term compensation-related charges
 
 
32,522

 
 
 
—

 
 
 
32,522

 
 
Total adjustments before taxes
 
 
14,040

 
 
 
—

 
 
 
14,040

 
 
Income tax effect of adjustments
 
 
(3,826
)
 
 
 
 
 
 
 
(3,826
)
 
 
Non-recurring tax items
 
 
550

 
 
 
 
 
 
 
550

 
 
Effect of adjustments, net of income taxes
 
 
$
10,764

 
$
0.25

 
$
—

 
$
—

 
$
10,764

 
$
0.25

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted:
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings (loss) and diluted earnings (loss) per share (1)
 
 
$
25,872

 
$
0.60

 
$
(397
)
 
$
(0.01
)
 
$
25,475

 
$
0.59

(1)
Net loss attributable to Pre-Owned Stores operations was $0.17 per fully diluted share in the six months ended June 30, 2018.
 
Six Months Ended June 30, 2017
 
 
 
Income (Loss)
 
Income (Loss)
 
 
 
 
 
 
 
From Continuing
Operations
 
From Discontinued
Operations
 
Net
Income (Loss)
 
Weighted
Average
Shares
 
Amount
 
Per
Share
Amount
 
Amount
 
Per
Share
Amount
 
Amount
 
Per
Share
Amount
 
(In thousands, except per share amounts)
Reported:
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings (loss) and shares
44,680

 
$
12,294

 

 
$
(703
)
 

 
$
11,591

 

Effect of participating securities:

 

 

 

 

 

 

Non-vested restricted stock

 
(9
)
 

 
—

 

 
(9
)
 

Basic earnings (loss) and shares
44,680

 
$
12,285

 
$
0.27

 
$
(703
)
 
$
(0.01
)
 
$
11,582

 
$
0.26

Effect of dilutive securities:

 

 

 

 

 

 

Stock compensation plans
296

 

 

 

 

 

 

Diluted earnings (loss) and shares
44,976

 
$
12,285

 
$
0.27

 
$
(703
)
 
$
(0.01
)
 
$
11,582

 
$
0.26

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
Impairment charges
 
 
$
3,115

 
 
 
$
—

 
 
 
$
3,115

 
 
Legal and storm damage charges
 
 
6,851

 
 
 
—

 
 
 
6,851

 
 
Lease exit adjustments
 
 
992

 
 
 
—

 
 
 
992

 
 
Loss on debt extinguishment
 
 
15,268

 
 
 
—

 
 
 
15,268

 
 
Total adjustments before taxes
 
 
26,226

 
 
 
—

 
 
 
26,226

 
 
Income tax effect of adjustments
 
 
(10,294
)
 
 
 
—

 
 
 
$
(10,294
)
 
 
Effect of adjustments, net of income taxes
 
 
$
15,932

 
$
0.36

 
$
—

 
$
(0.01
)
 
$
15,932

 
$
0.35

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted:
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings (loss) and diluted earnings (loss) per share (2)
 
 
$
28,226

 
$
0.63

 
$
(703
)
 
$
(0.02
)
 
$
27,523

 
$
0.61

(2) Net loss attributable to Pre-Owned Stores operations was $0.15 per fully diluted share in the six months ended June 30, 2017.
    




Sonic Automotive, Inc.
Results of Operations (Unaudited)
 
New Vehicles
 
Three Months Ended June 30,
 
Better / (Worse)
 
2018
 
2017
 
Change
 
% Change
 
(In thousands, except unit and per unit data)
Reported new vehicle:
 
 
 
 
 
 
 
Revenue
$
1,238,571

 
$
1,275,069

 
$
(36,498
)
 
(2.9
)%
Gross profit
$
57,268

 
$
62,522

 
$
(5,254
)
 
(8.4
)%
Unit sales
30,877

 
33,148

 
(2,271
)
 
(6.9
)%
Revenue per unit
$
40,113

 
$
38,466

 
$
1,647

 
4.3
 %
Gross profit per unit
$
1,855

 
$
1,886

 
$
(31
)
 
