SYS-CON MEDIA Authors: Mat Mathews, PR.com Newswire, David Smith, Tim Crawford, Kevin Benedict

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

CHARLOTTE, N.C., Feb. 19, 2014 /PRNewswire/ -- Sonic 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


















































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

Reported:


(In thousands)

   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

Reported:


(In thousands)

   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

Same Store:


(In thousands)

   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

Same Store:


(In thousands)

   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

 

 

SOURCE Sonic Automotive, Inc.

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