SAH

SONIC AUTOMOTIVE INC

Consumer Cyclical | Small Cap

$1.44

EPS Forecast

$3,540

Revenue Forecast

The company already released most recent quarter's earnings. We will publish our AI's next quarter's forecast around 2024-12-31
EX-99.1 2 q420198kexhibit991.htm EX-99.1 Document

Exhibit 99.1

Sonic Automotive Reports All-Time Record Fourth Quarter and
All-Time Record Full Year 2019

EchoPark Hits Record Revenues of $1.2 Billion;
Sonic Announces Total Annual Revenue Target of $20 Billion

CHARLOTTE, N.C. – February 19, 2020 - 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, 2019.

Fourth Quarter Highlights

•All-time record quarterly earnings per diluted share from continuing operations of $1.04 for the fourth quarter of 2019, up 104% compared to the fourth quarter of 2018
•All-time record quarterly consolidated total revenues of $2.7 billion and gross profit of $393.9 million for the fourth quarter of 2019, compared to $2.6 billion and $370.7 million, respectively, for the fourth quarter of 2018
•EchoPark revenues of $308.6 million, up 52% from the fourth quarter of 2018, EchoPark retail volume of 12,676 units, up 45% from the fourth quarter of 2018
•EchoPark segment income of $2.1 million, up 145% compared to the fourth quarter of 2018
•Same Store Franchised Dealerships Segment operating results:
◦Revenues up 8.5%, gross profit up 9.4% compared to the fourth quarter of 2018
◦New vehicle unit volume up 7.5%; new vehicle gross profit per unit up 1.4%, to $2,213 per unit
◦Retail used vehicle unit volume up 9.7%; retail used vehicle gross profit per unit up 2.6%, to $1,269 per unit
◦Parts, service and collision repair gross profit up 6.2%, Customer Pay gross profit up 10.2% compared to the fourth quarter of 2018
◦Finance and insurance (“F&I”) gross profit up 13.7% compared to the fourth quarter of 2018 (all-time record quarterly F&I gross profit per retail unit of $1,809 on a total Sonic consolidated basis)

Full Year Highlights

•All-time record full year earnings per diluted share from continuing operations of $3.31, up 171% compared to 2018
•All-time record full year consolidated total revenues of $10.5 billion and gross profit of $1.5 billion, compared to $10.0 billion and $1.4 billion, respectively, for 2018
•EchoPark revenues of $1.2 billion, up 66% from 2018, EchoPark retail volume of 49,520 units, up 68% from 2018
•EchoPark segment income of $9.1 million, up 117% compared to 2018
•Fiscal year 2019 debt reduction of $238 million, in line with $300 million target by mid-to-late 2020
•Same Store Franchised Dealerships Segment operating results:
◦Revenues up 5.5%, gross profit up 6.7% compared to 2018
◦New vehicle unit volume up 0.6%; new vehicle gross profit per unit up 0.4%, to $2,083 per unit
◦Retail used vehicle unit volume up 7.7%; retail used vehicle gross profit per unit down 1.8%, to $1,272 per unit
◦Parts, service and collision repair gross profit up 6.0%, Customer Pay gross profit up 8.2% compared to 2018
◦F&I gross profit up 10.3% compared to 2018 (all-time record annual F&I gross profit per retail unit of $1,743 on a total Sonic consolidated basis)

Commentary

David Smith, Sonic’s and EchoPark’s Chief Executive Officer, commented, “Our 2019 performance was exceptional, with record-breaking consolidated total revenues and earnings per diluted share from continuing operations. This was led by tremendous year-over-year annual revenue growth of 66% at EchoPark, our specialty pre-owned vehicle stores, as well as strong performance from our franchised dealerships.”

Mr. Smith continued, “During the fourth quarter, EchoPark opened its Long Beach, California store, our ninth location nationwide and our first in California. Upon opening, this location proceeded to sell over 450 vehicles within the first 45 days of operation. This is an excellent start and it speaks to the strength of our unique business model and the industry-leading guest experience our EchoPark stores provide. EchoPark experienced strong growth in 2019, and we believe it is poised for further growth in 2020 as we capitalize on opportunities to expand EchoPark’s reach into new markets, which we expect to include three new stores by the end of 2020. Taking into consideration EchoPark’s growth trajectory and the continued strength of our franchised dealerships, 2020 marks the beginning of our march towards our long-term goal of achieving $20 billion in total annual revenues this decade.”

Jeff Dyke, Sonic's and EchoPark’s President, commented, “In 2019, we continued improving our operational performance, driving increased gross profit to our bottom line. As a result, we achieved record net income from continuing operations of $3.31 per diluted


share for the year. At the same time, we moved forward with our deleveraging initiatives, resulting in a total debt reduction of $238 million. With the progress we have made, we are well on our way to reaching our stated goal of reducing debt by $300 million by mid-to-late 2020. With our strong 2019 results and improved balance sheet, we are well positioned to execute on our growth plans for our increasingly profitable EchoPark business, even as we continue to strategically grow our core franchised business.”

Fourth Quarter 2019 Operational Summary

For the fourth quarter of 2019, Sonic consolidated total revenues were $2.7 billion, up 7% compared to the fourth quarter of 2018. EchoPark Segment revenues were $308.6 million for the fourth quarter of 2019, representing a 52% increase from the fourth quarter of 2018. Franchised Dealerships Segment revenues were $2.4 billion for the fourth quarter of 2019, up 3% from the fourth quarter of 2018, despite the disposal of ten franchised dealerships in 2019 which generated revenues of $165.7 million during the fourth quarter of 2018.

SG&A expenses were $260.9 million in the fourth quarter of 2019, a decrease of 5% compared to the year-ago period, including the effect of items of interest below. SG&A expenses as a percentage of gross profit were 66.2% for the fourth quarter of 2019 compared to 73.9% in the fourth quarter of 2018. Excluding certain items of interest below (a non-GAAP measure), SG&A expenses as a percentage of gross profit improved 40 basis points, to 73.7%, for the fourth quarter of 2019, compared to 74.1% in the year-ago period.

