EchoPark Segment Achieved All-Time Record
Quarterly Adjusted EBITDA* in the First Quarter of 2024, Exceeding
Previously Stated Target of Breakeven Adjusted EBITDA* in the First
Quarter
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 first quarter ended March 31, 2024.
First Quarter 2024 Financial
Summary
- Total revenues of $3.4 billion, down 3% year-over-year; total
gross profit of $536.2 million, down 3% year-over-year
- Reported net income of $42.0 million, down 12% year-over-year
($1.20 earnings per diluted share, down 7% year-over-year)
- Reported net income includes the effects of a $2.2 million
pre-tax charge related to accelerated equity compensation vesting
and a $1.0 million pre-tax impairment charge in the Franchised
Dealerships Segment; a $4.2 million pre-tax charge related to the
previously announced closure of the remaining Northwest Motorsport
stores in the EchoPark Segment; offset partially by a $1.9 million
tax benefit on the above charges
- Excluding these items, adjusted net income* was $47.5 million,
down 3% year-over-year ($1.36 adjusted earnings per diluted share*,
up 2% year-over-year)
- Total reported selling, general and administrative (“SG&A”)
expenses as a percentage of gross profit of 73.1% (71.1% on a
Franchised Dealerships Segment basis, 86.6% on an EchoPark Segment
basis, and 104.8% on a Powersports Segment basis)
- Total adjusted SG&A expenses as a percentage of gross
profit* of 72.0% (70.7% on a Franchised Dealerships Segment basis,
78.6% on an EchoPark Segment basis, and 104.8% on a Powersports
Segment basis)
- EchoPark Segment revenues of $559.4 million, down 14%
year-over-year; record first quarter EchoPark Segment total gross
profit of $52.6 million, up 34% year-over-year; EchoPark Segment
retail used vehicle unit sales volume of 17,981, down 10%
year-over-year
- Reported EchoPark Segment loss of $2.9 million and adjusted
EchoPark Segment income* of $1.3 million
- All-time record quarterly EchoPark Segment adjusted EBITDA* of
$7.3 million, up 120% year-over-year
- Exceeded previously issued target for an expected return to
breakeven EchoPark Segment adjusted EBITDA* in the first quarter of
2024
- Excluding closed stores, EchoPark Segment adjusted EBITDA* was
$9.4 million, a 142% improvement year-over-year
- During the first quarter, Sonic repurchased approximately 0.5
million shares of its Class A Common Stock for an aggregate
purchase price of approximately $27.0 million
* Represents a non-GAAP financial measure - please refer to the
discussion and reconciliation of non-GAAP financial measures
below.
Commentary
David Smith, Chairman and Chief Executive Officer of Sonic
Automotive, stated, “We are proud of our team’s performance in the
first quarter, with our diversified business model and commitment
to returning capital to stockholders driving year-over-year growth
in adjusted earnings per share* despite the continued normalization
of new vehicle margins in our franchised dealerships segment.
During the quarter, our EchoPark Segment results exceeded our
previously communicated target for breakeven adjusted EBITDA*, and
we are excited to report all-time record quarterly EchoPark Segment
adjusted EBITDA* for the first quarter. We remain confident that we
have the right strategy, the right people, and the right culture to
continue to grow our diversified business and create long-term
value for our stakeholders.”
Jeff Dyke, President of Sonic Automotive, commented, “Our
EchoPark results in the first quarter demonstrate our team's
valuable industry experience and the adaptability of our innovative
EchoPark model, and validate the difficult decisions we made to
right-size our EchoPark footprint over the last several quarters.
Based on recent trends and our outlook for gradual improvement in
the used vehicle market going forward, we remain confident in our
ability to maintain positive quarterly EchoPark Segment adjusted
EBITDA* for the remainder of 2024, driving significant
year-over-year improvement in the EchoPark Segment to help mitigate
the continuing effects of margin normalization in our Franchised
Dealerships Segment.”
Heath Byrd, Chief Financial Officer of Sonic Automotive, added,
“Our diversified cash flow streams continued to benefit our overall
financial position in the first quarter. As of March 31, 2024, we
had $847 million of total liquidity, including $335 million in cash
and floor plan deposits on hand. We believe we remain
well-positioned to adapt to evolving market conditions and position
the Company for success in 2024 and beyond.”
First Quarter 2024 Segment
Highlights
The financial measures discussed below are results for the first
quarter of 2024 with comparisons made to the first quarter of 2023,
unless otherwise noted.
