Sonic Automotive, Inc. Reports Fourth Quarter and Full Year Results
EchoPark Grows Retail Unit Volume 95%
CHARLOTTE, N.C., Feb. 20, 2019 /PRNewswire/ -- Sonic Automotive, Inc. (NYSE: SAH), one of the nation's largest automotive retailers, today reported financial results for the fourth quarter and full year ended December 31, 2018.
- Fourth quarter revenue and gross profit of $2.6 billion and $370.7 million, respectively
- Record fourth quarter pre-owned retail unit sales of 35,135 units
- Record quarterly F&I gross profit per retail unit of $1,659
- Record quarterly F&I gross of $109.6 million
- EchoPark stores retailed 8,762 units during the fourth quarter, up 94.9% from the fourth quarter of 2017
- GAAP continuing operations earnings per diluted share of $0.51 per diluted share in the fourth quarter of 2018
- GAAP continuing operations earnings per diluted share of $1.22 per diluted share for the full year 2018
- Adjusted continuing operations earnings per diluted share of $0.76 per diluted share in the fourth quarter of 2018
- Adjusted continuing operations earnings per diluted share of $1.79 per diluted share for the full year 2018
- Increased quarterly cash dividend 67%, to $0.10 per share
Fourth Quarter and Full Year 2018 Results
GAAP Basis
Net income from continuing operations for the fourth quarter of 2018 was $22.0 million, or $0.51 per diluted share. Comparatively, net income from continuing operations for the fourth quarter of 2017 was $62.1 million, or $1.42 per diluted share.
Net income from continuing operations for the full year 2018 was $52.4 million, or $1.22 per diluted share. Comparatively, net income from continuing operations for the full year 2017 was $94.2 million, or $2.12 per diluted share.
Adjusted Basis
Adjusted net income from continuing operations and related earnings per diluted share are non-GAAP financial measures. The schedules included in this press release reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures.
Adjusted net income from continuing operations for the fourth quarter of 2018 was $32.7 million, or $0.76 per diluted share. The adjustments in the fourth quarter of 2018 relate to lease-related matters and fixed asset and franchise asset impairments. Adjusted net income from continuing operations for the fourth quarter of 2017 was $36.6 million, or $0.84 per diluted share. The adjustments in the 2017 quarterly period relate to the benefit of the change in the federal income tax rate in future periods, a gain related to the disposal of franchises, adjustments to physical damage accruals and charges related to fixed asset and franchise asset impairments and legal matters.
Adjusted net income from continuing operations for the full year 2018 was $76.9 million, or $1.79 per diluted share. The adjustments in the 2018 annual period relate to fixed asset and franchise asset impairments, legal, storm damage and lease exit charges, long-term compensation related charges and executive transition costs, offset partially by gains related to the disposal of franchises. Adjusted net income from continuing operations for the full year 2017 was $82.2 million, or $1.85 per diluted share. The adjustments in the 2017 annual period relate to the benefit of the change in the federal income tax rate in future periods, gains related to the disposal of franchises and charges related to fixed asset and franchise asset impairments, debt refinance costs and legal matters.
Commentary
David Smith, Sonic's and EchoPark's Chief Executive Officer, commented, "We saw new car volume erode in the fourth quarter of 2018 versus the prior year quarter, driven by difficult year-over-year comparisons in Texas given Hurricane Harvey in 2017. We continue to outperform our internal targets on used vehicles and F&I which both posted records in the fourth quarter of 2018. Our EchoPark platform continues to grow at a rapid pace, up 95% in unit volume in the fourth quarter of 2018, compared to the prior year quarter. We expect to see new car volatility continue over the long term and believe EchoPark growth will add more stability to our future operations. We believe EchoPark will provide Sonic with diversification that will hedge the risk of new vehicle manufacturer driven swings in volume and incentives that can negatively affect the profitability of our franchise operations. We expect 2019 to be a challenging year, given new car volatility, but believe our used vehicle, fixed operations and F&I performance will more than offset this volatility. In addition, our EchoPark platform should significantly improve its profit performance in 2019."
Jeff Dyke, Sonic's and EchoPark's President, commented, "I agree with David Smith's comments, and would add that our exposure to BMW and Honda, which make up on average 40% of our profits, makes it difficult when these brands have challenging years. I am also enthusiastic about our EchoPark performance and look forward to announcing even better results as we move into the next couple of quarters. We expect 2019 to be a very big year for the EchoPark brand. We successfully launched our Charlotte store in the fourth quarter of 2018, which was profitable in the month of December, its second full month of operation, and performed even better in January. Our Houston store opened on December 7, 2018 and was our best EchoPark store opening to date, selling 266 vehicles in the last three weeks of December and selling 373 vehicles in January. We expect Houston volume to continue climbing and ultimately operate in the volume range of our Dallas location, which sells nearly 1,200 vehicles a month. We expect the interest rate environment to remain challenging in 2019, anticipating several rate hikes. Given our luxury mix with higher than average inventory values, rising interest rates considerably erode our profitability. Accordingly, we are actively managing our inventory balances. Our days' supply numbers in both new and used vehicles were 59 days and 31 days, respectively, at the end of 2018. Given this challenging environment, we completed headcount reductions in the first quarter of 2019, reducing our corporate and regional staff by over 6%, and have identified additional savings opportunities to reduce costs in 2019 and will continue to search for additional cost savings measures throughout 2019."
Heath Byrd, Sonic's and EchoPark's Executive Vice President and Chief Financial Officer, added, "Given the volatility in the new car market, coupled with our expansion options for EchoPark, we will discontinue our historical practice of providing annual earnings per share guidance. In addition, starting in the first quarter of 2019, we will report our results on a GAAP basis only."
