EX-99.1

EX-99.1 2 d21040dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Sonic Automotive, Inc. Reports Record Earnings

Q3 2015 Diluted Continuing Operations Earnings per Share of $0.53

Third Quarter 2015 Results

•

Record third quarter net income from continuing operations of $27.1 million, up $3.1 million, or 12.7% from the prior year period quarterly adjusted amount of $24.0 million

•

All-time record quarterly new retail sales of 36,891 units, up 1.6% over the prior year quarter

•

All-time record quarterly pre-owned retail sales of 30,467 units, up 10.6% over the prior year quarter – retailed 100 pre-owned units per store per month in the quarter

•

All-time record quarterly pre-owned gross profit of $41.7 million, up 1.2% over the prior year quarter

•

Record third quarter fixed operations gross profit of $169.7 million, up 9.3% over the prior year quarter

•

All-time quarterly total gross profit of $360.3 million, up 5.5% over the prior year quarter

•

Echo Park^® stores retail 920 units, up 4.4% from the prior quarter

CHARLOTTE, N.C. – October 28, 2015 – Sonic Automotive, Inc. (NYSE: SAH), one of the nation’s largest automotive retailers, today reported net income from continuing operations for the third quarter of 2015 of $27.1 million, or $0.53 per diluted share. Included in these amounts are pre-tax expenses of $3.7 million, or $0.04 per diluted share, related to EchoPark^® operations.

Adjusted net income from continuing operations for the third quarter of 2014 was $24.0 million, or $0.46 per diluted share. Included in these adjusted amounts are pre-tax expenses of $3.6 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 third quarter of 2014 were $24.6 million and $0.47 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 Chief Executive Officer, noted, “The overall increase in retail activity and our dedication to provide our customers with an outstanding buying and servicing experience contributed to record results during the quarter. The automotive retail environment continues to expand and present us with opportunities to strengthen and grow our business.”

“We are extremely excited about the development of our EchoPark^® brand. Our EchoPark^® stores continue to grow and we expect two additional stores to open in the Denver market in the first half of 2016. We are in the process of acquiring property in two additional markets as we look to accelerate the EchoPark rollout in the latter part of 2016 and early 2017.”

“During the quarter, our One Sonic-One Experience (“OSOE”) stores experienced year-over-year net new vehicle market share gains. Our customers love the speed and ease offered by this buying experience. We have been mystery shopped by various parties over the last year and have received rave reviews, notably, a July 20, 2015 review by Matt Jones, Senior Editor for Edmunds.com entitled, “Mystery Shopping Sonic Automotive’s New Sales Process.” We believe customers will come to the same conclusion Mr. Jones came to in the article… that we are onto something.”

Jeff Dyke, Sonic’s EVP of Operations, stated, “We continue to make progress on all fronts of our business. Our core business is performing well and steps that we have taken to increase inventory levels in pre-owned and our technician count are beginning to payoff. We are gaining share across all brands in our One Sonic-One Experience stores in Charlotte and should be ready to begin phase I of our technology rollout in the first quarter of 2016. We also continue to make excellent progress at our EchoPark stores and are right on our forecast. This is a very exciting time for our team that has worked countless hours to bring us to this point as we look forward to offering our guests an experience they simply cannot get anywhere else in the industry.”

Third 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: 30271525

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: 30271525

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 September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(In thousands, except per share and unit data)
Revenues:
New retail vehicles	$	1,352,180		$	1,312,592		$	3,828,027		$	3,708,114
Fleet vehicles		15,849			15,245			37,612			65,120

Total new vehicles		1,368,029			1,327,837			3,865,639			3,773,234
Used vehicles		652,058			583,570			1,904,594			1,747,254
Wholesale vehicles		37,971			41,433			120,760			127,797

Total vehicles		2,058,058			1,952,840			5,890,993			5,648,285
Parts, service and collision repair		350,520			325,740			1,019,878			973,646
Finance, insurance and other, net		85,830			77,024			242,792			223,340

Total revenues		2,494,408			2,355,604			7,153,663			6,845,271
Gross profit		360,251			341,489			1,050,764			1,017,436
Selling, general and administrative expenses		(280,041	)		(270,144	)		(835,564	)		(803,031	)
Impairment charges		(37	)		(208	)		(16,698	)		(215	)
Depreciation and amortization		(17,250	)		(14,235	)		(50,953	)		(43,047	)