Net income from continuing operations for the fourth quarter of 2019 was $46.3 million, or $1.04 per diluted share. Comparatively, net income from continuing operations for the fourth quarter of 2018 was $22.0 million, or $0.51 per diluted share. Included in the above reported fourth quarter results (unless otherwise noted) are the following pre-tax items of interest:

(In millions)Q4 2019Q4 2018Income Statement
Line Item
Gain on franchise disposals$29.3  $—  SG&A expenses
Lease exit adjustments —  0.8  SG&A expenses
Impairment charges(17.7) (15.6) Impairment charges(1) 
Loss on extinguishment of debt(7.2) —  Other expense
Subtotal: Pre-tax items of interest $4.4  $(14.8) 
Tax effect of above items (1.2) 4.1  
Tax-effected items of interest$3.2  $(10.7) 

Note: Amounts in table relate to the Franchised Dealerships Segment unless otherwise noted.
(1) $16.6 million in the fourth quarter of 2019 and $1.5 million in the fourth quarter of 2018 attributed to the EchoPark Segment related to building and land held for sale at former EchoPark locations.

Full Year 2019 Operational Summary

For full year 2019, Sonic consolidated total revenues were $10.5 billion, up 5% compared to 2018. EchoPark Segment revenues were $1.2 billion for full year 2019, representing a 66% increase from 2018. Franchised Dealerships Segment revenues were $9.3 billion for full year 2019, flat compared to 2018, despite the disposal of ten franchised dealerships in 2019 which generated revenues of $656.1 million during 2018.

SG&A expenses were $1.1 billion in 2019, a decrease of 4% compared to 2018, including the effect of items of interest below. SG&A expenses as a percentage of gross profit were 72.3% in 2019 compared to 79.2% in 2018. Excluding certain items of interest below (a non-GAAP measure), SG&A expense as a percentage of gross profit improved 210 basis points, to 76.9%, for full year 2019, compared to 79.0% in 2018. Overall SG&A expense decreased as the Company continued its focus on disciplined expense control.



Net income from continuing operations for full year 2019 was $144.5 million, or $3.31 per diluted share. Comparatively, net income from continuing operations for full year 2018 was $52.4 million, or $1.22 per diluted share. Included in the above reported full year results (unless otherwise noted) are the following pre-tax items of interest:

(In millions)FY 2019FY 2018Income Statement
Line Item
Gain on franchise disposals$76.0  $38.9  SG&A expenses
Executive transition costs(6.3) (1.6) SG&A expenses
Legal and storm damage charges —  (5.7) SG&A expenses
Long-term compensation charges —  (32.5) SG&A expenses(1) 
Lease exit adjustments —  (1.4) SG&A expenses
Impairment charges(19.6) (29.5) Impairment charges(2) 
Loss on extinguishment of debt(7.2) —  Other expense
Subtotal: Pre-tax items of interest $42.9  $(31.8) 
Tax effect of above items (14.2) 7.3  
Tax-effected items of interest$28.7  $(24.5) 

Note: Amounts in table relate to the Franchised Dealerships Segment unless otherwise noted.
(1) $32.5 million in 2018 relates to the EchoPark Segment.
(2) $18.5 million in 2019 and $1.6 million in 2018 attributed to the EchoPark Segment related to building and land held for sale at former EchoPark locations.

Dividend

Sonic’s Board of Directors approved a quarterly cash dividend of $0.10 per share payable on April 15, 2020 to all stockholders of record on March 13, 2020.

Fourth Quarter 2019 / Full Year 2019 Earnings Conference Call

Senior management will host a conference call today at 11:00 A.M. (Eastern) to discuss the quarter’s results. To access the live broadcast of the call over the Internet go to www.sonicautomotive.com, then click on “Our Company” at the top of the page, then “Investor Relations,” then “Earnings Conference Calls” at the bottom of the page.

The conference call will also be available live by dialing in 10 minutes prior to the start of the call at:

Domestic: (877) 450-3867
International: (706) 643-0958
Conference ID: 1659619

A conference call replay will be available one hour following the call for seven days and can be accessed by calling:

Domestic: (855) 859-2056
International: (404) 537-3406
Conference ID: 1659619

Presentation materials for the Company’s earnings conference call will be accessible beginning the morning of the conference call on the Company’s website at www.sonicautomotive.com by clicking on “Our Company” at the top of the page, then “Investor Relations,” then “Webcasts & Presentations” at the bottom of the page.

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 an operating segment within the Company with nine existing locations that specialize in pre-owned vehicle sales and provide 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 with respect to long-term annual revenue targets, anticipated future growth and profitability in the Company’s EchoPark Segment, anticipated openings of new EchoPark stores in 2020, anticipated future performance and growth of our Franchised Dealerships Segment, and anticipated future debt reduction in 2020. 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, 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, 2018 and the Company’s other periodic 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 may contain certain non-GAAP financial measures as defined under SEC rules, such as SG&A expenses as a percentage of gross profit excluding certain items required to be included by GAAP. 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 attached financial tables. 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.

Company Contacts

Investor Inquiries:
Heath Byrd, Executive Vice President and Chief Financial Officer (704) 566-2400
Danny Wieland, Director of Financial Reporting (704) 927-3462
ir@sonicautomotive.com

Press Inquiries:
Danielle DeVoren / Anthony Feldman
(212) 896-1272 / (347) 487-6194
sonic@kcsa.com



Sonic Automotive, Inc.
Results of Operations (Unaudited)