- Franchised Dealerships Segment operating results include:
- Same store revenues up 1%; same store gross profit down 5%
- Same store retail new vehicle unit sales volume up 5%; same
store retail new vehicle gross profit per unit down 32%, to
$3,716
- Same store retail used vehicle unit sales volume up 4%; same
store retail used vehicle gross profit per unit down 3%, to
$1,585
- Same store parts, service and collision repair (“Fixed
Operations”) gross profit up 6%; same store customer pay gross
profit up 6%; same store warranty gross profit up 13%; same store
Fixed Operations gross profit margin up 70 basis points, to
50.1%
- Same store finance and insurance ("F&I") gross profit up
3%; same store F&I gross profit per retail unit of $2,350, down
1%
- On a trailing quarter cost of sales basis, the Franchised
Dealerships Segment had 50 days’ supply of new vehicle inventory
(including in-transit) and 28 days’ supply of used vehicle
inventory
- EchoPark Segment operating results include:
- Revenues of $559.4 million, down 14%; gross profit of $52.6
million, up 34%
- On a same market basis (which excludes closed stores), revenues
were up 11% and gross profit was up 79%
- Retail used vehicle unit sales volume of 17,981, down 10%
- On a same market basis (which excludes closed stores), retail
used vehicle unit sales volume was up 13%
- Reported segment loss of $2.9 million, adjusted segment income*
of $1.3 million, and adjusted EBITDA* of $7.3 million
- Reported segment loss includes $5.9 million loss related to
closed stores (closed stores represent a $2.2 million loss on an
adjusted segment loss* basis and a $2.1 million loss on an adjusted
EBITDA* basis)
- Excluding closed stores, reported segment income was $1.3
million, adjusted segment income* was $3.5 million, and adjusted
EBITDA* was $9.4 million
- On a trailing quarter cost of sales basis, the EchoPark Segment
had 36 days’ supply of used vehicle inventory
- Powersports Segment operating results include:
- Revenues of $27.7 million, down 19%; gross profit of $7.8
million, down 20%
- Segment loss of $2.3 million and adjusted EBITDA* loss of $0.8
million
- First quarter Powersports Segment adjusted EBITDA* loss
reflects the seasonality of this business and was in line with our
previously communicated expectation for near breakeven adjusted
EBITDA*
* 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 July 15, 2024 to all stockholders of
record on June 14, 2024.
First Quarter 2024 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 First Quarter 2024
Earnings Conference Call. Dial-in access remains available
throughout the live call; however, to ensure you are connected for
the full call we suggest dialing in at least 10 minutes before the
start of the call. A webcast replay will be available following the
call for 14 days at ir.sonicautomotive.com.
About Sonic Automotive
Sonic Automotive, Inc., a Fortune 500 company based in
Charlotte, North Carolina, is on a quest to become the most
valuable diversified automotive retail and service brand in
America. Our Company culture thrives on creating, innovating, and
providing industry-leading guest experiences, driven by strategic
investments in technology, teammates, and ideas that ultimately
fulfill ownership dreams, enrich lives, and deliver happiness to
our guests and teammates. As one of the largest automotive and
powersports retailers in America, we are committed to delivering on
this goal while pursuing expansive growth and taking progressive
measures to be the leader in these categories. Our new platforms,
programs, and people are set to drive the next generation of
automotive and powersports experiences. More information about
Sonic Automotive can be found at www.sonicautomotive.com and
ir.sonicautomotive.com.
About EchoPark
Automotive
EchoPark Automotive is one of the most comprehensive retailers
of nearly new pre-owned vehicles in America today. Our unique
business model offers a best-in-class shopping and utilizes one of
the most innovative technology-enabled sales strategies in our
industry. Our approach provides a personalized and proven
guest-centric buying process that consistently delivers
award-winning guest experiences and superior value to car buyers
nationwide, with savings of up to $3,000 versus the competition.
Consumers have responded by putting EchoPark among the top national
pre-owned vehicle retailers in products, sales, and service, while
receiving the 2023 Consumer Satisfaction Award from DealerRater.
EchoPark’s mission is in the name: Every Car, Happy Owner. This
drives the experience for guests and differentiates EchoPark from
the competition. More information about EchoPark Automotive can be
found at www.echopark.com.
