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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________
FORM 10-Q
______________________________________
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2019
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 1-13395
______________________________________
SONIC AUTOMOTIVE, INC.
(Exact name of registrant as specified in its charter)
______________________________________
| | | | | | | | |
Delaware | | 56-2010790 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
| | | | | | | | | | | | | | | | | | | | |
| | 4401 Colwick Road | | | | 28211 |
| | Charlotte, | North Carolina | | | |
| (Address of principal executive offices) | | | | | (Zip Code) |
(704) 566-2400
(Registrant’s telephone number, including area code)
______________________________________
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | | | | | | | |
Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
Class A Common Stock, par value $0.01 per share | | SAH | | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | |
Large accelerated filer | ☒ | Accelerated filer | ☐ |
| | | |
Non-accelerated filer | ☐ | Smaller reporting company | ☐ |
| | | |
| | Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of October 21, 2019, there were 31,105,000 shares of the registrant’s Class A Common Stock and 12,029,375 shares of the registrant’s Class B Common Stock outstanding.
UNCERTAINTY OF FORWARD-LOOKING STATEMENTS AND INFORMATION
This Quarterly Report on Form 10-Q contains, and written or oral statements made from time to time by us or by our authorized officers may contain, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements address our future objectives, plans and goals, as well as our intent, beliefs and current expectations regarding future operating performance, results and events, and can generally be identified by words such as “may,” “will,” “should,” “believe,” “expect,” “estimate,” “anticipate,” “intend,” “plan,” “foresee” and other similar words or phrases.
These forward-looking statements are based on our current estimates and assumptions and involve various risks and uncertainties. As a result, you are cautioned that these forward-looking statements are not guarantees of future performance, and that actual results could differ materially from those projected in these forward-looking statements. Factors which may cause actual results to differ materially from our projections include those risks described in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2018 and in “Item 1A. Risk Factors” of this report and elsewhere herein, as well as:
•the number of new and used vehicles sold in the United States as compared to our expectations and the expectations of the market;
•our ability to generate sufficient cash flows or to obtain additional financing to fund our EchoPark expansion, capital expenditures, our share repurchase program, dividends on our common stock, acquisitions and general operating activities;
•our business and growth strategies, including, but not limited to, our EchoPark store operations;
•the reputation and financial condition of vehicle manufacturers whose brands we represent, the financial incentives vehicle manufacturers offer and their ability to design, manufacture, deliver and market their vehicles successfully;
•our relationships with manufacturers, which may affect our ability to obtain desirable new vehicle models in inventory or to complete additional acquisitions or dispositions;
•the adverse resolution of one or more significant legal proceedings against us or our franchised dealerships or EchoPark stores;
•changes in laws and regulations governing the operation of automobile franchises, accounting standards, taxation requirements and environmental laws;
•changes in vehicle and parts import quotas, duties, tariffs or other restrictions;
•general economic conditions in the markets in which we operate, including fluctuations in interest rates, employment levels, the level of consumer spending and consumer credit availability;
•high competition in the retail automotive industry, which not only creates pricing pressures on the products and services we offer, but also on businesses we may seek to acquire;
•our ability to successfully integrate potential future acquisitions; and
•the rate and timing of overall economic recovery or decline.
These forward-looking statements speak only as of the date of this report or when made, and we undertake no obligation to revise or update these statements to reflect subsequent events or circumstances, except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission.
SONIC AUTOMOTIVE, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019
TABLE OF CONTENTS
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Item 2. | | |
Item 3. | | |
Item 4. | | |
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Item 1. | | |
Item 1A. | | |
Item 2. | | |
Item 6. | | |
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PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
SONIC AUTOMOTIVE, INC.
