Exhibit 99.1

Sonic Automotive, Inc. Reports 39% Increase in Third Quarter Continuing Operations Earnings; Raises Full Year Guidance

CHARLOTTE, N.C. – October 25, 2011Sonic Automotive, Inc. (NYSE: SAH), one of the nation’s largest automotive retailers, today reported that 2011 third quarter earnings from continuing operations were $0.33 per diluted share compared to $0.25 per diluted share in the prior year quarter.

Third Quarter 2011 Highlights

 

   

Continuing operations profits up 39%; EPS up 32%

 

   

Total revenues up 13% over prior year quarter. Volume exceeds industry growth.

 

   

New vehicle revenue up 13%; New vehicle volume up 8%

 

   

Used vehicle revenue up 17%; Used volume up 16%; 10th consecutive quarter of double-digit growth

 

   

Parts and Service revenue up 5%.

Business Overview – Strong Top Line Growth Continues

Commenting on the third quarter results, Jeff Dyke, the Company’s EVP of Operations, stated, “We saw continued growth both in the overall industry trends and in Sonic’s third quarter results. New and used vehicle revenue saw double digit growth, which translated into a 39% increase in continuing operations profit compared to the same period last year. Our higher-margin parts and service business continues to increase as we grow our customer base and continue the implementation of operating playbooks in this area.”

Current Outlook – Increasing Full-Year Guidance

Commenting on the business, B. Scott Smith, the Company’s President, said, “The automotive retail industry continued its steady rebound throughout the third quarter. We saw sales volume increase as we progressed through the quarter as a result of the recovery in the Japanese production capability. We expect this momentum to continue into the fourth quarter as these brands return to a normal production cycle.”

Mr. Smith continued, “We continue to target a 2011 industry volume of 12.5 million vehicles. As a result of the growth we’ve seen in our base business through the successful integration of our various operating playbooks and our favorable brand mix, we are increasing our expected 2011 earnings from continuing operations to $1.33 to $1.37 per share.”

Presentation materials for the Company’s October 25, 2011 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 “Investor Relations” tab under “Our Company” and choosing “Webcasts & Presentations”.

To access the live broadcast of the call over the Internet go to: 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: (855) 859-2056, International callers dial (404) 537-3406, Conference ID: #16406078.

About Sonic Automotive

Sonic Automotive, Inc., a Fortune 500 company based in Charlotte, N.C., is one of the nation’s largest automotive retailers. Sonic can be reached on the web at www.sonicautomotive.com.

Included herein are forward-looking statements, including statements with respect to future industry growth trends, recovery of Japanese brands production capacity, EPS targets and future impacts from the implementation of our various operational playbooks. 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 in the markets in which we operate, new and used vehicle sales volume, the success of our operational strategies, the rate and timing of overall economic recovery and the risk factors described in the Company’s annual report on Form 10-K for the year ending December 31, 2010 and quarterly report on Form 10-Q for the quarter ending June 30, 2011. 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)

 

     Third Quarter Ended September 30,  
     2011     2010  

Revenues

    

New retail vehicles

   $ 1,005,800      $ 886,355   

Fleet vehicles

     52,780        51,354   
  

 

 

   

 

 

 

Total new vehicles

     1,058,580        937,709   

Used vehicles

     530,969        453,815   

Wholesale vehicles

     48,588        47,597   
  

 

 

   

 

 

 

Total vehicles

     1,638,137        1,439,121   

Parts, service and collision repair

     297,951        283,741   

Finance, insurance and other

     56,761        47,398   
  

 

 

   

 

 

 

Total revenues

     1,992,849        1,770,260   

Total gross profit

     302,924        281,799   

SG&A expenses

     (238,704     (226,331

Impairment charges

     (102     (87

Depreciation

     (10,340     (8,731
  

 

 

   

 

 

 

Operating income

     53,778        46,650   

Interest expense, floor plan

     (4,348     (5,430

Interest expense, other, net

     (15,116     (15,226

Interest expense, non-cash, convertible debt

     (1,742     (1,768

Interest expense / amortization, non-cash, cash flow swaps

     (313     (1,484

Other expense, net

     (826     (351
  

 

 

   

 

 

 

Income from continuing operations before taxes

     31,433        22,391   

Provision for income taxes

     (12,100     (8,442
  

 

 

   

 

 

 

Income from continuing operations

     19,333        13,949   

Income (loss) from discontinued operations

     68        (964
  

 

 

   

 

 

 

Net income

   $ 19,401      $ 12,985   
  

 

 

   

 

 

 

Diluted:

    

