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Sonic Automotive Inc (SAH) SEC Filing 8-K Material Event for the period ending Wednesday, February 15, 2023

Sonic Automotive Inc

CIK: 1043509 Ticker: SAH


Exhibit 99.1

Sonic Automotive Reports All-Time Record Fourth Quarter and Full Year Revenues

Repurchased 5.6 Million Shares of Class A Common Stock During 2022, or 14% of Total Shares Outstanding as of December 31, 2021
Announces Acquisition of 13 Powersports Locations, Further Diversifying Retail Portfolio

CHARLOTTE, N.C. – February 15, 2023 – 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 fourth quarter and fiscal year ended December 31, 2022.

Fourth Quarter 2022 Financial Summary
All-time record quarterly revenues of $3.6 billion, up 13% year-over-year; record fourth quarter gross profit of $576.1 million, up 9% year-over-year
Reported fourth quarter net loss of $190.9 million ($5.22 loss per diluted share)
Reported net loss includes the effect of a $320.4 million pre-tax charge related to non-cash impairment charges, offset partially by a $9.1 million pre-tax gain on the disposal of real estate and an income tax benefit of $22.6 million related to these non-recurring items
Excluding non-recurring items, adjusted fourth quarter net income* was $97.8 million ($2.61 adjusted earnings per diluted share*)
Selling, general and administrative (“SG&A”) expenses as a percentage of gross profit of 63.6% (56.6% on a Franchised Dealerships Segment basis, a decrease of 110 basis points year-over-year)
Adjusted SG&A expenses as a percentage of gross profit* of 65.2% (58.3% on a Franchised Dealerships Segment basis, an increase of 80 basis points year-over-year)
Record fourth quarter EchoPark revenues of $589.3 million, up 2% year-over-year; fourth quarter EchoPark gross profit of $40.8 million, flat year-over-year
Since October 1, 2022, Sonic has repurchased approximately 0.7 million shares of its Class A Common Stock for an aggregate purchase price of approximately $35.8 million, or an average of $48.25 per share

Full Year 2022 Financial Summary
All-time record annual revenues of $14.0 billion, up 13% year-over-year; all-time record annual gross profit of $2.3 billion, up 21% year-over-year
Reported full year net income of $88.5 million ($2.23 earnings per diluted share)
Reported net income includes the effect of a $320.4 million pre-tax charge related to non-cash impairment charges and a $4.4 million pre-tax charge related to long-term compensation charges, offset partially by a $9.1 million pre-




tax gain on the disposal of real estate and an income tax benefit of $22.6 million related to these non-recurring items
Excluding non-recurring items, adjusted full year net income* was $381.6 million ($9.61 adjusted earnings per diluted share*, an all-time annual record)
SG&A expenses as a percentage of gross profit of 67.1% (59.9% on a Franchised Dealerships Segment basis, a decrease of 110 basis points year-over-year)
Adjusted SG&A expenses as a percentage of gross profit* of 67.3% (60.1% on a Franchised Dealerships Segment basis, a decrease of 80 basis points year-over-year)
All-time record annual EchoPark revenues of $2.5 billion, up 5% year-over-year; all-time record annual EchoPark gross profit of $175.1 million, up 18% year-over-year
During 2022, Sonic repurchased approximately 5.6 million shares of its Class A Common Stock for an aggregate purchase price of approximately $261.9 million, or an average of $47.08 per share

* 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 extremely proud of our team’s performance in the fourth quarter, capping off another year of all-time record annual revenues and adjusted earnings per share. Our commitment to delivering an exceptional guest experience and our dedication to the growth and development of our teammates continue to pay dividends for our key stakeholders. As we execute our long-term strategic plan, we remain focused on leveraging growth opportunities across our diversified portfolio to maximize future earnings potential and to position Sonic Automotive for continued success in the future. To that end, we are pleased to announce further diversification of our retail portfolio with our newly created Powersports Segment, driving incremental growth opportunities by partnering with top powersports brands, including Harley-Davidson, Can-Am, Sea-Doo, Polaris, Kawasaki, Suzuki, Ducati, BMW, Honda, Indian Motorcycle and Yamaha. We are excited about the opportunity in this space and would like to welcome the teams from Black Hills Harley-Davidson in Sturgis, South Dakota, Team Mancuso Powersports in Houston, Texas, and Horny Toad Harley-Davidson in Temple, Texas to the Sonic Automotive family.”