Forward-Looking
Statements
Included herein are forward-looking statements, including
statements regarding anticipated future EchoPark profitability and
anticipated future EchoPark adjusted EBITDA. There are many factors
that affect management’s views about future events and trends of
the Company’s business. These factors involve risks and
uncertainties that could cause actual results or trends to differ
materially from management’s views, including, without limitation,
economic conditions in the markets in which we operate, supply
chain disruptions and manufacturing delays, labor shortages, the
impacts of inflation and increases in interest rates, new and used
vehicle industry sales volume, future levels of consumer demand for
new and used vehicles, anticipated future growth in each of our
operating segments, the success of our operational strategies, the
rate and timing of overall economic expansion or contraction, the
integration of recent or future acquisitions, and the risk factors
described in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2023 and other reports and information filed
with the United States Securities and Exchange Commission (the
“SEC”). The Company does not undertake any obligation to update
forward-looking information, except as required under federal
securities laws and the rules and regulations of the SEC.
Non-GAAP Financial
Measures
This press release and the attached financial tables contain
certain non-GAAP financial measures as defined under SEC rules,
such as adjusted net income, adjusted earnings per diluted share,
adjusted SG&A expenses as a percentage of gross profit,
adjusted segment income, and adjusted EBITDA. As required by SEC
rules, the Company has provided reconciliations of these non-GAAP
financial measures to the most directly comparable GAAP financial
measures in the schedules included in this press release. The
Company believes that these non-GAAP financial measures improve the
transparency of the Company’s disclosures and provide a meaningful
presentation of the Company’s results.
Sonic Automotive, Inc.
Results of Operations
(Unaudited)
Results of Operations -
Consolidated
Three Months Ended March
31,
Better / (Worse)
2024
2023
% Change
(In millions, except per share
amounts)
Revenues:
Retail new vehicles
$
1,455.8
$
1,442.8
1
%
Fleet new vehicles
19.6
18.8
4
%
Total new vehicles
1,475.4
1,461.6
1
%
Used vehicles
1,215.6
1,344.9
(10
)%
Wholesale vehicles
77.3
85.6
(10
)%
Total vehicles
2,768.3
2,892.1
(4
)%
Parts, service and collision repair
446.7
430.5
4
%
Finance, insurance and other, net
169.0
168.6
—
%
Total revenues
3,384.0
3,491.2
(3
)%
Cost of sales:
Retail new vehicles
(1,359.4
)
(1,304.7
)
(4
)%
Fleet new vehicles
(18.9
)
(17.9
)
(6
)%
Total new vehicles
(1,378.3
)
(1,322.6
)
(4
)%
Used vehicles
(1,168.6
)
(1,314.9
)
11
%
Wholesale vehicles
(78.1
)
(82.6
)
5
%
Total vehicles
(2,625.0
)
(2,720.1
)
3
%
Parts, service and collision repair
(222.8
)
(217.6
)
(2
)%
Total cost of sales
(2,847.8
)
(2,937.7
)
3
%
Gross profit
536.2
553.5
(3
)%
Selling, general and administrative
expenses
(392.2
)
(412.8
)
5
%
Impairment charges
(1.0
)
—
(100
)%
Depreciation and amortization
(36.3
)
(34.3
)
(6
)%
Operating income (loss)
106.7
106.4
—
%
Other income (expense):
Interest expense, floor plan
(20.3
)
(14.6
)
(39
)%
Interest expense, other, net
(29.0
)
(28.4
)
(2
)%
Other income (expense), net
0.1
0.2
(50
)%
Total other income (expense)
(49.2
)
(42.8
)
(15
)%
Income (loss) before taxes
57.5
63.6
(10
)%
