Sonic Automotive, Inc. Posts All-Time Record New Vehicle Retail and Fixed Operations Gross Profits - True Price® Strategy Gains Traction

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CHARLOTTE, N.C., Feb. 19, 2014 /PRNewswire/ -- Sonic Automotive, Inc. (NYSE: SAH), one of the nation's largest automotive retailers, today reported fourth quarter of 2013 adjusted diluted earnings per share from continuing operations of $0.67, an increase of 28.8% compared to $0.52 in the prior year quarter.  2013 fourth quarter adjusted net income from continuing operations was $35.5 million, a 23.4% increase over prior year fourth quarter results of $28.8 million.  On an unadjusted basis, fourth quarter 2013 diluted earnings per share from continuing operations were $0.55, compared to $0.52 in the prior year quarter.

For the full year 2013, Sonic Automotive grew adjusted diluted earnings per share from continuing operations by 18.0% to $2.03 per diluted share, compared to an adjusted amount of $1.72 per diluted share in the 2012.  On an unadjusted basis, full year 2013 diluted earnings per share from continuing operations were $1.59, compared to $1.56 in the prior year.  See the accompanying tables for reconciliation between all adjusted and unadjusted amounts.

Q4 2013 and 2013 Annual Highlights

  • All-time record new retail unit sales for Q4 and full year 2013 of 34,001 and 132,363, respectively.
  • All-time record Q4 new retail gross profit of $82.1 million.
  • All-time record fixed operations gross profit for Q4 and full year 2013 of $152.6 million and $597.1 million, respectively.
  • All-time record used retail unit and gross profit for full year 2013 of 107,054 units and $150.4 million, respectively.
  • Record Q4 used retail unit sales of 26,354.
  • Total revenues up 5.8% in Q4 over prior year quarter, and up 5.7% over the prior full year.
  • New vehicle retail revenue up 3.1% in Q4 over the prior year quarter, and up 6.0% over the prior full year.
  • Used vehicle retail revenue up 12.7% in Q4 over the prior year quarter, and up 6.0% over the prior full year.
  • Fixed Operations (Parts, Service & Collision) revenue up $29.8 million in Q4 over the prior year quarter, or 10.4%, and up $67.9 million, or 5.8%, over the prior full year.
  • Full year SG&A to gross profit of 77.1%.

Sonic Automotive's EVP of Operations, Jeff Dyke, commented, "Wow what a year for Sonic Automotive!  We made great progress as we continued the process of preparing our Company for the long-term growth.  I am very pleased with Q4 results that included our largest profit quarter in our history, absent the non-cash impairment charges.  This kind of performance amidst all of the change our team endured to prepare for our One Sonic-One Experience transition and the work going into our stand-alone pre-owned concept further highlights the strength and talent of our operations team and the mix of quality brands we proudly represent.  We continue to execute at a very high level and there is no question our Playbook execution strategy implemented years ago is a very big part of our success.  The creation of a customer-centric culture has allowed Sonic Automotive to develop technologies, processes, branding and marketing that our industry has never experienced.  We are very excited to unveil our work beginning this year as we start the rollout One Sonic-One Experience and we introduce the Denver market to a very special pre-owned concept.  2014 is going to be another challenging year for our team with all of the changes we plan but, if history is any indication, our team will succeed in executing these initiatives and I can't wait to see them go to work.  It's going to be fun!"

Growth & Operating Strategies

Commenting on 2013 results and the 2014 outlook, B. Scott Smith, Sonic Automotive's President, noted, "The 2013 year was a transition year for us.  We were able to improve our capital structure earlier in the year by replacing costly 9% notes with 5% notes.  This action will save us over $15 million over the long-term as we strive to continually increase shareholder value.  Our balance sheet has never been stronger.  Going forward, we are committed to the following growth and operating strategies: 

  • Stand-alone pre-owned stores
  • One Sonic-One Experience (customer experience initiative)
  • Franchise acquisitions
  • Own dealership properties
  • Return capital to shareholders

As we have demonstrated over the last several years, one of our core competencies and competitive advantages is our ability to execute in the pre-owned space.  We intend to capitalize on this strength.  In addition, through our One Sonic-One Experience initiative, we intend to leverage the Sonic Automotive brand by changing the way customers shop and buy vehicles at our stores.  The customer will drive the process and we will do everything we can to make their buying experience the best they've ever had.  We are on track to opening our first pre-owned store in Denver in the fourth quarter of 2014 and we will be working diligently in 2014 to ultimately bring both of these initiatives to our customers."