Jeff Dyke, President of Sonic Automotive, commented, “Our franchised dealerships team has continued to successfully adapt to an unprecedented automotive retail environment, driving exceptional performance in 2022. Despite a challenging used vehicle industry backdrop, we remain committed to EchoPark’s long-term potential and are focused on executing strategic enhancements to the business model in 2023, while maintaining our target of 90% U.S. population coverage by 2025. We firmly believe in our team’s ability to adapt to an evolving automotive retail market and macroeconomic backdrop to drive toward achieving our long-term goals.”

Heath Byrd, Chief Financial Officer of Sonic Automotive, added, “Our outstanding results in 2022 speak to the strength of our diversified model, which has allowed us to focus on the long-term growth potential at EchoPark while also returning capital to our stockholders via our dividend and share repurchases. We remain committed to a disciplined, return-based capital allocation, balancing $454.8 million in remaining share repurchase authorization with prudent cash management in an uncertain macroeconomic




environment. We had $804.5 million of liquidity as of December 31, 2022, which we believe provides us flexibility to strategically deploy capital in 2023 and beyond to continue to deliver long-term returns for our stockholders.”

Fourth Quarter 2022 Segment Highlights
The financial measures discussed below are results for the fourth quarter of 2022 with comparisons made to the fourth quarter of 2021, unless otherwise noted.
Franchised Dealerships Segment operating results include:
Same store revenues up 12%; same store gross profit up 3%
Same store retail new vehicle unit sales volume up 5%; same store retail new vehicle gross profit per unit down 6%, to $6,301
Same store retail used vehicle unit sales volume up 6%; same store retail used vehicle gross profit per unit down 33%, to $1,405
Same store parts, service and collision repair (“Fixed Operations”) gross profit up 12%; same store customer pay gross profit up 13%; same store warranty gross profit up 15%; same store Fixed Operations gross margin up 10 basis points, to 49.8%
Same store F&I gross profit up 11%; record fourth quarter reported Franchised Dealerships Segment F&I gross profit per retail unit of $2,421, up 3%
On a trailing quarter cost of sales basis, the Franchised Dealerships Segment had 24 days’ supply of new vehicle inventory (including in-transit) and 26 days’ supply of used vehicle inventory
EchoPark Segment operating results include:
Record fourth quarter revenues of $589.3 million, up 2% year-over-year; gross profit of $40.8 million, flat year-over-year
Record fourth quarter retail used vehicle unit sales volume of 17,435, up 11% year-over-year
Retail used vehicle unit sales volume was comprised of 81% 1-4-year-old vehicles and 19% 5-plus-year-old vehicles, with 28% of retail used vehicle unit sales volume sourced from non-auction sources
Segment loss of $33.3 million and adjusted EBITDA* loss of $25.4 million (including market expansion-related losses of $4.2 million and $3.6 million, respectively)
On a trailing quarter cost of sales basis, the EchoPark Segment had 40 days’ supply of used vehicle inventory
Powersports Segment operating results include:
Financial results from eight stores acquired during 2022, including Horny Toad Harley-Davidson in Temple, Texas (acquired January 2022) and seven Team Mancuso Powersports stores in Houston, Texas (acquired August 2022)
Revenues of $28.6 million, gross profit of $8.7 million, gross margin of 30.3%
Segment income of $1.8 million and adjusted EBITDA* of $2.9 million

* Please refer to the discussion and reconciliation of Non-GAAP Financial Measures below.





Full Year 2022 Segment Highlights
The financial measures discussed below are results for the full year 2022 with comparisons made to the full year 2021, unless otherwise noted.
Franchised Dealerships Segment operating results include:
Same store revenues up 1%; same store gross profit up 7%
Same store retail new vehicle unit sales volume down 14%; same store retail new vehicle gross profit per unit up 45%, to $6,630
Same store retail used vehicle unit sales volume down 11%; same store retail used vehicle gross profit per unit down 9%, to $1,605
Same store Fixed Operations gross profit up 9%; same store customer pay gross profit up 14%; same store warranty gross profit up 1%; same store Fixed Operations gross margin down 40 basis points, to 49.8%
Same store F&I gross profit down 1%; record annual reported Franchised Dealerships Segment F&I gross profit per retail unit of $2,453, up 14%
EchoPark Segment operating results include:
All-time record annual revenues of $2.5 billion, up 5% year-over-year; all-time record annual gross profit of $175.1 million, up 18% year-over-year
Retail used vehicle unit sales volume of 64,259, down 18% year-over-year
Retail used vehicle unit sales volume was comprised of 86% 1-4-year-old vehicles and 14% 5-plus-year-old vehicles, with 25% of retail used vehicle unit sales volume sourced from non-auction sources
Segment loss of $133.9 million and adjusted EBITDA* loss of $105.4 million (including market expansion-related losses of $32.6 million and $30.2 million, respectively)
Powersports Segment operating results include:
Financial results from eight stores acquired during 2022, including Horny Toad Harley-Davidson in Temple, Texas (acquired January 2022) and seven Team Mancuso Powersports stores in Houston, Texas (acquired August 2022)
Full year 2022 financial results for the Powersports Segment do not reflect expected annualized amounts on a go-forward basis due to the timing of acquisitions in 2022 and the February 2023 acquisition of the Black Hills Harley-Davidson platform, consisting of five retail locations near Sturgis, South Dakota
Revenues of $53.5 million, gross profit of $16.8 million, gross margin of 31.3%
Segment income of $2.7 million and adjusted EBITDA* of $4.6 million

