8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 26, 2017

SONIC AUTOMOTIVE, INC.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction

of incorporation)

1-13395	56-2010790
(Commission File Number)	(IRS Employer Identification No.)
4401 Colwick Road Charlotte, North Carolina	28211
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (704) 566-2400

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02. Results of Operations and Financial Condition.

On April 26, 2017, Sonic Automotive, Inc. (the “Company”) issued a press release announcing its financial results for its fiscal first quarter ended March 31, 2017 (the “Earnings Press Release”). A copy of the Earnings Press Release is attached hereto as Exhibit 99.1 and a copy of the earnings call presentation materials is attached hereto as Exhibit 99.2.

Item 7.01. Regulation FD Disclosure.

On April 26, 2017, in the Earnings Press Release, the Company announced the approval of a quarterly cash dividend.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

99.1     Press release of Sonic Automotive, Inc., dated April 26, 2017

99.2     Earnings call presentation materials

The information in this Current Report on Form 8-K, including the exhibits attached hereto, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SONIC AUTOMOTIVE, INC.
Date: April 26, 2017	By:	/s/ HEATH R. BYRD
		Heath R. Byrd
		Executive Vice President and
		Chief Financial Officer

INDEX TO EXHIBITS

Exhibit No.	Description
99.1	Press release of Sonic Automotive, Inc., dated April 26, 2017
99.2	Earnings call presentation materials

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Sonic Automotive, Inc. Reports First Quarter Results

CHARLOTTE, N.C. – April 26, 2017 – Sonic Automotive, Inc. (NYSE: SAH), one of the nation’s largest automotive retailers, today reported financial results for the first quarter of 2017.

First Quarter 2017 Results

• EchoPark^® stores retailed 1,673 units, up 77.8% over the prior year quarter

• Record Q1 pre-owned units of 30,372 contributing gross profit of $40.8 million

• Record Q1 fixed operations gross profit of $169.3 million, up 2.0% over the prior year quarter

• Record Q1 F&I gross profit and gross profit per retail unit of $83.1 million and $1,379, respectively

• Record Q1 total gross profit of $350.3 million, up 1.5% over the prior year quarter

GAAP Basis

Net income from continuing operations for the first quarter of 2017 was $0.0 million, or $0.00 per diluted share. These results include charges related to the redemption of Sonic’s 7.0% Senior Subordinated Notes due 2022 (the “7.0% Notes”), weather-related physical damage costs and fixed asset impairments, offset by net settlement gains related to legal matters. The pre-tax charges related to the redemption of the 7.0% Notes totaled approximately $15.3 million, or $0.21 per diluted share. In conjunction with this redemption, Sonic lowered its overall borrowing costs, extended its debt maturities and increased its liquidity through a private placement (with registration rights) of $250.0 million of 6.125% Senior Subordinated Notes due 2027 (the “6.125% Notes”). See the attached schedules for additional information related to first quarter 2017 charges. Also included in the GAAP reported amounts for the first quarter of 2017 is a net after-tax loss from operations related to EchoPark^® of $3.3 million, or $0.07 per diluted share.

Comparatively, net income from continuing operations for the first quarter of 2016 was $14.5 million, or $0.31 per diluted share. The results from 2016 include charges for weather-related physical damage costs. Also included in the GAAP reported amounts for the first quarter of 2016 is a net after-tax loss from operations related to EchoPark^® of $2.2 million, or $0.05 per diluted share.

Adjusted Basis

Adjusted net income from continuing operations and related earnings per diluted share are non-GAAP financial measures. The schedules included in this press release reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures.

Adjusted net income from continuing operations for the first quarter of 2017 and 2016 was $10.3 million, or $0.23 per diluted share, and $18.2 million, or $0.39 per diluted share, respectively. The adjustments in the 2017 quarterly period relate to the redemption of Sonic’s 7.0% Notes, weather-related physical damage costs and fixed asset impairments, offset by net settlement gains related to legal matters. The adjustments in the 2016 quarterly period are for weather-related physical damage costs.

Commentary

Jeff Dyke, Sonic’s EVP of Operations, stated, “As we expected and forecasted in our internal models, the months of January and February in 2017 were difficult. Weakness was driven by a lack of new retail volume and a shorter fixed operations calendar in February. As we typically see, March was very good. In fact, we were able to set volume and gross records within the month of March. However, the month was not strong enough to offset the weakness experienced in the first two months of the year. I was particularly pleased with our pre-owned and F&I performances for the quarter, both posting record results. Our F&I performance continues improving at a rapid pace, setting an all-time PUR record in the month of March. March was also our biggest used volume month in company history, which helped support a resurgence of our business for the quarter. EchoPark^® continues to make great progress and we expect to break ground in the San Antonio, Texas market in April. We also launched One Sonic One Experience (“OSOE”) in a BMW store during the first quarter of 2017 and the store has ramped up nicely each month since our January install. We will continue the rollout of EchoPark^® and OSOE as the performance of these initiatives continues to validate our strategy.”