Provision for income taxes - benefit
(expense)
(15.5
)
(15.9
)
3
%
Net income (loss)
$
42.0
$
47.7
(12
)%
Basic earnings (loss) per common share
$
1.24
$
1.33
(7
)%
Basic weighted-average common shares
outstanding
34.0
35.9
5
%
Diluted earnings (loss) per common
share
$
1.20
$
1.29
(7
)%
Diluted weighted-average common shares
outstanding
34.9
36.9
5
%
Dividends declared per common share
$
0.30
$
0.28
7
%
Franchised Dealerships Segment - Reported
Three Months Ended March
31,
Better / (Worse)
2024
2023
% Change
(In millions, except unit and
per unit data)
Revenues:
Retail new vehicles
$
1,439.9
$
1,421.0
1
%
Fleet new vehicles
19.6
18.8
4
%
Total new vehicles
1,459.5
1,439.8
1
%
Used vehicles
729.3
767.6
(5
)%
Wholesale vehicles
48.6
58.4
(17
)%
Total vehicles
2,237.4
2,265.8
(1
)%
Parts, service and collision repair
439.9
423.8
4
%
Finance, insurance and other, net
119.6
117.1
2
%
Total revenues
2,796.9
2,806.7
—
%
Gross Profit:
Retail new vehicles
94.1
134.0
(30
)%
Fleet new vehicles
0.7
0.9
(22
)%
Total new vehicles
94.8
134.9
(30
)%
Used vehicles
40.8
40.8
—
%
Wholesale vehicles
(0.2
)
1.9
(111
)%
Total vehicles
135.4
177.6
(24
)%
Parts, service and collision repair
220.8
209.6
5
%
Finance, insurance and other, net
119.6
117.1
2
%
Total gross profit
475.8
504.3
(6
)%
Selling, general and administrative
expenses
(338.5
)
(331.2
)
(2
)%
Impairment charges
(1.0
)
—
(100
)%
Depreciation and amortization
(29.8
)
(26.5
)
(12
)%
Operating income (loss)
106.5
146.6
(27
)%
Other income (expense):
Interest expense, floor plan
(16.0
)
(9.9
)
(62
)%
Interest expense, other, net
(27.8
)
(26.9
)
(3
)%
Other income (expense), net
—
—
—
%
Total other income (expense)
(43.8
)
(36.8
)
(19
)%
Income (loss) before taxes
62.7
109.8
(43
)%
Add: Impairment charges
1.0
—
100
%
Segment income (loss)
$
63.7
$
109.8
(42
)%
Unit Sales Volume:
Retail new vehicles
25,297
24,539
3
%
Fleet new vehicles
379
441
(14
)%
Total new vehicles
25,676
24,980
3
%
Used vehicles
25,666
25,107
2
%
Wholesale vehicles
5,105
5,483
(7
)%
Retail new & used vehicles
50,963
49,646
3
%
Used-to-New Ratio
1.01
1.02
(1
)%
Gross Profit Per Unit:
Retail new vehicles
$
3,722
$
5,463
(32
)%
Fleet new vehicles
$
1,706
$
2,020
(16
)%
New vehicles
$
3,692
$
5,402
(32
)%
Used vehicles
$
1,592
$
1,626
(2
)%
Finance, insurance and other, net
$
2,348
$
2,360
(1
)%
Note: Reported Franchised Dealerships Segment results include
(i) same store results from the “Franchised Dealerships Segment -
Same Store” table below and (ii) the effects of acquisitions, open
points, dispositions and holding company impacts for the periods
reported. All currently operating franchised dealership stores are
included within the same store group as of the first full month
following the first anniversary of the store’s opening or
acquisition.
Franchised Dealerships Segment - Same Store
Three Months Ended March
31,
Better / (Worse)
2024
2023
% Change
(In millions, except unit and
per unit data)
Revenues:
Retail new vehicles
$
1,435.5
$
1,398.8
3
%
Fleet new vehicles
19.6
18.9
4
%
Total new vehicles
1,455.1
1,417.7
3
%
Used vehicles
726.0
753.9
(4
)%
Wholesale vehicles
48.4
57.6
(16
)%
Total vehicles
2,229.5
2,229.2
—
%
Parts, service and collision repair
438.6
417.8
5
%
Finance, insurance and other, net
119.3
115.3
3
%
Total revenues
2,787.4
2,762.3
1
%
Gross Profit:
Retail new vehicles
93.7
132.3
(29
)%
Fleet new vehicles
0.7
0.9
(22
)%
Total new vehicles
94.4
133.2
(29
)%
Used vehicles
40.5
40.1
1
%
Wholesale vehicles
(0.2
)
1.8
(111
)%
Total vehicles
