Sonic Automotive – Investor Presentation February 2021 Updated February 17, 2021 Exhibit 99.2


 
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 “may,” “will,” “should,” “could,” “believe,” “expect,” “estimate,” “anticipate,” “intend,” “plan,” “foresee” and other similar words or phrases. 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, the effects of COVID-19 on operations, anticipated future new vehicle unit sales volume, anticipated future used vehicle unit sales volume, anticipated future parts, service and collision repair (“Fixed Operations”) gross profit, anticipated expense reductions, long-term annual revenue targets, anticipated future growth and profitability in our EchoPark Segment, anticipated openings of new EchoPark stores, anticipated future performance and growth of our Franchised Dealerships Segment, anticipated liquidity positions, anticipated industry new vehicle sales volume, the implementation of growth and operating strategies, including acquisitions of dealerships and properties, the return of capital to stockholders, 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, 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 expansion or contraction, 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”). 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, except as required under federal securities laws and the rules and regulations of the SEC.


 
3 Company Overview


 
4 Sonic Automotive: Who We Are QUICK FACTS Our High Growth EchoPark Segment Offers a Unique Approach to Pre-Owned Vehicle and F&I Sales Below-Market Pricing with a No Haggle Purchase Experience Drives Industry-Leading Used Vehicle Volume Throughput (NYSE: SAH) a Fortune 500 Company and One of the Nation’s Largest Automotive Retailers Our Core Franchised Dealerships Segment is a Full-Service Automotive Retailer, Selling New and Used Vehicles, Arranging F&I Product Sales, and Providing Parts, Service and Collision Repair 104 20+ 14 13 $9.8B $1.4B 93K New Vehicles Sold 159K Total Revenues Automotive Brands Locations Used Vehicles Sold States Collision Centers Gross Profit Note: Revenue, Gross Profit, New & Used Vehicles Sold are for FY 2020


 
5 Investment Highlights Multiple Growth And Profit Drivers For Franchised Segment Unique, High Return EchoPark Business Model Broad Revenue Stream Diversification Complementary Relationship – Sonic Franchised And EchoPark Disciplined Capital Allocation To Accelerate EchoPark Growth Focused On Expense Control And Strengthening The Balance Sheet Expect To More Than Double Total Revenue By 2025


 
6 Revenue Composition BY GEOGRAPHY TX 28% CA 26%CO 10% TN 7% FL 7% AL 6% NC 5% GA 3% VA 2% MD 2% SC 2% NV 2% Concentrated in Major Metro Markets Geographic Footprint, Revenue Streams and Brand Mix Offer Attractive Diversification Across the Automotive Retail Space Note: Percentages are Percent of Total Revenue for FY 2020


 
7 Revenue Composition – Diversified Revenue Streams Note: Percentages are Percent of Total for FY 2020 5% 34% 13% 42% 39% 7%43% 17% Revenue Gross Profit New Vehicle Used Vehicle (Including Wholesale) Parts, Service & Collision Repair ("Fixed Operations") Finance & Insurance ("F&I") Brand Distribution Note: Percentages are Percent of Total Revenue for FY 2020 Brand % of Revenue Franchise Brand % of Revenue BMW 22% Mercedes 11% Audi 6% Lexus 4% Land Rover 4% Porsche 3% Cadillac 2% MINI 1% Other Luxury (1) 2% Honda 11% Toyota 7% Hyundai 1% Volkswagen 1% Nissan <1% EchoPark 15% Non-Franchise 15% Ford 5% General Motors (2) 5% Luxury 55% 20%Import Domestic 10% (1) Includes Volvo, Jaguar, Acura and Infiniti (2) Includes Chevrolet, GMC and Buick Business Line Mix


 
8 EchoPark Automotive – A Unique Growth Story Expansion Plan For 140+ Point Distribution Network By 2025 Unique, High Return Business Model 1 to 4-Year-Old Vehicles - Nearly New With Remaining OEM Warranty 30% of Guests Travel More Than 30 Minutes To Shop Our Inventory 10% Below Market Pricing With Simplified, Easy Purchase Experience Focus On Pre-Owned Market – More Stable Than New Vehicle Market The New Car Alternative™ Price. Quality. Experience.


 
9 EchoPark – High Volume Model Drives Superior Returns Gross Profit Per Unit (“GPU”) Franchised Used EchoPark B (W) Front-End Used Vehicle GPU $1,300 $(100) F&I GPU $1,400 $2,250 Parts and Service Reconditioning GPU $500 - Total Used-Related GPU $3,200 $2,150 ($1,050) Volume Differential Factor x1 X5 Pro Forma Comparative Used-Related Gross Profit $3,200 $10,750 $7,550 Ultra-Low Pricing Attractive F&I High Volume Throughput May Yield Slightly Negative Front-End Gross Profit Per Unit Higher Penetration Rates On F&I Products vs. Sonic Franchised Stores 5X Volume Per Store Per Month vs. Sonic Franchised Stores Note: Amounts are estimates of future results used for comparative modeling purposes. Actual store results may differ.