B. Scott Smith, the Company’s Chief Executive Officer, noted, “We continue executing strategies that yield long-term benefits. We believe the refinancing of our 7.0% Notes with a 6.125% Note issuance will prove to be a big win for us as we expect interest rates to continue to gradually rise over the next several years. Although the charges incurred during the quarter relating to the redemption depressed our reported earnings, we will enjoy the benefits of this long-term financing over the next ten years. Moving forward, we are excited about the upcoming opening of our new Audi store in Pensacola, Florida and the introduction of the EchoPark^® brand to the Texas market in 2017. We are committed to growing the Company through the expansion of our EchoPark^® brand and through the expansion of our franchised dealerships through acquisitions and open points. We believe our strong relationships with our manufacturer partners will allow us to continue to aggressively grow this part of our business if the target fits within our acquisition strategy. We welcome the opportunity to review these types of deals.”

Dividend

Sonic’s Board of Directors approved a quarterly dividend of $0.05 per share payable in cash for stockholders of record on June 15, 2017. The dividend will be payable on July 14, 2017.

First Quarter Earnings Conference Call

Senior management will host a conference call today at 11:00 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 “Earnings Conference Calls.”

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: 1713085

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: 1713085

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. More information about EchoPark^® Automotive can be found at www.echopark.com.

Forward Looking Statements

Included herein are forward-looking statements, including statements with respect to the anticipated benefits of our long-term financing strategy, the anticipated expansion of our EchoPark^® business and our franchised dealerships, and our belief that our strong relationships with our manufacturer partners will allow us to continue to aggressively grow our franchised dealership business through strategic acquisitions and new dealership open points. 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, 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 ended December 31, 2016. 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 Securities and Exchange Commission (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 from continuing operations and related earnings per diluted share, which exclude certain items disclosed in the attached financial tables. As required by SEC rules, the Company provides reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures. The Company believes that these non-GAAP financial measures improve the transparency of the Company’s disclosure, provide a meaningful presentation of the Company’s results from its core business operations excluding the impact of items not related to the Company’s ongoing core business operations, and improve the period-to-period comparability of the Company’s results from its core business operations.

###

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 (the “Adjusted” amounts) 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 (the “Reported” amounts) 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 March 31,
	2017			2016
	(In thousands, except per share and unit data)
Revenues:
New retail vehicles	$	1,147,380		$	1,149,437
Fleet vehicles		24,552			15,133
Total new vehicles		1,171,932			1,164,570
Used vehicles		634,474			598,355
Wholesale vehicles		46,310			44,374
Total vehicles		1,852,716			1,807,299
Parts, service and collision repair		352,043			346,054
Finance, insurance and other, net		83,063			81,273
Total revenues		2,287,822			2,234,626
Gross profit		350,346			345,150
Selling, general and administrative expenses		(292,234	)		(284,375	)
Impairment charges		(510	)		—
Depreciation and amortization		(21,153	)		(18,470	)
Operating income (loss)		36,449			42,305
Other income (expense):
Interest expense, floor plan		(8,387	)		(6,436	)
Interest expense, other, net		(13,409	)		(12,339	)
Other income (expense), net		(14,501	)		104
Total other income (expense)		(36,297	)		(18,671	)
Income (loss) from continuing operations before taxes		152			23,634
Provision for income taxes for continuing operations - benefit (expense)		(172	)		(9,170	)
Income (loss) from continuing operations		(20	)		14,464
Income (loss) from discontinued operations		(521	)		160
Net income (loss)	$	(541	)	$	14,624
Diluted earnings (loss) per common share:
Earnings (loss) per share from continuing operations	$	—		$	0.31
Earnings (loss) per share from discontinued operations		(0.01	)		—
Earnings (loss) per common share	$	(0.01	)	$	0.31
Weighted average common shares outstanding		44,791			47,122
Gross Margin Data (Continuing Operations):
New retail vehicles		5.1	%		5.1	%
Fleet vehicles		(0.9	%)		0.2	%
Total new vehicles		5.0	%		5.0	%
Used vehicles		6.4	%		6.8	%
Wholesale vehicles		(2.5	%)		(2.4	%)
Parts, service and collision repair		48.1	%		48.0	%
Finance, insurance and other		100.0	%		100.0	%
Overall gross margin		15.3	%		15.4	%
SG&A Expenses (Continuing Operations):
Compensation	$	176,547		$	169,041
Advertising		15,257			15,347
Rent		18,487			18,720
Other		81,943			81,267
Total SG&A expenses	$	292,234		$	284,375
SG&A expenses as % of gross profit		83.4	%		82.4	%
Operating Margin %		1.6	%		1.9	%
Unit Data (Continuing Operations):
New retail units		29,870			30,156
Fleet units		625			449
Total new units		30,495			30,605
Used units		30,372			29,333
Wholesale units		8,307			8,423

