Sonic Automotive, Inc. Posts Record Fourth Quarter Profits and Full Year Retail Unit Sales
CHARLOTTE, N.C., Feb. 20, 2013 /PRNewswire/ -- Sonic Automotive, Inc. (NYSE: SAH), one of the nation's largest automotive retailers, today reported preliminary diluted earnings per share from continuing operations of $0.52, an increase of 44.4% compared to $0.36 in the prior year quarter. 2012 fourth quarter net income from continuing operations were $28.8 million, a 35.5% increase over prior year results of $21.2 million. When adjusting for charges recorded in the prior year period related to legal and lease charges, 2012 fourth quarter net income from continuing operations improved $3.4 million, or 13.2%, from an adjusted fourth quarter 2011 result of $25.4 million.
For the full year 2012, the Company grew adjusted net income from continuing operations by 19.6% to $1.71 per diluted share compared to $1.43 per diluted share in the prior year. The adjustments for both periods are detailed further in the attached tables.
During the quarter, the Company repurchased 3.5 million shares of its Class A common stock at an average price of $19.27 per share. For the year, the Company repurchased 4.4 million shares of its Class A common stock at an average price of $19.00 per share. The fully diluted share count was reduced from 65.5 million shares for the full year of 2011 to 54.0 million shares going into 2013, a reduction of 17.6%.
Subsequent to the end of the fourth quarter, Sonic's Board of Directors authorized an additional $100 million to be used in the Company's share repurchase program. When combined with previously unused authorized amounts, Sonic has approximately $144.2 million of total authorization from its Board of Directors to repurchase shares of the Company's Class A Common Stock.
Q4 2012 Highlights – New Retail Volume Outpaces Industry; Annual Cost Lower than Target
Record retail unit sales in full year 2012 of 231,192 units
Record Q4 Continuing Operations Net Income of $28.8 million (1)
Total Q4 revenues up 10.4% over prior year quarter, up 11.2% for full year
New vehicle retail revenue up 15.7% in Q4, up 17.5% for full year
Used vehicle retail units up 6.3% in Q4, up 6.4% for the full year
Parts, Service & Collision gross profit up $3.7 million in Q4 to $140.9 million, a fourth quarter record, up $15.4 million for the full year to $568.9 million, an annual record
Full year SG&A to gross profit of 76.8%, better than annual target of 78.0%
(1) – Excluding unusual tax adjustments in the comparative prior year periods
The Company's EVP of Operations, Jeff Dyke, commented, "We are very pleased with our performance in the fourth quarter. Our continued execution of our playbook processes enabled us to achieve record breaking full year total vehicle unit sales of 231,192 units. The new vehicle retail unit sales increase of 14.5% in the fourth quarter 2012 over the prior year quarter outpaced the industry growth of 11.1%. Coupled with growth in all other areas of our business, we generated over $20 million more gross profit in Q4 2012 than in Q4 2011. As a result of this increase and cost reductions in other areas, we were able to increase our net income from continuing operations 13.2% from the prior year quarter adjusted total. We would like to thank our customers, our manufacturer partners, and our associates for working together to help us achieve this performance."
2013 Outlook
Commenting on the fourth quarter and the 2013 outlook, B. Scott Smith, the Company's President, noted, "Our work continued in the fourth quarter to improve our operations, our capital structure, and increase shareholder value through a combination of operational execution and share repurchases. Looking into 2013, we believe we can continue to build on the momentum generated last year to offer our customers an exceptional and unique buying experience and build customer loyalty. Although we still hold fast to our guiding strategic initiative to improve our base business, we believe we are now positioned to take advantage of open point and acquisition opportunities and will explore these avenues in 2013. We expect the automotive retailing sector to continue to grow in 2013 and are anticipating 2013 new vehicle industry volume of between 15.0 million units and 15.5 million units. We currently expect earnings per share from continuing operations of between $1.93 and $2.03 for the full year 2013. We will have additional comments on our 2013 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 the Company's website at www.sonicautomotive.com by clicking on the "Investor Relations" tab under "Our Company" and choosing "Webcasts & Presentations".
The conference call will also be available live by dialing in 10 minutes prior to the start of the call at:
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, 2012.
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, anticipated 2013 earnings per share from continuing operations, anticipated acquisition and growth activity, 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, 2011 and quarterly report on Form 10-Q for the period ended September 30, 2012. The Company does not undertake any obligation to update forward-looking information.
