EX-99.1

EX-99.1 2 d23071dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Sonic Automotive, Inc. Reports Quarterly Adjusted Continuing Operations Earnings per Share of $0.46

All-Time Record Gross Profit and Achieved 100 Pre-Owned Retail Unit Sales per Store per Month

Second Quarter 2015 Results

•

Record Q2 total gross profit of $355.6 million, up 2.5% over the prior year quarter

•

Achieved milestone of retailing 100 pre-owned units per store per month for the quarter on a same store basis

•

All-time record quarterly pre-owned retail sales of 30,301 units, up 6.3% over the prior year quarter

•

All-time record quarterly fixed operations gross profit of $170.2 million, up 6.5% over the prior year quarter

•

Echo Park^® stores retail 881 units, up 221 units, or 33.5%, from the prior quarter

CHARLOTTE, N.C. – July 20, 2015 – Sonic Automotive, Inc. (NYSE: SAH), one of the nation’s largest automotive retailers, today reported adjusted net income from continuing operations for the second quarter of 2015 of $23.4 million, or $0.46 per diluted share. Included in these adjusted amounts are pre-tax expenses of $4.1 million, or $0.05 per diluted share, related to EchoPark^® operations.

Adjusted net income from continuing operations for the second quarter of 2014 was $23.5 million, or $0.44 per diluted share. Included in these adjusted amounts are pre-tax expenses of $3.2 million, or $0.04 per diluted share, related to EchoPark^® operations.

On a GAAP basis, net income from continuing operations and related diluted earnings per share for the second quarter of 2015 were $15.1 million and $0.30 per share, respectively, and net income from continuing operations and related diluted earnings per share for the second quarter of 2014 were $27.1 million and $0.51 per share, respectively. See the accompanying tables for a reconciliation of the adjusted balances to GAAP basis amounts and further details of the quarterly adjustments.

B. Scott Smith, Sonic’s President, noted, “I’m proud of our operations team for achieving the lofty goal of retailing 100 pre-owned vehicles per store per month. We have had quarters in the past when we approached achieving this metric and several months where we surpassed this metric, but it had never been achieved on a quarterly basis. Generating this type of retail activity fuels our fixed operations and F&I areas where we are most profitable.”

“We also worked to build our fixed operations business in the quarter. In addition to the benefits we experienced through the reconditioning work performed to achieve the sale of 100 pre-owned vehicles per store per month, we were able to grow overall same store fixed operations gross profit $13.1 million, or 8.5%, compared to the prior year quarter. Fixed operations growth was achieved in our customer pay, warranty and internal categories. This type of internal growth

strategy is central to our One Sonic-One Experience (OSOE) initiative which is intended to grow the top-line revenue categories, generate retail activity, and realize benefits over multiple gross profit streams.”

Jeff Dyke, Sonic’s EVP of Operations, stated, “We had another very busy quarter at Sonic Automotive. From a franchise store perspective, we executed our playbook and delivered another solid operating performance allowing our team to leverage this performance while we build on our OSOE strategy and our EchoPark^® business model. I am very excited about our pre-owned volume and the continued focus and execution from our team as they achieved 100 units per store per month for the quarter. Our focus on our fixed operations business, and in particular our customer pay business, is beginning to pay off and the result showed in the quarter. Warranty business was also robust.”

“Our OSOE strategy continues to make progress. The associated technology’s performance is working very well and as a result, we have decided to move ahead with the rollout of several of its technology applications that will benefit our guests and associates. Our proprietary CRM, desking and appraisal tools will be added to our stores over the next year and a half in the first wave of three planned waves that will ultimately result in the complete rollout of OSOE. We will roll out our F&I and pricing tools as part of the OSOE strategy once we are comfortable with our performance in the Charlotte test market.”

