Exhibit 99.1

Sonic Automotive, Inc. Diluted EPS Up 21%

Continuing Operations Net Income Improves 20%

CHARLOTTE, N.C. – July 23, 2012Sonic Automotive, Inc. (NYSE: SAH), one of the nation’s largest automotive retailers, today reported 2012 second quarter earnings from continuing operations of $27.5 million for an 20% increase over the prior year results. Earnings from continuing operations per diluted share increased 21% to $0.46 compared to $0.38 in the prior year quarter.

Q2 2012 Highlights – Record Quarterly Used Unit Volume; Continued to Improve Same Store Revenue Through Investments in the Base Business; Improvements Realized Across All Revenue Streams

 

   

Total Q2 revenues up 12.3% over prior year quarter

 

   

New vehicle retail revenue up 21.3%

 

   

Used vehicle revenue up 4.0%

 

   

Parts and Service revenue up 3.2%

 

   

SG&A to gross profit % up slightly to 77.8% from 77.5% in the prior year quarter

Second quarter 2012 results include 1) the unfavorable effect of approximately $0.03 per fully diluted share related to a loss recorded on the repurchase of $20.2 million principal amount of Sonic’s 5% Convertible Senior Notes and 2) the favorable effect of approximately $0.06 per fully diluted share related to the settlement of certain tax matters.

B. Scott Smith, the Company’s President, noted, “We continue to make progress improving all aspects of our business. During the second quarter, we have taken actions to improve our capital structure through the issuance of low-cost, long-term debt and the associated outstanding tender offer for our remaining 5% Convertible Senior Notes. We have also settled an outstanding tax matter on terms favorable and acceptable to us. All the while, we have continued to lay the foundation to become one of America’s best places to work and shop. Our dedication to customers we serve and our associates led to the results achieved this quarter.”

Following up on B. Scott Smith’s comments, Jeff Dyke, the Company’s EVP of Operations noted, “We are extremely pleased with our double-digit revenue growth driven partially by record used vehicle unit volume. New and used vehicle unit volume growth fueled our fixed operations and F&I business lines which were able to collectively increase gross profit by $13.2 million. We are continuing to see the benefits of our technology and training investments. We believe the consistent execution of our processes coupled with our dedication to highly qualified associates will allow us to drive profitability and provide an exceptional customer experience.”

Subsequent to the end of the second quarter, Sonic’s Board of Directors authorized an additional $100 million to be used in the Company’s share repurchase program. When combined with previously unused authorized amounts, Sonic has approximately $130 million of total authorization from its Board of Directors to repurchase shares of the Company’s Class A Common Stock.


Second Quarter Earnings Conference Call

Senior management will host a conference call today at 11:00 A.M. (Eastern) to discuss the quarter’s results. To access the live broadcast of the call over the Internet go to: www.sonicautomotive.com, then click on “Our Company”, then “Investor Relations”, then “Earnings Conference Calls”.

Presentation materials for the conference call 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”.

The conference call will also be available live by dialing in 10 minutes prior to the start of the call at:

Domestic: 1.877.791.3416

International: 1.706.643.0958

Conference ID: 94848488

A conference call replay will be available one hour following the call for seven days and can be accessed by calling:

Domestic: 1.855.859.2056

International: 1.404.537.3406

Conference ID: 94848488

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 anticipated growth in new vehicle sales, and future success and impacts from the implementation of our strategic initiatives. 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 industry sales volume, the success of our operational strategies, the rate and timing of overall economic recovery or decline, and the risk factors described in the Company’s annual report on Form 10-K for the year ending December 31, 2011 and quarterly report on Form 10-Q for the period ended March 31, 2012. The Company does not undertake any obligation to update forward-looking information.


Sonic Automotive, Inc.

Results of Operations (Unaudited)

(Dollars in thousands, except per share data)

 

       Second Quarter Ended June 30,   
       2012            2011   

Revenues

                      

New retail vehicles

     $                      1,176,781           $                      969,828    

Fleet vehicles

       44,516             55,449    

Total new vehicles

       1,221,297             1,025,277    

Used vehicles

       550,040             529,107    

Wholesale vehicles

       43,984             41,136    

Total vehicles

       1,815,321             1,595,520    

Parts, service and collision repair

       304,570             295,094    

Finance, insurance and other

       65,338             55,369    

Total revenues

       2,185,229             1,945,983    

Total gross profit

       320,772             305,934    

Selling, general and administrative expenses

       (249,525)             (237,092)   

Impairment charges

       (33)             (41)   

Depreciation and amortization

       (11,390)             (9,699)   

Operating income (loss)

       59,824             59,102    

Interest expense, floor plan

       (5,053)             (4,914)   

Interest expense, other, net

       (12,712)             (15,339)   

Interest expense, non-cash, convertible debt

       (1,413)             (1,715)   

Interest income (expense/amortization), non-cash, cash flow swaps

       83             (464)   