Fourth Quarter 2018 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 the "Earnings Conference Calls" link at the bottom of the page.
Presentation materials for the 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," then "Investor Relations," then the "Webcasts & Presentations" link 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: 5294515
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: 5294515
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. More information about EchoPark Automotive can be found at www.echopark.com.
Forward-Looking Statements
Included herein are forward-looking statements. 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 recovery or decline, and the risk factors described in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 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 contain certain non-GAAP financial measures as defined under SEC rules, such as adjusted net income from continuing operations and related earnings per diluted share, which exclude certain items disclosed in the attached financial tables. As required by SEC rules, the Company provides reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures. The Company believes that these non-GAAP financial measures improve the transparency of the Company's disclosure, provide a meaningful presentation of the Company's results from its core business operations excluding the impact of items not related to the Company's ongoing core business operations, and improve the period-to-period comparability of the Company's results from its core business operations.
Sonic Automotive, Inc. | |||||||||||
Results of Operations | |||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
(Dollars and shares in thousands, except per share amounts) | |||||||||||
Revenues: | |||||||||||
New vehicles | $ | 1,319,587 | $ | 1,485,749 | $ | 4,974,097 | $ | 5,295,051 | |||
Used vehicles | 755,882 | 685,965 | 2,973,498 | 2,622,053 | |||||||
Wholesale vehicles | 49,899 | 40,890 | 217,625 | 171,064 | |||||||
Total vehicles | 2,125,368 | 2,212,604 | 8,165,220 | 8,088,168 | |||||||
Parts, service and collision repair | 339,257 | 355,137 | 1,380,887 | 1,416,010 | |||||||
Finance, insurance and other, net | 109,633 | 100,198 | 405,523 | 363,030 | |||||||
Total revenues | 2,574,258 | 2,667,939 | 9,951,630 | 9,867,208 | |||||||
Cost of Sales: | |||||||||||
New vehicles | (1,253,792) | (1,407,861) | (4,732,595) | (5,030,125) | |||||||
Used vehicles | (722,291) | (651,074) | (2,830,510) | (2,467,150) | |||||||
Wholesale vehicles | (52,069) | (43,224) | (228,874) | (179,778) | |||||||
Total vehicles | (2,028,152) | (2,102,160) | (7,791,979) | (7,677,053) | |||||||
Parts, service and collision repair | (175,391) | (181,690) | (713,526) | (732,479) | |||||||
Total cost of sales | (2,203,543) | (2,283,850) | (8,505,505) | (8,409,532) | |||||||
Gross profit | 370,715 | 384,089 | 1,446,125 | 1,457,676 | |||||||
Selling, general and administrative expenses | (273,915) | (277,634) | (1,145,325) | (1,147,773) | |||||||
Impairment charges | (15,553) | (6,079) | (29,514) | (9,394) | |||||||
Depreciation and amortization | (22,556) | (23,192) | (93,623) | (88,944) | |||||||
Operating income (loss) | 58,691 | 77,184 | 177,663 | 211,565 | |||||||
Other income (expense): | |||||||||||
Interest expense, floor plan | (13,585) | (9,982) | (48,398) | (36,395) | |||||||
Interest expense, other, net | (13,914) | (13,324) | (54,059) | (52,524) | |||||||
Other income (expense), net | — | (32) | 106 | (14,522) | |||||||
Total other income (expense) | (27,499) | (23,338) | (102,351) | (103,441) | |||||||
Income (loss) from continuing operations before taxes | 31,192 | 53,846 | 75,312 | 108,124 | |||||||
Provision for income taxes for continuing operations - benefit (expense) | (9,212) | 8,282 | (22,922) | (13,971) | |||||||
Income (loss) from continuing operations | 21,981 | 62,128 | 52,390 | 94,153 | |||||||
Discontinued operations: | |||||||||||
Income (loss) from discontinued operations before taxes | (221) | (293) | (1,017) | (1,942) | |||||||
Provision for income taxes for discontinued operations - benefit (expense) | 60 | 117 | 277 | 772 | |||||||
Income (loss) from discontinued operations | (161) | (176) | (740) | (1,170) | |||||||
Net income (loss) | $ | 21,820 | $ | 61,952 | $ | 51,650 | $ | 92,983 | |||
Basic earnings (loss) per common share: | |||||||||||
