Sonic Automotive Reports All-Time Record Quarterly Revenues

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Previously Announced Strategic Adjustments to EchoPark Business Expected to Enhance Near-Term Performance While Maintaining Long-Term Strategic Plan

CHARLOTTE, N.C., July 27, 2023--(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 second quarter ended June 30, 2023.

Second Quarter 2023 Financial Summary

  • All-time record quarterly revenues of $3.7 billion, up 4% year-over-year; quarterly gross profit of $568.9 million, down 3% year-over-year

  • Reported second quarter net income of $23.4 million, down 75% year-over-year ($0.65 earnings per diluted share, down 72% year-over-year)

    • Adjusted second quarter net income* was $66.0 million, down 33% year-over-year ($1.83 adjusted earnings per diluted share*, down 25% year-over-year)

  • Reported selling, general and administrative ("SG&A") expenses as a percentage of gross profit of 68.9% (59.7% on a Franchised Dealerships Segment basis)

    • Adjusted SG&A expenses as a percentage of gross profit* of 70.5% (63.3% on a Franchised Dealerships Segment basis)

  • EchoPark Segment revenues of $600.6 million, down 9% year-over-year; EchoPark Segment gross profit of $26.8 million, down 44% year-over-year; EchoPark Segment retail used vehicle unit sales volume of 17,084, up 4% year-over-year

EchoPark Update

  • Completed previously announced plan to indefinitely suspend operations at eight EchoPark retail hub locations and 14 related EchoPark delivery/buy centers, plus three Northwest Motorsport locations within the EchoPark Segment (collectively, the "closed EchoPark stores"), representing a total of $13.2 million of segment loss in the second quarter of 2023

  • Recorded a second quarter 2023 charge related to the closed EchoPark stores of approximately $75.2 million, including $62.6 million of non-cash impairment charges, $2.2 million of severance, $0.4 million of non-cash lease exit charges and $10.0 million of non-cash inventory valuation adjustments (of which $7.7 million relates to stores with ongoing operations)

  • Expect ongoing expenses associated with the closed EchoPark stores of approximately $2.5 million to $3.0 million per quarter

  • Reiterate previously issued guidance of an expected return to breakeven EchoPark Segment adjusted EBITDA* in the first quarter of 2024

* 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, "Our team remains focused on executing our strategic plan and adapting our business to an evolving industry backdrop. I am extremely proud of our team's continued efforts to maximize profitability in the near-term, while positioning Sonic for long-term success. We believe the strategic investments in our business and our teammates will allow us to continue to deliver an exceptional guest experience while generating returns for our stockholders in the long run."

Jeff Dyke, President of Sonic Automotive, commented, "Our team's combined decades of experience in the automotive retail industry has taught us that making tough business decisions in the short-term can pay dividends over time. We remain confident in the long-term potential for EchoPark and believe that the steps we have taken to improve near-term financial performance will position us to achieve our strategic goals. In the meantime, our franchised dealerships and powersports teams continue to perform at a high level, maintaining our focus on profitability enhancements and cash flow generation as market conditions begin to normalize."

Heath Byrd, Chief Financial Officer of Sonic Automotive, added, "Our strong balance sheet and cash flows provide us with the flexibility to continue to enhance our diversified business model and adapt to changes in the macroeconomic and industry backdrop. As of June 30, 2023, we had $864 million of liquidity, including $407 million in cash and floor plan deposits on hand. With the improvements we have made to the EchoPark cost structure, we believe we remain well-positioned to achieve our financial goals and continue to deliver long-term returns for our stockholders."

Second Quarter 2023 Segment Highlights

The financial measures discussed below are results for the second quarter of 2023 with comparisons made to the second quarter of 2022, unless otherwise noted.

  • Franchised Dealerships Segment operating results include:

    • Same store revenues up 6%; same store gross profit down 2%

    • Same store retail new vehicle unit sales volume up 12%; same store retail new vehicle gross profit per unit down 25%, to $4,986

    • Same store retail used vehicle unit sales volume down 10%; same store retail used vehicle gross profit per unit down 3%, to $1,618

    • Same store parts, service and collision repair ("Fixed Operations") gross profit up 9%; same store customer pay gross profit up 11%; same store warranty gross profit up 6%; same store Fixed Operations gross margin down 10 basis points, to 49.6%

    • Same store finance and insurance ("F&I") gross profit up 4%; same store F&I gross profit per retail unit of $2,522, up 4% (all-time record quarterly Franchised Dealerships Segment F&I per unit of $2,516, up 2%)

    • On a trailing quarter cost of sales basis, the Franchised Dealerships Segment had 30 days’ supply of new vehicle inventory (including in-transit) and 31 days’ supply of used vehicle inventory

  • EchoPark Segment operating results include:

    • Revenues of $600.6 million, down 9%; gross profit of $26.8 million, down 44% (reported gross profit includes a $10.0 million charge related to used vehicle inventory valuation adjustments)

      • Revenues from the closed EchoPark stores were $74.4 million, down 30%; gross profit from the closed EchoPark stores was $3.1, down 37%

    • Retail used vehicle unit sales volume of 17,084, up 4%

      • Retail used vehicle unit sales volume from the closed EchoPark stores was 2,324 units (14% of EchoPark Segment retail used vehicle unit sales volume)

    • Reported segment loss of $52.8 million, adjusted segment loss* of $40.0 million, and adjusted EBITDA* loss of $31.8 million

      • Reported segment loss from the closed EchoPark stores was $13.2 million

    • Retail used vehicle unit sales volume was comprised of 82% 1-4-year-old vehicles and 18% 5-plus-year-old vehicles, with 23% of retail used vehicle unit sales volume sourced from non-auction sources

    • On a trailing quarter cost of sales basis, the EchoPark Segment had 39 days’ supply of used vehicle inventory

  • Powersports Segment operating results include:

    • Revenues of $45.0 million, gross profit of $12.8 million, gross margin of 28.5%

    • Segment income of $2.0 million and adjusted EBITDA* of $3.4 million

    • Year-over-year comparative financial results are not meaningful due to the timing of acquisitions of Horny Toad Harley-Davidson in Temple, Texas (one store acquired in January 2022), Team Mancuso Powersports in Houston, Texas (seven stores acquired in August 2022), and Black Hills Harley-Davidson in Sturgis, South Dakota (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.

