CHARLOTTE, N.C., Oct. 27 /PRNewswire-FirstCall/ -- Sonic
Automotive, Inc. (NYSE:SAH), the nation's third-largest automotive
retailer, today reported that 2009 third quarter earnings from
continuing operations were $0.22 per diluted share which includes
an after-tax gain of $0.01 per diluted share, related to the
Company's repurchase of convertible notes. This compares to a loss
from continuing operations of $0.38 per diluted share, in the prior
year quarter. The results for the prior year quarter include the
after-tax effect of impairment charges, lease exit accruals and
hurricane damage of $0.53 per diluted share. Business Overview -
Strong operating results and improved capital structure B. Scott
Smith, the Company's President, said, "We are pleased with what we
were able to accomplish this quarter at Sonic Automotive. In
addition to continuing to post strong operating results we
completed a very successful public refinancing of our 2010 debt
obligations. The offering in late September allowed us to de-lever
our balance sheet, remove some extremely dilutive convertible debt
from our capital structure and mitigate future refinancing risk in
the near term. This also paves the way for what we believe will be
a successful refinancing of our upcoming syndicated credit
facility. This offering would not have been possible without the
strong fundamentals of our business model which is evident in our
consistent operating performance and cash flow generation
throughout this business cycle." New Vehicles - Strongest
year-over-year market share performance to date Commenting on the
Company's new car sales, Mr. Smith noted, "The combination of
increased customer traffic from the CARS program and the continued
execution of our e-Commerce strategies resulted in Sonic posting
its strongest year-over-year new vehicle performance so far this
year. We have now had eight consecutive months of new car market
share gains. In addition to the improved unit volume, our new
vehicle retail margins were up 70 basis points to 7.6% and our new
vehicle days supply was at 39 days." Used Vehicles - Used vehicle
volume up 25% Overall used vehicle unit volume was up 25% and total
used vehicle revenue was up over 18% for the third quarter of 2009
compared to the third quarter of 2008. Jeff Dyke, the Company's EVP
of Operations, stated, "Our used vehicle volume continued to grow
throughout the quarter despite the heavy emphasis on new vehicle
sales stemming from the CARS program. Our used-to-new ratio, which
has continued to improve throughout the year, was at 80% for the
third quarter. Our certified pre-owned business, which has been a
consistent strength for Sonic, remains strong at 34% of our overall
used vehicle volume. We are growing our used vehicle business by
continuing to expand our presence across the entire spectrum of the
used vehicle market." Parts and Service - Margin expansion
continues with stable revenues Sonic's parts and service revenue
for the third quarter was flat with the prior year quarter while
the gross margin at 50.6% represents an improvement over the prior
year third quarter margin of 49.6% and the second quarter 2009
margin of 50.3%. Mr. Dyke stated, "Our parts and service business
continues to add a substantial amount of stability to our results
of operations. We have steadily grown our fixed operations margin
every quarter this year as a result of the pricing, merchandising
and other strategies being implemented with the rollout of our
parts and service playbook. We have every reason to expect this
trend will continue as the rollout progresses." Presentation
materials for the Company's October 27, 2009 earnings conference
call at 11:00 A.M. (Eastern) can be accessed on the Company's
website at http://www.sonicautomotive.com/ by clicking on the "For
Investors" tab and choosing "Webcasts & Presentations" on the
right side of the monitor. To access the live broadcast of the call
over the Internet go to: http://www.ccbn.com/ or
http://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: 800-642-1687, International callers dial (706)
645-9291 Conference ID: 34082140 About Sonic Automotive Sonic
Automotive, Inc., a Fortune 300 company based in Charlotte, N.C.,
is the nation's third-largest automotive retailer, operating 153
franchises. Sonic can be reached on the web at
http://www.sonicautomotive.com/. Included herein are
forward-looking statements, including statements with respect to
future debt refinancing. 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, risks associated with acquisitions and the risk factors
described in the Company's current report on Form 8-K filed August
21, 2009. 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 Nine Months Ended
9/30/2009 9/30/2008 9/30/2009 9/30/2008 --------- ---------
--------- --------- Revenues New retail vehicles $776,578 $889,237
$2,005,486 $2,700,879 Fleet vehicles 48,789 53,234 164,160 278,007
Total new vehicles 825,367 942,471 2,169,646 2,978,886 Used
vehicles 365,501 308,158 1,034,444 994,906 Wholesale vehicles
33,220 64,995 97,478 216,378 ------ ------ ------ ------- Total
vehicles 1,224,088 1,315,624 3,301,568 4,190,170 Parts, service and
collision repair 255,372 256,867 768,003 787,928 Finance, insurance
