Sonic Automotive Reports All-Time Record Quarterly Revenues and Pre-Tax Earnings

Record Fourth Quarter Results Reflect Strong Performance and Improved Cost Structure

CHARLOTTE, N.C.--(BUSINESS WIRE)--Sonic Automotive, Inc. (“Sonic” or the “Company”) (NYSE:SAH), one of the nation’s largest automotive retailers, today reported financial results for the fourth quarter and full year ended December 31, 2020. The financial measures discussed below are results for the fourth quarter of 2020 compared to the fourth quarter of 2019, or full year 2020 compared to full year 2019, as applicable, unless otherwise noted.

Fourth Quarter Highlights

• All-time record quarterly revenues of $2.8 billion, up 1.8%, and all-time record quarterly income from continuing operations before taxes of $90.4 million, up 48.3%
• Reported earnings from continuing operations of $57.5 million ($1.31 per diluted share), compared to $46.3 million ($1.04 per diluted share) for the fourth quarter of 2019
• All-time record quarterly adjusted earnings from continuing operations* of $65.8 million ($1.50 per diluted share), an increase of 52.7% compared to $43.1 million ($0.97 per diluted share) for the fourth quarter of 2019
• Reported selling, general and administrative (“SG&A”) expenses as a percentage of gross profit were 66.6%, compared to 66.2% for the fourth quarter of 2019
• All-time record quarterly adjusted SG&A expenses as a percentage of gross profit* of 68.1%, compared to 73.7% for the fourth quarter of 2019, a 560-basis point improvement
• All-time record quarterly total Finance & Insurance (“F&I”) gross profit per retail unit of $2,031, up 12.3%
• Reported EchoPark results include:
  • All-time record quarterly EchoPark revenues of $386.9 million, up 25.4%
  • EchoPark retail sales volume of 14,841, up 17.1%
• Same store Franchised Dealerships Segment operating results include:
  • Revenues up 1.5%, gross profit up 1.7%
  • New vehicle unit sales volume down 6.9%; new vehicle gross profit per unit up 31.4%, to all-time record $2,932
  • Retail used vehicle unit sales volume down 2.9%; retail used vehicle gross profit per unit down 24.2%, to $972
  • Parts, service and collision repair gross profit down 3.2% (customer pay gross profit down 0.5%); gross margin up 180 basis points, to 50.7%
  • F&I gross profit up 7.8%; all-time record quarterly reported Franchised Dealerships Segment F&I gross profit per retail unit of $1,965, up 14.9%

Full Year Highlights

• Total revenues of $9.8 billion, down 6.6%, and gross profit of $1.4 billion, down 6.4%,
• Reported loss from continuing operations of $50.7 million ($1.19 per diluted share), compared to earnings from continuing operations of $144.5 million ($3.31 per diluted share) for full year 2019
• All-time record annual adjusted earnings from continuing operations* of $168.9 million ($3.85 per diluted share), an increase of 45.9% compared to $115.8 million ($2.65 per diluted share) for full year 2019
• Reported SG&A expenses as a percentage of gross profit were 72.3%, compared to 72.3% for full year 2019
• Adjusted SG&A expenses as a percentage of gross profit* were 72.9%, compared to 76.9% for full year 2019, a 400-basis point improvement
• All-time record annual total F&I gross profit per retail unit of $1,952, up 12.0%
• Reported EchoPark results include:
  • All-time record annual EchoPark revenues of $1.4 billion, up 22.1%
  • All-time record annual EchoPark retail sales volume of 57,161 units, up 15.4%
• Same store Franchised Dealerships Segment operating results include:
  • Revenues down 6.4%, gross profit down 3.9%
  • New vehicle sales volume down 12.9%; new vehicle unit gross profit per unit up 19.0%, to all-time record $2,508
  • Retail used vehicle unit sales volume down 4.4%; retail used vehicle gross profit per unit down 8.8%, to $1,168
  • Parts, service and collision repair gross profit down 7.7% (customer pay gross profit down 3.6%); gross margin up 100 basis points, to 49.9%
  • F&I gross profit up 1.2%; all-time record annual reported Franchised Dealerships Segment F&I gross profit per retail unit of $1,846, up 14.0%

