Exhibit 99.1
Sonic Automotive, Inc. Announces Fourth Quarter and Year-End 2008 Results
CHARLOTTE, N.C. – March 31, 2009 – Sonic Automotive, Inc. (NYSE: SAH), a leader in automotive retailing, today announced a fourth quarter 2008 loss from continuing operations of $658.8 million, or $16.43 per diluted share, compared to income from continuing operations of $26.8 million, or $0.62 per diluted share, in the prior year period.
For the full year 2008, the Company recorded a loss from continuing operations of $634.1 million, or $15.71 per diluted share, compared to income from continuing operations of $98.2 million, or $2.17 per diluted share, for the full year 2007.
After adjusting for the charges which are more fully described in the attached tables, the Company had a loss from continuing operations of $4.8 million, or $0.12 per diluted share, for the fourth quarter 2008 and income from continuing operations of $42.2 million, or $1.05 per diluted share, for the full year 2008.
Scott Smith, the Company’s President and Chief Strategic Officer, stated, “Due to the current market conditions and the resulting decline in our stock price, we were required under accounting rules to record non-cash goodwill and franchise impairment charges this quarter. This non-cash charge has no impact on the covenant calculations under our credit facility.”
Mr. Smith continued, “We are operating in one of the most challenging economic environments in automotive retailing history. The disruption in the credit markets, increases in unemployment, and the resulting declines in consumer confidence have caused industry-wide new vehicle sales levels to decline dramatically. To respond to these challenges in the new vehicle sales environment, we are focusing on the other core pieces of our business including used vehicles and parts and service. We are seeing promising improvements in these areas in the early part of 2009. We also continue to focus on the cost side of the business and have implemented cost reductions which we project to yield approximately $125 million in annual savings. We envision the macro-economic environment and the automotive retailing business will continue to be challenging in 2009. As a result, we have determined it is not feasible to provide reliable 2009 earnings guidance at this time.”
Presentation materials for the Company’s earnings conference call at 11:00 A.M. (Eastern) on April 1, 2009 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 #85024968.
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 164 franchises. Sonic can be reached on the Web at www.sonicautomotive.com.
Included herein are forward-looking statements, including statements with respect to cost reduction plans and the 2009 economic outlook. 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, 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 | Twelve Months Ended | |||||||||||||||
| 12/31/2008 | 12/31/2007 | 12/31/2008 | 12/31/2007 | |||||||||||||
| Revenues |
||||||||||||||||
| New retail vehicles |
$ | 650,765 | $ | 996,684 | $ | 3,245,451 | $ | 3,851,589 | ||||||||
| Fleet vehicles |
27,647 | 58,129 | 192,386 | 224,802 | ||||||||||||
| Total new vehicles |
678,412 | 1,054,813 | 3,437,837 | 4,076,391 | ||||||||||||
| Used vehicles |
271,432 | 316,560 | 1,213,263 | 1,200,154 | ||||||||||||
| Wholesale vehicles |
36,645 | 74,547 | 235,110 | 326,540 | ||||||||||||
| Total vehicles |
986,489 | 1,445,920 | 4,886,210 | 5,603,085 | ||||||||||||
| Parts, service and collision repair |
237,775 | 248,301 | 983,259 | 973,233 | ||||||||||||
| Finance, insurance and other |
31,342 | 46,054 | 165,307 | 181,053 | ||||||||||||
| Total revenues |
1,255,606 | 1,740,275 | 6,034,776 | 6,757,371 | ||||||||||||
| Total gross profit |
211,687 | 269,093 | 985,539 | 1,066,084 | ||||||||||||
| SG&A expenses |
(195,014 | ) | (194,834 | ) | (815,083 | ) | (790,221 | ) | ||||||||
| Impairment charges |
(789,944 | ) | (269 | ) | (811,784 | ) | (958 | ) | ||||||||
| Depreciation |
(8,997 | ) | (5,918 | ) | (31,680 | ) | (22,576 | ) | ||||||||