134.7
175.1
(23
)%
Parts, service and collision repair
219.6
206.3
6
%
Finance, insurance and other, net
119.3
115.3
3
%
Total gross profit
$
473.6
$
496.7
(5
)%
Unit Sales Volume:
Retail new vehicles
25,225
24,053
5
%
Fleet new vehicles
379
441
(14
)%
Total new vehicles
25,604
24,494
5
%
Used vehicles
25,552
24,601
4
%
Wholesale vehicles
5,094
5,389
(5
)%
Retail new & used vehicles
50,777
48,654
4
%
Used-to-New Ratio
1.01
1.02
(1
)%
Gross Profit Per Unit:
Retail new vehicles
$
3,716
$
5,499
(32
)%
Fleet new vehicles
$
1,706
$
2,020
(16
)%
New vehicles
$
3,686
$
5,437
(32
)%
Used vehicles
$
1,585
$
1,631
(3
)%
Finance, insurance and other, net
$
2,350
$
2,370
(1
)%
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 March
31,
Better / (Worse)
2024
2023
% Change
(In millions, except unit and
per unit data)
Revenues:
Retail new vehicles
$
—
$
1.0
(100
)%
Used vehicles
482.9
572.5
(16
)%
Wholesale vehicles
28.6
27.0
6
%
Total vehicles
511.5
600.5
(15
)%
Finance, insurance and other, net
47.9
50.0
(4
)%
Total revenues
559.4
650.5
(14
)%
Gross Profit:
Retail new vehicles
—
0.1
(100
)%
Used vehicles
5.3
(11.8
)
145
%
Wholesale vehicles
(0.6
)
1.1
(155
)%
Total vehicles
4.7
(10.6
)
144
%
Finance, insurance and other, net
47.9
50.0
(4
)%
Total gross profit
52.6
39.4
34
%
Selling, general and administrative
expenses
(45.6
)
(73.8
)
38
%
Impairment charges
—
—
—
%
Depreciation and amortization
(5.5
)
(7.0
)
21
%
Operating income (loss)
1.5
(41.4
)
104
%
Other income (expense):
Interest expense, floor plan
(3.8
)
(4.6
)
17
%
Interest expense, other, net
(0.7
)
(0.9
)
22
%
Other income (expense), net
0.1
0.1
—
%
Total other income (expense)
(4.4
)
(5.4
)
19
%
Income (loss) before taxes
(2.9
)
(46.8
)
94
%
Add: Impairment charges
—
—
—
%
Segment income (loss)
$
(2.9
)
$
(46.8
)
94
%
Unit Sales Volume:
Retail new vehicles
—
11
(100
)%
Used vehicles
17,981
19,980
(10
)%
Wholesale vehicles
2,994
2,916
3
%
Gross Profit Per Unit:
Total used vehicle and F&I
$
2,955
$
1,906
55
%
EchoPark Segment - Same Market
Three Months Ended March
31,
Better / (Worse)
2024
2023
% Change
(In millions, except unit and
per unit data)
Revenues:
Used vehicles
$
473.2
$
433.7
9
%
Wholesale vehicles
25.5
17.9
42
%
Total vehicles
498.7
451.6
10
%
Finance, insurance and other, net
47.5
38.3
24
%
Total revenues
546.2
489.9
11
%
Gross Profit:
Used vehicles
5.6
(9.8
)
157
%
Wholesale vehicles
0.1
1.2
(92
)%
Total vehicles
5.7
(8.6
)
166
%
Finance, insurance and other, net
47.5
38.3
24
%
Total gross profit
$
53.2
$
29.7
79
%
Unit Sales Volume:
Used vehicles
17,618
15,551
13
%
Wholesale vehicles
2,785
2,119
31
%
Gross Profit Per Unit:
Total used vehicle and F&I
$
3,018
$
1,833
65
%
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 March
31,
Better / (Worse)
2024
2023
% Change
(In millions, except unit and
per unit data)
Revenues:
Retail new vehicles
$
15.9
$
20.8
(24
)%
Used vehicles
3.4
4.8
(29
)%
Wholesale vehicles
0.1
0.2
(50
)%
Total vehicles
19.4
25.8
(25
)%
Parts, service and collision repair
6.8
6.7
1
%
Finance, insurance and other, net
1.5
1.5
—
%
Total revenues
27.7
34.0
(19
)%
Gross Profit:
Retail new vehicles
2.3
4.0
(43
)%
Used vehicles
0.9
1.0
(10
)%
Wholesale vehicles
—
—
—
%
Total vehicles
3.2
5.0
(36
)%
Parts, service and collision repair
3.1
3.3
(6
)%
Finance, insurance and other, net
1.5
1.5
—
%
Total gross profit
7.8
9.8
(20
)%
Selling, general and administrative
expenses
(8.1
)
(7.8
)
(4
)%
Depreciation and amortization
(1.0
)
(0.8
)
(25
)%
Operating income (loss)
(1.3
)
1.2
(208