(1.6
)%
Gross profit as a % of revenue
4.6
%
 
4.9
%
 
(30
)
 
bps
 
 
 
 
 
 
 
 
 
Six Months Ended June 30,
 
Better / (Worse)
 
2018
 
2017
 
Change
 
% Change
 
(In thousands, except unit and per unit data)
Reported new vehicle:
 
 
 
 
 
 
 
Revenue
$
2,419,416

 
$
2,447,001

 
$
(27,585
)
 
(1.1
)%
Gross profit
$
114,067

 
$
120,800

 
$
(6,733
)
 
(5.6
)%
Unit sales
60,377

 
63,643

 
(3,266
)
 
(5.1
)%
Revenue per unit
$
40,072

 
$
38,449

 
$
1,623

 
4.2
 %
Gross profit per unit
$
1,889

 
$
1,898

 
$
(9
)
 
(0.5
)%
Gross profit as a % of revenue
4.7
%
 
4.9
%
 
(20
)
 
bps
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
Better / (Worse)
 
2018
 
2017
 
Change
 
% Change
 
(In thousands, except unit and per unit data)
Same store new vehicle:
 
 
 
 
 
 
 
Revenue
$
1,218,895

 
$
1,199,305

 
$
19,590

 
1.6
 %
Gross profit
$
56,911

 
$
60,723

 
$
(3,812
)
 
(6.3
)%
Unit sales
30,314

 
30,749

 
(435
)
 
(1.4
)%
Revenue per unit
$
40,209

 
$
39,003

 
$
1,206

 
3.1
 %
Gross profit per unit
$
1,877

 
$
1,975

 
$
(98
)
 
(5.0
)%
Gross profit as a % of revenue
4.7
%
 
5.1
%
 
(40
)
 
bps
 
 
 
 
 
 
 
 
 
Six Months Ended June 30,
 
Better / (Worse)
 
2018
 
2017
 
Change
 
% Change
 
(In thousands, except unit and per unit data)
Same store new vehicle:
 
 
 
 
 
 
 
Revenue
$
2,352,999

 
$
2,301,260

 
$
51,739

 
2.2
 %
Gross profit
$
112,719

 
$
117,299

 
$
(4,580
)
 
(3.9
)%
Unit sales
58,404

 
58,973

 
(569
)
 
(1.0
)%
Revenue per unit
$
40,288

 
$
39,022

 
$
1,266

 
3.2
 %
Gross profit per unit
$
1,930

 
$
1,989

 
$
(59
)
 
(3.0
)%
Gross profit as a % of revenue
4.8
%
 
5.1
%
 
(30
)
 
bps








Sonic Automotive, Inc.
Results of Operations (Unaudited)
 
Used Vehicles
 
Three Months Ended June 30,
 
Better / (Worse)
 
2018
 
2017
 
Change
 
% Change
 
(In thousands, except unit and per unit data)
Reported used vehicle:
 
 
 
 
 
 
 
Revenue
$
762,572

 
$
641,891

 
$
120,681

 
18.8
 %
Gross profit
$
37,309

 
$
40,035

 
$
(2,726
)
 
(6.8
)%
Unit sales
35,779

 
30,536

 
5,243

 
17.2
 %
Revenue per unit
$
21,313

 
$
21,021

 
$
292

 
1.4
 %
Gross profit per unit
$
1,043

 
$
1,311

 
$
(268
)
 
(20.4
)%
Gross profit as a % of revenue
4.9
%
 
6.2
%
 
(130
)
 
bps
 
 
 
 
 
 
 
 
 
Six Months Ended June 30,
 
Better / (Worse)
 
2018
 
2017
 
Change
 
% Change
 
(In thousands, except unit and per unit data)
Reported used vehicle:
 
 
 
 
 
 
 
Revenue
$
1,471,618

 
$
1,276,364

 
$
195,254

 
15.3
 %
Gross profit
$
74,080

 
$
80,867

 
$
(6,787
)
 