Other income (expense), net

       (2,550)             15    

Income (loss) from continuing operations before taxes

       38,179             36,685    

Provision for income taxes - benefit (expense)

       (10,646)             (13,691)   

Income (loss) from continuing operations

       27,533             22,994    

Income (loss) from discontinued operations

       646             (1,643)   

Net income (loss)

     $ 28,179           $ 21,351    

Diluted:

                      

Weighted average common shares outstanding

       63,506             65,936    
                        

Earnings (loss) per share from continuing operations

     $ 0.46           $ 0.38    

Earnings (loss) per share from discontinued operations

       0.01             (0.03)   

Earnings (loss) per share

     $ 0.47           $ 0.35    
            

Gross Margin Data (Continuing Operations):

          
                        

New retail vehicles

       6.0%             6.8%    

Fleet vehicles

       2.8%             3.3%    

Total new vehicles

       5.8%             6.6%    

Used vehicles

       6.7%             7.4%    

Wholesale vehicles

       (3.3%)             (4.5%)   

Parts, service and collision repair

       48.9%             49.3%    

Finance, insurance and other

       100.0%             100.0%    

Overall gross margin

       14.7%             15.7%    
                        

SG&A Expenses (Continuing Operations):

          
                        

Compensation

     $ 148,569           $ 137,888    

Advertising

       13,684             13,425    

Rent and rent related

       28,516             32,664    

Other

       58,756             53,115    

Total

     $ 249,525           $ 237,092    
                        

SG&A Expenses as % of Gross Profit

       77.8%             77.5%    
                        

Operating Margin %

       2.7 %             3.0%    
            

Unit Data (Continuing Operations):

          
            

New retail units

       34,396             28,125    

Fleet units

       1,630             2,151    

Total new units

       36,026             30,276    

Used units

       27,528             26,799    

Wholesale units

       7,939             6,310    
          

Other Data:

          
            

Continuing Operations revenue percentage changes:

                

New retail vehicles

       21.3%          

Fleet vehicles

       (19.7%)          

Total new vehicles

       19.1%          

Used vehicles

       4.0%          

Parts, service and collision repair

       3.2%          

Finance, insurance and other

       18.0%          

Total revenues

       12.3%          


Sonic Automotive, Inc.

Results of Operations (Unaudited)

(Dollars in thousands, except per share data)

 

       Six Months Ended June 30,   
       2012            2011   

Revenues

                      

New retail vehicles

     $                      2,195,317            $                  1,878,682    

Fleet vehicles

       90,433              119,088    

Total new vehicles

       2,285,750              1,997,770    

Used vehicles

       1,067,092              1,003,662    

Wholesale vehicles

       89,325              76,182    

Total vehicles

       3,442,167              3,077,614    

Parts, service and collision repair

       606,318              582,195    

Finance, insurance and other

       124,587              104,471    

Total revenues

       4,173,072              3,764,280    

Total gross profit

       632,641              593,173    

Selling, general and administrative expenses

       (497,005)             (466,109)   

Impairment charges

       (34)             (58)   

Depreciation and amortization

       (22,461)             (19,595)   

Operating income (loss)

       113,141              107,411    

Interest expense, floor plan

       (9,527)             (10,280)   

Interest expense, other, net

       (27,791)             (30,698)   

Interest expense, non-cash, convertible debt

       (3,043)             (3,409)   

Interest income (expense/amortization), non-cash, cash flow swaps

       105              (286)   

Other income (expense), net

       (2,530)             88    

Income (loss) from continuing operations before taxes

       70,355              62,826    

Provision for income taxes—benefit (expense)

       (23,354)             (24,147)   

Income (loss) from continuing operations

       47,001              38,679    

Income (loss) from discontinued operations

       1,676              (2,364)   

Net income (loss)

     $ 48,677            $ 36,315    

Diluted:

                      

Weighted average common shares outstanding

       63,963              65,943    
                        

Earnings (loss) per share from continuing operations

     $ 0.79            $ 0.65    

Earnings (loss) per share from discontinued operations

       0.02              (0.04)   

Earnings (loss) per share

     $ 0.81            $ 0.61    
            

Gross Margin Data (Continuing Operations):

          
                        

New retail vehicles

       6.1%              6.6%    

Fleet vehicles

       3.1%              3.2%    

Total new vehicles

       6.0%              6.4%    

Used vehicles

       7.2%              7.6%    

Wholesale vehicles

       (1.4%)             (3.0%)   

Parts, service and collision repair

       48.8%              49.3%    

Finance, insurance and other

       100.0%              100.0%    

Overall gross margin

       15.2%              15.8%    
            

SG&A Expenses (Continuing Operations):

          
                        