Earnings (loss) per share from continuing operations | $ | 0.51 | $ | 1.44 | $ | 1.23 | $ | 2.14 | |||
Earnings (loss) per share from discontinued operations | — | (0.01) | (0.02) | (0.03) | |||||||
Earnings (loss) per common share | $ | 0.51 | $ | 1.43 | $ | 1.21 | $ | 2.11 | |||
Weighted average common shares outstanding | 42,710 | 43,156 | 42,708 | 43,997 | |||||||
Diluted earnings (loss) per common share: | |||||||||||
Earnings (loss) per share from continuing operations | $ | 0.51 | $ | 1.42 | $ | 1.22 | $ | 2.12 | |||
Earnings (loss) per share from discontinued operations | — | — | (0.02) | (0.03) | |||||||
Earnings (loss) per common share | $ | 0.51 | $ | 1.42 | $ | 1.20 | $ | 2.09 | |||
Weighted average common shares outstanding | 42,911 | 43,682 | 42,950 | 44,358 | |||||||
Dividends declared per common share | $ | 0.06 | $ | 0.05 | $ | 0.24 | $ | 0.20 | |||
Sonic Automotive, Inc. | |||||||||||||||||||
Per Share Data | |||||||||||||||||||
Three Months Ended December 31, 2018 | |||||||||||||||||||
Income (Loss) | Income (Loss) | Net | |||||||||||||||||
Weighted | Amount | Per | Amount | Per | Amount | Per | |||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||
Reported: | |||||||||||||||||||
Earnings (loss) and shares | 42,710 | $ | 21,981 | $ | (161) | $ | 21,820 | ||||||||||||
Effect of participating securities: | |||||||||||||||||||
Non-vested restricted stock | (21) | — | (21) | ||||||||||||||||
Basic earnings (loss) and shares | 42,710 | $ | 21,960 | $ | 0.51 | $ | (161) | $ | — | $ | 21,799 | $ | 0.51 | ||||||
Effect of dilutive securities: | |||||||||||||||||||
Stock compensation plans | 201 | ||||||||||||||||||
Diluted earnings (loss) and shares | 42,911 | $ | 21,960 | $ | 0.51 | $ | (161) | $ | — | $ | 21,799 | $ | 0.51 | ||||||
Adjustments: | |||||||||||||||||||
Impairment charges | $ | 15,553 | $ | — | $ | 15,553 | |||||||||||||
Lease exit adjustments | (800) | — | (800) | ||||||||||||||||
Total adjustments before taxes | 14,753 | — | 14,753 | ||||||||||||||||
Income tax effect of adjustments | (4,020) | — | (4,020) | ||||||||||||||||
Effect of adjustments, net of income taxes | $ | 10,733 | $ | 0.25 | $ | — | $ | — | $ | 10,733 | $ | 0.25 | |||||||
Adjusted: | |||||||||||||||||||
Earnings (loss) and diluted earnings (loss) per share (1) | $ | 32,714 | $ | 0.76 | $ | (161) | $ | — | $ | 32,553 | $ | 0.76 | |||||||
(1) | Net loss attributable to EchoPark was $0.08 per fully diluted share in the three months ended December 31, 2018. |
Three Months Ended December 31, 2017 | |||||||||||||||||||
Income (Loss) | Income (Loss) | Net | |||||||||||||||||
Weighted | Amount | Per | Amount | Per | Amount | Per | |||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||
Reported: | |||||||||||||||||||
Earnings (loss) and shares | 43,156 | $ | 62,128 | $ | (176) | $ | 61,952 | ||||||||||||
Effect of participating securities: | |||||||||||||||||||
Non-vested restricted stock | (57) | — | (57) | ||||||||||||||||
Basic earnings (loss) and shares | 43,156 | $ | 62,071 | $ | 1.44 | $ | (176) | $ | (0.01) | $ | 61,895 | $ | 1.43 | ||||||
Effect of dilutive securities: | |||||||||||||||||||
Stock compensation plans | 526 | ||||||||||||||||||
Diluted earnings (loss) and shares | 43,682 | $ | 62,071 | $ | 1.42 | $ | (176) | $ | — | $ | 61,895 | $ | 1.42 | ||||||
Adjustments: | |||||||||||||||||||
Impairment charges | $ | 6,080 | $ | — | $ | 6,080 | |||||||||||||
Legal and storm damage adjustments | (1,153) | — | (1,153) | ||||||||||||||||
Long-term compensation-related charges | 1,271 | — | 1,271 | ||||||||||||||||
Gain on disposal of franchises | (1,507) | — | (1,507) | ||||||||||||||||
Total adjustments before taxes | 4,691 | — | 4,691 | ||||||||||||||||
Income tax effect of adjustments | (1,841) | — | (1,841) | ||||||||||||||||
Non-recurring tax items | (28,409) | — | (28,409) | ||||||||||||||||
Effect of adjustments, net of income taxes | $ | (25,559) | $ | (0.58) | $ | — | $ | (0.01) | $ | (25,559) | $ | (0.59) | |||||||
Adjusted: | |||||||||||||||||||
Earnings (loss) and diluted earnings (loss) per share (2) | $ | 36,569 | $ | 0.84 | $ | (176) | $ | (0.01) | $ | 36,393 | $ | 0.83 | |||||||
(2) | Net loss attributable to EchoPark was $0.04 per fully diluted share in the three months ended December 31, 2017. |
Twelve Months Ended December 31, 2018 | |||||||||||||||||||
Income (Loss) | Income (Loss) | Net | |||||||||||||||||
