Slide 1: Q1 2015 Earnings Review
Q1 2015 EARNINGS REVIEW April 21, 2015 Exhibit 99.2
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Slide 4: Forward-Looking Statements
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
Slide 5: Content
3 CONTENT • STRATEGIC FOCUS • FINANCIAL RESULTS • OPERATIONS REVIEW • SUMMARY AND OUTLOOK
Slide 6: Strategic Focus
4 STRATEGIC FOCUS 1. Growth • One Sonic-One Experience • EchoPark ® • Acquisitions & Open Points 2. Own Our Properties 3. Return Capital to Shareholders
Slide 7: Strategic Focus: One Sonic-One Experience (OSOE)
STRATEGIC FOCUS ONE SONIC-ONE EXPERIENCE (OSOE) 5 • Goals • Pilot Stores Underway • 36 Month Implementation • Charlotte Market Rollout in Progress Result - Increase Market Share and Customer Retention 1 Associate, 1 Price, 1 Hour Improve Transparency; Increase Trust Operational Efficiencies
Slide 8: Strategic Focus: EchoPark
STRATEGIC FOCUS EchoPark ® • Hub Opened November 3 • 2 Neighborhood Stores Opened in January 2015 • Expect at least 1 more in 2015 and another in 2016
Slide 9: Strategic Focus: Acquisitions & Open Points
STRATEGIC FOCUS ACQUISITIONS & OPEN POINTS • Open Points Mercedes Benz in Dallas Market Operational in 2016 Audi in Pensacola Market Operational in 2016 Nissan in TN Market Operational in late 2016 / early 2017 • Exploring Acquisition and Open Point Opportunities in Other Markets
Slide 10: Strategic Focus: Own Our Properties
8 STRATEGIC FOCUS OWN OUR PROPERTIES 2007 2008 2011 2012 2013 2014 Q1 2015 Proj. - 2017 0% 12% 18% 23% 31% 36% 37% 49%
Slide 11: Strategic Focus: Return Capital to Shareholders
9 STRATEGIC FOCUS RETURN CAPITAL TO SHAREHOLDERS • Unused Authorization of Approximately $ 68 million • Quarterly Dividend of $0.025 Per Share Shares (in thousands) Average Price / Share $ (in millions) 2015 Activity $ 24.89 $ 11.1
Slide 12: Q1 2015 Financial Review
Q1 2015 FINANCIAL REVIEW
Slide 13: Q1 2015 Financial Review: Franchise Dealerships
Q1 2015 FINANCIAL REVIEW FRANCHISE DEALERSHIPS
Slide 14: Adjusted Franchised Operations
ADJUSTED FRANCHISED OPERATIONS B/(W) than Q1 2014 12 Note – Continuing operations includes results of sold stores after March 31, 2014. (1) – Amounts are adjusted. See appendix for reconciliation of adjusted amounts to GAAP amounts (amounts in millions, except per share data) Q1 2015 $ % Revenue $ 2
Slide 15: Franchised SG&A to Gross Walk – Q1
FRANCHISED SG&A TO GROSS WALK – Q1 13 (1) – Amounts are adjusted. See appendix for reconciliation of adjusted amounts to GAAP amounts Q1 2015 Adjusted (1) Less: OSOE Less: Centralization Initiatives 79.2% (1.1%) (0.5%) 77.6% Q1 2015 Adj for 210 bps Better than Q1 2014 of 79.7%
Slide 16: Q1 2015 Financial Review: EchoPark
Q1 2015 FINANCIAL REVIEW ECHOPARK ®
Slide 17: EchoPark Q1 Results
ECHOPARK ® Q1 RESULTS 15 B/(W) than Q1 2014 (1) – Amounts are adjusted. See appendix for reconciliation of adjusted amounts to GAAP amounts (amounts in millions, except per share data) Q1 2015 $ Revenue $ 15.7 $ 15.7 Gross Profit $ 1.8 $ 1.8 Operating Profit (1) ($ 4.8) ($ 3.1) Interest & Other ($ 0
Slide 18: Q1 2015 Financial Review: Total Enterprise
Q1 2015 FINANCIAL REVIEW TOTAL ENTERPRISE
Slide 19: Adjusted Total Q1 2015 Results
ADJUSTED TOTAL Q1 2015 RESULTS B/(W) than Q1 2014 17 Note – Continuing operations includes results of sold stores after March 31, 2014. (1) – Amounts are adjusted. See appendix for reconciliation of adjusted amounts to GAAP amounts (amounts in millions, except per share data) Q1 2015 $ % Revenue $ 2
