Exhibit 99.1

FOR IMMEDIATE RELEASE

Sonic Automotive, Inc. Posts All-Time Record New Vehicle Retail and Fixed Operations Gross Profits - True Price® Strategy Gains Traction

CHARLOTTE, N.C. – February 19, 2014Sonic Automotive, Inc. (NYSE: SAH), one of the nation’s largest automotive retailers, today reported fourth quarter of 2013 adjusted diluted earnings per share from continuing operations of $0.67, an increase of 28.8% compared to $0.52 in the prior year quarter. 2013 fourth quarter adjusted net income from continuing operations was $35.5 million, a 23.4% increase over prior year fourth quarter results of $28.8 million. On an unadjusted basis, fourth quarter 2013 diluted earnings per share from continuing operations were $0.55, compared to $0.52 in the prior year quarter.

For the full year 2013, Sonic Automotive grew adjusted diluted earnings per share from continuing operations by 18.0% to $2.03 per diluted share, compared to an adjusted amount of $1.72 per diluted share in the 2012. On an unadjusted basis, full year 2013 diluted earnings per share from continuing operations were $1.59, compared to $1.56 in the prior year. See the accompanying tables for reconciliation between all adjusted and unadjusted amounts.

Q4 2013 and 2013 Annual Highlights

 

    All-time record new retail unit sales for Q4 and full year 2013 of 34,001 and 132,363, respectively.

 

    All-time record Q4 new retail gross profit of $82.1 million.

 

    All-time record fixed operations gross profit for Q4 and full year 2013 of $152.6 million and $597.1 million, respectively.

 

    All-time record used retail unit and gross profit for full year 2013 of 107,054 units and $150.4 million, respectively.

 

    Record Q4 used retail unit sales of 26,354.

 

    Total revenues up 5.8% in Q4 over prior year quarter, and up 5.7% over the prior full year.

 

    New vehicle retail revenue up 3.1% in Q4 over the prior year quarter, and up 6.0% over the prior full year.

 

    Used vehicle retail revenue up 12.7% in Q4 over the prior year quarter, and up 6.0% over the prior full year.

 

    Fixed Operations (Parts, Service & Collision) revenue up $29.8 million in Q4 over the prior year quarter, or 10.4%, and up $67.9 million, or 5.8%, over the prior full year.

 

    Full year SG&A to gross profit of 77.1%.


Sonic Automotive’s EVP of Operations, Jeff Dyke, commented, “Wow what a year for Sonic Automotive! We made great progress as we continued the process of preparing our Company for the long-term growth. I am very pleased with Q4 results that included our largest profit quarter in our history, absent the non-cash impairment charges. This kind of performance amidst all of the change our team endured to prepare for our One Sonic-One Experience transition and the work going into our stand-alone pre-owned concept further highlights the strength and talent of our operations team and the mix of quality brands we proudly represent. We continue to execute at a very high level and there is no question our Playbook execution strategy implemented years ago is a very big part of our success. The creation of a customer-centric culture has allowed Sonic Automotive to develop technologies, processes, branding and marketing that our industry has never experienced. We are very excited to unveil our work beginning this year as we start the rollout One Sonic-One Experience and we introduce the Denver market to a very special pre-owned concept. 2014 is going to be another challenging year for our team with all of the changes we plan but, if history is any indication, our team will succeed in executing these initiatives and I can’t wait to see them go to work. It’s going to be fun!”

Growth & Operating Strategies

Commenting on 2013 results and the 2014 outlook, B. Scott Smith, Sonic Automotive’s President, noted, “The 2013 year was a transition year for us. We were able to improve our capital structure earlier in the year by replacing costly 9% notes with 5% notes. This action will save us over $15 million over the long-term as we strive to continually increase shareholder value. Our balance sheet has never been stronger. Going forward, we are committed to the following growth and operating strategies:

 

    Stand-alone pre-owned stores

 

    One Sonic-One Experience (customer experience initiative)

 

    Franchise acquisitions

 

    Own dealership properties

 

    Return capital to shareholders

As we have demonstrated over the last several years, one of our core competencies and competitive advantages is our ability to execute in the pre-owned space. We intend to capitalize on this strength. In addition, through our One Sonic-One Experience initiative, we intend to leverage the Sonic Automotive brand by changing the way customers shop and buy vehicles at our stores. The customer will drive the process and we will do everything we can to make their buying experience the best they’ve ever had. We are on track to opening our first pre-owned store in Denver in the fourth quarter of 2014 and we will be working diligently in 2014 to ultimately bring both of these initiatives to our customers.”

“Our growth strategy also includes opportunistic acquisitions in markets where we currently conduct business, development of open points in coordination with our manufacturing partners and the possibility of the acquisition of substantial dealership platforms that would augment our current operations. Our purchase of a BMW store and a Mercedes Benz store in the Denver market in 2013 demonstrates our commitment to continual growth. These two stores are expected to add approximately $200 million to our annual revenues. We have also continued to strengthen our balance sheet in 2013 by investing over $75 million in our properties. We added ten stores to our portfolio of owned properties increasing the percentage of properties owned to 31%. By the end of 2017, we expect to own approximately 45% of our properties. In addition, during 2013 we returned $17.1 million to shareholders through share repurchases and approximately $5.3 million in declared dividends. At December 31, 2013, our common stock repurchase authorization was $133 million.”

