Sonic Automotive, Inc. Reports Third Quarter Results
EchoPark Revenue Up 226% with Volume Up 221%
CHARLOTTE, N.C., Oct. 25, 2018 /PRNewswire/ -- Sonic Automotive, Inc. (NYSE: SAH), one of the nation's largest automotive retailers, today reported financial results for the third quarter of 2018.
- Third quarter revenue and gross profit of $2.5 billion and $360.5 million, respectively
- Record third quarter pre-owned retail unit sales of 34,952 units
- Record third quarter F&I gross profit per retail unit of $1,505
- Record third quarter F&I gross of $98.1 million
- EchoPark stores retailed 7,698 units during the quarter, up 221% from the third quarter of 2017
- GAAP continuing operations earnings per diluted share of $0.36 per diluted share in the third quarter of 2018
- Adjusted continuing operations earnings per diluted share of $0.43 per diluted share in the third quarter of 2018
Third Quarter 2018 Results
GAAP Basis
Net income from continuing operations for the third quarter of 2018 was $15.3 million, or $0.36 per diluted share. Comparatively, net income from continuing operations for the third quarter of 2017 was $19.7 million, or $0.45 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 third quarter of 2018 was $18.3 million, or $0.43 per diluted share. The adjustments in the third quarter of 2018 relate to storm damage, executive transition costs and charges related to the disposal of franchises. Adjusted net income from continuing operations for the third quarter of 2017 was $17.4 million, or $0.40 per diluted share. The adjustments in the third quarter of 2017 relate to a gain from the disposal of a franchise and charges related to fixed asset impairments, storm damage and legal matters.
Commentary
David Bruton Smith, the Company's Chief Executive Officer, noted, "Our EchoPark strategy to grow our pre-owned business continued according to plan in the third quarter of 2018. Revenues grew by nearly $130 million, or 226%, compared to the prior year quarter and we anticipate this upward trajectory to continue into the fourth quarter of 2018 with the opening of two additional EchoPark locations. On October 8, 2018, we opened an EchoPark store in Charlotte, North Carolina, and we expect to open another EchoPark Store in Houston, Texas by the end of 2018. On the franchise side of the business, revenues declined 1.7% on a same store basis primarily due to the strong third quarter comparison in 2017 containing the rebound effects of Hurricane Harvey. Despite this headwind, the franchised dealerships increased total gross profit by 1.1% during the quarter with strong performances in used vehicles and fixed operations. We look forward to a robust selling environment in the fourth quarter."
Jeff Dyke, the Company's President, noted, "We continue to work with our manufacturer partners to improve our margins at the store level and to make facility investments that provide the appropriate return for all parties. I am pleased with the progress we are making but believe we have more opportunity for improvement with certain brands. As David mentioned, we are very excited about the performance of EchoPark and our expansion plans."
Dividend
Sonic's Board of Directors approved a quarterly dividend of $0.06 per share payable in cash for our stockholders of record on December 14, 2018. The dividend will be payable on January 15, 2019.
Third 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 the "Investor Relations" tab under "Our Company" and choosing 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: 9177697
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: 9177697
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, including statements with respect to our EchoPark brand expansion and our performance in the fourth quarter of 2018. 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 (Unaudited) | |||||||||||
Results of Operations | |||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
(Dollars and shares in thousands, except per share amounts) | |||||||||||
Revenues: | |||||||||||