Results of Operations
Three Months Ended December 31,Better / (Worse)Twelve Months Ended December 31,Better / (Worse)
20192018% Change20192018% Change
(In thousands, except per share amounts)
Revenues:
New vehicles$1,360,064  $1,319,587  3.1 %$4,889,171  $4,974,097  (1.7)%
Used vehicles869,708  755,882  15.1 %3,489,972  2,973,498  17.4 %
Wholesale vehicles46,596  49,899  (6.6)%202,946  217,625  (6.7)%
Total vehicles2,276,368  2,125,368  7.1 %8,582,089  8,165,220  5.1 %
Parts, service and collision repair346,514  339,257  2.1 %1,395,303  1,380,887  1.0 %
Finance, insurance and other, net125,522  109,633  14.5 %476,951  405,523  17.6 %
Total revenues2,748,404  2,574,258  6.8 %10,454,343  9,951,630  5.1 %
Cost of Sales:
New vehicles(1,292,480) (1,253,792) 3.1 %(4,656,084) (4,732,595) (1.6)%
Used vehicles(832,877) (722,291) 15.3 %(3,342,576) (2,830,510) 18.1 %
Wholesale vehicles(47,941) (52,069) (7.9)%(207,378) (228,874) (9.4)%
Total vehicles(2,173,298) (2,028,152) 7.2 %(8,206,038) (7,791,979) 5.3 %
Parts, service and collision repair(181,222) (175,391) 3.3 %(727,288) (713,526) 1.9 %
Total cost of sales(2,354,520) (2,203,543) 6.9 %(8,933,326) (8,505,505) 5.0 %
Gross profit393,884  370,715  6.2 %1,521,017  1,446,125  5.2 %
Selling, general and administrative expenses(260,921) (273,915) 4.7 %(1,099,374) (1,145,325) 4.0 %
Impairment charges(17,692) (15,553) (13.8)%(20,768) (29,514) 29.6 %
Depreciation and amortization(23,048) (22,556) (2.2)%(93,169) (93,623) 0.5 %
Operating income (loss)92,223  58,691  57.1 %307,706  177,663  73.2 %
Other income (expense):
Interest expense, floor plan(11,137) (13,585) 18.0 %(48,519) (48,398) (0.3)%
Interest expense, other, net(13,458) (13,914) 3.3 %(52,953) (54,059) 2.0 %
Other income (expense), net(6,680) —  (100.0)%(6,589) 106  (6316.0)%
Total other income (expense)(31,275) (27,499) (13.7)%(108,061) (102,351) (5.6)%
Income (loss) from continuing operations before taxes60,948  31,192  95.4 %199,645  75,312  165.1 %
Provision for income taxes for continuing operations - benefit (expense)(14,676) (9,212) (59.3)%(55,108) (22,922) (140.4)%
Income (loss) from continuing operations46,272  21,980  110.5 %144,537  52,390  175.9 %
Discontinued operations:
Income (loss) from discontinued operations before taxes62  (221) 128.1 %(554) (1,017) 45.5 %
Provision for income taxes for discontinued operations - benefit (expense)(27) 62  (143.5)%154  277  (44.4)%
Income (loss) from discontinued operations35  (159) 122.0 %(400) (740) 45.9 %
Net income (loss)$46,307  $21,821  112.2 %$144,137  $51,650  179.1 %
Basic earnings (loss) per common share:
Earnings (loss) per share from continuing operations$1.07  $0.51  109.8 %$3.36  $1.23  173.2 %
Earnings (loss) per share from discontinued operations—  —  — %(0.01) (0.02) 50.0 %
Earnings (loss) per common share$1.07  $0.51  109.8 %$3.35  $1.21  176.9 %
Weighted-average common shares outstanding43,078  42,710  0.9 %43,016  42,708  0.7 %
Diluted earnings (loss) per common share:
Earnings (loss) per share from continuing operations$1.04  $0.51  103.9 %$3.31  $1.22  171.3 %
Earnings (loss) per share from discontinued operations—  —  — %(0.01) (0.02) 50.0 %
Earnings (loss) per common share$1.04  $0.51  103.9 %$3.30  $1.20  175.0 %
Weighted-average common shares outstanding44,463  42,911  (3.6)%43,710  42,950  (1.8)%
Dividends declared per common share$0.10  $0.06  66.7 %$0.40  $0.24  66.7 %






New Vehicles - Consolidated

Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported new vehicle:
Revenue$1,360,064  $1,319,587  $40,477  3.1 %
Gross profit$67,584  $65,795  $1,789  2.7 %
Unit sales30,591  31,331  (740) (2.4)%
Revenue per unit$44,460  $42,118  $2,342  5.6 %
Gross profit per unit$2,209  $2,100  $109  5.2 %
Gross profit as a % of revenue5.0 %5.0 %—  bps
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported new vehicle:
Revenue$4,889,171  $4,974,097  $(84,926) (1.7)%
Gross profit$233,087  $241,502  $(8,415) (3.5)%
Unit sales114,131  122,717  (8,586) (7.0)%
Revenue per unit$42,838  $40,533  $2,305  5.7 %
Gross profit per unit$2,042  $1,968  $74  3.8 %
Gross profit as a % of revenue4.8 %4.9 %(10) bps
Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store new vehicle:
Revenue$1,336,909  $1,215,081  $121,828  10.0 %
Gross profit$66,437  $60,919  $5,518  9.1 %
Unit sales30,018  27,921  2,097  7.5 %
Revenue per unit$44,537  $43,519  $1,018  2.3 %
Gross profit per unit$2,213  $2,182  $31  1.4 %
Gross profit as a % of revenue5.0 %5.0 %—  bps
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store new vehicle:
Revenue$4,691,795  $4,504,210  $187,585  4.2 %
Gross profit$224,526  $222,335  $2,191  1.0 %
Unit sales107,803  107,149  654  0.6 %
Revenue per unit$43,522  $42,037  $1,485  3.5 %
Gross profit per unit$2,083  $2,075  $8  0.4 %
Gross profit as a % of revenue4.8 %4.9 %(10) bps












Used Vehicles - Consolidated

Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported used vehicle:
Revenue$869,708  $755,882  $113,826  15.1 %
Gross profit$36,831  $33,591  $3,240  9.6 %
Unit sales39,775  35,135  4,640  13.2 %
Revenue per unit$21,866  $21,514  $352  1.6 %
Gross profit per unit$926  $956  $(30) (3.1)%
Gross profit as a % of revenue4.2 %4.4 %(20) bps
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported used vehicle:
Revenue$3,489,972  $2,973,498  $516,474  17.4 %
Gross profit$147,396  $142,988  $4,408  3.1 %
Unit sales162,149  139,605  22,544  16.1 %
Revenue per unit$21,523  $21,299  $224  1.1 %
Gross profit per unit$909  $1,024  $(115) (11.2)%
Gross profit as a % of revenue4.2 %4.8 %(60) bps
Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store used vehicle:
Revenue$809,993  $711,494  $98,499  13.8 %
Gross profit$33,604  $28,127  $5,477  19.5 %
Unit sales37,174  32,446  4,728  14.6 %
Revenue per unit$21,789  $21,929  $(140) (0.6)%
Gross profit per unit$904  $867  $37  4.3 %
Gross profit as a % of revenue4.1 %4.0 %10  bps
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store used vehicle:
Revenue$3,191,404  $2,759,003  $432,401  15.7 %
Gross profit$131,695  $124,304  $7,391  5.9 %
Unit sales146,456  126,415  20,041  15.9 %
Revenue per unit$21,791  $21,825  $(34) (0.2)%
Gross profit per unit$899  $983  $(84) (8.5)%
Gross profit as a % of revenue4.1 %4.5 %(40) bps
















