Sonic Automotive, Inc. · NYSE:SAH
Sonic Automotive — Q1 2018 Earnings Presentation
36 slides from Sonic Automotive's earnings presentation, Apr 26, 2018
Slide 1: Q1 2018 Investor Presentation
1 Q1 2018 Investor Presentation Exhibit 99.2Exhibit 99.2
Slide 2: Strategic Focus: Own Our Properties
2 STRATEGIC FOCUS Own Our Properties Increased Equity in Properties to $281M in 2017 % of Properties Owned 2007 2008 2011 2012 2013 2014 2015 2016 Est 2018 —% 12% 18% 23% 31% 36% 39% 41% 44%
Slide 3: Overview - Geographic: Concentration in Major Metro Markets
3 CA 31% TX 26% TN 7% FL 6% AL 5% CO 5% GA 4% NC 3% OH 3% VA 3% MD 3% EP - CO 2% Other 1% OVERVIEW - GEOGRAPHIC Concentration in Major Metro Markets
Slide 4: Company Overview
COMPANY OVERVIEW Sonic) EchoPark’
Slide 5: Overview — Franchised Geographic
OVERVIEW — FRANCHISED GEOGRAPHIC Headquartered in Charlotte, NC 101 Stores, 23 Brands, 18 Collision Repair Centers Platforms in Major Metro Markets Sonic) EchoPark
Slide 6: Overview — EchoPark Geographic - CO
ulder = 2 OVERVIEW — ECHOPARK GEOGRAPHIC - CO Have purchased property in the following markets (some are under Westthinstet construction): ig > Dallas/Ft. Worth Arvada, 5. V San Antonio all = @. = Denver Tip eave Watkin Lakewood 3 eq S Se ae Littleton ‘EchoPark Automptive EchoPark Automotive
Slide 7: Overview — EchoPark Geographic - TX
OVERVIEW — ECHOPARK GEOGRAPHIC - TX West San Antonio Location Opened in Q4 2017 New Braunfels Location Opened in Q1 2018 ® Grey Forest Helotes Bulv verde Timberwood Park _ Hollywood. Park @ * New Braunfels
Slide 8: Overview - Geographic
OVERVIEW - GEOGRAPHIC M Markets 2017. EchoPark
Slide 9: Overview — Brand Composition
OVERVIEW — BRAND COMPOSITION New Retail Revenue & . Other Lux Overall Revenue Mix M% Revenue streams) VW Land Rover: and brand mix offer 2% 3% active diversification across the automotive retail
Slide 10: Q1 2018 Financial Review: Franchised Segment
Q1 2018 FINANCIAL REVIEW FRANCHISED SEGMENT Sonic) EchoPark’
Slide 11: Franchised Segment Q1 2018 Results
FRANCHISED SEGMENT Q1 2018 RESULTS (amounts in millions, except per share data) Q1 2018 (1) Revenue $2,269 Gross Profit $340 SG&A $276 SG&A as % of Gross 81.0% Depreciation $22 Operating Profit $43 Interest & Other ($23) Pre-tax $19 Diluted EPS $0.36 B/(W) than Q1 2017 (1) $ % $23 1.0% ($5) (1.5%) $
Slide 12: New Vehicle SAAR
NEW VEHICLE SAAR YTD 2018 - 17.1M Full Year 2017 - 17.2M Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec —2017 ——2018 Sonic) EchoPark
Slide 13: New Vehicle - Same Store Franchised
NEW VEHICLE SAME STORE - FRANCHISED Qi 2018 Q1 2017 B/(W) New Volume 29,416 29,865 (1.5%) Selling Price $ 39,996 $ 38,569 3.7% Gross Margin % 4.8% 5.0% (20) bps GPU $ 1,929 $ 1,933 $ (3) Gross Profit $ 56.8 $ 57.7 (1.7%) SAAR (millions) 17.1 zee (0.6%) Total New Units Jan Feb Mar. Total 2018 8,949 9
Slide 14: New Vehicle - Gross, Unit & GPU Trend
NEW VEHICLE - GROSS, UNIT & GPU TREND Continuing Operations - Franchised Gross §$ (in millions) = Units $2,070 $2,078 $2,132 wee ores $1,950 one 000, 51,925 Stee, $1,857 e708 Lee eey ae” "Fe081911—g1.886 — gi.ag0°” hy bo Se 00, S108 Pee gi7g0° Coccccccscoe nus $78 oe $74 Me g74 63 $65 $65 $66 $66 :
Slide 15: Used Vehicle Retail
USED VEHICLE RETAIL tore Franchised — Same St Q1 2018 Q1 2017 BU(W) Retail Volume 28,014 27,849 0.6% GPU $ 1,213 $ 1,313 $ (100) Used to New 96% 95% 100 bps Vehicles/Store/Month (100 stores) 93 93 - Front End Gross and F&l (in millions) Jan Feb Mar Total 2018 $ 21.0 $ 208 $ 26.9 $ 68.6 2017 21.6 21.