 
10 Franchised Dealerships Complementary Relationship Between Segments • Thrives When New Vehicle Industry Is Healthy, Particularly Where Luxury Brands Are Strong • Diverse Revenue Streams - Some Recession-Resistant • Relatively Low Fixed Costs And Multiple Operational Levers • Further Growth Opportunities:  Parts and Service Business  Used Vehicles  F&I Penetration • Strong Secular Growth Phase Due To:  Focus On Recession-Resistant Pre-Owned Vehicle Market  Below-Market Price Strategy  Simplified, Easy Purchase Experience • If Pre-Owned Vehicle Valuations Decline, EchoPark Should:  Benefit From Rapid Inventory Turns, Creating An Even Greater Pricing Advantage Over Competitors To Drive Additional Volume


 
11 Industry-Leading Used Vehicle Volume Throughput 83 104 101 Peer Average* Sonic Franchised (Q3 2020) Sonic Franchised (Q4 2020) * Peer Average Is Store Count As Of And Unit Sales For The Quarter Ended September 30, 2020 (Q4 2020 Data Not Available As Of Date Of This Report) For ABG, AN, GPI, LAD And PAG ** CarMax Data Is Store Count As Of And Unit Sales For The Quarter Ended November 30, 2020, EchoPark Data Includes Retail Hub Locations Open For At Least Three Full Months Note: Data Source – Company Filings, Company Websites 295 491 402 CarMax** EchoPark** (Q3 2020) EchoPark** (Q4 2020) Utilize Highly Efficient Inventory Sourcing, Pricing And Selling Processes To Maximize Throughput Retail Used Vehicle Unit Sales Per Store Per Month


 
12 Inventory Management Expertise 43 30 30 Peer Average* Sonic Franchised (September 30, 2020) Sonic Franchised (December 31, 2020) * Peer Average Is As Of September 30, 2020 (December 31, 2020 Data Not Available As Of Date Of This Report) For ABG, AN, GPI, LAD And PAG ** CarMax Data Is As Of November 30, 2020 Note: Data Source – Company Filings, Calculated Based On Trailing Quarter Cost Of Sales If Not Explicitly Disclosed 58 34 41 CarMax** EchoPark (September 30, 2020) EchoPark (December 31, 2020) Low Inventory Days’ Supply Reduces Risk Of Fluctuations In Used Vehicle Valuations Data Analytics Tools Enable Accuracy, Consistency And Scalability Of Used Inventory Sourcing And Pricing Used Vehicle Inventory Days’ Supply Opened 4 New Locations In Q4 2020 – Days’ Supply Higher Due To Immature Sales Volume


 
13 Strategic Direction Drive New And Used Vehicle Profit Growth Through Multiple Channels (Traditional Sale Or Lease, Online Selling, Alternative Sources Of Inventory) Continued Growth Opportunity In Parts & Service, F&I Ongoing Profitability Enhancement Through SG&A Expense Control, Inventory Management Early-Stage Strong Secular Growth Phase Profitability Improving As Older Stores Continue To Mature 14 Retail Hub Locations And 2 Delivery & Buy Centers Open At December 31, 2020 Projected To Add 25 New Locations Annually In 2021- 2025 Accelerated Growth Plan For 140+ Point Distribution Network Expected To Deliver 575,000 Unit Sales Annually By 2025 Strict Capital Allocation Strategy Prioritizes Highest Return on Investment Strategically Deploy Capital To Accelerate EchoPark’s Already Strong Growth Continue To Monitor Acquisition Opportunities As Market Evolves Franchised Dealerships EchoPark Capital Allocation


 
14 EchoPark


 
15 EchoPark – Brand Promise Up To 40% Below New Vehicle Price Up To 10% Below Used Vehicle Market Price High Quality, Low Mileage Vehicle With Existing Warranty Transparent Guest-Centric Experience New Car Feel Without The New Car Price Complete Purchase In Under An Hour Zero Reported Accidents On CARFAX Buy & Sell Your Way – On-Site Or Online P r i c e . Q u a l i t y. E x p e r i e n c e . T h e F u l l O m n i - C h a n n e l O p t i o n


 
16 EchoPark – Developing Nationwide Distribution Network Existing Retail Hub Existing Delivery & Buy Center Delivery & Buy Center Coverage Area 140+ Point Distribution Network By 2025 New Retail Hub To Open In 2021-2022


 
17 EchoPark – Modeled 4-Wall Economics At Maturity (Modeled Metrics Assume 100% Maturity) Delivery & Buy Center Medium Retail Hub Large Retail Hub Average Monthly Retail Unit Volume 300 750 1,500 Average Vehicle Selling Price 20,500$ 20,500$ 20,500$ Total Annual Revenues 82,000,000$ 205,000,000$ 410,000,000$ Total Combined Gross Profit Per Unit Retailed ("GPU") 1,700$ 2,150$ 2,150$ Target SG&A Expenses as % of Gross Profit 65% 60% 60% Annual Pre-Tax Profit 2,100,000$ 7,200,000$ 14,400,000$ Average Compensation Per Employee (with Fringe) 68,000$ 78,000$ 78,000$ Total Headcount 7 105 170 Sales Experience Guide ("EG") Headcount N/A 25 50 Average Retail Unit Sales Per EG Per Month N/A 30 30 Target Inventory Days' Supply N/A 30 Days 30 Days Working Capital Investment -$ 15,000,000$ 31,000,000$ Inventory Floor Plan Financing -$ (15,000,000)$ (31,000,000)$ Capital Expenditures, Including Land (Varies By Market) $1-$2 Million $7-$12 Million $20-$25 Million Estimated Months to Breakeven 3-6 Months 6-9 Months 6-9 Months Estimated Years to Maturity 2 Years 4 Years 5 Years Pre-Tax Return On Investment 55%+ 35% - 50% 28% - 33% Note: Estimated average pre-tax losses of $1.5 to $2.0 million per new medium or large retail hub opening (~40% incurred in 3 months prior to opening, ~60% incurred post- opening prior to targeted breakeven). Pre-tax losses for new delivery & buy center locations are expected to be approximately $0.2 million per location prior to targeted breakeven. Note: Amounts are estimates of future results used for comparative modeling purposes. Actual store results may differ.