“EchoPark^® made great strides again this quarter as we ramped up and executed our business plan. We are meeting our goals and have started the acquisition of properties for our next market. We plan to begin construction in this next market before the end of this year. We also plan on adding an additional five locations to our Denver market over the next twelve months. Our associates have created a culture in the stores which allows them to offer our customers an easy, transparent shopping experience and, as a result, our guest feedback is overwhelmingly positive. We expect our initial neighborhood locations in Denver will become cash flow positive prior to the end of this year and we have developed a next generation neighborhood store that further improves our guest experience and operational efficiency.”

Second Quarter 2015 Earnings Conference Call

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

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

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

Domestic: 1.877.450.3867

International: 1.706.643.0958

Conference ID: 76953618

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

Domestic: 1.855.859.2056

International: 1.404.537.3406

Conference ID: 76953618

About Sonic Automotive

Sonic Automotive, Inc., a Fortune 500 company based in Charlotte, N.C., is one of the nation’s largest automotive retailers. Sonic can be reached on the web at www.sonicautomotive.com.

Included herein are forward-looking statements, including statements with respect to anticipated future success and impacts from the implementation of our planned customer experience and stand-alone pre-owned store initiatives. There are many factors that affect management’s views about future events and trends of the Company’s business. These factors involve risk and uncertainties that could cause actual results or trends to differ materially from management’s view, including without limitation, economic conditions in the markets in which we operate, new and used vehicle industry sales volume, the success of our operational strategies, the rate and timing of overall economic recovery or decline, and the risk factors described in the Company’s annual report on Form 10-K for the year ending December 31, 2014. The Company does not undertake any obligation to update forward-looking information.

###

Contact:

Heath Byrd, Chief Financial Officer (704) 566-2400

C.G. Saffer, Vice President and Chief Accounting Officer (704) 566-2439

Sonic Automotive, Inc.

Results of Operations (Unaudited)

This release contains certain non-GAAP financial measures as defined under SEC rules, such as, but not limited to, adjusted income from continuing operations and related earnings per share data. The Company has reconciled these measures to the most directly comparable GAAP measures in the release. The Company believes that these non-GAAP financial measures improve the transparency of the Company’s disclosure by providing period-to-period comparability of the Company’s results from operations.


	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(In thousands, except per share and unit data)
Revenues:
New retail vehicles	$	1,285,632		$	1,283,231		$	2,475,847		$	2,395,521
Fleet vehicles		9,656			15,546			21,763			49,876

Total new vehicles		1,295,288			1,298,777			2,497,610			2,445,397
Used vehicles		658,794			603,868			1,252,536			1,163,684
Wholesale vehicles		41,131			44,765			82,789			86,363

Total vehicles		1,995,213			1,947,410			3,832,935			3,695,444
Parts, service and collision repair		346,164			329,134			669,358			647,905
Finance, insurance and other, net		82,363			76,736			156,963			146,317

Total revenues		2,423,740			2,353,280			4,659,256			4,489,666
Gross profit		355,554			346,947			690,513			675,947
Selling, general and administrative expenses		(284,661	)		(268,914	)		(555,523	)		(532,887	)
Impairment charges		(10,469	)		(4	)		(16,661	)		(7	)
Depreciation and amortization		(17,294	)		(14,431	)		(33,703	)		(28,812	)

Operating income (loss)		43,130			63,598			84,626			114,241
Other income (expense):
Interest expense, floor plan		(5,345	)		(4,846	)		(10,123	)		(9,535	)
Interest expense, other, net		(13,054	)		(13,865	)		(26,274	)		(27,683	)
Other income (expense), net		10			3			100			100

Total other income (expense)		(18,389	)		(18,708	)		(36,297	)		(37,118	)

Income (loss) from continuing operations before taxes		24,741			44,890			48,329			77,123
Provision for income taxes for continuing operations- benefit (expense)		(9,649	)		(17,829	)		(18,848	)		(30,078	)

Income (loss) from continuing operations		15,092			27,061			29,481			47,045

Income (loss) from discontinued operations		(311	)		(68	)		(732	)		(666	)