Sonic Automotive, Inc.
Results of Operations (Unaudited)
(Dollars and shares in thousands, except per share amounts)
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
Fourth Quarter Ended
December 31, 2012
December 31, 2011
Reported
Adjustments
Adjusted
Reported
Adjustments
Adjusted
Revenues:
New retail vehicles
$ 1,259,924
$ -
$ 1,259,924
$ 1,089,251
$ -
$ 1,089,251
Fleet vehicles
43,130
-
43,130
49,782
-
49,782
Total new vehicles
1,303,054
-
1,303,054
1,139,033
-
1,139,033
Used vehicles
489,063
-
489,063
465,386
-
465,386
Wholesale vehicles
44,820
-
44,820
45,946
-
45,946
Total vehicles
1,836,937
-
1,836,937
1,650,365
-
1,650,365
Parts, service and collision repair
287,113
-
287,113
278,721
-
278,721
Finance, insurance and other
64,685
-
64,685
54,360
-
54,360
Total revenues
2,188,735
-
2,188,735
1,983,446
-
1,983,446
Gross profit
314,119
-
314,119
293,694
-
293,694
Selling, general and administrative expenses
(236,798)
-
(236,798)
(227,946)
6,816
(1)
(221,130)
Impairment charges
(383)
-
(383)
(40)
-
(40)
Depreciation and amortization
(11,886)
-
(11,886)
(10,252)
-
(10,252)
Operating income (loss)
65,052
-
65,052
55,456
6,816
62,272
Other income (expense):
Interest expense, floor plan
(5,534)
-
(5,534)
(4,589)
-
(4,589)
Interest expense, other, net
(14,215)
-
(14,215)
(16,329)
-
(16,329)
Other income (expense), net
183
-
183
(265)
-
(265)
Total other income (expense)
(19,566)
-
(19,566)
(21,183)
-
(21,183)
Income (loss) from continuing operations before taxes
45,486
-
45,486
34,273
6,816
41,089
Provision for income taxes - benefit (expense)
(16,694)
-
(16,694)
(13,032)
(2,617)
(2)
(15,649)
Income (loss) from continuing operations
28,792
-
28,792
21,241
4,199
25,440
Income (loss) from discontinued operations
1,590
-
1,590
(703)
(387)
(3)
(1,090)
Net income (loss)
$ 30,382
$ -
$ 30,382
$ 20,538
$ 3,812
$ 24,350
Diluted earnings (loss) per common share:
Earnings (loss) per share from continuing operations
$ 0.52
$ -
$ 0.52
$ 0.36
$ 0.07
$ 0.43
Earnings (loss) per share from discontinued operations
0.03
-
0.03
(0.01)
(0.01)
(0.02)
Earnings (loss) per common share
$ 0.55
$ -
$ 0.55
$ 0.35
$ 0.06
$ 0.41
Weighted average common shares outstanding
54,763
54,763
64,467
64,467
Gross Margin Data (Continuing Operations):
New retail vehicles
6.1%
6.1%
6.3%
6.3%
Fleet vehicles
2.4%
2.4%
3.3%
3.3%
Total new vehicles
5.9%
5.9%
6.2%
6.2%
Used vehicles
6.7%
6.7%
7.1%
7.1%
Wholesale vehicles
(3.5%)
(3.5%)
(2.1%)
(2.1%)
Parts, service and collision repair
49.1%
49.1%
49.2%
49.2%
Finance, insurance and other
100.0%
100.0%
100.0%
100.0%
Overall gross margin
14.4%
14.4%
14.8%
14.8%
SG&A Expenses (Continuing Operations):
Compensation
$ 140,423
$ 132,641
Advertising
13,243
11,120
Rent and rent related
26,653
28,240
Other
56,479
55,945
Total SG&A expenses
$ 236,798
$ -
$ 236,798
$ 227,946
$ (6,816)
$ 221,130
SG&A expenses as % of gross profit
75.4%
75.4%
77.6%
75.3%
Operating Margin %
3.0%
3.0%
2.8%
3.1%
Unit Data (Continuing Operations):
New retail units
33,767
29,482
Fleet units
1,312
1,878
Total new units
35,079
31,360
Used units
23,943
22,520
Wholesale units
7,452
6,879
(1) Represents lease exit adjustments and legal settlement charges.