(8.4
)%
Unit sales
69,518

 
60,908

 
8,610

 
14.1
 %
Revenue per unit
$
21,169

 
$
20,956

 
$
213

 
1.0
 %
Gross profit per unit
$
1,066

 
$
1,328

 
$
(262
)
 
(19.7
)%
Gross profit as a % of revenue
5.0
%
 
6.3
%
 
(130
)
 
bps
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
Better / (Worse)
 
2018
 
2017
 
Change
 
% Change
 
(In thousands, except unit and per unit data)
Same store used vehicle:
 
 
 
 
 
 
 
Revenue
$
653,646

 
$
600,181

 
$
53,465

 
8.9
 %
Gross profit
$
36,396

 
$
36,062

 
$
334

 
0.9
 %
Unit sales
30,395

 
28,165

 
2,230

 
7.9
 %
Revenue per unit
$
21,505

 
$
21,309

 
$
196

 
0.9
 %
Gross profit per unit
$
1,197

 
$
1,280

 
$
(83
)
 
(6.5
)%
Gross profit as a % of revenue
5.6
%
 
6.0
%
 
(40
)
 
bps
 
 
 
 
 
 
 
 
 
Six Months Ended June 30,
 
Better / (Worse)
 
2018
 
2017
 
Change
 
% Change
 
(In thousands, except unit and per unit data)
Same store used vehicle:
 
 
 
 
 
 
 
Revenue
$
1,266,307

 
$
1,193,826

 
$
72,481

 
6.1
 %
Gross profit
$
69,588

 
$
72,738

 
$
(3,150
)
 
(4.3
)%
Unit sales
59,064

 
56,111

 
2,953

 
5.3
 %
Revenue per unit
$
21,440

 
$
21,276

 
$
164

 
0.8
 %
Gross profit per unit
$
1,178

 
$
1,296

 
$
(118
)
 
(9.1
)%
Gross profit as a % of revenue
5.5
%
 
6.1
%
 
(60
)
 
bps





Sonic Automotive, Inc.
Results of Operations (Unaudited)
 
Wholesale Vehicles
 
Three Months Ended June 30,
 
Better / (Worse)
 
2018
 
2017
 
Change
 
% Change
 
(In thousands, except unit and per unit data)
Reported used vehicle:
 
 
 
 
 
 
 
Revenue
$
53,748

 
$
40,765

 
$
12,983

 
31.8
 %
Gross profit
$
(3,357
)
 
$
(1,917
)
 
$
(1,440
)
 
(75.1
)%
Unit sales
8,442

 
7,783

 
659

 
8.5
 %
Revenue per unit
$
6,367

 
$
5,238

 
$
1,129

 
21.6
 %
Gross profit per unit
$
(398
)
 
$
(246
)
 
$
(152
)
 
(61.8
)%
Gross profit as a % of revenue
(6.2
)%
 
(4.7
)%
 
(150
)
 
bps
 
 
 
 
 
 
 
 
 
Six Months Ended June 30,
 
Better / (Worse)
 
2018
 
2017
 
Change
 
% Change
 
(In thousands, except unit and per unit data)
Reported used vehicle:
 
 
 
 
 
 
 
Revenue
$
119,148

 
$
87,076

 
$
32,072

 
36.8
 %
Gross profit
$
(7,781
)
 
$
(3,087
)
 
$
(4,694
)
 
(152.1
)%
Unit sales
18,122

 
16,090

 
2,032

 
12.6
 %
Revenue per unit
$
6,575

 
$
5,412

 
$
1,163

 
21.5
 %
Gross profit per unit
$
(429
)
 
$
(192
)
 
$
(237
)
 
(123.4
)%
Gross profit as a % of revenue
(6.5
)%
 
(3.5
)%
 
(300
)
 
bps
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
Better / (Worse)
 
2018
 
2017
 
Change
 
% Change
 
(In thousands, except unit and per unit data)
Same store used vehicle:
 
 
 
 
 
 
 
Revenue
$
49,160

 
$
37,796

 
$
11,364

 
30.1
 %
Gross profit
$
(3,455
)
 
$
(1,692
)
 
$
(1,763
)
 