New vehicles | $ | 1,235,094 | $ | 1,362,301 | $ | 3,654,510 | $ | 3,809,302 | |||
Used vehicles | 745,998 | 659,724 | 2,217,616 | 1,936,088 | |||||||
Wholesale vehicles | 48,578 | 43,098 | 167,726 | 130,174 | |||||||
Total vehicles | 2,029,670 | 2,065,123 | 6,039,852 | 5,875,564 | |||||||
Parts, service and collision repair | 343,118 | 347,717 | 1,041,630 | 1,060,873 | |||||||
Finance, insurance and other, net | 98,061 | 92,861 | 295,890 | 262,832 | |||||||
Total revenues | 2,470,849 | 2,505,701 | 7,377,372 | 7,199,269 | |||||||
Cost of Sales: | |||||||||||
New vehicles | (1,173,453) | (1,296,063) | (3,478,802) | (3,622,264) | |||||||
Used vehicles | (710,681) | (620,579) | (2,108,219) | (1,816,076) | |||||||
Wholesale vehicles | (49,877) | (46,390) | (176,806) | (136,555) | |||||||
Total vehicles | (1,934,011) | (1,963,032) | (5,763,827) | (5,574,895) | |||||||
Parts, service and collision repair | (176,302) | (180,047) | (538,135) | (550,788) | |||||||
Total cost of sales | (2,110,313) | (2,143,079) | (6,301,962) | (6,125,683) | |||||||
Gross profit | 360,536 | 362,622 | 1,075,410 | 1,073,586 | |||||||
Selling, general and administrative expenses | (289,022) | (283,974) | (871,410) | (870,139) | |||||||
Impairment charges | — | (200) | (13,961) | (3,315) | |||||||
Depreciation and amortization | (23,377) | (22,686) | (71,067) | (65,751) | |||||||
Operating income (loss) | 48,137 | 55,762 | 118,972 | 134,381 | |||||||
Other income (expense): | |||||||||||
Interest expense, floor plan | (12,192) | (8,882) | (34,815) | (26,413) | |||||||
Interest expense, other, net | (13,313) | (13,028) | (40,144) | (39,200) | |||||||
Other income (expense), net | — | 4 | 107 | (14,490) | |||||||
Total other income (expense) | (25,505) | (21,906) | (74,852) | (80,103) | |||||||
Income (loss) from continuing operations before taxes | 22,632 | 33,856 | 44,120 | 54,278 | |||||||
Provision for income taxes for continuing operations - benefit (expense) | (7,331) | (14,126) | (13,711) | (22,254) | |||||||
Income (loss) from continuing operations | 15,301 | 19,730 | 30,409 | 32,024 | |||||||
Discontinued operations: | |||||||||||
Income (loss) from discontinued operations before taxes | (252) | (481) | (797) | (1,650) | |||||||
Provision for income taxes for discontinued operations - benefit (expense) | 69 | 191 | 218 | 657 | |||||||
Income (loss) from discontinued operations | (183) | (290) | (579) | (993) | |||||||
Net income (loss) | $ | 15,118 | $ | 19,440 | $ | 29,830 | $ | 31,031 | |||
Basic earnings (loss) per common share: | |||||||||||
Earnings (loss) per share from continuing operations | $ | 0.36 | $ | 0.45 | $ | 0.71 | $ | 0.72 | |||
Earnings (loss) per share from discontinued operations | (0.01) | — | (0.01) | (0.02) | |||||||
Earnings (loss) per common share | $ | 0.35 | $ | 0.45 | $ | 0.70 | $ | 0.70 | |||
Weighted average common shares outstanding | 42,673 | 43,496 | 42,708 | 44,281 | |||||||
Diluted earnings (loss) per common share: | |||||||||||
Earnings (loss) per share from continuing operations | $ | 0.36 | $ | 0.45 | $ | 0.71 | $ | 0.72 | |||
Earnings (loss) per share from discontinued operations | (0.01) | (0.01) | (0.02) | (0.02) | |||||||
Earnings (loss) per common share | $ | 0.35 | $ | 0.44 | $ | 0.69 | $ | 0.70 | |||
Weighted average common shares outstanding | 42,994 | 43,811 | 42,964 | 44,585 | |||||||
Dividends declared per common share | $ | 0.06 | $ | 0.05 | $ | 0.18 | $ | 0.15 | |||
Sonic Automotive, Inc. Results of Operations (Unaudited) | |||||||||||||||||||
Per Share Data | |||||||||||||||||||
Three Months Ended September 30, 2018 | |||||||||||||||||||
Income (Loss) From | Income (Loss) From | Net Income (Loss) | |||||||||||||||||
Weighted | Amount | Per Share | Amount | Per Share | Amount | Per Share | |||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||
Reported: | |||||||||||||||||||
Earnings (loss) and shares | 42,673 | $ | 15,301 | $ | (183) | $ | 15,118 | ||||||||||||
Effect of participating securities: | |||||||||||||||||||
Non-vested restricted stock | (14) | — | (14) | ||||||||||||||||
