Repurchased 1.6 Million Shares of Class A
Common Stock, or Approximately 5% of Total Shares Outstanding as of
December 31, 2022
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, 2023.
First Quarter 2023 Financial
Summary
- Record first quarter revenues of $3.5 billion, up 1%
year-over-year; quarterly gross profit of $553.5 million, down 3%
year-over-year
- Reported first quarter net income of $47.7 million, down 51%
year-over-year ($1.29 earnings per diluted share, down 45%
year-over-year)
- Excluding non-recurring items, adjusted first quarter net
income* was $49.2 million, down 49% year-over-year ($1.33 adjusted
earnings per diluted share*, down 43% year-over-year)
- Reported selling, general and administrative (“SG&A”)
expenses as a percentage of gross profit of 74.6% (65.7% on a
Franchised Dealerships Segment basis) and adjusted SG&A
expenses as a percentage of gross profit* of 74.2%
- Record first quarter EchoPark Segment revenues of $650.5
million, up 5% year-over-year; first quarter EchoPark Segment gross
profit of $39.4 million, down 9% year-over-year; record first
quarter EchoPark Segment retail used vehicle unit sales volume of
19,980, up 34%
- During the first quarter, Sonic repurchased approximately 1.6
million shares of its Class A Common Stock for an aggregate
purchase price of approximately $90.7 million, or an average of
$55.16 per share
- Sonic's Board of Directors approved a 3.6% increase to the
Company's quarterly cash dividend, to $0.29 per share, payable on
July 14, 2023 to all stockholders of record on June 15, 2023
* 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, and are excited to build on last year's success as
we move forward in 2023. Despite ongoing challenges in the
automotive retail industry, including rising interest rates and
vehicle affordability concerns, we remain focused on delivering an
exceptional guest experience and executing our long-term strategic
plan. We are excited about the prospects for our core franchised
dealerships business, and the growth opportunities at EchoPark and
our growing powersports business, as we leverage our diversified
portfolio to maximize future earnings potential.”
Jeff Dyke, President of Sonic Automotive, commented, “Our
franchised dealerships team continues to demonstrate the
adaptability of our business, achieving all-time record quarterly
Fixed Operations gross profit while actively addressing ongoing
challenges in the new and used vehicle retail market. We are also
encouraged by the momentum we are seeing at EchoPark, with 34%
growth in sales volume year-over-year, demonstrating that our
below-market pricing and exceptional guest experience continue to
resonate with shoppers in the face of ongoing affordability
challenges. We are committed to EchoPark’s long-term earnings
potential and remain focused on executing strategic enhancements to
the business model in 2023 as we drive toward EchoPark's expected
return to profitability in 2024.”
Heath Byrd, Chief Financial Officer of Sonic Automotive, added,
“Our diversified business model continues to allow us to focus on
the long-term growth potential at EchoPark and our powersports
business, while utilizing the cash flows from our franchised
dealerships business to support our capital strategy via our
dividend and share repurchases while continuing to invest in the
business. We are increasingly focused on our disciplined,
return-based capital allocation in the face of an uncertain
macroeconomic outlook. As of March 31, 2023, we had $893 million of
liquidity, including $432 million in cash and floor plan deposits
on hand, which we believe provides us flexibility to strategically
deploy capital in 2023 and beyond to continue to deliver long-term
returns for our stockholders.”
First Quarter 2023 Segment
Highlights
The financial measures discussed below are results for the first
quarter of 2023 with comparisons made to the first quarter of 2022,
unless otherwise noted.
- Franchised Dealerships Segment operating results include:
- Same store revenues down 1%; same store gross profit down
3%
- Same store retail new vehicle unit sales volume down 1%; same
store retail new vehicle gross profit per unit down 17%, to
$5,434
- Same store retail used vehicle unit sales volume down 8%; same
store retail used vehicle gross profit per unit down 12%, to
$1,560
- Same store parts, service and collision repair (“Fixed
Operations”) gross profit up 12%; same store customer pay gross
profit up 14%; same store warranty gross profit up 9%; same store
Fixed Operations gross margin up 30 basis points, to 49.3%
- Same store finance and insurance ("F&I") gross profit down
4%; same store F&I gross profit per retail unit of $2,318, flat
year-over-year
- On a trailing quarter cost of sales basis, the Franchised
Dealerships Segment had 31 days’ supply of new vehicle inventory
(including in-transit) and 29 days’ supply of used vehicle
inventory
- EchoPark Segment operating results include:
- Record first quarter revenues of $650.5 million, up 5%; gross
profit of $39.4 million, down 9%
- Record first quarter retail used vehicle unit sales volume of
19,980, up 34%
- Retail used vehicle unit sales volume was comprised of 84%
1-4-year-old vehicles and 16% 5-plus-year-old vehicles, with 20% of
retail used vehicle unit sales volume sourced from non-auction
sources
- Segment loss of $46.8 million and adjusted EBITDA* loss of
$36.9 million
- On a trailing quarter cost of sales basis, the EchoPark Segment
had 48 days’ supply of used vehicle inventory
- Powersports Segment operating results include:
- Revenues of $34.0 million, gross profit of $9.8 million, gross
margin of 28.8%
- Segment income of $0.6 million and adjusted EBITDA* of $1.9
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.