(104.2
)%
Unit sales
7,644

 
7,092

 
552

 
7.8
 %
Revenue per unit
$
6,431

 
$
5,329

 
$
1,102

 
20.7
 %
Gross profit per unit
$
(452
)
 
$
(239
)
 
$
(213
)
 
(89.1
)%
Gross profit as a % of revenue
(7.0
)%
 
(4.5
)%
 
(250
)
 
bps
 
 
 
 
 
 
 
 
 
Six Months Ended June 30,
 
Better / (Worse)
 
2018
 
2017
 
Change
 
% Change
 
(In thousands, except unit and per unit data)
Same store used vehicle:
 
 
 
 
 
 
 
Revenue
$
109,225

 
$
80,848

 
$
28,377

 
35.1
 %
Gross profit
$
(7,906
)
 
$
(2,627
)
 
$
(5,279
)
 
(201.0
)%
Unit sales
16,440

 
14,619

 
1,821

 
12.5
 %
Revenue per unit
$
6,644

 
$
5,530

 
$
1,114

 
20.1
 %
Gross profit per unit
$
(481
)
 
$
(180
)
 
$
(301
)
 
(167.2
)%
Gross profit as a % of revenue
(7.2
)%
 
(3.2
)%
 
(400
)
 
bps





Sonic Automotive, Inc.
Results of Operations (Unaudited)
 
Parts, Service and Collision Repair (“Fixed Operations”)
 
Three Months Ended June 30,
 
Better / (Worse)
 
2018
 
2017
 
Change
 
% Change
 
(In thousands, except unit and per unit data)
Reported:
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
Customer pay
$
140,351

 
$
139,194

 
$
1,157

 
0.8
 %
Warranty
63,888

 
72,661

 
(8,773
)
 
(12.1
)%
Wholesale parts
40,844

 
42,806

 
(1,962
)
 
(4.6
)%
Internal, sublet and other
101,671

 
106,452

 
(4,781
)
 
(4.5
)%
Total
$
346,754

 
$
361,113

 
$
(14,359
)
 
(4.0
)%
 
 
 
 
 
 
 


Gross profit
 
 
 
 
 
 


Customer pay
$
75,100

 
$
74,344

 
$
756

 
1.0
 %
Warranty
35,871

 
40,319

 
(4,448
)
 
(11.0
)%
Wholesale parts
6,900

 
7,331

 
(431
)
 
(5.9
)%
Internal, sublet and other
49,180

 
51,076

 
(1,896
)
 
(3.7
)%
Total
$
167,051

 
$
173,070

 
$
(6,019
)
 
(3.5
)%
 
 
 
 
 
 
 
 
Gross profit as a % of revenue
 
 
 
 
 
 
 
Customer pay
53.5
%
 
53.4
%
 
10
 bps
 
 
Warranty
56.1
%
 
55.5
%
 
60
 bps
 
 
Wholesale parts
16.9
%
 
17.1
%
 
(20
) bps
 
 
Internal, sublet and other
48.4
%
 
48.0
%
 
40
 bps
 
 
Total
48.2
%
 
47.9
%
 
30
 bps
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30,
 
Better / (Worse)
 
2018
 
2017
 
Change
 
% Change
 
(In thousands, except unit and per unit data)
Reported:
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
Customer pay
$
282,706

 
$
277,328

 
$
5,378

 
1.9
 %
Warranty
131,489

 
142,579

 
(11,090
)
 
(7.8
)%
Wholesale parts
83,345

 
86,087

 
(2,742
)
 
(3.2
)%
Internal, sublet and other
200,972

 
207,162

 
(6,190
)
 
(3.0
)%
Total
$
698,512

 
$
713,156

 
$
(14,644
)
 
(2.1
)%
 
 
 
 
 
 
 
 
Gross profit
 
 
 
 
 
 
 
Customer pay
$
151,449

 
$
147,784

 
$
3,665

 
2.5
 %
Warranty
73,772

 
78,989

 
(5,217
)
 
(6.6
)%
Wholesale parts
14,165

 
14,881

 
(716
)
 