Wholesale Vehicles - Consolidated

Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported wholesale vehicle:
Revenue$46,596  $49,899  $(3,303) (6.6)%
Gross profit (loss) $(1,345) $(2,170) $825  38.0 %
Unit sales7,899  8,214  (315) (3.8)%
Revenue per unit$5,899  $6,075  $(176) (2.9)%
Gross profit (loss) per unit$(170) $(264) $94  35.5 %
Gross profit (loss) as a % of revenue(2.9)%(4.3)%140  bps
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported wholesale vehicle:
Revenue$202,946  $217,625  $(14,679) (6.7)%
Gross profit (loss)$(4,432) $(11,249) $6,817  60.6 %
Unit sales34,153  34,167  (14) — %
Revenue per unit$5,942  $6,369  $(427) (6.7)%
Gross profit (loss) per unit$(130) $(329) $199  60.5 %
Gross profit (loss) as a % of revenue(2.2)%(5.2)%300  bps
Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store wholesale vehicle:
Revenue$44,769  $46,458  $(1,689) (3.6)%
Gross profit (loss)$(1,355) $(1,962) $607  30.9 %
Unit sales7,415  7,356  59  0.8 %
Revenue per unit$6,038  $6,316  $(278) (4.4)%
Gross profit (loss) per unit$(183) $(267) $84  31.5 %
Gross profit (loss) as a % of revenue(3.0)%(4.2)%120  bps
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store wholesale vehicle:
Revenue$191,431  $195,743  $(4,312) (2.2)%
Gross profit (loss)$(3,808) $(9,792) $5,984  61.1 %
Unit sales31,016  29,245  1,771  6.1 %
Revenue per unit$6,172  $6,693  $(521) (7.8)%
Gross profit (loss) per unit$(123) $(335) $212  63.3 %
Gross profit (loss) as a % of revenue(2.0)%(5.0)%300  bps
















Parts, Service and Collision Repair (“Fixed Operations”) - Consolidated

Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands)
Reported Fixed Operations:
Revenue:
Customer pay$141,442  $137,690  $3,752  2.7 %
Warranty63,713  68,425  (4,712) (6.9)%
Wholesale parts39,934  38,302  1,632  4.3 %
Internal, sublet and other101,425  94,840  6,585  6.9 %
Total$346,514  $339,257  $7,257  2.1 %
Gross profit:
Customer pay$76,346  $73,173  $3,173  4.3 %
Warranty35,302  38,411  (3,109) (8.1)%
Wholesale parts6,868  6,797  71  1.0 %
Internal, sublet and other46,776  45,485  1,291  2.8 %
Total$165,292  $163,866  $1,426  0.9 %
Gross profit as a % of revenue:
Customer pay54.0 %53.1 %90  bps
Warranty55.4 %56.1 %(70) bps
Wholesale parts17.2 %17.7 %(50) bps
Internal, sublet and other46.1 %48.0 %(190) bps
Total47.7 %48.3 %(60) bps
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands)
Reported Fixed Operations:
Revenue:
Customer pay$561,422  $560,037  $1,385  0.2 %
Warranty272,389  266,644  5,745  2.2 %
Wholesale parts157,603  161,066  (3,463) (2.2)%
Internal, sublet and other403,889  393,140  10,749  2.7 %
Total$1,395,303  $1,380,887  $14,416  1.0 %
Gross profit:
Customer pay$304,950  $299,617  $5,333  1.8 %
Warranty150,984  150,746  238  0.2 %
Wholesale parts27,187  27,746  (559) (2.0)%
Internal, sublet and other184,894  189,252  (4,358) (2.3)%
Total$668,015  $667,361  $654  0.1 %
Gross profit as a % of revenue:
Customer pay54.3 %53.5 %80  bps
Warranty55.4 %56.5 %(110) bps
Wholesale parts17.3 %17.2 %10  bps
Internal, sublet and other45.8 %48.1 %(230) bps
Total47.9 %48.3 %(40) bps









Fixed Operations - Consolidated (Continued)

Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands)
Same store Fixed Operations:
Revenue:
Customer pay$139,273  $129,217  $10,056  7.8 %
Warranty63,042  65,432  (2,390) (3.7)%
Wholesale parts39,398  36,483  2,915  8.0 %
Internal, sublet and other98,942  87,904  11,038  12.6 %
Total$340,655  $319,036  $21,619  6.8 %
Gross profit:
Customer pay$75,406  $68,444  $6,962  10.2 %
Warranty35,007  36,748  (1,741) (4.7)%
Wholesale parts6,772  6,423  349  5.4 %
Internal, sublet and other46,116  42,256  3,860  9.1 %
Total$163,301  $153,871  $9,430  6.1 %
Gross profit as a % of revenue:
Customer pay54.1 %53.0 %110  bps
Warranty55.5 %56.2 %(70) bps
Wholesale parts17.2 %17.6 %(40) bps
Internal, sublet and other46.6 %48.1 %(150) bps
Total47.9 %48.2 %(30) bps
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands)
Same store Fixed Operations:
Revenue:
Customer pay$547,826  $517,152  $30,674  5.9 %
Warranty264,282  250,750  13,532  5.4 %
Wholesale parts154,166  152,030  2,136  1.4 %
Internal, sublet and other384,584  359,441  25,143  7.0 %
Total$1,350,858  $1,279,373  $71,485  5.6 %
Gross profit:
Customer pay$297,916  $275,484  $22,432  8.1 %
Warranty146,644  140,305  6,339  4.5 %
Wholesale parts26,542  25,972  570  2.2 %
Internal, sublet and other177,442  172,786  4,656  2.7 %
Total$648,544  $614,547  $33,997  5.5 %
Gross profit as a % of revenue:
Customer pay54.4 %53.3 %110  bps
Warranty55.5 %56.0 %(50) bps
Wholesale parts17.2 %17.1 %10  bps
Internal, sublet and other46.1 %48.1 %(200) bps
Total48.0 %48.0 %—  bps