Acquisition and Disposition Activity

During the second quarter of 2023, Sonic disposed of three franchised dealerships in Alabama and North Carolina, which generated net cash from disposition of approximately $52.3 million and a net gain on disposition of approximately $20.9 million. These disposed stores represent projected annualized revenues of approximately $170 million and projected annualized pre-tax income of approximately $5 million.

Dividend

Sonic’s Board of Directors approved a quarterly cash dividend of $0.29 per share, payable on October 13, 2023 to all stockholders of record on September 15, 2023.

Second 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 (866) 682-6100 (domestic) or +1 (862) 298-0702 (international) and ask to be connected to the Sonic Automotive Second 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 automotive retailer 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 retailers in America, we are committed to delivering on this goal while pursuing expansive growth and taking progressive measures to be the leader in this category. Our new platforms, programs, and people are set to drive the next generation of automotive 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 at number one among national pre-owned vehicle retailers in products, sales, and service based on Google Reviews between April 2021 through April 2022, 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 June 30,

Better / (Worse)

Six Months Ended June 30,

Better / (Worse)

2023

2022

% Change

2023

2022

% Change

(In millions, except per share amounts)

Revenues:

Retail new vehicles

$

1,608.2

$

1,344.3

20

%

$

3,051.0

$

2,695.6

13

%

Fleet new vehicles

28.3

19.8

43

%

47.1

38.0

24

%

Total new vehicles

1,636.5

1,364.1

20

%

3,098.1

2,733.6

13

%

Used vehicles

1,305.9

1,448.3

(10

)%

2,650.8

2,818.4

(6

)%

Wholesale vehicles

91.5

121.4

(25

)%

177.0

290.2

(39

)%

Total vehicles

3,033.9

2,933.8

3

%

5,925.9

5,842.2

1

%

Parts, service and collision repair

443.7

399.2

11

%

874.2

780.5

12

%

Finance, insurance and other, net

175.3

173.2

1

%

344.0

339.7

1

%

Total revenues

3,652.9

3,506.2

4

%

7,144.1

6,962.4

3

%

Cost of sales:

Retail new vehicles

(1,466.8

)

(1,176.0

)

(25

)%

(2,771.5

)

(2,359.6

)

(17

)%

Fleet new vehicles

(27.0

)

(18.9

)

(43

)%

(45.0

)

(36.2

)

(24

)%

Total new vehicles

(1,493.8

)

(1,194.9

)

(25

)%

(2,816.5

)

(2,395.8

)

(18

)%

Used vehicles

(1,274.4

)

(1,401.7

)

9

%

(2,589.3

)

(2,724.0

)

5

%

Wholesale vehicles

(92.5

)

(120.2

)

23

%

(174.9

)

(287.6

)

39

%

Total vehicles

(2,860.7

)

(2,716.8

)

(5

)%

(5,580.7

)

(5,407.4

)

(3

)%

Parts, service and collision repair

(223.3

)

(200.6

)

(11

)%

(440.9

)

(394.9

)

(12

)%

Total cost of sales

(3,084.0

)

(2,917.4

)

(6

)%

(6,021.6

)

(5,802.3

)

(4

)%

Gross profit

568.9

588.8

(3

)%

1,122.5

1,160.1

(3

)%

Selling, general and administrative expenses

(391.9

)

(402.8

)

3

%

(804.7

)

(789.8

)

(2

)%

Impairment charges

(62.6

)

—

(100

)%

(62.6

)

—

(100

)%

Depreciation and amortization

(36.1

)

(31.2

)

(16

)%

(70.5

)

(61.1

)

(15

)%

Operating income (loss)

78.3

154.8

(49

)%

184.7

309.2

(40

)%

Other income (expense):

Interest expense, floor plan

(17.0

)

(6.1

)

(179

)%

(31.5

)

(11.1

)

(184

)%

Interest expense, other, net

(28.9

)

(21.3

)

(36

)%

(57.3

)

(42.1

)

(36

)%

Other income (expense), net

0.1

(0.2

)

150

%

0.2

0.1

100

%

Total other income (expense)

(45.8

)

(27.6

)

(66

)%

(88.6

)

(53.1

)

(67

)%

Income (loss) before taxes

32.5

127.2

(74

)%

96.1

256.1

(62

)%

Provision for income taxes - benefit (expense)

(9.1

)

(32.4

)

72

%

(25.0

)

(64.0

)

61

%

Net income (loss)

$

23.4

$

94.8

(75

)%

$

71.1

$

192.1

(63

)%

Basic earnings (loss) per common share

$

0.66

$

2.40

(73

)%

$

2.00

$

4.81

(58

)%

Basic weighted-average common shares outstanding

35.3

39.5

11

%

35.6

40.0

11

%

Diluted earnings (loss) per common share

$

0.65

$

2.34

(72

)%

$

1.95

$

4.67

(58

)%

Diluted weighted-average common shares outstanding

36.0

40.5

11

%

36.5

41.2

12

%

Dividends declared per common share

$

0.29

$

0.25

16

%

$

0.57

$

0.37

54

%

Franchised Dealerships Segment - Reported

Three Months Ended June 30,

Better / (Worse)

