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Sonic Automotive, Inc. Reports Record Results

CHARLOTTE, N.C., Feb. 21, 2017 --

Fourth Quarter 2016 Results

  • Record Q4 pre-owned units and gross profit of 29,621 and $41.5 million, respectively
  • Record Q4 fixed operations gross profit of $169.9 million, up 0.5% over the prior year quarter
  • Record Q4 F&I gross profit and gross profit per retail unit of $88.3 million and $1,363, respectively
  • Record Q4 total gross profit of $371.7 million, up 2.2% over the prior year quarter
  • EchoPark® stores retailed 1,330 units, up 74.1% over the prior year quarter

Full Year 2016 Results

  • Record annual pre-owned units of 119,174, up 1.8% over the prior year
  • Record annual fixed operations gross profit of $674.1 million, up 1.3% over the prior year
  • Record annual F&I gross profit and gross profit per retail unit of $343.3 million and $1,354, respectively
  • Record annual total gross profit of $1.429 billion, up 1.0% over the prior year
  • EchoPark® stores retailed 4,865 units, up 50.9% over the prior year

Sonic Automotive, Inc. , one of the nation's largest automotive retailers, today reported financial results for the fourth quarter and full year of 2016.

GAAP Basis

Net income from continuing operations for the fourth quarter of 2016 and 2015 was $38.0 million, or $0.84 per diluted share, and $31.5 million, or $0.63 per diluted share, respectively.    Also included in the reported amounts for the fourth quarter of 2016 and 2015 is a net loss from operations related to EchoPark® of $1.3 million, or $0.03 per diluted share, and $2.2 million, or $0.04 per diluted share, respectively.

Net income from continuing operations for the full year of 2016 and 2015 was $94.5 million, or $2.06 per diluted share, and $88.1 million, or $1.73 per diluted share, respectively.  Also included in the reported amounts for the full year of 2016 and 2015 is a net loss from operations related to EchoPark® of $7.8 million, or $0.17 per diluted share, and $10.8 million, or $0.21 per diluted share, respectively.

Adjusted Basis

Adjusted net income from continuing operations and related earnings per diluted share are non-GAAP financial measures.  The schedules included in this press release reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures.

Adjusted net income from continuing operations for the fourth quarter of 2016 and 2015 was $29.8 million, or $0.66 per diluted share, and $30.9 million, or $0.61 per diluted share, respectively.  The adjustments in the 2016 quarterly period relate to gains for a settlement with an original equipment manufacturer ("OEM") and the adjustment of physical damage loss accruals offset partially by losses related to fixed asset impairments and lease exit charges.  The adjustments in the 2015 quarterly period relate to gains from the disposal of dealership franchises, offset partially by losses related to fixed asset and franchise asset impairments.     

Adjusted net income from continuing operations for the full year of 2016 and 2015 was $92.3 million, or $2.01 per diluted share, and $100.2 million, or $1.97 per diluted share, respectively.  The adjustments in the 2016 annual period relate to gains for a settlement with an OEM, partially offset by charges related to physical damage losses, lease exit charges and fixed asset impairments.  The adjustments in the 2015 annual period related to charges related to physical damage losses, legal matters, lease exit charges and fixed assets impairments, franchise assets and goodwill, offset partially by gains from the disposal of dealership franchises.    

Commentary

Jeff Dyke, Sonic's EVP of Operations, stated, "We are very proud of our record setting performance in the fourth quarter and throughout 2016.  During the year, increases in fixed operations and F&I gross profit have been able to overshadow challenges experienced in the new and used vehicle gross profit categories. We are very proud of our team for how they handled these challenges driven by recalls, over-supply of inventory and softening in the Houston, Texas market. The December month was an all-time record breaking month for us and offset a weaker start to the quarter.  We sold, grossed, serviced and profited more in December than in any month in our company's history.  We believe our brand mix, improvements in the Houston economy and our team's execution of our Playbook strategy helped lead to this record breaking performance.  In addition, our stores representing three of our most significant brands, Honda, BMW and Mercedes, were able to outpace industry unit results during the fourth quarter."

