Exhibit 99.1
Sonic Automotive, Inc. Reports First Quarter Earnings In Line with Company Expectations
CHARLOTTE, N.C. – April 29, 2008 – Sonic Automotive, Inc. (NYSE: SAH), a leader in automotive retailing, today reported that its 2008 first quarter earnings from continuing operations were $18.0 million, or $0.44 per diluted share, compared to $22.3 million, or $0.49 per diluted share, for the same period in 2007.
Total revenue for the first quarter of 2008 increased 1.0% over the prior year period primarily from the impact of acquisitions made during 2007. Overall same store revenue declined 4.0% over the prior year quarter with softness in new vehicle sales being partially offset by growth in used vehicles and finance and insurance. On a same store basis compared to the same quarter last year, new vehicle retail revenues declined 8.2%, used vehicle retail revenues were up 11.5%, fixed operations revenue was up 0.7% and finance and insurance revenues were up 5.9%.
B. Scott Smith, the Company’s President said, “Our results for this quarter are in line with our expectations given our previous forecast of a soft new vehicle sales environment through the first half of this year. To confront these challenges, we are continuing our strong focus on the higher-margin segments of our business – fixed operations, finance and insurance, and used vehicles. In particular, the growth in our used vehicle business demonstrates the strength of our business model and strategy as our stores continue to embrace the concepts we have rolled out over the last 24 months. The quarter’s results met our internal forecasts and, as a result, we remain comfortable with our 2008 continuing operations EPS target of $2.35 to $2.50 per diluted share.”
Presentation materials for the Company’s April 29, 2008 earnings conference call at 11:00 A.M. (Eastern) can be accessed on the Company’s website at www.sonicautomotive.com by clicking on the “For Investors” tab and choosing “Webcasts & Presentations” on the left side of the monitor.
To access the live broadcast of the call over the Internet go to: www.ccbn.com or www.sonicautomotive.com
A live audio of the call will be accessible to the public by calling (877) 791-3416. International callers dial (706) 643-0958. Callers should dial in approximately 10 minutes before the call begins.
A conference call replay will be available one hour following the call for seven days and can be accessed by calling: 800-642-1687, Conference ID: 43381696, International callers dial (706) 645-9291.
About Sonic Automotive
Sonic Automotive, Inc., a Fortune 300 company based in Charlotte, N.C., is one of the largest automotive retailers in the United States operating 168 franchises. Sonic can be reached on the web at www.sonicautomotive.com.
Included herein are forward-looking statements, including statements pertaining to anticipated diluted earnings per share from continuing operations. There are many factors that affect management’s views about future events and trends of the Company’s business. These factors involve risk and uncertainties that could cause actual results or trends to differ materially from management’s view, including without limitation, economic conditions, risks associated with acquisitions and the risk factors described in the Company’s annual report on Form 10-K for the year ended December 31, 2007. The Company does not undertake any obligation to update forward-looking information.
SONIC AUTOMOTIVE, INC.
RESULTS OF OPERATIONS
(in thousands, except per share, unit data and percentage amounts)
(Unaudited)
| Three Months Ended | ||||||||
| 3/31/2008 | 3/31/2007 | |||||||
| Revenues |
||||||||
| New retail vehicles |
$ | 985,274 | $ | 1,032,994 | ||||
| Fleet vehicles |
107,592 | 88,805 | ||||||
| Total new vehicles |
1,092,866 | 1,121,799 | ||||||
| Used vehicles |
372,559 | 320,133 | ||||||
| Wholesale vehicles |
88,911 | 113,332 | ||||||
| Total vehicles |
1,554,336 | 1,555,264 | ||||||
| Parts, service and collision repair |
296,049 | 281,093 | ||||||
| Finance, insurance and other |
51,137 | 46,940 | ||||||
| Total revenues |
1,901,522 | 1,883,297 | ||||||
| Total gross profit |
305,643 | 298,176 | ||||||
| SG&A expenses |
242,451 | 231,507 | ||||||
| Depreciation |
7,935 | 5,572 | ||||||
| Operating income |
55,257 | 61,097 | ||||||