Slide 16: F&I - Gross & PUR Trend
F&l—- GROSS & PUR TREND Franchised — Same Store Gross $ (in millions) ~§ GPUS $82 $79 Qi 2018 Qt 2017 EchoPark
Slide 17: Fixed Ops
FIXED OPS Franchised — Same Store Q1 2018 Qi 2017 B/W) Revenue $ 346 $ 343 0.8% Gross Profit $ 167 $ 164 1.9% Growth Achieved With One Less Selling Day [_ ceases) ee
Slide 18: Q1 2018 Financial Review: Pre-Owned Segment
Q1 2018 FINANCIAL REVIEW PRE-OWNED SEGMENT Sonic) EchoPark’
Slide 19: Pre-Owned Segment 2018 Results
PRE-OWNED SEGMENT Revenue Gross Profit SG&A as % of Gross Operating Profit Interest & Other Pre-tax Diluted EPS. Retail Units Total Front and F&I Gross per Unit Retailed 2018 RESULTS B/(W) than Q1 2017 (1 $ ¥ Q1 2018 (1) Yo $131.5 $89.7 214.6% $12.4 $7.4 159.4% $15.0 ($6.4) (73.8%) 123.7% 6,090 bps
Slide 20: Q1 2018 Financial Review: Total Enterprise
Q1 2018 FINANCIAL REVIEW TOTAL ENTERPRISE Sonic) EchoPark’
Slide 21: Consolidated Q1 2018 Results
CONSOLIDATED Q1 2018 RESULTS B/(W) than Q1 2017 (1) $ (amounts in millions, except per share data) Q1 2018 (1) fo Revenue $2,401 $113 4.9% Gross Profit $352 $2 0.6% $291 $0 0.1% SG&A as % of Gross 82.4% 70 bps Depreciation $24 ($3) (12.2%) Operating Profit $38 ($0) (0.1%) Interest & Other ($24) ($3)
Slide 22: Revenue & Gross Profit
Q1 2018 REVENUE & GROSS PROFIT B/(W) than Q1 2017 (amounts in milion, except unit and per unit data) Q1 2018 $ %o New Revenue $1,181 $9 0.8% Used Retail Revenue $709 $75 11.8% Fixed Operations Revenue $352 ($0) (0.1%) F&l Revenue $94 $11 12.8% Total Revenue $2,401 $113 4.9% New Gross $57 ($1) (2.5%)
Slide 23: 2018 Adjusted SG&A to Gross
1 2018 ADJUSTED SG&A TO GROSS 82.4% 83.1% 49.9% Qi 2018") Q1 201710) Advertising =Comp =Rent =Other (1) —Q1 2018 and Q1 2017 results are adjusted — See appendix for reconciliation to GAAP amounts. 5 EchoPark
Slide 24: Q1 2018 Interest Expense
Q1 2018 INTEREST EXPENSE %. B/W) than Q1 2017 (1) $ (amounts in milions) Q1 2018 Floor Plan Interest Expense $11 ($2) (27.3%) Interest Expense, Other $13 ($1) (5.6%) $24 ($3). (14.2%) Total Interest Expense Floor Plan Higher Due to Rate Increases (1) Qt 2017 results are adjusted — See appendix for r
Slide 25: 2018 Cap Ex
2018 CAP EX YTD Estimated Q1 2018 2018 Real Estate & Facility Related $ 60.4 $ 118.5 All Other Cap Ex 5.3 23.7 Subtotal $ 65.7 $ 142.3 Less: Mortgages (21.0) (35.7) Total Cash Used - Cap Ex $ 44.7 $ 106.6 en
Slide 26: Debt Covenants
DEBT COVENANTS Covenant Q42017 Q1 2018 Liquidity Ratio >= 1.05 1.13 1.09 Fixed Charge Coverage Ratio >= 1.20 1.65 1.70 <= 5.75 4.72 4.90 Total Lease Adjusted Leverage Ratio EchoPark
Slide 27: Share Repurchases