(2) Represents tax-effect of pre-tax adjustments above.
(3) Represents tax-effected amounts related to lease exit adjustments.
Sonic Automotive, Inc.
Results of Operations (Unaudited)
(Dollars and shares in thousands, except per share amounts)
Year Ended December 31, 2012
Year Ended December 31, 2011
Reported
Adjustments
Adjusted
Reported
Adjustments
Adjusted
Revenues:
New retail vehicles
$ 4,546,209
$ -
$ 4,546,209
$ 3,867,978
$ -
$ 3,867,978
Fleet vehicles
169,715
-
169,715
220,120
-
220,120
Total new vehicles
4,715,924
-
4,715,924
4,088,098
-
4,088,098
Used vehicles
2,053,477
-
2,053,477
1,930,852
-
1,930,852
Wholesale vehicles
183,326
-
183,326
167,075
-
167,075
Total vehicles
6,952,727
-
6,952,727
6,186,025
-
6,186,025
Parts, service and collision repair
1,162,319
-
1,162,319
1,125,672
-
1,125,672
Finance, insurance and other
250,422
-
250,422
209,109
-
209,109
Total revenues
8,365,468
-
8,365,468
7,520,806
-
7,520,806
Gross profit
1,235,153
-
1,235,153
1,158,611
-
1,158,611
Selling, general and administrative expenses
(949,026)
-
(949,026)
(899,424)
6,816
(4)
(892,608)
Impairment charges
(440)
-
(440)
(200)
-
(200)
Depreciation and amortization
(45,285)
-
(45,285)
(39,446)
-
(39,446)
Operating income (loss)
240,402
-
240,402
219,541
6,816
226,357
Other income (expense):
Interest expense, floor plan
(19,454)
-
(19,454)
(18,405)
-
(18,405)
Interest expense, other, net
(60,090)
1,167
(1)
(58,923)
(66,857)
-
(66,857)
Other income (expense), net
(19,625)
19,713
(2)
88
(1,017)
-
(1,017)
Total other income (expense)
(99,169)
20,880
(78,289)
(86,279)
-
(86,279)
Income (loss) from continuing operations before taxes
141,233
20,880
162,113
133,262
6,816
140,078
Provision for income taxes - benefit (expense)
(49,972)
(11,711)
(3)
(61,683)
(51,731)
(2,617)
(5)
(54,348)
Income (loss) from continuing operations
91,261
9,169
100,430
81,531
4,199
85,730
Income (loss) from discontinued operations
(2,160)
-
(2,160)
(5,277)
(387)
(6)
(5,664)
Net income (loss)
$ 89,101
$ 9,169
$ 98,270
$ 76,254
$ 3,812
$ 80,066
Diluted earnings (loss) per common share:
Earnings (loss) per share from continuing operations
$ 1.56
$ 0.15
$ 1.71
$ 1.37
$ 0.06
$ 1.43
Earnings (loss) per share from discontinued operations
(0.03)
-
(0.03)
(0.08)
-
(0.08)
Earnings (loss) per common share
$ 1.53
$ 0.15
$ 1.68
$ 1.29
$ 0.06
$ 1.35
Weighted average common shares outstanding
60,406
60,406
65,464
65,464
Gross Margin Data (Continuing Operations):
New retail vehicles
6.0%
6.0%
6.6%
6.6%
Fleet vehicles
2.8%
2.8%
3.2%
3.2%
Total new vehicles
5.9%
5.9%
6.4%
6.4%
Used vehicles
7.0%
7.0%
7.2%
7.2%
Wholesale vehicles
(3.3%)
(3.3%)
(3.1%)
(3.1%)
Parts, service and collision repair
(48.9%)
(48.9%)
49.2%
49.2%
Finance, insurance and other
100.0%
100.0%
100.0%
100.0%
Overall gross margin
14.8%
14.8%
15.4%
15.4%
SG&A Expenses (Continuing Operations):
Compensation
$ 566,886
$ 527,146
Advertising
50,349
49,128
Rent and rent related
106,628
115,080
Other
225,163
208,070
Total SG&A expenses
$ 949,026
$ -
$ 949,026
$ 899,424
$ (6,816)
$ 892,608
SG&A expenses as % of gross profit
76.8%
76.8%
77.6%
77.0%
Operating Margin %
2.9%
2.9%
2.9%
3.0%
Unit Data (Continuing Operations):
New retail units
128,636
108,564
Fleet units
5,928
8,508
Total new units
134,564
117,072
Used units
102,556
96,355
Wholesale units
31,188
25,180
(1) Represents double-carry interest in July 2012.
