Sonic Automotive, Inc. Reports Third Quarter Earnings

Q3 2016 Continuing Operations Diluted Earnings per Share of $0.42, and $0.47 on an Adjusted Basis

CHARLOTTE, N.C., Nov. 1, 2016 /PRNewswire/ --

Third Quarter 2016 Highlights

  • All-time record quarterly used retail unit sales of 30,933, up 1.5% over the prior year quarter
  • Record third quarter fixed operations gross profit of $170.0 million, up 0.2% over the prior year quarter with one less selling day
  • All-time record F&I quarterly gross profit of $89.6 million, up 4.4% over the prior year quarter
  • EchoPark® stores retail 1,458 units, up 58.5% from the prior year quarter – five stores operational in the Denver market

Sonic Automotive, Inc. (NYSE: SAH), one of the nation's largest automotive retailers, today reported financial results for the third quarter of 2016.

GAAP Basis

Net income from continuing operations for the third quarter of 2016 was $19.0 million, or $0.42 per diluted share.  Included in these amounts are net pre-tax charges totaling $3.7 million, or $0.05 per diluted share, consisting of fixed asset impairment charges (relating to a facility construction project and the abandonment of certain construction projects) which were partially offset by favorable storm-related physical damage and legal accrual adjustments.  Also included in the reported amounts for the third quarter of 2016 is a net loss from operations related to EchoPark® of $2.3 million, or $0.05 per diluted share.

Net income from continuing operations for the third quarter of 2015 was $27.1 million, or $0.53 per diluted share.  Included in these reported amounts is a net loss from operations related to EchoPark® of $2.2 million, or $0.04 per diluted share. 

Adjusted Basis

Adjusted net income from continuing operations for the third quarter of 2016 was $21.2 million, or $0.47 per diluted share.  Excluded from these adjusted amounts are the impairment of fixed assets, physical damage and legal adjustments discussed above (see attached tables for additional information and reconciliation of reported GAAP basis amounts to adjusted balances).

There were no adjusted amounts for the third quarter of 2015.

Commentary

Jeff Dyke, Sonic's EVP of Operations, stated, "We had another record quarter in fixed operations, F&I and pre-owned, but did face headwinds during the quarter.  Stop-sale vehicles, BMW brand performance and weakness in one of our most profitable markets, Houston, negatively impacted our results.  Given BMW's brand performance during the quarter and that BMW stores represent over 30% of our profitability, we were negatively impacted.  We have absolute confidence in the BMW brand and are working with our partners at BMW to address this bump in the road, which we view as a short-term issue.    We are making progress with our stop-sale inventory with less than 2,200 units on hand at the end of the third quarter of 2016 compared to nearly 4,700 units on hand at the end of the second quarter of 2016.    Finally, we expect weakness to continue in the Houston market, especially in our high-line stores, through at least the end of the year as we believe the energy sector's recovery may take time to gain some momentum."

"Our One Sonic-One Experience ("OSOE") stores are also making good progress and we plan to launch the technology in our first BMW store in the first quarter of 2017.  The technology, pricing tools and OSOE playbook have continued to develop nicely and we are excited to see how these tools can be leveraged in a BMW retail operation.  We are confident that the implementation of OSOE will greatly enhance our BMW customers' buying experience as our EchoPark® stores and current OSOE stores boast some of the very highest social media reputation scores in the industry."

B. Scott Smith, Sonic's Chief Executive Officer, noted, "We continued to execute our long-term strategies during a challenging third quarter.  Expansion of EchoPark® is continuing with two new stores operating during the quarter.  We are very excited that combined, our original three stores generated positive cash during the third quarter.  Our sixth Denver market store, located in Colorado Springs, will open during the first half of 2017.  In addition, we will break ground on our first Texas locations in the first half of 2017."