(4.8
)%
Internal, sublet and other
97,293

 
100,760

 
(3,467
)
 
(3.4
)%
Total
$
336,679

 
$
342,414

 
$
(5,735
)
 
(1.7
)%
 
 
 
 
 
 
 
 
Gross profit as a % of revenue
 
 
 
 
 
 
 
Customer pay
53.6
%
 
53.3
%
 
30
 bps
 
 
Warranty
56.1
%
 
55.4
%
 
70
 bps
 
 
Wholesale parts
17.0
%
 
17.3
%
 
(30
) bps
 
 
Internal, sublet and other
48.4
%
 
48.6
%
 
(20
) bps
 
 
Total
48.2
%
 
48.0
%
 
20
 bps
 
 




Sonic Automotive, Inc.
Results of Operations (Unaudited)
 
Parts, Service and Collision Repair (“Fixed Operations”)
 
Three Months Ended June 30,
 
Better / (Worse)
 
2018
 
2017
 
Change
 
% Change
 
(In thousands, except unit and per unit data)
Same Store:
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
Customer pay
$
139,871

 
$
131,447

 
$
8,424

 
6.4
 %
Warranty
63,709

 
69,369

 
(5,660
)
 
(8.2
)%
Wholesale parts
40,288

 
40,779

 
(491
)
 
(1.2
)%
Internal, sublet and other
97,287

 
100,114

 
(2,827
)
 
(2.8
)%
Total
$
341,155

 
$
341,709

 
$
(554
)
 
(0.2
)%
 
 
 
 
 
 
 
 
Gross profit
 
 
 
 
 
 
 
Customer pay
$
74,910

 
$
69,979

 
$
4,931

 
7.0
 %
Warranty
35,667

 
38,582

 
(2,915
)
 
(7.6
)%
Wholesale parts
6,837

 
6,996

 
(159
)
 
(2.3
)%
Internal, sublet and other
47,674

 
47,705

 
(31
)
 
(0.1
)%
Total
$
165,088

 
$
163,262

 
$
1,826

 
1.1
 %
 
 
 
 
 
 
 
 
Gross profit as a % of revenue
 
 
 
 
 
 
 
Customer pay
53.6
%
 
53.2
%
 
40
 bps
 
 
Warranty
56.0
%
 
55.6
%
 
40
 bps
 
 
Wholesale parts
17.0
%
 
17.2
%
 
(20
) bps
 
 
Internal, sublet and other
49.0
%
 
47.7
%
 
130
 bps
 
 
Total
48.4
%
 
47.8
%
 
60
 bps
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30,
 
Better / (Worse)
 
2018
 
2017
 
Change
 
% Change
 
(In thousands, except unit and per unit data)
Same Store:
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
Customer pay
$
276,278

 
$
262,639

 
$
13,639

 
5.2
 %
Warranty
129,554

 
135,041

 
(5,487
)
 
(4.1
)%
Wholesale parts
81,400

 
81,770

 
(370
)
 
(0.5
)%
Internal, sublet and other
190,633

 
194,575

 
(3,942
)
 
(2.0
)%
Total
$
677,865

 
$
674,025

 
$
3,840

 
0.6
 %
 
 
 
 
 
 
 
 
Gross profit
 
 
 
 
 
 
 
Customer pay
$
148,092

 
$
139,662

 
$
8,430

 
6.0
 %
Warranty
72,502

 
74,764

 
(2,262
)
 
(3.0
)%
Wholesale parts
13,872

 
14,173

 
(301
)
 
(2.1
)%
Internal, sublet and other
93,124

 
93,773

 
(649
)
 
(0.7
)%
Total
$
327,590

 
$
322,372

 
$
5,218

 
1.6
 %
 
 
 
 
 
 
 
 
Gross profit as a % of revenue
 
 
 
 
 
 
 
Customer pay
53.6
%
 
53.2
%
 
40
 bps
 
 
Warranty
56.0
%
 
55.4
%
 
60
 bps
 
 
Wholesale parts
17.0
%
 
17.3
%
 
(30
) bps
 
 
Internal, sublet and other
48.8
%
 
48.2
%
 
60
 bps
 
 
Total
48.3
%
 
47.8
%
 
50
 bps
 
 