"EchoPark® continues to improve its performance from an operational and financial standpoint.  Several of the original stores in Denver were cash flow positive in the fourth quarter at the store operating level and our first store that has been open the longest was profitable for the year.  We have an additional store opening in Colorado Springs in the second quarter that will bring our store count total in Colorado to six.  Our next market we expect to open will be in Texas, specifically, the San Antonio market where we anticipate openings of at least three new locations in late 2017.  We are excited about our EchoPark® performance and the progress we are making from a profit perspective.  We also continue to have one of the highest Reputation.com scores for auto retail, and retail in general, as guests continue to tell us that the goal we set of developing the best guest experience in the industry is being met!"

2017 Outlook

B. Scott Smith, the Company's Chief Executive Officer, noted, "The 2016 year proved to be a bit of a roller coaster ride from month-to-month as we believe consumer uncertainty, the effect of recalls and stop-sales made it challenging for all automotive retailers. We expect 2017 to be consistent with the 2016 environment for dealers and anticipate new vehicle industry volume to be between 17.0 million and 17.5 million units.  We project diluted earnings per share from continuing operations for 2017 to be between $2.00 and $2.10 per share.  This range includes the effect of projected EchoPark® results and expansion.  We are projecting a loss related to EchoPark® for 2017 of between $0.23 and $0.27 per diluted share.  We will have additional comments on our 2017 outlook in our earnings call later today."

Dividend

Sonic's Board of Directors approved a quarterly dividend of $0.05 per share payable in cash for stockholders of record on March 15, 2017.  The dividend will be payable on April 14, 2017. 

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: 1.877.450.3867
International: 1.706.643.0958
Conference ID: 57878967

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: 57878967

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.

Forward Looking Statements

Included herein are forward-looking statements, including statements with respect to anticipated expansion of our EchoPark® business, the estimated new vehicle industry volume in 2017 and anticipated diluted earnings per share from continuing operations for the full year ending December 31, 2017.  There are many factors that affect management's views about future events and trends of the Company's business.  These factors involve risks and uncertainties that could cause actual results or trends to differ materially from management's views, 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, 2015.  The Company does not undertake any obligation to update forward-looking information, except as required under federal securities laws and the rules and regulations of the Securities and Exchange Commission (the "SEC").

Non-GAAP Financial Measures

This press release and the attached financial tables contain certain non-GAAP financial measures as defined under SEC rules, such as adjusted net income from continuing operations and related earnings per diluted share, which exclude certain items disclosed in the attached financial tables.  As required by SEC rules, the Company provides reconciliations of these measures to the most directly comparable GAAP financial measures.  The Company believes that these non-GAAP financial measures improve the transparency of the Company's disclosure, provide a meaningful presentation of the Company's results from its core business operations excluding the impact of items not related to the Company's ongoing core business operations, and improve the period-to-period comparability of the Company's results from its core business operations.

 

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)


This release contains certain non-GAAP financial measures (the "Adjusted" amounts) 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" amounts) 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 December 31,


Twelve Months Ended December 31,



2016


2015


2016


2015



(In thousands, except per share and unit data)

Revenues:









New retail vehicles


$          1,396,413


$          1,377,661


$          5,180,535


$          5,205,688

Fleet vehicles


11,914


22,101


53,970


59,713

Total new vehicles


1,408,327


1,399,762


5,234,505


5,265,401

Used vehicles


651,608


607,430


2,533,122


2,512,024

Wholesale vehicles


57,906


34,579


211,048


155,339

Total vehicles


2,117,841


2,041,771


7,978,675


7,932,764

Parts, service and collision repair


350,726


345,068


1,409,819


1,364,947

Finance, insurance and other, net


88,346


83,796


343,285


326,588

Total revenues


2,556,913


2,470,635


9,731,779


9,624,299

Gross profit


371,735


363,848


1,429,274


1,414,612

Selling, general and administrative expenses


(267,135)


(275,002)


(1,110,856)


(1,110,565)

Impairment charges


(1,824)


(1,257)


(8,063)