“We expect the automotive retailing sector to continue to grow in 2014 and are anticipating 2014 new vehicle industry volume of between 15.75 million units and 16.25 million units. We will have additional comments on our 2014 outlook in our earnings call later today.”


Fourth 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 Sonic Automotive’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: 1.877.441.0824

International: 1.706.643.0958

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

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.

The results reported in this press release, the accompanying summary tables and the presentation materials for the conference call today at 11:00 AM (Eastern) are preliminary and unaudited and are subject to change upon completion of the audit for our financial statements for the period ended December 31, 2013.

This release contains certain non-GAAP financial measures as defined under SEC rules, such as, but not limited to, adjusted income from continuing operations and related earnings per share data. The Company has reconciled these measures to the most directly comparable GAAP measures in the accompanying tables. The Company believes that these non-GAAP financial measures improve the transparency of the Company’s disclosure by providing period-to-period comparability of the Company’s results from operations.

Included herein are forward-looking statements, including statements with respect to anticipated 2013 industry new vehicle sales volume, the implementation of growth and operating strategies, including acquisitions of dealerships and properties, the development of open points and stand-alone pre-owned stores, the return of capital to shareholders and anticipated 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, 2012 and quarterly report on Form 10-Q for the period ended September 30, 2013. The Company does not undertake any obligation to update forward-looking information.

###


Sonic Automotive, Inc.

Results of Operations (Unaudited)

 

This release contains certain non-GAAP financial measures (the “Adjusted” columns) as defined under SEC rules, such as, but not limited to, adjusted income from continuing operations and related earnings per share data. The Company has reconciled these measures to the most directly comparable GAAP measures (the “Reported” columns) in the release. The Company believes that these non-GAAP financial measures improve the transparency of the Company’s disclosure by providing period-to-period comparability of the Company’s results from operations.

 

    Fourth Quarter Ended December 31, 2013     Fourth Quarter Ended December 31, 2012  
        Reported             Adjustments             Adjusted             Reported             Adjustments             Adjusted      
    (In thousands, except per share and unit amounts)  

Revenues:

           

New retail vehicles

    $         1,299,444          $ -              $         1,299,444          $         1,259,924          $ -              $         1,259,924     

Fleet vehicles

    38,254          -              38,254          43,130          -              43,130     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total new vehicles

    1,337,698          -              1,337,698          1,303,054          -              1,303,054     

Used vehicles

    551,028          -              551,028          489,063          -              489,063     

Wholesale vehicles

    40,772          -              40,772          44,820          -              44,820     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total vehicles

    1,929,498          -              1,929,498          1,836,937          -              1,836,937     

Parts, service and collision repair

    316,888          -              316,888          287,113          -              287,113     

Finance, insurance and other, net

    68,983          -              68,983          64,685          -              64,685     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

    2,315,369          -              2,315,369          2,188,735          -              2,188,735     

Gross profit

    338,700          -              338,700          314,119          -              314,119     

Selling, general and administrative expenses

    (254,647)         -              (254,647)         (236,798)         -              (236,798)    

Impairment charges

    (9,803)         9,803   (1)      -              (383)         -              (383)    

Depreciation and amortization

    (14,986)         -              (14,986)         (11,886)         -              (11,886)    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

    59,264          9,803          69,067          65,052          -              65,052     

Other income (expense):

           

Interest expense, floor plan

    (5,688)         -              (5,688)         (5,534)         -              (5,534)    

Interest expense, other, net

    (13,183)         -              (13,183)         (14,215)         -              (14,215)    

Other income (expense), net

    1          -              1          183          -              183     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expense)

    (18,870)         -              (18,870)         (19,566)         -              (19,566)    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations before taxes

    40,394          9,803          50,197          45,486          -              45,486     

Provision for income taxes - benefit (expense)

    (10,832)         (3,823)         (14,655)         (16,694)         -              (16,694)    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations

    29,562          5,980          35,542          28,792          -              28,792     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from discontinued operations

    (1,478)         -              (1,478)         1,590          -              1,590     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

    $ 28,084          $ 5,980          $ 34,064          $ 30,382          $ -              $ 30,382     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings (loss) per common share:

           

Earnings (loss) per share from continuing operations

    $ 0.55          $ 0.12          $ 0.67          $ 0.52          $ -              $ 0.52     

Earnings (loss) per share from discontinued operations

    (0.02)         (0.01)         (0.03)         0.03          -              0.03     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings (loss) per common share

    $ 0.53          $ 0.11          $ 0.64          $ 0.55          $ -              $ 0.55     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding

    52,974            52,974          54,763            54,763     

Gross Margin Data (Continuing Operations):

           

New retail vehicles

    6.3%            6.3%          6.1%            6.1%     

Fleet vehicles

    2.2%            2.2%          2.4%            2.4%     

Total new vehicles

    6.2%            6.2%          5.9%            5.9%     

Used vehicles

    6.5%            6.5%          6.7%            6.7%     

Wholesale vehicles

    (3.9%)           (3.9%)         (3.5%)           (3.5%)    