"Our growth strategy also includes opportunistic acquisitions in markets where we currently conduct business, development of open points in coordination with our manufacturing partners and the possibility of the acquisition of substantial dealership platforms that would augment our current operations.  Our purchase of a BMW store and a Mercedes Benz store in the Denver market in 2013 demonstrates our commitment to continual growth.  These two stores are expected to add approximately $200 million to our annual revenues.  We have also continued to strengthen our balance sheet in 2013 by investing over $75 million in our properties.  We added ten stores to our portfolio of owned properties increasing the percentage of properties owned to 31%.  By the end of 2017, we expect to own approximately 45% of our properties.  In addition, during 2013 we returned $17.1 million to shareholders through share repurchases and approximately $5.3 million in declared dividends.  At December 31, 2013, our common stock repurchase authorization was $133 million."

"We expect the automotive retailing sector to continue to grow in 2014 and are anticipating 2014 new vehicle industry volume of between 15.75 million units and 16.25 million units.  We will have additional comments on our 2014 outlook in our earnings call later today."

Fourth 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 Sonic Automotive'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: 1.877.441.0824
International: 1.706.643.0958

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

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. 

The results reported in this press release, the accompanying summary tables and the presentation materials for the conference call today at 11:00 AM (Eastern) are preliminary and unaudited and are subject to change upon completion of the audit for our financial statements for the period ended December 31, 2013.

This release contains certain non-GAAP financial measures as defined under SEC rules, such as, but not limited to, adjusted income from continuing operations and related earnings per share data.  The Company has reconciled these measures to the most directly comparable GAAP measures in the accompanying tables.  The Company believes that these non-GAAP financial measures improve the transparency of the Company's disclosure by providing period-to-period comparability of the Company's results from operations.

Included herein are forward-looking statements, including statements with respect to anticipated 2013 industry new vehicle sales volume, the implementation of growth and operating strategies, including acquisitions of dealerships and properties, the development of open points and stand-alone pre-owned stores, the return of capital to shareholders and anticipated 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, 2012 and quarterly report on Form 10-Q for the period ended September 30, 2013.  The Company does not undertake any obligation to update forward-looking information.

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)

This release contains certain non-GAAP financial measures (the "Adjusted" columns) as defined under SEC rules, such as, but not limited to, adjusted income from continuing operations and related earnings per share data.  The Company has reconciled these measures to the most directly comparable GAAP measures (the "Reported" columns) in the release.  The Company believes that these non-GAAP financial measures improve the transparency of the Company's disclosure by providing period-to-period comparability of the Company's results from operations















Fourth Quarter Ended December 31, 2013

Fourth Quarter Ended December 31, 2012


Reported

Adjustments

Adjusted

Reported

Adjustments

Adjusted


(In thousands, except per share and unit amounts)

Revenues:











   New retail vehicles

$   1,299,444

$                -

$   1,299,444

$   1,259,924

$                -

$   1,259,924

   Fleet vehicles

38,254

-

38,254

43,130

-

43,130

      Total new vehicles

1,337,698

-

1,337,698

1,303,054

-

1,303,054

   Used vehicles

551,028

-

551,028

489,063

-

489,063

   Wholesale vehicles

40,772

-

40,772

44,820

-

44,820

      Total vehicles

1,929,498

-

1,929,498

1,836,937

-

1,836,937

   Parts, service and collision repair


316,888

-

316,888

287,113

-

287,113

   Finance, insurance and other, net

68,983

-

68,983

64,685

-

64,685

      Total revenues


2,315,369

-

2,315,369

2,188,735

-

2,188,735

Gross profit

338,700

-

338,700

314,119

-

314,119

Selling, general and administrative expenses


(254,647)

-

(254,647)

(236,798)

-

(236,798)

Impairment charges


(9,803)

9,803

(1)

-

(383)

-

(383)

Depreciation and amortization


(14,986)

-

(14,986)

(11,886)

-

(11,886)

Operating income (loss)

59,264

9,803

69,067

65,052

-

65,052

Other income (expense):










   Interest expense, floor plan


(5,688)

-

(5,688)

(5,534)

-

(5,534)

   Interest expense, other, net

(13,183)

-

(13,183)

(14,215)

-

(14,215)

   Other income (expense), net

1

-

1

183

-

183

      Total other income (expense)


(18,870)

-

(18,870)

(19,566)

-

(19,566)

Income (loss) from continuing operations before taxes

40,394

9,803

50,197

45,486

-

45,486

Provision for income taxes - benefit (expense)


(10,832)

(3,823)

(14,655)

(16,694)

-

(16,694)