| Operating income |
(782,268 | ) | 68,072 | (673,008 | ) | 252,329 | ||||||||||
| Interest expense, floor plan |
(9,620 | ) | (13,703 | ) | (38,263 | ) | (54,143 | ) | ||||||||
| Interest expense, other |
(14,833 | ) | (10,146 | ) | (54,430 | ) | (36,411 | ) | ||||||||
| Other (expense) / income |
650 | (37 | ) | 726 | 44 | |||||||||||
| Income / (loss) from continuing operations before taxes |
(806,071 | ) | 44,186 | (764,975 | ) | 161,819 | ||||||||||
| Income taxes |
147,287 | (17,379 | ) | 130,848 | (63,621 | ) | ||||||||||
| Income / (loss) from continuing operations |
(658,784 | ) | 26,807 | (634,127 | ) | 98,198 | ||||||||||
| Discontinued operations: |
||||||||||||||||
| Income / (loss) from operations and the sale of discontinued franchises |
(22,148 | ) | (3,087 | ) | (55,954 | ) | 809 | |||||||||
| Income tax benefit / (expense) |
(4,665 | ) | (684 | ) | 4,154 | (3,505 | ) | |||||||||
| Loss from discontinued operations |
(26,813 | ) | (3,771 | ) | (51,800 | ) | (2,696 | ) | ||||||||
| Net income/ (loss) |
$ | (685,597 | ) | $ | 23,036 | $ | (685,927 | ) | $ | 95,502 | ||||||
| Diluted: |
||||||||||||||||
| Weighted average common shares outstanding |
40,087 | 44,894 | 40,356 | 46,941 | ||||||||||||
| Earnings / (loss) per share from continuing operations |
($16.43 | ) | $ | 0.62 | ($15.71 | ) | $ | 2.17 | ||||||||
| Loss per share from discontinued operations |
($0.67 | ) | ($0.08 | ) | ($1.29 | ) | ($0.04 | ) | ||||||||
| Earnings / (loss) per share |
($17.10 | ) | $ | 0.54 | ($17.00 | ) | $ | 2.13 | ||||||||
| Gross Margin Data (Continuing Operations): |
||||||||||||||||
| Retail new vehicles |
6.8 | % | 7.3 | % | 7.1 | % | 7.5 | % | ||||||||
| Fleet vehicles |
1.8 | % | 0.7 | % | 1.3 | % | 0.8 | % | ||||||||
| Total new vehicles |
6.6 | % | 7.0 | % | 6.8 | % | 7.1 | % | ||||||||
| Used vehicles retail |
7.0 | % | 8.4 | % | 8.5 | % | 9.1 | % | ||||||||
| Total vehicles retail |
6.7 | % | 7.3 | % | 7.2 | % | 7.6 | % | ||||||||
| Wholesale vehicles |
(6.9 | %) | (2.3 | %) | (2.8 | %) | (1.4 | %) | ||||||||
| Parts, service and collision repair |
50.1 | % | 50.3 | % | 49.8 | % | 50.4 | % | ||||||||
| Finance, insurance and other |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
| Overall gross margin |
16.9 | % | 15.5 | % | 16.3 | % | 15.8 | % | ||||||||
| SG&A Expenses (Continuing Operations): |
||||||||||||||||
| Personnel |
$ | 98,214 | $ | 108,170 | $ | 443,669 | $ | 447,704 | ||||||||
| Advertising |
10,556 | 14,998 | 50,866 | 55,849 | ||||||||||||
| Facility rent |
21,316 | 21,771 | 85,260 | 85,840 | ||||||||||||
| Other |
64,928 | 49,895 | 235,288 | 200,828 | ||||||||||||
| Total |
$ | 195,014 | $ | 194,834 | $ | 815,083 | $ | 790,221 | ||||||||
| SG&A Expenses as % of Gross Profit |
||||||||||||||||
| Personnel |
46.4 | % | 40.2 | % | 45.0 | % | 42.0 | % | ||||||||
| Advertising |
5.0 | % | 5.6 | % | 5.2 | % | 5.2 | % | ||||||||
| Facility rent |
10.1 | % | 8.1 | % | 8.7 | % | 8.1 | % | ||||||||
| Other |
30.7 | % | 18.6 | % | 23.9 | % | 18.8 | % | ||||||||
| Total |
92.1 | % | 72.4 | % | 82.7 | % | 74.1 | % | ||||||||
| Operating Margin % |
(62.3 | %) | 3.9 | % | (11.2 | %) | 3.7 | % | ||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||
| 12/31/2008 | 12/31/2007 | 12/31/2008 | 12/31/2007 | ||||||||||||
| Unit Data (Continuing Operations): |
|||||||||||||||
| New retail units |
18,565 | 27,657 | 94,570 | 111,171 | |||||||||||
| Fleet units |
1,087 | 2,073 | 7,618 | 9,341 | |||||||||||
| New units |
19,652 | 29,730 | 102,188 | 120,512 | |||||||||||
| Used units |
13,796 | 15,027 | 60,124 | 58,861 | |||||||||||
| Total units retailed |
33,448 | 44,757 | 162,312 | 179,373 | |||||||||||
| Wholesale units |
5,489 | 8,239 | 30,035 | 35,631 | |||||||||||
| Average price per unit: |
|||||||||||||||
| New retail vehicles |
$ | 35,053 | $ | 36,037 | $ | 34,318 | $ | 34,646 | |||||||
| Fleet vehicles |
25,434 | 28,041 | 25,254 | 24,066 | |||||||||||
| Total new vehicles |
34,521 | 35,480 | 33,642 | 33,826 | |||||||||||