Weighted average common shares outstanding

     65,517        65,851   

Earnings per share from continuing operations

   $ 0.33      $ 0.25   

Loss per share from discontinued operations

     —          (0.02
  

 

 

   

 

 

 

Earnings per common share

   $ 0.33      $ 0.23   
  

 

 

   

 

 

 

Gross Margin Data (Continuing Operations):

    

New retail vehicles

     6.6     6.6

Fleet vehicles

     3.2     3.1

Total new vehicles

     6.5     6.4

Used vehicles

     6.6     7.8

Total vehicles retailed

     6.5     6.8

Wholesale vehicles

     (4.8 %)      (3.1 %) 

Parts, service and collision repair

     48.7     49.6

Finance, insurance and other

     100.0     100.0

Overall gross margin

     15.2     15.9

SG&A Expenses (Continuing Operations):

    

Personnel

   $ 139,100      $ 131,805   

Advertising

     13,884        12,642   

Rent and rent related

     30,591        32,365   

Other

     55,129        49,519   
  

 

 

   

 

 

 

Total

   $ 238,704      $ 226,331   

SG&A Expenses as % of Gross Profit

     78.8     80.3

Operating Margin %

     2.7     2.6

Unit Data (Continuing Operations):

    

Retail new units

     27,941        25,780   

Fleet units

     2,047        2,020   
  

 

 

   

 

 

 

Total new units

     29,988        27,800   

Used units

     26,608        22,987   
  

 

 

   

 

 

 

Total units retailed

     56,596        50,787   

Wholesale units

     7,326        7,272   

Other Data:

    

Continuing Operations unit volume percentage changes:

    

Retail new units

     8.4  

Fleet units

     1.3  

Total new units

     7.9  

Used units

     15.8  

Total units retailed

     11.4  

Wholesale units

     0.7  


Sonic Automotive, Inc.

Results of Operations (Unaudited)

(In thousands, except per share, unit data and percentage amounts)

 

     Nine Months Ended September 30,  
     2011     2010  

Revenues

    

New retail vehicles

   $ 2,902,729      $ 2,463,139   

Fleet vehicles

     171,869        148,849   
  

 

 

   

 

 

 

Total new vehicles

     3,074,598        2,611,988   

Used vehicles

     1,549,197        1,339,323   

Wholesale vehicles

     125,428        108,336   
  

 

 

   

 

 

 

Total vehicles

     4,749,223        4,059,647   

Parts, service and collision repair

     889,243        842,697   

Finance, insurance and other

     162,010        133,607   
  

 

 

   

 

 

 

Total revenues

     5,800,476        5,035,951   

Total gross profit

     903,824        830,153   

SG&A expenses

     (711,657     (672,542

Impairment charges

     (160     (132

Depreciation

     (30,099     (25,729
  

 

 

   

 

 

 

Operating income

     161,908        131,750   

Interest expense, floor plan

     (14,766     (15,615

Interest expense, other, net

     (45,986     (48,024

Interest expense, non-cash, convertible debt

     (5,151     (5,175

Interest expense / amortization, non-cash, cash flow swaps

     (599     (5,402

Other expense, net

     (736     (7,522
  

 

 

   

 

 

 

Income from continuing operations before taxes

     94,670        50,012   

Provision for income taxes

     (37,395     (19,905
  

 

 

   

 

 

 

Income from continuing operations

     57,275        30,107   

Loss from discontinued operations

     (1,559     (4,532
  

 

 

   

 

 

 

Net income

   $ 55,716      $ 25,575   
  

 

 

   

 

 

 

Diluted:

    

Weighted average common shares outstanding

     65,800        65,711   

Earnings per share from continuing operations

   $ 0.97      $ 0.56   

Loss per share from discontinued operations

     (0.03     (0.07
  

 

 

   

 

 

 

Earnings per common share

   $ 0.94      $ 0.49   
  

 

 

   

 

 

 

Gross Margin Data (Continuing Operations):

    

New retail vehicles

     6.6     6.8

Fleet vehicles

     3.2     2.8

Total new vehicles

     6.4     6.6

Used vehicles

     7.3     8.0

Total vehicles retailed

     6.7     7.1

Wholesale vehicles

     (3.8 %)      (3.6 %) 

Parts, service and collision repair

     49.1     50.0

Finance, insurance and other

     100.0     100.0

Overall gross margin

     15.6     16.5

SG&A Expenses (Continuing Operations):

    

Personnel

   $ 415,161      $ 394,505   

Advertising

     41,197        36,445   

Rent and rent related

     94,269        97,151   

Other

     161,030        144,441   
  

 

 

   

 

 

 