"We are also very excited to announce the progress we are making with our open-points.  Our new Mercedes-Benz open-point in McKinney, Texas began operations during the quarter.  We expect this store to contribute in excess of $100 million in revenue once it is completely ramped up.  The Nissan open-point in Cleveland, Tennessee, with expected annual revenues in excess of $30 million, will open before the end of the current year.  Lastly, our Pensacola Audi open-point broke ground during the quarter and is expected to open in the first quarter of 2017.  Once fully operational, we anticipate this store will produce annual revenues in excess of $50 million.  We continue to work with our manufacturer partners and anticipate further growth via additional open-points over the next several years."

"Lastly, our commitment to return capital to shareholders continued during the quarter as we repurchased approximately 579,000 Class A shares for roughly $10.0 million and declared a dividend with an expected payment of $2.2 million.  This brings our year-to-date annual return of capital to shareholders through stock repurchases to $97.5 million.  Coupled with dividends declared during 2016 of $9.0 million, we will have returned over $100 million to shareholders so far in 2016."

"Based on results experienced so far this year and uncertainty related to new vehicle margins in the fourth quarter, we are adjusting our earnings guidance range.  We currently estimate diluted earnings per share from continuing operations for the fourth quarter of 2016 will range from $0.59 to $0.69 and $1.95 to $2.05 on an adjusted basis for the full year of 2016.  This guidance does not include the effect of any amounts related to an anticipated settlement with VW expected to be finalized by the end of the year."

Dividend

Sonic's Board of Directors approved a quarterly dividend of $0.05 per share payable in cash for stockholders of record on December 15, 2016.  The dividend will be payable on January 13, 2017.

Third Quarter 2016 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 "Webcasts & Presentations."

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: 1.877.450.3867
International: 1.706.643.0958
Conference ID: 96968408

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: 96968408

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.

Forward Looking Statements

Included herein are forward-looking statements, including statements with respect to anticipated expansion of our EchoPark® business, anticipated improved profitability in the fourth quarter of 2016, anticipated continued weakness in the Houston market, anticipated launch of OSOE technology in new markets in the first quarter of 2017, anticipated opening dates for and anticipated future annual revenues from previously-announced open-point dealerships, anticipated additional open-point dealerships in future years, and anticipated diluted earnings per share from continuing operations for the fourth quarter and the full year ending December 31, 2016.  There are many factors that affect management's views about future events and trends of the Company's business.  These factors involve risks and uncertainties that could cause actual results or trends to differ materially from management's views, 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, 2015.  The Company does not undertake any obligation to update forward-looking information, except as required under federal securities laws and the rules and regulations of the SEC.

Non-GAAP Financial Measures

This press release and the attached financial tables contain certain non-GAAP financial measures as defined under SEC rules, such as adjusted net income and adjusted earnings per share from continuing operations, which exclude certain items disclosed in the attached financial tables.  As required by SEC rules, the Company provides reconciliations of these measures to the most directly comparable GAAP measures.  The Company believes that these non-GAAP financial measures improve the transparency of the Company's disclosure, provide a meaningful presentation of the Company's results from its core business operations excluding the impact of items not related to the Company's ongoing core business operations, and improve the period-to-period comparability of the Company's results from its core business operations.

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)


This release contains certain non-GAAP financial measures (the "Adjusted" amounts) 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" amounts) 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.




Three Months Ended September 30,


Nine Months Ended September 30,



2016


2015


2016


2015



(In thousands, except per share and unit data)

Revenues:









New retail vehicles


$          1,364,842


$          1,352,180


$          3,784,122


$          3,828,027

Fleet vehicles


10,302


15,849


42,056


37,612

     Total new vehicles


1,375,144


1,368,029


3,826,178


3,865,639

Used vehicles


660,974


652,058


1,881,514


1,904,594

Wholesale vehicles


70,522


37,971


153,141


120,760

     Total vehicles


2,106,640


2,058,058


5,860,833


5,890,993

Parts, service and collision repair


361,709


350,520


1,059,093


1,019,878

Finance, insurance and other, net


89,579


85,830


254,940


242,792

     Total revenues


2,557,928


2,494,408


7,174,866


7,153,663

Gross profit


359,085


360,251


1,057,540


1,050,764

Selling, general and administrative expenses


(282,141)