* 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 $0.28 per share, payable on April 14, 2023 to all stockholders of record on March 15, 2023.

Fourth Quarter 2022 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 Fourth Quarter 2022 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 2021 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 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, 2021 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.

Company 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




Sonic Automotive, Inc.
Results of Operations (Unaudited)
Results of Operations - Consolidated
Three Months Ended December 31,Better / (Worse)Twelve Months Ended December 31,Better / (Worse)
20222021% Change20222021% Change
(In millions, except per share amounts)
Revenues:
Retail new vehicles$1,555.3 $1,278.3 22 %$5,622.6 $4,993.4 13 %
Fleet new vehicles29.3 73.6 (60)%99.4 124.6 (20)%
Total new vehicles1,584.6 1,351.9 17 %5,722.0 5,118.0 12 %
Used vehicles1,341.1 1,210.9 11 %5,515.4 4,933.6 12 %
Wholesale vehicles80.0 110.5 (28)%484.9 367.2 32 %
Total vehicles3,005.7 2,673.3 12 %11,722.3 10,418.8 13 %
Parts, service and collision repair411.1 360.1 14 %1,599.7 1,340.4 19 %
Finance, insurance and other, net173.8 151.2 15 %679.1 637.2 %
Total revenues3,590.6 3,184.6 13 %14,001.1 12,396.4 13 %
Cost of sales:
Retail new vehicles(1,390.7)(1,120.9)(24)%(4,959.8)(4,533.7)(9)%
Fleet new vehicles(27.5)(73.0)62 %(94.5)(123.0)23 %
Total new vehicles(1,418.2)(1,193.9)(19)%(5,054.3)(4,656.7)(9)%
Used vehicles(1,305.6)(1,164.3)(12)%(5,334.6)(4,800.6)(11)%
Wholesale vehicles(83.7)(107.3)22 %(488.0)(357.3)(37)%
Total vehicles(2,807.5)(2,465.5)(14)%(10,876.9)(9,814.6)(11)%
Parts, service and collision repair(207.0)(188.5)(10)%(807.2)(667.5)(21)%
Total cost of sales(3,014.5)(2,654.0)(14)%(11,684.1)(10,482.1)(11)%
Gross profit576.1 530.6 %2,317.0 1,914.3 21 %
Selling, general and administrative expenses(366.3)(343.3)(7)%(1,555.1)(1,274.7)(22)%
Impairment charges(320.4)(0.1)NM(320.4)(0.1)NM
Depreciation and amortization(33.5)(27.4)(22)%(127.5)(101.1)(26)%
Operating income (loss)(144.1)159.8 (190)%314.0 538.4 (42)%
Other income (expense):
Interest expense, floor plan(13.6)(4.0)(240)%(34.3)(16.7)(105)%
Interest expense, other, net(24.9)(17.8)(40)%(89.9)(48.0)(87)%
Other income (expense), net0.1 (15.9)101 %0.2 (15.5)101 %
Total other income (expense)(38.4)(37.7)(2)%(124.0)(80.2)(55)%
Income (loss) before taxes(182.5)122.1 (249)%190.0 458.2 (59)%
Provision for income taxes - benefit (expense)(8.4)(25.8)67 %(101.5)(109.3)%
Net income (loss)$(190.9)$96.3 (298)%$88.5 $348.9 (75)%
Basic earnings (loss) per common share$(5.22)$2.35 (322)%$2.29 $8.43 (73)%
Basic weighted-average common shares outstanding36.5 40.9 11 %38.7 41.4 %
Diluted earnings (loss) per common share$(5.22)$2.25 (332)%$2.23 $8.06 (72)%
Diluted weighted-average common shares outstanding(1)
36.5 42.8 15 %39.7 43.3 %
Dividends declared per common share$0.28 $0.12 133 %$1.03 $0.46 124 %
(1) Basic weighted-average common shares outstanding used for the three months ended December 31, 2022 due to the net loss on a reported GAAP basis.
NM = Not Meaningful