Parts, service and collision repair

    48.2%            48.2%          49.1%            49.1%     

Finance, insurance and other

    100.0%            100.0%          100.0%            100.0%     

Overall gross margin

    14.6%            14.6%          14.4%            14.4%     

SG&A Expenses (Continuing Operations):

           

Compensation

    $ 151,704              $ 140,423         

Advertising

    15,327              13,243         

Rent

    17,632              19,286         

Other

    69,984              63,846         
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total SG&A expenses

    $ 254,647          $ -              $ 254,647          $ 236,798          $ -              $ 236,798     

SG&A expenses as % of gross profit

    75.2%            75.2%          75.4%            75.4%     

Operating Margin %

    2.6%            3.0%          3.0%            3.0%     

Unit Data (Continuing Operations):

           

New retail units

    34,001              33,767         

Fleet units

    1,250              1,312         
 

 

 

       

 

 

     

Total new units

    35,251              35,079         

Used units

    26,354              23,943         

Wholesale units

    6,670              7,452         

(1) Represents $9.2 million of property and equipment impairment charges and a $0.6 million franchise asset impairment charge.


Sonic Automotive, Inc.

Results of Operations (Unaudited)

 

     Year Ended December 31, 2013      Year Ended December 31, 2012  
     Reported      Adjustments     Adjusted      Reported      Adjustments     Adjusted  
     (In thousands, except per share and unit amounts)  

Revenues:

               

New retail vehicles

     $ 4,819,787           $ -              $   4,819,787           $   4,546,209           $ -              $   4,546,209     

Fleet vehicles

     169,398           -              169,398           169,715           -              169,715     
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Total new vehicles

     4,989,185           -              4,989,185           4,715,924           -              4,715,924     

Used vehicles

     2,176,034           -              2,176,034           2,053,477           -              2,053,477     

Wholesale vehicles

     175,328           -              175,328           183,326           -              183,326     
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Total vehicles

     7,340,547           -              7,340,547           6,952,727           -              6,952,727     

Parts, service and collision repair

     1,230,178           -              1,230,178           1,162,319           -              1,162,319     

Finance, insurance and other, net

     272,443           -              272,443           250,422           -              250,422     
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Total revenues

     8,843,168           -              8,843,168           8,365,468           -              8,365,468     

Gross profit

     1,301,607           -              1,301,607           1,235,153           -              1,235,153     

Selling, general and administrative expenses

     (1,003,125)          -              (1,003,125)          (949,026)          -              (949,026)    

Impairment charges

     (9,872)          9,872   (1)      -               (440)          -              (440)    

Depreciation and amortization

     (54,007)          -              (54,007)          (45,285)          -              (45,285)    
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Operating income (loss)

     234,603           9,872          244,475           240,402           -              240,402     

Other income (expense):

               

Interest expense, floor plan

     (21,954)          -              (21,954)          (19,454)          -              (19,454)    

Interest expense, other, net

     (55,485)          788   (2)      (54,697)          (60,090)          1,167   (4)      (58,923)    

Other income (expense), net

     (28,143)          28,235   (3)      92           (19,625)          19,898   (5)      273     
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Total other income (expense)

     (105,582)          29,023          (76,559)          (99,169)          21,065          (78,104)    
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Income (loss) from continuing operations before taxes

     129,021           38,895          167,916           141,233           21,065          162,298     

Provision for income taxes - benefit (expense)

     (44,343)          (15,169)        (59,512)          (49,972)          (11,784)   (6)      (61,756)    
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Income (loss) from continuing operations

     84,678           23,726          108,404           91,261           9,281          100,542     
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Income (loss) from discontinued operations

     (3,060)          -              (3,060)          (2,160)          -              (2,160)    
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Net income (loss)

     $ 81,618           $ 23,726          $ 105,344           $ 89,101           $ 9,281          $ 98,382     
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Diluted earnings (loss) per common share:

               

Earnings (loss) per share from continuing operations

     $ 1.59           $ 0.44          $ 2.03           $ 1.56           $ 0.16          $ 1.72     

Earnings (loss) per share from discontinued operations

     (0.06)          0.01          (0.05)          (0.03)          (0.01)         (0.04)    
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Earnings (loss) per common share

     $ 1.53           $ 0.45          $ 1.98           $ 1.53           $ 0.15          $ 1.68     
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Weighted average common shares outstanding

     52,941             52,941           60,406             60,406     

Gross Margin Data (Continuing Operations):

               

New retail vehicles

     5.9%             5.9%           6.0%             6.0%     

Fleet vehicles

     2.6%             2.6%           2.8%             2.8%     

Total new vehicles

     5.8%             5.8%           5.9%             5.9%     

Used vehicles

     6.9%             6.9%           7.0%             7.0%     

Wholesale vehicles

     (4.5%)            (4.5%)          (3.3%)            (3.3%)    

Parts, service and collision repair

     48.5%             48.5%           48.9%             48.9%     

Finance, insurance and other

     100.0%             100.0%           100.0%             100.0%     

Overall gross margin

     14.7%             14.7%           14.8%             14.8%     

SG&A Expenses (Continuing Operations):