Basic earnings (loss) and shares | 42,673 | $ | 15,287 | $ | 0.36 | $ | (183) | $ | (0.01) | $ | 15,104 | $ | 0.35 | ||||||
Effect of dilutive securities: | |||||||||||||||||||
Stock compensation plans | 321 | ||||||||||||||||||
Diluted earnings (loss) and shares | 42,994 | $ | 15,287 | $ | 0.36 | $ | (183) | $ | (0.01) | $ | 15,104 | $ | 0.35 | ||||||
Adjustments: | |||||||||||||||||||
Storm damage charges | $ | 1,185 | $ | — | $ | 1,185 | |||||||||||||
Loss on disposal of franchises | 346 | — | 346 | ||||||||||||||||
Executive transition costs | 1,581 | — | 1,581 | ||||||||||||||||
Total adjustments before taxes | 3,112 | — | 3,112 | ||||||||||||||||
Income tax effect of adjustments | (848) | — | (848) | ||||||||||||||||
Non-recurring tax items | 763 | — | 763 | ||||||||||||||||
Effect of adjustments, net of income taxes | $ | 3,027 | $ | 0.07 | $ | — | $ | — | $ | 3,027 | $ | 0.07 | |||||||
Adjusted: | |||||||||||||||||||
Earnings (loss) and diluted earnings (loss) per share (1) | $ | 18,328 | $ | 0.43 | $ | (183) | $ | (0.01) | $ | 18,145 | $ | 0.42 | |||||||
(1) Net loss attributable to EchoPark was $0.09 per fully diluted share in the three months ended September 30, 2018. | |||||||||||||||||||
Three Months Ended September 30, 2017 | |||||||||||||||||||
Income (Loss) From | Income (Loss) From | Net Income (Loss) | |||||||||||||||||
Weighted | Amount | Per Share | Amount | Per Share | Amount | Per Share | |||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||
Reported: | |||||||||||||||||||
Earnings (loss) and shares | 43,496 | $ | 19,730 | $ | (290) | $ | 19,440 | ||||||||||||
Effect of participating securities: | |||||||||||||||||||
Non-vested restricted stock | (18) | — | (18) | ||||||||||||||||
Basic earnings (loss) and shares | 43,496 | $ | 19,712 | $ | 0.45 | $ | (290) | $ | — | $ | 19,422 | $ | 0.45 | ||||||
Effect of dilutive securities: | |||||||||||||||||||
Stock compensation plans | 315 | ||||||||||||||||||
Diluted earnings (loss) and shares | 43,811 | $ | 19,712 | $ | 0.45 | $ | (290) | $ | (0.01) | $ | 19,422 | $ | 0.44 | ||||||
Adjustments: | |||||||||||||||||||
Impairment charges | $ | 198 | $ | — | $ | 198 | |||||||||||||
Legal and storm damage charges | 3,930 | — | 3,930 | ||||||||||||||||
Gain on disposal of franchises | (8,489) | — | (8,489) | ||||||||||||||||
Total adjustments before taxes | (4,361) | — | (4,361) | ||||||||||||||||
Income tax effect of adjustments | 2,065 | $ | 2,065 | ||||||||||||||||
Effect of adjustments, net of income taxes | $ | (2,296) | $ | (0.05) | $ | — | $ | — | $ | (2,296) | $ | (0.05) | |||||||
Adjusted: | |||||||||||||||||||
Earnings (loss) and diluted earnings (loss) per share (2) | $ | 17,434 | $ | 0.40 | $ | (290) | $ | (0.01) | $ | 17,144 | $ | 0.39 | |||||||
(2) Net loss attributable to EchoPark was $0.07 per fully diluted share in the three months ended September 30, 2017. | |||||||||||||||||||
Nine Months Ended September 30, 2018 | |||||||||||||||||||
Income (Loss) From | Income (Loss) From | Net Income (Loss) | |||||||||||||||||
Weighted | Amount | Per Share | Amount | Per Share | Amount | Per Share | |||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||
Reported: | |||||||||||||||||||
Earnings (loss) and shares | 42,708 | $ | 30,409 | $ | (579) | $ | 29,830 | ||||||||||||
Effect of participating securities: | |||||||||||||||||||
Non-vested restricted stock | (29) | — | (29) | ||||||||||||||||
Basic earnings (loss) and shares | 42,708 | $ | 30,380 | $ | 0.71 | $ | (579) | $ | (0.01) | $ | 29,801 | $ | 0.70 | ||||||
Effect of dilutive securities: | |||||||||||||||||||
Stock compensation plans | 256 | ||||||||||||||||||
Diluted earnings (loss) and shares | 42,964 | $ | 30,380 | $ | 0.71 | $ | (579) | $ | (0.02) | $ | 29,801 | $ | 0.69 | ||||||
Adjustments: | |||||||||||||||||||
Impairment charges | $ | 13,958 | $ | — | $ | 13,958 | |||||||||||||
Legal and storm damage charges | 5,749 | — | 5,749 | ||||||||||||||||
Lease exit adjustments | 2,235 | — | 2,235 | ||||||||||||||||
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 | 17,152 | — | 17,152 | ||||||||||||||||