 
18 EchoPark – Delivery & Buy Center Model Existing Retail Hub Delivery & Buy Center Market Coverage Opportunity Delivery & Buy Center Model • Utilize Existing Retail Hub For Inventory Storage And Reconditioning (Asset Light Expansion) • Advertise Inventory In Surrounding Markets • Drive Incremental eCommerce Sales In New Markets • Inspect & Buy Vehicles From Guests After Online Appraisal • Arrange Next-To-Last-Mile Transit To EchoPark Delivery & Buy Center • Guest Picks Up Vehicle At EchoPark Delivery & Buy Center Near Their Home Strategic Advantages • Quick Entry Into New Markets With Minimal Capital Expenditures Or Overhead Costs • Same Guest-Centric Purchase Experience And Convenience • Blend Of Brick And Mortar And eCommerce Distribution Network Creates Operating Leverage Delivery & Buy Center Locations • Greenville, SC (Opened July 2020) • Knoxville, TN (Opened December 2020) • Expect To Open 20 Additional Locations Annually In 2021-2025


 
19 EchoPark – 5-Year Accelerated Growth Forecast 57,161 575,000 FY 2020 FY 2025E Retail Unit Sales Volume FY 2020 FY 2025E $1.4 $14.0 Total Revenues (In Billions) 58% CAGR $221.0 FY 2020 FY 2025E Pre-Tax Profit (Loss) (In Millions) ($1.1) $11.0 $261.0 FY 2020 FY 2025E EBITDA (In Millions) Rate Of Expansion • Expect to Open 25 Locations Per Year From 2021-2025 • 20 Delivery & Buy Centers • 5 Medium Or Large Retail Hubs • See 4-Wall Model On Prior Slide Total Addressable Market • ~20 Million 0-4 Year Old Vehicle Transactions Annually • Existing Stores Generate >300,000 Unique Leads On An Annualized Basis • Rapid Expansion To Meet Current Demand And Considerable Upside Opportunity Note: Amounts are estimates of future results used for modeling purposes. Actual results may differ materially.


 
20 EchoPark – Growth Path 212 660 881 920 764 941 1,136 1,585 1,685 1,673 2,049 2,400 4,496 5,518 7,459 7,698 8,762 11,051 12,587 13,206 12,676 13,986 13,207 15,127 14,841 - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 $- $50 $100 $150 $200 $250 $300 $350 $400 $450 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 (In M ill io ns ) Quarterly Retail Units Quarterly Revenue Retail Unit Volume Forecast: Q1 2021E – 18,000-19,000 Units FY 2021E – 100,000-105,000 Units Despite Impact Of COVID-19, We Expect Return To High Rate Of Revenue And Unit Sales Volume Growth From Maturity Of Existing Markets And New Market Openings


 
21 EchoPark – Adjusted EBITDA Trend ($2,802) ($1,115) ($3,353) ($2,168) ($3,029) ($2,059) $4,957 $4,792 $6,352 $5,299 $5,169 $5,569 $3,149 ($2,921) $6,093 $6,214 $6,831 $4,804 $(290) $(4,000) $(2,000) $- $2,000 $4,000 $6,000 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Adjusted EBITDA Less Impact of New Stores Q4 2020 Includes Impact Of 4 New Store Openings, Continued GPU Pressure Driving Lower Adjusted EBITDA (In T ho us an ds ) Newly Opened Store Losses and Future Store Pre-Opening Costs Reduced FY 2020 Adjusted EBITDA By $6.6 Million Refer To Appendix For Calculation And Reconciliation of Adjusted EBITDA (A Non-GAAP Measure)


 
22 EchoPark – Market Maturity Comparison - 150 300 450 600 750 900 1,050 1,200 1,350 1,500 1,650 1,800 Denver/Colorado Springs Dallas San Antonio Charlotte Houston Long Beach Tampa Nashville Atlanta Average Monthly Retail Unit Volume Q4 2020 Q4 2019 Note – Delivery & Buy Center Sales are Included in the Retail Hub Market Where Inventory Resides (e.g., Greenville, SC is in the Charlotte Market) Newer Markets Continue to Grow In Line With Forecast Model >5 Years In Market >5 Years In Market 3 Years In Market 2 Years In Market 2 Years In Market 1 Year In Market Market Opened April 2020 Market Opened October 2020 Market Opened December 2020 Grew Market Share In All Markets – Denver, Dallas And Long Beach Experienced Lower Overall Market Transaction Volume Due To COVID-19


 
23 Franchised Dealerships


 
24 New & Used Vehicle Sales Parts & Service (P&S) Finance & Insurance (F&I) Franchised Dealerships Franchised Dealerships84 Brands, Luxury Weighted20+ New & hicle Sales Parts & r i (P&S) Finance & Insurance (F&I) Collision Repair Centers14 20 Major Metropolitan Markets Focused On Inventory Mix and Attractive Pricing to Drive Growth and Profitability