Six Months Ended June 30,

Better / (Worse)

2023

2022

% Change

2023

2022

% Change

(In millions, except unit and per unit data)

Revenues:

Retail new vehicles

$

1,583.3

$

1,341.7

18

%

$

3,004.3

$

2,687.4

12

%

Fleet new vehicles

28.3

19.9

42

%

47.1

38.0

24

%

Total new vehicles

1,611.6

1,361.6

18

%

3,051.4

2,725.4

12

%

Used vehicles

774.5

871.9

(11

)%

1,542.0

1,725.7

(11

)%

Wholesale vehicles

55.6

79.2

(30

)%

114.0

185.5

(39

)%

Total vehicles

2,441.7

2,312.7

6

%

4,707.4

4,636.6

2

%

Parts, service and collision repair

433.4

398.1

9

%

857.2

778.7

10

%

Finance, insurance and other, net

132.2

129.8

2

%

249.4

256.2

(3

)%

Total revenues

3,007.3

2,840.6

6

%

5,814.0

5,671.5

3

%

Gross Profit:

Retail new vehicles

136.9

167.3

(18

)%

270.9

333.8

(19

)%

Fleet new vehicles

1.3

0.9

44

%

2.1

1.8

17

%

Total new vehicles

138.2

168.2

(18

)%

273.0

335.6

(19

)%

Used vehicles

44.5

43.7

2

%

85.3

90.6

(6

)%

Wholesale vehicles

(1.0

)

(0.5

)

(100

)%

1.0

(0.9

)

211

%

Total vehicles

181.7

211.4

(14

)%

359.3

425.3

(16

)%

Parts, service and collision repair

215.4

198.1

9

%

425.0

384.8

10

%

Finance, insurance and other, net

132.2

129.8

2

%

249.4

256.2

(3

)%

Total gross profit

529.3

539.3

(2

)%

1,033.7

1,066.3

(3

)%

Selling, general and administrative expenses

(316.1

)

(327.5

)

3

%

(647.3

)

(642.9

)

(1

)%

Impairment charges

—

—

—

%

—

—

—

%

Depreciation and amortization

(27.9

)

(25.3

)

(10

)%

(54.5

)

(50.0

)

(9

)%

Operating income (loss)

185.3

186.5

(1

)%

331.9

373.4

(11

)%

Other income (expense):

Interest expense, floor plan

(11.9

)

(3.9

)

(205

)%

(21.8

)

(7.2

)

(203

)%

Interest expense, other, net

(27.5

)

(20.2

)

(36

)%

(54.4

)

(40.3

)

(35

)%

Other income (expense), net

—

(0.3

)

100

%

0.1

0.1

—

%

Total other income (expense)

(39.4

)

(24.4

)

(61

)%

(76.1

)

(47.4

)

(61

)%

Income (loss) before taxes

145.9

162.1

(10

)%

255.8

326.0

(22

)%

Add: Impairment charges

—

—

—

%

—

—

—

%

Segment income (loss)

$

145.9

$

162.1

(10

)%

$

255.8

$

326.0

(22

)%

Unit Sales Volume:

Retail new vehicles

27,358

24,342

12

%

51,897

48,944

6

%

Fleet new vehicles

590

422

40

%

1,031

782

32

%

Total new vehicles

27,948

24,764

13

%

52,928

49,726

6

%

Used vehicles

25,197

28,156

(11

)%

50,304

55,234

(9

)%

Wholesale vehicles

5,516

5,851

(6

)%

10,999

12,623

(13

)%

Retail new & used vehicles

52,555

52,498

—

%

102,201

104,178

(2

)%

Used-to-New Ratio

0.92

1.16

(21

)%

0.97

1.13

(14

)%

Gross Profit Per Unit:

Retail new vehicles

$

5,003

$

6,871

(27

)%

$

5,221

$

6,821

(23

)%

Fleet new vehicles

$

2,099

$

2,235

(6

)%

$

2,065

$

2,285

(10

)%

New vehicles

$

4,942

$

6,792

(27

)%

$

5,159

$

6,749

(24

)%

Used vehicles

$

1,765

$

1,553

14

%

$

1,695

$

1,640

3

%

Finance, insurance and other, net

$

2,516

$

2,472

2

%

$

2,440

$

2,460

(1

)%

NM = Not Meaningful

Franchised Dealerships Segment - Same Store

Three Months Ended June 30,

Better / (Worse)

Six Months Ended June 30,

Better / (Worse)

2023

2022

% Change

2023

2022

% Change

(In millions, except unit and per unit data)

Revenues:

Retail new vehicles

$

1,558.2

$

1,323.9

18

%

$

2,953.7

$

2,653.8

11

%

Fleet new vehicles

28.4

19.9

43

%

47.2

38.0

24

%

Total new vehicles

1,586.6

1,343.8

18

%

3,000.9

2,691.8

11

%

Used vehicles

761.9

857.2

(11

)%

1,513.4

1,695.2

(11

)%

Wholesale vehicles

54.5

78.3

(30

)%

112.0

183.0

(39

)%

Total vehicles

2,403.0

2,279.3

5

%

4,626.3

4,570.0

1

%

Parts, service and collision repair

427.3

392.5

9

%

843.5

767.9

10

%

Finance, insurance and other, net

130.1

124.8

4

%

245.4

246.2

—

%

Total revenues

2,960.4

2,796.6

6

%

5,715.2

5,584.1

2

%

Gross Profit:

Retail new vehicles

133.8

160.0

(16

)%

265.1

319.1

(17

)%

Fleet new vehicles

1.2

0.9

33

%

2.1

1.8

17

%

Total new vehicles

135.1

161.0

(16

)%

267.2

320.9

(17

)%

Used vehicles

40.0

45.9

(13

)%

78.5

93.0

(16

)%

Wholesale vehicles

(0.3

)

