Exhibit 99.1

Sonic Automotive, Inc. Adjusted Diluted EPS Up 18%

Total Retail Unit Sales Increased 16.2%

CHARLOTTE, N.C. – October 23, 2012 – Sonic Automotive, Inc. (NYSE: SAH), one of the nation’s largest automotive retailers, today reported 2012 third quarter adjusted earnings from continuing operations of $23.1 million for a 14.9% increase over the prior year results. Adjusted earnings from continuing operations per diluted share increased 17.6% to $0.40 compared to $0.34 in the prior year quarter. Adjusted results exclude a pre-tax charge of approximately $18.5 million, or $0.19 per diluted share, related to costs associated with retiring its outstanding 5.0% Convertible Senior Notes due 2029 (“5% Notes”).

Q3 2012 Highlights – Near-Record Quarterly New Retail Unit Volume; Completed Debt Issuance and Tender Process for 5% Convertible Notes; Costs In Line with Yearly Expectation

 

   

Total Q3 revenues up 11.7% over prior year quarter

 

   

New vehicle retail units up 25.2%

 

   

Used vehicle retail units up 6.6%

 

   

Parts and Service gross profit up 1.7%, up 3.3% when adjusted for selling days

 

   

SG&A to gross profit % improved to 77.6% from 77.9% in the prior year quarter

B. Scott Smith, the Company’s President, noted, “We are pleased with our performance in the third quarter. Our operating performance stayed on track while we eliminated the last remnant of debt associated with our debt restructuring activities in 2009. We believe we have positioned the company for continued success by eliminating a significant ownership dilution risk through repurchasing the remaining 5% Notes during the quarter. This strategic action has simplified our capital structure and improved our debt profile by pushing our earliest public debt maturity back out to 2018.”

The Company’s EVP of Operations, Jeff Dyke, commented, “Our quarterly new retail vehicle unit volume of 33,737 units is the second highest level our complement of stores has ever achieved. The record occurred in the third quarter of 2006 when the quarterly SAAR averaged 16.6 million units compared to the current SAAR of 14.5 million units. We would like to thank our customers, our manufacturer partners and our associates for working together to help us achieve this performance. All the while, we were able to operate efficiently by controlling costs as evidenced by a 30 bps improvement in our SG&A to gross percentage to 77.6% from the prior year quarter. We continue to leverage technology and data to improve our customers’ experience in our stores and create value. For example, our new SIMS (Sonic Inventory Management System) and Retail Trade Center Process will completely revolutionize the way we manage, price and retail inventory across our stores. We anticipate completing the roll out of these systems in February of 2013 with the full benefits of the systems yielding results in the second quarter of 2013. We believe this will be another catalyst in driving our pre-owned performance in 2013.”


Third 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: 36761316

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: 36761316

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 used 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 June 30, 2012. The Company does not undertake any obligation to update forward-looking information.


Sonic Automotive, Inc.

Results of Operations (Unaudited)

(Dollars and shares in thousands, except per share amounts)

 

     Third Quarter Ended
September 30, 2012
    Third Quarter Ended
September 30, 2011
 
     Reported     Adjustments     Adjusted     Reported     Adjustments      Adjusted  

Revenues:

             

New retail vehicles

   $ 1,172,064      $ —        $ 1,172,064      $ 974,850      $ —         $ 974,850   

Fleet vehicles

     37,302        —          37,302        52,319        —           52,319   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total new vehicles

     1,209,366        —          1,209,366        1,027,169        —           1,027,169   

Used vehicles

     534,028        —          534,028        509,751        —           509,751   

Wholesale vehicles

     53,088        —          53,088        47,137        —           47,137   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total vehicles

     1,796,482        —          1,796,482        1,584,057        —           1,584,057   

Parts, service and collision repair

     290,897        —          290,897        287,105        —           287,105   

Finance, insurance and other

     64,867        —          64,867        54,974        —           54,974   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total revenues

     2,152,246        —          2,152,246        1,926,136        —           1,926,136   