Income tax effect of adjustments | (4,674) | — | (4,674) | ||||||||||||||||
Non-recurring tax items | 1,313 | — | 1,313 | ||||||||||||||||
Effect of adjustments, net of income taxes | $ | 13,791 | $ | 0.32 | $ | — | $ | — | $ | 13,791 | $ | 0.32 | |||||||
Adjusted: | |||||||||||||||||||
Earnings (loss) and diluted earnings (loss) per share (3) | $ | 44,200 | $ | 1.03 | $ | (579) | $ | (0.02) | $ | 43,621 | $ | 1.01 | |||||||
(3) Net loss attributable to EchoPark was $0.26 per fully diluted share in the nine months ended September 30, 2018. | |||||||||||||||||||
Nine Months Ended September 30, 2017 | |||||||||||||||||||
Income (Loss) From | Income (Loss) From | Net Income (Loss) | |||||||||||||||||
Weighted | Amount | Per Share | Amount | Per Share | Amount | Per Share | |||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||
Reported: | |||||||||||||||||||
Earnings (loss) and shares | 44,281 | $ | 32,024 | $ | (993) | $ | 31,031 | ||||||||||||
Effect of participating securities: | |||||||||||||||||||
Non-vested restricted stock | (28) | — | (28) | ||||||||||||||||
Basic earnings (loss) and shares | 44,281 | $ | 31,996 | $ | 0.72 | $ | (993) | $ | (0.02) | $ | 31,003 | $ | 0.70 | ||||||
Effect of dilutive securities: | |||||||||||||||||||
Stock compensation plans | 304 | ||||||||||||||||||
Diluted earnings (loss) and shares | 44,585 | $ | 31,996 | $ | 0.72 | $ | (993) | $ | (0.02) | $ | 31,003 | $ | 0.70 | ||||||
Adjustments: | |||||||||||||||||||
Impairment charges | $ | 3,313 | $ | — | $ | 3,313 | |||||||||||||
Legal and storm damage charges | 10,781 | — | 10,781 | ||||||||||||||||
Lease exit adjustments | 992 | — | 992 | ||||||||||||||||
Loss on debt extinguishment | 15,268 | — | 15,268 | ||||||||||||||||
Gain on disposal of franchises | (8,489) | — | (8,489) | ||||||||||||||||
Total adjustments before taxes | 21,865 | — | 21,865 | ||||||||||||||||
Income tax effect of adjustments | (8,229) | — | $ | (8,229) | |||||||||||||||
Effect of adjustments, net of income taxes | $ | 13,636 | $ | 0.30 | $ | — | $ | — | $ | 13,636 | $ | 0.30 | |||||||
Adjusted: | |||||||||||||||||||
Earnings (loss) and diluted earnings (loss) per share (4) | $ | 45,660 | $ | 1.02 | $ | (993) | $ | (0.02) | $ | 44,667 | $ | 1.00 | |||||||
(4) Net loss attributable to EchoPark was $0.22 per fully diluted share in the nine months ended September 30, 2017. | |||||||||||||||||||
Sonic Automotive, Inc. Results of Operations (Unaudited) | |||||||||||||
New Vehicles | |||||||||||||
Three Months Ended September 30, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands, except unit and per unit data) | |||||||||||||
Reported new vehicle: | |||||||||||||
Revenue | $ | 1,235,094 | $ | 1,362,301 | $ | (127,207) | (9.3) | % | |||||
Gross profit | $ | 61,641 | $ | 66,238 | $ | (4,597) | (6.9) | % | |||||
Unit sales | 31,009 | 35,489 | (4,480) | (12.6) | % | ||||||||
Revenue per unit | $ | 39,830 | $ | 38,387 | $ | 1,443 | 3.8 | % | |||||
Gross profit per unit | $ | 1,988 | $ | 1,866 | $ | 122 | 6.5 | % | |||||
Gross profit as a % of revenue | 5.0 | % | 4.9 | % | 10 | bps | |||||||
Nine Months Ended September 30, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands, except unit and per unit data) | |||||||||||||
Reported new vehicle: | |||||||||||||
Revenue | $ | 3,654,510 | $ | 3,809,302 | $ | (154,792) | (4.1) | % | |||||
Gross profit | $ | 175,708 | $ | 187,038 | $ | (11,330) | (6.1) | % | |||||
Unit sales | 91,386 | 99,132 | (7,746) | (7.8) | % | ||||||||
Revenue per unit | $ | 39,990 | $ | 38,427 | $ | 1,563 | 4.1 | % | |||||
Gross profit per unit | $ | 1,923 | $ | 1,887 | $ | 36 | 1.9 | % | |||||
Gross profit as a % of revenue | 4.8 | % | 4.9 | % | (10) | bps | |||||||
Three Months Ended September 30, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands, except unit and per unit data) | |||||||||||||
Same store new vehicle: | |||||||||||||
Revenue | $ | 1,235,103 | $ | 1,288,932 | $ | (53,829) | (4.2) | % | |||||
Gross profit | $ | 61,106 | $ | 63,590 | $ | (2,484) | (3.9) | % | |||||
Unit sales | 31,010 | 33,162 | (2,152) | (6.5) | % | ||||||||