(0.6

)

50

%

1.4

(0.9

)

256

%

Total vehicles

174.8

206.3

(15

)%

347.1

413.0

(16

)%

Parts, service and collision repair

212.0

195.2

9

%

417.5

379.1

10

%

Finance, insurance and other, net

130.1

124.8

4

%

245.4

246.2

—

%

Total gross profit

$

516.9

$

526.3

(2

)%

$

1,010.0

$

1,038.3

(3

)%

Unit Sales Volume:

Retail new vehicles

26,844

23,936

12

%

50,840

48,170

6

%

Fleet new vehicles

590

422

40

%

1,031

782

32

%

Total new vehicles

27,434

24,358

13

%

51,871

48,952

6

%

Used vehicles

24,737

27,596

(10

)%

49,260

54,099

(9

)%

Wholesale vehicles

5,418

5,764

(6

)%

10,790

12,426

(13

)%

Retail new & used vehicles

51,581

51,532

—

%

100,100

102,269

(2

)%

Used-to-New Ratio

0.92

1.15

(20

)%

0.97

1.12

(13

)%

Gross Profit Per Unit:

Retail new vehicles

$

4,986

$

6,686

(25

)%

$

5,215

$

6,624

(21

)%

Fleet new vehicles

$

2,099

$

2,235

(6

)%

$

2,065

$

2,285

(10

)%

New vehicles

$

4,924

$

6,609

(25

)%

$

5,152

$

6,555

(21

)%

Used vehicles

$

1,618

$

1,663

(3

)%

$

1,593

$

1,718

(7

)%

Finance, insurance and other, net

$

2,522

$

2,422

4

%

$

2,452

$

2,407

2

%

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 June 30,

Better / (Worse)

Six Months Ended June 30,

Better / (Worse)

2023

2022

% Change

2023

2022

% Change

(In millions, except unit and per unit data)

Revenues:

Retail new vehicles

$

—

$

1.3

(100

)%

$

1.0

$

5.7

(82

)%

Used vehicles

524.0

574.5

(9

)%

1,096.5

1,089.8

1

%

Wholesale vehicles

35.5

42.0

(15

)%

62.5

104.5

(40

)%

Total vehicles

559.5

617.8

(9

)%

1,160.0

1,200.0

(3

)%

Finance, insurance and other, net

41.1

43.1

(5

)%

91.1

83.0

10

%

Total revenues

600.6

660.9

(9

)%

1,251.1

1,283.0

(2

)%

Gross Profit:

Retail new vehicles

—

0.6

(100

)%

0.1

1.6

(94

)%

Used vehicles

(14.3

)

2.4

(696

)%

(26.2

)

3.1

(945

)%

Wholesale vehicles

—

1.7

(100

)%

1.2

3.4

(65

)%

Total vehicles

(14.3

)

4.7

(404

)%

(24.9

)

8.1

(407

)%

Finance, insurance and other, net

41.1

43.1

(5

)%

91.1

83.0

10

%

Total gross profit

26.8

47.8

(44

)%

66.2

91.1

(27

)%

Selling, general and administrative expenses

(66.6

)

(73.0

)

9

%

(140.4

)

(144.1

)

3

%

Impairment charges

(62.6

)

—

(100

)%

(62.6

)

—

(100

)%

Depreciation and amortization

(7.4

)

(5.8

)

(28

)%

(14.4

)

(10.9

)

(32

)%

Operating income (loss)

(109.8

)

(31.0

)

(254

)%

(151.2

)

(63.9

)

(137

)%

Other income (expense):

Interest expense, floor plan

(4.8

)

(2.2

)

(118

)%

(9.3

)

(3.9

)

(138

)%

Interest expense, other, net

(0.9

)

(1.1

)

18

%

(1.8

)

(1.8

)

—

%

Other income (expense), net

0.1

0.1

—

%

—

—

—

%

Total other income (expense)

(5.6

)

(3.2

)

(75

)%

(11.1

)

(5.7

)

(95

)%

Income (loss) before taxes

(115.4

)

(34.2

)

(237

)%

(162.3

)

(69.6

)

(133

)%

Add: Impairment charges

62.6

—

100

%

62.6

—

100

%

Segment income (loss)

$

(52.8

)

$

(34.2

)

(54

)%

$

(99.7

)

$

(69.6

)

(43

)%

Unit Sales Volume:

Retail new vehicles

—

37

(100

)%

11

81

(86

)%

Used vehicles

17,084

16,496

4

%

37,064

31,427

18

%

Wholesale vehicles

3,235

2,694

20

%

6,151

6,343

(3

)%

Gross Profit Per Unit:

Total used vehicle and F&I

$

1,569

$

2,751

(43

)%

$

1,750

$

2,730

(36

)%

NM = Not Meaningful

EchoPark Segment - Same Market

Three Months Ended June 30,

Better / (Worse)

Six Months Ended June 30,

Better / (Worse)

2023

2022

% Change

2023

2022

% Change

(In millions, except unit and per unit data)

Revenues:

Used vehicles

$

422.3

$

338.7

25

%

$

875.9

$

621.2

41

%

Wholesale vehicles

23.7

26.8

(12

)%

43.9

72.2

(39

)%

Total vehicles

446.0

365.5

22

%

919.8

693.4

33

%

Finance, insurance and other, net

33.0

25.2

31

%

73.4

47.5

55

%

Total revenues

479.0

390.7

23

%

993.2

740.9

34

%

Gross Profit:

Used vehicles

(2.2

)

(2.1

)

(5

)%

(10.6

)

