CHARLOTTE, N.C., April 21, 2015 /PRNewswire/ --
First Quarter 2015 Results
-- Record Q1 new retail units of 31,334, up 4.3%, over the prior year quarter -- Record Q1 pre-owned units and gross profit of 28,135 and $40.8 million, respectively -- Record Q1 fixed operations gross profit of $156.4 million, up 2.8% over the prior year quarter -- Record Q1 total gross profit of $335.0 million, up 1.8% over the prior year quarter -- EchoPark(®) stores retail 660 units
Sonic Automotive, Inc. (NYSE: SAH), one of the nation's largest automotive retailers, today reported adjusted net income from continuing operations for the first quarter of 2015 of $18.8 million, or $0.37 per diluted share. Included in these adjusted amounts are pre-tax expenses of $4.9 million, or $0.06 per diluted share, related to the Company's EchoPark(®) initiative and $3.8 million, or $0.05 per diluted share, related to its One Sonic-One Experience initiative.
Net income from continuing operations for the first quarter of 2014 was $20.0 million, or $0.38 per diluted share. Included in these amounts are pre-tax expenses of $1.7 million, or $0.02 per diluted share, related to the Company's EchoPark(®) initiative and $2.1 million, or $0.02 per diluted share, related to its One Sonic-One Experience initiative.
On a GAAP basis, net income from continuing operations and related diluted earnings per share for the first quarter 2015 were $14.4 million and $0.28 per share, respectively. There were no adjustments in the first quarter of 2014. See the accompanying tables for details of quarterly adjustments.
Jeff Dyke, Sonic's EVP of Operations, stated, "We had another solid record setting quarter! Our One Sonic-One Experience stores are making great progress. Our first store that adopted the process, Town & Country Toyota, has gained more than 600 basis points of market share in each of the last two months year-over-year, is tracking to do the same again in April, and has experienced steady growth in profitability. More exciting is the remaining Charlotte stores are following in the same path giving us great confidence that we are on the right track. While the change has been significant, the results from a share and guest satisfaction perspective are adding to our resolve that the decisions we have made to enhance our guest experience are right on target. We are also equally excited about EchoPark(®)! We sold 660 units for the quarter, just under 300 units in the month of March, and have grown the business rapidly. These results are a direct reflection of our business plan, our team's depth of experience, our unmatched guest experience and a response from our customer base that confirms what we were trying to accomplish. As these two strategies come to life, we look for the Sonic Brand to become a household name in the retail world beyond automotive driven by an unmatched customer experience. None of this would be possible without the extraordinary effort of our remarkable team - many thanks to them! We look forward to continued success in the coming years."
B. Scott Smith, Sonic's President, remarked, "We have made a lot of progress in the first quarter of the year. Our Charlotte stores have migrated to our One Sonic-One Experience platform and we now have three EchoPark(® )retail operating locations in Denver, with progress made to open an additional location by the end of 2015. We are very pleased with how our associates and customers are embracing the technologies and improved transaction processes. Although there is still a lot of work to be done to ensure the long-term sustainability of these initiatives, the cornerstones have been set and we look forward to building upon these in the future."
First 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 "Webcasts & Presentations."
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: 1.877.450.3867
International: 1.706.643.0958
Conference ID: 20767539
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: 20767539
About Sonic Automotive
Sonic Automotive, Inc., a Fortune 500 company based in Charlotte, N.C., is one of the nation's largest automotive retailers. Sonic can be reached on the web at www.sonicautomotive.com.