Sonic Automotive, Inc.
Results of Operations (Unaudited)
 
Finance, Insurance and Other, Net (“F&I”)    
 
Three Months Ended June 30,
 
Better / (Worse)
 
2018
 
2017
 
Change
 
% Change
 
(In thousands, except per unit data)
Reported:
 
 
 
 
 
 
 
Revenue
$
104,104

 
$
86,908

 
$
17,196

 
19.8
%
Gross profit per retail unit (excludes fleet)
$
1,572

 
$
1,379

 
$
193

 
14.0
%
 
 
 
 
 
 
 

 
Six Months Ended June 30,
 
Better / (Worse)
 
2018
 
2017
 
Change
 

 
(In thousands, except per unit data)
Reported:
 
 
 
 
 
 

Revenue
$
197,829

 
$
169,971

 
$
27,858

 
16.4
%
Gross profit per retail unit (excludes fleet)
$
1,532

 
$
1,379

 
$
153

 
11.1
%
 
 
 
 
 
 
 

 
Three Months Ended June 30,
 
Better / (Worse)
 
2018
 
2017
 
Change
 

 
(In thousands, except per unit data)
Same Store:
 
 
 
 
 
 

Revenue
$
89,344

 
$
79,575

 
$
9,769

 
12.3
%
Gross profit per retail unit (excludes fleet)
$
1,481

 
$
1,366

 
$
115

 
8.4
%
 
 
 
 
 
 
 

 
Six Months Ended June 30,
 
Better / (Worse)
 
2018
 
2017
 
Change
 

 
(In thousands, except per unit data)
Same Store:
 
 
 
 
 
 

Revenue
$
169,985

 
$
155,646

 
$
14,339

 
9.2
%
Gross profit per retail unit (excludes fleet)
$
1,456

 
$
1,367

 
$
89

 
6.5
%



Sonic Automotive, Inc.
Results of Operations (Unaudited)
 
Selling, General and Administrative (“SG&A”) Expenses
 
Three Months Ended June 30,
 
Better / (Worse)
 
2018
 
2017
 
Change
 
% Change
 
(In thousands)
Reported:
 
 
 
 
 
 
 
Compensation
$
197,641

 
$
171,182

 
$
(26,459
)
 
(15.5
)%
Advertising
16,270

 
15,344

 
(926
)
 
(6.0
)%
Rent
13,702

 
19,110

 
5,408

 
28.3
 %
Other
49,849

 
88,295

 
38,446

 
43.5
 %
Total SG&A expenses
$
277,462

 
$
293,931

 
$
16,469

 
5.6
 %
Adjustments:
 
 
 
 
 
 
 
Legal and storm damage charges
$
(3,064
)
 
$
(5,618
)
 
 
 
 
Long-term compensation-related charges
(23,333
)
 
—

 
 
 
 
Lease exit adjustments
2,579

 
(992
)
 
 
 
 
Gain on disposal of franchises
38,048

 
—

 
 
 
 
Total SG&A adjustments
$
14,230

 
$
(6,610
)
 
 
 
 
Adjusted:
 
 
 
 
 
 
 
Total adjusted SG&A expenses
$
291,692

 
$
287,321

 
$
(4,371
)
 
(1.5
)%
Reported:
 
 
 
 
 
 
 
SG&A expenses as a % of gross profit:
 
 
 
 
 
 
 
Compensation
54.5
 %
 
47.5
 %
 
(700
) bps
 
 
Advertising
4.5
 %
 
4.3
 %
 
(20
) bps
 
 
Rent
3.8
 %
 
5.3
 %
 
150
 bps
 
 
Other
13.8
 %
 
24.4
 %
 
1,060
 bps
 
 
Total SG&A expenses as a % of gross profit
76.6
 %
 
81.5
 %
 
490
 bps
 
 
Adjustments:
 
 
 
 
 
 
 
Legal and storm damage charges
(0.8
)%
 
(1.5
)%
 
 
 