(280,041)


(843,721)


(835,564)

Impairment charges


(6,089)


(37)


(6,240)


(16,698)

Depreciation and amortization


(19,928)


(17,250)


(57,302)


(50,953)

Operating income (loss)


50,927


62,923


150,277


147,549

Other income (expense):








Interest expense, floor plan


(6,672)


(5,364)


(19,797)


(15,488)

Interest expense, other, net


(13,016)


(12,361)


(37,560)


(38,635)

Other income (expense), net


11


-


120


102

     Total other income (expense)


(19,677)


(17,725)


(57,237)


(54,021)

Income (loss) from continuing operations before taxes


31,250


45,198


93,040


93,528

Provision for income taxes for continuing operations - benefit (expense)


(12,281)


(18,095)


(36,565)


(36,944)

Income (loss) from continuing operations


18,969


27,103


56,475


56,584

Income (loss) from discontinued operations


(858)


(598)


(918)


(1,331)

Net income (loss)


$               18,111


$               26,505


$               55,557


$               55,253









Diluted earnings (loss) per common share:








     Earnings (loss) per share from continuing operations


$                   0.42


$                   0.53


$                   1.22


$                   1.11

     Earnings (loss) per share from discontinued operations


(0.02)


(0.01)


(0.02)


(0.03)

     Earnings (loss) per common share


$                   0.40


$                   0.52


$                   1.20


$                   1.08

     Weighted average common shares outstanding


45,354


50,769


46,130


51,086









Gross Margin Data (Continuing Operations):








New retail vehicles


4.6%


4.8%


4.9%


5.1%

Fleet vehicles


0.3%


(0.8%)


0.5%


(0.5%)

     Total new vehicles


4.5%


4.8%


4.9%


5.0%

Used vehicles


6.0%


6.4%


6.2%


6.5%

Wholesale vehicles


(3.6%)


(6.5%)


(3.5%)


(4.4%)

Parts, service and collision repair


47.0%


48.4%


47.6%


48.7%

Finance, insurance and other


100.0%


100.0%


100.0%


100.0%

     Overall gross margin


14.0%


14.4%


14.7%


14.7%









SG&A Expenses (Continuing Operations):








Compensation


$             171,287


$             167,489


$             506,894


$             497,158

Advertising


14,987


15,470


45,834


46,160

Rent


18,037


18,558


55,265


55,058

Other


77,830


78,524


235,728


237,188

     Total SG&A expenses


$             282,141


$             280,041


$             843,721


$             835,564

SG&A expenses as % of gross profit


78.6%


77.7%


79.8%


79.5%









Operating Margin %


2.0%


2.5%


2.1%


2.1%









Unit Data (Continuing Operations):








New retail units


35,715


36,891


99,100


102,901

Fleet units


339


602


1,341


1,244

     Total new units


36,054


37,493


100,441


104,145

Used units


30,933


30,467


89,553


88,903

Wholesale units


10,377


7,787


26,012


23,574

 

 

Sonic Automotive, Inc.
Results of Operations (Unaudited)


Per Share Data



























Three Months Ended September 30, 2016





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


45,118


$     18,969




$       (858)




$     18,111



Effect of participating securities:















     Non-vested restricted stock




(11)




-




(11)



Basic earnings (loss) and shares


45,118


$     18,958


$       0.42


$       (858)


$      (0.02)


$     18,100


$       0.40

Effect of dilutive securities:















     Stock compensation plans


236













Diluted earnings (loss) and shares


45,354


$     18,958


$       0.42


$       (858)


$      (0.02)


$     18,100


$       0.40
















Adjustments:















Impairment charges




$       6,089




$             -




$       6,089



Storm damage and other




(2,341)




1,000




(1,341)