Finance, Insurance and Other, Net (“F&I”) - Consolidated

Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported F&I:
Revenue$125,522  $109,633  $15,889  14.5 %
Unit sales69,376  66,102  3,274  5.0 %
Gross profit per retail unit (excludes fleet)$1,809  $1,659  $151  9.1 %
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported F&I:
Revenue$476,951  $405,523  $71,428  17.6 %
Unit sales273,606  260,424  13,182  5.1 %
Gross profit per retail unit (excludes fleet)$1,743  $1,557  $186  11.9 %
Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store F&I:
Revenue$115,513  $98,634  $16,879  17.1 %
Unit sales66,202  60,003  6,199  10.3 %
Gross profit per retail unit (excludes fleet)$1,745  $1,644  $101  6.1 %
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store F&I:
Revenue$426,441  $360,317  $66,124  18.4 %
Unit sales251,585  231,711  19,874  8.6 %
Gross profit per retail unit (excludes fleet)$1,695  $1,555  $140  9.0 %

















New Vehicles - Franchised Dealerships Segment

Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported new vehicle:
Revenue$1,360,064  $1,319,587  $40,477  3.1 %
Gross profit$67,584  $65,795  $1,789  2.7 %
Unit sales30,591  31,331  (740) (2.4)%
Revenue per unit$44,460  $42,118  $2,342  5.6 %
Gross profit per unit$2,209  $2,100  $109  5.2 %
Gross profit as a % of revenue5.0 %5.0 %—  bps
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported new vehicle:
Revenue$4,889,171  $4,974,097  $(84,926) (1.7)%
Gross profit$233,087  $241,502  $(8,415) (3.5)%
Unit sales114,131  122,717  (8,586) (7.0)%
Revenue per unit$42,838  $40,533  $2,305  5.7 %
Gross profit per unit$2,042  $1,968  $74  3.8 %
Gross profit as a % of revenue4.8 %4.9 %(10) bps
Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store new vehicle:
Revenue$1,336,909  $1,215,081  $121,828  10.0 %
Gross profit$66,437  $60,919  $5,518  9.1 %
Unit sales30,018  27,921  2,097  7.5 %
Revenue per unit$44,537  $43,519  $1,018  2.3 %
Gross profit per unit$2,213  $2,182  $31  1.4 %
Gross profit as a % of revenue5.0 %5.0 %—  bps
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store new vehicle:
Revenue$4,691,795  $4,504,210  $187,585  4.2 %
Gross profit$224,526  $222,335  $2,191  1.0 %
Unit sales107,803  107,149  654  0.6 %
Revenue per unit$43,522  $42,037  $1,485  3.5 %
Gross profit per unit$2,083  $2,075  $8  0.4 %
Gross profit as a % of revenue4.8 %4.9 %(10) bps








Used Vehicles - Franchised Dealerships Segment

Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported used vehicle:
Revenue$604,422  $576,396  $28,026  4.9 %
Gross profit$35,727  $35,385  $342  1.0 %
Unit sales27,099  26,373  726  2.8 %
Revenue per unit$22,304  $21,856  $448  2.0 %
Gross profit per unit$1,318  $1,342  $(24) (1.8)%
Gross profit as a % of revenue5.9 %6.1 %(24) bps
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported used vehicle:
Revenue$2,493,467  $2,370,799  $122,668  5.2 %
Gross profit$147,541  $148,350  $(809) (0.5)%
Unit sales112,629  110,168  2,461  2.2 %
Revenue per unit$22,139  $21,520  $619  2.9 %
Gross profit per unit$1,310  $1,347  $(37) (2.7)%
Gross profit as a % of revenue5.9 %6.3 %(40) bps
Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store used vehicle:
Revenue$586,324  $543,052  $43,272  8.0 %
Gross profit$33,720  $29,959  $3,761  12.6 %
Unit sales26,566  24,221  2,345  9.7 %
Revenue per unit$22,070  $22,421  $(351) (1.6)%
Gross profit per unit$1,269  $1,237  $32  2.6 %
Gross profit as a % of revenue5.8 %5.5 %28  bps
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store used vehicle:
Revenue$2,394,077  $2,201,382  $192,695  8.8 %
Gross profit$136,077  $128,648  $7,429  5.8 %
Unit sales106,998  99,335  7,663  7.7 %
Revenue per unit$22,375  $22,161  $214  1.0 %
Gross profit per unit$1,272  $1,295  $(23) (1.8)%
Gross profit as a % of revenue5.7 %5.8 %(10) bps



Wholesale Vehicles - Franchised Dealerships Segment

Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported wholesale vehicle:
Revenue$39,250  $49,145  $(9,895) (20.1)%
Gross profit (loss) $(1,253) $(2,072) $819  39.5 %
Unit sales6,148  8,161  (2,013) (24.7)%
Revenue per unit$6,384  $6,022  $362  6.0 %
Gross profit (loss) per unit$(204) $(254) $50  19.7 %
Gross profit (loss) as a % of revenue(3.2)%(4.2)%102  bps
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported wholesale vehicle:
Revenue$180,020  $197,183  $(17,163) (8.7)%
Gross profit (loss)$(4,100) $(11,779) $7,679  65.2 %
Unit sales28,379  30,615  (2,236) (7.3)%
Revenue per unit$6,343  $6,441  $(98) (1.5)%
Gross profit (loss) per unit$(144) $(385) $241  62.6 %
Gross profit (loss) as a % of revenue(2.3)%(6.0)%370  bps
Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store wholesale vehicle:
Revenue$38,600  $45,706  $(7,106) (15.5)%
Gross profit (loss)$(1,269) $(1,865) $596  32.0 %
Unit sales5,920  7,303  (1,383) (18.9)%
Revenue per unit$6,520  $6,258  $262  4.2 %
Gross profit (loss) per unit$(214) $(255) $41  16.1 %
Gross profit (loss) as a % of revenue(3.3)%(4.1)%78  bps
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store wholesale vehicle:
Revenue$172,985  $179,895  $(6,910) (3.8)%
Gross profit (loss)$(3,508) $(10,320) $6,812  66.0 %
Unit sales26,341  26,583  (242) (0.9)%
Revenue per unit$6,567  $6,767  $(200) (3.0)%
Gross profit (loss) per unit$(133) $(388) $255  65.7 %
Gross profit (loss) as a % of revenue(2.0)%(5.7)%370  bps