Included herein are forward-looking statements, including statements with respect to anticipated future success and impacts from the implementation of our planned customer experience and stand-alone pre-owned store 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, 2014. 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 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 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. Three Months Ended March 31, 2015 2014 ---- ---- (In thousands, except per share and unit data) Revenues: New retail vehicles $1,190,215 $1,112,291 Fleet vehicles 12,108 34,329 Total new vehicles 1,202,323 1,146,620 Used vehicles 593,742 559,816 Wholesale vehicles 41,656 41,598 ------ ------ Total vehicles 1,837,721 1,748,034 Parts, service and collision repair 323,194 318,771 Finance, insurance and other, net 74,600 69,581 ------ ------ Total revenues 2,235,515 2,136,386 Gross profit 334,959 329,000 Selling, general and administrative expenses (270,862) (263,973) Impairment charges (6,192) (3) Depreciation and amortization (16,409) (14,381) ------- ------- Operating income (loss) 41,496 50,643 Other income (expense): Interest expense, floor plan (4,778) (4,689) Interest expense, other, net (13,219) (13,818) Other income (expense), net 90 97 --- --- Total other income (expense) (17,907) (18,410) ------- ------- Income (loss) from continuing operations before taxes 23,589 32,233 Provision for income taxes - benefit (expense) (9,200) (12,249) ------ ------- Income (loss) from continuing operations 14,389 19,984 Income (loss) from discontinued operations (422) (598) ---- ---- Net income (loss) $13,967 $19,386 ======= ======= Diluted earnings (loss) per common share: Earnings (loss) per share from continuing operations $0.28 $0.38 Earnings (loss) per share from discontinued operations (0.01) (0.02) Earnings (loss) per common share $0.27 $0.36 ===== ===== Weighted average common shares outstanding 51,403 52,946 Gross Margin Data (Continuing Operations): New retail vehicles 5.3% 5.9% Fleet vehicles (0.6%) 2.6% Total new vehicles 5.3% 5.8% Used vehicles 6.9% 7.3% Wholesale vehicles (0.5%) (0.2%) Parts, service and collision repair 48.4% 47.7% Finance, insurance and other 100.0% 100.0% Overall gross margin 15.0% 15.4% SG&A Expenses (Continuing Operations): Compensation $161,858 $157,154 Advertising 15,332 14,119 Rent 18,254 18,535 Other 75,418 74,165 Total SG&A expenses $270,862 $263,973 SG&A expenses as % of gross profit 80.9% 80.2% Operating Margin % 1.9% 2.4% Unit Data (Continuing Operations): New retail units 31,334 30,029 Fleet units 355 1,102 Total new units 31,689 31,131 Used units 28,135 27,657 Wholesale units 7,777 7,380
Sonic Automotive, Inc. Results of Operations (Unaudited) Per Share Data Three Months Ended March 31, 2015 --------------------------------- Income (Loss) Income (Loss) From Continuing From Discontinued Operations Average 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 50,854 $14,389 $(422) $13,967 Effect of participating securities: Non-vested restricted stock and stock units (5) - (5) --- --- --- Basic earnings (loss) and shares 50,854 $14,384 $0.28 $(422) $(0.01) $13,962 $0.27 Effect of dilutive securities: Stock compensation plans 549 Diluted earnings (loss) and shares 51,403 $14,384 $0.28 $(422) $(0.01) $13,962 $0.27 ====== ======= ===== ===== ====== ======= ===== Adjustments (net of tax): Impairment charges $3,777 $0.07 - $ - $3,777 $0.07 Other 634 0.02 - - 634 0.02 Total adjustments $4,411 $0.09 $ - $ - $4,411 $0.09 Adjusted: Earnings (loss) and Diluted earnings (loss) per share (1) $18,800 $0.37 $(422) $(0.01) $18,378 $0.36 ===== ====== ===== (1) Expenses attributable to the EchoPark(R) initiative were $0.06 per fully diluted share in the three months ended March 31, 2015 Three Months Ended March 31, 2014 --------------------------------- 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 52,418 $19,984 $(598) $19,386 Effect of participating securities: Non-vested restricted stock and stock units (63) - (63) --- --- --- Basic earnings (loss) and shares 52,418 $19,921 $0.38 $(598) $(0.01) $19,323 $0.37 Effect of dilutive securities: Stock compensation plans 528 --- Diluted earnings (loss) and shares (2) 52,946 $19,921 $0.38 $(598) $(0.02) $19,323 $0.36 ====== ======= ===== ===== ====== ======= ===== (2) Expenses attributable to the EchoPark(R) initiative were $0.02 per fully diluted share in the three months ended March 31, 2014
Sonic Automotive, Inc. Results of Operations (Unaudited) New Vehicles Three Months Ended March 31, Better / (Worse) ---------------------------- ---------------- 2015 2014 Change % Change ---- ---- ------ -------- (In thousands, except units and per unit data) Reported: Revenue $1,202,323 $1,146,620 $55,703 4.9% Gross profit $63,350 $66,673 $(3,323) (5.0%) Unit sales 31,689 31,131 558 1.8% Revenue per unit $37,941 $36,832 $1,109 3.0% Gross profit per unit $1,999 $2,142 $(143) (6.7%) Gross profit as a % of revenue 5.3% 5.8% (50) bps Three Months Ended March 31, Better / (Worse) ---------------------------- ---------------- 2015 2014 Change % Change ---- ---- ------ -------- (In thousands, except units and per unit data) Same Store: Revenue $1,190,252 $1,110,066 $80,186 7.2% Gross profit $62,438 $64,632 $(2,194) (3.4%) Unit sales 31,336 30,082 1,254 4.2% Revenue per unit $37,984 $36,901 $1,083 2.9% Gross profit per unit $1,993 $2,149 $(156) (7.3%) Gross profit as a % of revenue 5.2% 5.8% (60) bps
Sonic Automotive, Inc. Results of Operations (Unaudited) Used Vehicles Three Months Ended March 31, Better / (Worse) ---------------------------- ---------------- 2015 2014 Change % Change ---- ---- ------ -------- (In thousands, except units and per unit data) Reported: Revenue $593,742 $559,816 $33,926 6.1% Gross profit $40,844 $40,693 $151 0.4% Unit sales 28,135 27,657 478 1.7% Revenue per unit $21,103 $20,241 $862 4.3% Gross profit per unit $1,452 $1,471 $(19) (1.3%) Gross profit as a % of revenue 6.9% 7.3% (40) bps Three Months Ended March 31, Better / (Worse) ---------------------------- ---------------- 2015 2014 Change % Change ---- ---- ------ -------- (In thousands, except units and per unit data) Same Store: Revenue $572,759 $537,639 $35,120 6.5% Gross profit $40,013 $39,286 $727 1.9% Unit sales 27,079 26,601 478 1.8% Revenue per unit $21,151 $20,211 $940 4.7% Gross profit per unit $1,478 $1,477 $1 0.1% Gross profit as a % of revenue 7.0% 7.3% (30) bps
Sonic Automotive, Inc. Results of Operations (Unaudited) Wholesale Vehicles Three Months Ended March 31, Better / (Worse) ---------------------------- ---------------- 2015 2014 Change % Change ---- ---- ------ -------- (In thousands, except units and per unit data) Reported: Revenue $41,656 $41,598 $58 0.1% Gross profit (loss) $(210) $(93) $(117) (125.8%) Unit sales 7,777 7,380 397 5.4% Revenue per unit $5,356 $5,637 $(281) (5.0%) Gross profit (loss) per unit $(27) $(13) $(14) (107.7%) Gross profit (loss) as a % of revenue (0.5%) (0.2%) (30) bps Three Months Ended March 31, Better / (Worse) ---------------------------- ---------------- 2015 2014 Change % Change ---- ---- ------ -------- (In thousands, except units and per unit data) Same Store: Revenue $40,773 $40,246 $527 1.3% Gross profit (loss) $(186) $(23) $(163) (708.7%) Unit sales 7,523 7,145 378 5.3% Revenue per unit $5,420 $5,633 $(213) (3.8%) Gross profit (loss) per unit $(25) $(3) $(22) (733.3%) Gross profit (loss) as a % of revenue (0.5%) (0.1%) (40) bps