CONDENSED CONSOLIDATE D STATEMENTS OF INCOME
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | | | Nine Months Ended September 30, | | |
| 2019 | | 2018 | | 2019 | | 2018 |
| (Dollars and shares in thousands, except per share amounts) | | | | | | |
Revenues: | | | | | | | |
New vehicles | $ | 1,258,018 | | | $ | 1,235,094 | | | $ | 3,529,106 | | | $ | 3,654,510 | |
Used vehicles | 914,272 | | | 745,998 | | | 2,620,264 | | | 2,217,616 | |
Wholesale vehicles | 51,542 | | | 48,578 | | | 156,351 | | | 167,726 | |
Total vehicles | 2,223,832 | | | 2,029,670 | | | 6,305,721 | | | 6,039,852 | |
Parts, service and collision repair | 352,047 | | | 343,118 | | | 1,048,789 | | | 1,041,630 | |
Finance, insurance and other, net | 126,841 | | | 98,061 | | | 351,429 | | | 295,890 | |
Total revenues | 2,702,720 | | | 2,470,849 | | | 7,705,939 | | | 7,377,372 | |
Cost of Sales: | | | | | | | |
New vehicles | (1,202,710) | | | (1,173,453) | | | (3,363,603) | | | (3,478,802) | |
Used vehicles | (877,444) | | | (710,681) | | | (2,509,699) | | | (2,108,219) | |
Wholesale vehicles | (52,648) | | | (49,877) | | | (159,437) | | | (176,806) | |
Total vehicles | (2,132,802) | | | (1,934,011) | | | (6,032,739) | | | (5,763,827) | |
Parts, service and collision repair | (183,107) | | | (176,302) | | | (546,067) | | | (538,135) | |
Total cost of sales | (2,315,909) | | | (2,110,313) | | | (6,578,806) | | | (6,301,962) | |
Gross profit | 386,811 | | | 360,536 | | | 1,127,133 | | | 1,075,410 | |
Selling, general and administrative expenses | (296,826) | | | (289,022) | | | (838,453) | | | (871,410) | |
Impairment charges | (1,124) | | | — | | | (3,076) | | | (13,961) | |
Depreciation and amortization | (23,665) | | | (23,377) | | | (70,120) | | | (71,067) | |
Operating income (loss) | 65,196 | | | 48,137 | | | 215,484 | | | 118,972 | |
Other income (expense): | | | | | | | |
Interest expense, floor plan | (11,638) | | | (12,192) | | | (37,382) | | | (34,815) | |
Interest expense, other, net | (13,013) | | | (13,313) | | | (39,494) | | | (40,144) | |
Other income (expense), net | (5) | | | — | | | 90 | | | 107 | |
Total other income (expense) | (24,656) | | | (25,505) | | | (76,786) | | | (74,852) | |
Income (loss) from continuing operations before taxes | 40,540 | | | 22,632 | | | 138,698 | | | 44,120 | |
Provision for income taxes for continuing operations - benefit (expense) | (11,372) | | | (7,331) | | | (40,430) | | | (13,711) | |
Income (loss) from continuing operations | 29,168 | | | 15,301 | | | 98,268 | | | 30,409 | |
Discontinued operations: | | | | | | | |
Income (loss) from discontinued operations before taxes | (223) | | | (252) | | | (616) | | | (797) | |
Provision for income taxes for discontinued operations - benefit (expense) | 65 | | | 69 | | | 179 | | | 218 | |
Income (loss) from discontinued operations | (158) | | | (183) | | | (437) | | | (579) | |
Net income (loss) | $ | 29,010 | | | $ | 15,118 | | | $ | 97,831 | | | $ | 29,830 | |
Basic earnings (loss) per common share: | | | | | | | |
Earnings (loss) per share from continuing operations | $ | 0.68 | | | $ | 0.36 | | | $ | 2.28 | | | $ | 0.71 | |
Earnings (loss) per share from discontinued operations | (0.01) | | | (0.01) | | | (0.01) | | | (0.01) | |
Earnings (loss) per common share | $ | 0.67 | | | $ | 0.35 | | | $ | 2.27 | | | $ | 0.70 | |
Weighted-average common shares outstanding | 43,078 | | | 42,673 | | | 42,995 | | | 42,708 | |
Diluted earnings (loss) per common share: | | | | | | | |
Earnings (loss) per share from continuing operations | $ | 0.66 | | | $ | 0.36 | | | $ | 2.26 | | | $ | 0.71 | |
Earnings (loss) per share from discontinued operations | — | | | (0.01) | | | (0.01) | | | (0.02) | |
Earnings (loss) per common share | $ | 0.66 | | | $ | 0.35 | | | $ | 2.25 | | | $ | 0.69 | |
Weighted-average common shares outstanding | 44,203 | | | 42,994 | | | 43,456 | | | 42,964 | |
See notes to unaudited condensed consolidated financial statements.