| Used vehicles |
19,675 | 21,066 | 20,179 | 20,390 | |||||||||||
| Wholesale vehicles |
6,676 | 9,048 | 7,828 | 9,164 | |||||||||||
| Other Data: |
|||||||||||||||
| Same store revenue percentage changes: |
|||||||||||||||
| New retail |
(35.1 | %) | (19.3 | %) | |||||||||||
| Fleet |
(52.4 | %) | (25.5 | %) | |||||||||||
| Total New Vehicles |
(36.1 | %) | (19.7 | %) | |||||||||||
| Used |
(14.6 | %) | (2.2 | %) | |||||||||||
| Parts, service and collision repair |
(4.7 | %) | (2.2 | %) | |||||||||||
| Finance, insurance and other |
(31.1 | %) | (10.2 | %) | |||||||||||
| Total |
(28.2 | %) | (14.3 | %) | |||||||||||
| 12/31/2008 | 12/31/2007 | ||||||||||||||
| Balance Sheet Data: |
|||||||||||||||
| ASSETS |
|||||||||||||||
| Current Assets: |
|||||||||||||||
| Cash and cash equivalents |
$ | 6,971 | $ | 16,514 | |||||||||||
| Receivables, net |
247,025 | 347,309 | |||||||||||||
| Inventories |
916,837 | 1,093,017 | |||||||||||||
| Assets held for sale |
406,576 | 87,342 | |||||||||||||
| Other current assets |
16,822 | 35,879 | |||||||||||||
| Total current assets |
1,594,231 | 1,580,061 | |||||||||||||
| Property and Equipment, Net |
369,892 | 286,591 | |||||||||||||
| Goodwill, Net |
327,007 | 1,276,074 | |||||||||||||
| Other Intangibles, Net |
82,328 | 111,342 | |||||||||||||
| Other Assets |
37,243 | 28,676 | |||||||||||||
| TOTAL ASSETS |
$ | 2,410,701 | $ | 3,282,744 | |||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
|||||||||||||||
| Current Liabilities: |
|||||||||||||||
| Floor plan notes payable |
$ | 921,023 | $ | 1,125,670 | |||||||||||
| Other current liabilities |
277,938 | 247,658 | |||||||||||||
| Liabilities associated with assets held for sale |
199,482 | 48,592 | |||||||||||||
| Current maturities of long-term debt |
751,337 | 4,197 | |||||||||||||
| Total current liabilities |
2,149,780 | 1,426,117 | |||||||||||||
| LONG-TERM DEBT |
— | 697,800 | |||||||||||||
| OTHER LONG-TERM LIABILITIES |
71,132 | 83,829 | |||||||||||||
| DEFERRED INCOME TAXES |
— | 144,170 | |||||||||||||
| STOCKHOLDERS’ EQUITY |
189,789 | 930,828 | |||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ | 2,410,701 | $ | 3,282,744 | |||||||||||
| Balance Sheet Ratios: |
|||||||||||||||
| Current Ratio |
0.74 | 1.11 | |||||||||||||
| Debt to Total Capital, Net of Cash |
79.7 | % | 42.4 | % | |||||||||||
Sonic Automotive, Inc.
Results of Operations (Unaudited)
(in thousands, except per share, unit data and percentage amounts)
| Twelve Months Ended | Twelve Months Ended | |||||||||||||||||||||||
| As Reported 12/31/2008 |
Adjustments | As Adjusted 12/31/2008 |
As Reported 12/31/2007 |
Adjustments | As Adjusted 12/31/2007 |
|||||||||||||||||||
| Revenues |
||||||||||||||||||||||||
| New retail vehicles |
$ | 3,245,451 | $ | — | $ | 3,245,451 | $ | 3,851,589 | $ | — | $ | 3,851,589 | ||||||||||||
| Fleet vehicles |
192,386 | — | 192,386 | 224,802 | — | 224,802 | ||||||||||||||||||
| Total new vehicles |
3,437,837 | — | 3,437,837 | 4,076,391 | — | 4,076,391 | ||||||||||||||||||
| Used vehicles |
1,213,263 | — | 1,213,263 | 1,200,154 | — | 1,200,154 | ||||||||||||||||||
| Wholesale vehicles |
235,110 | — | 235,110 | 326,540 | — | 326,540 | ||||||||||||||||||
| Total vehicles |
4,886,210 | — | 4,886,210 | 5,603,085 | — | 5,603,085 | ||||||||||||||||||
| Parts, service and collision repair |
983,259 | — | 983,259 | 973,233 | — | 973,233 | ||||||||||||||||||
| Finance, insurance and other |
165,307 | — | 165,307 | 181,053 | — | 181,053 | ||||||||||||||||||
| Total revenues |
6,034,776 | — | 6,034,776 | 6,757,371 | — | 6,757,371 | ||||||||||||||||||
| Total gross profit |
985,539 | — | 985,539 | 1,066,084 | — | 1,066,084 | ||||||||||||||||||
| SG&A expenses |
(815,083 | ) | 18,280 | (796,803 | ) | (790,221 | ) | 1,046 | (789,175 | ) | ||||||||||||||
| Impairment charges |
(811,784 | ) | 811,784 | — | (958 | ) | 958 | — | ||||||||||||||||
| Depreciation |
(31,680 | ) | — | (31,680 | ) | (22,576 | ) | — | (22,576 | ) | ||||||||||||||
| Operating income |