(17,955)

Depreciation and amortization


(20,144)


(17,846)


(77,446)


(68,799)

Operating income (loss)


82,632


69,743


232,909


217,293

Other income (expense):








Interest expense, floor plan


(7,919)


(5,840)


(27,716)


(21,326)

Interest expense, other, net


(12,546)


(12,275)


(50,106)


(50,910)

Other income (expense), net


5


-


125


99

Total other income (expense)


(20,460)


(18,115)


(77,697)


(72,137)

Income (loss) from continuing operations before taxes


62,172


51,628


155,212


145,156

Provision for income taxes for continuing operations - benefit (expense)


(24,131)


(20,121)


(60,696)


(57,065)

Income (loss) from continuing operations


38,041


31,507


94,516


88,091

Income (loss) from discontinued operations


(405)


(449)


(1,323)


(1,780)

Net income (loss)


$               37,636


$               31,058


$               93,193


$               86,311









Diluted earnings (loss) per common share:








Earnings (loss) per share from continuing operations


$                   0.84


$                   0.63


$                   2.06


$                   1.73

Earnings (loss) per share from discontinued operations


(0.01)


(0.01)


(0.03)


(0.03)

Earnings (loss) per common share


$                   0.83


$                   0.62


$                   2.03


$                   1.70

Weighted average common shares outstanding


45,341


50,278


45,948


50,883









Gross Margin Data (Continuing Operations):








New retail vehicles


5.3%


5.4%


5.0%


5.2%

Fleet vehicles


(0.3%)


0.1%


0.3%


(0.3%)

Total new vehicles


5.2%


5.3%


5.0%


5.1%

Used vehicles


6.4%


6.4%


6.3%


6.5%

Wholesale vehicles


(3.3%)


(5.8%)


(3.5%)


(4.7%)

Parts, service and collision repair


48.4%


49.0%


47.8%


48.8%

Finance, insurance and other


100.0%


100.0%


100.0%


100.0%

Overall gross margin


14.5%


14.7%


14.7%


14.7%









SG&A Expenses (Continuing Operations):








Compensation


$             167,724


$             169,510


$             674,617


$             666,668

Advertising


15,840


15,470


61,674


61,630

Rent


18,638


18,481


73,903


73,539

Other


64,933


71,541


300,662


308,728

Total SG&A expenses


$             267,135


$             275,002


$          1,110,856


$          1,110,565

SG&A expenses as % of gross profit


71.9%


75.6%


77.7%


78.5%









Operating Margin %


3.2%


2.8%


2.4%


2.3%









Unit Data (Continuing Operations):








New retail units


35,188


35,228


134,288


138,129

Fleet units


374


628


1,715


1,872

Total new units


35,562


35,856


136,003


140,001

Used units


29,621


28,220


119,174


117,123

Wholesale units


9,086


6,594


35,098


30,168

 

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)































Per Share Data
































Three Months Ended December 31, 2016





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


44,764


$     38,041




$       (405)




$     37,636



Effect of participating securities:















Non-vested restricted stock




(22)




-




(22)



Basic earnings (loss) and shares


44,764


$     38,019


$       0.85


$       (405)


$      (0.01)


$     37,614


$       0.84

Effect of dilutive securities:















Stock compensation plans


577













Diluted earnings (loss) and shares


45,341


$     38,019


$       0.84


$       (405)


$      (0.01)


$     37,614


$       0.83
















Adjustments:















OEM Settlement




$    (14,836)




$             -




$    (14,836)



Impairment charges




1,824




-




1,824



Storm damage and other




(411)




450




39



Total adjustments before taxes




(13,423)




450




(12,973)



Income tax effect of above adjustments




5,210




(153)




5,057



Effect of adjustments, net of income taxes




$      (8,213)


$      (0.18)


$         297


$       0.01


$      (7,916)


$      (0.17)
















Adjusted:















Earnings (loss) and















diluted earnings (loss) per share (1)




$     29,828


$       0.66


$       (108)


$           -


$     29,720


$       0.66
















(1) Net loss attributable to EchoPark®operations was $0.03 per fully diluted share in the three months ended December 31, 2016

