1
SONIC AUTOMOTIVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | | | Nine Months Ended September 30, | | |
| 2019 | | 2018 | | 2019 | | 2018 |
| (Dollars in thousands) | | | | | | |
Net income (loss) | $ | 29,010 | | | $ | 15,118 | | | $ | 97,831 | | | $ | 29,830 | |
Other comprehensive income (loss) before taxes: | | | | | | | |
Change in fair value of interest rate swap and interest rate cap agreements | (223) | | | 533 | | | (3,971) | | | 5,736 | |
Amortization of terminated interest rate swap agreements | (786) | | | — | | | (1,707) | | | — | |
Total other comprehensive income (loss) before taxes | (1,009) | | | 533 | | | (5,678) | | | 5,736 | |
Provision for income tax benefit (expense) related to components of other comprehensive income (loss) | 330 | | | (145) | | | 1,726 | | | (1,563) | |
Other comprehensive income (loss) | (679) | | | 388 | | | (3,952) | | | 4,173 | |
Comprehensive income (loss) | $ | 28,331 | | | $ | 15,506 | | | $ | 93,879 | | | $ | 34,003 | |
See notes to unaudited condensed consolidated financial statements.
2
SONIC AUTOMOTIVE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| | | | | | | | | | | |
| September 30, 2019 | | December 31, 2018 |
| (Dollars in thousands) | | |
ASSETS | | | |
Current Assets: | | | |
Cash and cash equivalents | $ | 2,401 | | | $ | 5,854 | |
Receivables, net | 365,005 | | | 438,186 | |
Inventories | 1,528,667 | | | 1,528,461 | |
Other current assets | 126,388 | | | 20,886 | |
Total current assets | 2,022,461 | | | 1,993,387 | |
Property and Equipment, net | 1,136,213 | | | 1,178,489 | |
Goodwill | 487,306 | | | 509,592 | |
Other Intangible Assets, net | 64,300 | | | 69,705 | |
Operating Right-of-Use Lease Assets | 328,850 | | | — | |
Finance Right-of-Use Lease Assets | 35,322 | | | — | |
Other Assets | 43,440 | | | 45,634 | |
Total Assets | $ | 4,117,892 | | | $ | 3,796,807 | |
| | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | |
Current Liabilities: | | | |
Notes payable - floor plan - trade | $ | 742,520 | | | $ | 821,074 | |
Notes payable - floor plan - non-trade | 704,238 | | | 712,966 | |
Trade accounts payable | 119,790 | | | 114,263 | |
Operating short-term lease liabilities | 43,692 | | | — | |
Finance short-term lease liabilities | 1,515 | | | — | |
Accrued interest | 11,872 | | | 13,417 | |
Other accrued liabilities | 259,467 | | | 257,823 | |
Current maturities of long-term debt | 62,854 | | | 26,304 | |
Total current liabilities | 1,945,948 | | | 1,945,847 | |
Long-Term Debt | 846,222 | | | 918,779 | |
Other Long-Term Liabilities | 71,133 | | | 75,887 | |
Operating Long-Term Lease Liabilities | 295,005 | | | — | |
Finance Long-Term Lease Liabilities | 36,646 | | | — | |
Deferred Income Taxes | 20,513 | | | 33,178 | |
Commitments and Contingencies | | | | | |
Stockholders’ Equity: | | | |
Class A Convertible Preferred Stock, none issued | — | | | — | |
Class A Common Stock, $0.01 par value; 100,000,000 shares authorized; 64,733,667 shares issued and 31,105,000 shares outstanding at September 30, 2019; 64,197,385 shares issued and 30,721,226 shares outstanding at December 31, 2018 | 647 | | | 642 | |
Class B Common Stock, $0.01 par value; 30,000,000 shares authorized; 12,029,375 shares issued and outstanding at September 30, 2019 and December 31, 2018 | 121 | | | 121 | |
Paid-in capital | 753,214 | | | 745,052 | |
Retained earnings | 748,166 | | | 670,691 | |
Accumulated other comprehensive income (loss) | 281 | | | 4,233 | |
Treasury stock, at cost; 33,628,667 Class A Common Stock shares held at September 30, 2019 and 33,476,159 Class A Common Stock shares held at December 31, 2018 | (600,004) | | | (597,623) | |
Total Stockholders’ Equity | 902,425 | | | 823,116 | |
Total Liabilities and Stockholders’ Equity | $ | 4,117,892 | | | $ | 3,796,807 | |
See notes to unaudited condensed consolidated financial statements.