(673,008 | ) | 830,064 | 157,056 | 252,329 | 2,004 | 254,333 | |||||||||||||||||
| Interest expense, floor plan |
(38,263 | ) | — | (38,263 | ) | (54,143 | ) | — | (54,143 | ) | ||||||||||||||
| Interest expense, other |
(54,430 | ) | — | (54,430 | ) | (36,411 | ) | — | (36,411 | ) | ||||||||||||||
| Other (expense) / income |
726 | — | 726 | 44 | — | 44 | ||||||||||||||||||
| Income / (loss) from continuing operations before taxes |
(764,975 | ) | 830,064 | 65,089 | 161,819 | 2,004 | 163,823 | |||||||||||||||||
| Income taxes |
130,848 | (153,691 | ) | (22,843 | ) | (63,621 | ) | (419 | ) | (64,040 | ) | |||||||||||||
| Income / (loss) from continuing operations |
(634,127 | ) | 676,373 | 42,246 | 98,198 | 1,585 | 99,783 | |||||||||||||||||
| Discontinued operations: |
— | — | ||||||||||||||||||||||
| Income / (loss) from operations and the sale of discontinued franchises |
(55,954 | ) | 55,529 | (425 | ) | 809 | 7,398 | 8,207 | ||||||||||||||||
| Income tax benefit / (expense) |
4,154 | (4,286 | ) | (132 | ) | (3,505 | ) | (1,960 | ) | (5,465 | ) | |||||||||||||
| Loss from discontinued operations |
(51,800 | ) | 51,243 | (557 | ) | (2,696 | ) | 5,438 | 2,742 | |||||||||||||||
| Net income/ (loss) |
$ | (685,927 | ) | $ | 727,616 | $ | 41,689 | $ | 95,502 | $ | 7,023 | $ | 102,525 | |||||||||||
| Diluted: |
||||||||||||||||||||||||
| Weighted average common shares outstanding |
40,356 | 40,356 | 40,356 | 46,941 | 46,941 | 46,941 | ||||||||||||||||||
| Earnings / (loss) per share from continuing operations |
($15.71 | ) | $ | 16.76 | $ | 1.05 | $ | 2.17 | $ | 0.03 | $ | 2.20 | ||||||||||||
| Earnings / (loss) per share from discontinued operations |
($1.29 | ) | $ | 1.27 | ($0.02 | ) | ($0.04 | ) | $ | 0.12 | $ | 0.08 | ||||||||||||
| Earnings / (loss) per share |
($17.00 | ) | $ | 18.03 | $ | 1.03 | $ | 2.13 | $ | 0.15 | $ | 2.28 | ||||||||||||
| Gross Margin Data (Continuing Operations): |
||||||||||||||||||||||||
| Retail new vehicles |
7.1 | % | 0.0 | % | 7.1 | % | 7.5 | % | 0.0 | % | 7.5 | % | ||||||||||||
| Fleet vehicles |
1.3 | % | 0.0 | % | 1.3 | % | 0.8 | % | 0.0 | % | 0.8 | % | ||||||||||||
| Total new vehicles |
6.8 | % | 0.0 | % | 6.8 | % | 7.1 | % | 0.0 | % | 7.1 | % | ||||||||||||
| Used vehicles retail |
8.5 | % | 0.0 | % | 8.5 | % | 9.1 | % | 0.0 | % | 9.1 | % | ||||||||||||
| Total vehicles retail |
7.2 | % | 0.0 | % | 7.2 | % | 7.6 | % | 0.0 | % | 7.6 | % | ||||||||||||
| Wholesale vehicles |
(2.8 | %) | 0.0 | % | (2.8 | %) | (1.4 | %) | 0.0 | % | (1.4 | %) | ||||||||||||
| Parts, service and collision repair |
49.8 | % | 0.0 | % | 49.8 | % | 50.4 | % | 0.0 | % | 50.4 | % | ||||||||||||
| Finance, insurance and other |
100.0 | % | 0.0 | % | 100.0 | % | 100.0 | % | 0.0 | % | 100.0 | % | ||||||||||||
| Overall gross margin |
16.3 | % | 0.0 | % | 16.3 | % | 15.8 | % | 0.0 | % | 15.8 | % | ||||||||||||
| SG&A Expenses (Continuing Operations): |
||||||||||||||||||||||||
| Personnel |
$ | 443,669 | $ | — | $ | 443,669 | $ | 447,704 | $ | — | $ | 447,704 | ||||||||||||
| Advertising |
50,866 | — | 50,866 | 55,849 | — | $ | 55,849 | |||||||||||||||||
| Facility rent |
85,260 | — | 85,260 | 85,840 | — | $ | 85,840 | |||||||||||||||||
| Other |
235,288 | (18,280 | ) | 217,008 | 200,828 | (1,046 | ) | $ | 199,782 | |||||||||||||||
| Total |
$ | 815,083 | $ | (18,280 | ) | $ | 796,803 | $ | 790,221 | $ | (1,046 | ) | $ | 789,175 | ||||||||||
| SG&A Expenses as % of Gross Profit |
||||||||||||||||||||||||
| Personnel |
45.0 | % | 0.0 | % | 45.0 | % | 42.0 | % | 0.0 | % | 42.0 | % | ||||||||||||
| Advertising |
5.2 | % | 0.0 | % | 5.2 | % | 5.2 | % | 0.0 | % | 5.2 | % | ||||||||||||
| Facility rent |
8.7 | % | 0.0 | % | 8.7 | % | 8.1 | % | 0.0 | % | 8.1 | % | ||||||||||||
| Other |
23.9 | % | (1.8 | %) | 22.1 | % | 18.8 | % | (0.1 | %) | 18.7 | % | ||||||||||||
| Total |
82.7 | % | (1.8 | %) | 80.9 | % | 74.1 | % | (0.1 | %) | 74.0 | % | ||||||||||||
| Operating Margin % |
(11.2 | %) | 13.8 | % | 2.6 | % | 3.7 | % | 0.0 | % | 3.8 | % | ||||||||||||
Sonic Automotive, Inc.