(2) Represents debt extinguishment charges related to the 5.0% Convertible Notes.
(3) Represents the tax effect of pre-tax adjustments above and the effect of the settlement of a state tax examination.
(4) Represents lease exit adjustments and legal settlement charges.
(5) Represents the tax effect of pre-tax adjustments above.
(6) Represents tax-effected amounts related to lease exit adjustments.
Press Release $SAH Sonic Automotive Inc.
CHARLOTTE, N.C., Feb. 20, 2013 /PRNewswire/ -- Sonic Automotive, Inc. (NYSE: SAH), one of the nation's largest automotive retailers, today reported preliminary diluted earnings per share from continuing operations of $0.52, an increase of 44.4% compared to $0.36 in the prior year quarter. 2012 fourth quarter net income from continuing operations were $28.8 million, a 35.5% increase over prior year results of $21.2 million. When adjusting for charges recorded in the prior year period related to legal and lease charges, 2012 fourth quarter net income from continuing operations improved $3.4 million, or 13.2%, from an adjusted fourth quarter 2011 result of $25.4 million.
For the full year 2012, the Company grew adjusted net income from continuing operations by 19.6% to $1.71 per diluted share compared to $1.43 per diluted share in the prior year. The adjustments for both periods are detailed further in the attached tables.
During the quarter, the Company repurchased 3.5 million shares of its Class A common stock at an average price of $19.27 per share. For the year, the Company repurchased 4.4 million shares of its Class A common stock at an average price of $19.00 per share. The fully diluted share count was reduced from 65.5 million shares for the full year of 2011 to 54.0 million shares going into 2013, a reduction of 17.6%.
Subsequent to the end of the fourth quarter, Sonic's Board of Directors authorized an additional $100 million to be used in the Company's share repurchase program. When combined with previously unused authorized amounts, Sonic has approximately $144.2 million of total authorization from its Board of Directors to repurchase shares of the Company's Class A Common Stock.
Q4 2012 Highlights – New Retail Volume Outpaces Industry; Annual Cost Lower than Target
(1) – Excluding unusual tax adjustments in the comparative prior year periods
The Company's EVP of Operations, Jeff Dyke, commented, "We are very pleased with our performance in the fourth quarter. Our continued execution of our playbook processes enabled us to achieve record breaking full year total vehicle unit sales of 231,192 units. The new vehicle retail unit sales increase of 14.5% in the fourth quarter 2012 over the prior year quarter outpaced the industry growth of 11.1%. Coupled with growth in all other areas of our business, we generated over $20 million more gross profit in Q4 2012 than in Q4 2011. As a result of this increase and cost reductions in other areas, we were able to increase our net income from continuing operations 13.2% from the prior year quarter adjusted total. We would like to thank our customers, our manufacturer partners, and our associates for working together to help us achieve this performance."
2013 Outlook
Commenting on the fourth quarter and the 2013 outlook, B. Scott Smith, the Company's President, noted, "Our work continued in the fourth quarter to improve our operations, our capital structure, and increase shareholder value through a combination of operational execution and share repurchases. Looking into 2013, we believe we can continue to build on the momentum generated last year to offer our customers an exceptional and unique buying experience and build customer loyalty. Although we still hold fast to our guiding strategic initiative to improve our base business, we believe we are now positioned to take advantage of open point and acquisition opportunities and will explore these avenues in 2013. We expect the automotive retailing sector to continue to grow in 2013 and are anticipating 2013 new vehicle industry volume of between 15.0 million units and 15.5 million units. We currently expect earnings per share from continuing operations of between $1.93 and $2.03 for the full year 2013. We will have additional comments on our 2013 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 the Company's website at www.sonicautomotive.com by clicking on the "Investor Relations" tab under "Our Company" and choosing "Webcasts & Presentations".