               

Compensation

     $ 601,495                $ 566,886          

Advertising

     56,609                50,349          

Rent

     73,976                76,484          

Other

     271,045                255,307          
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Total SG&A expenses

     $   1,003,125           $ -              $ 1,003,125           $ 949,026           $ -              $ 949,026     

SG&A expenses as % of gross profit

     77.1%             77.1%           76.8%             76.8%     

Operating Margin %

     2.7%             2.8%           2.9%             2.9%     

Unit Data (Continuing Operations):

               

New retail units

     132,363                128,636          

Fleet units

     5,911                5,928          
  

 

 

         

 

 

      

Total new units

     138,274                134,564          

Used units

     107,054                102,556          

Wholesale units

     29,961                31,188          

(1) Represents $9.3 million of property and equipment impairment charges and a $0.6 million franchise asset impairment charge.

(2) Represents double-carry interest on the 9.0% Senior Subordinated Notes.

(3) Represents loss on extinguishment of the 9.0% Senior Subordinated Notes.

(4) Represents double-carry interest on the 7.0% Senior Subordinated Notes.

(5) Represents loss on extinguishment of the 5.0% Convertible Senior Notes.

(6) Includes tax adjustments related to the settlement of certain tax matters and the tax effect of items (4) and (5) above.


Sonic Automotive, Inc.

Results of Operations (Unaudited)

 

Per Share Data

 

     Fourth Quarter Ended December 31, 2013  
            Income (Loss)      Income (Loss)                
            From Continuing      From Discontinued                
            Operations      Operations      Net Income (Loss)  
       Weighted               Per             Per             Per  
       Average               Share             Share             Share  
       Shares          Amount          Amount          Amount            Amount            Amount          Amount    
     (In thousands, except per share amounts)  

Reported:

                    

Earnings (loss) and shares

     52,492           $       29,562              $       (1,478)             $       28,084        

Effect of participating securities:

                    

Non-vested restricted stock and stock units

        (208)             -              (208)       
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Basic earnings (loss) and shares

     52,492           $ 29,354           $       0.56           $ (1,478)          $       (0.03)          $ 27,876           $       0.53     

Effect of dilutive securities:

                    

Contingently convertible debt (5.0% Convertible Notes)

     -           -              -              -        

Stock compensation plans

     482                       
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Diluted earnings (loss) and shares

     52,974           $ 29,354           $ 0.55           $ (1,478)          $ (0.02)          $ 27,876           $ 0.53     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Adjustments (net of tax):

                    

Impairment Charges

        $ 5,980           $ 0.11           $ -           $ -           $ 5,980           $ 0.11     

Effect of two-class method & rounding

        (42)          0.01           -           (0.01)          (42)          -         
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total adjustments

        $ 5,938           $ 0.12           $ -           $ (0.01)          $ 5,938           $ 0.11     

Adjusted:

                    
        

 

 

       

 

 

       

 

 

 

Diluted earnings (loss) per share

           $ 0.67              $ (0.03)             $ 0.64     
        

 

 

       

 

 

       

 

 

 
     Fourth Quarter Ended December 31, 2012  
            Income (Loss)      Income (Loss)                
            From Continuing      From Discontinued                
            Operations      Operations      Net Income (Loss)  
     Weighted               Per             Per             Per  
     Average               Share             Share             Share  
     Shares        Amount      Amount      Amount      Amount      Amount      Amount  
     (In thousands, except per share amounts)  

Reported:

                    

Earnings (loss) and shares

     54,289           $ 28,792              $ 1,590              $ 30,382        

Effect of participating securities:

                    

Non-vested restricted stock and stock units

        (433)             -              (433)       
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Basic earnings (loss) and shares

     54,289           $ 28,359           $ 0.52           $ 1,590           $ 0.03           $ 29,949           $ 0.55     

Effect of dilutive securities:

                    

Stock compensation plans

     474                       
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Diluted earnings (loss) and shares

     54,763           $ 28,359           $ 0.52           $ 1,590           $ 0.03           $ 29,949           $ 0.55     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 


Sonic Automotive, Inc.

Results of Operations (Unaudited)

 

Per Share Data

 

     Year Ended December 31, 2013  
            Income (Loss)      Income (Loss)                
            From Continuing        From Discontinued                  
            Operations      Operations        Net Income (Loss)    
         Weighted                 Per             Per             Per  
     Average             Share             Share             Share  
     Shares          Amount          Amount        Amount        Amount          Amount            Amount    
     (In thousands, except per share amounts)  

Reported:

                    

Earnings (loss) and shares

     52,556           $       84,678               $       (3,060)              $       81,618         

Effect of participating securities:

                    

Non-vested restricted stock and stock units

        (601)              -                 (601)        
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Basic earnings (loss) and shares

     52,556           $ 84,077            $       1.60            $ (3,060)           $     (0.06)           $ 81,017           $       1.54     

Effect of dilutive securities:

                    

Stock compensation plans

     385                       
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Diluted earnings (loss) and shares

