July 5, 2024

Form 8K

Item 1.05. Material Cybersecurity Incidents.

 

As previously disclosed on its Current Report on Form 8-K filed on June 21, 2024, Sonic Automotive, Inc. (the

“Company”) has experienced disruptions since June 19, 2024 in its access to certain information systems provided to the

Company by CDK Global (“CDK”) due to a cybersecurity incident experienced by CDK (the “Incident”). The affected systems

include the Company’s dealer management system (“DMS”), its customer relationship management system (“CRM”) and other

systems that support sales, inventory and accounting functions (collectively with the DMS and the CRM, the “Affected

Systems”). As of the date of this filing, access to the basic functionality of the DMS has been restored. Other Affected Systems,

including the CRM and certain functions of the DMS, remain offline as the Company continues to investigate and test such

systems. Additionally, some third-party applications typically accessible through the Affected Systems also remain offline. The

timing of restoration of full access to all Affected Systems remains unclear.

 

Since the onset of the Incident, the Company has closely monitored the effect of the Incident on its business, financial

condition and results of operations. While the full impact of the Incident on the Company and its results of operations and

financial condition are not presently ascertainable, based on the information available to the Company on the date hereof, the

Company concluded that the Incident is reasonably likely to have a material impact on the Company’s results of operation for

the second fiscal quarter ended June 30, 2024 due to, among other thing, a slower rate of vehicle sales during the period since

June 19, 2024 due to the impact of the Incident on the Affected Systems. As a result, the Company expects that its earnings for

the second fiscal quarter ended June 30, 2024 will be adversely impacted by the Incident. As of the date hereof, the Company

has not yet determined whether the Incident has otherwise had or is otherwise reasonably likely to have a material impact on

the Company and its financial condition.