Total adjustments before taxes




3,748




1,000




4,748



Income tax effect of above adjustments




(1,473)




(390)




(1,863)



     Effect of adjustments, net of income taxes




$       2,275


$       0.05


$         610


$       0.01


$       2,885


$       0.06
















Adjusted:















Earnings (loss) and















     diluted earnings (loss) per share (1)




$     21,244


$       0.47


$       (248)


$      (0.01)


$     20,996


$       0.46
















(1) Net loss attributable to EchoPark® operations was $0.05 per fully diluted share in the three months ended September 30, 2016



































Three Months Ended September 30, 2015





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


50,456


$     27,103




$       (598)




$     26,505



Effect of participating securities:















     Non-vested restricted stock




(13)




-




(13)



Basic earnings (loss) and shares


50,456


$     27,090


$       0.54


$       (598)


$      (0.01)


$     26,492


$       0.53

Effect of dilutive securities:















     Stock compensation plans


313













Diluted earnings (loss) and shares (2)


50,769


$     27,090


$       0.53


$       (598)


$      (0.01)


$     26,492


$       0.52































(2) Net loss attributable to EchoPark® operations was $0.04 per fully diluted share in the three months ended September 30, 2015

































Per Share Data
































Nine Months Ended September 30, 2016





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


45,930


$     56,475




$       (918)




$     55,557



Effect of participating securities:















     Non-vested restricted stock




(31)




-




(31)



Basic earnings (loss) and shares


45,930


$     56,444


$       1.23


$       (918)


$      (0.02)


$     55,526


$       1.21

Effect of dilutive securities:















Stock compensation plans


200













Diluted earnings (loss) and shares


46,130


$     56,444


$       1.22


$       (918)


$      (0.02)


$     55,526


$       1.20
















Adjustments:















Impairment charges




$       6,089




$             -




$       6,089



Storm damage and other




3,702




477




4,179



Total adjustments before taxes




9,791




477




10,268



Income tax effect of above adjustments




(3,818)




(187)




(4,005)



     Effect of adjustments, net of income taxes




$       5,973


$       0.13


$         290


$       0.01


$       6,263


$       0.14
















Adjusted:















Earnings (loss) and















     diluted earnings (loss) per share (3)




$     62,448


$       1.35


$       (628)


$      (0.01)


$     61,820


$       1.34
















(3) Net loss attributable to EchoPark® operations was $0.14 per fully diluted share in the nine months ended September 30, 2016




































Nine Months Ended September 30, 2015





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


50,697


$     56,584




$    (1,331)




$     55,253



Effect of participating securities:















     Non-vested restricted stock




(27)




-




(27)



Basic earnings (loss) and shares


50,697


$     56,557


$       1.12


$    (1,331)


$      (0.03)


$     55,226


$       1.09

Effect of dilutive securities:















     Stock compensation plans


389













Diluted earnings (loss) and shares


51,086


$     56,557


$       1.11


$    (1,331)


$      (0.03)


$     55,226


$       1.08
















Adjustments:















Gain on disposal




$         (955)




$             -




$         (955)



Impairment charges




16,661




-




16,661



Storm damage and other




5,138




-




5,138



Total adjustments before taxes




20,844




-




20,844



Income tax effect of above adjustments




(8,129)




-




(8,129)



     Effect of adjustments, net of income taxes




$     12,715


$       0.25


$             -


$           -


$     12,715


$       0.25
















Adjusted:















Earnings (loss) and















     diluted earnings (loss) per share (4)




$     69,299


$       1.36


$    (1,331)


$      (0.03)


$     67,968


$       1.33
















(4) Net loss attributable to EchoPark® operations was $0.15 per fully diluted share in the nine months ended September 30, 2015




 

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)


New Vehicles


















Three Months Ended September 30,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except units and per unit data)

Reported:








Revenue


$          1,375,144


$          1,368,029


$                 7,115


0.5%

Gross profit


$               62,388


$               65,435


$               (3,047)