Revenue per unit | $ | 39,829 | $ | 38,868 | $ | 961 | 2.5 | % | |||||
Gross profit per unit | $ | 1,971 | $ | 1,918 | $ | 53 | 2.8 | % | |||||
Gross profit as a % of revenue | 4.9 | % | 4.9 | % | — | bps | |||||||
Nine Months Ended September 30, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands, except unit and per unit data) | |||||||||||||
Same store new vehicle: | |||||||||||||
Revenue | $ | 3,588,102 | $ | 3,590,192 | $ | (2,090) | (0.1) | % | |||||
Gross profit | $ | 173,825 | $ | 180,889 | $ | (7,064) | (3.9) | % | |||||
Unit sales | 89,414 | 92,135 | (2,721) | (3.0) | % | ||||||||
Revenue per unit | $ | 40,129 | $ | 38,967 | $ | 1,162 | 3.0 | % | |||||
Gross profit per unit | $ | 1,944 | $ | 1,963 | $ | (19) | (1.0) | % | |||||
Gross profit as a % of revenue | 4.8 | % | 5.0 | % | (20) | bps | |||||||
Sonic Automotive, Inc. Results of Operations (Unaudited) | |||||||||||||
Used Vehicles | |||||||||||||
Three Months Ended September 30, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands, except unit and per unit data) | |||||||||||||
Reported used vehicle: | |||||||||||||
Revenue | $ | 745,998 | $ | 659,724 | $ | 86,274 | 13.1 | % | |||||
Gross profit | $ | 35,317 | $ | 39,145 | $ | (3,828) | (9.8) | % | |||||
Unit sales | 34,952 | 30,841 | 4,111 | 13.3 | % | ||||||||
Revenue per unit | $ | 21,343 | $ | 21,391 | $ | (48) | (0.2) | % | |||||
Gross profit per unit | $ | 1,010 | $ | 1,269 | $ | (259) | (20.4) | % | |||||
Gross profit as a % of revenue | 4.7 | % | 5.9 | % | (120) | bps | |||||||
Nine Months Ended September 30, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands, except unit and per unit data) | |||||||||||||
Reported used vehicle: | |||||||||||||
Revenue | $ | 2,217,616 | $ | 1,936,088 | $ | 281,528 | 14.5 | % | |||||
Gross profit | $ | 109,397 | $ | 120,012 | $ | (10,615) | (8.8) | % | |||||
Unit sales | 104,470 | 91,749 | 12,721 | 13.9 | % | ||||||||
Revenue per unit | $ | 21,227 | $ | 21,102 | $ | 125 | 0.6 | % | |||||
Gross profit per unit | $ | 1,047 | $ | 1,308 | $ | (261) | (20.0) | % | |||||
Gross profit as a % of revenue | 4.9 | % | 6.2 | % | (130) | bps | |||||||
Three Months Ended September 30, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands, except unit and per unit data) | |||||||||||||
Same store used vehicle: | |||||||||||||
Revenue | $ | 653,793 | $ | 614,894 | $ | 38,899 | 6.3 | % | |||||
Gross profit | $ | 35,302 | $ | 35,270 | $ | 32 | 0.1 | % | |||||
Unit sales | 30,527 | 28,328 | 2,199 | 7.8 | % | ||||||||
Revenue per unit | $ | 21,417 | $ | 21,706 | $ | (289) | (1.3) | % | |||||
Gross profit per unit | $ | 1,156 | $ | 1,245 | $ | (89) | (7.1) | % | |||||
Gross profit as a % of revenue | 5.4 | % | 5.7 | % | (30) | bps | |||||||
Nine Months Ended September 30, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands, except unit and per unit data) | |||||||||||||
Same store used vehicle: | |||||||||||||
Revenue | $ | 1,913,815 | $ | 1,795,568 | $ | 118,247 | 6.6 | % | |||||
Gross profit | $ | 104,945 | $ | 107,503 | $ | (2,558) | (2.4) | % | |||||
Unit sales | 89,311 | 83,873 | 5,438 | 6.5 | % | ||||||||
Revenue per unit | $ | 21,429 | $ | 21,408 | $ | 21 | 0.1 | % | |||||
Gross profit per unit | $ | 1,175 | $ | 1,282 | $ | (107) | (8.3) | % | |||||
Gross profit as a % of revenue | 5.5 | % | 6.0 | % | (50) | bps | |||||||
Sonic Automotive, Inc. Results of Operations (Unaudited) | |||||||||||||
Wholesale Vehicles | |||||||||||||
Three Months Ended September 30, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands, except unit and per unit data) | |||||||||||||
Reported wholesale vehicle: | |||||||||||||
Revenue | $ | 48,578 | $ | 43,098 | $ | 5,480 | 12.7 | % | |||||
Gross profit | $ | (1,299) | $ | (3,292) | $ | 1,993 | 60.5 | % | |||||
Unit sales | 7,831 | 7,832 | (1) | — | % | ||||||||
Revenue per unit | $ | 6,203 | $ | 5,503 | $ | 700 | 12.7 | % | |||||
Gross profit per unit | $ | (166) | $ | (420) | $ | 254 | 60.5 | % | |||||
Gross profit as a % of revenue | (2.7) | % | (7.6) | % | 490 | bps | |||||||