Franchised Dealerships Segment - Reported

Three Months Ended December 31,Better / (Worse)Twelve Months Ended December 31,Better / (Worse)
20222021% Change20222021% Change
(In millions, except unit and per unit data)
Revenues:
Retail new vehicles$1,534.5 $1,273.6 20 %$5,581.6 $4,984.4 12 %
Fleet new vehicles29.4 73.7 (60)%99.4 124.6 (20)%
Total new vehicles1,563.9 1,347.3 16 %5,681.0 5,109.0 11 %
Used vehicles823.4 727.7 13 %3,391.5 2,901.0 17 %
Wholesale vehicles52.6 74.0 (29)%314.0 257.2 22 %
Total vehicles2,439.9 2,149.0 14 %9,386.5 8,267.2 14 %
Parts, service and collision repair404.8 346.3 17 %1,588.0 1,340.4 18 %
Finance, insurance and other, net128.0 110.1 16 %510.1 443.5 15 %
Total revenues2,972.7 2,605.4 14 %11,484.6 10,051.1 14 %
Gross Profit:
Retail new vehicles160.8 156.7 %655.3 458.7 43 %
Fleet new vehicles1.8 0.6 200 %4.9 1.6 206 %
Total new vehicles162.6 157.3 %660.2 460.3 43 %
Used vehicles38.4 50.8 (24)%174.4 188.1 (7)%
Wholesale vehicles(3.2)0.4 (900)%(6.3)0.6 NM
Total vehicles197.8 208.5 (5)%828.3 649.0 28 %
Parts, service and collision repair200.9 171.1 17 %786.7 673.1 17 %
Finance, insurance and other, net128.0 110.1 16 %510.1 443.5 15 %
Total gross profit526.7 489.7 %2,125.1 1,765.6 20 %
Selling, general and administrative expenses(298.1)(282.8)(5)%(1,273.0)(1,076.9)(18)%
Impairment charges(115.5)— NM(115.5)— NM
Depreciation and amortization(26.0)(22.5)(16)%(101.8)(84.8)(20)%
Operating income (loss)87.1 184.4 (53)%634.8 603.9 %
Other income (expense):
Interest expense, floor plan(9.8)(2.5)(292)%(23.6)(11.8)(100)%
Interest expense, other, net(23.4)(17.1)(37)%(85.0)(46.3)(84)%
Other income (expense), net— (15.6)100 %(0.1)(15.5)99 %
Total other income (expense)(33.2)(35.2)%(108.7)(73.6)(48)%
Income (loss) before taxes53.9 149.2 (64)%526.1 530.3 (1)%
Add: Impairment charges115.5 — NM115.5 — NM
Segment income (loss)$169.4 $149.2 14 %$641.6 $530.3 21 %
Unit Sales Volume:
Retail new vehicles26,239 23,475 12 %99,424 99,815 — %
Fleet new vehicles661 2,246 (71)%2,115 3,543 (40)%
Total new vehicles26,900 25,721 %101,539 103,358 (2)%
Used vehicles26,631 23,397 14 %108,512 105,457 %
Wholesale vehicles5,616 5,424 %24,052 25,128 (4)%
Retail new & used vehicles52,870 49,118 %207,936 208,815 — %
Used:New Ratio1.01 0.91 12 %1.09 1.02 %
Gross Profit Per Unit:
Retail new vehicles$6,130 $6,673 (8)%$6,591 $4,595 43 %
Fleet new vehicles$2,642 $286 824 %$2,292 $454 405 %
New vehicles$6,044 $6,115 (1)%$6,502 $4,453 46 %
Used vehicles$1,442 $2,172 (34)%$1,607 $1,784 (10)%
Finance, insurance and other, net$2,421 $2,349 %$2,453 $2,160 14 %

NM = Not Meaningful

Note: Reported Franchised Dealerships Segment results include (i) same store results from the “Franchised Dealerships Segment - Same Store” table below and (ii) the effects of acquisitions, open points, dispositions and holding company impacts for the periods reported. All currently operating franchised dealership stores are included within the same store group as of the first full month following the first anniversary of the store’s opening or acquisition.




