Sonic Automotive, Inc. Profits up 24% Same Store Revenue Grows 9% - Record Q1 Revenues

CHARLOTTE, N.C., April 23, 2012 /PRNewswire/ -- Sonic Automotive, Inc. (NYSE: SAH), one of the nation's largest automotive retailers, today reported 2012 first quarter earnings from continuing operations of $19.5 million for a 24% increase over the prior year results.  Earnings from continuing operations per diluted share increased 22% to $0.33 compared to $0.27 in the prior year quarter. 

Q1 2012 Highlights – Record Q1 Same Store Revenues; Fixed Operations Revenue and Gross Revenue Growth Despite Lower Warranty Activity; Continue to Invest in Base Business

  • Total Q1 revenues up 9.3% over prior year quarter
  • New vehicle retail revenue up 12.1% in Q1
  • Used vehicle revenue up 9.0% for the quarter
  • Parts and Service revenue up 5.1% in Q1
  • SG&A to gross profit % down 30 bps to 79.4% for the quarter

B. Scott Smith, the Company's President, noted, "We are pleased with this quarter's results. Our overall profitability increased significantly from the prior year quarter due to our strong revenue growth and continued improvement in our SG&A to gross profit metrics.  The improvements in these metrics were achieved as we continue substantial investment in our information technology and training initiatives.  We have cultivated a culture and team that are mature and stable, allowing us to embrace and execute these processes and technologies.  Our goal remains the same, develop predictable, repeatable and sustainable processes through the use of innovative technologies and operating playbooks to create a competitive advantage benefiting Sonic Automotive now and in the years to come."

Commenting on Sonic's operating performance, Jeff Dyke, the Company's EVP of Operations noted, "As a result of our operating disciplines, we achieved record first quarter revenues of nearly $2 billion with our current complement of stores.  Our new vehicle retail unit volume, which increased 11.2% versus the first quarter of 2011, outpaced the new vehicle retail industry volume increase.  We are excited about the possibilities of further improvement resulting from our continued focus on efficient execution of our selling and customer service processes."

First Quarter 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", then "Investor Relations", then "Earnings Conference Calls".

Presentation materials for the conference call can be accessed on the Company's website at www.sonicautomotive.com by clicking on the "Investor Relations" tab under "Our Company" and choosing "Webcasts & Presentations".

A live audio of the call will be accessible to the public by calling (877) 791-3416. International callers dial (706) 643-0958.  Callers should dial in approximately 10 minutes before the call begins.

A conference call replay will be available one hour following the call for seven days and can be accessed by calling:  800-585-8367, Conference ID: 70848537, International callers dial (404) 537-3406.

About Sonic Automotive

Sonic Automotive, Inc., a Fortune 500 company based in Charlotte, N.C., is one of the nation's largest automotive retailers.  Sonic can be reached on the web at www.sonicautomotive.com.

Included herein are forward-looking statements, including statements with respect to anticipated growth in new vehicle sales, and future success and impacts from the implementation of our strategic initiatives.  There are many factors that affect management's views about future events and trends of the Company's business.  These factors involve risk and uncertainties that could cause actual results or trends to differ materially from management's view, 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 recovery or decline, and the risk factors described in the Company's annual report on Form 10-K for the year ending December 31, 2011.  The Company does not undertake any obligation to update forward-looking information.

Sonic Automotive, Inc.