 
25 Franchised Dealerships – Geographic Footprint Platforms in Major Metro Markets Headquartered in Charlotte, NC 84 Stores, 20+ Brands, 14 Collision Repair Centers


 
26 Franchised Dealerships – Strategic Levers Multiple Growth Drivers Divest Underperforming or Capital-Intensive Stores Grow Parts and Service Maximize F&I Penetration Used Vehicle Volume Throughput Inventory Sourcing Apply EchoPark Learnings Omni-Channel Platform SG&A Expense Discipline Acquire Potential High Return Stores


 
27 Omni-Channel Strategy


 
28 Full Omni-Channel Infrastructure Guest Experience Managers Centralized Appraisals, Inventory Sourcing, Pricing Centralized Call Support Centralized F&I Digital Interface People Proprietary Technology Centralized Marketing Develop & Launch eCommerce Platform B u y & S e l l Yo u r Wa y Proprietary Ability to Buy a Car A to Z Online or Any Step In Between Utilize SIMS, Python Analytics, Robotic Process Automation, Hyper-Intelligence Technology ON-SITE ONLINE S ea m le ss to th e G ue st


 
29 Buy & Sell Your Way • Complete A Traditional Vehicle Purchase Experience With A Modern, Technology- Enabled Approach • Can Be Completed In Under An Hour • Research Online, Utilize Chat, Text, Phone, Zoom To Reduce In-Person Process • Review And Select Insurance Products And Financing Options • Includes Online Trade-In Appraisal And Firm Purchase Offer • Complete A Full eCommerce Transaction In Minutes • Test Drive And Finalize Purchase At Franchised Dealership, EchoPark Retail Hub Or EchoPark Delivery & Buy Center Buy & Sell Your Way Start Online, Finish On-Site Or Buy Completely Online Buy On-Site • Our Blend Of Brick And Mortar And eCommerce Strategies Allows Guests To Choose Their Preferred Buying Approach • A Flexible, Guest- Centric Experience With Options • Will Be Seamless To The Guest, Regardless of Which Path They Choose Represents ~10% Of Q4 2020 Vehicle Sales Transactions


 
30 Q4 & FY 2020 Financial Snapshot


 
31 Q4 2020 – Consolidated Continuing Operations B/(W) than Q4 2019 (In millions, except per share data) Q4 2020 $ % Revenues $2,798.6 $50.1 1.8% Gross profit $389.1 ($4.8) (1.2%) SG&A expenses $259.0 $1.9 0.7% SG&A expenses as % of gross profit 66.6% (40) bps Earnings from continuing operations before taxes $90.4 $29.4 48.3% Continuing Ops: Net income $57.5 $11.2 24.2% Diluted earnings per share $1.31 $0.27 26.0% Refer to Appendix for Calculation of Adjusted Results and Reconciliation of Non-GAAP Measures Excluding The Effect Of Franchise Disposals, Revenues Increased 3.8% & Gross Profit Increased 0.7% Sustained Expense Reductions Drove Profit And EPS Growth In Q4 2020 Q4 2020 Adjusted SG&A Expenses As % Of Gross Profit Decreased 560 Basis Points, To 68.1% Q4 2020 Adjusted EPS Of $1.50, Up 54.6% Compared To Q4 2019


 
32 FY 2020 – Consolidated Continuing Operations B/(W) than FY 2019 (In millions, except per share data) FY 2020 $ % Revenues $9,767.0 ($687.3) (6.6%) Gross profit $1,423.6 ($97.4) (6.4%) SG&A expenses $1,028.7 $70.7 6.4% SG&A expenses as % of gross profit 72.3% 0 bps Earnings (loss) from continuing operations before taxes ($34.8) ($234.4) (117.4%) Continuing Ops: Net income (loss) ($50.7) ($195.2) (135.1%) Diluted earnings (loss) per share ($1.19) ($4.50) (136.0%) Refer to Appendix for Calculation of Adjusted Results and Reconciliation of Non-GAAP Measures Excluding The Effect Of Franchise Disposals, Revenues Decreased 3.2% & Gross Profit Decreased 3.3% FY 2020 Adjusted SG&A Expenses As % Of Gross Profit Decreased 400 Basis Points, To 72.9% FY 2020 Adjusted EPS Of $3.85, Up 45.3% Compared To FY 2019


 
33 Strong Balance Sheet And Liquidity December 31, 2020 December 31, 2019 (In Millions) Cash and cash equivalents 170.3$ 29.1$ Availability under the 2016 Revolving Credit Facility 214.7 230.7 Availability under our used vehicle floor plan facilities(1) - 17.1 Availability under the 2019 Mortgage Facility 11.2 3.1 Availability under the 2020 Line Of Credit Facility 57.0 - Floor plan deposit balance 73.2 - Total available liquidity resources 526.4$ 280.0$ Covenant Requirement* December 31, 2020 December 31, 2019 Liquidity ratio >= 1.05 1.18 1.11 Fixed charge coverage ratio >= 1.20 2.07 1.60 Total lease adjusted leverage ratio <= 5.75 2.78 3.21 Net debt to Adjusted EBITDA ratio(2) 1.29 2.20 * As Defined In The 2016 Revolving Credit Facility and 2019 Mortgage Facility (1) During Q2 2020 Sonic Converted Its Used Vehicle Floor Plan Facilities From A Borrowing Base To A VIN-Specific Floor Plan Line. The December 31, 2020 Availability Under This Line Was $34.6 Million. (2) Refer to Appendix for Calculation of Adjusted Results and Reconciliation of Non-GAAP Measures Strategic Management Actions Have Significantly Increased Available Liquidity During The COVID-19 Pandemic