Three Months Ended December 31, 2015





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


49,872


$     1,507




$      (449)




$    31,058



Effect of participating securities:















Non-vested restricted stock




(13)




-




(13)



Basic earnings (loss) and shares


49,872


$   31,494


$      0.63


$      (449)


$     (0.01)


$    31,045


$      0.62

Effect of dilutive securities:















Stock compensation plans


406













Diluted earnings (loss) and shares


50,278


$    31,494


$      0.63


$      (449)


$     (0.01)


$    31,045


$      0.62
















Adjustments:















Gain on disposal




$     (2,323)




$            -




$     (2,323)



Impairment charges




1,257




-




1,257



Total adjustments before taxes




(1,066)




-




(1,066)



Income tax effect of above adjustments




415




-




415



Effect of adjustments, net of income taxes




$        (651)


$     (0.02)


$            -


$           -


$        (651)


$     (0.02)
















Adjusted:















Earnings (loss) and















diluted earnings (loss) per share (2)




$    30,856


$      0.61


$      (449)


$     (0.01)


$    30,407


$      0.60
















(2) Net loss attributable to EchoPark®operations was $0.04 per fully diluted share in the three months ended December 31, 2015





 

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)


Per Share Data
































Twelve Months Ended December 31, 2016





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


45,637


$     94,516




$    (1,323)




$     93,193



Effect of participating securities:















Non-vested restricted stock




(52)




-




(52)



Basic earnings (loss) and shares


45,637


$     94,464


$       2.07


$    (1,323)


$      (0.03)


$     93,141


$       2.04

Effect of dilutive securities:















Stock compensation plans


311













Diluted earnings (loss) and shares


45,948


$     94,464


$       2.06


$    (1,323)


$      (0.03)


$     93,141


$       2.03
















Adjustments:















OEM Settlement




$    (14,836)




$             -




$    (14,836)



Impairment charges




7,913




-




7,913



Storm damage and other




3,290




927




4,217



Total adjustments before taxes




(3,633)




927




(2,706)



Income tax effect of above adjustments




1,394




(341)




1,053



Effect of adjustments, net of income taxes




$      (2,239)


$      (0.05)


$         586


$       0.01


$      (1,653)


$      (0.04)
















Adjusted:















Earnings (loss) and















diluted earnings (loss) per share (3)




$     92,277


$       2.01


$       (737)


$      (0.02)


$     91,540


$       1.99
















(3) Net loss attributable to EchoPark®operations was $0.17 per fully diluted share in the twelve months ended December 31, 2016





































Twelve Months Ended December 31, 2015





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


50,489


$     88,091




$    (1,780)




$     86,311



Effect of participating securities:















Non-vested restricted stock




(36)




-




(36)



Basic earnings (loss) and shares


50,489


$     88,055


$       1.74


$    (1,780)


$      (0.03)


$     86,275


$       1.71

Effect of dilutive securities:















Stock compensation plans


394













Diluted earnings (loss) and shares


50,883


$     88,055


$       1.73


$    (1,780)


$      (0.03)


$     86,275


$       1.70
















Adjustments:















Gain on disposal




$      (3,279)




$             -




$      (3,279)



Impairment charges




17,918




-




17,918



Storm damage and other




5,138




-




5,138



Total adjustments before taxes




19,777




-




19,777



Income tax effect of above adjustments




(7,713)




-




(7,713)



Effect of adjustments, net of income taxes




$     12,064


$       0.24


$             -


$      (0.01)


$     12,064


$       0.23
















Adjusted:















Earnings (loss) and















diluted earnings (loss) per share (4)




$   100,155


$       1.97


$    (1,780)


$      (0.04)


$     98,375


$       1.93
















(4) Net loss attributable to EchoPark® operations was $0.19 per fully diluted share in the twelve months ended December 31, 2015





 

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)


New Vehicles




















Three Months Ended December 31,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except units and per unit data)

Reported:








Revenue


$          1,408,327


$          1,399,762


$                 8,565


0.6%

Gross profit


$               73,916


$               74,209


$                  (293)


