Sonic Automotive, Inc. Profits up 24%

Same Store Revenue Grows 9% - Record Q1 Revenues

News provided by

Sonic Automotive, Inc.

Apr 23, 2012, 07:30 ET

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

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

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

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

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

First Quarter Earnings Conference Call

Senior management will host a conference call today at 11:00 A.M. (Eastern) to discuss the quarter's results.  To access the live broadcast of the call over the Internet go to:  www.sonicautomotive.com, then click on "Our Company", then "Investor Relations", then "Earnings Conference Calls".

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

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

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

About Sonic Automotive

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

Included herein are forward-looking statements, including statements with respect to anticipated growth in new vehicle sales, and future success and impacts from the implementation of our strategic initiatives.  There are many factors that affect management's views about future events and trends of the Company's business.  These factors involve risk and uncertainties that could cause actual results or trends to differ materially from management's view, including without limitation, economic conditions in the markets in which we operate, new and used vehicle industry sales volume, the success of our operational strategies, the rate and timing of overall economic recovery or decline, and the risk factors described in the Company's annual report on Form 10-K for the year ending December 31, 2011.  The Company does not undertake any obligation to update forward-looking information.

Sonic Automotive, Inc.



Results of Operations (Unaudited)



(Dollars in thousands, except per share data)
























First Quarter Ended March 31,





2012

2011

Revenues





New retail vehicles

$                  1,018,536

$                      908,853

Fleet vehicles

45,917

63,640

Total new vehicles

1,064,453

972,493

Used vehicles

517,052

474,555

Wholesale vehicles

45,341

35,046

Total vehicles

1,626,846

1,482,094

Parts, service and collision repair

301,748

287,100

Finance, insurance and other

59,248

49,102

Total revenues

1,987,842

1,818,296

Total gross profit

311,869

287,238

Selling, general and administrative expenses

(247,480)

(229,016)

Impairment charges

(1)

(17)

Depreciation and amortization

(11,071)

(9,895)

Operating income (loss)

53,317

48,310

Interest expense, floor plan

(4,473)

(5,365)

Interest expense, other, net

(15,080)

(15,359)

Interest expense, non-cash, convertible debt

(1,630)

(1,694)

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

22

178

Other income (expense), net

19

71

Income (loss) from continuing operations before taxes

32,175

26,141

Provision for income taxes - benefit (expense)

(12,709)

(10,457)

Income (loss) from continuing operations

19,466

15,684

Income (loss) from discontinued operations

1,032

(720)

Net income (loss)

$                       20,498

$                        14,964








Diluted:






Weighted average common shares outstanding

64,420

65,950









Earnings (loss) per share from continuing operations 

$                           0.33

$                            0.27

Earnings (loss) per share from discontinued operations

0.02

(0.01)

Earnings (loss) per share

$                           0.35

$                            0.26








Gross Margin Data (Continuing Operations):












New retail vehicles

6.2%

6.3%

Fleet vehicles

3.4%

3.1%

Total new vehicles


6.1%

6.1%

Used vehicles 

7.8%

7.9%

Wholesale vehicles

0.5%

(1.3%)

Parts, service and collision repair

48.7%

49.3%

Finance, insurance and other

100.0%

100.0%

Overall gross margin

15.7%

15.8%








SG&A Expenses (Continuing Operations):












Compensation

$                     147,534

$                      134,802

Advertising

13,044

13,440

Rent and rent related

28,693

29,791

Other

58,209

50,983

Total

$                     247,480

$                      229,016








SG&A Expenses as % of Gross Profit

79.4%

79.7%








Operating Margin %

2.7%

2.7%








Unit Data (Continuing Operations):












New retail units

29,685

26,703

Fleet units

1,705

2,488

Total new units

31,390

29,191

Used units

26,547

24,895

Wholesale units

7,526

5,583








Other Data:












Continuing Operations revenue percentage changes:




New retail vehicles

12.1%


Fleet vehicles

(27.8%)


Total new vehicles

9.5%


Used vehicles

9.0%


Parts, service and collision repair

5.1%


Finance, insurance and other

20.7%


Total revenues

9.3%









Sonic Automotive, Inc.











Earnings Per Share Reconciliation (Unaudited)











(Dollars in thousands, except per share data)





















































First Quarter Ended March 31, 2012







Income (Loss)

Income (Loss)











From Continuing

From Discontinued











Operations

Operations

Net Income (Loss)





Weighted


Per


Per


Per





Average


Share


Share


Share




Shares

Amount

Amount

Amount

Amount

Amount

Amount






















Earnings (loss) and shares

52,224

$    19,466


$     1,032


$   20,498





Effect of participating securities:

















Non-vested restricted stock
    and stock units

-

(303)


-


(303)





Basic earnings (loss) and shares

52,224

$    19,163

$     0.37

$     1,032

$     0.02

$   20,195

$     0.39



Effect of dilutive securities:

















Contingently convertible debt (5.0% Convertible Notes)

11,676

2,167


5


2,172





Stock compensation plans

520















Diluted earnings (loss) and shares

64,420

$    21,330

$     0.33

$     1,037

$     0.02

$   22,367

$     0.35






























































First Quarter Ended March 31, 2011







Income (Loss)

Income (Loss)











From Continuing

From Discontinued











Operations

Operations

Net Income (Loss)





Weighted


Per


Per


Per





Average


Share


Share


Share




Shares

Amount

Amount

Amount

Amount

Amount

Amount






















Earnings (loss) and shares

52,416

$    15,684


$      (720)


$   14,964





Effect of participating securities:

















Non-vested restricted stock and stock units

-

(205)


-


(205)





Basic earnings (loss) and shares

52,416

$    15,479

$     0.30

$      (720)

$   (0.02)

$   14,759

$     0.28



Effect of dilutive securities:

















Contingently convertible debt (5.0% Convertible Notes)

12,890

2,296


14


2,310





Stock compensation plans

644















Diluted earnings (loss) and shares

65,950

$    17,775

$     0.27

$      (706)

$   (0.01)

$   17,069

$     0.26







































SOURCE Sonic Automotive, Inc.