Operating income (loss)		62,923			56,902			147,549			171,143
Other income (expense):
Interest expense, floor plan		(5,364	)		(4,406	)		(15,488	)		(13,941	)
Interest expense, other, net		(12,361	)		(12,893	)		(38,635	)		(40,576	)
Other income (expense), net		—			(1	)		102			98

Total other income (expense)		(17,725	)		(17,300	)		(54,021	)		(54,419	)

Income (loss) from continuing operations before taxes		45,198			39,602			93,528			116,724
Provision for income taxes for continuing operations- benefit (expense)		(18,095	)		(15,045	)		(36,944	)		(45,122	)

Income (loss) from continuing operations		27,103			24,557			56,584			71,602

Income (loss) from discontinued operations		(598	)		155			(1,331	)		(511	)

Net income (loss)	$	26,505		$	24,712		$	55,253		$	71,091

Diluted earnings (loss) per common share:
Earnings (loss) per share from continuing operations	$	0.53		$	0.47		$	1.11		$	1.35
Earnings (loss) per share from discontinued operations		(0.01	)		—			(0.03	)		(0.01	)

Earnings (loss) per common share	$	0.52		$	0.47		$	1.08		$	1.34

Weighted average common shares outstanding		50,769			52,553			51,086			52,808

Gross Margin Data (Continuing Operations):
New retail vehicles		4.8	%		5.3	%		5.1	%		5.6	%
Fleet vehicles		(0.8	%)		0.6	%		(0.5	%)		2.1	%
Total new vehicles		4.8	%		5.2	%		5.0	%		5.6	%
Used vehicles		6.4	%		7.1	%		6.5	%		6.8	%
Wholesale vehicles		(6.5	%)		(2.6	%)		(4.4	%)		(2.0	%)
Parts, service and collision repair		48.4	%		47.7	%		48.7	%		48.0	%
Finance, insurance and other		100.0	%		100.0	%		100.0	%		100.0	%

Overall gross margin		14.4	%		14.5	%		14.7	%		14.9	%

SG&A Expenses (Continuing Operations):
Compensation	$	167,489		$	163,230		$	497,158		$	483,493
Advertising		15,470			14,045			46,160			42,027
Rent		18,558			18,145			55,058			55,324
Other		78,524			74,724			237,188			222,187

Total SG&A expenses	$	280,041		$	270,144		$	835,564		$	803,031
SG&A expenses as % of gross profit		77.7	%		79.1	%		79.5	%		78.9	%

Operating Margin %		2.5	%		2.4	%		2.1	%		2.5	%

Unit Data (Continuing Operations):
New retail units		36,891			36,301			102,901			101,177
Fleet units		602			473			1,244			2,133

Total new units		37,493			36,774			104,145			103,310
Used units		30,467			27,536			88,903			83,707
Wholesale units		7,787			7,916			23,574			23,034

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Per Share Data


	Three Months Ended September 30, 2015
			Income (Loss)					Income (Loss)
			From Continuing					From Discontinued
			Operations					Average						Net Income (Loss)
	Weighted					Per					Per						Per
	Average					Share					Share						Share
	Shares		Amount			Amount		Amount			Amount			Amount			Amount
	(In thousands, except per share amounts)
Reported:
Earnings (loss) and shares		50,456	$	27,103				$	(598	)				$	26,505
Effect of participating securities:
Non-vested restricted stock and stock units				(13	)				—						(13	)

Basic earnings (loss) and shares		50,456	$	27,090		$	0.54	$	(598	)	$	(0.01	)	$	26,492		$	0.53
Effect of dilutive securities:
Stock compensation plans		313

Diluted earnings (loss) and shares (1)		50,769	$	27,090		$	0.53	$	(598	)	$	(0.01	)	$	26,492		$	0.52

(1)	Expenses attributable to EchoPark^® operations were $0.04 per fully diluted share in the three months ended September 30, 2015.