Fixed Operations - Franchised Dealerships Segment

Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands)
Reported Fixed Operations:
Revenue:
Customer pay$141,252  $137,544  $3,708  2.7 %
Warranty63,713  68,425  (4,712) (6.9)%
Wholesale parts39,934  38,302  1,632  4.3 %
Internal, sublet and other94,269  91,929  2,340  2.5 %
Total$339,168  $336,200  $2,968  0.9 %
Gross profit:
Customer pay$76,343  $73,153  $3,190  4.4 %
Warranty35,302  38,411  (3,109) (8.1)%
Wholesale parts6,868  6,797  71  1.0 %
Internal, sublet and other47,133  45,747  1,386  3.0 %
Total$165,646  $164,108  $1,538  0.9 %
Gross profit as a % of revenue:
Customer pay54.0 %53.2 %80  bps
Warranty55.4 %56.1 %(70) bps
Wholesale parts17.2 %17.7 %(50) bps
Internal, sublet and other50.0 %49.8 %20  bps
Total48.8 %48.8 %—  bps
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands)
Reported Fixed Operations:
Revenue:
Customer pay$560,734  $559,027  $1,707  0.3 %
Warranty272,389  266,644  5,745  2.2 %
Wholesale parts157,603  161,066  (3,463) (2.2)%
Internal, sublet and other375,824  377,822  (1,998) (0.5)%
Total$1,366,550  $1,364,559  $1,991  0.1 %
Gross profit:
Customer pay$304,927  $299,360  $5,567  1.9 %
Warranty150,984  150,746  238  0.2 %
Wholesale parts27,187  27,746  (559) (2.0)%
Internal, sublet and other185,860  187,365  (1,505) (0.8)%
Total$668,958  $665,217  $3,741  0.6 %
Gross profit as a % of revenue:
Customer pay54.4 %53.6 %80  bps
Warranty55.4 %56.5 %(110) bps
Wholesale parts17.3 %17.2 %10  bps
Internal, sublet and other49.5 %49.6 %(10) bps
Total49.0 %48.7 %30  bps










Fixed Operations - Franchised Dealerships Segment (Continued)

Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands)
Same store Fixed Operations:
Revenue:
Customer pay$139,127  $129,093  $10,034  7.8 %
Warranty63,042  65,432  (2,390) (3.7)%
Wholesale parts39,398  36,483  2,915  8.0 %
Internal, sublet and other93,030  85,213  7,817  9.2 %
Total$334,597  $316,222  $18,375  5.8 %
Gross profit:
Customer pay$75,404  $68,425  $6,979  10.2 %
Warranty35,007  36,748  (1,741) (4.7)%
Wholesale parts6,772  6,423  349  5.4 %
Internal, sublet and other46,406  42,513  3,893  9.2 %
Total$163,589  $154,109  $9,480  6.2 %
Gross profit as a % of revenue:
Customer pay54.2 %53.0 %120  bps
Warranty55.5 %56.2 %(70) bps
Wholesale parts17.2 %17.6 %(40) bps
Internal, sublet and other49.9 %49.9 %—  bps
Total48.9 %48.7 %20  bps
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands)
Same store Fixed Operations:
Revenue:
Customer pay$547,344  $516,572  $30,772  6.0 %
Warranty264,282  250,750  13,532  5.4 %
Wholesale parts154,166  152,030  2,136  1.4 %
Internal, sublet and other362,114  345,513  16,601  4.8 %
Total$1,327,906  $1,264,865  $63,041  5.0 %
Gross profit:
Customer pay$297,894  $275,387  $22,507  8.2 %
Warranty146,644  140,305  6,339  4.5 %
Wholesale parts26,542  25,972  570  2.2 %
Internal, sublet and other178,232  171,038  7,194  4.2 %
Total$649,312  $612,702  $36,610  6.0 %
Gross profit as a % of revenue:
Customer pay54.4 %53.3 %110  bps
Warranty55.5 %56.0 %(50) bps
Wholesale parts17.2 %17.1 %10  bps
Internal, sublet and other49.2 %49.5 %(30) bps
Total48.9 %48.4 %50  bps








F&I - Franchised Dealerships Segment

Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported F&I:
Revenue$96,946  $90,341  $6,605  7.3 %
Unit sales56,700  57,340  (640) (1.1)%
Gross profit per retail unit (excludes fleet)$1,710  $1,576  $134  8.5 %
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported F&I:
Revenue$363,117  $344,814  $18,303  5.3 %
Unit sales224,086  230,987  (6,901) (3.0)%
Gross profit per retail unit (excludes fleet)$1,620  $1,493  $127  8.5 %
Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store F&I:
Revenue$91,628  $80,579  $11,049  13.7 %
Unit sales55,594  51,778  3,816  7.4 %
Gross profit per retail unit (excludes fleet)$1,648  $1,556  $92  5.9 %
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store F&I:
Revenue$335,756  $304,293  $31,463  10.3 %
Unit sales212,127  204,631  7,496  3.7 %
Gross profit per retail unit (excludes fleet)$1,583  $1,487  $96  6.5 %