Dividend
Sonic’s Board of Directors approved a quarterly cash dividend of
$0.29 per share, payable on July 14, 2023 to all stockholders of
record on June 15, 2023.
First Quarter 2023 Earnings Conference
Call
Senior management will hold a conference call today at 11:00
A.M. (Eastern). Investor presentation and earnings press release
materials will be accessible beginning prior to the conference call
on the Company’s website at ir.sonicautomotive.com.
To access the live webcast of the conference call, please go to
ir.sonicautomotive.com and select the webcast link at the top of
the page. For telephone access to this conference call, please dial
(877) 407-8289 (domestic) or +1 (201) 689-8341 (international) and
ask to be connected to the Sonic Automotive First 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 fastest growing and most
comprehensive retailers of nearly new pre-owned vehicles in America
today. Our rapid growth plan is expected to bring our unique
business model to 90% of the U.S. population by 2025, utilizing 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 nationwide growth will continue to leverage
the unique and preferred Experience Centers in-market with a
best-in-class shopping and online buying tool. 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 EchoPark's anticipated future U.S. population
coverage, anticipated future EchoPark profitability, anticipated
future capital allocation and anticipated incremental growth
opportunities. 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, 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)
2023
2022
% Change
(In millions, except per share
amounts)
Revenues:
Retail new vehicles
$
1,442.8
$
1,351.3
7
%
Fleet new vehicles
18.8
18.2
3
%
Total new vehicles
1,461.6
1,369.5
7
%
Used vehicles
1,344.9
1,370.1
(2
) %
Wholesale vehicles
85.6
168.8
(49
) %
Total vehicles
2,892.1
2,908.4
(1
) %
Parts, service and collision repair
430.5
381.2
13
%
Finance, insurance and other, net
168.6
166.6
1
%
Total revenues
3,491.2
3,456.2
1
%
Cost of sales:
Retail new vehicles
(1,304.7
)
(1,183.6
)
(10
) %
Fleet new vehicles
(17.9
)
(17.4
)
(3
) %
Total new vehicles
(1,322.6
)
(1,201.0
)
(10
) %
Used vehicles
(1,314.9
)
(1,322.2
)
1
%
Wholesale vehicles
(82.6
)
(167.4
)
51
%
Total vehicles
(2,720.1
)
(2,690.6
)
(1
) %
Parts, service and collision repair
(217.6
)
(194.3
)
(12
) %
Total cost of sales
(2,937.7
)
(2,884.9
)
(2
) %
Gross profit
553.5
571.3
(3
) %
Selling, general and administrative
expenses
(412.8
)
(387.0
)
(7
) %
Impairment charges
—
—
—
%
Depreciation and amortization
(34.3
)
(29.9
)
(15
) %
Operating income (loss)
106.4
154.4
(31
) %
Other income (expense):
Interest expense, floor plan
(14.6
)
(5.0
)
(192
) %
Interest expense, other, net
(28.4
)
(20.8
)
(37
) %
Other income (expense), net
0.2
0.3
(33
) %
Total other income (expense)
(42.8
)
(25.5
)
(68
) %
Income (loss) before taxes
63.6
128.9
(51
) %
Provision for income taxes - benefit
(expense)
(15.9
)
(31.6
)
50
%
Net income (loss)
$
47.7
$
97.3
(51
) %
Basic earnings (loss) per common share
$
1.33
$
2.41
(45
) %
Basic weighted-average common shares
outstanding
35.9
40.4
11
%