 
34 Capital Expenditure Discipline Strict Capital Allocation Strategy Prioritizes Highest Return On Investment Actual FY 2020 Capital Expenditures Of $74.0 Million, Net Of Mortgage Proceeds FY 2021E Includes Plans For 25 Additional EchoPark Locations $181.2 $87.8 $89.3 $92.4 $100.0 $53.0 $75.8 $36.3 $34.8 $75.0 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021E Gross Capital Expenditures (In Millions) Franchise EchoPark


 
35 Appendix


 
36 Non-GAAP Reconciliation – Adjusted SG&A Expenses Better / (Worse) Q4 2020 Q4 2019 Change % Change Reported : (In millions) Compensation $ 176.1 $ 184.5 $ 8.4 4.6 % Advertising 10.5 14.5 4.0 27.6 % Rent 13.6 13.3 (0.3) (2.3)% Other 58.8 48.6 (10.2) (21.0)% Total SG&A expenses $ 259.0 $ 260.9 $ 1.9 0.7 % Items of interest: Gain on franchise and real estate disposals 6.0 29.3 Total SG&A Adjustments $ 6.0 $ 29.3 Adjusted : Total adjusted SG&A expenses $ 265.0 $ 290.2 $ 25.2 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 SG&A expenses as a % of gross profit 68.1% 73.7% 560 bps


 
37 Non-GAAP Reconciliation – Adjusted SG&A Expenses Better / (Worse) FY 2020 FY 2019 Change % Change Reported : (In millions) Compensation $ 659.8 $ 733.9 $ 74.1 10.1 % Advertising 42.2 60.8 18.6 30.6 % Rent 54.5 54.6 0.1 0.2 % Other 272.8 250.1 (22.7) (9.1)% Total SG&A expenses $ 1,029.3 $ 1,099.4 $ 70.1 6.4 % Items of interest: Gain on franchise and real estate disposals 9.2 76.0 Executive transition costs - (6.3) Total SG&A Adjustments $ 9.2 $ 69.7 Adjusted : Total adjusted SG&A expenses $ 1,038.5 $ 1,169.1 $ 130.6 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: Gain on franchise and real estate disposals 0.6 % 4.6 % Total effect of adjustments 0.6 % 4.6 % Adjusted Total SG&A expenses as a % of gross profit 72.9% 76.9% 400 bps


 
38 Non-GAAP Reconciliation – Earnings Per Share Q4 2020 Q4 2019 (In thousands, except per share amounts) Weighted- Average Shares Amount Per Share Amount Weighted- Average Shares Amount Per Share Amount Diluted earnings (loss) and shares from continuing operations 44,022 57,483$ 1.31$ 44,463 46,270$ 1.04$ 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 1,291 Non-recurring tax items 11,941 - Adjusted diluted earnings (loss) and shares from continuing operations 44,022 65,824$ 1.50$ 44,463 43,107$ 0.97$


 
39 Non-GAAP Reconciliation – Earnings Per Share FY 2020 FY 2019 (In thousands, except per share amounts) Weighted- Average Shares Amount Per Share Amount Weighted- Average Shares Amount Per Share Amount Diluted earnings (loss) and shares from continuing operations(1) 42,483 (50,664)$ (1.19)$ 43,710 144,537$ 3.31$ 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) 14,194 Adjusted diluted earnings (loss) and shares from continuing operations 43,903 168,885$ 3.85$ 43,710 115,787$ 2.65$ (1) Basic Weighted-Average Shares Used For Twelve Months Ended December 31, 2020 Due To Net Loss On GAAP Basis


 
40 Non-GAAP Reconciliation – Segment Income Franchised Dealerships Segment EchoPark Segment Consolidated (In millions, except unit data) Q4 2020 Q4 2019 Q4 2020 Q4 2019 Q4 2020 Q4 2019 Revenues 2,411.6$ 2,439.9$ 386.9$ 308.6$ 2,798.6$ 2,748.4$ Gross profit 363.0$ 364.6$ 26.1$ 29.2$ 389.1$ 393.9$ SG&A expenses 235.9$ 237.8$ 23.0$ 23.1$ 259.0$ 260.9$ Adjusted segment income 91.6$ 54.5$ (6.0)$ 2.1$ 85.6$ 56.6$ Gain on franchise and real estate disposals 0.8 29.3 5.2 - 6.0 29.3 Loss on extinguishment of debt - (7.2) - - - (7.2) Segment income 92.4$ 76.6$ (0.8)$ 2.1$ 91.6$ 78.7$ Impairment charges (1.2) (1.1) - (16.6) (1.2) (17.7) Earnings (loss) from continuing operations before taxes 91.2$ 75.5$ (0.8)$ (14.5)$ 90.4$ 61.0$ Adjusted earnings (loss) from continuing operations before taxes 91.6$ 54.5$ (6.0)$ 2.1$ 85.6$ 56.6$ Gain on franchise and real estate disposals 0.8 29.3 5.2 - 6.0 29.3 Loss on extinguishment of debt - (7.2) - - - (7.2) Impairment charges (1.2) (1.1) - (16.6) (1.2) (17.7) Earnings (loss) from continuing operations before taxes 91.2$ 75.5$ (0.8)$ (14.5)$ 90.4$ 61.0$ Adjusted net income (loss) from continuing operations 65.8$ 43.1$ Gain on franchise and real estate disposals (before taxes) 6.0 29.3 Loss on extinguishment of debt (before taxes) - (7.2) Impairment charges (before taxes) (1.2) (17.7) Tax effect of items of interest and non-recurring tax items (13.1) (1.2) Net income (loss) from continuing operations 57.5$ 46.3$ New vehicle unit sales volume 27,566 30,591 - - 27,566 30,591 Retail used vehicle unit sales volume 25,490 27,099 14,841 12,676 40,331 39,775 Note: Segment Income (Loss) Defined As Earnings (Loss) From Continuing Operations Before Taxes And Impairment Charges