Income (loss) from continuing operations


29,562

5,980

35,542

28,792

-

28,792

Income (loss) from discontinued operations


(1,478)

-

(1,478)

1,590

-

1,590

Net income (loss)

$        28,084

$          5,980

$        34,064

$        30,382

$                -

$        30,382












Diluted earnings (loss) per common share:










      Earnings (loss) per share from continuing operations

$            0.55

$            0.12

$            0.67

$            0.52

$                -

$            0.52

      Earnings (loss) per share from discontinued operations

(0.02)

(0.01)

(0.03)

0.03

-

0.03

      Earnings (loss) per common share


$            0.53

$            0.11

$            0.64

$            0.55

$                -

$            0.55

      Weighted average common shares outstanding


52,974


52,974

54,763


54,763












Gross Margin Data (Continuing Operations):










   New retail vehicles


6.3%


6.3%

6.1%


6.1%

   Fleet vehicles


2.2%


2.2%

2.4%


2.4%

      Total new vehicles


6.2%


6.2%

5.9%


5.9%

   Used vehicles


6.5%


6.5%

6.7%


6.7%

   Wholesale vehicles


(3.9%)


(3.9%)

(3.5%)


(3.5%)

   Parts, service and collision repair


48.2%


48.2%

49.1%


49.1%

   Finance, insurance and other


100.0%


100.0%

100.0%


100.0%

      Overall gross margin


14.6%


14.6%

14.4%


14.4%












SG&A Expenses (Continuing Operations):










   Compensation


$      151,704




$      140,423



   Advertising


15,327




13,243



   Rent 


17,632




19,286



   Other


69,984




63,846



      Total SG&A expenses


$      254,647

$                -

$      254,647

$      236,798

$                -

$      236,798

   SG&A expenses as % of gross profit


75.2%


75.2%

75.4%


75.4%












Operating Margin %


2.6%


3.0%

3.0%


3.0%












Unit Data (Continuing Operations):










   New retail units

34,001




33,767



   Fleet units


1,250




1,312



      Total new units


35,251




35,079



   Used units


26,354




23,943



   Wholesale units

6,670




7,452















(1) Represents $9.2 million of property and equipment impairment charges and a $0.6 million franchise asset impairment charge



 

Sonic Automotive, Inc.

Results of Operations (Unaudited)















Year Ended December 31, 2013

Year Ended December 31, 2012


Reported

Adjustments

Adjusted

Reported

Adjustments

Adjusted


(In thousands, except per share and unit amounts)

Revenues:











   New retail vehicles

$   4,819,787

$                -

$   4,819,787

$   4,546,209

$                -

$   4,546,209

   Fleet vehicles


169,398

-

169,398

169,715

-

169,715

      Total new vehicles


4,989,185

-

4,989,185

4,715,924

-

4,715,924

   Used vehicles


2,176,034

-

2,176,034

2,053,477

-

2,053,477

   Wholesale vehicles


175,328

-

175,328

183,326

-

183,326

      Total vehicles


7,340,547

-

7,340,547

6,952,727

-

6,952,727

   Parts, service and collision repair


1,230,178

-

1,230,178

1,162,319

-

1,162,319

   Finance, insurance and other, net


272,443

-

272,443

250,422

-

250,422

      Total revenues


8,843,168

-

8,843,168

8,365,468

-

8,365,468

Gross profit

1,301,607

-

1,301,607

1,235,153

-

1,235,153

Selling, general and administrative expenses

(1,003,125)

-

(1,003,125)

(949,026)

-

(949,026)

Impairment charges

(9,872)

9,872

(1)

-

(440)

-

(440)

Depreciation and amortization


(54,007)

-

(54,007)

(45,285)

-

(45,285)

Operating income (loss)

234,603

9,872

244,475

240,402

-

240,402

Other income (expense):










   Interest expense, floor plan


(21,954)

-

(21,954)

(19,454)

-

(19,454)

   Interest expense, other, net

(55,485)

788

(2)

(54,697)

(60,090)

1,167

(4)

(58,923)

   Other income (expense), net


(28,143)

28,235

(3)

92

(19,625)

19,898

(5)

273

      Total other income (expense)


(105,582)

29,023

(76,559)

(99,169)

21,065

(78,104)

Income (loss) from continuing operations before taxes

129,021

38,895

167,916

141,233

21,065

162,298

Provision for income taxes - benefit (expense)

(44,343)

(15,169)

(59,512)

(49,972)

(11,784)

(6)

(61,756)

Income (loss) from continuing operations

84,678

23,726

108,404

91,261

9,281

100,542

Income (loss) from discontinued operations

(3,060)