)%
Other income (expense):
Interest expense, floor plan
(0.5
)
(0.1
)
(400
)%
Interest expense, other, net
(0.5
)
(0.6
)
17
%
Other income (expense), net
—
0.1
(100
)%
Total other income (expense)
(1.0
)
(0.6
)
(67
)%
Income (loss) before taxes
(2.3
)
0.6
(483
)%
Add: Impairment charges
—
—
—
%
Segment income (loss)
$
(2.3
)
$
0.6
(483
)%
Unit Sales Volume:
Retail new vehicles
845
1,107
(24
)%
Used vehicles
409
444
(8
)%
Wholesale vehicles
13
7
86
%
Gross Profit Per Unit:
Retail new vehicles
$
2,676
$
3,573
(25
)%
Used vehicles
$
2,185
$
2,328
(6
)%
Finance, insurance and other, net
$
1,197
$
980
22
%
Powersports Segment - Same Store
Three Months Ended March
31,
Better / (Worse)
2024
2023
% Change
(In millions, except unit and
per unit data)
Revenues:
Retail new vehicles
$
15.3
$
20.6
(26
)%
Used vehicles
2.7
4.3
(37
)%
Wholesale vehicles
0.3
0.1
200
%
Total vehicles
18.3
25.0
(27
)%
Parts, service and collision repair
6.1
6.4
(5
)%
Finance, insurance and other, net
1.4
1.5
(7
)%
Total revenues
25.8
32.9
(22
)%
Gross Profit:
Retail new vehicles
2.1
3.9
(46
)%
Used vehicles
0.7
0.9
(22
)%
Wholesale vehicles
0.1
(0.1
)
200
%
Total vehicles
2.9
4.7
(38
)%
Parts, service and collision repair
2.8
3.2
(13
)%
Finance, insurance and other, net
1.4
1.5
(7
)%
Total gross profit
$
7.1
$
9.4
(24
)%
Unit Sales Volume:
Retail new vehicles
828
1,100
(25
)%
Used vehicles
336
401
(16
)%
Wholesale vehicles
10
6
67
%
Retail new & used vehicles
1,164
1,501
(22
)%
Used-to-New Ratio
0.41
0.36
14
%
Gross Profit Per Unit:
Retail new vehicles
$
2,553
$
3,549
(28
)%
Used vehicles
$
2,202
$
2,274
(3
)%
Finance, insurance and other, net
$
1,225
$
981
25
%
Note: All currently operating powersports stores are included
within the same store group as of the first full month following
the first anniversary of the store’s opening or acquisition.
Non-GAAP Reconciliation - Consolidated - SG&A
Expenses
Three Months Ended March
31,
Better / (Worse)
2024
2023
Change
% Change
(In millions)
Reported:
Compensation
$
247.3
$
258.8
$
11.5
4
%
Advertising
22.3
26.1
3.8
15
%
Rent
9.3
11.3
2.0
18
%
Other
113.3
116.6
3.3
3
%
Total SG&A expenses
$
392.2
$
412.8
$
20.6
5
%
Adjustments:
Closed store accrued expenses
$
(2.1
)
$
—
Severance and long-term compensation
charges
(4.3
)
(2.0
)
Total SG&A adjustments
$
(6.4
)
$
(2.0
)
Adjusted:
Total adjusted SG&A expenses
$
385.8
$
410.8
$
25.0
6
%
Reported:
SG&A expenses as a % of gross
profit:
Compensation
46.1
%
46.7
%
60
bps
Advertising
4.2
%
4.7
%
50
bps
Rent
1.7
%
2.0
%
30
bps
Other
21.1
%
21.2
%
10
bps
Total SG&A expenses as a % of gross
profit
73.1
%
74.6
%
150
bps
Adjustments:
Closed store accrued expenses
(0.4
)%
—
%
Severance and long-term compensation
charges
(0.7
)%
(0.4
)%
Total effect of adjustments
(1.1
)%
(0.4
)%
Adjusted:
Total adjusted SG&A expenses as a % of
gross profit
72.0
%
74.2
%
220
bps
Non-GAAP Reconciliation - Franchised Dealerships Segment -
SG&A Expenses
Three Months Ended March
31,
Better / (Worse)
2024
2023
Change
% Change
(In millions)
Reported:
Compensation
$
216.5
$
213.8
$
(2.7
)
(1
)%
Advertising
15.3
9.9
(5.4
)
(55
)%
Rent
10.1
10.2
0.1
1
%
Other
96.6
97.3
0.7
1
%
Total SG&A expenses
$
338.5
$
331.2
$
(7.3
)
(2
)%
Adjustments:
Long-term compensation charges
$
(2.2
)
$
—
Total SG&A adjustments
$
(2.2
)
$
—
Adjusted:
Total adjusted SG&A expenses
$
336.3
$
331.2
$
(5.1
)
(2
)%
Reported:
SG&A expenses as a % of gross
profit:
Compensation
45.5
%
42.4
%
(310
)
bps
Advertising
3.2
%
2.0
%
(120
)
bps
Rent
2.1
%
2.0
%
(10
)
bps
Other