 
41 Non-GAAP Reconciliation – Segment Income Franchised Dealerships Segment EchoPark Segment Consolidated (In millions, except unit data) FY 2020 FY 2019 FY 2020 FY 2019 FY 2020 FY 2019 Revenues 8,348.1$ 9,292.3$ 1,419.0$ 1,162.0$ 9,767.0$ 10,454.3$ Gross profit 1,309.4$ 1,408.6$ 114.2$ 112.4$ 1,423.6$ 1,521.0$ SG&A expenses 933.7$ 1,011.8$ 94.9$ 87.6$ 1,028.7$ 1,099.4$ Adjusted segment income 227.2$ 148.8$ (1.1)$ 9.2$ 226.1$ 158.0$ Gain on franchise and real estate disposals 4.0 76.0 5.2 - 9.2 76.0 Executive transition costs - (6.3) - - - (6.3) Loss on extinguishment of debt - (7.2) - - - (7.2) Segment income 231.2$ 211.3$ 4.1$ 9.2$ 235.3$ 220.5$ Impairment charges (270.0) (1.1) - (19.7) (270.0) (20.8) Earnings (loss) from continuing operations before taxes (38.8)$ 210.2$ 4.1$ (10.5)$ (34.7)$ 199.7$ Adjusted earnings (loss) from continuing operations before taxes 226.4$ 148.8$ (1.1)$ 8.0$ 225.3$ 156.8$ Gain on franchise and real estate disposals 4.0 76.0 5.2 - 9.2 76.0 Executive transition costs - (6.3) - - - (6.3) Loss on extinguishment of debt - (7.2) - - - (7.2) Impairment charges (269.2) (1.1) - (18.5) (269.2) (19.6) Earnings (loss) from continuing operations before taxes (38.8)$ 210.2$ 4.1$ (10.5)$ (34.7)$ 199.7$ Adjusted net income (loss) from continuing operations 168.8$ 115.8$ Gain on franchise and real estate disposals (before taxes) 9.2 76.0 Executive transition costs (before taxes) - (6.3) Loss on extinguishment of debt (before taxes) - (7.2) Impairment charges (before taxes) (269.2) (19.6) Tax effect of items of interest and non-recurring tax items 40.5 (14.2) Net income (loss) from continuing operations (50.7)$ 144.5$ New vehicle unit sales volume 93,281 114,131 - - 93,281 114,131 Retail used vehicle unit sales volume 101,864 112,629 57,161 49,520 159,025 162,149 Note: Segment Income (Loss) Defined As Earnings (Loss) From Continuing Operations Before Taxes And Impairment Charges


 
42 Non-GAAP Reconciliation – Adjusted EBITDA (In thousands) FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Net Income (Loss) 93,193$ 92,983$ 51,650$ 144,137$ (51,385)$ Provision For Income Taxes 59,899 13,198 22,645 54,954 15,619 Income (Loss) Before Taxes 153,092$ 106,181$ 74,295$ 199,091$ (35,766)$ Non-Floor Plan Interest 48,034 50,531 52,049 50,475 38,672 Depreciation and Amortization 81,034 92,127 96,652 95,646 93,922 Stock-Based Compensation Expense 11,165 11,119 11,853 10,797 11,704 Loss (Gain) On Exit Of Leased Dealerships 1,386 2,157 1,709 (170) - Impairment Charges 8,063 9,394 29,514 20,768 270,017 Loss (Gain) On Debt Extinguishment (6) 14,607 - 6,690 - Long-Term Compensation Charges - - 32,522 - - Loss (Gain) on Franchise and Real Estate Disposals 48 (9,980) (39,307) (74,812) (8,247) Adjusted EBITDA 302,816$ 276,136$ 259,287$ 308,485$ 370,302$ Long-Term Debt (Including Current Portion) 882,678$ 1,024,703$ 945,083$ 706,886$ 720,067$ Cash and Equivalents (3,108) (6,352) (5,854) (29,103) (170,313) Floor Plan Deposit Balance (10,000) (3,000) - - (73,180) Net Debt 869,570$ 1,015,351$ 939,229$ 677,783$ 476,574$ Net Debt To Adjusted EBITDA Ratio 2.87 3.68 3.62 2.20 1.29 Note – Balance Sheet Amounts Are As Of December 31 for the FY Then Ended.