| Interest expense, floor plan |
13,397 | 15,853 | ||||||
| Interest expense, other |
11,863 | 8,554 | ||||||
| Other (expense) / income |
70 | 14 | ||||||
| Income from continuing operations before taxes |
30,067 | 36,704 | ||||||
| Income taxes |
12,027 | 14,428 | ||||||
| Income from continuing operations |
18,040 | 22,276 | ||||||
| Discontinued operations: |
||||||||
| Loss from operations and the sale of discontinued franchises |
(5,473 | ) | (3,154 | ) | ||||
| Income tax benefit |
1,641 | 869 | ||||||
| Loss from discontinued operations |
(3,832 | ) | (2,285 | ) | ||||
| Net income |
$ | 14,208 | $ | 19,991 | ||||
| Diluted: |
||||||||
| Weighted average common shares outstanding |
43,845 | 47,938 | ||||||
| Earnings per share from continuing operations |
$ | 0.44 | $ | 0.49 | ||||
| Loss per share from discontinued operations |
($ | 0.09 | ) | ($ | 0.05 | ) | ||
| Earnings per share |
$ | 0.35 | $ | 0.44 | ||||
| Gross Margin Data (Continuing Operations): |
||||||||
| Retail new vehicles |
7.4 | % | 7.4 | % | ||||
| Fleet vehicles |
2.1 | % | 2.2 | % | ||||
| Total new vehicles |
6.8 | % | 7.0 | % | ||||
| Used vehicles retail |
8.9 | % | 9.6 | % | ||||
| Total vehicles retail |
7.4 | % | 7.6 | % | ||||
| Wholesale vehicles |
(0.9 | %) | 0.4 | % | ||||
| Parts, service and collision repair |
49.7 | % | 50.1 | % | ||||
| Finance, insurance and other |
100.0 | % | 100.0 | % | ||||
| Overall gross margin |
16.1 | % | 15.8 | % | ||||
| SG&A Expenses (Continuing Operations): |
||||||||
| Personnel |
$ | 136,485 | $ | 130,500 | ||||
| Advertising |
16,343 | 15,089 | ||||||
| Facility rent |
25,620 | 25,407 | ||||||
| Other |
64,003 | 60,511 | ||||||
| Total |
$ | 242,451 | $ | 231,507 | ||||
| SG&A Expenses as % of Gross Profit |
||||||||
| Personnel |
44.7 | % | 43.8 | % | ||||
| Advertising |
5.3 | % | 5.1 | % | ||||
| Facility rent |
8.4 | % | 8.5 | % | ||||
| Other |
20.9 | % | 20.2 | % | ||||
| Total |
79.3 | % | 77.6 | % | ||||
| Operating Margin % |
2.9 | % | 3.2 | % | ||||
| Three Months Ended | ||||||||
| 3/31/2008 | 3/31/2007 | |||||||
| Unit Data (Continuing Operations): |
||||||||
| New retail units |
28,941 | 30,342 | ||||||
| Fleet units |
4,355 | 3,736 | ||||||
| Used units |
18,511 | 16,300 | ||||||
| Wholesale units |
10,749 | 12,438 | ||||||
| Average price per unit: |
||||||||
| New retail vehicles |
$ | 34,044 | $ | 34,045 | ||||
| Fleet vehicles |
24,705 | 23,770 | ||||||
| Used vehicles |
20,126 | 19,640 | ||||||
| Wholesale vehicles |
8,272 | 9,112 | ||||||
| Other Data: |
||||||||
| Same store revenue percentage changes: |
||||||||
| New retail |
(10.0 | %) | ||||||
| Fleet |
12.4 | % | ||||||
| Total New Vehicles |
(8.2 | %) | ||||||
| Used |
11.5 | % | ||||||
| Parts, service and collision repair |
0.7 | % | ||||||
| Finance, insurance and other |
5.9 | % | ||||||
| Total |
(4.0 | %) | ||||||
| Balance Sheet Data: |
||||||||
| 3/31/2008 | 12/31/2007 | |||||||
| ASSETS |
||||||||
| Current Assets: |
||||||||
| Cash and cash equivalents |
$ | 5,112 | $ | 16,514 | ||||
| Receivables, net |
305,624 | 347,309 | ||||||
| Inventories |
1,182,086 | 1,093,017 | ||||||
| Assets held for sale |
134,056 | 87,342 | ||||||
| Other current assets |
39,089 | 35,879 | ||||||
| Total current assets |
1,665,967 | 1,580,061 | ||||||
| Property and Equipment, Net |
365,653 | 286,591 | ||||||
| Goodwill, Net |
1,248,854 | 1,276,074 | ||||||
| Other Intangibles, Net |
111,306 | 111,342 | ||||||
| Other Assets |
32,336 | 28,676 | ||||||
| TOTAL ASSETS |
$ | 3,424,116 | $ | 3,282,744 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current Liabilities: |
||||||||
| Floor plan notes payable |
$ | 1,186,123 | $ | 1,125,670 | ||||
| Other current liabilities |
239,041 | 247,658 | ||||||
| Liabilities associated with assets held for sale |
64,043 | 48,592 | ||||||
| Current maturities of long-term debt |
4,338 | 4,197 | ||||||
| Total current liabilities |
1,493,545 | 1,426,117 | ||||||
| LONG-TERM DEBT |
783,348 | 697,800 | ||||||
| OTHER LONG-TERM LIABILITIES |
237,771 | 227,999 | ||||||
| STOCKHOLDERS’ EQUITY |
909,452 | 930,828 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ | 3,424,116 | $ | 3,282,744 | ||||
| Balance Sheet Ratios: |
||||||||
| Current Ratio |
1.12 | 1.11 | ||||||
| Debt to Total Capital, Net of Cash |
46.3 | % | 42.4 | % | ||||