20.3
%
19.3
%
(100
)
bps
Total SG&A expenses as a % of gross
profit
71.1
%
65.7
%
(540
)
bps
Adjustments:
Long-term compensation charges
(0.4
)%
—
%
Total effect of adjustments
(0.4
)%
—
%
Adjusted:
Total adjusted SG&A expenses as a % of
gross profit
70.7
%
65.7
%
(500
)
bps
Non-GAAP Reconciliation - EchoPark Segment - SG&A
Expenses
Three Months Ended March
31,
Better / (Worse)
2024
2023
Change
% Change
(In millions)
Reported:
Compensation
$
25.2
$
39.7
$
14.5
37
%
Advertising
6.6
15.8
9.2
58
%
Rent
(0.8
)
1.1
1.9
173
%
Other
14.6
17.2
2.6
15
%
Total SG&A expenses
$
45.6
$
73.8
$
28.2
38
%
Adjustments:
Closed store accrued expenses
$
(2.1
)
$
—
Severance and long-term compensation
charges
(2.1
)
(2.0
)
Total SG&A adjustments
$
(4.2
)
$
(2.0
)
Adjusted:
Total adjusted SG&A expenses
$
41.4
$
71.8
$
30.4
42
%
Reported:
SG&A expenses as a % of gross
profit:
Compensation
47.8
%
100.6
%
5,280
bps
Advertising
12.6
%
40.0
%
2,740
bps
Rent
(1.4
)%
2.7
%
410
bps
Other
27.6
%
43.9
%
1,630
bps
Total SG&A expenses as a % of gross
profit
86.6
%
187.2
%
10,060
bps
Adjustments:
Closed store accrued expenses
(4.0
)%
—
%
Severance and long-term compensation
charges
(4.0
)%
(5.1
)%
Total effect of adjustments
(8.0
)%
(5.1
)%
Adjusted:
Total adjusted SG&A expenses as a % of
gross profit
78.6
%
182.1
%
10,350
bps
Non-GAAP Reconciliation - Powersports Segment - SG&A
Expenses
Three Months Ended March
31,
Better / (Worse)
2024
2023
Change
% Change
(In millions)
Reported:
Compensation
$
5.6
$
5.3
$
(0.3
)
(6
)%
Advertising
0.4
0.4
—
—
%
Rent
—
—
—
—
%
Other
2.1
2.1
—
—
%
Total SG&A expenses
$
8.1
$
7.8
$
(0.3
)
(4
)%
Reported:
SG&A expenses as a % of gross
profit:
Compensation
72.7
%
53.9
%
(1,880
)
bps
Advertising
5.1
%
4.2
%
(90
)
bps
Rent
0.4
%
0.4
%
—
bps
Other
26.6
%
21.6
%
(500
)
bps
Total SG&A expenses as a % of gross
profit
104.8
%
80.1
%
(2,470
)
bps
Non-GAAP Reconciliation - Franchised Dealerships Segment -
Income (Loss) Before Taxes and Segment Income (Loss)
Three Months Ended March
31,
2024
2023
% Change
(In millions)
Reported:
Income (loss) before taxes
$
62.7
$
109.8
(43
)%
Add: Impairment charges
1.0
—
Segment income (loss)
$
63.7
$
109.8
(42
)%
Adjustments:
Long-term compensation charges
$
2.2
$
—
Total pre-tax adjustments
$
2.2
$
—
Adjusted:
Segment income (loss)
$
65.9
$
109.8
(40
)%
Non-GAAP Reconciliation - EchoPark Segment - Income (Loss)
Before Taxes and Segment Income (Loss)
Three Months Ended March
31,
2024
2023
% Change
(In millions)
Reported:
Income (loss) before taxes
$
(2.9
)
$
(46.8
)
94
%
Add: Impairment charges
—
—
Segment income (loss)
$
(2.9
)
$
(46.8
)
94
%
Adjustments:
Closed store accrued expenses
$
2.1
$
—
Severance and long-term compensation
charges
2.1
2.0
Total pre-tax adjustments
$
4.2
$
2.0
Adjusted:
Segment income (loss)
$
1.3
$
(44.8
)
103
%
Non-GAAP Reconciliation - Powersports Segment - Income (Loss)
Before Taxes and Segment Income (Loss)
Three Months Ended March
31,
2024
2023
% Change
(In millions)
Reported:
Income (loss) before taxes
$
(2.3
)
$
0.6
(483
)%
Add: Impairment charges
—
—
Segment income (loss)
$
(2.3
)
$
0.6
(483
)%
Non-GAAP Reconciliation - Consolidated - Net Income (Loss)
and Diluted Earnings (Loss) Per Share
Three Months Ended March 31,
2024
Three Months Ended March 31,
2023
Weighted- Average
Shares
Net Income (Loss)
Per Share
Amount
Weighted- Average
Shares
Net Income (Loss)
Per Share
Amount
(In millions, except per share
amounts)
Reported net income (loss), diluted
shares, and diluted earnings (loss) per share
34.9