Net income (loss)	$	14,781		$	26,993		$	28,749		$	46,379

Diluted earnings (loss) per common share:
Earnings (loss) per share from continuing operations	$	0.30		$	0.51		$	0.57		$	0.89
Earnings (loss) per share from discontinued operations		(0.01	)		—			(0.01	)		(0.02	)

Earnings (loss) per common share	$	0.29		$	0.51		$	0.56		$	0.87

Weighted average common shares outstanding		51,093			52,930			51,247			52,938

Gross Margin Data (Continuing Operations):
New retail vehicles		5.1	%		5.8	%		5.2	%		5.8	%
Fleet vehicles		(0.1	%)		2.3	%		(0.3	%)		2.5	%
Total new vehicles		5.0	%		5.7	%		5.1	%		5.8	%
Used vehicles		6.2	%		6.2	%		6.5	%		6.7	%
Wholesale vehicles		(6.5	%)		(2.9	%)		(3.5	%)		(1.6	%)
Parts, service and collision repair		49.2	%		48.6	%		48.8	%		48.2	%
Finance, insurance and other		100.0	%		100.0	%		100.0	%		100.0	%
Overall gross margin		14.7	%		14.7	%		14.8	%		15.1	%

SG&A Expenses (Continuing Operations):
Compensation	$	167,811		$	163,109		$	329,669		$	320,263
Advertising		15,358			13,864			30,689			27,982
Rent		18,246			18,643			36,500			37,178
Other		83,246			73,298			158,665			147,464

Total SG&A expenses	$	284,661		$	268,914		$	555,523		$	532,887
SG&A expenses as % of gross profit		80.1	%		77.5	%		80.5	%		78.8	%

Operating Margin %		1.8	%		2.7	%		1.8	%		2.5	%

Unit Data (Continuing Operations):
New retail units		34,676			34,847			66,010			64,876
Fleet units		287			558			642			1,660

Total new units		34,963			35,405			66,652			66,536
Used units		30,301			28,514			58,436			56,171
Wholesale units		8,010			7,738			15,787			15,118

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Per Share Data


	Three Months Ended June 30, 2015
			Income (Loss) From Continuing Operations						Income (Loss) From Discontinued Average						Net Income (Loss)
	Weighted Average Shares		Amount			Per Share Amount			Amount			Per Share Amount			Amount			Per Share Amount
	(In thousands, except per share amounts)
Reported:
Earnings (loss) and shares		50,784	$	15,092					$	(311	)				$	14,781
Effect of participating securities:
Non-vested restricted stock and stock units				(7	)					—						(7	)

Basic earnings (loss) and shares		50,784	$	15,085		$	0.30		$	(311	)	$	(0.01	)	$	14,774		$	0.29
Effect of dilutive securities:
Stock compensation plans		309

Diluted earnings (loss) and shares		51,093	$	15,085		$	0.30		$	(311	)	$	(0.01	)	$	14,774		$	0.29

Adjustments (net of tax):
Gain on disposal			$	(645	)	$	(0.01	)	$	—		$	—		$	(645	)	$	(0.01	)
Impairment charges				6,386			0.12			—			—			6,386			0.12
Storm damage and other				2,555			0.05			—			—			2,555			0.05

Total adjustments			$	8,296		$	0.16		$	—		$	—		$	8,296		$	0.16

Adjusted:
Earnings (loss) and

Diluted earnings (loss) per share (1)			$	23,388		$	0.46		$	(311	)	$	(0.01	)	$	23,077		$	0.45

(1)	Expenses attributable to EchoPark^® operations were $0.05 per fully diluted share in the three months ended June 30, 2015.