The conference call will also be available live by dialing in 10 minutes prior to the start of the call at:
Domestic: 1.877.791.3416
International: 1.706.643.0958
Conference ID: 93141081
A conference call replay will be available one hour following the call for seven days and can be accessed by calling:
Domestic: 1.855.859.2056
International: 1.404.537.3406
Conference ID: 93141081
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, 2012.
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, anticipated 2013 earnings per share from continuing operations, anticipated acquisition and growth activity, 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, 2011 and quarterly report on Form 10-Q for the period ended September 30, 2012. The Company does not undertake any obligation to update forward-looking information.
Sonic Automotive, Inc.
Results of Operations (Unaudited)
(Dollars and shares in thousands, except per share amounts)
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
Fourth Quarter Ended
December 31, 2012
December 31, 2011
Reported
Adjustments
Adjusted
Reported
Adjustments
Adjusted
Revenues:
New retail vehicles
$ 1,259,924
$ -
$ 1,259,924
$ 1,089,251
$ -
$ 1,089,251
Fleet vehicles
43,130
-
43,130
49,782
-
49,782
Total new vehicles
1,303,054
-
1,303,054
1,139,033
-
1,139,033
Used vehicles
489,063
-
489,063
465,386
-
465,386
Wholesale vehicles
44,820
-
44,820
45,946
-
45,946
Total vehicles
1,836,937
-
1,836,937
1,650,365
-
1,650,365
Parts, service and collision repair
287,113
-
287,113
278,721
-
278,721
Finance, insurance and other
64,685
-
64,685
54,360
-
54,360
Total revenues
2,188,735
-
2,188,735
1,983,446
-
1,983,446
Gross profit
314,119
-
314,119
293,694
-
293,694
Selling, general and administrative expenses
(236,798)
-
(236,798)
(227,946)
6,816
(1)
(221,130)
Impairment charges
(383)
-
(383)
(40)
-
(40)
Depreciation and amortization
(11,886)
-
(11,886)
(10,252)
-
(10,252)
Operating income (loss)
65,052
-
65,052
55,456
6,816
62,272
Other income (expense):
Interest expense, floor plan
(5,534)
-
(5,534)
(4,589)
-
(4,589)
Interest expense, other, net
(14,215)
-
(14,215)
(16,329)
-
(16,329)
Other income (expense), net
183
-
183
(265)
-
(265)
Total other income (expense)
(19,566)
-
(19,566)
(21,183)
-
(21,183)
Income (loss) from continuing operations before taxes
45,486
-
45,486
34,273
6,816
41,089
Provision for income taxes - benefit (expense)
(16,694)
-
(16,694)
(13,032)
(2,617)
(2)
(15,649)
Income (loss) from continuing operations
28,792
-
28,792
21,241
4,199
25,440
Income (loss) from discontinued operations
1,590
-
1,590
(703)
(387)
(3)
(1,090)
Net income (loss)
$ 30,382
$ -
$ 30,382
$ 20,538
$ 3,812
$ 24,350
Diluted earnings (loss) per common share:
Earnings (loss) per share from continuing operations
$ 0.52
$ -
$ 0.52
$ 0.36
$ 0.07
$ 0.43
Earnings (loss) per share from discontinued operations
0.03
-
0.03
(0.01)
(0.01)
(0.02)
Earnings (loss) per common share
$ 0.55
$ -
$ 0.55
$ 0.35
$ 0.06
$ 0.41
Weighted average common shares outstanding
54,763
54,763
64,467
64,467
Gross Margin Data (Continuing Operations):
New retail vehicles
6.1%
6.1%
6.3%
6.3%
Fleet vehicles
2.4%
2.4%
3.3%
3.3%
Total new vehicles
5.9%
5.9%
6.2%
6.2%
Used vehicles
6.7%
6.7%
7.1%
7.1%
Wholesale vehicles
(3.5%)
(3.5%)
(2.1%)
(2.1%)
Parts, service and collision repair
49.1%
49.1%
49.2%
49.2%
Finance, insurance and other
100.0%
100.0%
100.0%
100.0%
Overall gross margin
14.4%
14.4%
14.8%
14.8%
SG&A Expenses (Continuing Operations):
Compensation
$ 140,423
$ 132,641
Advertising
13,243
11,120
Rent and rent related
26,653
28,240
Other
56,479
55,945
Total SG&A expenses
$ 236,798
$ -
$ 236,798
$ 227,946
$ (6,816)
$ 221,130
SG&A expenses as % of gross profit
75.4%
75.4%
77.6%
75.3%
Operating Margin %
3.0%
3.0%
2.8%
3.1%
Unit Data (Continuing Operations):
New retail units
33,767
29,482
Fleet units
1,312
1,878
Total new units
35,079
31,360
Used units
23,943
22,520
Wholesale units
7,452
6,879
(1) Represents lease exit adjustments and legal settlement charges.