Results of Operations (Unaudited)
(in thousands, except per share, unit data and percentage amounts)
| Three Months Ended | Three Months Ended | |||||||||||||||||||||||
| As Reported 12/31/2008 |
Adjustments | As Adjusted 12/31/2008 |
As Reported 12/31/2007 |
Adjustments | As Adjusted 12/31/2007 |
|||||||||||||||||||
| Revenues |
||||||||||||||||||||||||
| New retail vehicles |
$ | 650,765 | $ | — | $ | 650,765 | $ | 996,684 | $ | — | $ | 996,684 | ||||||||||||
| Fleet vehicles |
27,647 | — | 27,647 | 58,129 | — | 58,129 | ||||||||||||||||||
| Total new vehicles |
678,412 | — | 678,412 | 1,054,813 | — | 1,054,813 | ||||||||||||||||||
| Used vehicles |
271,432 | — | 271,432 | 316,560 | — | 316,560 | ||||||||||||||||||
| Wholesale vehicles |
36,645 | — | 36,645 | 74,547 | — | 74,547 | ||||||||||||||||||
| Total vehicles |
986,489 | — | 986,489 | 1,445,920 | — | 1,445,920 | ||||||||||||||||||
| Parts, service and collision repair |
237,775 | — | 237,775 | 248,301 | — | 248,301 | ||||||||||||||||||
| Finance, insurance and other |
31,342 | — | 31,342 | 46,054 | — | 46,054 | ||||||||||||||||||
| Total revenues |
1,255,606 | — | 1,255,606 | 1,740,275 | — | 1,740,275 | ||||||||||||||||||
| Total gross profit |
211,687 | — | 211,687 | 269,093 | — | 269,093 | ||||||||||||||||||
| SG&A expenses |
(195,014 | ) | 3,900 | (191,114 | ) | (194,834 | ) | 267 | (194,567 | ) | ||||||||||||||
| Impairment charges |
(789,944 | ) | 789,944 | — | (269 | ) | 269 | — | ||||||||||||||||
| Depreciation |
(8,997 | ) | — | (8,997 | ) | (5,918 | ) | — | (5,918 | ) | ||||||||||||||
| Operating income |
(782,268 | ) | 793,844 | 11,576 | 68,072 | 536 | 68,608 | |||||||||||||||||
| Interest expense, floor plan |
(9,620 | ) | — | (9,620 | ) | (13,703 | ) | — | (13,703 | ) | ||||||||||||||
| Interest expense, other |
(14,833 | ) | — | (14,833 | ) | (10,146 | ) | — | (10,146 | ) | ||||||||||||||
| Other (expense) / income |
650 | — | 650 | (37 | ) | — | (37 | ) | ||||||||||||||||
| Income / (loss) from continuing operations before taxes |
(806,071 | ) | 793,844 | (12,227 | ) | 44,186 | 536 | 44,722 | ||||||||||||||||
| Income taxes |
147,287 | (139,891 | ) | 7,396 | (17,379 | ) | 156 | (17,223 | ) | |||||||||||||||
| Income / (loss) from continuing operations |
(658,784 | ) | 653,953 | (4,831 | ) | 26,807 | 692 | 27,499 | ||||||||||||||||
| Discontinued operations: |
— | — | ||||||||||||||||||||||
| Income / (loss) from operations and the sale of discontinued franchises |
(22,148 | ) | 21,586 | (562 | ) | (3,087 | ) | 1,440 | (1,647 | ) | ||||||||||||||
| Income tax benefit / (expense) |
(4,665 | ) | 7,628 | 2,963 | (684 | ) | 375 | (309 | ) | |||||||||||||||
| Loss from discontinued operations |
(26,813 | ) | 29,214 | 2,401 | (3,771 | ) | 1,815 | (1,956 | ) | |||||||||||||||
| Net income/ (loss) |
$ | (685,597 | ) | $ | 683,167 | $ | (2,430 | ) | $ | 23,036 | $ | 2,507 | $ | 25,543 | ||||||||||
| Diluted: |
||||||||||||||||||||||||
| Weighted average common shares outstanding |
40,087 | 40,087 | 40,087 | 44,894 | 44,894 | 44,894 | ||||||||||||||||||
| Earnings / (loss) per share from continuing operations |
($16.43 | ) | $ | 16.31 | ($0.12 | ) | $ | 0.62 | $ | 0.02 | $ | 0.64 | ||||||||||||
| Earnings / (loss) per share from discontinued operations |
($0.67 | ) | $ | 0.73 | $ | 0.06 | ($0.08 | ) | $ | 0.04 | ($0.04 | ) | ||||||||||||
| Earnings / (loss) per share |
($17.10 | ) | $ | 17.04 | ($0.06 | ) | $ | 0.54 | $ | 0.06 | $ | 0.60 | ||||||||||||
| Gross Margin Data (Continuing Operations): |
||||||||||||||||||||||||
| Retail new vehicles |
6.8 | % | 0.0 | % | 6.8 | % | 7.3 | % | 0.0 | % | 7.3 | % | ||||||||||||
| Fleet vehicles |
1.8 | % | 0.0 | % | 1.8 | % | 0.7 | % | 0.0 | % | 0.7 | % | ||||||||||||
| Total new vehicles |
6.6 | % | 0.0 | % | 6.6 | % | 7.0 | % | 0.0 | % | 7.0 | % | ||||||||||||
| Used vehicles retail |
7.0 | % | 0.0 | % | 7.0 | % | 8.4 | % | 0.0 | % | 8.4 | % | ||||||||||||