Commentary

Jeff Dyke, Sonic’s and EchoPark’s President, commented, “We are extremely proud of our team for all they have accomplished in 2020, driving the highest adjusted earnings from continuing operations* in our Company’s history in the face of the challenges of a global pandemic. Our fourth quarter and full year 2020 results reflect the continued strength and resilience of both our EchoPark and franchised dealerships segments, a significant rebound in customer activity and increasing demand for both new and used vehicles during the second half of the year, as well as fundamental improvements in our operating cost structure. These trends have continued into early 2021 and we believe we are well on the path to more than double the Company’s total revenues and significantly increase profitability over the next five years.”

Mr. Dyke continued, “Our EchoPark business achieved strong top-line growth during the fourth quarter, with record quarterly revenues of $386.9 million, up 25.4% from the prior year period. EchoPark’s continued growth demonstrates the significant benefits we offer our guests, who continue to see value in the excellent pricing, inventory selection and buying experience that EchoPark offers. This in-store experience, combined with our hybrid approach between online and on-site, offers consumers a full range of buying options in order to provide their ideal pre-owned vehicle purchase experience. With the opening of four new EchoPark points in the fourth quarter and the recent acquisition of two pre-owned businesses in Maryland and New York, we remain committed to developing our nationwide distribution network, which we continue to expect to retail over half a million pre-owned vehicles annually and drive $14.0 billion in annual EchoPark revenues by 2025.”

Heath Byrd, Sonic’s and EchoPark’s Chief Financial Officer, commented, “In 2020, we took significant steps to improve operating efficiencies and manage expenses throughout our entire organization, which drove record adjusted SG&A expenses as a percentage of gross profit* of 68.1% for the fourth quarter of 2020. Our team met the hurdles of the COVID-19 pandemic head on, initiating cost control measures to meet these challenges and remaining disciplined in this focus even as consumer demand rebounded in the second half of the year. Additionally, our balance sheet position is stronger than it has ever been, with the lowest net debt to adjusted EBITDA* ratio in our Company’s history and total available liquidity of $526.4 million as of December 31, 2020, up 88.0% from the beginning of the year.”

*Adjusted earnings from continuing operations, adjusted earnings per diluted share from continuing operations, adjusted SG&A expenses, adjusted SG&A expenses as a percentage of gross profit, and adjusted EBITDA are non-GAAP financial measures. The tables included in this press release reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures.

Dividend

Sonic’s Board of Directors approved a quarterly cash dividend of $0.10 per share payable on April 15, 2021 to all stockholders of record on March 15, 2021.

Fourth Quarter 2020 Earnings Conference Call

Senior management will hold a conference call on Wednesday, February 17, 2021 at 11:00 A.M. (Eastern). Investor presentation and earnings press release materials will be accessible beginning the morning of the conference call on the Company’s website at ir.sonicautomotive.com.

To access the live broadcast of the call over the internet, please go to ir.sonicautomotive.com. For telephone access to this conference call, please register in advance using this link: http://www.directeventreg.com/registration/event/7083166. After registering, you will receive a confirmation email that includes dial-in numbers and unique conference call and registrant passcodes for entry. Registration remains available through the live call, however, to ensure you are connected for the full call we suggest registering at least 10 minutes before the start of the call.

A conference call replay will be available one hour 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 one of the nation’s largest automotive retailers. Sonic can be reached on the web at www.sonicautomotive.com.

About EchoPark Automotive

EchoPark Automotive is a growing operating segment within the Company that specializes in pre-owned vehicle sales and provides a unique guest experience unlike traditional used car stores. More information about EchoPark Automotive can be found at www.echopark.com.

