Slide 1: Q2 2014 Earnings Review
Q2 2014 EARNINGS REVIEW July 22, 2014 Exhibit 99.2
Slide 2: Forward-Looking Statements
2 FORWARD-LOOKING STATEMENTS 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. This presentation contains “forward-looking statements” within the meaning of the Priva
Slide 3: Content
3 CONTENT • STRATEGIC FOCUS • QUARTER IN REVIEW • FINANCIAL RESULTS • OPERATIONS RECAP • SUMMARY AND OUTLOOK
Slide 4: Strategic Focus
STRATEGIC FOCUS 1. Growth • Grow The Base Business One Sonic-One Experience • Acquisitions & Open Points • Pre-Owned Specialty Stores 2. Own Our Properties 3. Return Capital to Shareholders 4
Slide 5: Strategic Focus: One Sonic-One Experience
STRATEGIC FOCUS ONE SONIC-ONE EXPERIENCE 5 • Goals • 1 Associate, 1 Price, 1 Hour • Improve Transparency; Increase Trust • Operational Efficiencies • Pilot Store Underway • 18 Month Implementation Result - Increase Market Share and Customer Retention
Slide 6: Strategic Focus: Pre-Owned
STRATEGIC FOCUS PRE-OWNED Break Ground Hiring & Training Merchandising & Advertising Opening Q1 Q2 Q3 Q4
Slide 7: Strategic Focus: Own Our Properties
7 STRATEGIC FOCUS OWN OUR PROPERTIES 2007 2008 2010 2011 2012 2013 Proj. - 2017 0% 12% 14% 18% 23% 31% 45%
Slide 8: Strategic Focus: Return Capital to Shareholders
8 STRATEGIC FOCUS RETURN CAPITAL TO SHAREHOLDERS • Unused authorization of approximately $ 121.4 million • Quarterly dividend of $0.025 per share Shares (in thousands) Average Price / Share $ (in millions) 2014 Activity $ 22.39 $ 11.2
Slide 9: Q2 2014 Financial Review
Q2 2014 FINANCIAL REVIEW
Slide 10: Q2 2014 Adjusted Results
Q2 2014 ADJUSTED RESULTS B/(W) than Q2 2013 10 (1) See Appendix for reconciliation to reported GAAP amounts. (amounts in millions, except per share data) Q2 2014 $ % Revenue $ 2,353 $ 151 7% Gross Profit $ 347 $ 23 7% Operating Profit (1) $ 58 ($ 5) (8%) Interest & Other (1) ($ 19) $ 1 3% Continuing
Slide 11: EPS Adjustments
EPS ADJUSTMENTS 11 (1) See Appendix for reconciliation to reported GAAP amounts. (amounts in millions, except per share date) Q2 2014 Q2 2013 Pre-Tax EPS Pre-Tax EPS Unadjusted EPS $ 0.51 $ 0.16 Hail and Legal $ 1.4 $ 0.01 $ 0.0 $ 0.00 Gain on Disposal ($7.3) ($ 0.08) $ 0.0 $ 0.00 Loss on Debt $ 0.0
Slide 12: Strategic Initiative Impact on EPS
STRATEGIC INITIATIVE IMPACT ON EPS 12 (amounts in millions, except per share date) Q2 2014 (1) See Appendix for reconciliation to reported GAAP amounts. Pre-Tax EPS Adjusted (1) $ 0.44 Pre-Owned Initiative $ 3.2 $ 0.04 One Sonic-One Experience $ 1.8 $ 0.02 Centralization of Business Office $ 0.3 $ 0
Slide 13: Total Gross
TOTAL GROSS 13 $ 347 M $ 324 M Q2 2014 Q2 2013 $74 $68 $36 $36 $77 $69 $160 $151 New Used F&I Fixed
Slide 14: SG&A to Gross
SG&A TO GROSS 14 76.6% 79.2% (1) See Appendix for reconciliation to reported GAAP amounts. (1) Q2 2014 Adjusted Q2 2013 Advertising Comp Rent Other 4.0% 4.2% 47.0% 46.2% 5.4% 5.7% 22.8% 20.5%
Slide 15: Strategic Initiative Impact on SG&A
STRATEGIC INITIATIVE IMPACT ON SG&A 15 (amounts in millions, except per share date) Q2 2014 (1) See Appendix for reconciliation to reported GAAP amounts. Pre-Tax SG&A % Adjusted (1) 79.2% Pre-Owned Initiative $ 3.2 0.90% One Sonic One Experience $ 1.8 0.50% Centralization of Business Office $ 0.3 0.