Compensation

     $ 296,102            $ 272,689    

Advertising

       26,727              26,865    

Rent and rent related

       57,209              62,455    

Other

       116,967              104,100    

Total

     $ 497,005              $466,109    
                        

SG&A Expenses as % of Gross Profit

       78.6%              78.6%    
                        

Operating Margin %

       2.7%              2.9%    
            

Unit Data (Continuing Operations):

          
                        

New retail units

       64,081              54,828    

Fleet units

       3,335              4,639    

Total new units

       67,416              59,467    

Used units

       54,075              51,694    

Wholesale units

       15,465              11,893    
            

Other Data:

          
            

Continuing Operations revenue percentage changes:

                

New retail vehicles

       16.9%           

Fleet vehicles

       (24.1%)          

  Total new vehicles

       14.4%           

Used vehicles

       6.3%           

Parts, service and collision repair

       4.1%           

Finance, insurance and other

       19.3%           

  Total revenues

       10.9%           


Sonic Automotive, Inc.

Earnings Per Share Reconciliation (Unaudited)

(Dollars in thousands, except per share data)

 

     Second Quarter Ended June 30, 2012  
            Income (Loss)
From Continuing
Operations
     Income (Loss)
From Discontinued
Operations
     Net Income (Loss)  
     Weighted
Average
Shares
     Amount     Per
Share
Amount
     Amount      Per
Share
Amount
     Amount     Per
Share
Amount
 

Earnings (loss) and shares

     52,593       $ 27,533         $ 646          $ 28,179     

Effect of participating securities:

                  

Non-vested restricted stock and stock units

        (429                   (429  
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Basic earnings (loss) and shares

     52,593       $ 27,104      $ 0.52       $ 646       $ 0.01       $ 27,750      $ 0.53   

Effect of dilutive securities:

                  

Contingently convertible debt (5.0% Convertible Notes)

     10,535         1,889                      1,889     

Stock compensation plans

     378                   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Diluted earnings (loss) and shares

     63,506       $ 28,993      $ 0.46       $ 646       $ 0.01       $ 29,639      $ 0.47   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

     Second Quarter Ended June 30, 2011  
            Income (Loss)
From Continuing
Operations
     Income (Loss)
From Discontinued
Operations
    Net Income (Loss)  
     Weighted
Average
Shares
     Amount     Per
Share
Amount
     Amount     Per
Share
Amount
    Amount     Per
Share
Amount
 

Earnings (loss) and shares

     52,461       $ 22,994         $ (1,643     $ 21,351     

Effect of participating securities:

                

Non-vested restricted stock and stock units

        (302                 (302  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings (loss) and shares

     52,461       $ 22,692      $ 0.43       $ (1,643   $ (0.03   $ 21,049      $ 0.40   

Effect of dilutive securities:

                

Contingently convertible debt (5.0% Convertible Notes)

     12,890         2,280           14          2,294     

Stock compensation plans

     585                 
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings (loss) and shares

     65,936       $ 24,972      $ 0.38       $ (1,629   $ (0.03   $ 23,343      $ 0.35   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

     Six Months Ended June 30, 2012  
            Income (Loss)
From Continuing
Operations
     Income (Loss)
From Discontinued
Operations
     Net Income (Loss)  
     Weighted
Average
Shares
     Amount     Per
Share
Amount
     Amount      Per
Share
Amount
     Amount     Per
Share
Amount
 

Earnings (loss) and shares

     52,409       $ 47,001         $ 1,676          $ 48,677     

Effect of participating securities:

                  

Non-vested restricted stock and stock units

        (729                   (729  
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Basic earnings (loss) and shares

     52,409       $ 46,272      $ 0.88       $ 1,676       $ 0.03       $ 47,948      $ 0.91   

Effect of dilutive securities:

                  

Contingently convertible debt (5.0% Convertible Notes)

     11,106         4,056           5            4,061     

Stock compensation plans

     448                   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Diluted earnings (loss) and shares

     63,963       $ 50,328      $ 0.79       $ 1,681       $ 0.02       $ 52,009      $ 0.81   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

     Six Months Ended June 30, 2011  
            Income (Loss)
From Continuing
Operations
     Income (Loss)
From Discontinued
Operations
    Net Income (Loss)  
     Weighted
Average
Shares
     Amount     Per
Share
Amount
     Amount     Per
Share
Amount
    Amount     Per
Share
Amount
 

Earnings (loss) and shares

     52,438       $ 38,679         $ (2,364     $ 36,315     

Effect of participating securities:

                

Non-vested restricted stock and stock units

        (508                 (508  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings (loss) and shares

     52,438       $ 38,171      $ 0.73       $ (2,364   $ (0.05   $ 35,807      $ 0.68   

Effect of dilutive securities:

                

Contingently convertible debt (5.0% Convertible Notes)

     12,890         4,576           28          4,604     

Stock compensation plans

     615                 
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings (loss) and shares

     65,943       $ 42,747      $ 0.65       $ (2,336   $ (0.04   $ 40,411      $ 0.61