Forward-Looking Statements

Included herein are forward-looking statements, including statements regarding anticipated future revenue levels, future profitability, projected SG&A expense levels, pre-owned vehicle sales projections and the opening of additional EchoPark 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, anticipated future growth in our EchoPark Segment, the success of our operational strategies, the rate and timing of overall economic expansion or contraction, the effect of the COVID-19 pandemic and related government-imposed restrictions on operations, and the risk factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, the Company’s Current Report on Form 8-K filed on February 12, 2021 and other reports and information filed with the 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 earnings from continuing operations, adjusted earnings per diluted share from continuing operations, adjusted SG&A expenses, adjusted SG&A expenses as a percentage of gross profit and adjusted EBITDA. As required by SEC rules, the Company has provided reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures in the schedules included in this press release. The Company believes that these non-GAAP financial measures improve the transparency of the Company’s disclosures and provide a meaningful presentation of the Company’s results.

Sonic Automotive, Inc. Results of Operations (Unaudited)
Results of Operations
	Three Months Ended December 31,						Better / (Worse)			Twelve Months Ended December 31,						Better / (Worse)
	2020			2019			% Change			2020			2019			% Change
	(In thousands, except per share amounts)
Revenues:
New vehicles	$	1,323,429		$	1,360,064		(2.7	)	%	$	4,281,223		$	4,889,171		(12.4	)	%
Used vehicles	959,875			869,708			10.4		%	3,564,832			3,489,972			2.1		%
Wholesale vehicles	59,156			46,596			27.0		%	197,378			202,946			(2.7	)	%
Total vehicles	2,342,460			2,276,368			2.9		%	8,043,433			8,582,089			(6.3	)	%
Parts, service and collision repair	319,068			346,514			(7.9	)	%	1,233,735			1,395,303			(11.6	)	%
Finance, insurance and other, net	137,026			125,522			9.2		%	489,874			476,951			2.7		%
Total revenues	2,798,554			2,748,404			1.8		%	9,767,042			10,454,343			(6.6	)	%
Cost of Sales:
New vehicles	(1,242,818		)	(1,292,480		)	3.8		%	(4,047,132		)	(4,656,084		)	13.1		%
Used vehicles	(941,413		)	(832,877		)	(13.0	)	%	(3,458,834		)	(3,342,576		)	(3.5	)	%
Wholesale vehicles	(61,988		)	(47,941		)	(29.3	)	%	(198,249		)	(207,378		)	4.4		%
Total vehicles	(2,246,219		)	(2,173,298		)	(3.4	)	%	(7,704,215		)	(8,206,038		)	6.1		%
Parts, service and collision repair	(163,218		)	(181,222		)	9.9		%	(639,182		)	(727,288		)	12.1		%
Total cost of sales	(2,409,437		)	(2,354,520		)	(2.3	)	%	(8,343,397		)	(8,933,326		)	6.6		%
Gross profit	389,117			393,884			(1.2	)	%	1,423,645			1,521,017			(6.4	)	%
Selling, general and administrative expenses	(258,977		)	(260,921		)	0.7		%	(1,028,666		)	(1,099,374		)	6.4		%
Impairment charges	(1,158		)	(17,692		)	93.5		%	(270,017		)	(20,768		)	(1,200.2	)	%
Depreciation and amortization	(23,145		)	(23,048		)	(0.4	)	%	(91,023		)	(93,169		)	2.3		%
Operating income (loss)	105,837			92,223			14.8		%	33,939			307,706			(89.0	)	%
Other income (expense):
Interest expense, floor plan	(5,406		)	(11,137		)	51.5		%	(27,228		)	(48,519		)	43.9		%
Interest expense, other, net	(10,048		)	(13,458		)	25.3		%	(41,572		)	(52,953		)	21.5		%
Other income (expense), net	(5		)	(6,680		)	99.9		%	97			(6,589		)	101.5		%
Total other income (expense)	(15,459		)	(31,275		)	50.6		%	(68,703		)	(108,061		)	36.4		%
Income (loss) from continuing operations before taxes	90,378			60,948			48.3		%	(34,764		)	199,645			(117.4	)	%
Provision for income taxes for continuing operations - benefit (expense)	(32,895		)	(14,676		)	(124.1	)	%	(15,900		)	(55,108		)	71.1		%
Income (loss) from continuing operations	57,483			46,272			24.2		%	(50,664		)	144,537			(135.1	)	%
Discontinued operations:
Income (loss) from discontinued operations before taxes	(194		)	62			(412.9	)	%	(1,002		)	(554		)	(80.9	)	%
Provision for income taxes for discontinued operations - benefit (expense)	50			(27		)	285.2		%	281			154			82.5		%
Income (loss) from discontinued operations	(144		)	35			(511.4	)	%	(721		)	(400		)	(80.3	)	%
Net income (loss)	$	57,339		$	46,307		23.8		%	$	(51,385	)	$	144,137		(135.7	)	%
Basic earnings (loss) per common share:
Earnings (loss) per share from continuing operations	$	1.37		$	1.07		28.0		%	$	(1.19	)	$	3.36		(135.4	)	%
Earnings (loss) per share from discontinued operations	—			—			—		%	(0.02		)	(0.01		)	(100.0	)	%
Earnings (loss) per common share	$	1.37		$	1.07		28.0		%	$	(1.21	)	$	3.35		(136.1	)	%
Weighted-average common shares outstanding	41,874			43,078			2.8		%	42,483			43,016			1.2		%
Diluted earnings (loss) per common share:
Earnings (loss) per share from continuing operations	$	1.31		$	1.04		26.0		%	$	(1.19	)	$	3.31		(136.0	)	%
Earnings (loss) per share from discontinued operations	(0.01		)	—			(100.0	)	%	(0.02		)	(0.01		)	(100.0	)	%
Earnings (loss) per common share	$	1.30		$	1.04		25.0		%	$	(1.21	)	$	3.30		(136.7	)	%
Weighted-average common shares outstanding^(1)	44,022			44,463			1.0		%	42,483			43,710			2.8		%
Dividends declared per common share	$	0.10		$	0.10		—		%	$	0.40		$	0.40		—		%