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Per Share Data

	Three Months Ended March 31, 2017
			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		44,791	$	(20	)			$	(521	)				$	(541	)
Effect of participating securities:
Non-vested restricted stock				—					—						—
Basic earnings (loss) and shares		44,791	$	(20	)	$	—	$	(521	)	$	(0.01	)	$	(541	)	$	(0.01	)
Effect of dilutive securities:
Stock compensation plans		—
Diluted earnings (loss) and shares		44,791	$	(20	)	$	—	$	(521	)	$	(0.01	)	$	(541	)	$	(0.01	)
Adjustments:
Impairment charges			$	510				$	—					$	510
Storm damage				2,382					—						2,382
Legal settlements				(1,149	)				—						(1,149	)
Loss on debt extinguishment.				15,268					—						15,268
Total adjustments before taxes				17,011					—						17,011
Income tax effect of above adjustments				(6,677	)				—						(6,677	)
Effect of adjustments, net of income taxes			$	10,334		$	0.23	$	—		$	—		$	10,334		$	0.23
Adjusted:
Earnings (loss), diluted shares and diluted earnings (loss) per share (1)		45,144	$	10,314		$	0.23	$	(521	)	$	(0.01	)	$	9,793		$	0.22

(1) Net loss attributable to EchoPark^® operations was $0.07 per fully diluted share in the three months ended March 31, 2017.

	Three Months Ended March 31, 2016
			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		46,950	$	14,464				$	160					$	14,624
Effect of participating securities:
Non-vested restricted stock				(6	)				—						(6	)
Basic earnings (loss) and shares		46,950	$	14,458		$	0.31	$	160		$	—		$	14,618		$	0.31
Effect of dilutive securities:
Stock compensation plans		172
Diluted earnings (loss) and shares		47,122	$	14,458		$	0.31	$	160		$	—		$	14,618		$	0.31
Adjustments:
Storm damage and other			$	6,043				$	(523	)				$	5,520
Total adjustments before taxes				6,043					(523	)					5,520
Income tax effect of above adjustments				(2,345	)				203						(2,142	)
Effect of adjustments, net of income taxes			$	3,698		$	0.08	$	(320	)	$	(0.01	)	$	3,378		$	0.07
Adjusted:
Earnings (loss) and diluted earnings (loss) per share (2)			$	18,162		$	0.39	$	(160	)	$	(0.01	)	$	18,002		$	0.38

(2) Net loss attributable to EchoPark^® operations was $0.05 per fully diluted share in the three months ended March 31, 2016.

Sonic Automotive, Inc.

Results of Operations (Unaudited)

New Vehicles

	Three Months Ended March 31,						Better / (Worse)
	2017			2016			Change			% Change
	(In thousands, except units and per unit data)
Reported:
Revenue	$	1,171,932		$	1,164,570		$	7,362			0.6	%
Gross profit	$	58,278		$	58,424		$	(146	)		(0.2	%)
Unit sales		30,495			30,605			(110	)		(0.4	%)
Revenue per unit	$	38,430		$	38,052		$	378			1.0	%
Gross profit per unit	$	1,911		$	1,909		$	2			0.1	%
Gross profit as a % of revenue		5.0	%		5.0	%		—	bps
	Three Months Ended March 31,						Better / (Worse)
	2017			2016			Change			% Change
	(In thousands, except units and per unit data)
Same Store:
Revenue	$	1,158,115		$	1,164,570		$	(6,455	)		(0.6	%)
Gross profit	$	57,558		$	58,375		$	(817	)		(1.4	%)
Unit sales		30,188			30,605			(417	)		(1.4	%)
Revenue per unit	$	38,363		$	38,052		$	311			0.8	%
Gross profit per unit	$	1,907		$	1,907		$	—			0.0	%
Gross profit as a % of revenue		5.0	%		5.0	%		—	bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Used Vehicles