3
SONIC AUTOMOTIVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Class A Common Stock | | | | Class A Treasury Stock | | | | Class B Common Stock | | | | Paid-In Capital | | Retained Earnings | | Accumulated Other Comprehensive Income (Loss) | | Total Stockholders’ Equity |
| Shares | | Amount | | Shares | | Amount | | Shares | | Amount | | | | | | | | |
| (Dollars and shares in thousands, except per share amounts) | | | | | | | | | | | | | | | | | | |
Balance at June 30, 2018 | 64,126 | | | $ | 641 | | | (33,444) | | | $ | (596,981) | | | 12,029 | | | $ | 121 | | | $ | 739,212 | | | $ | 638,895 | | | $ | 5,092 | | | $ | 786,980 | |
Shares awarded under stock compensation plans | 71 | | | 1 | | | — | | | — | | | — | | | — | | | (2) | | | — | | | — | | | (1) | |
Purchases of treasury stock | — | | | — | | | (32) | | | (642) | | | — | | | — | | | — | | | — | | | — | | | (642) | |
Effect of cash flow hedge instruments, net of tax expense of $145 | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 388 | | | 388 | |
Restricted stock amortization | — | | | — | | | — | | | — | | | — | | | — | | | 4,578 | | | — | | | — | | | 4,578 | |
Net income (loss) | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 15,118 | | | — | | | 15,118 | |
| | | | | | | | | | | | | | | | | | | |
Class A dividends declared ($0.06) | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (1,987) | | | — | | | (1,987) | |
Class B dividends declared ($0.06) | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (590) | | | — | | | (590) | |
Balance at September 30, 2018 | 64,197 | | | $ | 642 | | | (33,476) | | | $ | (597,623) | | | 12,029 | | | $ | 121 | | | $ | 743,788 | | | $ | 651,436 | | | $ | 5,480 | | | $ | 803,844 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Class A Common Stock | | | | Class A Treasury Stock | | | | Class B Common Stock | | | | Paid-In Capital | | Retained Earnings | | Accumulated Other Comprehensive Income (Loss) | | Total Stockholders’ Equity |
| Shares | | Amount | | Shares | | Amount | | Shares | | Amount | | | | | | | | |
| (Dollars and shares in thousands, except per share amounts) | | | | | | | | | | | | | | | | | | |
Balance at June 30, 2019 | 64,728 | | | $ | 647 | | | (33,629) | | | $ | (600,004) | | | 12,029 | | | $ | 121 | | | $ | 750,532 | | | $ | 723,469 | | | $ | 960 | | | $ | 875,725 | |
Shares awarded under stock compensation plans | 6 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Purchases of treasury stock | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Effect of cash flow hedge instruments, net of tax benefit of $330 | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (679) | | | (679) | |
Restricted stock amortization | — | | | — | | | — | | | — | | | — | | | — | | | 2,682 | | | — | | | — | | | 2,682 | |
Net income (loss) | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 29,010 | | | — | | | 29,010 | |
| | | | | | | | | | | | | | | | | | | |
Class A dividends declared ($0.10) | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (3,110) | | | — | | | (3,110) | |
Class B dividends declared ($0.10) | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (1,203) | | | — | | | (1,203) | |
Balance at September 30, 2019 | 64,734 | | | $ | 647 | | | (33,629) | | | $ | (600,004) | | | 12,029 | | | $ | 121 | | | $ | 753,214 | | | $ | 748,166 | | | $ | 281 | | | $ | 902,425 | |
See notes to unaudited condensed consolidated financial statements.