Slide 16: Strategic Initiative Spend
STRATEGIC INITIATIVE SPEND 16 (in millions) Actual YTD Q2 2014 Estimated FY 2014 Pre-Owned Initiative $ 5.0 $ 12.0 One Sonic-One Experience $ 3.6 $ 7.0 Centralization of Business Office $ 0.6 $ 3.0
Slide 17: Capital Spend
CAPITAL SPEND (amounts in millions) YTD Q2 2014 ESTIMATED 2014 Note – Spending excludes the effect of franchise acquisitions. 17 Real Estate Acquisitions $ 9.7 $ 31.2 All Other Cap Ex 38.9 144.2 Subtotal $ 48.6 $ 175.4 Less: Mortgage Funding (40.4) (40.4) Total Cash Used – Cap Ex $ 8.2 $ 135.0
Slide 18: Liquidity
LIQUIDITY (amounts in millions) Q2 2014 Q4 2013 18 Cash $ 3.0 $3.0 Revolver Availability 117.3 126.0 Used floor plan availability 60.6 27.1 Floor plan deposit balance 95.0 65.0 Total $ 275.9 $221.1
Slide 19: Debt Covenants
DEBT COVENANTS Covenant Actual Q2 2014 Compliant with all Covenants 19 Liquidity Ratio >= 1.05 1.21 Fixed Charge Coverage Ratio >= 1.20 1.82 Total Lease Adjusted Leverage Ratio <= 5.50 4.14
Slide 20: Operations Review
OPERATIONS REVIEW
Slide 21: New Vehicle Retail
NEW VEHICLE RETAIL Q2 2014 Q2 2013 B/(W) 21 Revenue $ 1,283 million $ 1,200 million 7.0% Volume 34,847 33,685 3.4% Selling Price $ 36,825 $ 35,616 3.4% Gross Margin % 5.8% 5.5% 30 bps GPU $ 2,119 $ 1,976 $ 143 Gross Profit $ 74 million $ 67 million 10.9% SAAR (includes fleet) 16.5 million 15.3 milli
Slide 22: Used Vehicle Retail
USED VEHICLE RETAIL Q2 2014 Q2 2013 B/(W) * - Includes front-end gross plus F&I related gross and fixed operations related gross 22 Revenue $ 604 million $ 539 million 12.0% Retail Volume 28,514 26,599 7.2% Used Retail GPU $ 1,314 $ 1,414 ($ 100) Used Related Retail Gross* $ 106 million $ 97 million
Slide 23: Fixed Ops
FIXED OPS 23 Q2 2014 B/(W) than Q2 2013 QTD YOY Gross Profit Change Breakdown: • Customer Pay Up 5.9% • Whsl. Parts Up 8.5% • Internal & Sublet Up 8.1% • Warranty Down 2.7% (amounts in millions) 2014 $ % Revenue $ 329 $ 22 7.2% Gross Profit $ 160 $ 9 5.8%
Slide 24: Summary
SUMMARY
Slide 25: Summary
Business environment continues to be favorable to retail automotive Posted all-time record pre-owned sales volumes producing record Q2 pre-owned gross profits Fixed operations continues to benefit from 0-5 year units in operation increasing Expect market share gains and customer retention from One S
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Slide 27: Appendix
Appendix 27
Slide 28: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS 28 This release contains certain non-GAAP financial measures (the "Adjusted" columns) 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 mos
Slide 29: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS 29 Second Quarter Ended June 30, 2014 Continuing Operations Discontinued Operations Total Operations ($ in millions, shares in thousands, except per share data) Net Income (Loss): Numerator Share Count: Denominator Diluted EPS Net Income (Loss): Numerator Share Count: Denomi
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