Diluted earnings (loss) per common
share
$
1.29
$
2.33
(45
) %
Diluted weighted-average common shares
outstanding
36.9
41.8
12
%
Dividends declared per common share
$
0.28
$
0.25
12
%
Franchised Dealerships Segment -
Reported
Three Months Ended March
31,
Better / (Worse)
2023
2022
% Change
(In millions, except unit and
per unit data)
Revenues:
Retail new vehicles
$
1,421.0
$
1,345.7
6
%
Fleet new vehicles
18.8
18.2
3
%
Total new vehicles
1,439.8
1,363.9
6
%
Used vehicles
767.6
853.6
(10
) %
Wholesale vehicles
58.4
106.4
(45
) %
Total vehicles
2,265.8
2,323.9
(3
) %
Parts, service and collision repair
423.8
380.5
11
%
Finance, insurance and other, net
117.1
126.5
(7
) %
Total revenues
2,806.7
2,830.9
(1
) %
Gross Profit:
Retail new vehicles
134.0
166.6
(20
) %
Fleet new vehicles
0.9
0.8
13
%
Total new vehicles
134.9
167.4
(19
) %
Used vehicles
40.8
46.9
(13
) %
Wholesale vehicles
1.9
(0.4
)
575
%
Total vehicles
177.6
213.9
(17
) %
Parts, service and collision repair
209.6
186.6
12
%
Finance, insurance and other, net
117.1
126.5
(7
) %
Total gross profit
504.3
527.0
(4
) %
Selling, general and administrative
expenses
(331.2
)
(315.2
)
(5
) %
Impairment charges
—
—
NM
Depreciation and amortization
(26.5
)
(24.9
)
(6
) %
Operating income (loss)
146.6
186.9
(22
) %
Other income (expense):
Interest expense, floor plan
(9.9
)
(3.3
)
(200
) %
Interest expense, other, net
(26.9
)
(20.0
)
(35
) %
Other income (expense), net
—
0.2
NM
Total other income (expense)
(36.8
)
(23.1
)
(59
) %
Income (loss) before taxes
109.8
163.8
(33
) %
Add: impairment charges
—
—
NM
Segment income (loss)
$
109.8
$
163.8
(33
) %
Unit Sales Volume:
Retail new vehicles
24,539
24,602
—
%
Fleet new vehicles
441
360
23
%
Total new vehicles
24,980
24,962
—
%
Used vehicles
25,107
27,078
(7
) %
Wholesale vehicles
5,483
6,772
(19
) %
Retail new & used vehicles
49,646
51,680
(4
) %
Used-to-New Ratio
1.02
1.10
(7
) %
Gross Profit Per Unit:
Retail new vehicles
$
5,463
$
6,771
(19
) %
Fleet new vehicles
$
2,020
$
2,344
(14
) %
New vehicles
$
5,402
$
6,707
(19
) %
Used vehicles
$
1,626
$
1,731
(6
) %
Finance, insurance and other, net
$
2,360
$
2,448
(4
) %
NM = Not Meaningful
Franchised Dealerships Segment - Same
Store
Three Months Ended March
31,
Better / (Worse)
2023
2022
% Change
(In millions, except unit and
per unit data)
Revenues:
Retail new vehicles
$
1,416.6
$
1,345.7
5
%
Fleet new vehicles
18.9
18.1
4
%
Total new vehicles
1,435.5
1,363.8
5
%
Used vehicles
765.0
853.7
(10
) %
Wholesale vehicles
58.1
106.4
(45
) %
Total vehicles
2,258.6
2,323.9
(3
) %
Parts, service and collision repair
422.0
380.5
11
%
Finance, insurance and other, net
114.7
119.7
(4
) %
Total revenues
2,795.3
2,824.1
(1
) %
Gross Profit:
Retail new vehicles
133.0
160.8
(17
) %
Fleet new vehicles
0.8
0.9
(11
) %
Total new vehicles
133.8
161.7
(17
) %
Used vehicles
39.0
47.9
(19
) %
Wholesale vehicles
1.8
(0.6
)
400
%
Total vehicles
174.6
209.0
(16
) %
Parts, service and collision repair
208.2
186.3
12
%
Finance, insurance and other, net
114.7
119.7
(4
) %
Total gross profit
$
497.5
$
515.0
(3
) %
Unit Sales Volume:
Retail new vehicles
24,465
24,602
(1
) %
Fleet new vehicles