4
SONIC AUTOMOTIVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Class A Common Stock | | | | Class A Treasury Stock | | | | Class B Common Stock | | | | Paid-In Capital | | Retained Earnings | | Accumulated Other Comprehensive Income (Loss) | | Total Stockholders’ Equity |
| Shares | | Amount | | Shares | | Amount | | Shares | | Amount | | | | | | | | |
| (Dollars and shares in thousands, except per share amounts) | | | | | | | | | | | | | | | | | | |
Balance at December 31, 2017 | 63,457 | | | $ | 635 | | | (32,290) | | | $ | (573,513) | | | 12,029 | | | $ | 121 | | | $ | 732,854 | | | $ | 625,356 | | | $ | 1,307 | | | $ | 786,760 | |
Shares awarded under stock compensation plans | 740 | | | 7 | | | — | | | — | | | — | | | — | | | 345 | | | — | | | — | | | 352 | |
Purchases of treasury stock | — | | | — | | | (1,186) | | | (24,110) | | | — | | | — | | | — | | | — | | | — | | | (24,110) | |
Effect of cash flow hedge instruments, net of tax expense of $1,563 | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 4,173 | | | 4,173 | |
Restricted stock amortization | — | | | — | | | — | | | — | | | — | | | — | | | 10,589 | | | — | | | — | | | 10,589 | |
Net income (loss) | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 29,830 | | | — | | | 29,830 | |
Cumulative effect of change in accounting principle (1) | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 3,918 | | | — | | | 3,918 | |
Class A dividends declared ($0.18) | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (6,224) | | | — | | | (6,224) | |
Class B dividends declared ($0.18) | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (1,444) | | | — | | | (1,444) | |
Balance at September 30, 2018 | 64,197 | | | $ | 642 | | | (33,476) | | | $ | (597,623) | | | 12,029 | | | $ | 121 | | | $ | 743,788 | | | $ | 651,436 | | | $ | 5,480 | | | $ | 803,844 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Class A Common Stock | | | | Class A Treasury Stock | | | | Class B Common Stock | | | | Paid-In Capital | | Retained Earnings | | Accumulated Other Comprehensive Income (Loss) | | Total Stockholders’ Equity |
| Shares | | Amount | | Shares | | Amount | | Shares | | Amount | | | | | | | | |
| (Dollars and shares in thousands, except per share amounts) | | | | | | | | | | | | | | | | | | |
Balance at December 31, 2018 | 64,197 | | | $ | 642 | | | (33,476) | | | $ | (597,623) | | | 12,029 | | | $ | 121 | | | $ | 745,052 | | | $ | 670,691 | | | $ | 4,233 | | | $ | 823,116 | |
Shares awarded under stock compensation plans | 537 | | | 5 | | | — | | | — | | | — | | | — | | | 55 | | | — | | | — | | | 60 | |
Purchases of treasury stock | — | | | — | | | (153) | | | (2,381) | | | — | | | — | | | — | | | — | | | — | | | (2,381) | |
Effect of cash flow hedge instruments, net of tax benefit of $1,726 | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (3,952) | | | (3,952) | |
Restricted stock amortization | — | | | — | | | — | | | — | | | — | | | — | | | 8,107 | | | — | | | — | | | 8,107 | |
Net income (loss) | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 97,831 | | | — | | | 97,831 | |
Cumulative effect of change in accounting principle (1) | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (7,428) | | | — | | | (7,428) | |
Class A dividends declared ($0.30) | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (9,319) | | | — | | | (9,319) | |
Class B dividends declared ($0.30) | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (3,609) | | | — | | | (3,609) | |
Balance at September 30, 2019 | 64,734 | | | $ | 647 | | | (33,629) | | | $ | (600,004) | | | 12,029 | | | $ | 121 | | | $ | 753,214 | | | $ | 748,166 | | | $ | 281 | | | $ | 902,425 | |
(1) See Note 1, “Summary of Significant Accounting Policies,” for further discussion.
See notes to unaudited condensed consolidated financial statements.
5
SONIC AUTOMOTIVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| | | | | | | | | | | |
| Nine Months Ended September 30, | | |
| 2019 | | 2018 |
| (Dollars in thousands) | | |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | |
Net income (loss) | $ | 97,831 | | | $ | 29,830 | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | | | |
Depreciation and amortization of property and equipment | 67,670 | | | 71,063 | |
Provision for bad debt expense | 277 | | |