	Three Months Ended March 31,						Better / (Worse)
	2017			2016			Change			% Change
	(In thousands, except units and per unit data)
Reported:
Revenue	$	634,474		$	598,355		$	36,119			6.0	%
Gross profit	$	40,833		$	40,531		$	302			0.7	%
Unit sales		30,372			29,333			1,039			3.5	%
Revenue per unit	$	20,890		$	20,399		$	491			2.4	%
Gross profit per unit	$	1,344		$	1,382		$	(38	)		(2.7	%)
Gross profit as a % of revenue		6.4	%		6.8	%		(40	)bps
	Three Months Ended March 31,						Better / (Worse)
	2017			2016			Change			% Change
	(In thousands, except units and per unit data)
Same Store:
Revenue	$	615,391		$	598,355		$	17,036			2.8	%
Gross profit	$	38,286		$	38,992		$	(706	)		(1.8	%)
Unit sales		29,458			29,333			125			0.4	%
Revenue per unit	$	20,890		$	20,399		$	491			2.4	%
Gross profit per unit	$	1,300		$	1,329		$	(29	)		(2.2	%)
Gross profit as a % of revenue		6.2	%		6.5	%		(30	)bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Wholesale Vehicles

	Three Months Ended March 31,						Better / (Worse)
	2017			2016			Change			% Change
	(In thousands, except units and per unit data)
Reported:
Revenue	$	46,310		$	44,374		$	1,936			4.4	%
Gross profit (loss)	$	(1,172	)	$	(1,078	)	$	(94	)		(8.7	%)
Unit sales		8,307			8,423			(116	)		(1.4	%)
Revenue per unit	$	5,575		$	5,268		$	307			5.8	%
Gross profit (loss) per unit	$	(141	)	$	(128	)	$	(13	)		(10.2	%)
Gross profit (loss) as a % of revenue		(2.5	%)		(2.4	%)		(10	)bps
	Three Months Ended March 31,						Better / (Worse)
	2017			2016			Change			% Change
	(In thousands, except units and per unit data)
Same Store:
Revenue	$	45,260		$	44,353		$	907			2.0	%
Gross profit (loss)	$	(1,085	)	$	(1,076	)	$	(9	)		(0.8	%)
Unit sales		8,120			8,418			(298	)		(3.5	%)
Revenue per unit	$	5,574		$	5,269		$	305			5.8	%
Gross profit (loss) per unit	$	(134	)	$	(128	)	$	(6	)		(4.7	%)
Gross profit (loss) as a % of revenue		(2.4	%)		(2.4	%)		0	bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

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

	Three Months Ended March 31,						Better / (Worse)
	2017			2016			Change			% Change
	(In thousands)
Reported:
Revenue
Customer pay	$	138,134		$	147,394		$	(9,260	)		(6.3	%)
Warranty		69,919			57,559			12,360			21.5	%
Wholesale parts		43,281			45,309			(2,028	)		(4.5	%)
Internal, sublet and other		100,709			95,792			4,917			5.1	%
Total	$	352,043		$	346,054		$	5,989			1.7	%
Gross profit
Customer pay	$	73,440		$	80,358		$	(6,918	)		(8.6	%)
Warranty		38,670			31,326			7,344			23.4	%
Wholesale parts		7,550			7,941			(391	)		(4.9	%)
Internal, sublet and other		49,684			46,375			3,309			7.1	%
Total	$	169,344		$	166,000		$	3,344			2.0	%
Gross profit as a % of revenue
Customer pay		53.2	%		54.5	%		(130	)bps
Warranty		55.3	%		54.4	%		90	bps
Wholesale parts		17.4	%		17.5	%		(10	)bps
Internal, sublet and other		49.3	%		48.4	%		90	bps
Total		48.1	%		48.0	%		10	bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

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

	Three Months Ended March 31,						Better / (Worse)
	2017			2016			Change			% Change
	(In thousands)
Same Store:
Revenue
Customer pay	$	137,419		$	147,394		$	(9,975	)		(6.8	%)
Warranty		69,589			57,559			12,030			20.9	%
Wholesale parts		43,228			45,309			(2,081	)		(4.6	%)
Internal, sublet and other		99,209			95,792			3,417			3.6	%
Total	$	349,445		$	346,054		$	3,391			1.0	%
Gross profit
Customer pay	$	73,089		$	80,358		$	(7,269	)		(9.0	%)
Warranty		38,439			31,282			7,157			22.9	%
Wholesale parts		7,537			7,941			(404	)		(5.1	%)
Internal, sublet and other		48,413			46,068			2,345			5.1	%
Total	$	167,478		$	165,649		$	1,829			1.1	%
Gross profit as a % of revenue
Customer pay		53.2	%		54.5	%		(130	)bps
Warranty		55.2	%		54.3	%		90	bps
Wholesale parts		17.4	%		17.5	%		(10	)bps
Internal, sublet and other		48.8	%		48.1	%		70	bps
Total		47.9	%		47.9	%		0	bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

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

	Three Months Ended March 31,				Better / (Worse)
	2017		2016		Change		% Change
	(In thousands, except per unit data)
Reported:
Revenue	$	83,063	$	81,273	$	1,790		2.2	%
Gross profit per retail unit (excludes fleet)	$	1,379	$	1,366	$	13		1.0	%
	Three Months Ended March 31,				Better / (Worse)
	2017		2016		Change		% Change
	(In thousands, except per unit data)
Same Store:
Revenue	$	80,860	$	80,852	$	8		0.0	%
Gross profit per retail unit (excludes fleet)	$	1,370	$	1,359	$	11		0.8	%

Sonic Automotive, Inc.