(5.4

)

(96

)%

Wholesale vehicles

0.1

1.3

(92

)%

1.1

3.0

(63

)%

Total vehicles

(2.1

)

(0.8

)

(163

)%

(9.5

)

(2.4

)

(296

)%

Finance, insurance and other, net

33.0

25.2

31

%

73.4

47.5

55

%

Total gross profit

$

30.9

$

24.4

27

%

$

63.9

$

45.1

42

%

Unit Sales Volume:

Used vehicles

13,732

10,104

36

%

29,823

18,791

59

%

Wholesale vehicles

2,462

1,849

33

%

4,736

4,452

6

%

Gross Profit Per Unit:

Total used vehicle and F&I

$

2,244

$

2,290

(2

)%

$

2,107

$

2,241

(6

)%

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 June 30,

Better / (Worse)

Six Months Ended June 30,

Better / (Worse)

2023

2022

% Change

2023

2022

% Change

(In millions, except unit and per unit data)

Revenues:

Retail new vehicles

$

24.9

$

1.2

NM

$

45.7

$

2.5

NM

Used vehicles

7.4

1.9

NM

12.3

2.9

NM

Wholesale vehicles

0.4

0.2

NM

0.5

0.2

NM

Total vehicles

32.7

3.3

NM

58.5

5.6

NM

Parts, service and collision repair

10.3

1.1

NM

17.0

1.8

NM

Finance, insurance and other, net

2.0

0.3

NM

3.5

0.5

NM

Total revenues

45.0

4.7

NM

79.0

7.9

NM

Gross Profit:

Retail new vehicles

4.5

0.4

NM

8.5

0.6

NM

Used vehicles

1.3

0.5

NM

2.4

0.7

NM

Wholesale vehicles

—

—

NM

(0.1

)

—

NM

Total vehicles

5.8

0.9

NM

10.8

1.3

NM

Parts, service and collision repair

5.0

0.5

NM

8.3

0.9

NM

Finance, insurance and other, net

2.0

0.3

NM

3.5

0.5

NM

Total gross profit

12.8

1.7

NM

22.6

2.7

NM

Selling, general and administrative expenses

(9.2

)

(2.3

)

NM

(17.0

)

(2.8

)

NM

Depreciation and amortization

(0.8

)

(0.1

)

NM

(1.6

)

(0.2

)

NM

Operating income (loss)

2.8

(0.7

)

NM

4.0

(0.3

)

NM

Other income (expense):

Interest expense, floor plan

(0.3

)

—

NM

(0.4

)

—

NM

Interest expense, other, net

(0.5

)

—

NM

(1.1

)

—

NM

Other income (expense), net

—

—

NM

0.1

—

NM

Total other income (expense)

(0.8

)

—

NM

(1.4

)

—

NM

Income (loss) before taxes

2.0

(0.7

)

NM

2.6

(0.3

)

NM

Add: Impairment charges

—

—

NM

—

—

NM

Segment income (loss)

$

2.0

$

(0.7

)

NM

$

2.6

$

(0.3

)

NM

Unit Sales Volume:

Retail new vehicles

1,396

48

NM

2,503

89

NM

Used vehicles

691

112

NM

1,135

176

NM

Wholesale vehicles

50

—

NM

57

—

NM

Gross Profit Per Unit:

Retail new vehicles

$

3,235

$

7,401

NM

$

3,385

$

7,156

NM

Used vehicles

$

1,942

$

4,196

NM

$

2,093

$

4,028

NM

Finance, insurance and other, net

$

952

$

1,933

NM

$

964

$

1,818

NM

NM = Not Meaningful

Note: Year-over-year comparative financial results are not meaningful due to the timing of acquisitions of Horny Toad Harley-Davidson in Temple, Texas (one store acquired in January 2022), Team Mancuso Powersports in Houston, Texas (seven stores acquired in August 2022), and Black Hills Harley-Davidson in Sturgis, South Dakota (five stores acquired in February 2023).

Non-GAAP Reconciliation - Consolidated - SG&A Expenses

Three Months Ended June 30,

Better / (Worse)

2023

2022

Change

% Change

(In millions)

Reported:

Compensation

$

261.0

$

266.4

$

5.4

2

%

Advertising

22.8

25.6

2.8

11

%

Rent

11.5

13.7

2.2

16

%

Other

96.6

97.1

0.5

1

%

Total SG&A expenses

$

391.9

$

402.8

$

10.9

3

%

Adjustments:

Acquisition and disposition-related gain (loss)

$

20.7

$

—

Hail and storm damage charges

(1.9

)

—

Lease exit charges

(0.4

)

—

Severance and long-term compensation charges

(2.2

)

(4.4

)

Total SG&A adjustments

$

16.2

$

(4.4

)

Adjusted:

Total adjusted SG&A expenses

$

408.1

$

398.4

$

(9.7

)

(2

)%

Reported:

SG&A expenses as a % of gross profit:

Compensation

45.9

%

45.2

%

(70

)

bps

Advertising

4.0

%

4.3

%

30

bps

Rent

2.0

%

2.3

%

30

bps

Other

17.0

%

16.6

%

(40

)

bps

Total SG&A expenses as a % of gross profit

68.9

%

68.4

%

(50

)

bps

Adjustments:

Acquisition and disposition-related gain (loss)

2.0

%

—

%

Hail and storm damage charges

(0.2

)%

—

%

Lease exit charges

—

%

—

%

Severance and long-term compensation charges

(0.2

)%

(0.7

)%

Total effect of adjustments

1.6

%

(0.7

)%

Adjusted:

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

70.5

%

67.7

%

(280

)

bps

Reported:

Total gross profit

$

568.9

$

588.8

$

(19.9

)