	Three Months Ended June 30, 2014
			Income (Loss) From Continuing Operations						Income (Loss) From Discontinued Operations					Net Income (Loss)
	Weighted Average Shares		Amount			Per Share Amount			Amount			Per Share Amount		Amount			Per Share Amount
	(In thousands, except per share amounts)
Reported:
Earnings (loss) and shares		52,514	$	27,061					$	(68	)			$	26,993
Effect of participating securities:
Non-vested restricted stock and stock units				(87	)					—					(87	)

Basic earnings (loss) and shares		52,514	$	26,974		$	0.51		$	(68	)	$	—	$	26,906		$	0.51
Effect of dilutive securities:
Stock compensation plans		416

Diluted earnings (loss) and shares		52,930	$	26,974		$	0.51		$	(68	)	$	—	$	26,906		$	0.51

Adjustments (net of tax):
Gain on disposal			$	(4,446	)	$	(0.08	)	$	—		$	—	$	(4,446	)	$	(0.08	)
Storm damage and other				840			0.01			—			—		840			0.01

Total adjustments			$	(3,606	)	$	(0.07	)	$	—		$	—	$	(3,606	)	$	(0.07	)

Adjusted:
Earnings (loss) and

Diluted earnings (loss) per share (2)			$	23,455		$	0.44		$	(68	)	$	—	$	23,387		$	0.44

(2)	Expenses attributable to EchoPark^® operations were $0.04 per fully diluted share in the three months ended June 30, 2014.

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Per Share Data


	Six Months Ended June 30, 2015
			Income (Loss) From Continuing Operations						Income (Loss) From Discontinued Operations						Net Income (Loss)
	Weighted Average Shares		Amount			Per Share Amount			Amount			Per Share Amount			Amount			Per Share Amount
	(In thousands, except per share amounts)
Reported:
Earnings (loss) and shares		50,819	$	29,481					$	(732	)				$	28,749
Effect of participating securities:
Non-vested restricted stock and stock units				(14	)					—						(14	)

Basic earnings (loss) and shares		50,819	$	29,467		$	0.58		$	(732	)	$	(0.01	)	$	28,735		$	0.57
Effect of dilutive securities:
Stock compensation plans		428

Diluted earnings (loss) and shares		51,247	$	29,467		$	0.57		$	(732	)	$	(0.01	)	$	28,735		$	0.56

Adjustments (net of tax):
Gain on disposal			$	(583	)	$	(0.01	)	$	—		$	—		$	(583	)	$	(0.01	)
Impairment charges				10,166			0.20			—			—			10,166			0.20
Storm damage and other				3,132			0.06			—			—			3,132			0.06

Total adjustments			$	12,715		$	0.25		$	—		$	—		$	12,715		$	0.25

Adjusted:
Earnings (loss) and

Diluted earnings (loss) per share (3)			$	42,196		$	0.82		$	(732	)	$	(0.01	)	$	41,464		$	0.81

(3)	Expenses attributable to EchoPark^® operations were $0.11 per fully diluted share in the six months ended June 30, 2015.


	Six Months Ended June 30, 2014
			Income (Loss) From Continuing Operations						Income (Loss) From Discontinued Operations						Net Income (Loss)
	Weighted Average Shares		Amount			Per Share Amount			Amount			Per Share Amount			Amount			Per Share Amount
	(In thousands, except per share amounts)
Reported:
Earnings (loss) and shares		52,466	$	47,045					$	(666	)				$	46,379
Effect of participating securities:
Non-vested restricted stock and stock units				(151	)					—						(151	)

Basic earnings (loss) and shares		52,466	$	46,894		$	0.89		$	(666	)	$	(0.01	)	$	46,228		$	0.88
Effect of dilutive securities:
Stock compensation plans		472

Diluted earnings (loss) and shares		52,938	$	46,894		$	0.89		$	(666	)	$	(0.02	)	$	46,228		$	0.87

Adjustments (net of tax):
Gain on disposal			$	(4,446	)	$	(0.08	)	$	—		$	—		$	(4,446	)	$	(0.08	)
Storm damage and other				840			0.01			—			—			840			0.01
Effect of two-class method & rounding				—			—			—			0.01			—			0.01

Total adjustments			$	(3,606	)	$	(0.07	)	$	—		$	0.01		$	(3,606	)	$	(0.06	)

Adjusted:
Earnings (loss) and

Diluted earnings (loss) per share (4)			$	43,439		$	0.82		$	(666	)	$	(0.01	)	$	42,773		$	0.81

(4)	Expenses attributable to EchoPark^® operations were $0.06 per fully diluted share in the six months ended June 30, 2014.

