- -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date to earliest event reported): March 24, 1998 SONIC AUTOMOTIVE, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as Specified in Charter) Delaware 1-13395 56-2010790 - ---------------------------- --------------------- ----------------------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 5401 East Independence Boulevard P.O. Box 18747 Charlotte, North Carolina 28026 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (704) 532-3320 - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) - -------------------------------------------------------------------------------- ITEM 2. ACQUISITION OF DISPOSITION OF ASSETS On March 24, 1998, Sonic Automotive, Inc. (the "Company") acquired certain tangible and intangible assets, including machinery, equipment, furnishings, automobiles, supplies, accounts and notes receivable, new and used vehicle inventories, parts inventories and supplies, leases, contract rights, and goodwill (the "Assets"), and assumed certain liabilities, including all current liabilities, of M&S Auto Resources, Inc. (d/b/a Clearwater Toyota), Clearwater Auto Resources, Inc. (d/b/a Clearwater Mitsubishi), and Clearwater Collision Center, Inc. (collectively, the "Clearwater Dealerships") pursuant to an Asset Purchase Agreement dated as of December 30, 1997 among the Company, as buyer, the Clearwater Dealership as sellers, and Scott Fink, Michael Cohen, Jeffrey Schuman, and Timothy McCabe as shareholders of the sellers, as amended, by Amendment No. 1 and Supplement to Asset Purchase Agreement dated as of March 24, 1998 (as amended the "Agreement"). Other terms of the Agreement provide for the leasing of the Clearwater Dealerships' real property for a period of ten years from M&S Auto Resources, Inc. with the option to renew for two successive periods of five years each. The aggregate consideration for the acquisition was approximately $15 million, consisting of approximately $11.04 million in cash obtained from the Company's Amended and Restated Credit Agreement dated December 15, 1997 with Ford Motor Credit Company, and 3,960 shares of the Company's Class A Series III Convertible Preferred Stock, par value $.01 per share, valued at approximately $3.96 million as of their date of issuance on March 24, 1998. By April 30, 1999, the Company will be required to make an additional payment, not to exceed $1.75 million, equal to 50% of the combined pre-tax earnings of the Clearwater Dealerships for the fiscal year ended December 31, 1998. The amount of consideration paid by the Company was determined through arms length negotiations with the sellers. The Assets were used in the operations of two automobile dealerships and a collision repair center. Such operations consisted of selling new and used cars and light trucks, selling replacement parts, providing vehicle maintenance, warranty, paint, and repair services, and arranging financing and insurance. The Company intends to continue such use. For additional information concerning the transaction, reference is made to the Agreement and to a press release issued as of January 6, 1998, copies of all of which are attached as exhibits hereto. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (A) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. Not required (B) PRO FORMA FINANCIAL INFORMATION. Attached as an exhibit to this report on Form 8-K are the following: UNAUDITED PRO FORMA FINANCIAL STATEMENTS REFLECTING THE BUSINESS COMBINATION OF SONIC AUTOMOTIVE, INC. AND CLEARWATER DEALERSHIPS Description of Unaudited Pro Forma Financial Statements Pro Forma Balance Sheet at December 31, 1997 (Unaudited) and Notes thereto. Pro Forma Statement of Income for the Year Ended December 31, 1997 (Unaudited) and Notes thereto. 2 (C) EXHIBITS
Exhibit Number Description - ------------------------------- ----------------------------------------------------------------------- 99.1 Asset Purchase Agreement dated December 30, 1997 between Sonic Automotive, Inc., as buyer, and M&S Resources, Inc., Clearwater Auto Resources, Inc., and Clearwater Collision Center, Inc., as sellers and Scott Fink, Michael Cohen, Jeffrey Schuman, and Timothy McCabe as shareholders of the sellers. 99.2 Amendment No. 1 and Supplement to Asset Purchase Agreement dated as of March 24, 1998 between Sonic Automotive, Inc., as buyer, and M&S Resources, Inc., Clearwater Auto Resources, Inc., and Clearwater Collision Center, Inc., as sellers and Scott Fink, Michael Cohen, Jeffrey Schuman, and Timothy McCabe as shareholders of the sellers. 99.3 Press Release dated January 6, 1998 99.4 Unaudited Pro Forma Financial Statements Reflecting the Business Combination of Sonic Automotive, Inc. and Clearwater Dealerships for the year ended December 31, 1997.
3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SONIC AUTOMOTIVE, INC. Date: March 30, 1998 By: /s/ Theodore M. Wright -------------------------------- Theodore M. Wright Chief Financial Officer, Vice President-Finance, Treasurer, Secretary and Director 4