Used Vehicles and F&I - EchoPark Segment

Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported retail used vehicle and F&I:
Retail used vehicle revenue$265,286  $179,486  $85,800  47.8 %
Retail used vehicle gross profit (loss)$1,104  $(1,794) $2,898  (161.5)%
Retail used vehicle unit sales12,676  8,762  3,914  44.7 %
Retail used vehicle revenue per unit$20,928  $20,485  $443  2.2 %
F&I revenue$28,576  $19,292  $9,284  48.1 %
Combined retail used vehicle gross profit and F&I revenue$29,680  $17,498  $12,182  69.6 %
Total retail used vehicle and F&I gross profit per unit$2,341  $1,997  $344  17.2 %
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported retail used vehicle and F&I:
Retail used vehicle revenue$996,505  $602,699  $393,806  65.3 %
Retail used vehicle gross profit (loss)$(146) $(5,362) $5,216  97.3 %
Retail used vehicle unit sales49,520  29,437  20,083  68.2 %
Retail used vehicle revenue per unit$20,123  $20,474  $(351) (1.7)%
F&I revenue$113,834  $60,709  $53,125  87.5 %
Combined retail used vehicle gross profit and F&I revenue$113,688  $55,347  $58,341  105.4 %
Total retail used vehicle and F&I gross profit per unit$2,296  $1,880  $416  22.1 %
Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store retail used vehicle and F&I:
Retail used vehicle revenue$223,669  $168,442  $55,227  32.8 %
Retail used vehicle gross profit (loss)$(116) $(1,832) $1,716  (93.7)%
Retail used vehicle unit sales10,608  8,225  2,383  29.0 %
Retail used vehicle revenue per unit$21,085  $20,479  $606  3.0 %
F&I revenue$23,885  $18,055  $5,830  32.3 %
Combined retail used vehicle gross profit and F&I revenue$23,769  $16,223  $7,546  46.5 %
Total retail used vehicle and F&I gross profit per unit$2,241  $1,972  $269  13.6 %
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store retail used vehicle and F&I:
Retail used vehicle revenue$797,327  $557,620  $239,707  43.0 %
Retail used vehicle gross profit (loss)$(4,382) $(4,344) $(38) (0.9)%
Retail used vehicle unit sales39,458  27,080  12,378  45.7 %
Retail used vehicle revenue per unit$20,207  $20,592  $(385) (1.9)%
F&I revenue$90,684  $56,023  $34,661  61.9 %
Combined retail used vehicle gross profit and F&I revenue$86,302  $51,679  $34,623  67.0 %
Total retail used vehicle and F&I gross profit per unit$2,187  $1,908  $279  14.6 %




Wholesale Vehicles - EchoPark Segment

Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported wholesale vehicle:
Revenue$7,346  $754  $6,592  874.3 %
Gross profit (loss) $(92) $(98) $6  6.1 %
Unit sales1,751  53  1,698  3,203.8 %
Revenue per unit$4,195  $14,226  $(10,031) (70.5)%
Gross profit (loss) per unit$(53) $(1,849) $1,796  97.1 %
Gross profit (loss) as a % of revenue(1.3)%(13.0)%1,170  bps
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Reported wholesale vehicle:
Revenue$22,926  $20,442  $2,484  12.2 %
Gross profit (loss)$(332) $530  $(862) (162.6)%
Unit sales5,774  3,552  2,222  62.6 %
Revenue per unit$3,971  $5,755  $(1,784) (31.0)%
Gross profit (loss) per unit$(57) $149  $(206) (138.3)%
Gross profit (loss) as a % of revenue(1.4)%2.6 %(400) bps
Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store wholesale vehicle:
Revenue$6,169  $753  $5,416  719.3 %
Gross profit (loss)$(86) $(97) $11  11.3 %
Unit sales1,495  53  1,442  2,720.8 %
Revenue per unit$4,126  $14,208  $(10,082) (71.0)%
Gross profit (loss) per unit$(58) $(1,830) $1,772  96.8 %
Gross profit (loss) as a % of revenue(1.4)%(12.9)%1,150  bps
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands, except unit and per unit data)
Same store wholesale vehicle:
Revenue$18,446  $15,848  $2,598  16.4 %
Gross profit (loss)$(300) $528  $(828) (156.8)%
Unit sales4,675  2,662  2,013  75.6 %
Revenue per unit$3,946  $5,953  $(2,007) (33.7)%
Gross profit (loss) per unit$(64) $198  $(262) (132.3)%
Gross profit (loss) as a % of revenue(1.6)%3.3 %(490) bps




Fixed Operations - EchoPark Segment

Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands)
Reported Fixed Operations:
Revenue$7,346  $3,057  $4,289  140.3 %
Gross profit (loss)$(354) $(242) $(112) 46.3 %
Gross profit (loss) as a % of revenue(4.8)%(7.9)%310  bps  
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands)
Reported Fixed Operations:
Revenue$28,753  $16,328  $12,425  76.1 %
Gross profit (loss)$(943) $2,144  $(3,087) (144.0)%
Gross profit (loss) as a % of revenue(3.3)%13.1 %(1,640) bps  
Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands)
Same store Fixed Operations:
Revenue$6,058  $2,814  $3,244  115.3 %
Gross profit (loss)$(288) $(238) $(50) 21.0 %
Gross profit (loss) as a % of revenue(4.8)%(8.5)%370  bps  
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands)
Same store Fixed Operations:
Revenue$22,952  $14,508  $8,444  58.2 %
Gross profit (loss)$(768) $1,845  $(2,613) (141.6)%
Gross profit (loss) as a % of revenue(3.3)%12.7 %(1,600) bps










Segment Income (Loss)


Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands)
Segment income (loss):
Franchised Dealerships Segment $76,541  $51,440  $25,101  48.8 %
EchoPark Segment 2,099  (4,695) 6,794  144.7 %
Total segment income (loss)$78,640  $46,745  $31,895  68.2 %
Impairment charges(17,692) (15,553) (2,139) (13.8)%
Income (loss) from continuing operations before taxes$60,948  $31,192  $29,756  95.4 %
Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands) 
Segment income (loss):
Franchised Dealerships Segment$211,267  $157,413  $53,854  34.2 %
EchoPark Segment9,146  (52,587) 61,733  117.4 %
Total segment income (loss)$220,413  $104,826  $115,587  110.3 %
Impairment charges(20,768) (29,514) 8,746  29.6 %
Income (loss) from continuing operations before taxes$199,645  $75,312  $124,333  165.1 %





Selling, General and Administrative (“SG&A”) Expenses - Non-GAAP Reconciliation

Three Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands)
Reported:
Compensation$184,455  $166,950  $(17,505) (10.5)%
Advertising14,522  16,196  1,674  10.3 %
Rent13,303  13,753  450  3.3 %
Other48,641  77,016  28,375  36.8 %
Total SG&A expenses$260,921  $273,915  $12,994  4.7 %
Items of interest:
Gain on franchise disposals$29,303  $—  
Lease exit adjustments—  800  
Total SG&A adjustments$29,303  $800  
Adjusted:
Total adjusted SG&A expenses$290,224  $274,715  $(15,509) (5.6)%
Reported:
SG&A expenses as a % of gross profit:
Compensation46.8 %45.0 %(180) bps
Advertising3.7 %4.4 %70  bps
Rent3.4 %3.7 %30  bps
Other12.3 %20.8 %850  bps
Total SG&A expenses as a % of gross profit66.2 %73.9 %770  bps
Items of interest:
Gain on franchise disposals7.5 %— %
Lease exit adjustments— %0.2 %
Total effect of adjustments7.5 %0.2 %
Adjusted:
Total adjusted SG&A expenses as a % of gross profit73.7 %74.1 %40  bps






