Sonic Automotive, Inc.

Results of Operations (Unaudited)

New Vehicles


	Three Months Ended June 30,						Better / (Worse)
	2015			2014			Change				% Change
	(In thousands, except units and per unit data)
Reported:
Revenue	$	1,295,288		$	1,298,777		$	(3,489	)			(0.3	%)
Gross profit	$	64,936		$	74,193		$	(9,257	)			(12.5	%)
Unit sales		34,963			35,405			(442	)			(1.2	%)
Revenue per unit	$	37,047		$	36,683		$	364				1.0	%
Gross profit per unit	$	1,857		$	2,096		$	(239	)			(11.4	%)
Gross profit as a % of revenue		5.0	%		5.7	%		(70	)	bps

	Six Months Ended June 30,						Better / (Worse)
	2015			2014			Change				% Change
	(In thousands, except units and per unit data)
Reported:
Revenue	$	2,497,610		$	2,445,397		$	52,213				2.1	%
Gross profit	$	128,285		$	140,866		$	(12,581	)			(8.9	%)
Unit sales		66,652			66,536			116				0.2	%
Revenue per unit	$	37,472		$	36,753		$	719				2.0	%
Gross profit per unit	$	1,925		$	2,117		$	(192	)			(9.1	%)
Gross profit as a % of revenue		5.1	%		5.8	%		(70	)	bps

	Three Months Ended June 30,						Better / (Worse)
	2015			2014			Change				% Change
	(In thousands, except units and per unit data)
Same Store:
Revenue	$	1,282,668		$	1,252,870		$	29,798				2.4	%
Gross profit	$	64,789		$	71,765		$	(6,976	)			(9.7	%)
Unit sales		34,575			34,125			450				1.3	%
Revenue per unit	$	37,098		$	36,714		$	384				1.0	%
Gross profit per unit	$	1,874		$	2,103		$	(229	)			(10.9	%)
Gross profit as a % of revenue		5.1	%		5.7	%		(60	)	bps

	Six Months Ended June 30,						Better / (Worse)
	2015			2014			Change				% Change
	(In thousands, except units and per unit data)
Same Store:
Revenue	$	2,472,920		$	2,362,936		$	109,984				4.7	%
Gross profit	$	127,227		$	136,397		$	(9,170	)			(6.7	%)
Unit sales		65,911			64,207			1,704				2.7	%
Revenue per unit	$	37,519		$	36,802		$	717				1.9	%
Gross profit per unit	$	1,930		$	2,124		$	(194	)			(9.1	%)
Gross profit as a % of revenue		5.1	%		5.8	%		(70	)	bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Used Vehicles


	Three Months Ended June 30,						Better / (Worse)
	2015			2014			Change				% Change
	(In thousands, except units and per unit data)
Reported:
Revenue	$	658,794		$	603,868		$	54,926				9.1	%
Gross profit	$	40,696		$	37,473		$	3,223				8.6	%
Unit sales		30,301			28,514			1,787				6.3	%
Revenue per unit	$	21,742		$	21,178		$	564				2.7	%
Gross profit per unit	$	1,343		$	1,314		$	29				2.2	%
Gross profit as a % of revenue		6.2	%		6.2	%		0		bps

	Six Months Ended June 30,						Better / (Worse)
	2015			2014			Change				% Change
	(In thousands, except units and per unit data)
Reported:
Revenue	$	1,252,536		$	1,163,684		$	88,852				7.6	%
Gross profit	$	81,540		$	78,167		$	3,373				4.3	%
Unit sales		58,436			56,171			2,265				4.0	%
Revenue per unit	$	21,434		$	20,717		$	717				3.5	%
Gross profit per unit	$	1,395		$	1,392		$	3				0.2	%
Gross profit as a % of revenue		6.5	%		6.7	%		(20	)	bps