(4.7%)

Unit sales


36,054


37,493


(1,439)


(3.8%)

Revenue per unit 


$               38,141


$               36,488


$                 1,653


4.5%

Gross profit per unit


$                 1,730


$                 1,745


$                    (15)


(0.9%)

Gross profit as a % of revenue


4.5%


4.8%


(30)

bps












Nine Months Ended September 30,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except units and per unit data)

Reported:








Revenue


$          3,826,178


$          3,865,639


$             (39,461)


(1.0%)

Gross profit


$             186,678


$             193,720


$               (7,042)


(3.6%)

Unit sales


100,441


104,145


(3,704)


(3.6%)

Revenue per unit


$               38,094


$               37,118


$                    976


2.6%

Gross profit per unit


$                 1,859


$                 1,860


$                      (1)


(0.1%)

Gross profit as a % of revenue


4.9%


5.0%


(10)

bps












Three Months Ended September 30,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except units and per unit data)

Same Store:








Revenue


$          1,369,958


$          1,354,798


$               15,160


1.1%

Gross profit


$               61,794


$               64,853


$               (3,059)


(4.7%)

Unit sales


35,957


37,164


(1,207)


(3.2%)

Revenue per unit


$               38,100


$               36,455


$                 1,645


4.5%

Gross profit per unit


$                 1,719


$                 1,745


$                    (26)


(1.5%)

Gross profit as a % of revenue


4.5%


4.8%


(30)

bps












Nine Months Ended September 30,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except units and per unit data)

Same Store:








Revenue


$          3,820,992


$          3,827,094


$               (6,102)


(0.2%)

Gross profit


$             186,011


$             192,204


$               (6,193)


(3.2%)

Unit sales


100,344


103,175


(2,831)


(2.7%)

Revenue per unit


$               38,079


$               37,093


$                    986


2.7%

Gross profit per unit


$                 1,854


$                 1,863


$                      (9)


(0.5%)

Gross profit as a % of revenue


4.9%


5.0%


(10)

bps


 

 

Sonic Automotive, Inc.
Results of Operations (Unaudited)


Used Vehicles
















Three Months Ended September 30,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except units and per unit data)

Reported:








Revenue


$             660,974


$             652,058


$                 8,916


1.4%

Gross profit


$               39,622


$               41,730


$               (2,108)


(5.1%)

Unit sales


30,933


30,467


466


1.5%

Revenue per unit


$               21,368


$               21,402


$                    (34)


(0.2%)

Gross profit per unit


$                 1,281


$                 1,370


$                    (89)


(6.5%)

Gross profit as a % of revenue


6.0%


6.4%


(40)

bps












Nine Months Ended September 30,


Better / (Worse)



2016


2015


 Change


% Change



(In thousands, except units and per unit data)

Reported:








Revenue


$          1,881,514


$          1,904,594


$             (23,080)


(1.2%)

Gross profit


$             117,121


$             123,271


$               (6,150)


(5.0%)

Unit sales


89,553


88,903


650


0.7%

Revenue per unit


$               21,010


$               21,423


$                  (413)


(1.9%)

Gross profit per unit


$                 1,308


$                 1,387


$                    (79)


(5.7%)

Gross profit as a % of revenue


6.2%


6.5%


(30)

bps












Three Months Ended September 30,


Better / (Worse)



2016


2015


 Change


% Change



(In thousands, except units and per unit data)

Same Store:








Revenue


$             649,308


$             644,255


$                 5,053


0.8%

Gross profit


$               39,862


$               41,726


$               (1,864)


(4.5%)

Unit sales


30,433


30,053


380


1.3%

Revenue per unit


$               21,336


$               21,437


$                  (101)


(0.5%)

Gross profit per unit


$                 1,310


$                 1,388


$                    (78)


(5.6%)

Gross profit as a % of revenue


6.1%


6.5%


(40)

bps












Nine Months Ended September 30,


Better / (Worse)



