Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - SONIC AUTOMOTIVE INC | d246308d8k.htm |
| EX-99.3 - PRESS RELEASE - SONIC AUTOMOTIVE INC | d246308dex993.htm |
| EX-99.2 - EARNINGS CALL PRESENTATION MATERIALS - SONIC AUTOMOTIVE INC | d246308dex992.htm |
Exhibit 99.1
Sonic Automotive, Inc. Reports 39% Increase in Third Quarter Continuing Operations Earnings; Raises Full Year Guidance
CHARLOTTE, N.C. – October 25, 2011 – Sonic Automotive, Inc. (NYSE: SAH), one of the nation’s largest automotive retailers, today reported that 2011 third quarter earnings from continuing operations were $0.33 per diluted share compared to $0.25 per diluted share in the prior year quarter.
Third Quarter 2011 Highlights
| • | Continuing operations profits up 39%; EPS up 32% |
| • | Total revenues up 13% over prior year quarter. Volume exceeds industry growth. |
| • | New vehicle revenue up 13%; New vehicle volume up 8% |
| • | Used vehicle revenue up 17%; Used volume up 16%; 10th consecutive quarter of double-digit growth |
| • | Parts and Service revenue up 5%. |
Business Overview – Strong Top Line Growth Continues
Commenting on the third quarter results, Jeff Dyke, the Company’s EVP of Operations, stated, “We saw continued growth both in the overall industry trends and in Sonic’s third quarter results. New and used vehicle revenue saw double digit growth, which translated into a 39% increase in continuing operations profit compared to the same period last year. Our higher-margin parts and service business continues to increase as we grow our customer base and continue the implementation of operating playbooks in this area.”
Current Outlook – Increasing Full-Year Guidance
Commenting on the business, B. Scott Smith, the Company’s President, said, “The automotive retail industry continued its steady rebound throughout the third quarter. We saw sales volume increase as we progressed through the quarter as a result of the recovery in the Japanese production capability. We expect this momentum to continue into the fourth quarter as these brands return to a normal production cycle.”
Mr. Smith continued, “We continue to target a 2011 industry volume of 12.5 million vehicles. As a result of the growth we’ve seen in our base business through the successful integration of our various operating playbooks and our favorable brand mix, we are increasing our expected 2011 earnings from continuing operations to $1.33 to $1.37 per share.”
Presentation materials for the Company’s October 25, 2011 earnings conference call at 11:00 A.M. (Eastern) 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”.
To access the live broadcast of the call over the Internet go to: www.sonicautomotive.com
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: (855) 859-2056, International callers dial (404) 537-3406, Conference ID: #16406078.
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 future industry growth trends, recovery of Japanese brands production capacity, EPS targets and future impacts from the implementation of our various operational playbooks. 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 sales volume, the success of our operational strategies, the rate and timing of overall economic recovery and the risk factors described in the Company’s annual report on Form 10-K for the year ending December 31, 2010 and quarterly report on Form 10-Q for the quarter ending June 30, 2011. The Company does not undertake any obligation to update forward-looking information.
Sonic Automotive, Inc.
Results of Operations (Unaudited)
(In thousands, except per share, unit data and percentage amounts)
| Third Quarter Ended September 30, | ||||||||
| 2011 | 2010 | |||||||
| Revenues |
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| New retail vehicles |
$ | 1,005,800 | $ | 886,355 | ||||
| Fleet vehicles |
52,780 | 51,354 | ||||||
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| Total new vehicles |