(1) Basic weighted-average shares used for twelve months ended December 31, 2020 due to net loss on reported GAAP basis.

Franchised Dealerships Segment - Reported
	Three Months Ended December 31,						Better / (Worse)			Twelve Months Ended December 31,						Better / (Worse)
	2020			2019			% Change			2020			2019			% Change
	(In thousands, except unit and per unit data)
Revenues:
New vehicles	$	1,323,429		$	1,360,064		(2.7	)	%	$	4,281,223		$	4,889,171		(12.4	)	%
Used vehicles	627,786			604,422			3.9		%	2,345,936			2,493,467			(5.9	)	%
Wholesale vehicles	49,181			39,250			25.3		%	168,655			180,020			(6.3	)	%
Total vehicles	2,000,396			2,003,736			(0.2	)	%	6,795,814			7,562,658			(10.1	)	%
Parts, service and collision repair	307,861			339,168			(9.2	)	%	1,194,394			1,366,550			(12.6	)	%
Finance, insurance and other, net	103,383			96,947			6.6		%	357,848			363,117			(1.5	)	%
Total revenues	2,411,640			2,439,851			(1.2	)	%	8,348,056			9,292,325			(10.2	)	%
Gross Profit:
New vehicles	80,611			67,583			19.3		%	234,091			233,087			0.4		%
Used vehicles	25,834			35,727			(27.7	)	%	122,948			147,541			(16.7	)	%
Wholesale vehicles	(2,905		)	(1,254		)	(131.7	)	%	(789		)	(4,100		)	80.8		%
Total vehicles	103,540			102,056			1.5		%	356,250			376,528			(5.4	)	%
Parts, service and collision repair	156,070			165,647			(5.8	)	%	595,342			668,958			(11.0	)	%
Finance, insurance and other, net	103,383			96,947			6.6		%	357,848			363,117			(1.5	)	%
Total gross profit	362,993			364,650			(0.5	)	%	1,309,440			1,408,603			(7.0	)	%
Selling, general and administrative expenses	(235,941		)	(237,849		)	0.8		%	(933,738		)	(1,011,763		)	7.7		%
Impairment charges	(1,158		)	(1,075		)	(7.7	)	%	(270,017		)	(1,101		)	NM
Depreciation and amortization	(20,275		)	(20,288		)	0.1		%	(79,929		)	(82,636		)	3.3		%
Operating income (loss)	105,619			105,438			0.2		%	25,756			313,103			(91.8	)	%
Other income (expense):
Interest expense, floor plan	(4,549		)	(10,275		)	55.7		%	(24,066		)	(45,055		)	46.6		%
Interest expense, other, net	(9,853		)	(13,019		)	24.3		%	(40,624		)	(51,231		)	20.7		%
Other income (expense), net	(5		)	(6,680		)	99.9		%	92			(6,651		)	101.4		%
Total other income (expense)	(14,407		)	(29,974		)	51.9		%	(64,598		)	(102,937		)	37.2		%
Income (loss) before taxes	91,212			75,464			20.9		%	(38,842		)	210,166			(118.5	)	%
Add: impairment charges	1,158			1,075			NM			270,017			1,101			NM
Segment income (loss)	$	92,370		$	76,539		20.7		%	$	231,175		$	211,267		9.4		%
Unit Sales Volume:
New vehicles	27,566			30,591			(9.9	)	%	93,281			114,131			(18.3	)	%
Used vehicles	25,490			27,099			(5.9	)	%	101,864			112,629			(9.6	)	%
Wholesale vehicles	6,463			6,148			5.1		%	24,879			28,379			(12.3	)	%
Retail new & used vehicles	53,056			57,690			(8.0	)	%	195,145			226,760			(13.9	)	%
Used:New Ratio	0.92			0.89			4.4		%	1.09			0.99			10.7		%
Gross Profit Per Unit:
New vehicles	$	2,924		$	2,209		32.4		%	$	2,510		$	2,042		22.9		%
Used vehicles	$	1,014		$	1,318		(23.1	)	%	$	1,207		$	1,310		(7.9	)	%
Finance, insurance and other, net	$	1,965		$	1,710		14.9		%	$	1,846		$	1,620		14.0		%
NM = Not Meaningful