2016


2015


 Change


% Change



(In thousands, except units and per unit data)

Same Store:








Revenue


$          1,869,441


$          1,878,064


$               (8,623)


(0.5%)

Gross profit


$             118,250


$             123,062


$               (4,812)


(3.9%)

Unit sales


89,033


87,549


1,484


1.7%

Revenue per unit


$               20,997


$               21,452


$                  (455)


(2.1%)

Gross profit per unit


$                 1,328


$                 1,406


$                    (78)


(5.5%)

Gross profit as a % of revenue


6.3%


6.6%


(30)

bps


 

 

Sonic Automotive, Inc.
Results of Operations (Unaudited)







Wholesale Vehicles

















Three Months Ended September 30,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except units and per unit data)

Reported:









Revenue


$               70,522


$               37,971


$               32,551


85.7%

Gross profit (loss)


$               (2,507)


$               (2,481)


$                    (26)


(1.0%)

Unit sales


10,377


7,787


2,590


33.3%

Revenue per unit


$                 6,796


$                 4,876


$                 1,920


39.4%

Gross profit (loss) per unit


$                  (242)


$                  (319)


$                      77


24.1%

Gross profit (loss) as a % of revenue


(3.6%)


(6.5%)


290

bps













Nine Months Ended September 30,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except units and per unit data)

Reported:









Revenue


$             153,141


$             120,760


$               32,381


26.8%

Gross profit (loss)


$               (5,425)


$               (5,366)


$                    (59)


(1.1%)

Unit sales


26,012


23,574


2,438


10.3%

Revenue per unit


$                 5,887


$                 5,123


$                    764


14.9%

Gross profit (loss) per unit


$                  (209)


$                  (228)


$                      19


8.3%

Gross profit (loss) as a % of revenue


(3.5%)


(4.4%)


90

bps













Three Months Ended September 30,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except units and per unit data)

Same Store:









Revenue


$               70,029


$               37,599


$               32,430


86.3%

Gross profit (loss)


$               (2,385)


$               (2,420)


$                      35


1.4%

Unit sales


10,323


7,722


2,601


33.7%

Revenue per unit


$                 6,784


$                 4,869


$                 1,915


39.3%

Gross profit (loss) per unit


$                  (231)


$                  (313)


$                      82


26.2%

Gross profit (loss) as a % of revenue


(3.4%)


(6.4%)


300

bps













Nine Months Ended September 30,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except units and per unit data)

Same Store:









Revenue


$             152,627


$             119,269


$               33,358


28.0%

Gross profit (loss)


$               (5,300)


$               (5,072)


$                  (228)


(4.5%)

Unit sales


25,953


23,300


2,653


11.4%

Revenue per unit


$                 5,881


$                 5,119


$                    762


14.9%

Gross profit (loss) per unit


$                  (204)


$                  (218)


$                      14


6.4%

Gross profit (loss) as a % of revenue


(3.5%)


(4.3%)


80

bps


 

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)





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















Three Months Ended September 30,


Better / (Worse)



2016


2015


 Change


% Change

Reported:


(In thousands)

Revenue









Customer pay


$             146,365


$             147,308


$                  (943)


(0.6%)

Warranty


60,388


58,522


1,866


3.2%

Wholesale parts


44,202


45,832


(1,630)


(3.6%)

Internal, sublet and other


110,754


98,858


11,896


12.0%

Total


$             361,709


$             350,520


$               11,189


3.2%

Gross profit









Customer pay


$               79,153


$               80,588


$               (1,435)


(1.8%)

Warranty


32,176


32,337


(161)


(0.5%)

Wholesale parts


7,566


8,045


(479)


(6.0%)

Internal, sublet and other


51,108


48,767


2,341


4.8%

Total


$             170,003


$             169,737


$                    266


0.2%

Gross profit as a % of revenue









Customer pay


54.1%


54.7%


(60)

bps


Warranty


53.3%


55.3%


(200)

bps


Wholesale parts


17.1%


17.6%


(50)

bps


Internal, sublet and other


46.1%


49.3%


(320)

bps


Total


47.0%


48.4%


(140)

bps













Nine Months Ended September 30,


Better / (Worse)