Nine Months Ended September 30, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands, except unit and per unit data) | |||||||||||||
Reported wholesale vehicle: | |||||||||||||
Revenue | $ | 167,726 | $ | 130,174 | $ | 37,552 | 28.8 | % | |||||
Gross profit | $ | (9,080) | $ | (6,381) | $ | (2,699) | (42.3) | % | |||||
Unit sales | 25,953 | 23,922 | 2,031 | 8.5 | % | ||||||||
Revenue per unit | $ | 6,463 | $ | 5,442 | $ | 1,021 | 18.8 | % | |||||
Gross profit per unit | $ | (350) | $ | (267) | $ | (83) | (31.1) | % | |||||
Gross profit as a % of revenue | (5.4) | % | (4.9) | % | (50) | bps | |||||||
Three Months Ended September 30, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands, except unit and per unit data) | |||||||||||||
Same store wholesale vehicle: | |||||||||||||
Revenue | $ | 46,238 | $ | 40,254 | $ | 5,984 | 14.9 | % | |||||
Gross profit | $ | (1,212) | $ | (2,912) | $ | 1,700 | 58.4 | % | |||||
Unit sales | 7,377 | 7,180 | 197 | 2.7 | % | ||||||||
Revenue per unit | $ | 6,268 | $ | 5,606 | $ | 662 | 11.8 | % | |||||
Gross profit per unit | $ | (164) | $ | (406) | $ | 242 | 59.6 | % | |||||
Gross profit as a % of revenue | (2.6) | % | (7.2) | % | 460 | bps | |||||||
Nine Months Ended September 30, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands, except unit and per unit data) | |||||||||||||
Same store wholesale vehicle: | |||||||||||||
Revenue | $ | 155,463 | $ | 121,102 | $ | 34,361 | 28.4 | % | |||||
Gross profit | $ | (9,118) | $ | (5,539) | $ | (3,579) | (64.6) | % | |||||
Unit sales | 23,817 | 21,799 | 2,018 | 9.3 | % | ||||||||
Revenue per unit | $ | 6,527 | $ | 5,555 | $ | 972 | 17.5 | % | |||||
Gross profit per unit | $ | (383) | $ | (254) | $ | (129) | (50.8) | % | |||||
Gross profit as a % of revenue | (5.9) | % | (4.6) | % | (130) | bps | |||||||
Sonic Automotive, Inc. Results of Operations (Unaudited) | |||||||||||||
Parts, Service and Collision Repair ("Fixed Operations") | |||||||||||||
Three Months Ended September 30, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands) | |||||||||||||
Reported: | |||||||||||||
Revenue | |||||||||||||
Customer pay | $ | 139,642 | $ | 137,850 | $ | 1,792 | 1.3 | % | |||||
Warranty | 66,730 | 70,575 | (3,845) | (5.4) | % | ||||||||
Wholesale parts | 39,419 | 40,927 | (1,508) | (3.7) | % | ||||||||
Internal, sublet and other | 97,327 | 98,365 | (1,038) | (1.1) | % | ||||||||
Total | $ | 343,118 | $ | 347,717 | $ | (4,599) | (1.3) | % | |||||
Gross profit | |||||||||||||
Customer pay | $ | 74,994 | $ | 74,302 | $ | 692 | 0.9 | % | |||||
Warranty | 38,563 | 38,821 | (258) | (0.7) | % | ||||||||
Wholesale parts | 6,784 | 6,958 | (174) | (2.5) | % | ||||||||
Internal, sublet and other | 46,475 | 47,589 | (1,114) | (2.3) | % | ||||||||
Total | $ | 166,816 | $ | 167,670 | $ | (854) | (0.5) | % | |||||
Gross profit as a % of revenue | |||||||||||||
Customer pay | 53.7 | % | 53.9 | % | (20) | bps | |||||||
Warranty | 57.8 | % | 55.0 | % | 280 | bps | |||||||
Wholesale parts | 17.2 | % | 17.0 | % | 20 | bps | |||||||
Internal, sublet and other | 47.8 | % | 48.4 | % | (60) | bps | |||||||
Total | 48.6 | % | 48.2 | % | 40 | bps | |||||||
Nine Months Ended September 30, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands) | |||||||||||||
Reported: | |||||||||||||
Revenue | |||||||||||||
Customer pay | $ | 422,348 | $ | 415,179 | $ | 7,169 | 1.7 | % | |||||
Warranty | 198,219 | 213,155 | (14,936) | (7.0) | % | ||||||||
Wholesale parts | 122,763 | 127,014 | (4,251) | (3.3) | % | ||||||||
Internal, sublet and other | 298,300 | 305,525 | (7,225) | (2.4) | % | ||||||||
Total | $ | 1,041,630 | $ | 1,060,873 | $ | (19,243) | (1.8) | % | |||||
Gross profit | |||||||||||||
Customer pay | $ | 226,443 | $ | 222,086 | $ | 4,357 | 2.0 | % | |||||
Warranty | 112,335 | 117,809 | (5,474) | (4.6) | % | ||||||||
Wholesale parts | 20,949 | 21,839 | (890) | (4.1) | % | ||||||||
Internal, sublet and other | 143,768 | 148,351 | (4,583) | (3.1) | % | ||||||||
Total | $ | 503,495 | $ | 510,085 | $ | (6,590) | (1.3) | % | |||||
Gross profit as a % of revenue | |||||||||||||
Customer pay | 53.6 | % | 53.5 | % | 10 | bps | |||||||