Gross profit

     307,659        —          307,659        293,384        —           293,384   

Selling, general and administrative expenses

     (238,680     —          (238,680     (228,563     —           (228,563

Impairment charges

     (23     —          (23     (102     —           (102

Depreciation and amortization

     (11,375     —          (11,375     (10,137     —           (10,137
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Operating income (loss)

     57,581        —          57,581        54,582        —           54,582   

Other income (expense):

             

Interest expense, floor plan

     (4,858     —          (4,858     (4,163     —           (4,163

Interest expense, other, net

     (15,709     1,167        (14,542     (16,941     —           (16,941

Other income (expense), net

     (17,275     17,320        45        (811     —           (811
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total other income (expense)

     (37,842     18,487        (19,355     (21,915     —           (21,915
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Income (loss) from continuing operations before taxes

     19,739        18,487        38,226        32,667        —           32,667   

Provision for income taxes—benefit (expense)

     (7,899     (7,210     (15,109     (12,556     —           (12,556
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Income (loss) from continuing operations

     11,840        11,277        23,117        20,111        —           20,111   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Income (loss) from discontinued operations

     (1,798     —          (1,798     (710     —           (710
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Net income (loss)

   $ 10,042      $ 11,277      $ 21,319      $ 19,401      $ —         $ 19,401   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Diluted earnings (loss) per common share:

             

Earnings (loss) per share from continuing operations

   $ 0.21      $ 0.19      $ 0.40      $ 0.34      $ —         $ 0.34   

Earnings (loss) per share from discontinued operations

     (0.03     —          (0.03     (0.01     —           (0.01
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Earnings (loss) per common share

   $ 0.18      $ 0.19      $ 0.37      $ 0.33      $ —         $ 0.33   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Weighted average common shares outstanding

     59,011        —          59,011        65,517        —           65,517   

Gross Margin Data (Continuing Operations):

             

New retail vehicles

     5.7       5.7     6.7        6.7

Fleet vehicles

     2.5       2.5     3.2        3.2

Total new vehicles

     5.6       5.6     6.5        6.5

Used vehicles

     6.8       6.8     6.6        6.6

Wholesale vehicles

     (6.5 )%        (6.5 )%      (4.7 )%         (4.7 )% 

Parts, service and collision repair

     48.9       48.9     48.7        48.7

Finance, insurance and other

     100.0       100.0     100.0        100.0

Overall gross margin

     14.3       14.3     15.2        15.2

SG&A Expenses (Continuing Operations):

             

Compensation

   $ 142,368          $ 134,001        

Advertising

     12,871            13,091        

Rent and rent related

     27,063            28,728        

Other

     56,378            52,743        
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total SG&A expenses

   $ 238,680      $ —        $ 238,680      $ 228,563      $ —         $ 228,563   

SG&A expenses as % of gross profit

     77.6       77.6     77.9        77.9

Operating Margin %

     2.7       2.7     2.8        2.8

Unit Data (Continuing Operations):

             

New retail units

     33,737            26,955        

Fleet units

     1,325            2,031        
  

 

 

       

 

 

      

Total new units

     35,062            28,986        

Used units

     27,018            25,334        

Wholesale units

     9,074            7,039        


Sonic Automotive, Inc.

Results of Operations (Unaudited)

(Dollars and shares in thousands, except per share amounts)

 

     Nine Months Ended
September 30, 2012
    Nine Months Ended
September 30, 2011
 
     Reported     Adjustments     Adjusted     Reported     Adjustments      Adjusted  

Revenues:

             

New retail vehicles

   $ 3,325,877      $ —        $ 3,325,877      $ 2,820,020      $ —         $ 2,820,020   

Fleet vehicles

     126,585        —          126,585        170,337        —           170,337   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total new vehicles

     3,452,462        —          3,452,462        2,990,357        —           2,990,357   

Used vehicles

     1,581,682        —          1,581,682        1,489,098        —           1,489,098   

Wholesale vehicles

     140,670        —          140,670        122,261        —           122,261   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total vehicles

