Sonic Automotive, Inc. Adjusted Diluted EPS Up 18%

Total Retail Unit Sales Increased 16.2%

News provided by

Sonic Automotive, Inc.

Oct 23, 2012, 07:30 ET

CHARLOTTE, N.C., Oct. 23, 2012 /PRNewswire/ -- Sonic Automotive, Inc. (NYSE: SAH), one of the nation's largest automotive retailers, today reported 2012 third quarter adjusted earnings from continuing operations of $23.1 million for a 14.9% increase over the prior year results.  Adjusted earnings from continuing operations per diluted share increased 17.6% to $0.40 compared to $0.34 in the prior year quarter.  Adjusted results exclude a pre-tax charge of approximately $18.5 million, or $0.19 per diluted share, related to costs associated with retiring its outstanding 5.0% Convertible Senior Notes due 2029 ("5% Notes").

Q3 2012 Highlights – Near-Record Quarterly New Retail Unit Volume; Completed Debt Issuance and Tender Process for 5% Convertible Notes; Costs In Line with Yearly Expectation

  • Total Q3 revenues up 11.7% over prior year quarter
  • New vehicle retail units up 25.2%
  • Used vehicle retail units up 6.6%
  • Parts and Service gross profit up 1.7%, up 3.3% when adjusted for selling days
  • SG&A to gross profit % improved to 77.6% from 77.9% in the prior year quarter

B. Scott Smith, the Company's President, noted, "We are pleased with our performance in the third quarter.  Our operating performance stayed on track while we eliminated the last remnant of debt associated with our debt restructuring activities in 2009.  We believe we have positioned the company for continued success by eliminating a significant ownership dilution risk through repurchasing the remaining 5% Notes during the quarter.  This strategic action has simplified our capital structure and improved our debt profile by pushing our earliest public debt maturity back out to 2018."

The Company's EVP of Operations, Jeff Dyke, commented, "Our quarterly new retail vehicle unit volume of 33,737 units is the second highest level our complement of stores has ever achieved.  The record occurred in the third quarter of 2006 when the quarterly SAAR averaged 16.6 million units compared to the current SAAR of 14.5 million units.  We would like to thank our customers, our manufacturer partners and our associates for working together to help us achieve this performance.  All the while, we were able to operate efficiently by controlling costs as evidenced by a 30 bps improvement in our SG&A to gross percentage to 77.6% from the prior year quarter.  We continue to leverage technology and data to improve our customers' experience in our stores and create value.  For example, our new SIMS (Sonic Inventory Management System) and Retail Trade Center Process will completely revolutionize the way we manage, price and retail inventory across our stores.  We anticipate completing the roll out of these systems in February of 2013 with the full benefits of the systems yielding results in the second quarter of 2013.  We believe this will be another catalyst in driving our pre-owned performance in 2013."

Third 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".

The conference call will also be available live by dialing in 10 minutes prior to the start of the call at:

Domestic: 1.877.791.3416
International: 1.706.643.0958
Conference ID: 36761316

A conference call replay will be available one hour following the call for seven days and can be accessed by calling:

Domestic: 1.855.859.2056
International: 1.404.537.3406
Conference ID: 36761316

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 used 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 and quarterly report on Form 10-Q for the period ended June 30, 2012.  The Company does not undertake any obligation to update forward-looking information.

Sonic Automotive, Inc.
Results of Operations (Unaudited)

(Dollars and shares in thousands, except per share amounts)















Third Quarter Ended 

Third Quarter Ended 


September 30, 2012

September 30, 2011


Reported

Adjustments

Adjusted

Reported

Adjustments

Adjusted














Revenues:











New retail vehicles

$ 1,172,064

$               -

$ 1,172,064

$  974,850

$               -

$  974,850

Fleet vehicles

37,302

-

37,302

52,319

-

52,319

Total new vehicles

1,209,366

-

1,209,366

1,027,169

-

1,027,169

Used vehicles

534,028

-

534,028

509,751

-

509,751

Wholesale vehicles

53,088

-

53,088

47,137

-

47,137

Total vehicles

1,796,482

-

1,796,482

1,584,057

-

1,584,057

Parts, service and collision repair

290,897

-

290,897

287,105

-

287,105

Finance, insurance and other

64,867

-

64,867

54,974

-

54,974

Total revenues

2,152,246

-

2,152,246

1,926,136

-

1,926,136

Gross profit

307,659

-

307,659

293,384

-

293,384

Selling, general and administrative expenses

(238,680)

-

(238,680)

(228,563)

-

(228,563)

Impairment charges

(23)

-

(23)

(102)

-

(102)

Depreciation and amortization

(11,375)

-

(11,375)

(10,137)

-

(10,137)

Operating income (loss)

57,581

-

57,581

54,582

-

54,582

Other income (expense):











Interest expense, floor plan

(4,858)

-

(4,858)

(4,163)

-

(4,163)

Interest expense, other, net

(15,709)

1,167

(14,542)

(16,941)

-

(16,941)

Other income (expense), net

(17,275)

17,320

45

(811)

-

(811)

Total other income (expense)

(37,842)

18,487

(19,355)

(21,915)

-

(21,915)

Income (loss) from continuing operations before taxes

19,739

18,487

38,226

32,667

-

32,667

Provision for income taxes - benefit (expense)

(7,899)

(7,210)

(15,109)

(12,556)

-

(12,556)

Income (loss) from continuing operations

11,840

11,277

23,117

20,111

-

20,111

Income (loss) from discontinued operations

(1,798)

-

(1,798)

(710)

-

(710)

Net income (loss)

$      10,042

$       11,277

$      21,319

$    19,401

$               -

$    19,401














Diluted earnings (loss) per common share:











Earnings (loss) per share from continuing operations

$          0.21

$           0.19

$          0.40

$        0.34

$               -

$        0.34

Earnings (loss) per share from discontinued operations

(0.03)

-

(0.03)

(0.01)

-

(0.01)

Earnings (loss) per common share

$          0.18

$           0.19

$          0.37

$        0.33

$               -

$        0.33

Weighted average common shares outstanding

59,011

-

59,011

65,517

-

65,517














Gross Margin Data (Continuing Operations):











New retail vehicles

5.7%


5.7%

6.7%


6.7%

Fleet vehicles

2.5%


2.5%

3.2%


3.2%

Total new vehicles

5.6%


5.6%

6.5%


6.5%

Used vehicles

6.8%


6.8%

6.6%


6.6%

Wholesale vehicles

(6.5%)


(6.5%)

(4.7%)


(4.7%)

Parts, service and collision repair

48.9%


48.9%

48.7%


48.7%

Finance, insurance and other

100.0%


100.0%

100.0%


100.0%

Overall gross margin

14.3%


14.3%

15.2%


15.2%














SG&A Expenses (Continuing Operations):











Compensation

$    142,368




$  134,001




Advertising

12,871




13,091




Rent and rent related

27,063




28,728




Other

56,378




52,743




Total SG&A expenses

$    238,680

$               -

$    238,680

$  228,563

$               -

$  228,563

SG&A expenses as % of gross profit

77.6%


77.6%

77.9%


77.9%














Operating Margin %

2.7%


2.7%

2.8%


2.8%














Unit Data (Continuing Operations):











New retail units

33,737




26,955




Fleet units

1,325




2,031




Total new units

35,062




28,986




Used units

27,018




25,334




Wholesale units

9,074




7,039





























  


Sonic Automotive, Inc.
Results of Operations (Unaudited)

(Dollars and shares in thousands, except per share amounts)
















Nine Months Ended

Nine Months Ended


September 30, 2012

September 30, 2011


Reported

Adjustments

Adjusted

Reported

Adjustments

Adjusted















Revenues:












New retail vehicles

$ 3,325,877

$               -

$ 3,325,877

$ 2,820,020

$               -

$ 2,820,020

Fleet vehicles

126,585

-

126,585

170,337

-

170,337

Total new vehicles

3,452,462

-

3,452,462

2,990,357

-

2,990,357

Used vehicles

1,581,682

-

1,581,682

1,489,098

-

1,489,098

Wholesale vehicles

140,670

-

140,670

122,261

-

122,261

Total vehicles

5,174,814

-

5,174,814

4,601,716

-

4,601,716

Parts, service and collision repair

885,412

-

885,412

857,541

-

857,541

Finance, insurance and other

187,199

-

187,199

157,175

-

157,175

Total revenues

6,247,425

-

6,247,425

5,616,432

-

5,616,432

Gross profit

930,368

-

930,368

875,544

-

875,544

Selling, general and administrative expenses

(722,446)

-

(722,446)

(682,442)

-

(682,442)

Impairment charges

(57)

-

(57)

(160)

-

(160)

Depreciation and amortization

(33,636)

-

(33,636)

(29,457)

-

(29,457)

Operating income (loss)

174,229

-

174,229

163,485

-

163,485

Other income (expense):












Interest expense, floor plan

(14,101)

-

(14,101)

(14,031)

-

(14,031)

Interest expense, other, net

(46,186)

1,167

(45,019)

(50,957)

-

(50,957)

Other income (expense), net

(19,808)

19,898

90

(741)

-

(741)

Total other income (expense)

(80,095)

21,065

(59,030)

(65,729)

-

(65,729)

Income (loss) from continuing operations before taxes

94,134

21,065

115,199

97,756

-

97,756

Provision for income taxes - benefit (expense)

(32,596)

(11,783)

(44,379)

(38,673)

-

(38,673)

Income (loss) from continuing operations

61,538

9,282

70,820

59,083

-

59,083

Income (loss) from discontinued operations

(2,819)

-

(2,819)

(3,367)

-

(3,367)

Net income (loss)

$      58,719

$         9,282

$      68,001

$      55,716

$               -

$      55,716















Diluted earnings (loss) per common share:












Earnings (loss) per share from continuing operations

$          1.05

$           0.14

$          1.19

$          0.99

$               -

$          0.99

Earnings (loss) per share from discontinued operations

(0.05)

-

(0.05)

(0.05)

-

(0.05)

Earnings (loss) per common share

$          1.00

$           0.14

$          1.14

$          0.94

$               -

$          0.94

Weighted average common shares outstanding

62,300

-

62,300

65,800

-

65,800















Gross Margin Data (Continuing Operations):












New retail vehicles

6.0%


6.0%

6.7%


6.7%

Fleet vehicles

2.9%


2.9%

3.2%


3.2%

Total new vehicles

5.9%


5.9%

6.5%


6.5%

Used vehicles

7.1%


7.1%

7.3%


7.3%

Wholesale vehicles

(3.2%)


(3.2%)

(3.6%)


(3.6%)

Parts, service and collision repair

48.9%


48.9%

49.1%


49.1%

Finance, insurance and other

100.0%


100.0%

100.0%


100.0%

Overall gross margin

14.9%


14.9%

15.6%


15.6%















SG&A Expenses (Continuing Operations):












Compensation

$    431,456




$    400,203





Advertising

38,330




39,065





Rent and rent related

81,724




88,668





Other

170,936




154,506





Total SG&A expenses

$    722,446

$               -

$    722,446

$    682,442

$               -

$    682,442

SG&A expenses as % of gross profit

77.7%


77.7%

77.9%


77.9%















Operating Margin %

2.8%


2.8%

2.9%


2.9%















Unit Data (Continuing Operations):












New retail units

96,249




80,550





Fleet units

4,616




6,630





Total new units

100,865




87,180





Used units

79,732




75,381





Wholesale units

24,116




18,633
































  

Sonic Automotive, Inc.
Results of Operations (Unaudited)

(In thousands, except per share amounts)

















Third Quarter Ended September 30, 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















Reported:













Earnings (loss) and shares

55,069

$ 11,840


$ (1,798)


$ 10,042

Effect of participating securities:













Non-vested restricted stock













and stock units


(175)


-


(175)

Basic earnings (loss) and shares 

55,069

$ 11,665

$   0.21

$ (1,798)

$  (0.03)

$   9,867

$   0.18

Effect of dilutive securities:













Contingently convertible













debt (5.0% Convertible Notes)

3,534

618


2


620

Stock compensation plans

408











Diluted earnings (loss) and shares

59,011

$ 12,283

$   0.21

$ (1,796)

$  (0.03)

$ 10,487

$   0.18















Adjustments (net of tax):













Double-carry interest


$      712

$   0.01

$          -

$       -

$      712

$   0.01

Debt extinguishment charges


10,565

0.18

-

-

10,565

0.18

Total adjustments


$ 11,277

$   0.19

$          -

$       -

$ 11,277

$   0.19















Adjusted:













Diluted earnings (loss) per share




$   0.40


$  (0.03)


$   0.37
































Third Quarter Ended September 30, 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















Reported:













Earnings (loss) and shares

52,366

$ 20,111


$    (710)


$ 19,401

Effect of participating securities:













Non-vested restricted stock













and stock units


(263)


-


(263)

Basic earnings (loss) and shares

52,366

$ 19,848

$   0.38

$    (710)

$  (0.01)

$ 19,138

$   0.37

Effect of dilutive securities:













Contingently convertible













debt (5.0% Convertible Notes)

12,590

2,329


37


2,366

Stock compensation plans

561











Diluted earnings (loss) and shares

65,517

$ 22,177

$   0.34

$    (673)

$  (0.01)

$ 21,504

$   0.33






























Sonic Automotive, Inc.
Results of Operations (Unaudited)

(In thousands, except per share amounts)

















Nine Months Ended September 30, 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















Reported:













Earnings (loss) and shares 

53,302

$ 61,538


$ (2,819)


$ 58,719

Effect of participating securities:













Non-vested restricted stock













and stock units 


(934)


-


(934)

Basic earnings (loss) and shares

53,302

$ 60,604

$   1.14

$ (2,819)

$  (0.06)

$ 57,785

$   1.08

Effect of dilutive securities:













Contingently convertible













debt (5.0% Convertible Notes)

8,563

4,638


43


4,681

Stock compensation plans 

435











Diluted earnings (loss) and shares 

62,300

$ 65,242

$   1.05

$ (2,776)

$  (0.05)

$ 62,466

$   1.00















Adjustments (net of tax):













Double-carry interest


$      712

$   0.01

$          -

$       -

$      712

$   0.01

Debt extinguishment charges


12,138

0.19

-

-

12,138

0.19

Settlement of state tax examination


(3,568)

(0.06)

-

-

(3,568)

(0.06)

Total adjustments


$   9,282

$   0.14

$          -

$       -

$   9,282

$   0.14















Adjusted:













Diluted earnings (loss) per share




$   1.19


$  (0.05)


$   1.14
































Nine Months Ended September 30, 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















Reported:













Earnings (loss) and shares 

52,414

$ 59,083


$ (3,367)


$ 55,716

Effect of participating securities:













Non-vested restricted stock













and stock units


(773)


-


(773)

Basic earnings (loss) and shares

52,414

$ 58,310

$   1.11

$ (3,367)

$  (0.06)

$ 54,943

$   1.05

Effect of dilutive securities:













Contingently convertible













debt (5.0% Convertible Notes)

12,789

6,851


119


6,970

Stock compensation plans

597











Diluted earnings (loss) and shares

65,800

$ 65,161

$   0.99

$ (3,248)

$  (0.05)

$ 61,913

$   0.94






























SOURCE Sonic Automotive, Inc.

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

icon3
440k+
Newsrooms &
Influencers
icon1
9k+
Digital Media
Outlets
icon2
270k+
Journalists
Opted In
GET STARTED