(2) Represents tax-effect of pre-tax adjustments above.
(3) Represents tax-effected amounts related to lease exit adjustments.
Sonic Automotive, Inc.
Results of Operations (Unaudited)
(Dollars and shares in thousands, except per share amounts)
Year Ended December 31, 2012
Year Ended December 31, 2011
Reported
Adjustments
Adjusted
Reported
Adjustments
Adjusted
Revenues:
New retail vehicles
$ 4,546,209
$ -
$ 4,546,209
$ 3,867,978
$ -
$ 3,867,978
Fleet vehicles
169,715
-
169,715
220,120
-
220,120
Total new vehicles
4,715,924
-
4,715,924
4,088,098
-
4,088,098
Used vehicles
2,053,477
-
2,053,477
1,930,852
-
1,930,852
Wholesale vehicles
183,326
-
183,326
167,075
-
167,075
Total vehicles
6,952,727
-
6,952,727
6,186,025
-
6,186,025
Parts, service and collision repair
1,162,319
-
1,162,319
1,125,672
-
1,125,672
Finance, insurance and other
250,422
-
250,422
209,109
-
209,109
Total revenues
8,365,468
-
8,365,468
7,520,806
-
7,520,806
Gross profit
1,235,153
-
1,235,153
1,158,611
-
1,158,611
Selling, general and administrative expenses
(949,026)
-
(949,026)
(899,424)
6,816
(4)
(892,608)
Impairment charges
(440)
-
(440)
(200)
-
(200)
Depreciation and amortization
(45,285)
-
(45,285)
(39,446)
-
(39,446)
Operating income (loss)
240,402
-
240,402
219,541
6,816
226,357
Other income (expense):
Interest expense, floor plan
(19,454)
-
(19,454)
(18,405)
-
(18,405)
Interest expense, other, net
(60,090)
1,167
(1)
(58,923)
(66,857)
-
(66,857)
Other income (expense), net
(19,625)
19,713
(2)
88
(1,017)
-
(1,017)
Total other income (expense)
(99,169)
20,880
(78,289)
(86,279)
-
(86,279)
Income (loss) from continuing operations before taxes
141,233
20,880
162,113
133,262
6,816
140,078
Provision for income taxes - benefit (expense)
(49,972)
(11,711)
(3)
(61,683)
(51,731)
(2,617)
(5)
(54,348)
Income (loss) from continuing operations
91,261
9,169
100,430
81,531
4,199
85,730
Income (loss) from discontinued operations
(2,160)
-
(2,160)
(5,277)
(387)
(6)
(5,664)
Net income (loss)
$ 89,101
$ 9,169
$ 98,270
$ 76,254
$ 3,812
$ 80,066
Diluted earnings (loss) per common share:
Earnings (loss) per share from continuing operations
$ 1.56
$ 0.15
$ 1.71
$ 1.37
$ 0.06
$ 1.43
Earnings (loss) per share from discontinued operations
(0.03)
-
(0.03)
(0.08)
-
(0.08)
Earnings (loss) per common share
$ 1.53
$ 0.15
$ 1.68
$ 1.29
$ 0.06
$ 1.35
Weighted average common shares outstanding
60,406
60,406
65,464
65,464
Gross Margin Data (Continuing Operations):
New retail vehicles
6.0%
6.0%
6.6%
6.6%
Fleet vehicles
2.8%
2.8%
3.2%
3.2%
Total new vehicles
5.9%
5.9%
6.4%
6.4%
Used vehicles
7.0%
7.0%
7.2%
7.2%
Wholesale vehicles
(3.3%)
(3.3%)
(3.1%)
(3.1%)
Parts, service and collision repair
(48.9%)
(48.9%)
49.2%
49.2%
Finance, insurance and other
100.0%
100.0%
100.0%
100.0%
Overall gross margin
14.8%
14.8%
15.4%
15.4%
SG&A Expenses (Continuing Operations):
Compensation
$ 566,886
$ 527,146
Advertising
50,349
49,128
Rent and rent related
106,628
115,080
Other
225,163
208,070
Total SG&A expenses
$ 949,026
$ -
$ 949,026
$ 899,424
$ (6,816)
$ 892,608
SG&A expenses as % of gross profit
76.8%
76.8%
77.6%
77.0%
Operating Margin %
2.9%
2.9%
2.9%
3.0%
Unit Data (Continuing Operations):
New retail units
128,636
108,564
Fleet units
5,928
8,508
Total new units
134,564
117,072
Used units
102,556
96,355
Wholesale units
31,188
25,180
(1) Represents double-carry interest in July 2012.