 
Long-term compensation-related charges
(6.5
)%
 
—
 %
 
 
 
 
Lease exit adjustments
0.7
 %
 
(0.3
)%
 
 
 
 
Gain on disposal of franchises
10.5
 %
 
—
 %
 
 
 
 
Total effect of adjustments
3.9
 %
 
(1.8
)%
 
 
 
 
Adjusted:
 
 
 
 
 
 
 
Total adjusted SG&A expenses as a % of gross profit
80.5
 %
 
79.7
 %
 
(80
) bps
 
 














Sonic Automotive, Inc.
Results of Operations (Unaudited)
 
Selling, General and Administrative (“SG&A”) Expenses
 
Six Months Ended June 30,
 
Better / (Worse)
 
2018
 
2017
 
Change
 
% Change
 
(In thousands)
Reported:
 
 
 
 
 
 
 
Compensation
$
382,678

 
$
347,729

 
$
(34,949
)
 
(10.1
)%
Advertising
32,287

 
30,602

 
(1,685
)
 
(5.5
)%
Rent
35,570

 
37,598

 
2,028

 
5.4
 %
Other
131,852

 
170,236

 
38,384

 
22.5
 %
Total SG&A expenses
$
582,387

 
$
586,165

 
$
3,778

 
0.6
 %
Adjustments:
 
 
 
 
 
 
 
Legal and storm damage charges
$
(4,564
)
 
$
(6,851
)
 
 
 
 
Long-term compensation-related charges
(32,522
)
 
—

 
 
 
 
Lease exit adjustments
(2,235
)
 
(992
)
 
 
 
 
Gain on disposal of franchises
39,239

 
—

 
 
 
 
Total SG&A adjustments
$
(82
)
 
$
(7,843
)
 
 
 
 
Adjusted:
 
 
 
 
 
 
 
Total adjusted SG&A expenses
$
582,305

 
$
578,322

 
$
(3,983
)
 
(0.7
)%
Reported:
 
 
 
 
 
 
 
SG&A expenses as a % of gross profit:
 
 
 
 
 
 
 
Compensation
53.5
 %
 
48.9
 %
 
(460
) bps
 
 
Advertising
4.5
 %
 
4.3
 %
 
(20
) bps
 
 
Rent
5.0
 %
 
5.3
 %
 
30
 bps
 
 
Other
18.5
 %
 
23.9
 %
 
540
 bps
 
 
Total SG&A expenses as a % of gross profit
81.5
 %
 
82.4
 %
 
90
 bps
 
 
Adjustments:
 
 
 
 
 
 
 
Legal and storm damage charges
(0.7
)%
 
(1.0
)%
 
 
 
 
Long-term compensation-related charges
(4.5
)%
 
—
 %
 
 
 
 
Lease exit adjustments
(0.3
)%
 
(0.1
)%
 
 
 
 
Gain on disposal of franchises
5.5
 %
 
—
 %
 
 
 
 
Total effect of adjustments
—
 %
 
(1.1
)%
 
 
 
 
Adjusted:
 
 
 
 
 
 
 
Total adjusted SG&A expenses as a % of gross profit
81.5
 %
 
81.3
 %
 
(20
) bps
 
 




Sonic Automotive, Inc.
Results of Operations (Unaudited)

Reconciliation of Other Non-GAAP Financial Measures
 
 
Twelve Months Ending December 31, 2018
 
 
Low
 
High
 
 
 
 
 
Expected GAAP diluted earnings per share from continuing operations
 
$
1.65

 
$
1.75

Adjustments:
 
 
 
 
Impairment charges
 
$
0.24

 
$
0.24

Legal and storm damage charges
 
$
0.08

 
$
0.08

Long-term compensation-related charges
 
$
0.55

 
$
0.55

Lease exit adjustments
 
$
0.04

 
$
0.04

Gain on disposal of franchises
 
$
(0.66
)
 
$
(0.66
)
Expected adjusted non-GAAP diluted earnings per share from continuing operations
 
$
1.90

 
$
2.00


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