| Total vehicles retail |
6.7 | % | 0.0 | % | 6.7 | % | 7.3 | % | 0.0 | % | 7.3 | % | ||||||||||||
| Wholesale vehicles |
(6.9 | %) | 0.0 | % | (6.9 | %) | (2.3 | %) | 0.0 | % | (2.3 | %) | ||||||||||||
| Parts, service and collision repair |
50.1 | % | 0.0 | % | 50.1 | % | 50.3 | % | 0.0 | % | 50.3 | % | ||||||||||||
| Finance, insurance and other |
100.0 | % | 0.0 | % | 100.0 | % | 100.0 | % | 0.0 | % | 100.0 | % | ||||||||||||
| Overall gross margin |
16.9 | % | 0.0 | % | 16.9 | % | 15.5 | % | 0.0 | % | 15.5 | % | ||||||||||||
| SG&A Expenses (Continuing Operations): |
||||||||||||||||||||||||
| Personnel |
$ | 98,214 | $ | — | $ | 98,214 | $ | 108,170 | $ | — | $ | 108,170 | ||||||||||||
| Advertising |
10,556 | — | 10,556 | 14,998 | — | $ | 14,998 | |||||||||||||||||
| Facility rent |
21,316 | — | 21,316 | 21,771 | — | $ | 21,771 | |||||||||||||||||
| Other |
64,928 | (3,900 | ) | 61,028 | 49,895 | (267 | ) | $ | 49,628 | |||||||||||||||
| Total |
$ | 195,014 | $ | (3,900 | ) | $ | 191,114 | $ | 194,834 | $ | (267 | ) | $ | 194,567 | ||||||||||
| SG&A Expenses as % of Gross Profit |
||||||||||||||||||||||||
| Personnel |
46.4 | % | 0.0 | % | 46.4 | % | 40.2 | % | 0.0 | % | 40.2 | % | ||||||||||||
| Advertising |
5.0 | % | 0.0 | % | 5.0 | % | 5.6 | % | 0.0 | % | 5.6 | % | ||||||||||||
| Facility rent |
10.1 | % | 0.0 | % | 10.1 | % | 8.1 | % | 0.0 | % | 8.1 | % | ||||||||||||
| Other |
30.7 | % | (1.8 | %) | 28.8 | % | 18.6 | % | (0.1 | %) | 18.5 | % | ||||||||||||
| Total |
92.1 | % | (1.8 | %) | 90.3 | % | 72.4 | % | (0.1 | %) | 72.3 | % | ||||||||||||
| Operating Margin % |
(62.3 | %) | 63.2 | % | 0.9 | % | 3.9 | % | 0.0 | % | 3.9 | % | ||||||||||||
Sonic Automotive, Inc.
Results of Operations (Unaudited)
(in thousands, except per share, unit data and percentage amounts)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| 12/31/2008 | 12/31/2007 | 12/31/2008 | 12/31/2007 | |||||||||||||
| (amounts in thousands) | ||||||||||||||||
| SG&A expenses as Reported |
$ | (195,014 | ) | $ | (194,834 | ) | $ | (815,083 | ) | $ | (790,221 | ) | ||||
| Adjustments: |
||||||||||||||||
| Hurricane and hail related expenses |
— | — | 8,000 | — | ||||||||||||
| Lease exit and other accruals |
3,900 | 267 | 10,280 | 1,046 | ||||||||||||
| Total Adjustments |
3,900 | 267 | 18,280 | 1,046 | ||||||||||||
| SG&A expenses as Adjusted |
$ | (191,114 | ) | $ | (194,567 | ) | $ | (796,803 | ) | $ | (789,175 | ) | ||||
| Impairment charges as Reported |
$ | (789,944 | ) | $ | (269 | ) | $ | (811,784 | ) | $ | (958 | ) | ||||
| Adjustments: |
||||||||||||||||
| Property impairment charges |
3,481 | 269 | 16,421 | 958 | ||||||||||||
| Goodwill impairment charges |
786,463 | — | 786,463 | — | ||||||||||||
| Franchise agreement and other asset impairment charges |
— | — | 8,900 | — | ||||||||||||
| Total Adjustments |
789,944 | 269 | 811,784 | 958 | ||||||||||||
| Impairment charges as Adjusted |
$ | — | $ | — | $ | — | $ | — | ||||||||
| Operating income as Reported |
$ | (782,268 | ) | $ | 68,072 | $ | (673,008 | ) | $ | 252,329 | ||||||
| Adjustments: |
||||||||||||||||
| Hurricane and hail related expenses |
— | — | 8,000 | — | ||||||||||||
| Lease exit and other accruals |
3,900 | 267 | 10,280 | 1,046 | ||||||||||||
| Property impairment charges |
3,481 | 269 | 16,421 | 958 | ||||||||||||
| Goodwill impairment charges |
786,463 | — | 786,463 | — | ||||||||||||
| Franchise agreement and other asset impairment charges |
— | — | 8,900 | — | ||||||||||||
| Total Adjustments |
793,844 | 536 | 830,064 | 2,004 | ||||||||||||
| Operating income as Adjusted |
$ | 11,576 | $ | 68,608 | $ | 157,056 | $ | 254,333 | ||||||||
| Income / (loss) from continuing operations before taxes as Reported |
$ | (806,071 | ) | $ | 44,186 | $ | (764,975 | ) | $ | 161,819 | ||||||
| Adjustments: |
||||||||||||||||
| Hurricane and hail related expenses |