(3

)%

Adjustments:

Used vehicle inventory valuation adjustment

$

10.0

$

—

Total adjustments

$

10.0

$

—

Adjusted:

Total adjusted gross profit

$

578.9

$

588.8

$

(9.9

)

(2

)%

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

Six Months Ended June 30,

Better / (Worse)

2023

2022

Change

% Change

(In millions)

Reported:

Compensation

$

519.7

$

518.9

$

(0.8

)

—

%

Advertising

48.9

51.7

2.8

5

%

Rent

22.8

26.4

3.6

14

%

Other

213.3

192.8

(20.5

)

(11

)%

Total SG&A expenses

$

804.7

$

789.8

$

(14.9

)

(2

)%

Adjustments:

Acquisition and disposition-related gain (loss)

$

20.7

$

—

Hail and storm damage charges

(1.9

)

—

Lease exit charges

(0.4

)

—

Severance and long-term compensation charges

(4.2

)

(4.4

)

Total SG&A adjustments

$

14.2

$

(4.4

)

Adjusted:

Total adjusted SG&A expenses

$

818.9

$

785.4

$

(33.5

)

(4

)%

Reported:

SG&A expenses as a % of gross profit:

Compensation

46.3

%

44.7

%

(160

)

bps

Advertising

4.4

%

4.5

%

10

bps

Rent

2.0

%

2.3

%

30

bps

Other

19.0

%

16.6

%

(240

)

bps

Total SG&A expenses as a % of gross profit

71.7

%

68.1

%

(360

)

bps

Adjustments:

Acquisition and disposition-related gain (loss)

0.9

%

—

%

Hail and storm damage charges

(0.1

)%

—

%

Lease exit charges

—

%

—

%

Severance and long-term compensation charges

(0.2

)%

(0.4

)%

Total effect of adjustments

0.6

%

(0.4

)%

Adjusted:

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

72.3

%

67.7

%

(460

)

bps

Reported:

Total gross profit

$

1,122.5

$

1,160.1

$

(37.6

)

(3

)%

Adjustments:

Used vehicle inventory valuation adjustment

$

10.0

$

—

Total adjustments

$

10.0

$

—

Adjusted:

Total adjusted gross profit

$

1,132.5

$

1,160.1

$

(27.6

)

(2

)%

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

Three Months Ended June 30,

Better / (Worse)

2023

2022

Change

% Change

(In millions)

Reported:

Compensation

$

219.0

$

225.9

$

6.9

3

%

Advertising

8.7

7.8

(0.9

)

(12

)%

Rent

9.4

11.0

1.6

15

%

Other

79.0

82.8

3.8

5

%

Total SG&A expenses

$

316.1

$

327.5

$

11.4

3

%

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

$

335.1

$

323.1

$

(12.0

)

(4

)%

Reported:

SG&A expenses as a % of gross profit:

Compensation

41.4

%

41.9

%

50

bps

Advertising

1.6

%

1.4

%

(20

)

bps

Rent

1.8

%

2.0

%

20

bps

Other

14.9

%

15.4

%

50

bps

Total SG&A expenses as a % of gross profit

59.7

%

60.7

%

100

bps

Adjustments:

Acquisition and disposition-related gain (loss)

4.0

%

—

%

Hail and storm damage charges

(0.4

)%

—

%

Long-term compensation charges

—

%

(0.8

)%

Total effect of adjustments

3.6

%

(0.8

)%

Adjusted:

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

63.3

%

59.9

%

(340

)

bps

Reported:

Total gross profit

$

529.3

$

539.3

$

(10.0

)

(2

)%

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

Six Months Ended June 30,

Better / (Worse)

2023

2022

Change

% Change

(In millions)

Reported:

Compensation

$

432.8

$

441.0

$

8.2

2

%

Advertising

18.6

15.6

(3.0

)

(19

)%

Rent

19.5

21.9

2.4

11

%

Other

176.4

164.4

(12.0

)

(7

)%

Total SG&A expenses

$

647.3

$

642.9

$

(4.4

)

(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

$

666.3

$

638.5

$

(27.8

)

(4

)%

Reported:

SG&A expenses as a % of gross profit:

Compensation

41.9

%

41.4

%

(50

)

bps

Advertising

1.8

%

1.5

%

(30

)

bps

Rent

1.9

%

2.1

%

20

bps

Other

17.0

%

15.3

%

(170

)

bps

Total SG&A expenses as a % of gross profit

62.6

%

60.3

%

(230

)

bps

Adjustments:

Acquisition and disposition-related gain (loss)

2.1

%

—

%

Hail and storm damage charges

(0.2

)%

—

%

Long-term compensation charges

—

%

(0.4

)%

Total effect of adjustments

1.9

%

(0.4

)%

Adjusted:

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

64.5

%

59.9

%

(460

)

bps

Reported:

Total gross profit

$

1,033.6

$

1,066.3

$

(32.7

)

(3

)%

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

Three Months Ended June 30,

Better / (Worse)

2023

2022

Change

% Change

(In millions)

Reported:

Compensation

$

35.4

$

38.6

$

3.2

8

%

Advertising

13.7

17.8

4.1

23

%

Rent

2.1

2.7

0.6

22

%

Other

15.4

13.9

(1.5

)

(11

)%

Total SG&A expenses

$

66.6

$

73.0

$

6.4

9

%

Adjustments:

Acquisition and disposition-related gain (loss)

$

(0.2

)

$

—

Lease exit charges

(0.4

)

—

Severance charges

(2.2

)

—

Total SG&A adjustments

$

(2.8

)

$

—

Adjusted:

Total adjusted SG&A expenses

$

63.8

$

73.0

$

9.2

12.6

%

Reported:

SG&A expenses as a % of gross profit:

Compensation

132.2

%

80.8

%

NM

Advertising

51.2

%

37.1

%

NM

Rent

8.0

%

5.7

%

(230

)

bps

Other

57.1

%

29.0

%

NM

Total SG&A expenses as a % of gross profit

248.5

%

152.6

%

NM

Adjustments:

Acquisition and disposition-related gain (loss)

(5.4

)%

—

%

Lease exit charges

(10.7

)%

—

%

Severance charges

(58.9

)%

—

%

Total effect of adjustments

(75.0

)%

—

%

Adjusted:

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

173.5

%

152.6

%

NM

Reported:

Total gross profit

$

26.8

$

47.8

$

(21.0

)

(44

)%

Adjustments:

Used vehicle inventory valuation adjustment

$

10.0

$

—

Total adjustments

$

10.0

$

—

Adjusted:

Total adjusted gross profit

$

36.8

$

47.8

$

(11.0

)

(23

)%

NM = Not Meaningful

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

Six Months Ended June 30,

Better / (Worse)

2023

2022

Change

% Change

(In millions)

Reported:

Compensation

$

75.1

$

75.7

$

0.6

1

%

Advertising

29.5

36.0

6.5

18

%

Rent

3.2

4.5

1.3

29

%

Other

32.6

27.9

(4.7

)

(17

)%

Total SG&A expenses

$

140.4

$

144.1

$

3.7

3

%

Adjustments:

Acquisition and disposition-related gain (loss)

$

(0.2

)

$

—

Lease exit charges

(0.4

)

—

Severance and long-term compensation charges

(4.2

)

—

Total SG&A adjustments

$

(4.8

)

$

—

Adjusted:

Total adjusted SG&A expenses

$

135.6

$

144.1

$

8.5

5.9

%

Reported:

SG&A expenses as a % of gross profit:

Compensation

113.4

%

83.1

%

NM

Advertising

44.5

%

39.6

%

(490

)

bps

Rent

4.9

%

4.9

%

—

bps

Other

49.2

%

30.6

%

NM

Total SG&A expenses as a % of gross profit

212.0

%

158.2

%

NM

Adjustments:

Acquisition and disposition-related gain (loss)

(1.4

)%

—

%

Lease exit charges

(2.8

)%

—

%

Severance and long-term compensation charges

(29.8

)%

—

%

Total effect of adjustments

(34.1

)%

—

%

Adjusted:

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

177.9

%

158.2

%

NM

Reported:

Total gross profit

$

66.2

$

91.1

$

(24.9

)

(27

)%

Adjustments:

Used vehicle inventory valuation adjustment

$

10.0

$

—

Total adjustments

$

10.0

$

—

Adjusted:

Total adjusted gross profit

$

76.2

$

91.1

$

(14.9

)

(16

)%

NM = Not Meaningful

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

Three Months Ended June 30,

Better / (Worse)

2023

2022

Change

% Change

(In millions)

Reported:

Compensation

$

6.6

$

1.9

$

(4.7

)

NM

Advertising

0.4

—

(0.4

)

NM

Rent

—

—

—

NM

Other

2.2

0.4

(1.8

)

NM

Total SG&A expenses

$

9.2

$

2.3

$

(6.9

)

NM

Reported:

SG&A expenses as a % of gross profit:

Compensation

51.3

%

110.8

%

NM

Advertising

2.9

%

2.3

%

NM

Rent

0.2

%

—

%

NM

Other

17.2

%

22.0

%

NM

Total SG&A expenses as a % of gross profit

71.6

%

135.1

%

NM

Reported:

Total gross profit

$

12.8

$

1.7

$

11.1

NM

NM = Not Meaningful

Six Months Ended June 30,

Better / (Worse)

2023

2022

Change

% Change

(In millions)

Reported:

Compensation

$

11.8

$

2.2

$

(9.6

)

NM

Advertising

0.8

0.1

(0.7

)

NM

Rent

0.1

—

(0.1

)

NM

Other

4.3

0.5

(3.8

)

NM

Total SG&A expenses

$

17.0

$

2.8

$

(14.2

)

NM

Reported:

SG&A expenses as a % of gross profit:

Compensation

52.4

%

80.0

%

NM

Advertising

3.5

%

2.2

%

NM

Rent

0.3

%

—

%

NM

Other

19.0

%

21.3

%

NM

Total SG&A expenses as a % of gross profit

75.2

%

103.5

%

NM

Reported:

Total gross profit

$

22.6

$

2.7

$

19.9

NM

NM = Not Meaningful

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

Three Months Ended June 30,

Six Months Ended June 30,

2023

2022

% Change

2023

2022

% Change

(In millions)

Reported:

Income (loss) before taxes

$

145.9

$

162.1

(10

)%

$

255.8

$

326.0

(22

)%

Add: Impairment charges

—

—

—

—

Segment income (loss)

$

145.9

$

162.1

(10

)%

$

255.8

$

326.0

(22

)%

Adjustments:

Acquisition and disposition-related (gain) loss

$

(20.9

)

$

—

$

(20.9

)

$

—

Hail and storm damage charges

1.9

—

1.9

—

Long-term compensation charges

—

4.4

—

4.4

Total pre-tax adjustments

$

(19.0

)

$

4.4

$

(19.0

)

$

4.4

Adjusted:

Segment income (loss)

$

126.9

$

166.5

(24

)%

$

236.8

$

330.4

(28

)%

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

Three Months Ended June 30,

Six Months Ended June 30,

2023

2022

% Change

2023

2022

% Change

(In millions)

Reported:

Income (loss) before taxes

$

(115.4

)

$

(34.2

)

(237

)%

$

(162.3

)

$

(69.6

)