     52,941           $ 84,077            $ 1.59            $ (3,060)           $ (0.06)           $ 81,017            $ 1.53     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Adjustments (net of tax):

                    

Impairment Charges

        $ 6,022            $ 0.11            $ -              $ -              $ 6,022            $ 0.11     

Double-carry interest

        481            0.01            -              -              481            0.01     

Debt extinguishment charges

        17,223            0.33            -              -              17,223            0.33     

Effect of two-class method & rounding

        (167)           (0.01)           -              0.01            (167)           -        
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total adjustments

        $ 23,559           $ 0.44           $ -              $ 0.01            $ 23,559           $ 0.45     

Adjusted:

                    
        

 

 

       

 

 

       

 

 

 

Diluted earnings (loss) per share

           $ 2.03              $ (0.05)              $ 1.98     
        

 

 

       

 

 

       

 

 

 
     Year Ended December 31, 2012  
            Income (Loss)      Income (Loss)                
            From Continuing      From Discontinued                
            Operations      Operations      Net Income (Loss)  
     Weighted             Per             Per             Per  
     Average             Share             Share             Share  
     Shares      Amount      Amount      Amount          Amount          Amount      Amount  
     (In thousands, except per share amounts)  

Reported:

                    

Earnings (loss) and shares

     53,550           $ 91,261               $ (2,160)              $ 89,101         

Effect of participating securities:

                    

Non-vested restricted stock and stock units

        (1,381)              -                 (1,381)        
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Basic earnings (loss) and shares

     53,550           $ 89,880            $ 1.68            $ (2,160)           $ (0.04)           $ 87,720            $ 1.64      

Effect of dilutive securities:

                    

Contingently convertible debt (5.0% Convertible Notes)

     6,411           4,617               64               4,681         

Stock compensation plans

     445                       
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Diluted earnings (loss) and shares

     60,406           $ 94,497            $ 1.56            $ (2,096)           $ (0.03)           $ 92,401            $ 1.53      
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Adjustments (net of tax):

                    

Double-carry interest

        $ 712            $ 0.01            $ -              $ -              $ 712            $ 0.01      

Debt extinguishment charges

        12,138            0.20            -              -              12,138            0.20      

Settlement of tax matters

        (3,569)           (0.06)           -              -              (3,569)           (0.06)     

Effect of two-class method & rounding

        (141)           0.01            -              (0.01)           (141)           -        
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total adjustments

        $ 9,140            $     0.16            $ -              $ (0.01)           $ 9,140            $ 0.15      

Adjusted:

                    
        

 

 

       

 

 

       

 

 

 

Diluted earnings (loss) per share

           $     1.72               $ (0.04)              $ 1.68      
        

 

 

       

 

 

       

 

 

 


Sonic Automotive, Inc.

Results of Operations (Unaudited)

 

New Vehicles

 

    Fourth Quarter Ended December 31,     Better / (Worse)  
    2013     2012         Change         % Change      
    (In thousands, except units and per unit amounts)  

Reported:

       

Revenue

  $ 1,337,698      $ 1,303,054      $ 34,644        2.7%   

Gross profit

  $ 82,936      $ 77,381      $ 5,555        7.2%   

Unit sales

    35,251        35,079        172        0.5%   

Revenue per unit

  $ 37,948      $ 37,146      $ 802        2.2%   

Gross profit per unit

  $ 2,353      $ 2,206      $ 147        6.7%   

Gross profit as a % of revenue

    6.2%        5.9%        30        bps   
    Year Ended December 31,     Better / (Worse)  
    2013     2012         Change         % Change      
    (In thousands, except units and per unit amounts)  

Reported:

       

Revenue

  $ 4,989,185      $ 4,715,924      $ 273,261        5.8%   

Gross profit

  $ 289,603      $ 278,349      $ 11,254        4.0%   

Unit sales

    138,274        134,564        3,710        2.8%   

Revenue per unit

  $ 36,082      $ 35,046      $ 1,036        3.0%   

Gross profit per unit

  $ 2,094      $ 2,069      $ 25        1.2%   

Gross profit as a % of revenue

    5.8%        5.9%        (10     bps   
    Fourth Quarter Ended December 31,     Better / (Worse)  
    2013     2012         Change         % Change      
    (In thousands, except units and per unit amounts)  

Same Store:

       

Revenue

  $ 1,312,838      $ 1,303,054      $ 9,784        0.8%   

Gross profit

  $ 81,500      $ 77,961      $ 3,539        4.5%   

Unit sales

    34,800        35,079        (279     (0.8%

Revenue per unit

  $ 37,725      $ 37,146      $ 579        1.6%   

Gross profit per unit

  $ 2,342      $ 2,222      $ 120        5.4%   

Gross profit as a % of revenue

    6.2%        6.0%        20        bps   
    Year Ended December 31,     Better / (Worse)  
    2013     2012         Change         % Change      
    (In thousands, except units and per unit amounts)  

Same Store:

       

Revenue

  $ 4,954,737      $ 4,715,924      $ 238,813        5.1%   

Gross profit

  $ 287,394      $ 279,648      $ 7,746        2.8%   

Unit sales

    137,649        134,564        3,085        2.3%   

Revenue per unit

  $ 35,995      $ 35,046      $ 949        2.7%   

Gross profit per unit

  $ 2,088      $ 2,078      $ 10        0.5%   

Gross profit as a % of revenue

    5.8%        5.9%        (10     bps   


Sonic Automotive, Inc.