Slide 20: Total Revenue & Gross Profit
TOTAL REVENUE & GROSS PROFIT Q1 2015 B/(W) than Q1 2014 18 (1) – Amounts are adjusted. See appendix for reconciliation of adjusted amounts to GAAP amounts (amounts in millions) Q1 2015 $ % New Retail Revenue $ 1,190 $ 78 7.0% Used Retail Revenue $ 594 $ 34 6.1% Fixed Operations Revenue $ 323 $ 4 1.4
Slide 21: Adjusted Total SG&A to Gross
ADJUSTED TOTAL SG&A TO GROSS 19 80.6% 80.2% Note – 2015 amounts are adjusted. See appendix for reconciliation of adjusted amounts to GAAP amounts Q1 2015 Q1 2014 4.6% 4.3% 48.1% 47.8% 5.4% 5.6% 22.5% 22.5% Advertising Comp Rent Other
Slide 22: Adjusted and GAAP EPS Summary
ADJUSTED AND GAAP EPS SUMMARY 20 (amounts in millions, except per share date) Q1 2015 Q1 2014 Pre-Tax EPS Pre-Tax EPS Adjusted Franchised EPS $35.7 $ 0.43 $ 34.0 $0.40 Adjusted EchoPark® EPS ($4.9) ($0.06) ($ 1.7) ($ 0.02) Adjusted Total EPS $ 30.8 $ 0.37 $32.2 $ 0.38 Adjustments: Impairment ($ 6.2)
Slide 23: Capital Spend
CAPITAL SPEND (amounts in millions) YTD Q1 2015 Estimated 2015 Note – Spending excludes the effect of franchise acquisitions. 21 Real Estate & Facility Related $ 37.2 $200.9 All Other Cap Ex 9.7 46.3 Subtotal $ 46.9 $ 247.2 Less: Mortgage Funding (25.6) (87.1) Total Cash Used – Cap Ex $ 21.3 $ 160.1
Slide 24: Liquidity
LIQUIDITY (amounts in millions) Q1 2015 Q4 2014 22 Cash $4.0 $ 4.2 Revolver Availability 161.1 165.6 Used floor plan availability 21.6 22.6 Floor plan deposit balance 56.0 57.5 Total $242.7 $ 249.9
Slide 25: Debt Covenants
DEBT COVENANTS Covenant Actual Q1 2015 Compliant with all Covenants 23 Liquidity Ratio >= 1.05 1.21 Fixed Charge Coverage Ratio >= 1.20 1.64 Total Lease Adjusted Leverage Ratio <= 5.50 4.16
Slide 26: Operations Review
OPERATIONS REVIEW
Slide 27: New Vehicle Retail Same Store
NEW VEHICLE RETAIL SAME STORE Q1 2015 Q1 2014 B/(W) 25 Volume 30,981 28,980 6.9% Selling Price $ 38,028 $ 37,120 2.4% Gross Margin % 5.3% 5.9% (60 bps) GPU $ 2,018 $ 2,199 ($ 182) Gross Profit $ 63 million $ 64 million (1.9%) SAAR (includes fleet) 16.6 million 15.6 million 6.4%
Slide 28: New Vehicle by Brand: Q1 2015 vs. Q1 2014
26 Q1 2015 vs. Q1 2014 (1) (1) – Industry includes fleet – Sonic does not NEW VEHICLE - BRAND 15.4% 6.9% 2.3% 6.9% 5.2% 24.8% 5.0% 15.3% 3.6% % Sonic Unit Sales BMW MB Cadillac Ford GM Honda Lexus Toyota Audi 9% 13% (14%) (3%) (4%) 11% 19% 12% 13% 8% 7% (6%) 2% 6% 2% 19% 9% 14% Sonic Industry
Slide 29: Used Vehicle Retail Same Store
USED VEHICLE RETAIL SAME STORE 27 Q1 2015 Q1 2014 B/(W) Retail Volume 27,079 26,601 1.8% Used Retail GPU $ 1,478 $ 1,477 $ 1 Used to New 0.87:1.00 0.92:1.00 (0.04) Vehicles / store / month (97 stores)
Slide 30: Fixed Ops Same Store
FIXED OPS SAME STORE Q1 2015 B/(W) than 2014 28 (amounts in millions) $ % Revenue $ 318 $ 10 3.2% Gross Profit $ 154 $ 7 4.9% (5.0%) 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Customer Pay Warranty Wholesale Parts Internal & Sublet (1.2%) 21.4% 1.8% 6.8% YOY Gross % Change
Slide 31: OSOE
OSOE
Slide 32: OSOE – Town & Country Toyota
30 OSOE – TOWN & COUNTRY TOYOTA NEW RETAIL UNITS 155 140 198 156 177 246 251 182 167 182 153 200 257 100 120 140 160 180 200 220 240 260 280 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 13.2% 12.9% 14.2% 13.1% 14.6% 18.0% 20.8% 15.8% 16.0% 15.1% 15.8% 22
Slide 33: OSOE – Town & Country Ford
31 OSOE – TOWN & COUNTRY FORD NEW RETAIL UNITS MARKET SHARE 135 113 138 121 108 141 108 73 93 108 100 83 121 70 80 90 100 110 120 130 140 150 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 19.5% 18.3% 17.0% 16.9% 13.9% 18.5% 17.3% 12.3% 16.0% 13.3% 15.9% 1