-

(3,060)

(2,160)

-

(2,160)

Net income (loss)

$        81,618

$        23,726

$      105,344

$        89,101

$          9,281

$        98,382












Diluted earnings (loss) per common share:










      Earnings (loss) per share from continuing operations


$            1.59

$            0.44

$            2.03

$            1.56

$            0.16

$            1.72

      Earnings (loss) per share from discontinued operations


(0.06)

0.01

(0.05)

(0.03)

(0.01)

(0.04)

      Earnings (loss) per common share


$            1.53

$            0.45

$            1.98

$            1.53

$            0.15

$            1.68

      Weighted average common shares outstanding


52,941


52,941

60,406


60,406












Gross Margin Data (Continuing Operations):










   New retail vehicles


5.9%


5.9%

6.0%


6.0%

   Fleet vehicles


2.6%


2.6%

2.8%


2.8%

      Total new vehicles


5.8%


5.8%

5.9%


5.9%

   Used vehicles


6.9%


6.9%

7.0%


7.0%

   Wholesale vehicles


(4.5%)


(4.5%)

(3.3%)


(3.3%)

   Parts, service and collision repair


48.5%


48.5%

48.9%


48.9%

   Finance, insurance and other


100.0%


100.0%

100.0%


100.0%

      Overall gross margin

14.7%


14.7%

14.8%


14.8%












SG&A Expenses (Continuing Operations):










   Compensation


$      601,495




$      566,886



   Advertising


56,609




50,349



   Rent 


73,976




76,484



   Other

271,045




255,307



      Total SG&A expenses


$   1,003,125

$                -

$   1,003,125

$      949,026

$                -

$      949,026

   SG&A expenses as % of gross profit


77.1%


77.1%

76.8%


76.8%












Operating Margin %

2.7%


2.8%

2.9%


2.9%












Unit Data (Continuing Operations):










   New retail units


132,363




128,636



   Fleet units


5,911




5,928



      Total new units


138,274




134,564



   Used units


107,054




102,556



   Wholesale units


29,961




31,188















(1) Represents $9.3 million of property and equipment impairment charges and a $0.6 million franchise asset impairment charge.

(2) Represents double-carry interest on the 9.0% Senior Subordinated Notes.

(3) Represents loss on extinguishment of the 9.0% Senior Subordinated Notes.

(4) Represents double-carry interest on the 7.0% Senior Subordinated Notes.

(5) Represents loss on extinguishment of the 5.0% Convertible Senior Notes.

(6) Includes tax adjustments related to the settlement of certain tax matters and the tax effect of items (4) and (5) above.

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)
















Per Share Data
































Fourth Quarter Ended December 31, 2013




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


(In thousands, except per share amounts)

Reported:














   Earnings (loss) and shares


52,492

$    29,562


$    (1,478)


$     28,084


   Effect of participating securities:














      Non-vested restricted stock














         and stock units




(208)


-


(208)


   Basic earnings (loss) and shares


52,492

$    29,354

$    0.56

$    (1,478)

$    (0.03)

$     27,876

$    0.53

   Effect of dilutive securities:














      Contingently convertible














         debt (5.0% Convertible Notes)

-

-


-


-


      Stock compensation plans


482












   Diluted earnings (loss) and shares


52,974

$    29,354

$    0.55

$    (1,478)

$    (0.02)

$     27,876

$    0.53
















Adjustments (net of tax):














   Impairment Charges


$      5,980

$    0.11

$             -

$          -

$       5,980

$    0.11

   Effect of two-class method & rounding


(42)

0.01

-

(0.01)

(42)

-

      Total adjustments




$      5,938

$    0.12

$             -

$    (0.01)

$       5,938

$    0.11
















Adjusted:














   Diluted earnings (loss) per share




$    0.67


$    (0.03)


$    0.64


































Fourth Quarter Ended December 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


(In thousands, except per share amounts)

Reported:














   Earnings (loss) and shares


54,289

$    28,792


$      1,590


$     30,382


   Effect of participating securities:














      Non-vested restricted stock














         and stock units




(433)


-


(433)


Basic earnings (loss) and shares


54,289

$    28,359

$    0.52

$      1,590

$      0.03

$     29,949

$    0.55

Effect of dilutive securities:














      Stock compensation plans


474












Diluted earnings (loss) and shares


54,763

$    28,359

$    0.52

$      1,590

$      0.03

$     29,949

$    0.55
















































Per Share Data
































Year Ended December 31, 2013




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


(In thousands, except per share amounts)

Reported:














   Earnings (loss) and shares

52,556

$    84,678


$    (3,060)


$     81,618


   Effect of participating securities:














      Non-vested restricted stock














         and stock units




(601)


-


(601)


   Basic earnings (loss) and shares


52,556

$    84,077

$    1.60

$    (3,060)

$    (0.06)

$     81,017

$    1.54

   Effect of dilutive securities:














      Stock compensation plans


385












   Diluted earnings (loss) and shares


52,941

$    84,077

$    1.59

$    (3,060)

$    (0.06)

$     81,017

$    1.53
















Adjustments (net of tax):














   Impairment Charges


$      6,022

$    0.11

$             -

$          -

$       6,022

$    0.11

   Double-carry interest




481

0.01

-

-

481

0.01

   Debt extinguishment charges


17,223

0.33

-

-

17,223

0.33

   Effect of two-class method & rounding


(167)

(0.01)

-

0.01

(167)

-

      Total adjustments




$    23,559

$    0.44

$             -

$      0.01

$     23,559

$    0.45
















Adjusted:














   Diluted earnings (loss) per share






$    2.03


$    (0.05)


$    1.98


































Year Ended December 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


(In thousands, except per share amounts)

Reported:














   Earnings (loss) and shares

53,550

$    91,261


$    (2,160)


$     89,101


   Effect of participating securities:














      Non-vested restricted stock














         and stock units




(1,381)


-


(1,381)


   Basic earnings (loss) and shares

53,550

$    89,880

$    1.68

$    (2,160)

$    (0.04)

$     87,720

$    1.64

   Effect of dilutive securities:














      Contingently convertible














         debt (5.0% Convertible Notes)

6,411

4,617


64


4,681


      Stock compensation plans


445












   Diluted earnings (loss) and shares


60,406

$    94,497

$    1.56

$    (2,096)

$    (0.03)

$     92,401

$    1.53
















Adjustments (net of tax):














   Double-carry interest




$         712

$    0.01

$             -

$          -

$          712

$    0.01

   Debt extinguishment charges


12,138

0.20

-

-

12,138

0.20

   Settlement of tax matters




(3,569)

(0.06)

-

-

(3,569)

(0.06)

   Effect of two-class method & rounding




(141)

0.01

-

(0.01)

(141)

-

      Total adjustments


$      9,140

$    0.16

$             -

$    (0.01)

$       9,140

$    0.15
















Adjusted:














   Diluted earnings (loss) per share




$    1.72


$    (0.04)


$    1.68

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)










New Vehicles




















Fourth Quarter Ended December 31,

Better / (Worse)


2013

2012

Change

% Change


(In thousands, except units and per unit amounts)

Reported:







   Revenue

$            1,337,698

$            1,303,054

$       34,644

2.7%

   Gross profit


$                 82,936

$                 77,381

$         5,555

7.2%

   Unit sales


35,251

35,079

172

0.5%

   Revenue per unit


$                 37,948

$                 37,146

$            802

2.2%

   Gross profit per unit


$                   2,353

$                   2,206

$            147

6.7%

   Gross profit as a % of revenue


6.2%

5.9%

30

bps











Year Ended December 31,

Better / (Worse)


2013

2012

Change

% Change


(In thousands, except units and per unit amounts)

Reported:







   Revenue


$            4,989,185

$            4,715,924

$     273,261

5.8%

   Gross profit


$               289,603

$               278,349

$       11,254

4.0%

   Unit sales


138,274

134,564

3,710

2.8%

   Revenue per unit


$                 36,082

$                 35,046

$         1,036

3.0%

   Gross profit per unit


$                   2,094

$                   2,069

$              25

1.2%

   Gross profit as a % of revenue


5.8%

5.9%

(10)

bps











Fourth Quarter Ended December 31,

Better / (Worse)


2013

2012

Change

% Change


(In thousands, except units and per unit amounts)

Same Store:







   Revenue


$            1,312,838

$            1,303,054

$         9,784

0.8%

   Gross profit


$                 81,500

$                 77,961

$         3,539

4.5%

   Unit sales


34,800

35,079

(279)

(0.8%)

   Revenue per unit


$                 37,725

$                 37,146

$            579

1.6%

   Gross profit per unit


$                   2,342

$                   2,222

$            120

5.4%

   Gross profit as a % of revenue


6.2%

6.0%

20

bps











Year Ended December 31,

Better / (Worse)


2013

2012

Change

% Change


(In thousands, except units and per unit amounts)

Same Store:







   Revenue


$            4,954,737

$            4,715,924

$     238,813

5.1%

   Gross profit


$               287,394

$               279,648

$         7,746

2.8%

   Unit sales


137,649

134,564

3,085

2.3%

   Revenue per unit


$                 35,995

$                 35,046

$            949

2.7%

   Gross profit per unit

$                   2,088

$                   2,078

$              10

0.5%

   Gross profit as a % of revenue


5.8%

5.9%

(10)

bps

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)









Used Vehicles


















Fourth Quarter Ended December 31,

Better / (Worse)


2013

2012

Change

% Change


(In thousands, except units and per unit amounts)

Reported:






   Revenue

$               551,028

$               489,063

$       61,965

12.7%

   Gross profit


$                 35,784

$                 32,776

$         3,008

9.2%

   Unit sales


26,354

23,943

2,411

10.1%

   Revenue per unit


$                 20,909

$                 20,426

$            483

2.4%

   Gross profit per unit


$                   1,358

$                   1,369

$            (11)

(0.8%)

   Gross profit as a % of revenue


6.5%

6.7%

(20)

bps










Year Ended December 31,

Better / (Worse)


2013

2012

 Change

% Change


(In thousands, except units and per unit amounts)

Reported:






   Revenue

$            2,176,034

$            2,053,477

$     122,557

6.0%

   Gross profit


$               150,400

$               143,454

$         6,946

4.8%

   Unit sales


107,054

102,556

4,498

4.4%

   Revenue per unit


$                 20,327

$                 20,023

$            304

1.5%

   Gross profit per unit


$                   1,405

$                   1,399

$                6

0.4%

   Gross profit as a % of revenue


6.9%

7.0%

(10)

bps










Fourth Quarter Ended December 31,

Better / (Worse)


2013

2012

 Change

% Change


(In thousands, except units and per unit amounts)

Same Store:






   Revenue

$               537,694

$               489,063

$       48,631

9.9%

   Gross profit


$                 34,576

$                 33,775

$            801

2.4%

   Unit sales


25,885

23,943

1,942

8.1%

   Revenue per unit


$                 20,772

$                 20,426

$            346

1.7%

   Gross profit per unit


$                   1,336

$                   1,411

$            (75)

(5.3%)

   Gross profit as a % of revenue


6.4%

6.9%

(50)

bps










Year Ended December 31,

Better / (Worse)


2013

2012

 Change

% Change


(In thousands, except units and per unit amounts)

Same Store:






   Revenue

$            2,157,213

$            2,053,477

$     103,736

5.1%

   Gross profit


$               148,683

$               143,759

$         4,924

3.4%

   Unit sales


106,397

102,556

3,841

3.7%

   Revenue per unit


$                 20,275

$                 20,023

$            252

1.3%

   Gross profit per unit


$                   1,397

$                   1,402

$              (5)

(0.4%)

   Gross profit as a % of revenue


6.9%

7.0%

(10)

bps

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)









Wholesale Vehicles


















Fourth Quarter Ended December 31,

Better / (Worse)


2013

2012

Change

% Change


(In thousands, except units and per unit amounts)

Reported:







   Revenue


$                 40,772

$                 44,820

$       (4,048)

(9.0%)

   Gross profit (loss)


$                (1,589)

$                (1,576)

$           (13)

(0.8%)

   Unit sales


6,670

7,452

(782)

(10.5%)

   Revenue per unit


$                   6,113

$                   6,014

$              99

1.6%

   Gross profit (loss) per unit


$                   (238)

$                   (211)

$           (27)

(12.8%)

   Gross profit (loss) as a % of revenue


(3.9%)

(3.5%)

(40)

bps











Year Ended December 31,

Better / (Worse)


2013

2012

Change

% Change


(In thousands, except units and per unit amounts)

Reported:







   Revenue


$               175,328

$               183,326

$       (7,998)

(4.4%)

   Gross profit (loss)

$                (7,931)

$                (5,975)

$       (1,956)

(32.7%)

   Unit sales


29,961

31,188

(1,227)

(3.9%)

   Revenue per unit


$                   5,852

$                   5,878

$            (26)

(0.4%)

   Gross profit (loss) per unit


$                   (265)

$                   (192)

$            (73)

(38.0%)

   Gross profit (loss) as a % of revenue


(4.5%)

(3.3%)

(120)

bps











Fourth Quarter Ended December 31,

Better / (Worse)


2013

2012

Change

% Change


(In thousands, except units and per unit amounts)

Same Store:







   Revenue


$                 39,355

$                 44,820

$       (5,465)

(12.2%)

   Gross profit (loss)


$                (1,494)

$                (1,576)