Franchised Dealerships Segment - Same Store

Three Months Ended December 31,Better / (Worse)Twelve Months Ended December 31,Better / (Worse)
20222021% Change20222021% Change
(In millions, except unit and per unit data)
Revenues:
Retail new vehicles$1,380.9 $1,202.3 15 %$4,794.4 $4,901.8 (2)%
Fleet new vehicles27.2 11.8 131 %85.1 62.7 36 %
Total new vehicles1,408.1 1,214.1 16 %4,879.5 4,964.5 (2)%
Used vehicles744.7 695.6 %2,955.6 2,860.8 %
Wholesale vehicles59.9 66.5 (10)%256.9 249.2 %
Total vehicles2,212.7 1,976.2 12 %8,092.0 8,074.5 — %
Parts, service and collision repair378.2 337.3 12 %1,458.6 1,327.8 10 %
Finance, insurance and other, net114.4 103.1 11 %429.0 435.3 (1)%
Total revenues2,705.3 2,416.6 12 %9,979.6 9,837.6 %
Gross Profit:
Retail new vehicles147.5 148.7 (1)%561.3 449.2 25 %
Fleet new vehicles1.2 0.6 100 %3.6 1.6 125 %
Total new vehicles148.7 149.3 — %564.9 450.8 25 %
Used vehicles33.2 47.0 (29)%149.1 184.2 (19)%
Wholesale vehicles(2.8)2.2 (227)%(5.1)8.0 (164)%
Total vehicles179.1 198.5 (10)%708.9 643.0 10 %
Parts, service and collision repair188.3 167.5 12 %725.8 666.3 %
Finance, insurance and other, net114.4 103.1 11 %429.0 435.3 (1)%
Total gross profit$481.8 $469.1 %$1,863.7 $1,744.6 %
Unit Sales Volume:
Retail new vehicles23,416 22,238 %84,663 98,311 (14)%
Fleet new vehicles621 293 112 %1,853 1,590 17 %
Total new vehicles24,037 22,531 %86,516 99,901 (13)%
Used vehicles23,624 22,371 %92,939 104,084 (11)%
Wholesale vehicles5,275 5,049 %19,533 24,683 (21)%
Retail new & used vehicles47,040 44,609 %177,602 202,395 (12)%
Used:New Ratio1.01 1.01 — %1.10 1.06 %
Gross Profit Per Unit:
Retail new vehicles$6,301 $6,686 (6)%$6,630 $4,570 45 %
Fleet new vehicles$1,879 $1,962 (4)%$1,938 $969 100 %
New vehicles$6,187 $6,625 (7)%$6,529 $4,512 45 %
Used vehicles$1,405 $2,099 (33)%$1,605 $1,769 (9)%
Finance, insurance and other, net$2,431 $2,349 %$2,415 $2,151 12 %
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 December 31,Better / (Worse)Twelve Months Ended December 31,Better / (Worse)
20222021% Change20222021% Change
(In millions, except unit and per unit data)
Revenues:
Retail new vehicles$2.0 $4.6 (57)%$9.2 $9.0 %
Used vehicles515.5 497.0 %2,116.8 2,032.6 %
Wholesale vehicles27.3 36.5 (25)%170.6 110.0 55 %
Total vehicles544.8 538.1 %2,296.6 2,151.6 %
Finance, insurance and other, net44.5 41.1 %166.4 193.7 (14)%
Total revenues589.3 579.2 %2,463.0 2,345.3 %
Gross Profit:
Retail new vehicles0.2 0.7 (71)%1.1 1.1 — %
Used vehicles(3.6)(3.7)%4.4 (55.2)108 %
Wholesale vehicles(0.3)2.8 (111)%3.2 9.2 (65)%
Total vehicles(3.7)(0.2)NM8.7 (44.9)119 %
Finance, insurance and other, net44.5 41.1 %166.4 193.7 (14)%
Total gross profit40.8 40.9 — %175.1 148.8 18 %
Selling, general and administrative expenses(62.3)(60.5)(3)%(269.8)(197.8)(36)%
Impairment charges(204.9)(0.1)NM(204.9)(0.1)NM
Depreciation and amortization(7.0)(4.8)(46)%(24.7)(16.3)(52)%
Operating income (loss)(233.4)(24.5)(853)%(324.3)(65.4)(396)%
Other income (expense):
Interest expense, floor plan(3.9)(1.5)(160)%(10.7)(4.9)(118)%
Interest expense, other, net(0.9)(0.8)(13)%(3.9)(1.7)(129)%
Other income (expense), net— 0.1 (100)%0.1 (0.1)200 %
Total other income (expense)(4.8)(2.2)(118)%(14.5)(6.7)(116)%
Income (loss) before taxes(238.2)(26.7)(792)%(338.8)(72.1)(370)%
Add: Impairment charges204.9 0.1 NM204.9 0.1 NM
Segment income (loss)$(33.3)$(26.6)(25)%$(133.9)$(72.0)(86)%
Unit Sales Volume:
Retail new vehicles26 59 (56)%152 128 19 %
Used vehicles17,435 15,649 11 %64,107 77,835 (18)%
Wholesale vehicles2,444 2,436 — %11,236 11,667 (4)%
Gross Profit Per Unit:
Total used vehicle and F&I$2,340 $2,344 — %$2,657 $1,774 50 %
NM = Not Meaningful
Note: Reported EchoPark Segment results include (i) same market results from the “EchoPark Segment - Same Market” table below and (ii) the effects of acquisitions, open points, dispositions and holding company impacts for the periods reported. 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.