	Three Months Ended September 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		52,070	$	24,557					$	155					$	24,712
Effect of participating securities:
Non-vested restricted stock and stock units				(79	)					—						(79	)

Basic earnings (loss) and shares		52,070	$	24,478		$	0.47		$	155		$	—		$	24,633		$	0.47
Effect of dilutive securities:
Stock compensation plans		483

Diluted earnings (loss) and shares		52,553	$	24,478		$	0.47		$	155		$	—		$	24,633		$	0.47

Adjustments (net of tax):
Gain on disposal			$	(1,953	)	$	(0.04	)	$	—		$	—		$	(1,953	)	$	(0.04	)
Impairment charges				126			—			—			—			126			—
Storm damage and other				1,317			0.03			—			—			1,317			0.03
Lease exit adjustments				—			—			(845	)		(0.02	)		(845	)		(0.02	)

Total adjustments			$	(510	)	$	(0.01	)	$	(845	)	$	(0.02	)	$	(1,355	)	$	(0.03	)
Adjusted:
Earnings (loss) and

Diluted earnings (loss) per share (2)			$	24,047		$	0.46		$	(690	)	$	(0.02	)	$	23,357		$	0.44

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

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Per Share Data


	Nine Months Ended September 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		50,697	$	56,584					$	(1,331	)				$	55,253
Effect of participating securities:
Non-vested restricted stock and stock units				(27	)					—						(27	)

Basic earnings (loss) and shares		50,697	$	56,557		$	1.12		$	(1,331	)	$	(0.03	)	$	55,226		$	1.09
Effect of dilutive securities:
Stock compensation plans		389

Diluted earnings (loss) and shares		51,086	$	56,557		$	1.11		$	(1,331	)	$	(0.03	)	$	55,226		$	1.08

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)			$	69,299		$	1.36		$	(1,331	)	$	(0.03	)	$	67,968		$	1.33

(3)	Expenses attributable to EchoPark^® operations were $0.15 per fully diluted share in the nine months ended September 30, 2015.


	Nine Months Ended September 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		52,333	$	71,602					$	(511	)				$	71,091
Effect of participating securities:
Non-vested restricted stock and stock units				(229	)					—						(229	)

Basic earnings (loss) and shares		52,333	$	71,373		$	1.36		$	(511	)	$	(0.01	)	$	70,862		$	1.35
Effect of dilutive securities:
Stock compensation plans		475

Diluted earnings (loss) and shares		52,808	$	71,373		$	1.35		$	(511	)	$	(0.01	)	$	70,862		$	1.34

Adjustments (net of tax):
Gain on disposal			$	(6,400	)	$	(0.12	)	$	—		$	—		$	(6,400	)	$	(0.12	)
Impairment charges				126			—			—			—			126			—
Storm damage and other				2,158			0.04			—			—			2,158			0.04
Lease exit adjustments				—			—			(845	)		(0.01	)		(845	)		(0.01	)

Total adjustments			$	(4,116	)	$	(0.08	)	$	(845	)	$	(0.01	)	$	(4,961	)	$	(0.09	)

Adjusted:
Earnings (loss) and

Diluted earnings (loss) per share (4)			$	67,486		$	1.27		$	(1,356	)	$	(0.02	)	$	66,130		$	1.25

(4)	Expenses attributable to EchoPark^® operations were $0.10 per fully diluted share in the nine months ended September 30, 2014.

Sonic Automotive, Inc.

Results of Operations (Unaudited)

New Vehicles


	Three Months Ended September 30,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands, except units and per unit data)
Reported:
Revenue	$	1,368,029		$	1,327,837		$	40,192			3.0	%
Gross profit	$	65,435		$	69,026		$	(3,591	)		(5.2	%)
Unit sales		37,493			36,774			719			2.0	%
Revenue per unit	$	36,488		$	36,108		$	380			1.1	%
Gross profit per unit	$	1,745		$	1,877		$	(132	)		(7.0	%)
Gross profit as a % of revenue		4.8	%		5.2	%		(40	) bps

	Nine Months Ended September 30,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands, except units and per unit data)
Reported:
Revenue	$	3,865,639		$	3,773,234		$	92,405			2.4	%
Gross profit	$	193,720		$	209,892		$	(16,172	)		(7.7	%)
Unit sales		104,145			103,310			835			0.8	%
Revenue per unit	$	37,118		$	36,523		$	595			1.6	%
Gross profit per unit	$	1,860		$	2,032		$	(172	)		(8.5	%)
Gross profit as a % of revenue		5.0	%		5.6	%		(60	) bps

	Three Months Ended September 30,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands, except units and per unit data)
Same Store:
Revenue	$	1,357,281		$	1,307,800		$	49,481			3.8	%
Gross profit	$	64,860		$	67,826		$	(2,966	)		(4.4	%)
Unit sales		37,147			36,143			1,004			2.8	%
Revenue per unit	$	36,538		$	36,184		$	354			1.0	%
Gross profit per unit	$	1,746		$	1,877		$	(131	)		(7.0	%)
Gross profit as a % of revenue		4.8	%		5.2	%		(40	) bps