$              82

5.2%

   Unit sales


6,523

7,452

(929)

(12.5%)

   Revenue per unit


$                   6,033

$                   6,014

$              19

0.3%

   Gross profit (loss) per unit


$                   (229)

$                   (211)

$            (18)

(8.5%)

   Gross profit (loss) as a % of revenue


(3.8%)

(3.5%)

(30)

bps











Year Ended December 31,

Better / (Worse)


2013

2012

Change

% Change


(In thousands, except units and per unit amounts)

Same Store:







   Revenue


$               173,612

$               183,325

$       (9,713)

(5.3%)

   Gross profit (loss)


$                (7,830)

$                 (5,976)

$       (1,854)

(31.0%)

   Unit sales


29,785

31,188

(1,403)

(4.5%)

   Revenue per unit


$                   5,829

$                   5,878

$            (49)

(0.8%)

   Gross profit (loss) per unit


$                   (263)

$                    (192)

$            (71)

(37.0%)

   Gross profit (loss) as a % of revenue


(4.5%)

(3.3%)

(120)

bps

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)









Parts, Service and Collision Repair ("Fixed Operations") 












Fourth Quarter Ended December 31,

Better / (Worse)


2013

2012

 Change

% Change

Reported:

(In thousands)

   Revenue







      Customer Pay

$               139,443

$               130,595

$         8,848

6.8%

      Warranty


50,572

41,621

8,951

21.5%

      Wholesale Parts


44,468

38,282

6,186

16.2%

      Internal, Sublet & Other


82,405

76,615

5,790

7.6%

         Total


$               316,888

$               287,113

$       29,775

10.4%

   Gross profit







      Customer Pay


$                 76,315

$                 71,587

$         4,728

6.6%

      Warranty


26,694

21,972

4,722

21.5%

      Wholesale Parts


8,084

7,244

840

11.6%

      Internal, Sublet & Other


41,493

40,051

1,442

3.6%

         Total


$               152,586

$               140,854

$       11,732

8.3%

   Gross profit as a % of revenue







      Customer Pay


54.7%

54.8%

(10)

bps

      Warranty


52.8%

52.8%

0

bps

      Wholesale Parts


18.2%

18.9%

(70)

bps

      Internal, Sublet & Other


50.4%

52.3%

(190)

bps

         Total


48.2%

49.1%

(90)

bps











Year Ended December 31,

Better / (Worse)


2013

2012

 Change

% Change

Reported:

(In thousands)

   Revenue







      Customer Pay

$               546,695

$               525,674

$       21,021

4.0%

      Warranty


188,061

167,964

20,097

12.0%

      Wholesale Parts


169,338

153,827

15,511

10.1%

      Internal, Sublet & Other


326,084

314,854

11,230

3.6%

         Total


$            1,230,178

$            1,162,319

$       67,859

5.8%

   Gross profit







      Customer Pay


$               300,800

$               289,427

$       11,373

3.9%

      Warranty


101,351

88,287

13,064

14.8%

      Wholesale Parts


31,242

29,494

1,748

5.9%

      Internal, Sublet & Other


163,699

161,695

2,004

1.2%

         Total


$               597,092

$               568,903

$       28,189

5.0%

   Gross profit as a % of revenue







      Customer Pay


55.0%

55.1%

(10)

bps

      Warranty


53.9%

52.6%

130

bps

      Wholesale Parts


18.4%

19.2%

(80)

bps

      Internal, Sublet & Other


50.2%

51.4%

(120)

bps

         Total


48.5%

48.9%

(40)

bps

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)









Parts, Service and Collision Repair ("Fixed Operations") 













Fourth Quarter Ended December 31,

Better / (Worse)


2013

2012

 Change

% Change

Same Store:

(In thousands)

   Revenue







      Customer Pay


$               134,542

$               130,595

$         3,947

3.0%

      Warranty


49,209

41,621

7,588

18.2%

      Wholesale Parts


43,236

38,282

4,954

12.9%

      Internal, Sublet & Other


80,708

76,615

4,093

5.3%

            Total


$               307,695

$               287,113

$       20,582

7.2%

   Gross profit







      Customer Pay


$                 73,790

$                 71,587

$         2,203

3.1%

      Warranty


26,063

21,972

4,091

18.6%

      Wholesale Parts


7,772

7,244

528

7.3%

      Internal, Sublet & Other


40,367

39,778

589

1.5%

         Total


$               147,992

$               140,581

$         7,411

5.3%

   Gross profit as a % of revenue







      Customer Pay


54.8%

54.8%

0

bps

      Warranty


53.0%

52.8%

20

bps

      Wholesale Parts


18.0%

18.9%

(90)

bps

      Internal, Sublet & Other


50.0%

51.9%

(190)

bps

         Total


48.1%

49.0%

(90)

bps











Year Ended December 31,

Better / (Worse)