EchoPark Segment - Same Market
Three Months Ended December 31,Better / (Worse)Twelve Months Ended December 31,Better / (Worse)
20222021% Change20222021% Change
(In millions, except unit and per unit data)
Revenues:
Retail new vehicles$2.2 $4.5 (51)%$12.5 $8.9 40 %
Used vehicles400.0 464.3 (14)%1,623.2 1,993.9 (19)%
Wholesale vehicles22.3 35.2 (37)%149.3 108.7 37 %
Total vehicles424.5 504.0 (16)%1,785.0 2,111.5 (15)%
Finance, insurance and other, net32.0 38.9 (18)%123.0 190.8 (36)%
Total revenues456.5 542.9 (16)%1,908.0 2,302.3 (17)%
Gross Profit:
Retail new vehicles0.2 0.4 (50)%1.1 0.8 38 %
Used vehicles(5.5)(5.6)%(14.3)(56.8)75 %
Wholesale vehicles(0.2)2.9 (107)%3.7 9.4 (61)%
Total vehicles(5.5)(2.3)(139)%(9.5)(46.6)80 %
Finance, insurance and other, net32.0 38.9 (18)%123.0 190.8 (36)%
Total gross profit$26.5 $36.6 (28)%$113.5 $144.2 (21)%
Unit Sales Volume:
Retail new vehicles26 59 (56)%152 128 19 %
Used vehicles13,919 14,882 (6)%51,336 76,838 (33)%
Wholesale vehicles1,969 2,321 (15)%9,466 11,546 (18)%
Gross Profit Per Unit:
Total used vehicle and F&I$1,895 $2,239 (15)%$2,109 $1,741 21 %

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 December 31,Better / (Worse)Twelve Months Ended December 31,Better / (Worse)
20222021% Change20222021% Change
(In millions, except unit and per unit data)
Revenues:
Retail new vehicles$18.8 $— NM$31.8 $— NM
Used vehicles2.1 — NM7.1 — NM
Wholesale vehicles0.1 — NM0.3 — NM
Total vehicles21.0 — NM39.2 — NM
Parts, service and collision repair6.3 — NM11.7 — NM
Finance, insurance and other, net1.3 — NM2.6 — NM
Total revenues28.6 — NM53.5 — NM
Gross Profit:
Retail new vehicles3.6 — NM6.4 — NM
Used vehicles0.7 — NM2.0 — NM
Wholesale vehicles— — NM— — NM
Total vehicles4.3 — NM8.4 — NM
Parts, service and collision repair3.1 — NM5.8 — NM
Finance, insurance and other, net1.3 — NM2.6 — NM
Total gross profit8.7 — NM16.8 — NM
Selling, general and administrative expenses(5.9)— NM(12.3)— NM
Impairment charges— — NM— — NM
Depreciation and amortization(0.6)— NM(1.0)— NM
Operating income (loss)2.2 — NM3.5 — NM
Other income (expense):
Interest expense, floor plan— — NM— — NM
Interest expense, other, net(0.6)— NM(1.0)— NM
Other income (expense), net0.2 — NM0.2 — NM
Total other income (expense)(0.4)— NM(0.8)— NM
Income (loss) before taxes1.8 — NM2.7 — NM
Add: impairment charges— — NM— — NM
Segment income (loss)$1.8 $— NM$2.7 $— NM
Unit Sales Volume:
Retail new vehicles1,013 — NM1,592 — NM
Used vehicles237 — NM590 — NM
Wholesale vehicles34 — NM35 — NM
Retail new & used vehicles1,250 — NM2,182 — NM
Gross Profit Per Unit:
Retail new vehicles$3,535 $— NM$3,974 $— NM
Used vehicles$2,860 $— NM$3,349 $— NM
Finance, insurance and other, net$1,026 $— NM$1,205 $— NM