SHARE REPURCHASES (000's) (00's) (000's) Shares _$/Share $ Availability EOY - 2017 $ 107,686 Q1 Activity 1,152 $2035 $ 23,449 (23,449) Total 2018 Activity 1,152 $2035 $ 23449 $ 84,237 en
Slide 28: Appendix
APPENDIX Sonic) EchoPark’
Slide 29: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS (amounts in thousands) Net income $ 31,548 $ 89,929 $ 76,254 $ 89,101 $ 81618 $ 97.217 $ 86311 $ 93,193 $ 92,983 Non-Floorplan Interest 67,735 68,604 63,576 58,453 55,356 52,269 49,524 48,034 50,531 Depreciation & Amortization 57,036 45,827 51,164 52,616 58,139 62,161 72,130
Slide 30: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Franchised Pre-Owned Franchised Pre-Ow Dealerships Stores Consolidated _Dealerships Stores Consolidated "had Carrings (oss) per share $ 020 $ (025) $ (005) $ 007 $ (007) $ : Adjustments (net parent chatges 0.07 : 0.07 (0.02) (0.02) Le other. 0.03 0.03 o1 0.01 Compensaton-lte
Slide 31: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Consolidated Franchised Dealerships Pre-Owned Stores March 31, March 31, March31, Continuing Operations 2018 2017 2078 2017 2018, (iamilionsy Reported: GBA S$ 3049 $ 2922 $ 207 $ 2036 $ 22 § 86 ‘Adjustments: Legal and other Storm dat Gain on disposal Adjusted: GBA Reported:
Slide 32: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Operations, Reported: ‘Adjustments (before income taxes): Adjusted: Reported: ‘Adjustments (before income taxes): 8) Adjusted: Reported: ‘Adjustments (net of income taxes): ry tments Total adj Adjusted: 32 Consolidated Franchised Dealerships Pre-Owned Stores March 31, March
Slide 33: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Continuing Operations ported: Interest Expense - Other. Adjustme! Double-carry interest - 7.0% Notes. Total other income adjustments . Total interest Expense - Other. Continuing Operations Reported: Other Expense / (Income). justment Debt extinguishment -7.0% Notes Total oth
Slide 34: Non-GAAP Reconciliations
‘Adjustments: tepalmentcharpes NON-GAAP RECONCILIATIONS Tse Montha Ended March 31,2018 Income (Loss) re (Loss) From Continuing beqeomruds rations Oper Not Income (Loss| Weighted Por ‘Average o Shares _Amount_ _Amount_ __Amount {in thousands, except per shi Reporte eae (loss) and shares 42,789 $ (2,0
Slide 35: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS ‘Three Months Ended March 31, 2017 Income (Loss) Income (Loss) From Continuing From Discontinued Operatior Operations Net Income (Loss| Per poate share Share Amount _Amount Weighted ‘Average Reported: Earnings (loss) and shares 44791 $ — (20) $ (21) $ (641) ct of participati
Slide 36: Sonic) EchoPark’
Sonic) EchoPark’