     5,174,814        —          5,174,814        4,601,716        —           4,601,716   

Parts, service and collision repair

     885,412        —          885,412        857,541        —           857,541   

Finance, insurance and other

     187,199        —          187,199        157,175        —           157,175   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total revenues

     6,247,425        —          6,247,425        5,616,432        —           5,616,432   

Gross profit

     930,368        —          930,368        875,544        —           875,544   

Selling, general and administrative expenses

     (722,446     —          (722,446     (682,442     —           (682,442

Impairment charges

     (57     —          (57     (160     —           (160

Depreciation and amortization

     (33,636     —          (33,636     (29,457     —           (29,457
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Operating income (loss)

     174,229        —          174,229        163,485        —           163,485   

Other income (expense):

             

Interest expense, floor plan

     (14,101     —          (14,101     (14,031     —           (14,031

Interest expense, other, net

     (46,186     1,167        (45,019     (50,957     —           (50,957

Other income (expense), net

     (19,808     19,898        90        (741     —           (741
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total other income (expense)

     (80,095     21,065        (59,030     (65,729     —           (65,729
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Income (loss) from continuing operations before taxes

     94,134        21,065        115,199        97,756        —           97,756   

Provision for income taxes—benefit (expense)

     (32,596     (11,783     (44,379     (38,673     —           (38,673
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Income (loss) from continuing operations

     61,538        9,282        70,820        59,083        —           59,083   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Income (loss) from discontinued operations

     (2,819     —          (2,819     (3,367     —           (3,367
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Net income (loss)

   $ 58,719      $ 9,282      $ 68,001      $ 55,716      $ —         $ 55,716   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Diluted earnings (loss) per common share:

             

Earnings (loss) per share from continuing operations

   $ 1.05      $ 0.14      $ 1.19      $ 0.99      $ —         $ 0.99   

Earnings (loss) per share from discontinued operations

     (0.05     —          (0.05     (0.05     —           (0.05
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Earnings (loss) per common share

   $ 1.00      $ 0.14      $ 1.14      $ 0.94      $ —         $ 0.94   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Weighted average common shares outstanding

     62,300        —          62,300        65,800        —           65,800   

Gross Margin Data (Continuing Operations):

             

New retail vehicles

     6.0       6.0     6.7        6.7

Fleet vehicles

     2.9       2.9     3.2        3.2

Total new vehicles

     5.9       5.9     6.5        6.5

Used vehicles

     7.1       7.1     7.3        7.3

Wholesale vehicles

     (3.2 )%        (3.2 )%      (3.6 )%         (3.6 )% 

Parts, service and collision repair

     48.9       48.9     49.1        49.1

Finance, insurance and other

     100.0       100.0     100.0        100.0

Overall gross margin

     14.9       14.9     15.6        15.6

SG&A Expenses (Continuing Operations):

             

Compensation

   $ 431,456          $ 400,203        

Advertising

     38,330            39,065        

Rent and rent related

     81,724            88,668        

Other

     170,936            154,506        
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total SG&A expenses

   $ 722,446      $ —        $ 722,446      $ 682,442      $ —         $ 682,442   

SG&A expenses as % of gross profit

     77.7       77.7     77.9        77.9

Operating Margin %

     2.8       2.8     2.9        2.9

Unit Data (Continuing Operations):

             

New retail units

     96,249            80,550        

Fleet units

     4,616            6,630        
  

 

 

       

 

 

      

Total new units

     100,865            87,180        

Used units

     79,732            75,381        

Wholesale units

     24,116            18,633        


Sonic Automotive, Inc.