Weighted | Amount | Per | Amount | Per | Amount | Per | |||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||
Reported: | |||||||||||||||||||
Earnings (loss) and shares | 42,708 | $ | 52,390 | $ | (740) | $ | 51,650 | ||||||||||||
Effect of participating securities: | |||||||||||||||||||
Non-vested restricted stock | (50) | — | (50) | ||||||||||||||||
Basic earnings (loss) and shares | 42,708 | $ | 52,340 | $ | 1.23 | $ | (740) | $ | (0.02) | $ | 51,600 | $ | 1.21 | ||||||
Effect of dilutive securities: | |||||||||||||||||||
Stock compensation plans | 242 | ||||||||||||||||||
Diluted earnings (loss) and shares | 42,950 | $ | 52,340 | $ | 1.22 | $ | (740) | $ | (0.02) | $ | 51,600 | $ | 1.20 | ||||||
Adjustments: | |||||||||||||||||||
Impairment charges | $ | 29,512 | $ | — | $ | 29,512 | |||||||||||||
Legal and storm damage charges | 5,749 | — | 5,749 | ||||||||||||||||
Lease exit adjustments | 1,435 | — | 1,435 | ||||||||||||||||
Gain on disposal of franchises | (38,893) | — | (38,893) | ||||||||||||||||
Long-term compensation-related charges | 32,522 | — | 32,522 | ||||||||||||||||
Executive transition costs | 1,581 | — | 1,581 | ||||||||||||||||
Total adjustments before taxes | 31,906 | — | 31,906 | ||||||||||||||||
Income tax effect of adjustments | (8,694) | — | (8,694) | ||||||||||||||||
Non-recurring tax items | 1,313 | — | 1,313 | ||||||||||||||||
Effect of adjustments, net of income taxes | $ | 24,524 | $ | 0.57 | $ | — | $ | — | $ | 24,524 | $ | 0.57 | |||||||
Adjusted: | |||||||||||||||||||
Earnings (loss) and diluted earnings (loss) per share (3) | $ | 76,914 | $ | 1.79 | $ | (740) | $ | (0.02) | $ | 76,174 | $ | 1.77 | |||||||
(3) | Net loss attributable to EchoPark was $0.34 per fully diluted share in the twelve months ended December 31, 2018. |
Twelve Months Ended December 31, 2017 | |||||||||||||||||||
Income (Loss) | Income (Loss) | Net | |||||||||||||||||
Weighted | Amount | Per | Amount | Per | Amount | Per | |||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||
Reported: | |||||||||||||||||||
Earnings (loss) and shares | 43,997 | $ | 94,153 | $ | (1,170) | $ | 92,983 | ||||||||||||
Effect of participating securities: | |||||||||||||||||||
Non-vested restricted stock | (85) | — | (85) | ||||||||||||||||
Basic earnings (loss) and shares | 43,997 | $ | 94,068 | $ | 2.14 | $ | (1,170) | $ | (0.03) | $ | 92,898 | $ | 2.11 | ||||||
Effect of dilutive securities: | |||||||||||||||||||
Stock compensation plans | 361 | ||||||||||||||||||
Diluted earnings (loss) and shares | 44,358 | $ | 94,068 | $ | 2.12 | $ | (1,170) | $ | (0.03) | $ | 92,898 | $ | 2.09 | ||||||
Adjustments: | |||||||||||||||||||
Impairment charges | $ | 9,393 | $ | — | $ | 9,393 | |||||||||||||
Legal and storm damage charges | 9,628 | — | 9,628 | ||||||||||||||||
Long-term compensation-related charges | 1,271 | — | 1,271 | ||||||||||||||||
Lease exit adjustments | 992 | — | 992 | ||||||||||||||||
Gain on disposal of franchises | (9,997) | — | (9,997) | ||||||||||||||||
Loss on debt extinguishment and double-carry interest | 15,268 | — | 15,268 | ||||||||||||||||
Total adjustments before taxes | 26,555 | — | 26,555 | ||||||||||||||||
Income tax effect of adjustments | (10,423) | — | (10,423) | ||||||||||||||||
Non-recurring tax items | (28,055) | — | (28,055) | ||||||||||||||||
Effect of adjustments, net of income taxes | $ | (11,923) | $ | (0.27) | $ | — | $ | 0.01 | $ | (11,923) | $ | (0.26) | |||||||
Adjusted: | |||||||||||||||||||
Earnings (loss) and diluted earnings (loss) per share (4) | $ | 82,230 | $ | 1.85 | $ | (1,170) | $ | (0.02) | $ | 81,060 | $ | 1.83 | |||||||
(4) | Net loss attributable to EchoPark was $0.26 per fully diluted share in the twelve months ended December 31, 2017. |
Sonic Automotive, Inc. | |||||||||||||
New Vehicles | |||||||||||||
Three Months Ended December 31, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands, except unit and per unit data) | |||||||||||||
Reported new vehicle: | |||||||||||||
Revenue | $ | 1,319,587 | $ | 1,485,749 | $ | (166,162) | (11.2) | % | |||||
Gross profit | $ | 65,795 | $ | 77,888 | $ | (12,093) | (15.5) | % | |||||
Unit sales | 31,331 | 36,531 | (5,200) | (14.2) | % | ||||||||
Revenue per unit | $ | 42,118 | $ | 40,671 | $ | 1,447 | 3.6 | % | |||||
Gross profit per unit | $ | 2,100 | $ | 2,132 | $ | (32) | (1.5) | % | |||||
Gross profit as a % of revenue | 5.0 | % | 5.2 | % | (20) |
