2024-06-21 SONIC AUTOMOTIVE INC Cybersecurity Incident

Page last updated on August 5, 2024

SONIC AUTOMOTIVE INC initially disclosed a cybersecurity incident in an SEC 8-K filing on 2024-06-21 16:01:31 EDT.

Company Summary

Sonic Automotive, as a Fortune 500 company and member of the Russell 2000 Index, is among the largest automotive retailers in the United.

Incident Details

Material: Unknown
Is Breach: Unknown
Records Compromised: Unknown
Data Types Impacted: No Data Types Tracked (yet)

Compromised Date:
Detected Date: 2024-06-19
Disclosure Date: 2024-06-21
Contained Date:
Recovered Date: 2024-08-05

Attack Goal: Unknown

Costs: No Costs Tracked (yet)

Filings

8-K filed on 2024-06-21

SONIC AUTOMOTIVE INC filed an 8-K at 2024-06-21 16:01:31 EDT
Accession Number: 0001043509-24-000059

Item 8.01 Other Events.

On June 19, 2024, CDK Global (“CDK”), a third-party provider of certain information systems used by Sonic Automotive, Inc. (the “Company”), notified its dealership customers that CDK had suspended certain systems, including systems used by the Company, in response to a cybersecurity incident impacting CDK. As a result, the Company experienced disruptions to its dealer management system (“DMS”) hosted by CDK, which supports critical dealership operations including those supporting sales, inventory and accounting functions and its customer relationship management (“CRM”) system. All of the Company’s dealerships are open and operating utilizing workaround solutions to minimize the disruption caused by this CDK outage.

Upon detection of the unauthorized activity, the Company immediately took precautionary containment steps to protect the Company’s systems and commenced an investigation of the incident. As the incident is ongoing, the full scope, nature and impact of the incident, including the extent to which the threat actor accessed any customer data, are not yet known.

While this incident has had, and is likely to continue to have, a negative impact on the Company’s business operations until the relevant systems are fully restored, the Company has not yet determined whether the incident is reasonably likely to have a material impact on the Company’s financial condition or results of operations.

8-K filed on 2024-07-05

SONIC AUTOMOTIVE INC filed an 8-K at 2024-07-05 16:00:17 EDT
Accession Number: 0001043509-24-000060

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.

8-K/A filed on 2024-08-05

SONIC AUTOMOTIVE INC filed a 8-K/A at 2024-08-05 16:03:23 EDT
Accession Number: 0001043509-24-000063

Item 1.05 Material Cybersecurity Incidents.

As previously disclosed in the Original Form 8-K, the Company has experienced disruptions in its access to certain information systems provided to the Company by CDK Global (“CDK”) due to a cybersecurity incident experienced by CDK on June 19, 2024 (the “Incident”). As of the date of this filing, access to the Company’s information systems affected by the Incident has been restored, including its dealer management system (“DMS”) and customer relationship management system (“CRM”). However, the Company experienced operational disruptions throughout July related to the functionality of certain CDK customer lead applications, inventory management applications and related third-party application integrations with CDK.

The Company has concluded that the Incident had a material impact on the Company’s business during and results of operations for the second fiscal quarter ended June 30, 2024 (“Q2”). The Company’s GAAP earnings per diluted share for Q2 were $1.18, and the Company estimates that the Incident adversely affected its GAAP earnings per diluted share for Q2 by approximately $0.64 without taking into account any potential recoveries related to the Incident and after factoring in estimated lost income and expenses attributable to the Incident.

Based on the information available to the Company on the date hereof, the Company has concluded that the Incident is not reasonably likely to have a material impact on the Company’s financial condition or its current or future business or results of operations, except as disclosed herein.

Company Information