	Three Months Ended June 30,						Better / (Worse)
	2015			2014			Change				% Change
	(In thousands, except units and per unit data)
Same Store:
Revenue	$	632,838		$	581,024		$	51,814				8.9	%
Gross profit	$	38,884		$	36,647		$	2,237				6.1	%
Unit sales		28,973			27,397			1,576				5.8	%
Revenue per unit	$	21,842		$	21,208		$	634				3.0	%
Gross profit per unit	$	1,342		$	1,338		$	4				0.3	%
Gross profit as a % of revenue		6.1	%		6.3	%		(20	)	bps

	Six Months Ended June 30,						Better / (Worse)
	2015			2014			Change				% Change
	(In thousands, except units and per unit data)
Same Store:
Revenue	$	1,205,597		$	1,118,663		$	86,934				7.8	%
Gross profit	$	78,897		$	75,933		$	2,964				3.9	%
Unit sales		56,052			53,998			2,054				3.8	%
Revenue per unit	$	21,509		$	20,717		$	792				3.8	%
Gross profit per unit	$	1,408		$	1,406		$	2				0.1	%
Gross profit as a % of revenue		6.5	%		6.8	%		(30	)	bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Wholesale Vehicles


	Three Months Ended June 30,						Better / (Worse)
	2015			2014			Change				% Change
	(In thousands, except units and per unit data)
Reported:
Revenue	$	41,131		$	44,765		$	(3,634	)			(8.1	%)
Gross profit (loss)	$	(2,676	)	$	(1,314	)	$	(1,362	)			(103.7	%)
Unit sales		8,010			7,738			272				3.5	%
Revenue per unit	$	5,135		$	5,785		$	(650	)			(11.2	%)
Gross profit (loss) per unit	$	(334	)	$	(170	)	$	(164	)			(96.5	%)
Gross profit (loss) as a % of revenue		(6.5	%)		(2.9	%)		(360	)	bps

	Six Months Ended June 30,						Better / (Worse)
	2015			2014			Change				% Change
	(In thousands, except units and per unit data)
Reported:
Revenue	$	82,789		$	86,363		$	(3,574	)			(4.1	%)
Gross profit (loss)	$	(2,884	)	$	(1,409	)	$	(1,475	)			(104.7	%)
Unit sales		15,787			15,118			669				4.4	%
Revenue per unit	$	5,244		$	5,713		$	(469	)			(8.2	%)
Gross profit (loss) per unit	$	(183	)	$	(93	)	$	(90	)			(96.8	%)
Gross profit (loss) as a % of revenue		(3.5	%)		(1.6	%)		(190	)	bps

	Three Months Ended June 30,						Better / (Worse)
	2015			2014			Change				% Change
	(In thousands, except units and per unit data)
Same Store:
Revenue	$	39,497		$	43,326		$	(3,829	)			(8.8	%)
Gross profit (loss)	$	(2,344	)	$	(1,307	)	$	(1,037	)			(79.3	%)
Unit sales		7,637			7,476			161				2.2	%
Revenue per unit	$	5,172		$	5,795		$	(623	)			(10.8	%)
Gross profit (loss) per unit	$	(307	)	$	(175	)	$	(132	)			(75.4	%)
Gross profit (loss) as a % of revenue		(5.9	%)		(3.0	%)		(290	)	bps