	Nine Months Ended September 30,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands, except units and per unit data)
Same Store:
Revenue	$	3,830,202		$	3,670,736		$	159,466			4.3	%
Gross profit	$	192,086		$	204,223		$	(12,137	)		(5.9	%)
Unit sales		103,058			100,350			2,708			2.7	%
Revenue per unit	$	37,165		$	36,579		$	586			1.6	%
Gross profit per unit	$	1,864		$	2,035		$	(171	)		(8.4	%)
Gross profit as a % of revenue		5.0	%		5.6	%		(60	) bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Used Vehicles


	Three Months Ended September 30,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands, except units and per unit data)
Reported:
Revenue	$	652,058		$	583,570		$	68,488			11.7	%
Gross profit	$	41,730		$	41,245		$	485			1.2	%
Unit sales		30,467			27,536			2,931			10.6	%
Revenue per unit	$	21,402		$	21,193		$	209			1.0	%
Gross profit per unit	$	1,370		$	1,498		$	(128	)		(8.5	%)
Gross profit as a % of revenue		6.4	%		7.1	%		(70	) bps

	Nine Months Ended September 30,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands, except units and per unit data)
Reported:
Revenue	$	1,904,594		$	1,747,254		$	157,340			9.0	%
Gross profit	$	123,271		$	119,412		$	3,859			3.2	%
Unit sales		88,903			83,707			5,196			6.2	%
Revenue per unit	$	21,423		$	20,873		$	550			2.6	%
Gross profit per unit	$	1,387		$	1,427		$	(40	)		(2.8	%)
Gross profit as a % of revenue		6.5	%		6.8	%		(30	) bps

	Three Months Ended September 30,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands, except units and per unit data)
Same Store:
Revenue	$	625,760		$	571,295		$	54,465			9.5	%
Gross profit	$	40,288		$	40,816		$	(528	)		(1.3	%)
Unit sales		29,173			26,902			2,271			8.4	%
Revenue per unit	$	21,450		$	21,236		$	214			1.0	%
Gross profit per unit	$	1,381		$	1,517		$	(136	)		(9.0	%)
Gross profit as a % of revenue		6.4	%		7.1	%		(70	) bps

	Nine Months Ended September 30,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands, except units and per unit data)
Same Store:
Revenue	$	1,831,379		$	1,689,958		$	141,421			8.4	%
Gross profit	$	119,184		$	116,749		$	2,435			2.1	%
Unit sales		85,225			80,900			4,325			5.3	%
Revenue per unit	$	21,489		$	20,889		$	600			2.9	%
Gross profit per unit	$	1,398		$	1,443		$	(45	)		(3.1	%)
Gross profit as a % of revenue		6.5	%		6.9	%		(40	) bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Wholesale Vehicles


	Three Months Ended September 30,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands, except units and per unit data)
Reported:
Revenue	$	37,971		$	41,433		$	(3,462	)		(8.4	%)
Gross profit (loss)	$	(2,481	)	$	(1,086	)	$	(1,395	)		(128.5	%)
Unit sales		7,787			7,916			(129	)		(1.6	%)
Revenue per unit	$	4,876		$	5,234		$	(358	)		(6.8	%)
Gross profit (loss) per unit	$	(319	)	$	(137	)	$	(182	)		(132.8	%)
Gross profit (loss) as a % of revenue		(6.5	%)		(2.6	%)		(390	) bps

	Nine Months Ended September 30,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands, except units and per unit data)
Reported:
Revenue	$	120,760		$	127,797		$	(7,037	)		(5.5	%)
Gross profit (loss)	$	(5,366	)	$	(2,493	)	$	(2,873	)		(115.2	%)
Unit sales		23,574			23,034			540			2.3	%
Revenue per unit	$	5,123		$	5,548		$	(425	)		(7.7	%)
Gross profit (loss) per unit	$	(228	)	$	(108	)	$	(120	)		(111.1	%)
Gross profit (loss) as a % of revenue		(4.4	%)		(2.0	%)		(240	) bps