(133

)%

Add: Impairment charges

62.6

—

62.6

—

Segment income (loss)

$

(52.8

)

$

(34.2

)

(54

)%

$

(99.7

)

$

(69.6

)

(43

)%

Adjustments:

Acquisition and disposition-related (gain) loss

$

0.2

$

—

$

0.2

$

—

Lease exit charges

0.4

—

0.4

—

Severance and long-term compensation charges

2.2

—

4.2

—

Used vehicle inventory valuation adjustment

10.0

—

10.0

—

Total pre-tax adjustments

$

12.8

$

—

$

14.8

$

—

Adjusted:

Segment income (loss)

$

(40.0

)

$

(34.2

)

(17

)%

$

(84.9

)

$

(69.6

)

(22

)%

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

Three Months Ended June 30,

Six Months Ended June 30,

2023

2022

% Change

2023

2022

% Change

(In millions)

Reported:

Income (loss) before taxes

$

2.0

$

(0.7

)

NM

$

2.6

$

(0.3

)

NM

Add: Impairment charges

—

—

—

—

Segment income (loss)

$

2.0

$

(0.7

)

NM

2.6

(0.3

)

NM

NM = Not Meaningful

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

Three Months Ended June 30, 2023

Three Months Ended June 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

36.0

$

23.4

$

0.65

40.5

$

94.8

$

2.34

Adjustments:

Acquisition and disposition-related gain (loss)

$

(20.7

)

$

—

Hail and storm damage charges

1.9

—

Impairment charges

62.6

—

Lease exit charges

0.4

—

Severance and long-term compensation charges

2.2

4.4

Used vehicle inventory valuation adjustment

10.0

—

Total pre-tax items of interest

$

56.4

$

4.4

Tax effect of above items

(13.8

)

—

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

36.0

$

66.0

$

1.83

40.5

$

99.2

$

2.45

Six Months Ended June 30, 2023

Six Months Ended June 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

36.5

$

71.1

$

1.95

41.2

$

192.1

$

4.67

Adjustments:

Acquisition and disposition-related gain (loss)

$

(20.7

)

$

—

Hail and storm damage charges

1.9

—

Impairment charges

62.6

—

Lease exit charges

0.4

—

Severance and long-term compensation charges

4.2

4.4

Used vehicle inventory valuation adjustment

10.0

—

Total pre-tax items of interest

$

58.4

$

4.4

Tax effect of above items

(14.3

)

—

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

36.5

$

115.2

$

3.16

41.2

$

196.5

$

4.77

Non-GAAP Reconciliation - Adjusted EBITDA

Three Months Ended June 30, 2023

Three Months Ended June 30, 2022

Franchised
Dealerships
Segment

EchoPark
Segment

Powersports
Segment

Total

Franchised
Dealerships
Segment

EchoPark
Segment

Powersports
Segment

Total

(In millions)

Net income (loss)

$

23.4

$

94.8

Provision for income taxes

9.1

32.4

Income (loss) before taxes

$

145.9

$

(115.4

)

$

2.0

$

32.5

$

162.1

$

(34.2

)

$

(0.7

)

$

127.2

Non-floor plan interest (1)

25.8

0.8

0.6

27.2

19.1

1.0

—

20.1

Depreciation and amortization (2)

29.5

7.4

0.8

37.7

26.4

5.9

0.1

32.4

Stock-based compensation expense

5.6

—

—

5.6

4.2

—

—

4.2

Loss (gain) on exit of leased dealerships

—

0.4

—

0.4

—

—

—

—

Impairment charges

—

62.6

—

62.6

—

—

—

—

Severance and long-term compensation charges

—

2.2

—

2.2

4.4

—

—

4.4

Acquisition and disposition related (gain) loss

(20.9

)

0.2

—

(20.7

)

0.1

—

—

0.1

Hail and storm damage charges

1.9

—

—

1.9

—

—

—

—

Used vehicle inventory valuation adjustment

—

10.0

—

10.0

—

—

—

—

Adjusted EBITDA

$

187.8

$

(31.8

)

$

3.4

$

159.4

$

216.3

$

(27.3

)

$

(0.6

)

$

188.4

Six Months Ended June 30, 2023

Six Months Ended June 30, 2022

Franchised
Dealerships
Segment

EchoPark
Segment

Powersports
Segment

Total

Franchised
Dealerships
Segment

EchoPark
Segment

Powersports
Segment

Total

(In millions)

Net income (loss)

$

71.1

$

192.1

Provision for income taxes

25.0

64.0

Income (loss) before taxes

$

255.8

$

(162.3

)

$

2.6

$

96.1

$

326.0

$

(69.6

)

$

(0.3

)

$

256.1

Non-floor plan interest (1)

51.2

1.7

1.2

54.1

38.1

1.7

—

39.8

Depreciation & amortization (2)

57.7

14.4

1.5

73.6

52.3

11.0

0.2

63.5

Stock-based compensation expense

10.6

—

—

10.6

8.6

—

—

8.6

Loss (gain) on exit of leased dealerships

—

0.4

—

0.4

—

—

—

—

Impairment charges

—

62.6

—

62.6

—

—

—

—

Severance and long-term compensation charges

—

4.2

—

4.2

4.4

—

—

4.4

Acquisition and disposition related (gain) loss

(20.9

)

0.2

—

(20.7

)

(1.0

)

—

—

(1.0

)

Hail and storm damage charges

1.9

—

—

1.9

—

—

—

—

Used vehicle inventory valuation adjustment

—

10.0

—

10.0

—

—

—

—

Adjusted EBITDA

$

356.3

$

(68.8

)

$

5.3

$

292.8

$

428.4

$

(56.9

)

$

(0.1

)

$

371.4

(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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230727411352/en/

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

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