Results of Operations (Unaudited)

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

	Three Months Ended March 31,						Better / (Worse)
	2017			2016			Change			% Change
	(In thousands)
Reported:
Compensation	$	176,547		$	169,041		$	(7,506	)		(4.4	%)
Advertising		15,257			15,347			90			0.6	%
Rent		18,487			18,720			233			1.2	%
Other		81,943			81,267			(676	)		(0.8	%)
Total SG&A expenses	$	292,234		$	284,375		$	(7,859	)		(2.8	%)
Adjustments:
Storm damage	$	(2,382	)	$	(6,043	)
Legal settlements		1,149			—
Total SG&A adjustments	$	(1,233	)	$	(6,043	)
Adjusted:
Total adjusted SG&A expenses	$	291,001		$	278,332		$	(12,669	)		(4.6	%)
Reported:
SG&A expenses as a % of gross profit
Compensation		50.4	%		49.0	%		(140	)bps
Advertising		4.4	%		4.4	%		0	bps
Rent		5.3	%		5.4	%		10	bps
Other		23.3	%		23.6	%		30	bps
Total SG&A expenses as a % of gross profit		83.4	%		82.4	%		(100	)bps
Adjustments:
Storm damage		(0.6	%)		(1.8	%)
Legal settlements		0.3	%		0.0	%
Total effect of adjustments		(0.3	%)		(1.8	%)
Adjusted:
Total adjusted SG&A as a % of gross profit		83.1	%		80.6	%		(250	)bps

EX-99.2

Q1 2017 Investor Presentation April 26, 2017 Exhibit 99.2

FORWARD-LOOKING STATEMENTS This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events, are not historical facts and are based on our current expectations and assumptions regarding our business, the economy and other future conditions. These statements can generally be identified by lead-in words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “foresee”, “may” ,”will” and other similar words. Statements that describe our Company’s objectives, plans or goals are also forward-looking statements. Examples of such forward-looking information we may be discussing in this presentation include, without limitation, anticipated 2017 industry new vehicle sales volume, the implementation of growth and operating strategies, including acquisitions of dealerships and properties, the development of open points and stand-alone pre-owned stores, the return of capital to shareholders, anticipated future success and impacts from the implementation of our strategic initiatives and earnings per share expectations. You are cautioned that these forward-looking statements are not guarantees of future performance, involve risks and uncertainties and actual results may differ materially from those projected in the forward-looking statements as a result of various factors. These risks and uncertainties include, among other things, (a) economic conditions in the markets in which we operate, (b) the success of our operational strategies, (c) our relationships with the automobile manufacturers, (d) new and pre-owned vehicle sales volume, and (e) earnings expectations for the year ending December 31, 2017. These risks and uncertainties, as well as additional factors that could affect our forward-looking statements, are described in our Form 10-K for the year ended December 31, 2016. These forward-looking statements, risks, uncertainties and additional factors speak only as of the date of this presentation. We undertake no obligation to update any such statements.

CONTENT COMPANY OVERVIEW STRATEGIC FOCUS FINANCIAL REVIEW OPERATIONS REVIEW SUMMARY & OUTLOOK

COMPANY OVERVIEW

OVERVIEW – FRANCHISED GEOGRAPHIC Based in Charlotte, NC 104 Stores, 25 Brands, 18 Collision Repair Centers Platforms in Major Metro Markets

OVERVIEW – ECHOPARK® DENVER GEOGRAPHIC Colorado Springs - Opens First Half of 2017

OVERVIEW – ECHOPARK® FLORIDA GEOGRAPHIC In Process of Converting AutoMatch Stores to EchoPark® Stores: Jacksonville Ocala Ft. Myers Also have property in Savannah, GA that is being developed.

Note: Percentages are percent of total revenue for FY 2016. Concentration in Major Metro Markets

Revenue streams and brand mix offer attractive diversification across the automotive retail space. Note: Percentages are for FY 2016.