bps | |||||||
Twelve Months Ended December 31, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands, except unit and per unit data) | |||||||||||||
Reported new vehicle: | |||||||||||||
Revenue | $ | 4,974,097 | $ | 5,295,051 | $ | (320,954) | (6.1) | % | |||||
Gross profit | $ | 241,502 | $ | 264,926 | $ | (23,424) | (8.8) | % | |||||
Unit sales | 122,717 | 135,663 | (12,946) | (9.5) | % | ||||||||
Revenue per unit | $ | 40,533 | $ | 39,031 | $ | 1,502 | 3.8 | % | |||||
Gross profit per unit | $ | 1,968 | $ | 1,953 | $ | 15 | 0.8 | % | |||||
Gross profit as a % of revenue | 4.9 | % | 5.0 | % | (10) | bps | |||||||
Three Months Ended December 31, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands, except unit and per unit data) | |||||||||||||
Same store new vehicle: | |||||||||||||
Revenue | $ | 1,318,755 | $ | 1,414,121 | $ | (95,366) | (6.7) | % | |||||
Gross profit | $ | 65,215 | $ | 75,428 | $ | (10,213) | (13.5) | % | |||||
Unit sales | 31,314 | 34,402 | (3,088) | (9.0) | % | ||||||||
Revenue per unit | $ | 42,114 | $ | 41,106 | $ | 1,008 | 2.5 | % | |||||
Gross profit per unit | $ | 2,083 | $ | 2,193 | $ | (110) | (5.0) | % | |||||
Gross profit as a % of revenue | 4.9 | % | 5.3 | % | (40) | bps | |||||||
Twelve Months Ended December 31, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands, except unit and per unit data) | |||||||||||||
Same store new vehicle: | |||||||||||||
Revenue | $ | 4,897,389 | $ | 4,992,552 | $ | (95,163) | (1.9) | % | |||||
Gross profit | $ | 238,648 | $ | 255,795 | $ | (17,147) | (6.7) | % | |||||
Unit sales | 120,400 | 126,101 | (5,701) | (4.5) | % | ||||||||
Revenue per unit | $ | 40,676 | $ | 39,592 | $ | 1,084 | 2.7 | % | |||||
Gross profit per unit | $ | 1,982 | $ | 2,028 | $ | (46) | (2.3) | % | |||||
Gross profit as a % of revenue | 4.9 | % | 5.1 | % | (20) | bps | |||||||
Sonic Automotive, Inc. | |||||||||||||
Used Vehicles | |||||||||||||
Three Months Ended December 31, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands, except unit and per unit data) | |||||||||||||
Reported used vehicle: | |||||||||||||
Revenue | $ | 755,882 | $ | 685,965 | $ | 69,917 | 10.2 | % | |||||
Gross profit | $ | 33,591 | $ | 34,891 | $ | (1,300) | (3.7) | % | |||||
Unit sales | 35,135 | 31,740 | 3,395 | 10.7 | % | ||||||||
Revenue per unit | $ | 21,514 | $ | 21,612 | $ | (98) | (0.5) | % | |||||
Gross profit per unit | $ | 956 | $ | 1,099 | $ | (143) | (13.0) | % | |||||
Gross profit as a % of revenue | 4.4 | % | 5.1 | % | (70) | bps | |||||||
Twelve Months Ended December 31, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands, except unit and per unit data) | |||||||||||||
Reported used vehicle: | |||||||||||||
Revenue | $ | 2,973,498 | $ | 2,622,053 | $ | 351,445 | 13.4 | % | |||||
Gross profit | $ | 142,988 | $ | 154,903 | $ | (11,915) | (7.7) | % | |||||
Unit sales | 139,605 | 123,489 | 16,116 | 13.1 | % | ||||||||
Revenue per unit | $ | 21,299 | $ | 21,233 | $ | 66 | 0.3 | % | |||||
Gross profit per unit | $ | 1,024 | $ | 1,254 | $ | (230) | (18.3) | % | |||||
Gross profit as a % of revenue | 4.8 | % | 5.9 | % | (110) | bps | |||||||
Three Months Ended December 31, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands, except unit and per unit data) | |||||||||||||
Same store used vehicle: | |||||||||||||
Revenue | $ | 711,830 | $ | 647,963 | $ | 63,867 | 9.9 | % | |||||
Gross profit | $ | 30,837 | $ | 32,079 | $ | (1,242) | (3.9) | % | |||||
Unit sales | 32,880 | 29,619 | 3,261 | 11.0 | % | ||||||||
Revenue per unit | $ | 21,649 | $ | 21,877 | $ | (228) | (1.0) | % | |||||
Gross profit per unit | $ | 938 | $ | 1,083 | $ | (145) | (13.4) | % | |||||
Gross profit as a % of revenue | 4.3 | % | 5.0 | % | (70) | bps | |||||||
Twelve Months Ended December 31, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands, except unit and per unit data) | |||||||||||||
Same store used vehicle: | |||||||||||||
Revenue | $ | 2,593,725 | $ | 2,427,306 | $ | 166,419 | 6.9 | % | |||||
Gross profit | $ | 136,200 | $ | 138,677 | $ | (2,477) | (1.8) | % | |||||
Unit sales | 120,339 | 112,605 | 7,734 | 6.9 | % | ||||||||
Revenue per unit | $ | 21,553 | $ | 21,556 | $ | (3) | — | % | |||||
Gross profit per unit | $ | 1,132 | $ | 1,232 | $ | (100) | (8.1) | % | |||||
Gross profit as a % of revenue | 5.3 | % | 5.7 | % | (40) | bps | |||||||
Sonic Automotive, Inc. | |||||||||||||