	Six Months Ended June 30,						Better / (Worse)
	2015			2014			Change				% Change
	(In thousands, except units and per unit data)
Same Store:
Revenue	$	80,270		$	83,573		$	(3,303	)			(4.0	%)
Gross profit (loss)	$	(2,530	)	$	(1,331	)	$	(1,199	)			(90.1	%)
Unit sales		15,160			14,621			539				3.7	%
Revenue per unit	$	5,295		$	5,716		$	(421	)			(7.4	%)
Gross profit (loss) per unit	$	(167	)	$	(91	)	$	(76	)			(83.5	%)
Gross profit (loss) as a % of revenue		(3.2	%)		(1.6	%)		(160	)	bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Parts, Service and Collision Repair (“Fixed Operations”)


	Three Months Ended June 30,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands)
Reported:
Revenue
Customer pay	$	146,548		$	145,040		$	1,508			1.0	%
Warranty		57,150			47,050			10,100			21.5	%
Wholesale parts		45,850			47,145			(1,295	)		(2.7	%)
Internal, sublet and other		96,616			89,899			6,717			7.5	%

Total	$	346,164		$	329,134		$	17,030			5.2	%

Gross profit
Customer pay	$	80,286		$	79,606		$	680			0.9	%
Warranty		32,679			25,671			7,008			27.3	%
Wholesale parts		8,148			8,308			(160	)		(1.9	%)
Internal, sublet and other		49,122			46,274			2,848			6.2	%

Total	$	170,235		$	159,859		$	10,376			6.5	%

Gross profit as a % of revenue
Customer pay		54.8	%		54.9	%		(10	)	bps
Warranty		57.2	%		54.6	%		260		bps
Wholesale parts		17.8	%		17.6	%		20		bps
Internal, sublet and other		50.8	%		51.5	%		(70	)	bps

Total		49.2	%		48.6	%		60		bps

	Six Months Ended June 30,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands)
Reported:
Revenue
Customer pay	$	284,171		$	286,162		$	(1,991	)		(0.7	%)
Warranty		110,648			93,641			17,007			18.2	%
Wholesale parts		90,862			95,089			(4,227	)		(4.4	%)
Internal, sublet and other		183,677			173,013			10,664			6.2	%

Total	$	669,358		$	647,905		$	21,453			3.3	%

Gross profit
Customer pay	$	155,963		$	157,605		$	(1,642	)		(1.0	%)
Warranty		62,440			50,909			11,531			22.7	%
Wholesale parts		16,287			16,469			(182	)		(1.1	%)
Internal, sublet and other		91,919			87,023			4,896			5.6	%

Total	$	326,609		$	312,006		$	14,603			4.7	%

Gross profit as a % of revenue
Customer pay		54.9	%		55.1	%		(20	)	bps
Warranty		56.4	%		54.4	%		200		bps
Wholesale parts		17.9	%		17.3	%		60		bps
Internal, sublet and other		50.0	%		50.3	%		(30	)	bps

Total		48.8	%		48.2	%		60		bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Parts, Service and Collision Repair (“Fixed Operations”)


	Three Months Ended June 30,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands)
Same Store:
Revenue
Customer pay	$	145,235		$	140,701		$	4,534			3.2	%
Warranty		56,672			45,065			11,607			25.8	%
Wholesale parts		45,502			45,855			(353	)		(0.8	%)
Internal, sublet and other		93,761			87,105			6,656			7.6	%

Total	$	341,170		$	318,726		$	22,444			7.0	%

Gross profit
Customer pay	$	79,537		$	77,320		$	2,217			2.9	%
Warranty		32,435			24,631			7,804			31.7	%
Wholesale parts		8,082			8,064			18			0.2	%
Internal, sublet and other		47,764			44,676			3,088			6.9	%

Total	$	167,818		$	154,691		$	13,127			8.5	%

Gross profit as a % of revenue
Customer pay		54.8	%		55.0	%		(20	)	bps
Warranty		57.2	%		54.7	%		250		bps
Wholesale parts		17.8	%		17.6	%		20		bps
Internal, sublet and other		50.9	%		51.3	%		(40	)	bps