Results of Operations (Unaudited)

 

Used Vehicles

 

    Fourth Quarter Ended December 31,     Better / (Worse)  
    2013     2012       Change           % Change      
    (In thousands, except units and per unit amounts)  

Reported:

       

Revenue

      $ 551,028          $ 489,063          $ 61,965        12.7%      

Gross profit

      $ 35,784          $ 32,776          $ 3,008        9.2%      

Unit sales

    26,354        23,943        2,411        10.1%      

Revenue per unit

      $ 20,909          $ 20,426          $ 483        2.4%      

Gross profit per unit

      $ 1,358          $ 1,369          $ (11     (0.8%)     

Gross profit as a % of revenue

    6.5%        6.7%        (20     bps   
    Year Ended December 31,     Better / (Worse)  
    2013     2012     Change     % Change  
    (In thousands, except units and per unit amounts)  

Reported:

       

Revenue

      $ 2,176,034          $ 2,053,477          $         122,557        6.0%      

Gross profit

      $ 150,400          $ 143,454          $ 6,946        4.8%      

Unit sales

    107,054        102,556        4,498        4.4%      

Revenue per unit

      $ 20,327          $ 20,023          $ 304        1.5%      

Gross profit per unit

      $ 1,405          $ 1,399          $ 6        0.4%      

Gross profit as a % of revenue

    6.9%        7.0%        (10     bps   
    Fourth Quarter Ended December 31,     Better / (Worse)  
    2013     2012     Change     % Change  
    (In thousands, except units and per unit amounts)  

Same Store:

       

Revenue

      $ 537,694          $ 489,063          $ 48,631        9.9%      

Gross profit

      $ 34,576          $ 33,775          $ 801        2.4%      

Unit sales

    25,885        23,943        1,942        8.1%      

Revenue per unit

      $ 20,772          $ 20,426          $ 346        1.7%      

Gross profit per unit

      $ 1,336          $ 1,411          $ (75     (5.3%)     

Gross profit as a % of revenue

    6.4%        6.9%        (50     bps   
    Year Ended December 31,     Better / (Worse)  
    2013     2012     Change     % Change  
    (In thousands, except units and per unit amounts)  

Same Store:

       

Revenue

      $ 2,157,213          $ 2,053,477          $ 103,736        5.1%      

Gross profit

      $ 148,683          $ 143,759          $ 4,924        3.4%      

Unit sales

    106,397        102,556        3,841        3.7%      

Revenue per unit

      $ 20,275          $ 20,023          $ 252        1.3%      

Gross profit per unit

      $ 1,397          $ 1,402          $ (5     (0.4%)     

Gross profit as a % of revenue

    6.9%        7.0%        (10     bps   


Sonic Automotive, Inc.

Results of Operations (Unaudited)

 

Wholesale Vehicles

 

    Fourth Quarter Ended December 31,     Better / (Worse)  
    2013     2012       Change           % Change      
    (In thousands, except units and per unit amounts)  

Reported:

       

Revenue

  $     40,772      $     44,820      $ (4,048     (9.0%

Gross profit (loss)

  $ (1,589   $ (1,576   $ (13     (0.8%

Unit sales

    6,670        7,452        (782     (10.5%

Revenue per unit

  $ 6,113      $ 6,014      $ 99        1.6%   

Gross profit (loss) per unit

  $ (238   $ (211   $ (27     (12.8%

Gross profit (loss) as a % of revenue

    (3.9%     (3.5%     (40     bps   
    Year Ended December 31,     Better / (Worse)  
    2013     2012     Change     % Change  
    (In thousands, except units and per unit amounts)  

Reported:

       

Revenue

  $ 175,328      $ 183,326      $ (7,998     (4.4%

Gross profit (loss)

  $ (7,931   $ (5,975   $ (1,956     (32.7%

Unit sales

    29,961        31,188        (1,227     (3.9%

Revenue per unit

  $ 5,852      $ 5,878      $ (26     (0.4%

Gross profit (loss) per unit

  $ (265   $ (192   $ (73     (38.0%

Gross profit (loss) as a % of revenue

    (4.5%     (3.3%     (120     bps   
    Fourth Quarter Ended December 31,     Better / (Worse)  
    2013     2012     Change     % Change  
    (In thousands, except units and per unit amounts)  

Same Store:

       

Revenue

  $ 39,355      $ 44,820      $ (5,465     (12.2%

Gross profit (loss)

  $ (1,494   $ (1,576   $ 82        5.2%   

Unit sales

    6,523        7,452        (929     (12.5%

Revenue per unit

  $ 6,033      $ 6,014      $ 19        0.3%   

Gross profit (loss) per unit

  $ (229   $ (211   $ (18     (8.5%

Gross profit (loss) as a % of revenue

    (3.8%     (3.5%     (30     bps   
    Year Ended December 31,     Better / (Worse)  
    2013     2012     Change     % Change  
    (In thousands, except units and per unit amounts)  

Same Store:

       

Revenue

  $ 173,612      $ 183,325      $ (9,713     (5.3%

Gross profit (loss)

  $ (7,830   $ (5,976   $ (1,854     (31.0%

Unit sales

    29,785        31,188        (1,403     (4.5%

Revenue per unit

  $ 5,829      $ 5,878      $ (49     (0.8%

Gross profit (loss) per unit

  $ (263   $ (192   $ (71     (37.0%

Gross profit (loss) as a % of revenue

    (4.5%     (3.3%     (120     bps   


Sonic Automotive, Inc.