Warranty | 56.7 | % | 55.3 | % | 140 | bps | |||||||
Wholesale parts | 17.1 | % | 17.2 | % | (10) | bps | |||||||
Internal, sublet and other | 48.2 | % | 48.6 | % | (40) | bps | |||||||
Total | 48.3 | % | 48.1 | % | 20 | bps | |||||||
Sonic Automotive, Inc. Results of Operations (Unaudited) | |||||||||||||
Parts, Service and Collision Repair ("Fixed Operations") | |||||||||||||
Three Months Ended September 30, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands) | |||||||||||||
Same Store: | |||||||||||||
Revenue | |||||||||||||
Customer pay | $ | 137,848 | $ | 131,453 | $ | 6,395 | 4.9 | % | |||||
Warranty | 65,923 | 67,182 | (1,259) | (1.9) | % | ||||||||
Wholesale parts | 39,419 | 38,961 | 458 | 1.2 | % | ||||||||
Internal, sublet and other | 94,652 | 92,429 | 2,223 | 2.4 | % | ||||||||
Total | $ | 337,842 | $ | 330,025 | $ | 7,817 | 2.4 | % | |||||
Gross profit | |||||||||||||
Customer pay | $ | 74,047 | $ | 70,769 | $ | 3,278 | 4.6 | % | |||||
Warranty | 36,605 | 36,949 | (344) | (0.9) | % | ||||||||
Wholesale parts | 6,782 | 6,634 | 148 | 2.2 | % | ||||||||
Internal, sublet and other | 45,886 | 44,529 | 1,357 | 3.0 | % | ||||||||
Total | $ | 163,320 | $ | 158,881 | $ | 4,439 | 2.8 | % | |||||
Gross profit as a % of revenue | |||||||||||||
Customer pay | 53.7 | % | 53.8 | % | (10) | bps | |||||||
Warranty | 55.5 | % | 55.0 | % | 50 | bps | |||||||
Wholesale parts | 17.2 | % | 17.0 | % | 20 | bps | |||||||
Internal, sublet and other | 48.5 | % | 48.2 | % | 30 | bps | |||||||
Total | 48.3 | % | 48.1 | % | 20 | bps | |||||||
Nine Months Ended September 30, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands) | |||||||||||||
Same Store: | |||||||||||||
Revenue | |||||||||||||
Customer pay | $ | 413,920 | $ | 393,933 | $ | 19,987 | 5.1 | % | |||||
Warranty | 195,477 | 202,223 | (6,746) | (3.3) | % | ||||||||
Wholesale parts | 120,819 | 120,731 | 88 | 0.1 | % | ||||||||
Internal, sublet and other | 285,025 | 286,474 | (1,449) | (0.5) | % | ||||||||
Total | $ | 1,015,241 | $ | 1,003,361 | $ | 11,880 | 1.2 | % | |||||
Gross profit | |||||||||||||
Customer pay | $ | 222,048 | $ | 210,369 | $ | 11,679 | 5.6 | % | |||||
Warranty | 109,107 | 111,714 | (2,607) | (2.3) | % | ||||||||
Wholesale parts | 20,654 | 20,807 | (153) | (0.7) | % | ||||||||
Internal, sublet and other | 138,948 | 137,930 | 1,018 | 0.7 | % | ||||||||
Total | $ | 490,757 | $ | 480,820 | $ | 9,937 | 2.1 | % | |||||
Gross profit as a % of revenue | |||||||||||||
Customer pay | 53.6 | % | 53.4 | % | 20 | bps | |||||||
Warranty | 55.8 | % | 55.2 | % | 60 | bps | |||||||
Wholesale parts | 17.1 | % | 17.2 | % | (10) | bps | |||||||
Internal, sublet and other | 48.7 | % | 48.1 | % | 60 | bps | |||||||
Total | 48.3 | % | 47.9 | % | 40 | bps | |||||||
Sonic Automotive, Inc. Results of Operations (Unaudited) | |||||||||||
Finance, Insurance and Other, Net ("F&I") | |||||||||||
Three Months Ended September 30, | Better / (Worse) | ||||||||||
2018 | 2017 | Change | % Change | ||||||||
(In thousands, except per unit data) | |||||||||||
Reported: | |||||||||||
Revenue | $ | 98,061 | $ | 92,861 | $ | 5,200 | 5.6 | % | |||
Gross profit per retail unit (excludes fleet) | $ | 1,505 | $ | 1,408 | $ | 97 | 6.9 | % | |||
Nine Months Ended September 30, | Better / (Worse) | ||||||||||
2018 | 2017 | Change | % Change | ||||||||
(In thousands, except per unit data) | |||||||||||
Reported: | |||||||||||
Revenue | $ | 295,890 | $ | 262,832 | $ | 33,058 | 12.6 | % | |||
Gross profit per retail unit (excludes fleet) | $ | 1,523 | $ | 1,389 | $ | 134 | 9.6 | % | |||
Three Months Ended September 30, | Better / (Worse) | ||||||||||
2018 | 2017 | Change | % Change | ||||||||
(In thousands, except per unit data) | |||||||||||
Same Store: | |||||||||||
Revenue | $ | 87,697 | $ | 85,928 | $ | 1,769 | 2.1 | % | |||
Gross profit per retail unit (excludes fleet) | $ | 1,444 | $ | 1,405 | $ | 39 | 2.8 | % | |||
Nine Months Ended September 30, | Better / (Worse) | ||||||||||
2018 | 2017 | Change | % Change | ||||||||
(In thousands, except per unit data) | |||||||||||
Same Store: | |||||||||||