NM = Not Meaningful







Non-GAAP Reconciliation - Consolidated - SG&A Expenses
Three Months Ended December 31,Better / (Worse)
20222021Change% Change
(In millions)
Reported:
Compensation$240.8 $226.0 $(14.8)(7)%
Advertising22.6 17.4 (5.2)(30)%
Rent12.7 12.1 (0.6)(5)%
Other90.2 87.8 (2.4)(3)%
Total SG&A expenses$366.3 $343.3 $(23.0)(7)%
Items of interest:
Long-term compensation charges$— $(6.5)
Acquisition and disposition-related gain (loss)9.1 (1.2)
Total SG&A adjustments$9.1 $(7.7)
Adjusted:
Total adjusted SG&A expenses$375.4 $335.6 $(39.8)(12)%
Reported:
SG&A expenses as a % of gross profit:
Compensation41.8 %42.6 %80 bps
Advertising3.9 %3.3 %(60)bps
Rent2.2 %2.3 %10 bps
Other15.7 %16.5 %80 bps
Total SG&A expenses as a % of gross profit63.6 %64.7 %110 bps
Items of interest:
Long-term compensation charges— %(1.2)%
Acquisition and disposition-related gain (loss)1.6 %(0.2)%
Total effect of adjustments1.6 %(1.4)%
Adjusted:
Total adjusted SG&A expenses as a % of gross profit65.2 %63.3 %(190)bps




























Non-GAAP Reconciliation - Consolidated - SG&A Expenses (Continued)
Twelve Months Ended December 31,Better / (Worse)
20222021Change% Change
(In millions)
Reported:
Compensation$1,014.8 $834.5 $(180.3)(22)%
Advertising95.4 61.6 (33.8)(55)%
Rent51.0 53.2 2.2 %
Other393.9 325.4 (68.5)(21)%
Total SG&A expenses$1,555.1 $1,274.7 $(280.4)(22)%
Items of interest:
Long-term compensation charges$(4.4)$(6.5)
Acquisition and disposition-related gain (loss)9.1 (1.2)
Total SG&A adjustments$4.7 $(7.7)
Adjusted:
Total adjusted SG&A expenses$1,559.8 $1,267.0 $(292.8)(23)%
Reported:
SG&A expenses as a % of gross profit:
Compensation43.8 %43.6 %(20)bps
Advertising4.1 %3.2 %(90)bps
Rent2.2 %2.8 %60 bps
Other17.0 %17.0 %— bps
Total SG&A expenses as a % of gross profit67.1 %66.6 %(50)bps
Items of interest:
Long-term compensation charges(0.2)%(0.3)%
Acquisition and disposition-related gain (loss)0.4 %(0.1)%
Total effect of adjustments0.2 %(0.4)%
Adjusted:
Total adjusted SG&A expenses as a % of gross profit67.3 %66.2 %(110)bps





Non-GAAP Reconciliation - Franchised Dealerships Segment - SG&A Expenses
Three Months Ended December 31,Better / (Worse)
20222021Change% Change
(In millions)
Reported:
Compensation$200.8 $189.8 $(11.0)(6)%
Advertising10.7 6.3 (4.4)(70)%
Rent10.5 10.4 (0.1)(1)%
Other76.1 76.3 0.2 — %
Total SG&A expenses$298.1 $282.8 $(15.3)(5)%
Items of interest:
Acquisition and disposition-related gain (loss)$9.1 $(1.2)
Total SG&A adjustments$9.1 $(1.2)
Adjusted:
Total adjusted SG&A expenses$307.2 $281.6 $(25.6)(9)%
Reported:
SG&A expenses as a % of gross profit:
Compensation38.1 %38.8 %70 bps
Advertising2.0 %1.3 %(70)bps
Rent2.0 %2.1 %10 bps
Other14.5 %15.5 %100 bps
Total SG&A expenses as a % of gross profit56.6 %57.7 %110 bps
Items of interest:
Acquisition and disposition-related gain (loss)1.7 %(0.2)%
Total effect of adjustments1.7 %(0.2)%
Adjusted:
Total adjusted SG&A expenses as a % of gross profit58.3 %57.5 %(80)bps