Franchised Dealerships Segment - Same Store
	Three Months Ended December 31,						Better / (Worse)		Twelve Months Ended December 31,						Better / (Worse)
	2020			2019			% Change		2020			2019			% Change
	(In thousands, except unit and per unit data)
Revenues:
New vehicles	$	1,322,958		$	1,326,947		(0.3	)%	$	4,258,098		$	4,654,982		(8.5	)%
Used vehicles	627,656			582,582			7.7	%	2,332,150			2,376,141			(1.9	)%
Wholesale vehicles	49,165			38,419			28.0	%	167,794			172,306			(2.6	)%
Total vehicles	1,999,779			1,947,948			2.7	%	6,758,042			7,203,429			(6.2	)%
Parts, service and collision repair	308,098			330,337			(6.7	)%	1,184,428			1,309,201			(9.5	)%
Finance, insurance and other, net	97,570			90,550			7.8	%	335,695			331,860			1.2	%
Total revenues	$	2,405,447		$	2,368,835		1.5	%	$	8,278,165		$	8,844,490		(6.4	)%
Gross Profit:
New vehicles	$	80,776		$	66,011		22.4	%	$	231,871		$	223,661		3.7	%
Used vehicles	24,768			33,646			(26.4	)%	117,903			135,259			(12.8	)%
Wholesale vehicles	(2,868		)	(1,255		)	(128.5	)%	(520		)	(3,382		)	84.6	%
Total vehicles	102,676			98,402			4.3	%	349,254			355,538			(1.8	)%
Parts, service and collision repair	156,321			161,500			(3.2	)%	590,946			640,015			(7.7	)%
Finance, insurance and other, net	97,570			90,550			7.8	%	335,695			331,860			1.2	%
Total gross profit	$	356,567		$	350,452		1.7	%	$	1,275,895		$	1,327,413		(3.9	)%
Unit Sales Volume:
New vehicles	27,552			29,586			(6.9	)%	92,445			106,170			(12.9	)%
Used vehicles	25,479			26,251			(2.9	)%	100,983			105,639			(4.4	)%
Wholesale vehicles	6,460			5,871			10.0	%	24,701			26,114			(5.4	)%
Retail new & used vehicles	53,031			55,837			(5.0	)%	193,428			211,809			(8.7	)%
Used:New Ratio	0.92			0.89			4.2	%	1.09			0.99			9.8	%
Gross Profit Per Unit:
New vehicles	$	2,932		$	2,231		31.4	%	$	2,508		$	2,107		19.0	%
Used vehicles	$	972		$	1,282		(24.2	)%	$	1,168		$	1,280		(8.8	)%
Finance, insurance and other, net	$	1,855		$	1,650		12.4	%	$	1,748		$	1,587		10.1	%