 
43 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) (In thousands) Net Income (Loss) $ 57,339 $ 46,307 Provision For Income Taxes 32,845 14,703 Income (Loss) Before Taxes $ 91,211 $ (833) $ (194) $ 90,184 $ 75,466 $ (14,518) $ 62 $ 61,010 Non-Floor Plan Interest 8,963 201 - 9,164 12,335 435 - 12,770 Depreciation And Amortization 21,167 2,863 - 24,030 20,972 2,765 - 23,737 Stock-Based Compensation Expense 3,152 - - 3,152 2,690 - - 2,690 Impairment Charges 1,158 - - 1,158 1,075 16,617 - 17,692 Loss On Debt Extinguishment - - - - 6,690 - - 6,690 Gain On Franchise And Real Estate Disposals (821) (5,152) - (5,973) (29,242) - - (29,242) Adjusted EBITDA $ 124,830 $ (2,921) $ (194) $ 121,715 $ 89,986 $ 5,299 $ 62 $ 95,347 Q4 2020 Q4 2019


 
44 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) (In thousands) Net Income (Loss) $ 59,818 $ 29,010 Provision For Income Taxes 20,620 11,307 Income (Loss) Before Taxes $ 80,434 $ 239 $ (235) $ 80,438 $ 38,417 $ 2,123 $ (223) $ 40,317 Non-Floor Plan Interest 9,781 147 - 9,928 12,011 402 - 12,413 Depreciation And Amortization 21,004 2,763 - 23,767 21,561 2,703 - 24,264 Stock-Based Compensation Expense 3,153 - - 3,153 2,681 - - 2,681 Impairment Charges 26 - - 26 - 1,124 - 1,124 Gain On Franchise Disposals (3,388) - - (3,388) 823 - - 823 Adjusted EBITDA $ 111,010 $ 3,149 $ (235) $ 113,924 $ 75,493 $ 6,352 $ (223) $ 81,622 Q3 2020 Q3 2019 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) (In thousands) Net Income (Loss) $ 30,791 $ 26,599 Provision For Income Taxes 6,353 10,009 Income (Loss) Before Taxes $ 34,856 $ 2,577 $ (289) $ 37,144 $ 35,129 $ 1,693 $ (213) $ 36,608 Non-Floor Plan Interest 8,938 234 - 9,172 12,599 431 - 13,030 Depreciation And Amortization 20,514 2,758 - 23,272 21,736 2,668 - 24,404 Stock-Based Compensation Expense 2,971 - - 2,971 2,612 - - 2,612 Impairment Charges 833 - - 833 - - - - Gain On Franchise Disposals 1,117 - - 1,117 356 - - 356 Adjusted EBITDA $ 69,229 $ 5,569 $ (289) $ 74,509 $ 72,432 $ 4,792 $ (213) $ 77,010 Q2 2020 Q2 2019


 
45 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) (In thousands) Net Income (Loss) $ (199,333) $ 42,221 Provision For Income Taxes (44,200) 18,935 Income (Loss) Before Taxes $ (245,344) $ 2,096 $ (285) $ (243,533) $ 61,156 $ 180 $ (180) $ 61,156 Non-Floor Plan Interest 10,043 365 - 10,408 11,829 433 - 12,262 Depreciation And Amortization 20,144 2,708 - 22,852 20,824 2,418 - 23,242 Stock-Based Compensation Expense 2,427 - - 2,427 2,814 - - 2,814 Loss (Gain) On Exit Of Leased Dealerships - - - - (170) - - (170) Impairment Charges 268,000 - - 268,000 26 1,926 - 1,952 Gain On Franchise Disposals - - - - (46,750) - - (46,750) Adjusted EBITDA $ 55,270 $ 5,169 $ (285) $ 60,154 $ 49,729 $ 4,957 $ (180) $ 54,506 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) (In thousands) Net Income (Loss) $ 46,307 $ 21,821 Provision For Income Taxes 14,703 9,150 Income (Loss) Before Taxes $ 75,466 $ (14,518) $ 62 $ 61,010 $ 37,388 $ (6,196) $ (221) $ 30,971 Non-Floor Plan Interest 12,335 435 - 12,770 12,902 423 89 13,414 Depreciation And Amortization 20,972 2,765 - 23,737 21,086 2,211 - 23,297 Stock-Based Compensation Expense 2,690 - - 2,690 1,264 - - 1,264 Loss (Gain) On Exit Of Leased Dealerships - - - - (1,080) 3 89 (988) Impairment Charges 1,075 16,617 - 17,692 14,053 1,500 - 15,553 Loss On Debt Extinguishment 6,690 - - 6,690 - - - - Gain On Franchise Disposals (29,242) - - (29,242) (158) - - (158) Adjusted EBITDA $ 89,986 $ 5,299 $ 62 $ 95,347 $ 85,455 $ (2,059) $ (43) $ 83,353 Q4 2019 Q4 2018 Q1 2020 Q1 2019