1,058,580 | 937,709 | ||||||
| Used vehicles |
530,969 | 453,815 | ||||||
| Wholesale vehicles |
48,588 | 47,597 | ||||||
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| Total vehicles |
1,638,137 | 1,439,121 | ||||||
| Parts, service and collision repair |
297,951 | 283,741 | ||||||
| Finance, insurance and other |
56,761 | 47,398 | ||||||
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| Total revenues |
1,992,849 | 1,770,260 | ||||||
| Total gross profit |
302,924 | 281,799 | ||||||
| SG&A expenses |
(238,704 | ) | (226,331 | ) | ||||
| Impairment charges |
(102 | ) | (87 | ) | ||||
| Depreciation |
(10,340 | ) | (8,731 | ) | ||||
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| Operating income |
53,778 | 46,650 | ||||||
| Interest expense, floor plan |
(4,348 | ) | (5,430 | ) | ||||
| Interest expense, other, net |
(15,116 | ) | (15,226 | ) | ||||
| Interest expense, non-cash, convertible debt |
(1,742 | ) | (1,768 | ) | ||||
| Interest expense / amortization, non-cash, cash flow swaps |
(313 | ) | (1,484 | ) | ||||
| Other expense, net |
(826 | ) | (351 | ) | ||||
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| Income from continuing operations before taxes |
31,433 | 22,391 | ||||||
| Provision for income taxes |
(12,100 | ) | (8,442 | ) | ||||
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| Income from continuing operations |
19,333 | 13,949 | ||||||
| Income (loss) from discontinued operations |
68 | (964 | ) | |||||
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| Net income |
$ | 19,401 | $ | 12,985 | ||||
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| Diluted: |
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| Weighted average common shares outstanding |
65,517 | 65,851 | ||||||
| Earnings per share from continuing operations |
$ | 0.33 | $ | 0.25 | ||||
| Loss per share from discontinued operations |
— | (0.02 | ) | |||||
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| Earnings per common share |
$ | 0.33 | $ | 0.23 | ||||
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| Gross Margin Data (Continuing Operations): |
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| New retail vehicles |
6.6 | % | 6.6 | % | ||||
| Fleet vehicles |
3.2 | % | 3.1 | % | ||||
| Total new vehicles |
6.5 | % | 6.4 | % | ||||
| Used vehicles |
6.6 | % | 7.8 | % | ||||
| Total vehicles retailed |
6.5 | % | 6.8 | % | ||||
| Wholesale vehicles |
(4.8 | %) | (3.1 | %) | ||||
| Parts, service and collision repair |
48.7 | % | 49.6 | % | ||||
| Finance, insurance and other |
100.0 | % | 100.0 | % | ||||
| Overall gross margin |
15.2 | % | 15.9 | % | ||||
| SG&A Expenses (Continuing Operations): |
||||||||
| Personnel |
$ | 139,100 | $ | 131,805 | ||||
| Advertising |
13,884 | 12,642 | ||||||
| Rent and rent related |
30,591 | 32,365 | ||||||
| Other |
55,129 | 49,519 | ||||||
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| Total |
$ | 238,704 | $ | 226,331 | ||||
| SG&A Expenses as % of Gross Profit |
78.8 | % | 80.3 | % | ||||
| Operating Margin % |
2.7 | % | 2.6 | % | ||||
| Unit Data (Continuing Operations): |
||||||||
| Retail new units |
27,941 | 25,780 | ||||||
| Fleet units |
2,047 | 2,020 | ||||||
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| Total new units |
29,988 | 27,800 | ||||||
| Used units |
26,608 | 22,987 | ||||||
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| Total units retailed |
56,596 | 50,787 | ||||||
| Wholesale units |
7,326 | 7,272 | ||||||
| Other Data: |
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| Continuing Operations unit volume percentage changes: |
||||||||
| Retail new units |
8.4 | % | ||||||
| Fleet units |
1.3 | % | ||||||
| Total new units |
7.9 | % | ||||||
| Used units |
15.8 | % | ||||||
| Total units retailed |
11.4 | % | ||||||
| Wholesale units |
0.7 | % | ||||||
Sonic Automotive, Inc.