Wholesale Vehicles | |||||||||||||
Three Months Ended December 31, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands, except unit and per unit data) | |||||||||||||
Reported wholesale vehicle: | |||||||||||||
Revenue | $ | 49,899 | $ | 40,890 | $ | 9,009 | 22.0 | % | |||||
Gross profit | $ | (2,170) | $ | (2,334) | $ | 164 | 7.0 | % | |||||
Unit sales | 8,214 | 7,463 | 751 | 10.1 | % | ||||||||
Revenue per unit | $ | 6,075 | $ | 5,479 | $ | 596 | 10.9 | % | |||||
Gross profit per unit | $ | (264) | $ | (313) | $ | 49 | 15.7 | % | |||||
Gross profit as a % of revenue | (4.3) | % | (5.7) | % | 140 | bps | |||||||
Twelve Months Ended December 31, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands, except unit and per unit data) | |||||||||||||
Reported wholesale vehicle: | |||||||||||||
Revenue | $ | 217,625 | $ | 171,064 | $ | 46,561 | 27.2 | % | |||||
Gross profit | $ | (11,249) | $ | (8,714) | $ | (2,535) | (29.1) | % | |||||
Unit sales | 34,167 | 31,385 | 2,782 | 8.9 | % | ||||||||
Revenue per unit | $ | 6,369 | $ | 5,451 | $ | 918 | 16.8 | % | |||||
Gross profit per unit | $ | (329) | $ | (278) | $ | (51) | (18.3) | % | |||||
Gross profit as a % of revenue | (5.2) | % | (5.1) | % | (10) | bps | |||||||
Three Months Ended December 31, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands, except unit and per unit data) | |||||||||||||
Same store wholesale vehicle: | |||||||||||||
Revenue | $ | 49,821 | $ | 37,964 | $ | 11,857 | 31.2 | % | |||||
Gross profit | $ | (2,118) | $ | (1,992) | $ | (126) | (6.3) | % | |||||
Unit sales | 8,205 | 6,860 | 1,345 | 19.6 | % | ||||||||
Revenue per unit | $ | 6,072 | $ | 5,534 | $ | 538 | 9.7 | % | |||||
Gross profit per unit | $ | (258) | $ | (290) | $ | 32 | 11.0 | % | |||||
Gross profit as a % of revenue | (4.3) | % | (5.2) | % | 90 | bps | |||||||
Twelve Months Ended December 31, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands, except unit and per unit data) | |||||||||||||
Same store wholesale vehicle: | |||||||||||||
Revenue | $ | 200,574 | $ | 158,787 | $ | 41,787 | 26.3 | % | |||||
Gross profit | $ | (11,215) | $ | (7,455) | $ | (3,760) | (50.4) | % | |||||
Unit sales | 31,080 | 28,547 | 2,533 | 8.9 | % | ||||||||
Revenue per unit | $ | 6,453 | $ | 5,562 | $ | 891 | 16.0 | % | |||||
Gross profit per unit | $ | (361) | $ | (261) | $ | (100) | (38.3) | % | |||||
Gross profit as a % of revenue | (5.6) | % | (4.7) | % | (90) | bps | |||||||
Sonic Automotive, Inc. | |||||||||||||
Parts, Service and Collision Repair ("Fixed Operations") | |||||||||||||
Three Months Ended December 31, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands) | |||||||||||||
Reported Fixed Operations: | |||||||||||||
Revenue | |||||||||||||
Customer pay | $ | 137,690 | $ | 140,285 | $ | (2,595) | (1.8) | % | |||||
Warranty | 68,425 | 69,771 | (1,346) | (1.9) | % | ||||||||
Wholesale parts | 38,302 | 41,445 | (3,143) | (7.6) | % | ||||||||
Internal, sublet and other | 94,840 | 103,636 | (8,796) | (8.5) | % | ||||||||
Total | $ | 339,257 | $ | 355,137 | $ | (15,880) | (4.5) | % | |||||
Gross profit | |||||||||||||
Customer pay | $ | 73,173 | $ | 74,748 | $ | (1,575) | (2.1) | % | |||||
Warranty | 38,411 | 38,273 | 138 | 0.4 | % | ||||||||
Wholesale parts | 6,797 | 7,149 | (352) | (4.9) | % | ||||||||
Internal, sublet and other | 45,485 | 53,277 | (7,792) | (14.6) | % | ||||||||
Total | $ | 163,866 | $ | 173,447 | $ | (9,581) | (5.5) | % | |||||
Gross profit as a % of revenue | |||||||||||||
Customer pay | 53.1 | % | 53.3 | % | (20) | bps | |||||||
Warranty | 56.1 | % | 54.9 | % | 120 | bps | |||||||
Wholesale parts | 17.7 | % | 17.2 | % | 50 | bps | |||||||
Internal, sublet and other | 48.0 | % | 51.4 | % | (340) | bps | |||||||
Total | 48.3 | % | 48.8 | % | (50) | bps | |||||||
Twelve Months Ended December 31, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands) | |||||||||||||
Reported Fixed Operations: | |||||||||||||
Revenue | |||||||||||||
Customer pay | $ | 560,037 | $ | 555,463 | $ | 4,574 | 0.8 | % | |||||
Warranty | 266,644 | 282,926 | (16,282) | (5.8) | % | ||||||||
Wholesale parts | 161,066 | 168,459 | (7,393) | (4.4) | % | ||||||||
Internal, sublet and other | 393,140 | 409,162 | (16,022) | (3.9) | % | ||||||||
Total | $ | 1,380,887 | $ | 1,416,010 | $ | (35,123) | (2.5) | % | |||||
Gross profit | |||||||||||||
Customer pay | $ | 299,616 | $ | 296,834 | $ | 2,782 | 0.9 | % | |||||