 
46 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) (In thousands) Net Income (Loss) $ 29,010 $ 15,118 Provision For Income Taxes 11,307 7,262 Income (Loss) Before Taxes $ 38,417 $ 2,123 $ (223) $ 40,317 $ 28,087 $ (5,455) $ (252) $ 22,380 Non-Floor Plan Interest 12,011 402 - 12,413 12,279 423 98 12,800 Depreciation And Amortization 21,561 2,703 - 24,264 22,140 1,999 - 24,139 Stock-Based Compensation Expense 2,681 - - 2,681 4,578 - - 4,578 Loss (Gain) On Exit Of Leased Dealerships - - - - 24 4 103 131 Impairment Charges - 1,124 - 1,124 - - - - Gain On Franchise Disposals 823 - - 823 88 - - 88 Adjusted EBITDA $ 75,493 $ 6,352 $ (223) $ 81,622 $ 67,196 $ (3,029) $ (51) $ 64,116 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) (In thousands) Net Income (Loss) $ 26,599 $ 16,905 Provision For Income Taxes 10,009 8,142 Income (Loss) Before Taxes $ 35,129 $ 1,693 $ (213) $ 36,608 $ 53,176 $ (27,832) $ (297) $ 25,047 Non-Floor Plan Interest 12,599 431 - 13,030 12,349 406 106 12,861 Depreciation And Amortization 21,736 2,668 - 24,404 22,801 1,919 - 24,720 Stock-Based Compensation Expense 2,612 - - 2,612 3,049 - - 3,049 Loss (Gain) On Exit Of Leased Dealerships - - - - (2,618) 6 106 (2,506) Impairment Charges - - - - 10,317 - - 10,317 Long-Term Compensation Charges - - - - - 23,333 - 23,333 Gain On Franchise Disposals 356 - - 356 (38,047) - - (38,047) Adjusted EBITDA $ 72,432 $ 4,792 $ (213) $ 77,010 $ 61,027 $ (2,168) $ (85) $ 58,774 Q3 2019 Q3 2018 Q2 2019 Q2 2018


 
47 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) (In thousands) Net Income (Loss) $ 42,221 $ (2,194) Provision For Income Taxes 18,935 (1,910) Income (Loss) Before Taxes $ 61,156 $ 180 $ (180) $ 61,156 $ 10,830 $ (14,686) $ (248) $ (4,104) Non-Floor Plan Interest 11,829 433 - 12,262 12,469 389 115 12,973 Depreciation And Amortization 20,824 2,418 - 23,242 22,830 1,666 - 24,496 Stock-Based Compensation Expense 2,814 - - 2,814 2,962 - - 2,962 Loss (Gain) On Exit Of Leased Dealerships (170) - - (170) 4,955 7 109 5,071 Impairment Charges 26 1,926 - 1,952 3,561 82 - 3,643 Long-Term Compensation Charges - - - - - 9,189 - 9,189 Gain On Franchise Disposals (46,750) - - (46,750) (1,190) - - (1,190) Adjusted EBITDA $ 49,729 $ 4,957 $ (180) $ 54,506 $ 56,417 $ (3,353) $ (24) $ 53,040 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) (In thousands) Net Income (Loss) $ 21,821 $ 61,952 Provision For Income Taxes 9,150 (8,399) Income (Loss) Before Taxes $ 37,388 $ (6,196) $ (221) $ 30,971 $ 57,822 $ (3,976) $ (293) $ 53,553 Non-Floor Plan Interest 12,902 423 89 13,414 12,449 276 123 12,848 Depreciation And Amortization 21,086 2,211 - 23,297 22,639 1,314 - 23,953 Stock-Based Compensation Expense 1,264 - - 1,264 2,217 - - 2,217 Loss (Gain) On Exit Of Leased Dealerships (1,080) 3 89 (988) 23 - 118 141 Impairment Charges 14,053 1,500 - 15,553 6,079 - - 6,079 Long-Term Compensation Charges - - - - - 1,271 - 1,271 Gain On Franchise Disposals (158) - - (158) (1,507) - (6) (1,513) Adjusted EBITDA $ 85,455 $ (2,059) $ (43) $ 83,353 $ 99,722 $ (1,115) $ (58) $ 98,549 Q1 2019 Q1 2018 Q4 2018 Q4 2017


 
48 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) (In thousands) Net Income (Loss) $ 15,118 $ 19,440 Provision For Income Taxes 7,262 13,935 Income (Loss) Before Taxes $ 28,087 $ (5,455) $ (252) $ 22,380 $ 38,228 $ (4,372) $ (481) $ 33,375 Non-Floor Plan Interest 12,279 423 98 12,800 12,126 253 132 12,511 Depreciation And Amortization 22,140 1,999 - 24,139 22,179 1,317 - 23,496 Stock-Based Compensation Expense 4,578 - - 4,578 3,179 - - 3,179 Loss (Gain) On Exit Of Leased Dealerships 24 4 103 131 (173) - 362 189 Impairment Charges - - - - 200 - - 200 Gain On Franchise Disposals 88 - - 88 (8,490) - - (8,490) Adjusted EBITDA $ 67,196 $ (3,029) $ (51) $ 64,116 $ 67,249 $ (2,802) $ 13 $ 64,460 Q3 2018 Q3 2017


 


 
Investor Relations Contacts: Sonic Automotive Inc. (NYSE: SAH) Danny Wieland, Vice President, Investor Relations & Financial Reporting ir@sonicautomotive.com (704) 927-3462 KCSA Strategic Communications David Hanover / Scott Eckstein sonic@kcsa.com (212) 896-1220