Sonic Automotive, Inc. Results of Operations (Unaudited) Parts, Service and Collision Repair ("Fixed Operations") Three Months Ended March 31, Better / (Worse) ---------------------------- ---------------- 2015 2014 Change % Change ---- ---- ------ -------- Reported: (In thousands) Revenue Customer pay $137,623 $141,121 $(3,498) (2.5%) Warranty 53,498 46,591 6,907 14.8% Wholesale parts 45,012 47,944 (2,932) (6.1%) Internal, sublet and other 87,061 83,115 3,946 4.7% Total $323,194 $318,771 $4,423 1.4% ======== ======== ====== === Gross profit Customer pay $75,678 $77,999 $(2,321) (3.0%) Warranty 29,760 25,238 4,522 17.9% Wholesale parts 8,138 8,161 (23) (0.3%) Internal, sublet and other 42,799 40,748 2,051 5.0% Total $156,375 $152,146 $4,229 2.8% ======== ======== ====== === Gross profit as a % of revenue Customer pay 55.0% 55.3% (30) bps Warranty 55.6% 54.2% 140 bps Wholesale parts 18.1% 17.0% 110 bps Internal, sublet and other 49.2% 49.0% 20 bps Total 48.4% 47.7% 70 bps
Sonic Automotive, Inc. Results of Operations (Unaudited) Parts, Service and Collision Repair ("Fixed Operations") Three Months Ended March 31, Better / (Worse) ---------------------------- ---------------- 2015 2014 Change % Change ---- ---- ------ -------- Same Store: (In thousands) Revenue Customer pay $135,768 $136,486 $(718) (0.5%) Warranty 52,971 44,774 8,197 18.3% Wholesale parts 44,580 46,667 (2,087) (4.5%) Internal, sublet and other 84,956 80,559 4,397 5.5% Total $318,275 $308,486 $9,789 3.2% ======== ======== ====== === Gross profit Customer pay $74,689 $75,558 $(869) (1.2%) Warranty 29,457 24,269 5,188 21.4% Wholesale parts 8,052 7,907 145 1.8% Internal, sublet and other 41,809 39,145 2,664 6.8% Total $154,007 $146,879 $7,128 4.9% ======== ======== ====== === Gross profit as a % of revenue Customer pay 55.0% 55.4% (40) bps Warranty 55.6% 54.2% 140 bps Wholesale parts 18.1% 16.9% 120 bps Internal, sublet and other 49.2% 48.6% 60 bps Total 48.4% 47.6% 80 bps
Sonic Automotive, Inc. Results of Operations (Unaudited) Finance, Insurance and Other, Net ("F&I") Three Months Ended March 31, Better / (Worse) ---------------------------- ---------------- 2015 2014 Change % Change ---- ---- ------ -------- (In thousands, except per unit data) Reported: Revenue $74,600 $69,581 $5,019 7.2% Gross profit per retail unit (excludes fleet) $1,254 $1,206 $48 4.0% Three Months Ended March 31, Better / (Worse) ---------------------------- ---------------- 2015 2014 Change % Change ---- ---- ------ -------- (In thousands, except per unit data) Same Store: Revenue $73,129 $67,182 $5,947 8.9% Gross profit per retail unit (excludes fleet) $1,260 $1,209 $51 4.2%
Sonic Automotive, Inc. Results of Operations (Unaudited) Selling, General and Administrative ("SG&A") Expenses Three Months Ended March 31, Better / (Worse) ---------------------------- ---------------- 2015 2014 Change % Change ---- ---- ------ -------- (In thousands) Reported: Compensation $161,858 $157,154 $(4,704) (3.0%) Advertising 15,332 14,119 (1,213) (8.6%) Rent 18,254 18,535 281 1.5% Other 75,418 74,165 (1,253) (1.7%) ------ ------ Total $270,862 $263,973 $(6,889) (2.6%) ======== ======== ======= ===== SG&A expenses as a % of gross profit Compensation 48.3% 47.8% (50) bps Advertising 4.6% 4.3% (30) bps Rent 5.4% 5.6% 20 bps Other 22.6% 22.5% (10) bps Total 80.9% 80.2% (70) bps
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SOURCE Sonic Automotive, Inc.