Results of Operations (Unaudited)

 

Parts, Service and Collision Repair (“Fixed Operations”)

 

            Fourth Quarter Ended December 31,             Better / (Worse)  
    2013     2012         Change             % Change      
    (In thousands)        

Reported:

       

Revenue

       

Customer Pay

    $ 139,443          $ 130,595          $ 8,848           6.8%     

Warranty

    50,572          41,621          8,951           21.5%     

Wholesale Parts

    44,468          38,282          6,186           16.2%     

Internal, Sublet & Other

    82,405          76,615          5,790           7.6%     
 

 

 

   

 

 

   

 

 

   

 

 

 

Total

    $ 316,888          $ 287,113          $         29,775           10.4%     
 

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

       

Customer Pay

    $ 76,315          $ 71,587          $ 4,728           6.6%     

Warranty

    26,694          21,972          4,722           21.5%     

Wholesale Parts

    8,084          7,244          840           11.6%     

Internal, Sublet & Other

    41,493          40,051          1,442           3.6%     
 

 

 

   

 

 

   

 

 

   

 

 

 

Total

    $ 152,586          $ 140,854          $ 11,732           8.3%     
 

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit as a % of revenue

       

Customer Pay

    54.7%          54.8%          (10)          bps   

Warranty

    52.8%          52.8%          0           bps   

Wholesale Parts

    18.2%          18.9%          (70)          bps   

Internal, Sublet & Other

    50.4%          52.3%          (190)          bps   
 

 

 

   

 

 

   

 

 

   

Total

    48.2%          49.1%          (90)          bps   
    Year Ended December 31,     Better / (Worse)  
    2013     2012     Change     % Change  
    (In thousands)        

Reported:

       

Revenue

       

Customer Pay

    $ 546,695          $ 525,674          $ 21,021           4.0%     

Warranty

    188,061          167,964          20,097           12.0%     

Wholesale Parts

    169,338          153,827          15,511           10.1%     

Internal, Sublet & Other

    326,084          314,854          11,230           3.6%     
 

 

 

   

 

 

   

 

 

   

 

 

 

Total

    $ 1,230,178          $ 1,162,319          $ 67,859           5.8%     
 

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

       

Customer Pay

    $ 300,800          $ 289,427          $ 11,373           3.9%     

Warranty

    101,351          88,287          13,064           14.8%     

Wholesale Parts

    31,242          29,494          1,748           5.9%     

Internal, Sublet & Other

    163,699          161,695          2,004           1.2%     
 

 

 

   

 

 

   

 

 

   

 

 

 

Total

    $ 597,092          $ 568,903          $ 28,189           5.0%     
 

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit as a % of revenue

       

Customer Pay

    55.0%          55.1%          (10)          bps   

Warranty

    53.9%          52.6%          130           bps   

Wholesale Parts

    18.4%          19.2%          (80)          bps   

Internal, Sublet & Other

    50.2%          51.4%          (120)          bps   
 

 

 

   

 

 

   

 

 

   

Total

    48.5%          48.9%          (40)          bps   


Sonic Automotive, Inc.

Results of Operations (Unaudited)

 

Parts, Service and Collision Repair (“Fixed Operations”)

 

            Fourth Quarter Ended December 31,             Better / (Worse)  
    2013     2012         Change             % Change      
    (In thousands)            

Same Store:

       

Revenue

       

Customer Pay

    $ 134,542          $ 130,595          $ 3,947           3.0%     

Warranty

    49,209          41,621          7,588           18.2%     

Wholesale Parts

    43,236          38,282          4,954           12.9%     

Internal, Sublet & Other

    80,708          76,615          4,093           5.3%     
 

 

 

   

 

 

   

 

 

   

 

 

 

Total

    $ 307,695          $ 287,113          $ 20,582           7.2%     
 

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

       

Customer Pay

    $ 73,790          $ 71,587          $ 2,203           3.1%     

Warranty

    26,063          21,972          4,091           18.6%     

Wholesale Parts

    7,772          7,244          528           7.3%     

Internal, Sublet & Other

    40,367          39,778          589           1.5%     
 

 

 

   

 

 

   

 

 

   

 

 

 

Total

    $ 147,992          $ 140,581          $ 7,411           5.3%     
 

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit as a % of revenue

       

Customer Pay

    54.8%          54.8%          0           bps   

Warranty

    53.0%          52.8%          20           bps   

Wholesale Parts

    18.0%          18.9%          (90)          bps   

Internal, Sublet & Other

    50.0%          51.9%          (190)          bps   
 

 