EchoPark Segment - Reported
	Three Months Ended December 31,						Better / (Worse)			Twelve Months Ended December 31,						Better / (Worse)
	2020			2019			% Change			2020			2019			% Change
	(In thousands, except unit and per unit data)
Revenues:
Used vehicles	$	332,089		$	265,286		25.2		%	$	1,218,896		$	996,505		22.3		%
Wholesale vehicles	9,975			7,346			35.8		%	28,723			22,926			25.3		%
Total vehicles	342,064			272,632			25.5		%	1,247,619			1,019,431			22.4		%
Parts, service and collision repair	11,207			7,346			52.6		%	39,341			28,753			36.8		%
Finance, insurance and other, net	33,643			28,575			17.7		%	132,026			113,834			16.0		%
Total revenues	386,914			308,553			25.4		%	1,418,986			1,162,018			22.1		%
Gross Profit:
Used	(7,372		)	1,104			(767.8	)	%	(16,950		)	(145		)	(11,589.7	)	%
Wholesale	73			(92		)	179.3		%	(82		)	(332		)	75.3		%
Total vehicles	(7,299		)	1,012			(821.2	)	%	(17,032		)	(477		)	(3,470.6	)	%
Parts, service and collision repair	(220		)	(354		)	37.9		%	(789		)	(943		)	16.3		%
Finance & insurance	33,643			28,576			17.7		%	132,026			113,834			16.0		%
Total gross profit	26,124			29,234			(10.6	)	%	114,205			112,414			1.6		%
SG&A	(23,036		)	(23,072		)	0.2		%	(94,928		)	(87,611		)	(8.4	)	%
Impairment	—			(16,617		)	100.0		%	—			(19,667		)	100.0		%
Depreciation	(2,870		)	(2,760		)	(4.0	)	%	(11,094		)	(10,533		)	(5.3	)	%
Operating income	218			(13,215		)	101.6		%	8,183			(5,397		)	251.6		%
Other income (expense):
Interest floor plan	(857		)	(862		)	0.6		%	(3,162		)	(3,464		)	8.7		%
Interest other	(195		)	(439		)	55.6		%	(948		)	(1,722		)	44.9		%
Other income (expense)	—			—			—		%	5			62			(91.9	)	%
Total other income (expense)	(1,052		)	(1,301		)	19.1		%	(4,105		)	(5,124		)	19.9		%
Income (loss) before taxes	(834		)	(14,516		)	94.3		%	4,078			(10,521		)	138.8		%
Less: impairment charges	—			(16,617		)	NM			—			(19,667		)	NM
Segment income (loss)	$	(834	)	$	2,101		(139.7	)	%	$	4,078		$	9,146		(55.4	)	%
Unit Sales Volume:
Used vehicles	14,841			12,676			17.1		%	57,161			49,520			15.4		%
Wholesale vehicles	2,004			1,751			14.4		%	7,178			5,774			24.3		%
Gross Profit Per Unit:
Total used vehicle and F&I	$	1,770		$	2,341		(24.4	)	%	$	2,013		$	2,296		(12.3	)	%
NM = Not Meaningful

