Exhibit 99.1
Sonic Automotive, Inc. Announces Second Quarter Results
CHARLOTTE, N.C. – July 29, 2008 – Sonic Automotive, Inc. (NYSE: SAH), a leader in automotive retailing, today announced that second quarter 2008 earnings from continuing operations were $20.1 million, or $0.49 per diluted share, compared to $28.8 million, or $0.62 per diluted share, in the prior year period.
“This quarter’s results are in line with our revised earnings target,” said President and Chief Strategic Officer B. Scott Smith. “We have seen some improvement in our July business compared to the relatively weak industry experience the entire sector saw in June but the overall market remains challenged. We continue to see the benefit of the automotive retailing model and believe the changes we are making in light of the current economic environment will benefit our Company well into the future.”
Presentation materials for the Company’s earnings conference call at 11:00 A.M. (Eastern) on July 29, 2008 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 right side of the screen.
To access the live broadcast of the conference call over the Internet go to: www.sonicautomotive.com.
A live audio of the conference 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 (domestic) or (706) 645-9291 (international), conference call ID #55356748.
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 166 franchises. Sonic can be reached on the Web at www.sonicautomotive.com.
Included herein are forward-looking statements, including statements with respect to July business activity. 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 quarterly report on Form 10-Q for the quarter ended March 31, 2008. The Company does not undertake any obligation to update forward-looking information.
Sonic Automotive, Inc.
Results of Operations (Unaudited)
(in thousands, except per share, unit data and percentage amounts)
| Three Months Ended | Six Months Ended | |||||||||||||||
| 6/30/2008 | 6/30/2007 | 6/30/2008 | 6/30/2007 | |||||||||||||
| Revenues |
||||||||||||||||
| New retail vehicles |
$ | 1,049,472 | $ | 1,128,335 | $ | 2,029,199 | $ | 2,156,505 | ||||||||
| Fleet vehicles |
120,507 | 101,030 | 228,099 | 189,835 | ||||||||||||
| Total new vehicles |
1,169,979 | 1,229,365 | 2,257,298 | 2,346,340 | ||||||||||||
| Used vehicles |
379,522 | 351,333 | 749,310 | 670,590 | ||||||||||||
| Wholesale vehicles |
82,467 | 98,260 | 166,802 | 203,972 | ||||||||||||
| Total vehicles |
1,631,968 | 1,678,958 | 3,173,410 | 3,220,902 | ||||||||||||
| Parts, service and collision repair |
294,608 | 283,478 | 587,581 | 561,606 | ||||||||||||
| Finance, insurance and other |
52,943 | 52,352 | 103,636 | 99,129 | ||||||||||||
| Total revenues |
1,979,519 | 2,014,788 | 3,864,627 | 3,881,637 | ||||||||||||
| Total gross profit |
310,755 | 313,697 | 613,512 | 609,364 | ||||||||||||
| SG&A expenses |
(242,042 | ) | (232,366 | ) | (481,690 | ) | (461,378 | ) | ||||||||
| Depreciation |
(8,879 | ) | (8,327 | ) | (16,744 | ) | (13,825 | ) | ||||||||
| Operating income |
59,834 | 73,004 | 115,078 | 134,161 | ||||||||||||
| Interest expense, floor plan |
(11,502 | ) | (16,645 | ) | (24,723 | ) | (32,342 | ) | ||||||||
| Interest expense, other |
(14,794 | ) | (8,871 | ) | (26,778 | ) | (17,548 | ) | ||||||||
| Other (expense) / income |
26 | 74 | 97 | 90 | ||||||||||||
| Income from continuing operations before taxes |
33,564 | 47,562 | 63,674 | 84,361 | ||||||||||||
| Income taxes |
(13,431 | ) | (18,722 | ) | (25,470 | ) | (33,256 | ) | ||||||||
| Income from continuing operations |
20,133 | 28,840 | 38,204 | 51,105 | ||||||||||||
| Discontinued operations: |
||||||||||||||||
| Loss from operations and the sale of discontinued franchises |
(13,319 | ) | (3,532 | ) | (18,836 | ) | (6,781 | ) | ||||||||
| Income tax benefit |
3,997 | 1,060 | 5,651 | 2,035 | ||||||||||||
| Loss from discontinued operations |
(9,322 | ) | (2,472 | ) | (13,185 | ) | (4,746 | ) | ||||||||
| Net income |
$ | 10,811 | $ | 26,368 | $ | 25,019 | $ | 46,359 | ||||||||
| Diluted: |
||||||||||||||||
| Weighted average common shares outstanding |
43,421 | 47,987 | 43,633 | 47,963 | ||||||||||||
| Earnings per share from continuing operations |
$ | 0.49 | $ | 0.62 | $ | 0.92 | $ | 1.11 | ||||||||
| Loss per share from discontinued operations |