2013

2012

 Change

% Change

Same Store:

(In thousands)

   Revenue







      Customer Pay


$               539,331

$               525,674

$       13,657

2.6%

      Warranty


185,864

167,964

17,900

10.7%

      Wholesale Parts


167,452

153,827

13,625

8.9%

      Internal, Sublet & Other


323,543

314,854

8,689

2.8%

         Total


$            1,216,190

$            1,162,319

$       53,871

4.6%

   Gross profit







      Customer Pay


$               296,956

$               289,427

$         7,529

2.6%

      Warranty


100,574

88,287

12,287

13.9%

      Wholesale Parts


30,766

29,494

1,272

4.3%

      Internal, Sublet & Other


161,629

160,764

865

0.5%

         Total


$               589,925

$               567,972

$       21,953

3.9%

   Gross profit as a % of revenue







      Customer Pay


55.1%

55.1%

0

bps

      Warranty


54.1%

52.6%

150

bps

      Wholesale Parts


18.4%

19.2%

(80)

bps

      Internal, Sublet & Other


50.0%

51.1%

(110)

bps

         Total


48.5%

48.9%

(40)

bps

 

 Sonic Automotive, Inc.

Results of Operations (Unaudited)









Finance, Insurance and Other, Net ("F&I")

















Fourth Quarter Ended December 31,

Better / (Worse)


2013

2012

Change

% Change


(In thousands, except per unit amounts)

Reported:







   Revenue

$                 68,983

$                 64,685

$         4,298

6.6%

   Gross profit per retail unit (excludes fleet)

$                   1,143

$                   1,121

$              22

2.0%




















Year Ended December 31,

Better / (Worse)


2013

2012

Change

% Change


(In thousands, except per unit amounts)

Reported:







   Revenue


$               272,443

$               250,422

$       22,021

8.8%

   Gross profit per retail unit (excludes fleet)

$                   1,138

$                   1,083

$              55

5.1%











Fourth Quarter Ended December 31,

Better / (Worse)


2013

2012

Change

% Change


(In thousands, except per unit amounts)

Same Store:







   Revenue


$                 67,712

$                 64,698

$         3,014

4.7%

   Gross profit per retail unit (excludes fleet)


$                   1,139

$                   1,121

$              18

1.6%




















Year Ended December 31,

Better / (Worse)


2013

2012

Change

% Change


(In thousands, except per unit amounts)

Same Store:







   Revenue


$               270,708

$               249,779

$       20,929

8.4%

   Gross profit per retail unit (excludes fleet)


$                   1,137

$                   1,080

$              57

5.3%

 

 Sonic Automotive, Inc.

Results of Operations (Unaudited)









Selling, General and Administrative ("SG&A") Expenses














Fourth Quarter Ended December 31,

Better / (Worse)


2013

2012

 Change

% Change


(In thousands)









   Compensation

$               151,704

$               140,423

$     (11,281)

(8.0%)

   Advertising


15,327

13,243

(2,084)

(15.7%)

   Rent


17,632

19,286

1,654

8.6%

   Other

69,984

63,846

(6,138)

(9.6%)

      Total


$               254,647

$               236,798

$     (17,849)

(7.5%)

SG&A as a % of gross profit






   Compensation


44.8%

44.7%

(10)

bps

   Advertising


4.5%

4.2%

(30)

bps

   Rent


5.2%

6.1%

90

bps

   Other

20.7%

20.4%

(30)

bps

      Total


75.2%

75.4%

20

bps










Year Ended December 31,

Better / (Worse)


2013

2012

 Change

% Change


(In thousands)








   Compensation


$               601,495

$               566,886

$     (34,609)

(6.1%)

   Advertising


56,609

50,349

(6,260)

(12.4%)

   Rent


73,976

76,484

2,508

3.3%

   Other


271,045

255,307

(15,738)

(6.2%)

      Total


$            1,003,125

$               949,026

$     (54,099)

(5.7%)

SG&A as a % of gross profit






   Compensation

46.2%

45.9%

(30)

bps

   Advertising


4.3%

4.1%

(20)

   Rent


5.7%

6.2%

50

bps

   Other

20.9%

20.6%

(30)

bps

      Total


77.1%

76.8%

(30)

bps

 

 

SOURCE Sonic Automotive, Inc.

Released February 19, 2014