Results of Operations (Unaudited)





(Dollars in thousands, except per share data)


























First Quarter Ended March 31,






2012


2011

Revenues







New retail vehicles


$                  1,018,536


$                      908,853


Fleet vehicles


45,917


63,640


Total new vehicles


1,064,453


972,493


Used vehicles


517,052


474,555


Wholesale vehicles


45,341


35,046


Total vehicles


1,626,846


1,482,094


Parts, service and collision repair


301,748


287,100


Finance, insurance and other


59,248


49,102


Total revenues


1,987,842


1,818,296

Total gross profit


311,869


287,238

Selling, general and administrative expenses


(247,480)


(229,016)

Impairment charges


(1)


(17)

Depreciation and amortization


(11,071)


(9,895)

Operating income (loss)


53,317


48,310

Interest expense, floor plan


(4,473)


(5,365)

Interest expense, other, net


(15,080)


(15,359)

Interest expense, non-cash, convertible debt


(1,630)


(1,694)

Interest income (expense/amortization), non-cash, cash flow swaps


22


178

Other income (expense), net


19


71

Income (loss) from continuing operations before taxes


32,175


26,141

Provision for income taxes - benefit (expense)


(12,709)


(10,457)

Income (loss) from continuing operations


19,466


15,684

Income (loss) from discontinued operations


1,032


(720)

Net income (loss)


$                       20,498


$                        14,964









Diluted:








Weighted average common shares outstanding


64,420


65,950










Earnings (loss) per share from continuing operations 


$                           0.33


$                            0.27


Earnings (loss) per share from discontinued operations


0.02


(0.01)


Earnings (loss) per share


$                           0.35


$                            0.26









Gross Margin Data (Continuing Operations):














New retail vehicles


6.2%


6.3%


Fleet vehicles


3.4%


3.1%


Total new vehicles




6.1%


6.1%


Used vehicles 


7.8%


7.9%


Wholesale vehicles


0.5%


(1.3%)


Parts, service and collision repair


48.7%


49.3%


Finance, insurance and other


100.0%


100.0%


Overall gross margin


15.7%


15.8%









SG&A Expenses (Continuing Operations):














Compensation


$                     147,534


$                      134,802


Advertising


13,044


13,440


Rent and rent related


28,693


29,791


Other



58,209


50,983


Total



$                     247,480


$                      229,016









SG&A Expenses as % of Gross Profit


79.4%


79.7%









Operating Margin %


2.7%


2.7%









Unit Data (Continuing Operations):














New retail units


29,685


26,703


Fleet units


1,705


2,488


Total new units


31,390


29,191


Used units


26,547


24,895


Wholesale units


7,526


5,583









Other Data:














Continuing Operations revenue percentage changes:






New retail vehicles


12.1%




Fleet vehicles


(27.8%)




Total new vehicles


9.5%




Used vehicles


9.0%




Parts, service and collision repair


5.1%




Finance, insurance and other


20.7%




Total revenues


9.3%











Sonic Automotive, Inc.













Earnings Per Share Reconciliation (Unaudited)













(Dollars in thousands, except per share data)























































First Quarter Ended March 31, 2012









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
























Earnings (loss) and shares


52,224


$    19,466




$     1,032




$   20,498







Effect of participating securities:



















Non-vested restricted stock
    and stock units


-


(303)




-




(303)







Basic earnings (loss) and shares


52,224


$    19,163


$     0.37


$     1,032


$     0.02


$   20,195


$     0.39





Effect of dilutive securities:



















Contingently convertible debt (5.0% Convertible Notes)


11,676


2,167




5




2,172







Stock compensation plans


520

















Diluted earnings (loss) and shares


64,420


$    21,330


$     0.33


$     1,037


$     0.02


$   22,367


$     0.35
































































First Quarter Ended March 31, 2011









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
























Earnings (loss) and shares


52,416


$    15,684




$      (720)




$   14,964







Effect of participating securities:



















Non-vested restricted stock and stock units


-


(205)




-




(205)







Basic earnings (loss) and shares


52,416


$    15,479


$     0.30


$      (720)


$   (0.02)


$   14,759


$     0.28





Effect of dilutive securities:



















Contingently convertible debt (5.0% Convertible Notes)


12,890


2,296




14




2,310







Stock compensation plans


644

















Diluted earnings (loss) and shares


65,950


$    17,775


$     0.27


$      (706)


$   (0.01)


$   17,069


$     0.26









































SOURCE Sonic Automotive, Inc.



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http://www.sonicautomotive.com

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