Total

   $ 711,657      $ 672,542   

SG&A Expenses as % of Gross Profit

     78.7     81.0

Operating Margin %

     2.8     2.6

Unit Data (Continuing Operations):

    

New retail units

     83,204        71,809   

Fleet units

     6,686        6,042   
  

 

 

   

 

 

 

Total new units

     89,890        77,851   

Used units

     78,994        68,861   
  

 

 

   

 

 

 

Total units retailed

     168,884        146,712   

Wholesale units

     19,326        17,627   

Other Data:

    

Continuing Operations unit volume percentage changes:

    

New retail units

     15.9  

Fleet units

     10.7  

Total new units

     15.5  

Used units

     14.7  

Total units retailed

     15.1  

Wholesale units

     9.6  


Sonic Automotive, Inc.

Earnings Per Share Reconciliation (Unaudited)

(In thousands, except per share data)

 

     For the Third Quarter Ended September 30, 2011  
            Income
From  Continuing
Operations
     Income
From  Discontinued
Operations
     Net Income  
     Weighted
Average
Shares
     Amount     Per
Share
Amount
     Amount      Per
Share
Amount
     Amount     Per
Share
Amount
 

Earnings and shares

     52,366       $ 19,333         $ 68          $ 19,401     

Effect of participating securities:

                  

Non-vested restricted stock and stock units

     —           (253        —              (253  
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Basic earnings and shares

     52,366       $ 19,080      $ 0.36       $ 68       $ 0.01       $ 19,148      $ 0.37   

Effect of dilutive securities:

                  

Contingently convertible debt (5.0% Convertible Notes)

     12,590         2,366           —              2,366     

Stock compensation plans

     561                   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Diluted earnings and shares

     65,517       $ 21,446      $ 0.33       $ 68       $ —         $ 21,514      $ 0.33   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

     For the Third Quarter Ended September 30, 2010  
            Income
From  Continuing
Operations
     Loss
From  Discontinued
Operations
    Net Income  
     Weighted
Average
Shares
     Amount     Per
Share
Amount
     Amount     Per
Share
Amount
    Amount     Per
Share
Amount
 

Earnings (loss) and shares

     52,311       $ 13,949         $ (964     $ 12,985     

Effect of participating securities:

                

Non-vested restricted stock and stock units

     —           (137        —            (137  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings (loss) and shares

     52,311       $ 13,812      $ 0.26       $ (964   $ (0.01   $ 12,848      $ 0.25   

Effect of dilutive securities:

                

Contingently convertible debt (5.0% Convertible Notes)

     12,890         2,498           16          2,514     

Stock compensation plans

     650                 
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings (loss) and shares

     65,851       $ 16,310      $ 0.25       $ (948   $ (0.02   $ 15,362      $ 0.23   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

     For the Nine Months Ended September 30, 2011  
            Income
From  Continuing
Operations
     Loss
From  Discontinued
Operations
    Net Income  
     Weighted
Average
Shares
     Amount     Per
Share
Amount
     Amount     Per
Share
Amount
    Amount     Per
Share
Amount
 

Earnings (loss) and shares

     52,414       $ 57,275         $ (1,559     $ 55,716     

Effect of participating securities:

                

Non-vested restricted stock and stock units

     —           (744        —            (744  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings (loss) and shares

     52,414       $ 56,531      $ 1.08       $ (1,559   $ (0.03   $ 54,972      $ 1.05   

Effect of dilutive securities:

                

Contingently convertible debt (5.0% Convertible Notes)

     12,789         6,970           —            6,970     

Stock compensation plans

     597                 
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings (loss) and shares

     65,800       $ 63,501      $ 0.97       $ (1,559   $ (0.03   $ 61,942      $ 0.94   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

     For the Nine Months Ended September 30, 2010  
            Income
From  Continuing
Operations
     Loss
From  Discontinued
Operations
    Net Income  
     Weighted
Average
Shares
     Amount     Per
Share
Amount
     Amount     Per
Share
Amount
    Amount     Per
Share
Amount
 

Earnings (loss) and shares

     52,151       $ 30,107         $ (4,532     $ 25,575     

Effect of participating securities:

                

Non-vested restricted stock and stock units

     —           (295        —            (295  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings (loss) and shares

     52,151       $ 29,812      $ 0.57       $ (4,532   $ (0.09   $ 25,280      $ 0.48   

Effect of dilutive securities:

                

Contingently convertible debt (5.0% Convertible Notes)

     12,890         6,709           28          6,737     

Stock compensation plans

     670                 
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings (loss) and shares

     65,711       $ 36,521      $ 0.56       $ (4,504   $ (0.07   $ 32,017      $ 0.49