Slide 34: OSOE – Fort Mill Ford
32 OSOE – FORT MILL FORD NEW RETAIL UNITS 110 121 156 116 133 124 94 86 77 114 108 84 111 50 70 90 110 130 150 170 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-14 15.9% 18.5% 20.1% 16.3% 17.0% 15.4% 16.3% 14.9% 12.4% 14.5% 16.9% 14.8% 14.6% 10.0% 12.0% 14.0
Slide 35: OSOE – Infiniti of Charlotte
33 OSOE – INFINITI OF CHARLOTTE NEW RETAIL UNITS 40.7% 51.1% 30.0% 44.4% 43.5% 46.6% 40.5% 50.6% 40.5% 31.7% 42.6% 46.8% 49.5% 30.0% 35.0% 40.0% 45.0% 50.0% 55.0% Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 37 45 30 34 31 30 36 40 30 34 30 35 53 25 30 3
Slide 36: OSOE – Cadillac of South Charlotte
34 OSOE – CADILLAC OF SOUTH CHARLOTTE NEW RETAIL UNITS 47.5% 41.7% 38.7% 36.7% 40.4% 40.0% 37.1% 45.7% 32.2% 26.5% 41.3% 38.0% 38.8% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% 55.0% 60.0% Mar-14 Apr-14 May-14 Jun-14 Jul -14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 MARKET SHARE 38 40 42
Slide 37: OSOE – Next Steps
35 OSOE – NEXT STEPS 1. We are still working on the pricing tool (in particular with Ford) we are a few months away from completion Drivers of the slowdown are “man” hours available and new technology opportunities – simply put this is a first of its kind and we are close to breaking the code 2. CRM
Slide 38: EchoPark
EchoPark ®
Slide 39: EchoPark Openings
37 EchoPark ® Openings: 122 183 185 292 6 34 31 69 0 6 19 35 143 135 188 0 50 100 150 200 250 300 350 Dec-14 Jan-15 Feb-15 Mar-15 Unit Volume Hub – 11/3/2014 Centennial – 12/26/2015 Highlands Ranch – 1/23/2015 Total Centennial Highlands Ranch HUB
Slide 40: Summary
Growth experienced in each revenue category achieving record results Gaining expense leverage in the franchised dealership segment including OSOE expenses Expect open points to drive future growth Continued share repurchases with excess capital Monitoring capital requirements as 2017 lease maturitie
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Slide 42: Appendix
Appendix 40
Slide 43: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS 41 Consolidated Franchised Dealerships EchoPark® Three Months Ended Three Months Ended Three Months Ended March 31, March 31, March 31, 2015 2014 2015 2014 2015 2014 (In millions) SG&A Reconciliation: As Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
Slide 44: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Consolidated Franchised Dealerships EchoPark® Three Months Ended Three Months Ended Three Months Ended March 31, March 31, March 31, 2015 2014 2015 2014 2015 2014 (In millions) Operating Profit Reconciliation: As Reported . . . . . . . . . . . . . . . . . . . . . . . . . . .
Slide 45: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS 43 Three Months Ended March 31, 2015 Income (Loss) Income (Loss) From Continuing From Discontinued Operations Average Net Income (Loss) Weighted Per Per Per Average Share Share Share Shares Amount Amount Amount Amount Amount Amount (In millions, except per share amounts) Rep
Slide 46: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Three Months Ended March 31, 2014 Income (Loss) Income (Loss) From Continuing From Discontinued Operations Operations Net Income (Loss) Weighted Per Per Per Average Share Share Share Shares Amount Amount Amount Amount Amount Amount (In millions, except per share amounts) Rep
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