Warranty | 150,746 | 156,082 | (5,336) | (3.4) | % | ||||||||
Wholesale parts | 27,746 | 28,989 | (1,243) | (4.3) | % | ||||||||
Internal, sublet and other | 189,253 | 201,626 | (12,373) | (6.1) | % | ||||||||
Total | $ | 667,361 | $ | 683,531 | $ | (16,170) | (2.4) | % | |||||
Gross profit as a % of revenue | |||||||||||||
Customer pay | 53.5 | % | 53.4 | % | 10 | bps | |||||||
Warranty | 56.5 | % | 55.2 | % | 130 | bps | |||||||
Wholesale parts | 17.2 | % | 17.2 | % | — | bps | |||||||
Internal, sublet and other | 48.1 | % | 49.3 | % | (120) | bps | |||||||
Total | 48.3 | % | 48.3 | % | — | bps | |||||||
Sonic Automotive, Inc. | |||||||||||||
Parts, Service and Collision Repair ("Fixed Operations") | |||||||||||||
Three Months Ended December 31, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands) | |||||||||||||
Same Store Fixed Operations: | |||||||||||||
Revenue | |||||||||||||
Customer pay | $ | 137,166 | $ | 134,686 | $ | 2,480 | 1.8 | % | |||||
Warranty | 68,607 | 66,823 | 1,784 | 2.7 | % | ||||||||
Wholesale parts | 38,295 | 40,015 | (1,720) | (4.3) | % | ||||||||
Internal, sublet and other | 94,026 | 98,065 | (4,039) | (4.1) | % | ||||||||
Total | $ | 338,094 | $ | 339,589 | $ | (1,495) | (0.4) | % | |||||
Gross profit | |||||||||||||
Customer pay | $ | 72,970 | $ | 71,740 | $ | 1,230 | 1.7 | % | |||||
Warranty | 38,526 | 36,647 | 1,879 | 5.1 | % | ||||||||
Wholesale parts | 6,797 | 6,906 | (109) | (1.6) | % | ||||||||
Internal, sublet and other | 45,483 | 50,458 | (4,975) | (9.9) | % | ||||||||
Total | $ | 163,776 | $ | 165,751 | $ | (1,975) | (1.2) | % | |||||
Gross profit as a % of revenue | |||||||||||||
Customer pay | 53.2 | % | 53.3 | % | (10) | bps | |||||||
Warranty | 56.2 | % | 54.8 | % | 140 | bps | |||||||
Wholesale parts | 17.7 | % | 17.3 | % | 40 | bps | |||||||
Internal, sublet and other | 48.4 | % | 51.5 | % | (310) | bps | |||||||
Total | 48.4 | % | 48.8 | % | (40) | bps | |||||||
Twelve Months Ended December 31, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands) | |||||||||||||
Same Store Fixed Operations: | |||||||||||||
Revenue | |||||||||||||
Customer pay | $ | 550,371 | $ | 528,163 | $ | 22,208 | 4.2 | % | |||||
Warranty | 263,814 | 268,800 | (4,986) | (1.9) | % | ||||||||
Wholesale parts | 159,004 | 160,691 | (1,687) | (1.0) | % | ||||||||
Internal, sublet and other | 377,480 | 383,326 | (5,846) | (1.5) | % | ||||||||
Total | $ | 1,350,669 | $ | 1,340,980 | $ | 9,689 | 0.7 | % | |||||
Gross profit | |||||||||||||
Customer pay | $ | 294,660 | $ | 281,891 | $ | 12,769 | 4.5 | % | |||||
Warranty | 147,507 | 148,237 | (730) | (0.5) | % | ||||||||
Wholesale parts | 27,429 | 27,702 | (273) | (1.0) | % | ||||||||
Internal, sublet and other | 183,927 | 187,709 | (3,782) | (2.0) | % | ||||||||
Total | $ | 653,523 | $ | 645,539 | $ | 7,984 | 1.2 | % | |||||
Gross profit as a % of revenue | |||||||||||||
Customer pay | 53.5 | % | 53.4 | % | 10 | bps | |||||||
Warranty | 55.9 | % | 55.1 | % | 80 | bps | |||||||
Wholesale parts | 17.3 | % | 17.2 | % | 10 | bps | |||||||
Internal, sublet and other | 48.7 | % | 49.0 | % | (30) | bps | |||||||
Total | 48.4 | % | 48.1 | % | 30 | bps | |||||||
Sonic Automotive, Inc. | |||||||||||
Finance, Insurance and Other, Net ("F&I") | |||||||||||
Three Months Ended December 31, | Better / (Worse) | ||||||||||
2018 | 2017 | Change | % Change | ||||||||
(In thousands, except per unit data) | |||||||||||
Reported F&I: | |||||||||||
Revenue | $ | 109,633 | $ | 100,198 | $ | 9,435 | 9.4 | % | |||
Unit Sales | 66,102 | 68,015 | (1,913) | (2.8) | % | ||||||
Gross profit per retail unit (excludes fleet) | $ | 1,659 | $ | 1,473 | $ | 186 | 12.6 | % | |||
Twelve Months Ended December 31, | Better / (Worse) | ||||||||||
2018 | 2017 | Change | % Change | ||||||||
(In thousands, except per unit data) | |||||||||||
Reported F&I: | |||||||||||
Revenue | $ | 405,523 | $ | 363,030 | $ | 42,493 | 11.7 | % | |||
Unit Sales | 260,424 | 257,217 | 3,207 | 1.2 | % | ||||||
Gross profit per retail unit (excludes fleet) | $ | 1,557 | $ | 1,411 | $ | 146 | 10.3 | % | |||
Three Months Ended December 31, | Better / (Worse) | ||||||||||
2018 | 2017 | Change | % Change | ||||||||
(In thousands, except per unit data) | |||||||||||
Same Store F&I: | |||||||||||
Revenue | $ | 101,966 | $ | 91,981 | $ | 9,985 | 10.9 | % | |||
Unit Sales | 63,830 | 63,805 | 25 | — | % | ||||||