Total		49.2	%		48.5	%		70		bps

	Six Months Ended June 30,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands)
Same Store:
Revenue
Customer pay	$	281,002		$	277,187		$	3,815			1.4	%
Warranty		109,644			89,838			19,806			22.0	%
Wholesale parts		90,082			92,522			(2,440	)		(2.6	%)
Internal, sublet and other		178,717			167,665			11,052			6.6	%

Total	$	659,445		$	627,212		$	32,233			5.1	%

Gross profit
Customer pay	$	154,225		$	152,877		$	1,348			0.9	%
Warranty		61,892			48,901			12,991			26.6	%
Wholesale parts		16,135			15,971			164			1.0	%
Internal, sublet and other		89,573			83,821			5,752			6.9	%

Total	$	321,825		$	301,570		$	20,255			6.7	%

Gross profit as a % of revenue
Customer pay		54.9	%		55.2	%		(30	)	bps
Warranty		56.4	%		54.4	%		200		bps
Wholesale parts		17.9	%		17.3	%		60		bps
Internal, sublet and other		50.1	%		50.0	%		10		bps

Total		48.8	%		48.1	%		70		bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Finance, Insurance and Other, Net (“F&I”)


	Three Months Ended June 30,				Better / (Worse)
	2015		2014		Change		% Change
	(In thousands, except per unit data)
Reported:
Revenue	$	82,363	$	76,736	$	5,627		7.3	%
Gross profit per retail unit (excludes fleet)	$	1,268	$	1,211	$	57		4.7	%

	Six Months Ended June 30,				Better / (Worse)
	2015		2014		Change		% Change
	(In thousands, except per unit data)
Reported:
Revenue	$	156,963	$	146,317	$	10,646		7.3	%
Gross profit per retail unit (excludes fleet)	$	1,261	$	1,209	$	52		4.3	%

	Three Months Ended June 30,				Better / (Worse)
	2015		2014		Change		% Change
	(In thousands, except per unit data)
Same Store:
Revenue	$	80,573	$	74,237	$	6,336		8.5	%
Gross profit per retail unit (excludes fleet)	$	1,274	$	1,218	$	56		4.6	%

	Six Months Ended June 30,				Better / (Worse)
	2015		2014		Change		% Change
	(In thousands, except per unit data)
Same Store:
Revenue	$	153,702	$	141,419	$	12,283		8.7	%
Gross profit per retail unit (excludes fleet)	$	1,267	$	1,213	$	54		4.5	%

Sonic Automotive, Inc.

Results of Operations (Unaudited)

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


	Three Months Ended June 30,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands)
Reported:
Compensation	$	167,811		$	163,109		$	(4,702	)		(2.9	%)
Advertising		15,358			13,864			(1,494	)		(10.8	%)
Rent		18,246			18,643			397			2.1	%
Other		83,246			73,298			(9,948	)		(13.6	%)

Total	$	284,661		$	268,914		$	(15,747	)		(5.9	%)

SG&A expenses as a % of gross profit
Compensation		47.2	%		47.0	%		(20	)	bps
Advertising		4.3	%		4.0	%		(30	)	bps
Rent		5.1	%		5.4	%		30		bps
Other		23.5	%		21.1	%		(240	)	bps

Total		80.1	%		77.5	%		(260	)	bps

	Six Months Ended June 30,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands)
Reported:
Compensation	$	329,669		$	320,263		$	(9,406	)		(2.9	%)
Advertising		30,689			27,982			(2,707	)		(9.7	%)
Rent		36,500			37,178			678			1.8	%
Other		158,665			147,464			(11,201	)		(7.6	%)

Total	$	555,523		$	532,887		$	(22,636	)		(4.2	%)

SG&A expenses as a % of gross profit
Compensation		47.7	%		47.4	%		(30	)	bps
Advertising		4.4	%		4.1	%		(30	)	bps
Rent		5.3	%		5.5	%		20		bps
Other		23.1	%		21.8	%		(130	)	bps

Total		80.5	%		78.8	%		(170	)	bps