Revenue | $ | 257,369 | $ | 241,018 | $ | 16,351 | 6.8 | % | |||
Gross profit per retail unit (excludes fleet) | $ | 1,452 | $ | 1,381 | $ | 71 | 5.1 | % | |||
Sonic Automotive, Inc. Results of Operations (Unaudited) | |||||||||||||
Selling, General and Administrative ("SG&A") Expenses | |||||||||||||
Three Months Ended September 30, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands) | |||||||||||||
Reported: | |||||||||||||
Compensation | $ | 175,393 | $ | 172,691 | $ | (2,702) | (1.6) | % | |||||
Advertising | 14,652 | 15,846 | 1,194 | 7.5 | % | ||||||||
Rent | 14,881 | 17,711 | 2,830 | 16.0 | % | ||||||||
Other | 84,096 | 77,726 | (6,370) | (8.2) | % | ||||||||
Total SG&A expenses | $ | 289,022 | $ | 283,974 | $ | (5,048) | (1.8) | % | |||||
Adjustments: | |||||||||||||
Legal and storm damage charges | $ | (1,185) | $ | (3,930) | |||||||||
Executive transition costs | (1,581) | — | |||||||||||
Gain (loss) on disposal of franchises | (346) | 8,489 | |||||||||||
Total SG&A adjustments | $ | (3,112) | $ | 4,559 | |||||||||
Adjusted: | |||||||||||||
Total adjusted SG&A expenses | $ | 285,910 | $ | 288,533 | $ | 2,623 | 0.9 | % | |||||
Reported: | |||||||||||||
SG&A expenses as a % of gross profit: | |||||||||||||
Compensation | 48.6 | % | 47.6 | % | (100) | bps | |||||||
Advertising | 4.1 | % | 4.4 | % | 30 | bps | |||||||
Rent | 4.1 | % | 4.9 | % | 80 | bps | |||||||
Other | 23.4 | % | 21.4 | % | (200) | bps | |||||||
Total SG&A expenses as a % of gross profit | 80.2 | % | 78.3 | % | (190) | bps | |||||||
Adjustments: | |||||||||||||
Legal and storm damage charges | (0.3) | % | (1.1) | % | |||||||||
Executive transition costs | (0.5) | % | — | % | |||||||||
Gain (loss) on disposal of franchises | (0.1) | % | 2.4 | % | |||||||||
Total effect of adjustments | (0.9) | % | 1.3 | % | |||||||||
Adjusted: | |||||||||||||
Total adjusted SG&A expenses as a % of gross profit | 79.3 | % | 79.6 | % | 30 | bps | |||||||
Sonic Automotive, Inc. Results of Operations (Unaudited) | |||||||||||||
Selling, General and Administrative ("SG&A") Expenses | |||||||||||||
Nine Months Ended September 30, | Better / (Worse) | ||||||||||||
2018 | 2017 | Change | % Change | ||||||||||
(In thousands) | |||||||||||||
Reported: | |||||||||||||
Compensation | $ | 558,071 | $ | 520,420 | $ | (37,651) | (7.2) | % | |||||
Advertising | 46,938 | 46,448 | (490) | (1.1) | % | ||||||||
Rent | 50,451 | 55,309 | 4,858 | 8.8 | % | ||||||||
Other | 215,950 | 247,962 | 32,012 | 12.9 | % | ||||||||
Total SG&A expenses | $ | 871,410 | $ | 870,139 | $ | (1,271) | (0.1) | % | |||||
Adjustments: | |||||||||||||
Legal and storm damage charges | $ | (5,749) | $ | (10,781) | |||||||||
Long-term compensation-related charges | (32,522) | — | |||||||||||
Executive transition costs | (1,581) | — | |||||||||||
Lease exit adjustments | (2,235) | (992) | |||||||||||
Gain on disposal of franchises | 38,893 | 8,489 | |||||||||||
Total SG&A adjustments | $ | (3,194) | $ | (3,284) | |||||||||
Adjusted: | |||||||||||||
Total adjusted SG&A expenses | $ | 868,216 | $ | 866,855 | $ | (1,361) | (0.2) | % | |||||
Reported: | |||||||||||||
SG&A expenses as a % of gross profit: | |||||||||||||
Compensation | 51.9 | % | 48.5 | % | (340) | bps | |||||||
Advertising | 4.4 | % | 4.3 | % | (10) | bps | |||||||
Rent | 4.7 | % | 5.2 | % | 50 | bps | |||||||
Other | 20.0 | % | 23.0 | % | 300 | bps | |||||||
Total SG&A expenses as a % of gross profit | 81.0 | % | 81.0 | % | — | bps | |||||||
Adjustments: | |||||||||||||
Legal and storm damage charges | (0.5) | % | (1.0) | % | |||||||||
Long-term compensation-related charges | (3.1) | % | — | % | |||||||||
Executive transition costs | (0.1) | % | — | % | |||||||||
Lease exit adjustments | (0.2) | % | (0.1) | % | |||||||||
Gain on disposal of franchises | 3.7 | % | 0.8 | % | |||||||||
Total effect of adjustments | (0.3) | % | (0.3) | % | |||||||||
Adjusted: | |||||||||||||
Total adjusted SG&A expenses as a % of gross profit | 80.7 | % | 80.7 | % | — | bps | |||||||
SOURCE Sonic Automotive, Inc.
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