Results of Operations (Unaudited)
(In thousands, except per share, unit data and percentage amounts)
| Nine Months Ended September 30, | ||||||||
| 2011 | 2010 | |||||||
| Revenues |
||||||||
| New retail vehicles |
$ | 2,902,729 | $ | 2,463,139 | ||||
| Fleet vehicles |
171,869 | 148,849 | ||||||
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| Total new vehicles |
3,074,598 | 2,611,988 | ||||||
| Used vehicles |
1,549,197 | 1,339,323 | ||||||
| Wholesale vehicles |
125,428 | 108,336 | ||||||
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| Total vehicles |
4,749,223 | 4,059,647 | ||||||
| Parts, service and collision repair |
889,243 | 842,697 | ||||||
| Finance, insurance and other |
162,010 | 133,607 | ||||||
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| Total revenues |
5,800,476 | 5,035,951 | ||||||
| Total gross profit |
903,824 | 830,153 | ||||||
| SG&A expenses |
(711,657 | ) | (672,542 | ) | ||||
| Impairment charges |
(160 | ) | (132 | ) | ||||
| Depreciation |
(30,099 | ) | (25,729 | ) | ||||
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| Operating income |
161,908 | 131,750 | ||||||
| Interest expense, floor plan |
(14,766 | ) | (15,615 | ) | ||||
| Interest expense, other, net |
(45,986 | ) | (48,024 | ) | ||||
| Interest expense, non-cash, convertible debt |
(5,151 | ) | (5,175 | ) | ||||
| Interest expense / amortization, non-cash, cash flow swaps |
(599 | ) | (5,402 | ) | ||||
| Other expense, net |
(736 | ) | (7,522 | ) | ||||
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| Income from continuing operations before taxes |
94,670 | 50,012 | ||||||
| Provision for income taxes |
(37,395 | ) | (19,905 | ) | ||||
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| Income from continuing operations |
57,275 | 30,107 | ||||||
| Loss from discontinued operations |
(1,559 | ) | (4,532 | ) | ||||
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| Net income |
$ | 55,716 | $ | 25,575 | ||||
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| Diluted: |
||||||||
| Weighted average common shares outstanding |
65,800 | 65,711 | ||||||
| Earnings per share from continuing operations |
$ | 0.97 | $ | 0.56 | ||||
| Loss per share from discontinued operations |
(0.03 | ) | (0.07 | ) | ||||
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| Earnings per common share |
$ | 0.94 | $ | 0.49 | ||||
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| Gross Margin Data (Continuing Operations): |
||||||||
| New retail vehicles |
6.6 | % | 6.8 | % | ||||
| Fleet vehicles |
3.2 | % | 2.8 | % | ||||
| Total new vehicles |
6.4 | % | 6.6 | % | ||||
| Used vehicles |
7.3 | % | 8.0 | % | ||||
| Total vehicles retailed |
6.7 | % | 7.1 | % | ||||
| Wholesale vehicles |
(3.8 | %) | (3.6 | %) | ||||
| Parts, service and collision repair |
49.1 | % | 50.0 | % | ||||
| Finance, insurance and other |
100.0 | % | 100.0 | % | ||||
| Overall gross margin |
15.6 | % | 16.5 | % | ||||
| SG&A Expenses (Continuing Operations): |
||||||||
| Personnel |
$ | 415,161 | $ | 394,505 | ||||
| Advertising |
41,197 | 36,445 | ||||||
| Rent and rent related |
94,269 | 97,151 | ||||||
| Other |
161,030 | 144,441 | ||||||
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| Total |
$ | 711,657 | $ | 672,542 | ||||
| SG&A Expenses as % of Gross Profit |
78.7 | % | 81.0 | % | ||||
| Operating Margin % |
2.8 | % | 2.6 | % | ||||
| Unit Data (Continuing Operations): |
||||||||
| New retail units |
83,204 | 71,809 | ||||||
| Fleet units |
6,686 | 6,042 | ||||||
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| Total new units |
89,890 | 77,851 | ||||||
| Used units |
78,994 | 68,861 | ||||||
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| Total units retailed |
168,884 | 146,712 | ||||||
| Wholesale units |
19,326 | 17,627 | ||||||
| Other Data: |
||||||||
| Continuing Operations unit volume percentage changes: |
||||||||
| New retail units |
15.9 | % | ||||||
| Fleet units |
10.7 | % | ||||||
| Total new units |
15.5 | % | ||||||
| Used units |
14.7 | % | ||||||
| Total units retailed |
15.1 | % | ||||||
| Wholesale units |
9.6 | % | ||||||
Sonic Automotive, Inc.