(2) Represents debt extinguishment charges related to the 5.0% Convertible Notes.
(3) Represents the tax effect of pre-tax adjustments above and the effect of the settlement of a state tax examination.
(4) Represents lease exit adjustments and legal settlement charges.
(5) Represents the tax effect of pre-tax adjustments above.
(6) Represents tax-effected amounts related to lease exit adjustments.
Sonic Automotive, Inc.
Results of Operations (Unaudited)
(In thousands, except per share amounts)
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
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:
Contingently convertible
debt (5.0% Convertible Notes)
-
-
-
-
Stock compensation plans
474
Diluted earnings (loss) and shares
54,763
$ 28,359
$ 0.52
$ 1,590
$ 0.03
$ 29,949
$ 0.55
Fourth Quarter Ended December 31, 2011
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
Reported:
Earnings (loss) and shares
52,194
$ 21,241
$ (703)
$ 20,538
Effect of participating securities:
Non-vested restricted stock
and stock units
(277)
-
(277)
Basic earnings (loss) and shares
52,194
$ 20,964
$ 0.40
$ (703)
$ (0.01)
$ 20,261
$ 0.39
Effect of dilutive securities:
Contingently convertible
debt (5.0% Convertible Notes)
11,713
2,314
16
2,330
Stock compensation plans
560
Diluted earnings (loss) and shares
64,467
$ 23,278
$ 0.36
$ (687)
$ (0.01)
$ 22,591
$ 0.35
Adjustments (net of tax):
Lease exit adjustments
$ 749
$ 0.01
(387)
$ (0.01)
$ 362
$ -
Legal settlement charges
3,450
0.06
-
-
3,450
0.06
Total adjustments
$ 4,199
$ 0.07
$ (387)
$ (0.01)
$ 3,812
$ 0.06
Adjusted:
Diluted earnings (loss) per share
$ 0.43
$ (0.02)
$ 0.41
Sonic Automotive, Inc.
Results of Operations (Unaudited)
(In thousands, except per share amounts)
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
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
12,025
0.20
-
-
12,025
0.20
Settlement of state tax examination
(3,568)
(0.06)
-
-
(3,568)
(0.06)
Total adjustments
$ 9,169
$ 0.15
$ -
$ -
$ 9,169
$ 0.15
Adjusted:
Diluted earnings (loss) per share
$ 1.71
$ (0.03)
$ 1.68
Year Ended December 31, 2011
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
Reported:
Earnings (loss) and shares
52,358
$ 81,531
$ (5,277)
$ 76,254
Effect of participating securities:
Non-vested restricted stock
and stock units
(1,056)
-
(1,056)
Basic earnings (loss) and shares
52,358
$ 80,475
$ 1.54
$ (5,277)
$ (0.10)
$ 75,198
$ 1.44
Effect of dilutive securities:
Contingently convertible
debt (5.0% Convertible Notes)
12,517
9,093
207
9,300
Stock compensation plans
589
Diluted earnings (loss) and shares
65,464
$ 89,568
$ 1.37
$ (5,070)
$ (0.08)
$ 84,498
$ 1.29
Adjustments (net of tax):
Lease exit adjustments
$ 749
$ 0.01
(387)
$ -
$ 362
$ 0.01
Legal settlement charges
3,450
0.05
-
-
3,450
0.05
Total adjustments
$ 4,199
$ 0.06
$ (387)
$ -
$ 3,812
$ 0.06
Adjusted:
Diluted earnings (loss) per share
$ 1.43
$ (0.08)
$ 1.35
SOURCE Sonic Automotive, Inc.