EchoPark Segment - Same Store
	Three Months Ended December 31,				Better / (Worse)		Twelve Months Ended December 31,				Better / (Worse)
	2020		2019		% Change		2020		2019		% Change
	(In thousands, except unit and per unit data)
Revenues:
Used vehicles	$	236,074	$	262,913	(10.2)	%	$	1,026,377	$	994,131	3.2	%
Wholesale vehicles	7,319		7,346		(0.4)	%	24,737		22,927		7.9	%
Total vehicles	243,393		270,259		(9.9)	%	1,051,114		1,017,058		3.3	%
Parts, service and collision repair	9,243		7,104		30.1	%	34,768		28,510		22.0	%
Finance, insurance and other, net	24,607		28,052		(12.3)	%	112,403		112,891		(0.4)	%
Total revenues	$	277,243	$	305,415	(9.2)	%	$	1,198,285	$	1,158,459	3.4	%
Gross Profit:
Used vehicles	$	(6,785)	$	(609)	(1,014.1)	%	$	(19,983)	$	(5,831)	(242.7)	%
Wholesale vehicles	(2)		(92)		97.8	%	(158)		(332)		52.4	%
Total vehicles	(6,787)		(701)		(868.2)	%	(20,141)		(6,163)		(226.8)	%
Parts, service and collision repair	(138)		(325)		57.5	%	(533)		(894)		40.4	%
Finance, insurance and other, net	24,607		28,052		(12.3)	%	112,403		112,891		(0.4)	%
Total gross profit	$	17,682	$	27,026	(34.6)	%	$	91,729	$	105,834	(13.3)	%
Unit Sales Volume:
Used vehicles	10,794		12,548		(14.0)	%	48,446		49,392		(1.9)	%
Wholesale vehicles	1,673		1,751		(4.5)	%	6,388		5,774		10.6	%
Gross Profit Per Unit:
Total used vehicle and F&I	$	1,651	$	2,187	(24.5)	%	$	1,908	$	2,168	(12.0)	%

Selling, General and Administrative (“SG&A”) Expenses - Non-GAAP Reconciliation
	Three Months Ended December 31,						Better / (Worse)
	2020			2019			Change			% Change
	(In thousands)
Reported:
Compensation	$	176,050		$	184,455		$	8,405		4.6	%
Advertising	10,509			14,522			4,013			27.6	%
Rent	13,560			13,303			(257)			(1.9)	%
Other	58,858			48,641			(10,217)			(21.0)	%
Total SG&A expenses	$	258,977		$	260,921		$	1,944		0.7	%
Items of interest:
Gain on franchise and real estate disposals	$	6,039		$	29,303
Total SG&A adjustments	$	6,039		$	29,303
Adjusted:
Total adjusted SG&A expenses	$	265,016		$	290,224		$	25,208		8.7	%
Reported:
SG&A expenses as a % of gross profit:
Compensation	45.2		%	46.8		%	160		bps
Advertising	2.7		%	3.7		%	100		bps
Rent	3.5		%	3.4		%	(10)		bps
Other	15.2		%	12.3		%	(290)		bps
Total SG&A expenses as a % of gross profit	66.6		%	66.2		%	(40)		bps
Items of interest:
Gain on franchise and real estate disposals	1.5		%	7.5		%
Total effect of adjustments	1.5		%	7.5		%
Adjusted:
Total adjusted SG&A expenses as a % of gross profit	68.1		%	73.7		%	560		bps

SG&A Expenses - Non-GAAP Reconciliation (Continued)
	Twelve Months Ended December 31,						Better / (Worse)
	2020			2019			Change			% Change
	(In thousands)
Reported:
Compensation	$	659,834		$	733,925		$	74,091		10.1	%
Advertising	42,186			60,831			18,645			30.7	%
Rent	54,494			54,611			117			0.2	%
Other	272,152			250,007			(22,145)			(8.9)	%
Total SG&A expenses	$	1,028,666		$	1,099,374		$	70,708		6.4	%
Items of interest:
Executive transition costs	$	—		$	(6,264)
Gain on franchise and real estate disposals	9,188			75,983
Total SG&A adjustments	$	9,188		$	69,719
Adjusted:
Total adjusted SG&A expenses	$	1,037,854		$	1,169,093		$	131,239		11.2	%
Reported:
SG&A expenses as a % of gross profit:
Compensation	46.3		%	48.3		%	200		bps
Advertising	3.0		%	4.0		%	100		bps
Rent	3.8		%	3.6		%	(20)		bps
Other	19.2		%	16.4		%	(280)		bps
Total SG&A expenses as a % of gross profit	72.3		%	72.3		%	—		bps
Items of interest:
Executive transition costs	—		%	(0.4)		%
Gain on franchise and real estate disposals	0.6		%	5.0		%
Total effect of adjustments	0.6		%	4.6		%
Adjusted:
Total adjusted SG&A expenses as a % of gross profit	72.9		%	76.9		%	400		bps