Non-GAAP Reconciliation - Franchised Dealerships Segment - SG&A Expenses (Continued)
Twelve Months Ended December 31,Better / (Worse)
20222021Change% Change
(In millions)
Reported:
Compensation$858.0 $719.6 $(138.4)(19)%
Advertising36.9 26.1 (10.8)(41)%
Rent42.4 46.6 4.2 %
Other335.6 284.6 (51.0)(18)%
Total SG&A expenses$1,272.9 $1,076.9 $(196.0)(18)%
Items of interest:
Long-term compensation charges$(4.4)$— 
Acquisition and disposition-related gain (loss)9.1 (1.2)
Total SG&A adjustments$4.7 $(1.2)
Adjusted:
Total adjusted SG&A expenses$1,277.6 $1,075.7 $(201.9)(19)%
Reported:
SG&A expenses as a % of gross profit:
Compensation40.4 %40.8 %40 bps
Advertising1.7 %1.5 %(20)bps
Rent2.0 %2.6 %60 bps
Other15.8 %16.1 %30 bps
Total SG&A expenses as a % of gross profit59.9 %61.0 %110 bps
Items of interest:
Long-term compensation charges(0.2)%— %
Acquisition and disposition-related gain (loss)0.4 %(0.1)%
Total effect of adjustments0.2 %(0.1)%
Adjusted:
Total adjusted SG&A expenses as a % of gross profit60.1 %60.9 %80 bps








Non-GAAP Reconciliation - EchoPark Segment - SG&A Expenses
Three Months Ended December 31,Better / (Worse)
20222021Change% Change
(In millions)
Reported:
Compensation$35.8 $36.2 $0.4 %
Advertising11.6 11.1 (0.5)(5)%
Rent2.2 1.7 (0.5)(29)%
Other12.7 11.5 (1.2)(10)%
Total SG&A expenses$62.3 $60.5 $(1.8)(3)%
Items of interest:
Long-term compensation charges$— $(6.5)
Total SG&A adjustments$— $(6.5)
Adjusted:
Total adjusted SG&A expenses$62.3 $54.0 $(8.3)(15)%
Reported:
SG&A expenses as a % of gross profit:
Compensation87.9 %88.5 %60 bps
Advertising28.4 %27.1 %(130)bps
Rent5.3 %4.2 %(110)bps
Other31.2 %28.3 %(290)bps
Total SG&A expenses as a % of gross profit152.8 %148.1 %(470)bps
Items of interest:
Long-term compensation charges— %(15.9)%
Total effect of adjustments— %(15.9)%
Adjusted:
Total adjusted SG&A expenses as a % of gross profit152.8 %132.2 %(2,060)bps




































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

Twelve Months Ended December 31,Better / (Worse)
20222021Change% Change
(In millions)
Reported:
Compensation$148.0 $114.9 $(33.1)(29)%
Advertising58.0 35.5 (22.5)(63)%
Rent8.5 6.6 (1.9)(29)%
Other55.3 40.8 (14.5)(36)%
Total SG&A expenses$269.8 $197.8 $(72.0)(36)%
Items of interest:
Long-term compensation charges$— $(6.5)
Total SG&A adjustments$— $(6.5)
Adjusted:
Total adjusted SG&A expenses$269.8 $191.3 $(78.5)(41)%
Reported:
SG&A expenses as a % of gross profit:
Compensation84.5 %77.2 %(730)bps
Advertising33.1 %23.9 %(920)bps
Rent4.9 %4.4 %(50)bps
Other31.6 %27.4 %(420)bps
Total SG&A expenses as a % of gross profit154.1 %132.9 %(2,120)bps
Items of interest:
Long-term compensation charges— %(4.3)%
Total effect of adjustments— %(4.3)%
Adjusted:
Total adjusted SG&A expenses as a % of gross profit154.1 %128.6 %(2,550)bps





Powersports Segment - SG&A Expenses
Three Months Ended December 31,Better / (Worse)
20222021Change% Change
(In millions)
Reported:
Compensation$4.1 $— NMNM
Advertising0.3 — NMNM
Rent— — NMNM
Other1.5 — NMNM
Total SG&A expenses$5.9 $— NMNM
Reported:
SG&A expenses as a % of gross profit:
Compensation47.9 %