 

   

 

 

   

 

 

   

Total

    48.1%          49.0%          (90)          bps   
    Year Ended December 31,     Better / (Worse)  
    2013     2012     Change     % Change  
    (In thousands)            

Same Store:

       

Revenue

       

Customer Pay

    $ 539,331          $ 525,674          $ 13,657           2.6%     

Warranty

    185,864          167,964          17,900           10.7%     

Wholesale Parts

    167,452          153,827          13,625           8.9%     

Internal, Sublet & Other

    323,543          314,854          8,689           2.8%     
 

 

 

   

 

 

   

 

 

   

 

 

 

Total

    $       1,216,190          $       1,162,319          $ 53,871           4.6%     
 

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

       

Customer Pay

    $ 296,956          $ 289,427          $ 7,529           2.6%     

Warranty

    100,574          88,287          12,287           13.9%     

Wholesale Parts

    30,766          29,494          1,272           4.3%     

Internal, Sublet & Other

    161,629          160,764          865           0.5%     
 

 

 

   

 

 

   

 

 

   

 

 

 

Total

    $ 589,925          $ 567,972          $         21,953           3.9%     
 

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit as a % of revenue

       

Customer Pay

    55.1%          55.1%          0           bps   

Warranty

    54.1%          52.6%          150           bps   

Wholesale Parts

    18.4%          19.2%          (80)          bps   

Internal, Sublet & Other

    50.0%          51.1%          (110)          bps   
 

 

 

   

 

 

   

 

 

   

Total

    48.5%          48.9%          (40)          bps   


Sonic Automotive, Inc.

Results of Operations (Unaudited)

 

Finance, Insurance and Other, Net (“F&I”)

 

    Fourth Quarter Ended December 31,     Better / (Worse)  
    2013     2012         Change         % Change      
    (In thousands, except per unit amounts)  

Reported:

       

Revenue

  $ 68,983       $ 64,685       $ 4,298         6.6%    

Gross profit per retail unit (excludes fleet)

  $ 1,143       $ 1,121       $ 22         2.0%    
    Year Ended December 31,     Better / (Worse)  
    2013     2012     Change     % Change      
    (In thousands, except per unit amounts)  

Reported:

       

Revenue

  $ 272,443       $ 250,422       $ 22,021         8.8%    

Gross profit per retail unit (excludes fleet)

  $ 1,138       $ 1,083       $ 55         5.1%    
    Fourth Quarter Ended December 31,     Better / (Worse)  
    2013     2012     Change     % Change      
    (In thousands, except per unit amounts)  

Same Store:

       

Revenue

  $ 67,712       $ 64,698       $ 3,014         4.7%    

Gross profit per retail unit (excludes fleet)

  $ 1,139       $ 1,121       $ 18         1.6%    
    Year Ended December 31,     Better / (Worse)  
    2013     2012     Change     % Change      
    (In thousands, except per unit amounts)  

Same Store:

       

Revenue

  $ 270,708       $ 249,779       $ 20,929         8.4%    

Gross profit per retail unit (excludes fleet)

  $ 1,137       $ 1,080       $ 57         5.3%    


Sonic Automotive, Inc.

Results of Operations (Unaudited)

 

Selling, General and Administrative (“SG&A”) Expenses

 

             Fourth Quarter Ended December 31,                  Better / (Worse)      
     2013      2012      Change          % Change      
     (In thousands)  

Compensation

     $ 151,704           $ 140,423           $         (11,281)          (8.0%)    

Advertising

     15,327           13,243           (2,084)          (15.7%)    

Rent

     17,632           19,286           1,654           8.6%      

Other

     69,984           63,846           (6,138)          (9.6%)    
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

     $ 254,647           $ 236,798           $ (17,849)          (7.5%)    
  

 

 

    

 

 

    

 

 

    

 

 

 

SG&A as a % of gross profit

           

Compensation

     44.8%           44.7%           (10)          bps   

Advertising

     4.5%           4.2%           (30)          bps   

Rent

     5.2%           6.1%           90            bps   

Other

     20.7%           20.4%           (30)          bps   
  

 

 

    

 

 

    

 

 

    

Total

     75.2%           75.4%           20            bps   
     Year Ended December 31,      Better / (Worse)  
     2013      2012      Change          % Change      
     (In thousands)  

Compensation

     $ 601,495           $ 566,886           $ (34,609)          (6.1%)    

Advertising

     56,609           50,349           (6,260)          (12.4%)    

Rent

     73,976           76,484           2,508            3.3%      

Other

     271,045           255,307           (15,738)          (6.2%)    
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

     $ 1,003,125           $ 949,026           $ (54,099)          (5.7%)    
  

 

 

    

 

 

    

 

 

    

 

 

 

SG&A as a % of gross profit

           

Compensation

     46.2%           45.9%           (30)          bps   

Advertising

     4.3%           4.1%           (20)       

Rent

     5.7%           6.2%           50            bps   

Other

     20.9%           20.6%           (30)          bps   
  

 

 

    

 

 

    

 

 

    

Total

     77.1%           76.8%           (30)          bps