2016


2015


 Change


% Change

Reported:


(In thousands)

Revenue









Customer pay


$             443,007


$             431,479


$               11,528


2.7%

Warranty


172,759


169,170


3,589


2.1%

Wholesale parts


133,533


136,693


(3,160)


(2.3%)

Internal, sublet and other


309,794


282,536


27,258


9.6%

Total


$          1,059,093


$          1,019,878


$               39,215


3.8%

Gross profit









Customer pay


$             240,833


$             236,551


$                 4,282


1.8%

Warranty


92,951


94,776


(1,825)


(1.9%)

Wholesale parts


23,305


24,332


(1,027)


(4.2%)

Internal, sublet and other


147,137


140,688


6,449


4.6%

Total


$             504,226


$             496,347


$                 7,879


1.6%

Gross profit as a % of revenue









Customer pay


54.4%


54.8%


(40)

bps


Warranty


53.8%


56.0%


(220)

bps


Wholesale parts


17.5%


17.8%


(30)

bps


Internal, sublet and other


47.5%


49.8%


(230)

bps


Total


47.6%


48.7%


(110)

bps


 

 

Sonic Automotive, Inc.
Results of Operations (Unaudited)






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
















Three Months Ended September 30,


Better / (Worse)



2016


2015


 Change


% Change

Same Store:


(In thousands)

Revenue









Customer pay


$             146,048


$             145,938


$                    110


0.1%

Warranty


60,307


57,858


2,449


4.2%

Wholesale parts


44,199


45,270


(1,071)


(2.4%)

Internal, sublet and other


109,657


97,765


11,892


12.2%

Total


$             360,211


$             346,831


$               13,380


3.9%

Gross profit









Customer pay


$               78,995


$               79,791


$                  (796)


(1.0%)

Warranty


32,094


32,042


52


0.2%

Wholesale parts


7,565


7,916


(351)


(4.4%)

Internal, sublet and other


50,345


48,116


2,229


4.6%

Total


$             168,999


$             167,865


$                 1,134


0.7%

Gross profit as a % of revenue









Customer pay


54.1%


54.7%


(60)

bps


Warranty


53.2%


55.4%


(220)

bps


Wholesale parts


17.1%


17.5%


(40)

bps


Internal, sublet and other 


45.9%


49.2%


(330)

bps


Total


46.9%


48.4%


(150)

bps













Nine Months Ended September 30,


Better / (Worse)



2016


2015


 Change


% Change

Same Store:


(In thousands)

Revenue









Customer pay


$             442,688


$             424,867


$               17,821


4.2%

Warranty


172,678


166,934


5,744


3.4%

Wholesale parts


133,530


134,605


(1,075)


(0.8%)

Internal, sublet and other


308,680


278,733


29,947


10.7%

Total


$          1,057,576


$          1,005,139


$               52,437


5.2%

Gross profit









Customer pay


$             240,675


$             232,869


$                 7,806


3.4%

Warranty


92,919


93,614


(695)


(0.7%)

Wholesale parts


23,304


23,906


(602)


(2.5%)

Internal, sublet and other


145,882


138,710


7,172


5.2%

Total


$             502,780


$             489,099


$               13,681


2.8%

Gross profit as a % of revenue









Customer pay


54.4%


54.8%


(40)

bps


Warranty


53.8%


56.1%


(230)

bps


Wholesale parts


17.5%


17.8%


(30)

bps


Internal, sublet and other


47.3%


49.8%


(250)

bps


Total


47.5%


48.7%


(120)

bps


 

 

Sonic Automotive, Inc.
Results of Operations (Unaudited)




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














Three Months Ended September 30,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except per unit data)

Reported:









Revenue


$               89,579


$               85,830


$                 3,749


4.4%

Gross profit per retail unit (excludes fleet)


$                 1,344


$                 1,274


$                      70


5.5%





















Nine Months Ended September 30,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except per unit data)

Reported:









Revenue


$             254,940


$             242,792


$               12,148


5.0%

Gross profit per retail unit (excludes fleet)


$                 1,351


$                 1,266


$                      85


6.7%












Three Months Ended September 30,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except per unit data)

Same Store:









Revenue


$               88,551


$               84,981


$                 3,570


4.2%

Gross profit per retail unit (excludes fleet)


$                 1,341


$                 1,276


$                      65


5.1%





















Nine Months Ended September 30,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except per unit data)

Same Store:









Revenue


$             253,287


$             240,163


$               13,124


5.5%

Gross profit per retail unit (excludes fleet)


$                 1,347


$                 1,267


$                      80


6.3%

 

 

Sonic Automotive, Inc.
Results of Operations (Unaudited)



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













Three Months Ended September 30,


Better / (Worse)



2016


2015


 Change


% Change



(In thousands)

Reported:









Compensation


$             171,287


$             167,489


$               (3,798)


(2.3%)

Advertising


14,987


15,470


483


3.1%

Rent


18,037


18,558


521


2.8%

Other


77,830


78,524


694


0.9%

Total SG&A expenses


$             282,141


$             280,041


$               (2,100)


(0.7%)










Adjustments:









Storm damage and other


$                 2,341


$                      -


$                 2,341


100.0%

Total SG&A adjustments


$                 2,341


$                      -


$                 2,341


100.0%










Adjusted:









Total adjusted SG&A expenses


$             284,482


$             280,041


$               (4,441)


(1.6%)










Reported:









SG&A expenses as a % of gross profit








Compensation


47.7%


46.5%


(120)

bps


Advertising


4.2%


4.3%


10

bps


Rent


5.0%


5.2%


20

bps


Other


21.7%


21.7%


(0)

bps


Total SG&A expenses as a % of gross profit


78.6%


77.7%


(90)

bps











Adjustments:









Storm damage and other


0.6%


0.0%


(60)

bps


Total effect of adjustments


0.6%


0.0%


(60)

bps











Adjusted:









Total adjusted SG&A as a % of gross profit


79.2%


77.7%


(150)

bps













Nine Months Ended September 30,


Better / (Worse)



2016


2015


 Change


% Change



(In thousands)

Reported:








Compensation


$             506,894


$             497,158


$               (9,736)


(2.0%)

Advertising


45,834


46,160


326


0.7%

Rent


55,265


55,058


(207)


(0.4%)

Other


235,728


237,188


1,460


0.6%

Total SG&A expenses


$             843,721


$             835,564


$               (8,157)


(1.0%)









Adjustments:









Gain on disposal


$                      -


$                    955


$                  (955)


(100.0%)

Storm damage and other


(3,702)


(5,138)


1,436


27.9%

Total SG&A adjustments


$               (3,702)


$               (4,183)


$                    481


11.5%










Adjusted:









Total adjusted SG&A expenses


$             840,019


$             831,381


$               (8,638)


(1.0%)










Reported:









SG&A expenses as a % of gross profit








Compensation


47.9%


47.3%


(60)

bps


Advertising


4.3%


4.4%


10

bps


Rent


5.2%


5.2%


0

bps


Other


22.4%


22.6%


20

bps


Total SG&A expenses as a % of gross profit


79.8%


79.5%


(30)

bps











Adjustments:









Gain on disposal


0.0%


0.1%


10

bps


Storm damage and other


(0.4%)


(0.5%)


(10)

bps


Total effect of adjustments


(0.4%)


(0.4%)


-

bps











Adjusted:









Total adjusted SG&A as a % of gross profit


79.4%


79.1%


(30)

bps


 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/sonic-automotive-inc-reports-third-quarter-earnings-300354814.html

SOURCE Sonic Automotive, Inc.