STRATEGIC FOCUS

STRATEGIC FOCUS Growth EchoPark® One Sonic-One Experience Acquisitions & Open Points Own Our Properties Return Capital to Shareholders Share Repurchases Dividends

STRATEGIC FOCUS EchoPark® Five Locations Open In Denver Thornton Hub Centennial Highlands Ranch Littleton Stapleton One Additional Denver Market Location by 1H of 2017 Florida AutoMatch Transition Occurring Acquiring Property in the Texas and Carolinas Markets Expect openings in 2017 EP Revenue FY 2016 revenue of $129M 68% YOY revenue growth

STRATEGIC FOCUS ONE SONIC-ONE EXPERIENCE (OSOE) Goals 1 Associate, 1 Price, 1 Hour Improve Transparency; Increase Trust Operational Efficiencies Grow Market Share Feed Fixed Operations Technology Being Introduced into Additional Markets (Charlotte was Pilot) CRM, Desking & Appraisal

STRATEGIC FOCUS ACQUISITIONS & OPEN POINTS Open Points Mercedes-Benz in Dallas Market Estimated Annual Revenues >$100M Operational in Q3 2016 Nissan in TN Market Estimated Annual Revenues >$30M Operational in Q4 2016 Audi in Pensacola Market Estimated Annual Revenues >$50M Operational in 1H of 2017 Exploring Acquisition and Open Point Opportunities in Other Markets

STRATEGIC FOCUS OWN OUR PROPERTIES % of Properties Owned Increased Equity in Properties to $281M in 2016

Quarterly Dividend at $0.05/Share in Q1 & Q2 of 2017 Acquired 11.2% of OS in 2016 New Share Count = 44.7M Down from High of 53.2M (Dec 2012) Dividends Declared of $9.1M in 2016 STRATEGIC FOCUS RETURN CAPITAL TO SHAREHOLDERS (000's) (000's) (000's) Shares $/Share $ Availability EOY - 2016 $45,032.523000000001 Q1 Activity 177.53200000000001 $22.509677128630329 $3,996.1880000000001 -3,996.1880000000001 Additional BOD Authorization ,100,000 Total 2017 Activity 177.53200000000001 $22.509677128630329 $3,996.1880000000001 $,141,036.33499999999

OUTSTANDING SHARE COUNT (in millions) Note – Balances are amounts outstanding at the end of the applicable period. These amounts exclude the effect of share dilution from convertible notes and equity grants outstanding. STRATEGIC FOCUS RETURN CAPITAL TO SHAREHOLDERS

Q1 2017 FINANCIAL REVIEW

Q1 2017 FINANCIAL REVIEW FRANCHISED SEGMENT

FRANCHISED SEGMENT Q1 2017 RESULTS – Q1 2017 and Q1 2016 results are adjusted – See appendix for reconciliation to GAAP amounts. B/(W) than Q1 2016 (1) (amounts in millions, except per share data) Q1 2017 (1) $ % Revenue $2,246.251349599998 $35.439564619999842 1.603175425349% Gross Profit $345.68172950749602 $3.7789587374990226 1.105272919839% SG&A $282.39013689999996 $-9.7644136638409691 -3.581618619085% SG&A as % of Gross 0.8169079034125708 -,200 bps Depreciation $19.969354840000001 -2.274144070000002 -0.12851748982021322 Operating Profit $43.322237947497804 $-8.259599166344902 -0.16012611470420707 Interest & Other $-20.586056670000001 $-2.2562398700000013 -0.12309123951527989 Pretax $22.736181277497899 $-10.515839036344202 -0.31624662011789656 Diluted EPS $0.3 $-0.14000000000000001 -0.31818181818181823 Diluted EPS Keyed $0.3 $-0.14000000000000001 -0.31818181818181823 CY 0.3 PY 0.44 change -0.14000000000000001 % -0.31818181818181823

Q1 2017 FINANCIAL REVIEW ECHOPARK® SEGMENT

ECHOPARK® SEGMENT Q1 2017 RESULTS 22 (1) – Excludes the effect of AutoMatch Stores – see appendix for reconciliation. (1) Total EchoPark EchoPark Only B/(W) than Q1 2016 (amounts in millions, except unit and per unit data) Q1 2017 Q1 2017 $ % Revenue $41.797235549999996 $33.665376829999992 $9.6245779499999955 0.40034351595557277 Gross Profit $4.6646679900000096 $4.0060857900000091 $0.75878502000000936 0.23366638132506876 Operating Profit $-5.1308441299999892 $-3.6051956699999894 $-0.37049048999998924 -0.11453609197237233 Interest & Other $-0.44245117999999994 $-0.35398884999999997 $-1.2889389999999935E-2 -3.7787776035% Pretax $-5.57329530999999 $-3.9591845199999907 $-0.3833798799999904 -0.10721499595123025 Diluted EPS $-7.0000000000000007E-2 Retail Units 1,673 1,313 372 0.39532412327311373 GPU $1,045.3807710699343 $1,069.2296191926876 -,321.22288877755682 -0.2310203958324846 F&I ($/unit) $1,175.7141542139868 $1,283.155559786748 -85.375566674463471 -6.238481904% Diluted EPS Keyed $-7.0000000000000007E-2 $-0.02 -0.4 CY -7.0000000000000007E-2 PY -0.05 Change -2.0000000000000004E-2 % Change 0.40000000000000008