	Three Months Ended September 30,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands, except units and per unit data)
Same Store:
Revenue	$	36,803		$	40,338		$	(3,535	)		(8.8	%)
Gross profit (loss)	$	(2,445	)	$	(1,065	)	$	(1,380	)		(129.6	%)
Unit sales		7,463			7,750			(287	)		(3.7	%)
Revenue per unit	$	4,931		$	5,205		$	(274	)		(5.3	%)
Gross profit (loss) per unit	$	(328	)	$	(137	)	$	(191	)		(139.4	%)
Gross profit (loss) as a % of revenue		(6.6	%)		(2.6	%)		(400	) bps

	Nine Months Ended September 30,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands, except units and per unit data)
Same Store:
Revenue	$	117,037		$	123,910		$	(6,873	)		(5.5	%)
Gross profit (loss)	$	(4,969	)	$	(2,396	)	$	(2,573	)		(107.4	%)
Unit sales		22,622			22,371			251			1.1	%
Revenue per unit	$	5,174		$	5,539		$	(365	)		(6.6	%)
Gross profit (loss) per unit	$	(220	)	$	(107	)	$	(113	)		(105.6	%)
Gross profit (loss) as a % of revenue		(4.2	%)		(1.9	%)		(230	) bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

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


	Three Months Ended September 30,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands)
Reported:
Revenue
Customer pay	$	147,308		$	141,458		$	5,850			4.1	%
Warranty		58,522			48,431			10,091			20.8	%
Wholesale parts		45,832			46,983			(1,151	)		(2.4	%)
Internal, sublet and other		98,858			88,868			9,990			11.2	%

Total	$	350,520		$	325,740		$	24,780			7.6	%

Gross profit
Customer pay	$	80,588		$	77,546		$	3,042			3.9	%
Warranty		32,337			26,254			6,083			23.2	%
Wholesale parts		8,045			8,122			(77	)		(0.9	%)
Internal, sublet and other		48,767			43,358			5,409			12.5	%

Total	$	169,737		$	155,280		$	14,457			9.3	%

Gross profit as a % of revenue
Customer pay		54.7	%		54.8	%		(10	) bps
Warranty		55.3	%		54.2	%		110	bps
Wholesale parts		17.6	%		17.3	%		30	bps
Internal, sublet and other		49.3	%		48.8	%		50	bps

Total		48.4	%		47.7	%		70	bps

	Nine Months Ended September 30,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands)
Reported:
Revenue
Customer pay	$	431,479		$	427,620		$	3,859			0.9	%
Warranty		169,170			142,072			27,098			19.1	%
Wholesale parts		136,693			142,071			(5,378	)		(3.8	%)
Internal, sublet and other		282,536			261,883			20,653			7.9	%

Total	$	1,019,878		$	973,646		$	46,232			4.7	%

Gross profit
Customer pay	$	236,551		$	235,151		$	1,400			0.6	%
Warranty		94,776			77,163			17,613			22.8	%
Wholesale parts		24,332			24,590			(258	)		(1.0	%)
Internal, sublet and other		140,688			130,381			10,307			7.9	%

Total	$	496,347		$	467,285		$	29,062			6.2	%

Gross profit as a % of revenue
Customer pay		54.8	%		55.0	%		(20	) bps
Warranty		56.0	%		54.3	%		170	bps
Wholesale parts		17.8	%		17.3	%		50	bps
Internal, sublet and other		49.8	%		49.8	%		0	bps

Total		48.7	%		48.0	%		70	bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

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


	Three Months Ended September 30,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands)
Same Store:
Revenue
Customer pay	$	146,360		$	139,186		$	7,174			5.2	%
Warranty		58,128			47,460			10,668			22.5	%
Wholesale parts		45,561			46,041			(480	)		(1.0	%)
Internal, sublet and other		96,460			87,261			9,199			10.5	%

Total	$	346,509		$	319,948		$	26,561			8.3	%

Gross profit
Customer pay	$	80,053		$	76,324		$	3,729			4.9	%
Warranty		32,216			25,784			6,432			24.9	%
Wholesale parts		7,979			7,941			38			0.5	%
Internal, sublet and other		47,440			42,418			5,022			11.8	%

Total	$	167,688		$	152,467		$	15,221			10.0	%

Gross profit as a % of revenue
Customer pay		54.7	%		54.8	%		(10	) bps
Warranty		55.4	%		54.3	%		110	bps
Wholesale parts		17.5	%		17.2	%		30	bps
Internal, sublet and other		49.2	%		48.6	%		60	bps