— | — | 8,000 | — | ||||||||||||
| Lease exit and other accruals |
3,900 | 267 | 10,280 | 1,046 | ||||||||||||
| Property impairment charges |
3,481 | 269 | 16,421 | 958 | ||||||||||||
| Goodwill impairment charges |
786,463 | — | 786,463 | — | ||||||||||||
| Franchise agreement and other asset impairment charges |
— | — | 8,900 | — | ||||||||||||
| Total Adjustments |
793,844 | 536 | 830,064 | 2,004 | ||||||||||||
| Income / (loss) from continuing operations before taxes as Adjusted |
$ | (12,227 | ) | $ | 44,722 | $ | 65,089 | $ | 163,823 | |||||||
| Income taxes as Reported |
$ | 147,287 | $ | (17,379 | ) | $ | 130,848 | $ | (63,621 | ) | ||||||
| Adjustments: |
||||||||||||||||
| Hurricane and hail related expenses |
— | — | (3,048 | ) | — | |||||||||||
| Lease exit and other accruals |
(1,486 | ) | (105 | ) | (3,917 | ) | (410 | ) | ||||||||
| Property impairment charges |
(1,326 | ) | (105 | ) | (6,256 | ) | (375 | ) | ||||||||
| Goodwill impairment charges |
(239,787 | ) | — | (239,787 | ) | — | ||||||||||
| Franchise agreement and other asset impairment charges |
— | — | (3,391 | ) | — | |||||||||||
| Valuation allowance |
102,708 | 366 | 102,708 | 366 | ||||||||||||
| Total Adjustments |
(139,891 | ) | 156 | (153,691 | ) | (419 | ) | |||||||||
| Income taxes as Adjusted |
$ | 7,396 | $ | (17,223 | ) | $ | (22,843 | ) | $ | (64,040 | ) | |||||
| Income / (loss) from continuing operations as Reported |
$ | (658,784 | ) | $ | 26,807 | $ | (634,127 | ) | $ | 98,198 | ||||||
| Adjustments: |
||||||||||||||||
| Hurricane and hail related expenses |
— | — | 4,952 | — | ||||||||||||
| Lease exit and other accruals |
2,414 | 162 | 6,363 | 636 | ||||||||||||
| Property impairment charges |
2,155 | 164 | 10,165 | 583 | ||||||||||||
| Goodwill impairment charges |
546,676 | — | 546,676 | — | ||||||||||||
| Franchise agreement and other asset impairment charges |
— | — | 5,509 | — | ||||||||||||
| Valuation allowance |
102,708 | 366 | 102,708 | 366 | ||||||||||||
| Total Adjustments |
653,953 | 692 | 676,373 | 1,585 | ||||||||||||
| Income / (loss) from continuing operations as Adjusted |
$ | (4,831 | ) | $ | 27,499 | $ | 42,246 | $ | 99,783 | |||||||
| Income / (loss) from operations and the sale of discontinued franchises as Reported |
$ | (22,148 | ) | $ | (3,087 | ) | $ | (55,954 | ) | $ | 809 | |||||
| Adjustments: |
||||||||||||||||
| Lease exit and other accruals |
1,594 | 1,440 | 15,968 | 2,324 | ||||||||||||
| Property impairment charges |
664 | — | 8,530 | 1,974 | ||||||||||||
| Goodwill impairment charges |
10,862 | — | 10,862 | — | ||||||||||||
| Franchise agreement and other asset impairment charges |
8,466 | — | 18,266 | 3,100 | ||||||||||||
| Favorable lease asset impairment charges |
— | — | 1,903 | — | ||||||||||||
| Total Adjustments |
21,586 | 1,440 | 55,529 | 7,398 | ||||||||||||
| Income / (loss) from operations and the sale of discontinued franchises as Adjusted |
$ | (562 | ) | $ | (1,647 | ) | $ | (425 | ) | $ | 8,207 | |||||
| Discontinued Operations income tax benefit / (expense) as Reported |
$ | (4,665 | ) | $ | (684 | ) | $ | 4,154 | $ | (3,505 | ) | |||||
| Adjustments: |
||||||||||||||||
| Lease exit and other accruals |
(559 | ) | (564 | ) | (5,605 | ) | (911 | ) | ||||||||
| Property impairment charges |
(233 | ) | — | (2,994 | ) | (774 | ) | |||||||||
| Goodwill impairment charges |
(924 | ) | — | (924 | ) | — | ||||||||||
| Franchise agreement and other asset impairment charges |
(2,972 | ) | — | (6,411 | ) | — | ||||||||||
| Favorable lease asset impairment charges |
— | — | (668 | ) | (1,214 | ) | ||||||||||
| Valuation allowance |
12,316 | 939 | 12,316 | 939 | ||||||||||||
| Total Adjustments |
7,628 | 375 | (4,286 | ) | (1,960 | ) | ||||||||||
| Discontinued Operations income tax benefit / (expense) as Adjusted |
$ | 2,963 | $ | (309 | ) | $ | (132 | ) | $ | (5,465 | ) | |||||
Sonic Automotive, Inc.