and other 41,302 43,259 110,663 139,355 ------ ------ ------
------- Total revenues 1,520,762 1,615,750 4,180,234 5,117,453
Total gross profit 257,468 259,360 729,727 816,348 SG&A
expenses (203,694) (220,413) (588,834) (656,799) Impairment charges
(339) (25,476) (4,164) (25,809) Depreciation and amortization
(8,080) (8,286) (24,523) (23,562) ------ ------ ------ -------
Operating income 45,355 5,185 112,206 110,178 Interest expense,
floor plan (4,324) (8,987) (14,368) (31,591) Non-cash interest
expense, convertible debt 7,818 (2,696) 1,556 (7,991) Interest
expense, other, net (19,305) (15,859) (57,496) (40,803) Other
income (expense), net 2,442 (9) 2,504 88 ------ ------ ------
------- Income (Loss) from continuing operations before taxes
31,986 (22,366) 44,402 29,881 Income tax (provision) benefit
(13,506) 7,301 (19,093) (13,598) ------ ------ ------ -------
Income (Loss) from continuing operations 18,480 (15,065) 25,309
16,283 Discontinued operations: Loss from operations and the sale
of discontinued franchises (3,848) (17,878) (10,681) (30,581)
Income tax benefit 962 5,977 2,670 9,174 Loss from discontinued
operations (2,886) (11,901) (8,011) (21,407) ------ ------ ------
------- Net income (loss) $15,594 $(26,966) $17,298 $(5,124)
======= ======== ======= ======= Basic: Weighted average common
shares outstanding 42,305 40,138 41,130 40,447 Earnings (Loss) per
share from continuing operations $0.43 ($0.38) $0.61 $0.40 Loss per
share from discontinued operations ($0.06) ($0.29) ($0.19) ($0.53)
Earnings (Loss) per share $0.37 ($0.67) $0.42 ($0.13) ===== ======
===== ====== Diluted: Weighted average common shares outstanding
63,195 40,138 52,529 40,626 Earnings (Loss) per share from
continuing operations $0.22 ($0.38) $0.42 $0.40 Loss per share from
discontinued operations ($0.05) ($0.29) ($0.16) ($0.53) ------
------ ------ ------- Earnings (Loss) per share $0.17 ($0.67) $0.26
($0.13) ===== ====== ===== ====== Gross Margin Data (Continuing
Operations): ------------------------- Retail new vehicles 7.6%
6.9% 7.3% 7.2% Fleet vehicles 2.9% 4.8% 3.7% 2.3% Total new
vehicles 7.3% 6.8% 7.0% 6.8% Used vehicles retail 7.8% 8.4% 8.3%
8.9% Total vehicles retail 7.5% 7.2% 7.4% 7.3% Wholesale vehicles
(5.4%) (1.9%) (3.3%) (1.9%) Parts, service and collision repair
50.6% 49.6% 50.0% 49.6% Finance, insurance and other 100.0% 100.0%
100.0% 100.0% Overall gross margin 16.9% 16.1% 17.5% 16.0% SG&A
Expenses (Continuing Operations): ------------- Personnel $118,345
$116,949 $337,737 $365,618 Advertising 10,734 12,817 31,333 42,405
Facility rent 22,560 27,257 67,225 68,736 Other 52,055 63,390
152,539 180,040 ------ ------ ------- ------- Total $203,694
$220,413 $588,834 $656,799 SG&A Expenses as % of Gross Profit
---------------- Personnel 45.9% 45.1% 46.3% 44.7% Advertising 4.2%
4.9% 4.3% 5.2% Facility rent 8.8% 10.5% 9.2% 8.4% Other 20.2% 24.5%
20.9% 22.2% ----- ----- ----- ----- Total 79.1% 85.0% 80.7% 80.5%
Operating Margin % 3.0% 0.3% 2.7% 2.2% Unit Data (Continuing
Operations): --------------------- Third Quarter Ended Nine Months
Ended 9/30/2009 9/30/2008 9/30/2009 9/30/2008 --------- ---------
--------- --------- New retail units 24,305 26,025 60,998 80,405
Fleet units 1,971 2,772 6,800 11,572 Used units 19,360 15,444
55,062 49,617 Wholesale units 6,612 8,636 17,414 27,559 Average
price per unit: New retail vehicles $31,951 $34,169 $32,878 $33,591
Fleet vehicles 24,753 19,204 24,141 24,024 Used vehicles 18,879
19,953 18,787 20,052 Wholesale vehicles 5,024 7,526 5,598 7,851
Other Data: ----------- Same store revenue percentage changes: New
retail (12.7%) (25.9%) Fleet (8.4%) (41.0%) Total New Vehicles
(12.4%) (27.3%) Used 18.6% 3.9% Parts, service and collision repair
(0.7%) (2.7%) Finance, insurance and other (3.8%) (20.2%) Total
(5.9%) (18.4%) ===== ====== Balance Sheet Data:
-------------------- 9/30/2009 12/31/2008(1) --------- ------------
ASSETS Current Assets: Cash and cash equivalents $614 $6,971
Restricted cash 106,913 - Receivables, net 163,161 247,025
Inventories 657,475 916,837 Assets held for sale 176,128 406,576
Other current assets 16,900 16,822 Total current assets 1,121,191
1,594,231 Property and Equipment, Net 378,170 369,892 Goodwill, Net
403,048 327,007 Other Intangibles, Net 79,685 82,328 Other Assets
22,674 32,087 ------ ------ TOTAL ASSETS $2,004,768 $2,405,545
========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY
--------------------- Current Liabilities: Floor plan notes payable
$605,059 $921,023 Other current liabilities 224,377 277,938
Liabilities associated with assets held for sale 53,123 199,482
Current maturities of long-term debt 105,750 738,447 -------
------- Total current liabilities 988,309 2,136,890 LONG-TERM DEBT
556,243 - OTHER LONG-TERM LIABILITIES 109,562 71,132 STOCKHOLDERS'
EQUITY 350,654 197,523 ------- ------- TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $2,004,768 $2,405,545 ========== ==========
(1) Restated for the adoption effects of ASC 470-20-65. DATASOURCE:
Sonic Automotive, Inc. CONTACT: David Cosper, Chief Financial
Officer, +1-704-566-2400, or Greg Young, VP of Finance,
+1-704-566-2489 Web Site: http://www.sonicautomotive.com/
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