Q1 2017 FINANCIAL REVIEW TOTAL ENTERPRISE

– Q1 2017 and Q1 2016 results are adjusted – See appendix for reconciliation to GAAP amounts. CONSOLIDATED Q1 2017 RESULTS B/(W) than Q1 2016 (1) (amounts in millions, except per share data) Q1 2017 (1) $ % Revenue $2,288 $53 2.4% Gross Profit $350 $5 1.5% SG&A $291 ($13) (4.6%) SG&A as % of Gross 83.1% (250) bps Depreciation $21 ($3) (14.5%) Operating Profit $38 ($10) (21.0%) Interest & Other ($21) ($2) (12.6%) Continuing Ops: Profit (after tax) $10 ($8) (43.2%) Diluted EPS $0.23 ($0.16) (41.0%)

Q1 2017 REVENUE & GROSS PROFIT B/(W) than Q1 2016 (amounts in millions, except unit and per unit data) Q1 2017 $ % New Retail Revenue $1,147 ($2) (0.2%) Used Retail Revenue $634 $36 6.0% Fixed Operations Revenue $352 $6 1.7% F&I Revenue $83 $2 2.2% Total Revenue $2,288 $53 2.4% New Retail Gross $58 $0 0.2% New Retail Units 29,870 (286) (0.9%) New Retail GPU $1,958 $22 1.1% Used Retail Gross $41 $0 0.7% Used Retail Units 30,372 1,039 3.5% Used Retail GPU $1,344 ($37) (2.7%) Fixed Operations Gross $169 $3 2.0% F&I Gross $83 $2 2.2% F&I GPU $1,379 $13 0.9% Total Gross $350 $5 1.5%

Q1 2017 SG&A TO GROSS – Q1 2017 & Q1 2016 are adjusted – See appendix for reconciliation to GAAP amounts. (1) 83.1% 80.6%

Q1 2017 SG&A TO GROSS – Q1 2017 and Q1 2016 are adjusted – See appendix for reconciliation to GAAP amounts. (1)

Q1 2017 INTEREST EXPENSE Floor Plan Increase Due to Higher Rates – Q1 2017 is adjusted – See appendix for reconciliation to GAAP amounts. B/(W) than Q1 2016 (amounts in millions) Q1 2017 (1) $ % Floor Plan Interest Expense $8.3863741399999991 $-1.95091313 -0.3031504855624943 Interest Expense, Other $12.74758289 $-0.40858017000000107 -3.311290055377% Total Interest Expense $21.133957029999998 $-2.3594932999999982 -0.12567566956544959

2017 CAP EX (amounts in millions) YTD Q1 2017 Estimated FY 2017 Real Estate & Facility Related $63.8 $224.8 All Other Cap Ex 12 19.899999999999999 Subtotal $75.8 $244.70000000000002 Less: Mortgage Funding -19.8 -73.7 Total Cash Used – Cap Ex $56 $171

DEBT COVENANTS Compliant with all Covenants Covenant Q1 2017 Liquidity Ratio >= 1.05 1.17 Fixed Charge Coverage Ratio >= 1.20 1.90 Total Lease Adjusted Leverage Ratio <= 5.75 4.25

OPERATIONS REVIEW

NEW VEHICLE RETAIL SAME STORE Retail Units Q1 2017 Q1 2016 B/(W) Retail Volume 29,563 30,156 (2.0%) Selling Price 38,344 $ 38,116 $ 0.6% Gross Margin % 5.1% 5.1% 0 bps GPU 1,954 $ 1,935 $ 20 $ Gross Profit (millions) 57.8 $ 58.3 $ (1.0%) SAAR (millions) 17.2 17.1 0.6% Jan Feb Mar Total 2017 9,505 8,917 11,141 29,563 2016 9,643 9,566 10,947 30,156 B/(W) -,138 -,649 194 -,593 SAAR - Keyed 18 17.899999999999999 .6% 0.10000000000000142 5.5865921787710297E-3