$
42.0
$
1.20
36.9
$
47.7
$
1.29
Adjustments:
Closed store accrued expenses
$
2.1
$
—
Impairment charges
1.0
—
Severance and long-term compensation
charges
4.3
2.0
Total pre-tax items of interest
$
7.4
$
2.0
Tax effect of above items
(1.9
)
(0.5
)
Adjusted net income (loss), diluted
shares, and diluted earnings (loss) per share
34.9
$
47.5
$
1.36
36.9
$
49.2
$
1.33
Non-GAAP Reconciliation - Adjusted EBITDA
Three Months Ended March 31,
2024
Three Months Ended March 31,
2023
Franchised Dealerships
Segment
EchoPark Segment
Powersports Segment
Total
Franchised Dealerships
Segment
EchoPark Segment
Powersports Segment
Total
(In millions)
Net income (loss)
$
42.0
$
47.7
Provision for income taxes
15.5
15.9
Income (loss) before taxes
$
62.7
$
(2.9
)
$
(2.3
)
$
57.5
$
109.8
$
(46.8
)
$
0.6
$
63.6
Non-floor plan interest (1)
26.3
0.6
0.5
27.4
25.4
0.9
0.6
26.9
Depreciation and amortization (2)
31.5
5.4
1.0
37.9
28.2
7.0
0.7
35.9
Stock-based compensation expense
4.4
—
—
4.4
5.0
—
—
5.0
Impairment charges
1.0
—
—
1.0
—
—
—
—
Severance and long-term compensation
charges
2.2
2.1
—
4.3
—
2.0
—
2.0
Closed store accrued expenses
$
—
$
2.1
$
—
$
2.1
$
—
$
—
$
—
$
—
Adjusted EBITDA
$
128.1
$
7.3
$
(0.8
)
$
134.6
$
168.4
$
(36.9
)
$
1.9
$
133.4
(1)
Includes interest expense, other, net in
the accompanying consolidated statements of operations, net of any
amortization of debt issuance costs or net debt discount/premium
included in (2) below.
(2)
Includes the following line items from the
accompanying consolidated statements of cash flows: depreciation
and amortization of property and equipment; debt issuance cost
amortization; and debt discount amortization, net of premium
amortization.
Non-GAAP Reconciliation - EchoPark Segment Operations and
Closed Stores
Three Months Ended March 31,
2024
Three Months Ended March 31,
2023
Better / (Worse) %
Change
EchoPark
Operations
Closed Stores
Total EchoPark
Segment
EchoPark
Operations
Closed Stores
Total EchoPark
Segment
EchoPark
Operations
Closed Stores
Total EchoPark
Segment
(In millions, except unit and
per unit data)
Total revenues
$
546.2
$
13.2
$
559.4
$
489.9
$
160.6
$
650.5
11
%
(92
)%
(14
)%
Total gross profit
$
53.2
$
(0.6
)
$
52.6
$
29.7
$
9.7
$
39.4
79
%
(106
)%
34
%
Income (loss) before taxes
$
2.9
$
(5.8
)
$
(2.9
)
$
(28.0
)
$
(18.8
)
$
(46.8
)
110
%
69
%
94
%
Non-floor plan interest (1)
0.6
—
0.6
0.5
0.4
0.9
NM
NM
NM
Depreciation and amortization (2)
5.4
—
5.4
5.3
1.7
7.0
NM
NM
NM
Severance and long-term compensation
charges
0.5
1.6
2.1
—
2.0
2.0
NM
NM
NM
Closed store accrued expenses
—
2.1
2.1
—
—
—
NM
NM
NM
Adjusted EBITDA
$
9.4
$
(2.1
)
$
7.3
$
(22.2
)
$
(14.7
)
$
(36.9
)
142
%
86
%
120
%
Used vehicle unit sales volume
17,618
363
17,981
15,551
4,429
19,980
13
%
(92
)%
(10
)%
Total used vehicle and F&I gross
profit per unit
$
3,018
$
314
$
2,955
$
1,833
$
2,290
$
1,906
65
%
(86
)%
55
%
NM = Not Meaningful
(1)
Includes interest expense, other, net in
the accompanying consolidated statements of operations, net of any
amortization of debt issuance costs or net debt discount/premium
included in (2) below.
(2)
Includes the following line items from the
accompanying consolidated statements of cash flows: depreciation
and amortization of property and equipment; debt issuance cost
amortization; and debt discount amortization, net of premium
amortization.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240425129250/en/
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
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