Earnings Per Share Reconciliation (Unaudited)
(In thousands, except per share data)
| For the Third Quarter Ended September 30, 2011 | ||||||||||||||||||||||||||||
| Income From Continuing Operations |
Income From Discontinued Operations |
Net Income | ||||||||||||||||||||||||||
| Weighted Average Shares |
Amount | Per Share Amount |
Amount | Per Share Amount |
Amount | Per Share Amount |
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| Earnings and shares |
52,366 | $ | 19,333 | $ | 68 | $ | 19,401 | |||||||||||||||||||||
| Effect of participating securities: |
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| Non-vested restricted stock and stock units |
— | (253 | ) | — | (253 | ) | ||||||||||||||||||||||
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| Basic earnings and shares |
52,366 | $ | 19,080 | $ | 0.36 | $ | 68 | $ | 0.01 | $ | 19,148 | $ | 0.37 | |||||||||||||||
| Effect of dilutive securities: |
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| Contingently convertible debt (5.0% Convertible Notes) |
12,590 | 2,366 | — | 2,366 | ||||||||||||||||||||||||
| Stock compensation plans |
561 | |||||||||||||||||||||||||||
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| Diluted earnings and shares |
65,517 | $ | 21,446 | $ | 0.33 | $ | 68 | $ | — | $ | 21,514 | $ | 0.33 | |||||||||||||||
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| For the Third Quarter Ended September 30, 2010 | ||||||||||||||||||||||||||||
| Income From Continuing Operations |
Loss From Discontinued Operations |
Net Income | ||||||||||||||||||||||||||
| Weighted Average Shares |
Amount | Per Share Amount |
Amount | Per Share Amount |
Amount | Per Share Amount |
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| Earnings (loss) and shares |
52,311 | $ | 13,949 | $ | (964 | ) | $ | 12,985 | ||||||||||||||||||||
| Effect of participating securities: |
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| Non-vested restricted stock and stock units |
— | (137 | ) | — | (137 | ) | ||||||||||||||||||||||
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| Basic earnings (loss) and shares |
52,311 | $ | 13,812 | $ | 0.26 | $ | (964 | ) | $ | (0.01 | ) | $ | 12,848 | $ | 0.25 | |||||||||||||
| Effect of dilutive securities: |
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| Contingently convertible debt (5.0% Convertible Notes) |
12,890 | 2,498 | 16 | 2,514 | ||||||||||||||||||||||||
| Stock compensation plans |
650 | |||||||||||||||||||||||||||
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| Diluted earnings (loss) and shares |
65,851 | $ | 16,310 | $ | 0.25 | $ | (948 | ) | $ | (0.02 | ) | $ | 15,362 | $ | 0.23 | |||||||||||||
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| For the Nine Months Ended September 30, 2011 | ||||||||||||||||||||||||||||
| Income From Continuing Operations |
Loss From Discontinued Operations |
Net Income | ||||||||||||||||||||||||||
| Weighted Average Shares |
Amount | Per Share Amount |
Amount | Per Share Amount |
Amount | Per Share Amount |
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| Earnings (loss) and shares |
52,414 | $ | 57,275 | $ | (1,559 | ) | $ | 55,716 | ||||||||||||||||||||
| Effect of participating securities: |
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| Non-vested restricted stock and stock units |
— | (744 | ) | — | (744 | ) | ||||||||||||||||||||||
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| Basic earnings (loss) and shares |
52,414 | $ | 56,531 | $ | 1.08 | $ | (1,559 | ) | $ | (0.03 | ) | $ | 54,972 | $ | 1.05 | |||||||||||||
| Effect of dilutive securities: |
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| Contingently convertible debt (5.0% Convertible Notes) |
12,789 | 6,970 | — | 6,970 | ||||||||||||||||||||||||
| Stock compensation plans |
597 | |||||||||||||||||||||||||||
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| Diluted earnings (loss) and shares |
65,800 | $ | 63,501 | $ | 0.97 | $ | (1,559 | ) | $ | (0.03 | ) | $ | 61,942 | $ | 0.94 | |||||||||||||
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| For the Nine Months Ended September 30, 2010 | ||||||||||||||||||||||||||||
| Income From Continuing Operations |
Loss From Discontinued Operations |
Net Income | ||||||||||||||||||||||||||
| Weighted Average Shares |
Amount | Per Share Amount |
Amount | Per Share Amount |
Amount | Per Share Amount |
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| Earnings (loss) and shares |
52,151 | $ | 30,107 | $ | (4,532 | ) | $ | 25,575 | ||||||||||||||||||||
| Effect of participating securities: |
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| Non-vested restricted stock and stock units |
— | (295 | ) | — | (295 | ) | ||||||||||||||||||||||
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| Basic earnings (loss) and shares |
52,151 | $ | 29,812 | $ | 0.57 | $ | (4,532 | ) | $ | (0.09 | ) | $ | 25,280 | $ | 0.48 | |||||||||||||
| Effect of dilutive securities: |
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| Contingently convertible debt (5.0% Convertible Notes) |
12,890 | 6,709 | 28 | 6,737 | ||||||||||||||||||||||||
| Stock compensation plans |
670 | |||||||||||||||||||||||||||
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| Diluted earnings (loss) and shares |
65,711 | $ | 36,521 | $ | 0.56 | $ | (4,504 | ) | $ | (0.07 | ) | $ | 32,017 | $ | 0.49 | |||||||||||||
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