441
360
23
%
Total new vehicles
24,906
24,962
—
%
Used vehicles
25,023
27,078
(8
) %
Wholesale vehicles
5,466
6,772
(19
) %
Retail new & used vehicles
49,488
51,680
(4
) %
Used-to-New Ratio
1.02
1.10
(7
) %
Gross Profit Per Unit:
Retail new vehicles
$
5,434
$
6,538
(17
) %
Fleet new vehicles
$
2,020
$
2,344
(14
) %
New vehicles
$
5,374
$
6,477
(17
) %
Used vehicles
$
1,560
$
1,768
(12
) %
Finance, insurance and other, net
$
2,318
$
2,316
—
%
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 March
31,
Better / (Worse)
2023
2022
% Change
(In millions, except unit and
per unit data)
Revenues:
Retail new vehicles
$
1.0
$
4.4
(77
) %
Used vehicles
572.5
515.4
11
%
Wholesale vehicles
27.0
62.4
(57
) %
Total vehicles
600.5
582.2
3
%
Finance, insurance and other, net
50.0
39.9
25
%
Total revenues
650.5
622.1
5
%
Gross Profit:
Retail new vehicles
0.1
0.8
(88
) %
Used vehicles
(11.8
)
0.7
NM
Wholesale vehicles
1.1
1.9
(42
) %
Total vehicles
(10.6
)
3.4
(412
) %
Finance, insurance and other, net
50.0
39.9
25
%
Total gross profit
39.4
43.3
(9
) %
Selling, general and administrative
expenses
(73.8
)
(71.2
)
(4
) %
Impairment charges
—
—
NM
Depreciation and amortization
(7.0
)
(5.0
)
(40
) %
Operating income (loss)
(41.4
)
(32.9
)
(26
) %
Other income (expense):
Interest expense, floor plan
(4.6
)
(1.7
)
(171
) %
Interest expense, other, net
(0.9
)
(0.8
)
(13
) %
Other income (expense), net
0.1
0.1
NM
Total other income (expense)
(5.4
)
(2.4
)
(125
) %
Income (loss) before taxes
(46.8
)
(35.3
)
(33
) %
Add: impairment charges
—
—
NM
Segment income (loss)
$
(46.8
)
$
(35.3
)
(33
) %
Unit Sales Volume:
Retail new vehicles
11
44
(75
) %
Used vehicles
19,980
14,931
34
%
Wholesale vehicles
2,916
3,649
(20
) %
Gross Profit Per Unit:
Total used vehicle and F&I
$
1,907
$
2,707
(30
) %
NM = Not Meaningful
EchoPark Segment - Same Market
Three Months Ended March
31,
Better / (Worse)
2023
2022
% Change
(In millions, except unit and
per unit data)
Revenues:
Retail new vehicles
$
1.0
$
4.5
(78
) %
Used vehicles
505.7
488.7
3
%
Wholesale vehicles
23.8
62.5
(62
) %
Total vehicles
530.5
555.7
(5
) %
Finance, insurance and other, net
44.7
37.9
18
%
Total revenues
575.2
593.6
(3
) %
Gross Profit:
Retail new vehicles
0.1
0.8
(88
) %
Used vehicles
(10.1
)
1.5
NM
Wholesale vehicles
1.1
2.0
(45
) %
Total vehicles
(8.9
)
4.3
(307
) %
Finance, insurance and other, net
44.7
37.9
18
%
Total gross profit
$
35.8
$
42.2
(15
) %
Unit Sales Volume:
Retail new vehicles
11
44
(75
) %
Used vehicles
17,789
14,042
27
%
Wholesale vehicles
2,571
3,649
(30
) %
Gross Profit Per Unit:
Total used vehicle and F&I
$
1,940
$
2,802
(31
) %
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)
2023
2022
% Change
(In millions, except unit and
per unit data)
Revenues:
Retail new vehicles
$
20.8
$
1.2
NM
Used vehicles
4.8
1.1
NM
Wholesale vehicles
0.2
—
NM
Total vehicles
25.8
2.3
NM
Parts, service and collision repair
6.7
0.7
NM
Finance, insurance and other, net
1.5
0.2
NM
Total revenues
34.0
3.2
NM
Gross Profit:
Retail new vehicles
4.0
0.3
NM
Used vehicles
1.0
0.2
NM
Wholesale vehicles
—
—
NM
Total vehicles
5.0
0.5
NM
Parts, service and collision repair