$ | (0.22 | ) | $ | (0.05 | ) | $ | (0.30 | ) | $ | (0.10 | ) | ||||
| Earnings per share |
$ | 0.27 | $ | 0.57 | $ | 0.62 | $ | 1.01 | ||||||||
| Gross Margin Data (Continuing Operations): |
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| Retail new vehicles |
7.5 | % | 7.4 | % | 7.4 | % | 7.4 | % | ||||||||
| Fleet vehicles |
1.3 | % | 2.6 | % | 1.7 | % | 2.4 | % | ||||||||
| Total new vehicles |
6.8 | % | 7.0 | % | 6.8 | % | 7.0 | % | ||||||||
| Used vehicles retail |
8.5 | % | 9.3 | % | 8.7 | % | 9.5 | % | ||||||||
| Total vehicles retail |
7.2 | % | 7.5 | % | 7.3 | % | 7.6 | % | ||||||||
| Wholesale vehicles |
(2.2 | %) | (1.3 | %) | (1.7 | %) | (0.6 | %) | ||||||||
| Parts, service and collision repair |
50.0 | % | 50.8 | % | 49.9 | % | 50.5 | % | ||||||||
| Finance, insurance and other |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
| Overall gross margin |
15.7 | % | 15.6 | % | 15.9 | % | 15.7 | % | ||||||||
| SG&A Expenses (Continuing Operations): |
||||||||||||||||
| Personnel |
$ | 136,924 | $ | 135,044 | $ | 271,948 | $ | 264,271 | ||||||||
| Advertising |
17,224 | 16,039 | 33,529 | 31,122 | ||||||||||||
| Facility rent |
21,410 | 24,880 | 46,419 | 49,840 | ||||||||||||
| Other |
66,484 | 56,403 | 129,794 | 116,145 | ||||||||||||
| Total |
$ | 242,042 | $ | 232,366 | $ | 481,690 | $ | 461,378 | ||||||||
| SG&A Expenses as % of Gross Profit |
||||||||||||||||
| Personnel |
44.1 | % | 43.0 | % | 44.3 | % | 43.4 | % | ||||||||
| Advertising |
5.5 | % | 5.1 | % | 5.5 | % | 5.1 | % | ||||||||
| Facility rent |
6.9 | % | 7.9 | % | 7.6 | % | 8.2 | % | ||||||||
| Other |
21.4 | % | 18.1 | % | 21.1 | % | 19.0 | % | ||||||||
| Total |
77.9 | % | 74.1 | % | 78.5 | % | 75.7 | % | ||||||||
| Operating Margin % |
3.0 | % | 3.6 | % | 3.0 | % | 3.5 | % | ||||||||
| Three Months Ended | Six Months Ended | |||||||||||
| Unit Data (Continuing Operations): | 6/30/2008 | 6/30/2007 | 6/30/2008 | 6/30/2007 | ||||||||
| New retail units |
32,187 | 33,780 | 61,028 | 64,021 | ||||||||
| Fleet units |
4,558 | 4,677 | 8,913 | 8,413 | ||||||||
| Used units |
18,871 | 17,443 | 37,266 | 33,702 | ||||||||
| Wholesale units |
10,505 | 10,814 | 20,814 | 22,639 | ||||||||
| Average price per unit: |
||||||||||||
| New retail vehicles |
$ | 32,605 | $ | 33,402 | $ | 33,250 | $ | 33,684 | ||||
| Fleet vehicles |
26,439 | 21,601 | 25,592 | 22,564 | ||||||||
| Used vehicles |
20,111 | 20,142 | 20,107 | 19,898 | ||||||||
| Wholesale vehicles |
7,850 | 9,086 | 8,014 | 9,010 | ||||||||
| Other Data: |
||||||||||||
| Same store revenue percentage changes: |
||||||||||||
| New retail |
(13.0%) | (11.6%) | ||||||||||
| Fleet |
2.9% | 7.4% | ||||||||||
| Total New Vehicles |
(11.7%) | (10.1%) | ||||||||||
| Used |
2.7% | 6.6% | ||||||||||
| Parts, service and collision repair |
(0.8%) | (0.1%) | ||||||||||
| Finance, insurance and other |
(2.1%) | 1.4% | ||||||||||
| Total |
(7.8%) | (6.1%) | ||||||||||
| Balance Sheet Data: |
||||||||||||
| 6/30/2008 | 12/31/2007 | |||||||||||
| ASSETS |
||||||||||||
| Current Assets: |
||||||||||||
| Cash and cash equivalents |
$ | 11,381 | $ | 16,514 | ||||||||
| Receivables, net |
279,740 | 347,309 | ||||||||||
| Inventories |
1,156,208 | 1,093,017 | ||||||||||
| Assets held for sale |
114,263 | 87,342 | ||||||||||
| Other current assets |
36,477 | 35,879 | ||||||||||
| Total current assets |
1,598,069 | 1,580,061 | ||||||||||
| Property and Equipment, Net |
396,841 | 286,591 | ||||||||||
| Goodwill, Net |
1,250,363 | 1,276,074 | ||||||||||
| Other Intangibles, Net |
108,684 | 111,342 | ||||||||||
| Other Assets |
28,565 | 28,676 | ||||||||||
| TOTAL ASSETS |
$ | 3,382,522 | $ | 3,282,744 | ||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||||||
| Current Liabilities: |
||||||||||||
| Floor plan notes payable |
$ | 1,159,953 | $ | 1,125,670 | ||||||||
| Other current liabilities |
230,421 | 247,658 | ||||||||||
| Liabilities associated with assets held for sale |
50,929 | 48,592 | ||||||||||
| Current maturities of long-term debt |
134,983 | 4,197 | ||||||||||
| Total current liabilities |
1,576,286 | 1,426,117 | ||||||||||
| LONG-TERM DEBT |
647,652 | 697,800 | ||||||||||
| OTHER LONG-TERM LIABILITIES |
224,267 | 227,999 | ||||||||||
| STOCKHOLDERS’ EQUITY |
934,317 | 930,828 | ||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ | 3,382,522 | $ | 3,282,744 | ||||||||