Earnings Per Share from Continuing Operations - Non-GAAP Reconciliation
	Three Months Ended December 31, 2020						Three Months Ended December 31, 2019
	Weighted- Average Shares	Amount			Per Share Amount		Weighted- Average Shares	Amount			Per Share Amount
	(In thousands, except per share amounts)
Diluted earnings (loss) and shares from continuing operations	44,022	$	57,483		$	1.31	44,463	$	46,272		$	1.04
Pre-tax items of interest:
Gain on franchise and real estate disposals		$	(6,039	)				$	(29,303	)
Loss on debt extinguishment		—						7,157
Impairment charges		1,158						17,692
Total pre-tax items of interest		$	(4,881	)				$	(4,454	)
Tax effect of above items		1,281						1,292
Non-recurring tax items		11,941						—
Adjusted diluted earnings (loss) and shares from continuing operations	44,022	$	65,824		$	1.50	44,463	$	43,110		$	0.97

	Twelve Months Ended December 31, 2020							Twelve Months Ended December 31, 2019
	Weighted- Average Shares	Amount			Per Share Amount			Weighted- Average Shares	Amount			Per Share Amount
	(In thousands, except per share amounts)
Diluted earnings (loss) and shares from continuing operations^(1)	42,483	$	(50,664	)	$	(1.19	)	43,710	$	144,537		$	3.31
Pre-tax items of interest:
Gain on franchise and real estate disposals		$	(9,188	)					$	(75,983	)
Executive transition costs		—							6,264
Loss on debt extinguishment		—							7,157
Impairment charges		269,158							19,618
Total pre-tax items of interest		$	259,970						$	(42,944	)
Tax effect of above items		(40,421		)					14,193
Adjusted diluted earnings (loss) and shares from continuing operations	43,903	$	168,885		$	3.85		43,710	$	115,786		$	2.65

(1) Basic weighted-average shares used for twelve months ended December 31, 2020 due to net loss on reported GAAP basis.

Adjusted EBITDA - Non-GAAP Reconciliation
	Twelve Months Ended December 31, 2020												Twelve Months Ended December 31, 2019
	Franchised Dealerships Segment			EchoPark Segment			Discontinued Operations			Total			Franchised Dealerships Segment			EchoPark Segment			Discontinued Operations			Total
	(In thousands)
Net income (loss)										$	(51,385	)										$	144,137
Provision for income taxes										15,619												54,954
Income (loss) before taxes	$	(38,842	)	$	4,078		$	(1,002	)	$	(35,766	)	$	210,167		$	(10,522	)	$	(554	)	$	199,091
Non-floor plan interest (1)	37,746			926			—			38,672			48,774			1,701			—			50,475
Depreciation and amortization (2)	82,807			11,115			—			93,922			85,093			10,553			—			95,646
Stock-based compensation expense	11,704			—			—			11,704			10,797			—			—			10,797
Loss (gain) on exit of leased dealerships	—			—			—			—			(170		)	—			—			(170		)
Asset impairment charges	270,017			—			—			270,017			1,101			19,667			—			20,768
Loss (gain) on debt extinguishment	—			—			—			—			6,690			—			—			6,690
Loss (gain) on franchise and real estate disposals	(3,095		)	(5,152		)	—			(8,247		)	(74,812		)	—			—			(74,812		)
Adjusted EBITDA	$	360,337		$	10,967		$	(1,002	)	$	370,302		$	287,640		$	21,399		$	(554	)	$	308,485
Long-term debt (including current portion)										$	720,067											$	706,886
Cash and equivalents										(170,313		)										(29,103		)
Floor plan deposit balance										(73,180		)										—
Net debt										$	476,574											$	677,783
Net debt to adjusted EBITDA ratio										1.29												2.20

(1)	Includes interest expense, other, net in the accompanying consolidated statements of operations, net of any amortization of debt issuance costs or net debt discount/premium included in (2) below.
(2)	Includes the following line items from the accompanying consolidated statements of cash flows: depreciation and amortization of property and equipment; debt issuance cost amortization; and debt discount amortization, net of premium amortization.