3.3
0.3
NM
Finance, insurance and other, net
1.5
0.2
NM
Total gross profit
9.8
1.0
NM
Selling, general and administrative
expenses
(7.8
)
(0.6
)
NM
Depreciation and amortization
(0.8
)
—
NM
Operating income (loss)
1.2
0.4
NM
Other income (expense):
Interest expense, floor plan
(0.1
)
—
NM
Interest expense, other, net
(0.6
)
—
NM
Other income (expense), net
0.1
—
NM
Total other income (expense)
(0.6
)
—
NM
Income (loss) before taxes
0.6
0.4
NM
Add: impairment charges
—
—
NM
Segment income (loss)
$
0.6
$
0.4
NM
Unit Sales Volume:
Retail new vehicles
1,107
41
NM
Used vehicles
444
64
NM
Wholesale vehicles
7
—
NM
Gross Profit Per Unit:
Retail new vehicles
$
3,573
$
6,829
NM
Used vehicles
$
2,328
$
3,733
NM
Finance, insurance and other, net
$
980
$
1,643
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 March
31,
Better / (Worse)
2023
2022
Change
% Change
(In millions)
Reported:
Compensation
$
258.8
$
252.5
$
(6.3
)
(2
) %
Advertising
26.1
26.2
0.1
—
%
Rent
11.3
12.7
1.4
11
%
Other
116.6
95.6
(21.0
)
(22
) %
Total SG&A expenses
$
412.8
$
387.0
$
(25.8
)
(7
) %
Items of interest:
Long term compensation charges
(2.0
)
$
—
Total SG&A adjustments
$
(2.0
)
$
—
Adjusted:
Total adjusted SG&A expenses
$
410.8
$
387.0
$
(23.8
)
(6
) %
Reported:
SG&A expenses as a % of gross
profit:
Compensation
46.7
%
44.2
%
(250
)
bps
Advertising
4.7
%
4.6
%
(10
)
bps
Rent
2.0
%
2.2
%
20
bps
Other
21.2
%
16.7
%
(450
)
bps
Total SG&A expenses as a % of gross
profit
74.6
%
67.7
%
(690
)
bps
Items of interest:
Long term compensation charges
(0.4
) %
—
%
Total effect of adjustments
(0.4
) %
—
%
Adjusted:
Total adjusted SG&A expenses as a % of
gross profit
74.2
%
67.7
%
(650
)
bps
Franchised Dealerships Segment -
SG&A Expenses
Three Months Ended March
31,
Better / (Worse)
2023
2022
Change
% Change
(In millions)
Reported:
Compensation
$
213.8
$
215.1
$
1.3
1
%
Advertising
9.9
7.9
(2.0
)
(25
) %
Rent
10.2
10.9
0.7
6
%
Other
97.2
81.3
(15.9
)
(20
) %
Total SG&A expenses
$
331.1
$
315.2
$
(15.9
)
(5
) %
Reported:
SG&A expenses as a % of gross
profit:
Compensation
42.4
%
40.8
%
(160
)
bps
Advertising
2.0
%
1.5
%
(50
)
bps
Rent
2.0
%
2.1
%
10
bps
Other
19.3
%
15.4
%
(390
)
bps
Total SG&A expenses as a % of gross
profit
65.7
%
59.8
%
(590
)
bps
Non-GAAP Reconciliation - EchoPark
Segment - SG&A Expenses
Three Months Ended March
31,
Better / (Worse)
2023
2022
Change
% Change
(In millions)
Reported:
Compensation
$
39.7
$
37.1
$
(2.6
)
(7
) %
Advertising
15.8
18.3
2.5
14
%
Rent
1.1
1.8
0.7
39
%
Other
17.2
14.0
(3.2
)
(23
) %
Total SG&A expenses
$
73.8
$
71.2
$
(2.6
)
(4
) %
Items of interest:
Long-term compensation charges
(2.0
)
—
Total SG&A adjustments
$
(2.0
)
$
—
Adjusted:
Total adjusted SG&A expenses
$
71.8
$
71.2
$
(0.6
)
(0.8
) %
Reported:
SG&A expenses as a % of gross
profit:
Compensation
100.6
%
85.7
%
(1,490
)
bps
Advertising
40.0
%
42.2
%
220
bps
Rent
2.7
%
4.2
%
150
bps
Other
43.9
%
32.3
%
(1,160
)
bps
Total SG&A expenses as a % of gross
profit
187.2
%
164.4
%
(2,280
)
bps
Items of interest:
Long-term compensation charges
(5.1
) %
—
%
Total effect of adjustments
(5.1
) %
—
%
Adjusted:
Total adjusted SG&A expenses as a % of
gross profit