Results of Operations (Unaudited)

(In thousands, except per share amounts)

 

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

Reported:

                

Earnings (loss) and shares

     55,069       $ 11,840         $ (1,798     $ 10,042     

Effect of participating securities:

                

Non-vested restricted stock and stock units

        (175        —            (175  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings (loss) and shares

     55,069       $ 11,665      $ 0.21       $ (1,798   $ (0.03   $ 9,867      $ 0.18   

Effect of dilutive securities:

                

Contingently convertible debt (5.0% Convertible Notes)

     3,534         618           2          620     

Stock compensation plans

     408                 
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings (loss) and shares

     59,011       $ 12,283      $ 0.21       $ (1,796   $ (0.03   $ 10,487      $ 0.18   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Adjustments (net of tax):

                

Double-carry interest

      $ 712      $ 0.01       $ —        $ —        $ 712      $ 0.01   

Debt extinguishment charges

        10,565        0.18         —          —          10,565        0.18   
     

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total adjustments

      $ 11,277      $ 0.19       $ —        $ —        $ 11,277      $ 0.19   

Adjusted:

                
       

 

 

      

 

 

     

 

 

 

Diluted earnings (loss) per share

        $ 0.40         $ (0.03     $ 0.37   
       

 

 

      

 

 

     

 

 

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

Reported:

                

Earnings (loss) and shares

     52,366       $ 20,111         $ (710     $ 19,401     

Effect of participating securities:

                

Non-vested restricted stock and stock units

        (263        —            (263  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings (loss) and shares

     52,366       $ 19,848      $ 0.38       $ (710   $ (0.01   $ 19,138      $ 0.37   

Effect of dilutive securities:

                

Contingently convertible debt (5.0% Convertible Notes)

     12,590         2,329           37          2,366     

Stock compensation plans

     561                 
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings (loss) and shares

     65,517       $ 22,177      $ 0.34       $ (673   $ (0.01   $ 21,504      $ 0.33   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted:

                
       

 

 

      

 

 

     

 

 

 

Diluted earnings (loss) per share

        $ 0.34         $ (0.01     $ 0.33   
       

 

 

      

 

 

     

 

 

 


Sonic Automotive, Inc.

Results of Operations (Unaudited)

(In thousands, except per share amounts)

 

     Nine Months Ended September 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
 

Reported:

               

Earnings (loss) and shares

     53,302       $ 61,538        $ (2,819     $ 58,719     

Effect of participating securities:

               

Non-vested restricted stock and stock units

        (934       —            (934  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings (loss) and shares

     53,302       $ 60,604      $ 1.14      $ (2,819   $ (0.06   $ 57,785      $ 1.08   

Effect of dilutive securities:

               

Contingently convertible debt (5.0% Convertible Notes)

     8,563         4,638          43          4,681     

Stock compensation plans

     435                
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings (loss) and shares

     62,300       $ 65,242      $ 1.05      $ (2,776   $ (0.05   $ 62,466      $ 1.00   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjustments (net of tax):

               

Double-carry interest

      $ 712      $ 0.01      $ —        $ —        $ 712      $ 0.01   

Debt extinguishment charges

        12,138        0.19        —          —          12,138        0.19   

Settlement of state tax examination

        (3,568     (0.06     —          —          (3,568     (0.06
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total adjustments

      $ 9,282      $ 0.14      $ —        $ —        $ 9,282      $ 0.14   

Adjusted:

               
       

 

 

     

 

 

     

 

 

 

Diluted earnings (loss) per share

        $ 1.19        $ (0.05     $ 1.14   
       

 

 

     

 

 

     

 

 

 
     Nine Months Ended September 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
 

Reported:

               

Earnings (loss) and shares

     52,414       $ 59,083        $ (3,367     $ 55,716     

Effect of participating securities:

               

Non-vested restricted stock and stock units

        (773       —            (773  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings (loss) and shares

     52,414       $ 58,310      $ 1.11      $ (3,367   $ (0.06   $ 54,943      $ 1.05   

Effect of dilutive securities:

               

Contingently convertible debt (5.0% Convertible Notes)

     12,789         6,851          119          6,970     

Stock compensation plans

     597                
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings (loss) and shares

     65,800       $ 65,161      $ 0.99      $ (3,248   $ (0.05   $ 61,913      $ 0.94   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted:

               
       

 

 

     

 

 

     

 

 

 

Diluted earnings (loss) per share

        $ 0.99        $ (0.05     $ 0.94