NEW VEHICLE SAAR YTD 2017 – 17.2M Full Year 2016 – 17.4M Full Year 2015 – 17.4M

NEW VEHICLE SAAR - RETAIL

VEHICLE DAYS SUPPLY

NEW VEHICLE NEW VEHICLE – GROSS & UNIT TREND Continuing Operations

NEW VEHICLE NEW VEHICLE – GROSS PER UNIT Continuing Operations

USED VEHICLE RETAIL SAME STORE Q1 Record Used Retail Volume March Month All-Time Record of 10,854 Used Retailed Q1 2017 Q1 2016 B/(W) Retail Volume 29,458 29,333 .4261412062% GPU $1,299.6950353045147 $1,329.2717543381109 $-29.576719033596191 Used to New 1 to 1.00 0.97 to 1.00 0.03 Vehicles/Store/Mth (105 stores) 94 93 1 Vehicles per store/month (Keyed) $0 $0 0.0%

* - Used Related Gross = (Used Gross + F&I + Reconditioning) ($’s in millions) USED VEHICLE – GROSS TREND Continuing Operations

Total Gross Flat Higher PUR increased gross $0.7M, however, offset entirely by effect of lower overall retail units. Gross (millions) $ 80.9 $ 80.9 F&I SAME STORE Record PUR

F&I F&I – GROSS & PUR TREND Continuing Operations Record Q1 Gross

FIXED OPERATIONS ($’s in millions) FIXED OPERATIONS – GROSS TREND Continuing Operations Record Q1 Fixed Ops Gross

FIXED OPS SAME STORE (amounts in millions) Q1 2017 Q1 2016 B/(W) Revenue $349.44485698 $346.05449943000002 .9797178062% Gross Profit $167.47825774 $165.64933493999999 1.1040930534% SAAR - Keyed 17.8M 16.8M 0.06

SUMMARY Challenging New Vehicles Environment January and February Slower than Normal – Picked Up In March New Vehicle GPU Leveling Off Used Vehicle Valuations Fairly Consistent - Slight Margin Pressure Fixed Operations Stable – Expect Growth Higher in Remaining Quarters Hail Storms Will Affect Q2 – Availability of Vehicles Salable in AL Market and Somewhat in TX Began AutoMatch Store Conversions to EchoPark ® OSOE Rollout Continues – First Full Rollout in BMW

APPENDIX

NON-GAAP RECONCILIATIONS (amounts in thousands) 2009 2010 2011 2012 2013 2014 2015 2016 Net Income 31,548 $ 89,929 $ 76,254 $ 89,101 $ 81,618 $ 97,217 $ 86,311 $ 93,193 $ Non-Floorplan Interest 67,735 68,604 63,576 58,453 55,356 52,269 49,524 48,034 Depreciation & Amortization 57,036 45,827 51,164 52,616 58,139 62,161 72,130 81,034 Income Taxes (53,900) (19,745) 46,907 47,648 43,386 62,346 55,962 59,899 Stock Comp 1,931 2,814 3,698 5,160 7,208 7,675 9,814 11,165 Lease Exit 33,013 4,266 4,384 4,286 2,915 302 1,848 1,386 Impairment 30,038 249 1,151 950 9,872 6,594 17,955 8,063 Loss (Gain) on Debt Extinguishment 6,745 7,665 1,107 19,713 28,238 - - (6) Loss (Gain) on Dealership Disposal 102 (2,615) 386 (10,343) 457 (11,279) (2,748) 48 Adjusted EBITDA 174,248 $ 196,994 $ 248,627 $ 267,584 $ 287,189 $ 277,285 $ 290,796 $ 302,816 $

NON-GAAP RECONCILIATIONS

NON-GAAP RECONCILIATIONS

NON-GAAP RECONCILIATIONS

NON-GAAP RECONCILIATIONS

NON-GAAP RECONCILIATIONS

5 NON-GAAP RECONCILIATIONS – ECHOPARK® Total EchoPark EchoPark Only AutoMatch Only (amounts in millions, except unit and per unit data) Q1 2017 Q1 2017 Q1 2017 Revenue $41.797235549999996 $33.665376829999992 $8.1318587200000003 Gross Profit $4.6646679900000096 $4.0060857900000091 $0.65858220000000101 Operating Profit $-5.1308441299999892 $-3.6051956699999894 $-1.52564846 Interest & Other $-0.44245117999999994 $-0.35398884999999997 $-8.8462330000000006E-2 Pretax $-5.57329530999999 $-3.9591845199999907 $-1.61411079 Retail Units 1,673 1,313 360 GPU $1,045.3807710699343 $1,069.2296191926876 $958.39872222222505 F&I ($/unit) $1,175.7141542139868 $1,283.155559786748 $783.85147222222236 Diluted EPS Keyed $-7.0000000000000007E-2 CY -7.0000000000000007E-2 PY -0.05 Change -2.0000000000000004E-2 % Change 0.40000000000000008