182.1
%
164.4
%
(1,770
)
bps
NM = Not Meaningful
Powersports Segment - SG&A
Expenses
Three Months Ended March
31,
Better / (Worse)
2023
2022
Change
% Change
(In millions)
Reported:
Compensation
$
5.3
$
0.3
$
(5.0
)
NM
Advertising
0.4
—
(0.4
)
NM
Rent
—
—
—
NM
Other
2.1
0.3
(1.8
)
NM
Total SG&A expenses
$
7.8
$
0.6
$
(7.2
)
NM
Reported:
SG&A expenses as a % of gross
profit:
Compensation
53.9
%
31.1
%
NM
Advertising
4.2
%
2.1
%
NM
Rent
0.4
%
—
%
NM
Other
21.6
%
20.1
%
NM
Total SG&A expenses as a % of gross
profit
80.1
%
53.3
%
NM
NM = Not Meaningful
Non-GAAP Reconciliation - Franchised
Dealerships Segment - Income (Loss) Before Taxes and Segment Income
(Loss)
Three Months Ended March
31,
2023
2022
% Change
(In millions)
Reported:
Income (loss) before taxes
$
109.8
$
163.8
(33
) %
Add: impairment charges
—
—
Segment income (loss)
$
109.8
$
163.8
(33
) %
Non-GAAP Reconciliation - EchoPark
Segment - Income (Loss) Before Taxes and Segment Income
(Loss)
Three Months Ended March
31,
2023
2022
% Change
(In millions)
Reported:
Income (loss) before taxes
$
(46.8
)
$
(35.3
)
(33
) %
Add: impairment charges
—
—
Segment income (loss)
$
(46.8
)
$
(35.3
)
(33
) %
Pre-tax items of interest:
Long-term compensation charges
2.0
—
Total pre-tax items of interest
$
2.0
$
—
Adjusted:
Segment income (loss)
$
(44.8
)
$
(35.3
)
(27
) %
Non-GAAP Reconciliation - Powersports
Segment - Income (Loss) Before Taxes and Segment Income
(Loss)
Three Months Ended March
31,
2023
2022
% Change
(In millions)
Reported:
Income (loss) before taxes
$
0.6
$
0.4
NM
Add: impairment charges
—
—
Segment income (loss)
$
0.6
$
0.4
NM
NM = Not Meaningful
Non-GAAP Reconciliation - Consolidated - Net Income (Loss) and
Diluted Earnings (Loss) Per Share
Three Months Ended March 31,
2023
Three Months Ended March 31,
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
36.9
$
47.7
$
1.29
41.8
$
97.3
$
2.33
Pre-tax items of interest:
Long term compensation charges
$
2.0
$
—
Total pre-tax items of interest
$
2.0
$
—
Tax effect of above items
(0.5
)
—
Adjusted net income (loss), diluted
shares, and diluted earnings (loss) per share
36.9
$
49.2
$
1.33
41.8
$
97.3
$
2.33
Non-GAAP Reconciliation - Adjusted
EBITDA
Three Months Ended March 31,
2023
Three Months Ended March 31,
2022
Franchised Dealerships
Segment
EchoPark Segment
Powersports Segment
Total
Franchised Dealerships
Segment
EchoPark Segment
Powersports Segment
Total
(In millions)
Net income (loss)
$
47.7
$
97.3
Provision for income taxes
15.9
31.6
Income (loss) before taxes
$
109.8
$
(46.8
)
$
0.6
$
63.6
$
163.8
$
(35.3
)
$
0.4
$
128.9
Non-floor plan interest (1)
25.4
0.9
0.6
26.9
19.0
0.7
—
19.7
Depreciation and amortization (2)
28.2
7.0
0.7
35.9
25.9
5.1
0.1
31.1
Stock-based compensation expense
5.0
—
—
5.0
4.4
—
—
4.4
Long-term compensation charges
—
2.0
—
2.0
—
—
—
—
Loss (gain) on franchise and real estate
disposals
—
—
—
—
(1.1
)
—
—
(1.1
)
Adjusted EBITDA
$
168.4
$
(36.9
)
$
1.9
$
133.4
$
212.0
$
(29.5
)
$
0.5
$
183.0
(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/20230427005146/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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