Total		48.4	%		47.7	%		70	bps

	Nine Months Ended September 30,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands)
Same Store:
Revenue
Customer pay	$	426,683		$	415,998		$	10,685			2.6	%
Warranty		167,771			137,297			30,474			22.2	%
Wholesale parts		135,643			138,563			(2,920	)		(2.1	%)
Internal, sublet and other		274,892			254,753			20,139			7.9	%

Total	$	1,004,989		$	946,611		$	58,378			6.2	%

Gross profit
Customer pay	$	234,006		$	228,983		$	5,023			2.2	%
Warranty		94,108			74,684			19,424			26.0	%
Wholesale parts		24,114			23,912			202			0.8	%
Internal, sublet and other		136,931			126,192			10,739			8.5	%

Total	$	489,159		$	453,771		$	35,388			7.8	%

Gross profit as a % of revenue
Customer pay		54.8	%		55.0	%		(20	) bps
Warranty		56.1	%		54.4	%		170	bps
Wholesale parts		17.8	%		17.3	%		50	bps
Internal, sublet and other		49.8	%		49.5	%		30	bps

Total		48.7	%		47.9	%		80	bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

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


	Three Months Ended September 30,				Better / (Worse)
	2015		2014		Change		% Change
	(In thousands, except per unit data)
Reported:
Revenue	$	85,830	$	77,024	$	8,806		11.4	%
Gross profit per retail unit (excludes fleet)	$	1,274	$	1,207	$	67		5.6	%

	Nine Months Ended September 30,				Better / (Worse)
	2015		2014		Change		% Change
	(In thousands, except per unit data)
Reported:
Revenue	$	242,792	$	223,340	$	19,452		8.7	%
Gross profit per retail unit (excludes fleet)	$	1,266	$	1,208	$	58		4.8	%

	Three Months Ended September 30,				Better / (Worse)
	2015		2014		Change		% Change
	(In thousands, except per unit data)
Same Store:
Revenue	$	84,052	$	75,797	$	8,255		10.9	%
Gross profit per retail unit (excludes fleet)	$	1,279	$	1,211	$	68		5.6	%

	Nine Months Ended September 30,				Better / (Worse)
	2015		2014		Change		% Change
	(In thousands, except per unit data)
Same Store:
Revenue	$	237,771	$	217,216	$	20,555		9.5	%
Gross profit per retail unit (excludes fleet)	$	1,271	$	1,213	$	58		4.8	%

Sonic Automotive, Inc.

Results of Operations (Unaudited)

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


	Three Months Ended September 30,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands)
Reported:
Compensation	$	167,489		$	163,230		$	(4,259	)		(2.6	%)
Advertising		15,470			14,045			(1,425	)		(10.1	%)
Rent		18,558			18,145			(413	)		(2.3	%)
Other		78,524			74,724			(3,800	)		(5.1	%)

Total	$	280,041		$	270,144		$	(9,897	)		(3.7	%)

Total pre-tax adjustments		—			1,043

Adjusted SG&A	$	280,041		$	271,187

SG&A expenses as a % of gross profit
Compensation		46.5	%		47.8	%		130	bps
Advertising		4.3	%		4.1	%		(20	) bps
Rent		5.2	%		5.3	%		10	bps
Other		21.7	%		21.9	%		20	bps

Total		77.7	%		79.1	%		140	bps

Total pre-tax adjustments		0.0	%		0.3	%

Adjusted SG&A as % of Gross		77.7	%		79.4	%

	Nine Months Ended September 30,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands)
Reported:
Compensation	$	497,158		$	483,493		$	(13,665	)		(2.8	%)
Advertising		46,160			42,027			(4,133	)		(9.8	%)
Rent		55,058			55,324			266			0.5	%
Other		237,188			222,187			(15,001	)		(6.8	%)

Total	$	835,564		$	803,031		$	(32,533	)		(4.1	%)

Total pre-tax adjustments		(4,183	)		6,955

Adjusted SG&A	$	831,381		$	809,986

SG&A expenses as a % of gross profit
Compensation		47.3	%		47.5	%		20	bps
Advertising		4.4	%		4.1	%		(30	) bps
Rent		5.2	%		5.4	%		20	bps
Other		22.6	%		21.9	%		(70	) bps

Total		79.5	%		78.9	%		(60	) bps

Total pre-tax adjustments		(0.4	%)		0.7	%

Adjusted SG&A as % of Gross		79.1	%		79.6	%