Gross profit per retail unit (excludes fleet) | $ | 1,597 | $ | 1,442 | $ | 156 | 10.8 | % | |||
Twelve Months Ended December 31, | Better / (Worse) | ||||||||||
2018 | 2017 | Change | % Change | ||||||||
(In thousands, except per unit data) | |||||||||||
Same Store F&I: | |||||||||||
Revenue | $ | 356,589 | $ | 331,288 | $ | 25,301 | 7.6 | % | |||
Unit Sales | 238,886 | 236,961 | 1,925 | 0.8 | % | ||||||
Gross profit per retail unit (excludes fleet) | $ | 1,493 | $ | 1,398 | $ | 95 | 6.8 | % | |||
Sonic Automotive, Inc. | |||||||||||||
Selling, General and Administrative ("SG&A") Expenses | |||||||||||||
Three Months Ended December 31, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands) | |||||||||||||
Reported: | |||||||||||||
Compensation | $ | 166,950 | $ | 172,515 | $ | 5,565 | 3.2 | % | |||||
Advertising | 16,196 | 15,116 | (1,080) | (7.1) | % | ||||||||
Rent | 13,753 | 17,713 | 3,960 | 22.4 | % | ||||||||
Other | 77,016 | 72,290 | (4,726) | (6.5) | % | ||||||||
Total SG&A expenses | $ | 273,915 | $ | 277,634 | $ | 3,719 | 1.3 | % | |||||
Adjustments: | |||||||||||||
Legal and storm damage adjustments | $ | — | $ | 1,153 | |||||||||
Long-term compensation-related charges | — | (1,271) | |||||||||||
Lease exit adjustments | 800 | — | |||||||||||
Gain on disposal of franchises | — | 1,507 | |||||||||||
Total SG&A adjustments | $ | 800 | $ | 1,389 | |||||||||
Adjusted: | |||||||||||||
Total adjusted SG&A expenses | $ | 274,715 | $ | 279,023 | $ | 4,308 | 1.5 | % | |||||
Reported: | |||||||||||||
SG&A expenses as a % of gross profit: | |||||||||||||
Compensation | 45.0 | % | 44.9 | % | (10) | bps | |||||||
Advertising | 4.4 | % | 3.9 | % | (50) | bps | |||||||
Rent | 3.7 | % | 4.6 | % | 90 | bps | |||||||
Other | 20.8 | % | 18.9 | % | (190) | bps | |||||||
Total SG&A expenses as a % of gross profit | 73.9 | % | 72.3 | % | (160) | bps | |||||||
Adjustments: | |||||||||||||
Legal and storm damage adjustments | — | % | 0.2 | % | |||||||||
Long-term compensation-related charges | — | % | (0.3) | % | |||||||||
Lease exit adjustments | 0.2 | % | — | % | |||||||||
Gain on disposal of franchises | — | % | 0.3 | % | |||||||||
Total effect of adjustments | 0.2 | % | 0.3 | % | |||||||||
Adjusted: | |||||||||||||
Total adjusted SG&A expenses as a % of gross profit | 74.1 | % | 72.6 | % | (150) | bps | |||||||
Sonic Automotive, Inc. | |||||||||||||
Selling, General and Administrative ("SG&A") Expenses | |||||||||||||
Twelve Months Ended December 31, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands) | |||||||||||||
Reported: | |||||||||||||
Compensation | $ | 725,022 | $ | 692,935 | $ | (32,087) | (4.6) | % | |||||
Advertising | 63,134 | 61,563 | (1,571) | (2.6) | % | ||||||||
Rent | 64,204 | 73,022 | 8,818 | 12.1 | % | ||||||||
Other | 292,965 | 320,253 | 27,288 | 8.5 | % | ||||||||
Total SG&A expenses | $ | 1,145,325 | $ | 1,147,773 | $ | 2,448 | 0.2 | % | |||||
Adjustments: | |||||||||||||
Legal and storm damage charges | $ | (5,749) | $ | (9,628) | |||||||||
Long-term compensation-related charges | (32,522) | (1,271) | |||||||||||
Executive transition costs | (1,581) | — | |||||||||||
Lease exit adjustments | (1,435) | (992) | |||||||||||
Gain on disposal of franchises | 38,893 | 9,997 | |||||||||||
Total SG&A adjustments | $ | (2,394) | $ | (1,894) | |||||||||
Adjusted: | |||||||||||||
Total adjusted SG&A expenses | $ | 1,142,931 | $ | 1,145,879 | $ | 2,948 | 0.3 | % | |||||
Reported: | |||||||||||||
SG&A expenses as a % of gross profit: | |||||||||||||
Compensation | 50.1 | % | 47.5 | % | (260) | bps | |||||||
Advertising | 4.4 | % | 4.2 | % | (20) | bps | |||||||
Rent | 4.4 | % | 5.0 | % | 60 | bps | |||||||
Other | 20.3 | % | 22.0 | % | 170 | bps | |||||||
Total SG&A expenses as a % of gross profit | 79.2 | % | 78.7 | % | (50) | bps | |||||||
Adjustments: | |||||||||||||
Legal and storm damage charges | (0.5) | % | (0.5) | % | |||||||||
Long-term compensation-related charges | (2.7) | % | (0.1) | % | |||||||||
Executive transition costs | (0.1) | % | — | % | |||||||||
Lease exit adjustments | (0.1) | % | (0.1) | % | |||||||||
Gain on disposal of franchises | 3.2 | % | 0.5 | % | |||||||||
Total effect of adjustments | (0.2) | % | (0.1) | % | |||||||||
Adjusted: | |||||||||||||
Total adjusted SG&A expenses as a % of gross profit | 79.0 | % | 78.6 | % | (40) | bps | |||||||
SOURCE Sonic Automotive, Inc.
Share this article