SG&A Expenses - Non-GAAP Reconciliation (Continued)

Twelve Months Ended December 31,Better / (Worse)
20192018Change% Change
(In thousands)
Reported:
Compensation$733,925  $725,022  $(8,903) (1.2)%
Advertising60,831  63,134  2,303  3.6 %
Rent54,611  64,204  9,593  14.9 %
Other250,007  292,965  42,958  14.7 %
Total SG&A expenses$1,099,374  $1,145,325  $45,951  4.0 %
Items of interest:
Legal and storm damage charges$—  $(5,749) 
Long-term compensation charges—  (32,522) 
Executive transition costs(6,264) (1,581) 
Lease exit adjustments—  (1,435) 
Gain on franchise disposals75,983  38,893  
Total SG&A adjustments$69,719  $(2,394) 
Adjusted:
Total adjusted SG&A expenses$1,169,093  $1,142,931  $(26,162) (2.3)%
Reported:
SG&A expenses as a % of gross profit:
Compensation48.3 %50.1 %180  bps
Advertising4.0 %4.4 %40  bps
Rent3.6 %4.4 %80  bps
Other16.4 %20.3 %390  bps
Total SG&A expenses as a % of gross profit72.3 %79.2 %690  bps
Items of interest:
Legal and storm damage charges— %(0.5)%
Long-term compensation charges— %(2.7)%
Executive transition costs(0.4)%(0.1)%
Lease exit adjustments— %(0.1)%
Gain on franchise disposals5.0 %3.2 %
Total effect of adjustments4.6 %(0.2)%
Adjusted:
Total adjusted SG&A expenses as a % of gross profit76.9 %79.0 %210  bps





Earnings Per Share from Continuing Operations - Non-GAAP Reconciliation

Three Months Ended December 31, 2019Three Months Ended December 31, 2018
Weighted-
Average
Shares		AmountPer
Share
Amount		Weighted-
Average
Shares		AmountPer
Share
Amount
(In thousands, except per share amounts) 
Diluted earnings (loss) and shares from continuing operations44,463  $46,272  $1.04  42,911  $21,981  $0.51  
Pre-tax items of interest:
Gain on franchise disposals$(29,303) $—  
Lease exit adjustments—  (800) 
Impairment charges17,692  15,553  
Loss on debt extinguishment 7,157  —  
Total pre-tax items of interest $(4,454) $14,753  
Tax effect of above items$1,292  $(4,020) 
Adjusted diluted earnings (loss) and shares from continuing operations44,463  $43,110  $0.97  42,911  $32,714  $0.76  



Twelve Months Ended December 31, 2019Twelve Months Ended December 31, 2018
Weighted-
Average
Shares		AmountPer
Share
Amount		Weighted-
Average
Shares		AmountPer
Share
Amount
(In thousands, except per share amounts) 
Diluted earnings (loss) and shares from continuing operations43,710  $144,537  $3.31  42,950  $52,390  $1.22  
Pre-tax items of interest:
Gain on franchise disposals$(75,983) $(38,893) 
Legal and storm damage charges—  5,749  
Long-term compensation charges—  32,522  
Executive transition costs6,264  1,581  
Impairment charges19,618  29,512
Loss on debt extinguishment7,157  —  
Lease exit adjustments—  1,435
Total pre-tax items of interest$(42,944) $31,906  
Tax effect of above items$14,193  $(8,694) 
Non-recurring tax items$—  $1,313  
Adjusted diluted earnings (loss) and shares from continuing operations43,710  $115,786  $2.65  42,950  $76,914  $1.79  






Adjusted EBITDA - Non-GAAP Reconciliation

Three Months Ended December 31, 2019Three Months Ended December 31, 2018
Franchised Dealerships SegmentEchoPark SegmentDiscontinued OperationsTotalFranchised Dealerships SegmentEchoPark SegmentDiscontinued OperationsTotal
(In thousands) 
Net income (loss)$46,307  $21,821  
Provision for income taxes14,703  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 amortization20,972  2,765  —  23,737  21,087  2,210  —  23,297  
Stock-based compensation expense2,690  —  —  2,690  1,264  —  —  1,264  
Loss (gain) on exit of leased dealerships—  —  —  —  (1,080) 3  89  (988) 
Impairment charges1,075  16,617  —  17,692  14,053  1,500  —  15,553  
Loss on debt extinguishment6,690  —  —  6,690  —  —  —  —  
Gain on franchise disposals(29,242) —  —  (29,242) (158) —  —  (158) 
Adjusted EBITDA $89,986  $5,299  $62  $95,347  $85,456  $(2,060) $(43) $83,353  



Twelve Months Ended December 31, 2019Twelve Months Ended December 31, 2018
Franchised Dealerships SegmentEchoPark SegmentDiscontinued OperationsTotalFranchised Dealerships SegmentEchoPark SegmentDiscontinued OperationsTotal
(In thousands) 
Net income (loss)$144,137  $51,650  
Provision for income taxes54,954  22,645  
Income (loss) before taxes$210,167  $(10,522) $(554) $199,091  $129,481  $(54,169) $(1,017) $74,295  
Non-floor plan interest 48,774  1,701  —  $50,475  50,000  1,641  408  52,049  
Depreciation and amortization85,093  10,553  —  95,646  88,857  7,795  —  96,652  
Stock-based compensation expense10,797  —  —  10,797  11,853  —  —  11,853  
Loss (gain) on exit of leased dealerships(170) —  —  (170) 1,281  20  408  1,709  
Impairment charges1,101  19,667  —  20,768  27,931  1,583  —  29,514  
Loss on debt extinguishment6,690  —  —  6,690  —  —  —  —  
Long-term compensation charges—  —  —  —  —  32,522  —  32,522  
Gain on franchise disposals(74,812) —  —  (74,812) (39,307) —  —  (39,307) 
Adjusted EBITDA $287,640  $21,399  $(554) $308,485  $270,096  $(10,608) $(201) $259,287