Results of Operations (Unaudited)
(in thousands, except per share, unit data and percentage amounts)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| 12/31/2008 | 12/31/2007 | 12/31/2008 | 12/31/2007 | |||||||||||||
| (amounts in thousands) | ||||||||||||||||
| Loss from discontinued operations as Reported |
$ | (26,813 | ) | $ | (3,771 | ) | $ | (51,800 | ) | $ | (2,696 | ) | ||||
| Adjustments: |
||||||||||||||||
| Lease exit and other accruals |
1,035 | 876 | 10,363 | 1,413 | ||||||||||||
| Property impairment charges |
431 | — | 5,536 | 1,200 | ||||||||||||
| Goodwill impairment charges |
9,938 | — | 9,938 | — | ||||||||||||
| Franchise agreement and other asset impairment charges |
5,494 | — | 11,855 | 3,100 | ||||||||||||
| Favorable lease asset impairment charges |
— | — | 1,235 | (1,214 | ) | |||||||||||
| Valuation allowance |
12,316 | 939 | 12,316 | 939 | ||||||||||||
| Total Adjustments |
29,214 | 1,815 | 51,243 | 5,438 | ||||||||||||
| Loss from discontinued operations as Adjusted |
$ | 2,401 | $ | (1,956 | ) | $ | (557 | ) | $ | 2,742 | ||||||
| Net income / (loss) as Reported |
$ | (685,597 | ) | $ | 23,036 | $ | (685,927 | ) | $ | 95,502 | ||||||
| Adjustments: |
||||||||||||||||
| Hurricane and hail related expenses |
— | — | 4,952 | — | ||||||||||||
| Lease exit and other accruals |
3,449 | 1,038 | 16,726 | 2,049 | ||||||||||||
| Property impairment charges |
2,586 | 164 | 15,701 | 1,783 | ||||||||||||
| Goodwill impairment charges |
556,614 | — | 556,614 | — | ||||||||||||
| Franchise agreement and other asset impairment charges |
5,494 | — | 17,364 | 1,886 | ||||||||||||
| Favorable lease asset impairment charges |
— | — | 1,235 | — | ||||||||||||
| Valuation allowance |
115,024 | 1,305 | 115,024 | 1,305 | ||||||||||||
| Total Adjustments |
683,167 | 2,507 | 727,616 | 7,023 | ||||||||||||
| Net income / (loss) as Adjusted |
$ | (2,430 | ) | $ | 25,543 | $ | 41,689 | $ | 102,525 | |||||||
| Earnings / (loss) per share from continuing operations as Reported |
$ | (16.43 | ) | $ | 0.62 | $ | (15.71 | ) | $ | 2.17 | ||||||
| Adjustments: |
||||||||||||||||
| Hurricane and hail related expenses |
— | — | 0.12 | — | ||||||||||||
| Lease exit and other accruals |
0.06 | — | 0.16 | 0.01 | ||||||||||||
| Property impairment charges |
0.05 | 0.01 | 0.25 | 0.01 | ||||||||||||
| Goodwill impairment charges |
13.64 | — | 13.55 | — | ||||||||||||
| Franchise agreement and other asset impairment charges |
— | — | 0.13 | — | ||||||||||||
| Valuation allowance |
2.56 | 0.01 | 2.55 | 0.01 | ||||||||||||
| Total Adjustments |
16.31 | 0.02 | 16.76 | 0.03 | ||||||||||||
| Earnings / (loss) per share from continuing operations as Adjusted |
$ | (0.12 | ) | $ | 0.64 | $ | 1.05 | $ | 2.20 | |||||||
| Earnings / (loss) per share from discontinued operations as Reported |
$ | (0.67 | ) | $ | (0.08 | ) | $ | (1.29 | ) | $ | (0.04 | ) | ||||
| Adjustments: |
||||||||||||||||
| Lease exit and other accruals |
0.03 | 0.02 | 0.26 | 0.03 | ||||||||||||
| Property impairment charges |
0.01 | — | 0.14 | 0.03 | ||||||||||||
| Goodwill impairment charges |
0.25 | — | 0.25 | — | ||||||||||||
| Franchise agreement and other asset impairment charges |
0.14 | — | 0.29 | 0.07 | ||||||||||||
| Favorable lease asset impairment charges |
— | — | 0.03 | (0.03 | ) | |||||||||||
| Valuation allowance |
0.30 | 0.02 | 0.30 | 0.02 | ||||||||||||
| Total Adjustments |
0.73 | 0.04 | 1.27 | 0.12 | ||||||||||||
| Earnings / (loss) per share from discontinued operations as Adjusted |
$ | 0.06 | $ | (0.04 | ) | $ | (0.02 | ) | $ | 0.08 | ||||||
| Earnings / (loss) per share as Reported |
$ | (17.10 | ) | $ | 0.54 | $ | (17.00 | ) | $ | 2.13 | ||||||
| Adjustments: |
||||||||||||||||
| Hurricane and hail related expenses |
— | — | 0.12 | — | ||||||||||||
| Lease exit and other accruals |
0.09 | 0.02 | 0.42 | 0.04 | ||||||||||||
| Property impairment charges |
0.06 | 0.01 | 0.39 | 0.04 | ||||||||||||
| Goodwill impairment charges |
13.88 | — | 13.79 | — | ||||||||||||
| Franchise agreement and other asset impairment charges |
0.14 | — | 0.43 | 0.07 | ||||||||||||
| Favorable lease asset impairment charges |
— | — | 0.03 | (0.03 | ) | |||||||||||
| Valuation allowance |
2.87 | 0.03 | 2.85 | 0.03 | ||||||||||||
| Total Adjustments |
17.04 | 0.06 | 18.03 | 0.15 | ||||||||||||
| Earnings / (loss) per share as Adjusted |
$ | (0.06 | ) | $ | 0.60 | $ | 1.03 | $ | 2.28 | |||||||