(0.4%)

Unit sales


35,562


35,856


(294)


(0.8%)

Revenue per unit


$               39,602


$               39,038


$                    564


1.4%

Gross profit per unit


$                 2,079


$                 2,070


$                        9


0.4%

Gross profit as a % of revenue


5.2%


5.3%


(10)


bps











Twelve Months Ended December 31,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except units and per unit data)

Reported:








Revenue


$          5,234,505


$          5,265,401


$             (30,896)


(0.6%)

Gross profit


$             260,594


$             267,929


$               (7,335)


(2.7%)

Unit sales


136,003


140,001


(3,998)


(2.9%)

Revenue per unit


$               38,488


$               37,610


$                    878


2.3%

Gross profit per unit


$                 1,916


$                 1,914


$                        2


0.1%

Gross profit as a % of revenue


5.0%


5.1%


(10)


bps











Three Months Ended December 31,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except units and per unit data)

Same Store:








Revenue


$          1,393,218


$          1,394,423


$               (1,205)


(0.1%)

Gross profit


$               73,391


$               74,428


$               (1,037)


(1.4%)

Unit sales


35,261


35,726


(465)


(1.3%)

Revenue per unit


$               39,512


$               39,031


$                    481


1.2%

Gross profit per unit


$                 2,081


$                 2,083


$                      (2)


(0.1%)

Gross profit as a % of revenue


5.3%


5.3%


-


bps











Twelve Months Ended December 31,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except units and per unit data)

Same Store:








Revenue


$          5,214,210


$          5,221,517


$               (7,307)


(0.1%)

Gross profit


$             259,403


$             266,632


$               (7,229)


(2.7%)

Unit sales


135,605


138,901


(3,296)


(2.4%)

Revenue per unit


$               38,451


$               37,592


$                    859


2.3%

Gross profit per unit


$                 1,913


$                 1,920


$                      (7)


(0.4%)

Gross profit as a % of revenue


5.0%


5.1%


(10)


bps

 

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)


Used Vehicles




















Three Months Ended December 31,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except units and per unit data)

Reported:








Revenue


$             651,608


$             607,430


$               44,178


7.3%

Gross profit


$               41,464


$               38,772


$                 2,692


6.9%

Unit sales


29,621


28,220


1,401


5.0%

Revenue per unit


$               21,998


$               21,525


$                    473


2.2%

Gross profit per unit


$                 1,400


$                 1,374


$                      26


1.9%

Gross profit as a % of revenue


6.4%


6.4%


-


bps











Twelve Months Ended December 31,


Better / (Worse)



2016


2015


 Change


% Change



(In thousands, except units and per unit data)

Reported:








Revenue


$          2,533,122


$          2,512,024


$               21,098


0.8%

Gross profit


$             158,585


$             162,042


$               (3,457)


(2.1%)

Unit sales


119,174


117,123


2,051


1.8%

Revenue per unit


$               21,256


$               21,448


$                  (192)


(0.9%)

Gross profit per unit


$                 1,331


$                 1,384


$                    (53)


(3.8%)

Gross profit as a % of revenue


6.3%


6.5%


(20)


bps











Three Months Ended December 31,


Better / (Worse)



2016


2015


 Change


% Change



(In thousands, except units and per unit data)

Same Store:








Revenue


$             632,856


$             603,026


$               29,830


4.9%

Gross profit


$               38,591


$               38,681


$                    (90)


(0.2%)

Unit sales


28,781


28,000


781


2.8%

Revenue per unit


$               21,989


$               21,537


$                    452


2.1%

Gross profit per unit


$                 1,341


$                 1,381


$                    (40)


(2.9%)

Gross profit as a % of revenue


6.1%


6.4%


(30)


bps











Twelve Months Ended December 31,


Better / (Worse)



2016


2015


 Change


% Change



(In thousands, except units and per unit data)

Same Store:








Revenue


$          2,502,267


$          2,481,090


$               21,177


0.9%

Gross profit


$             156,841


$             161,743


$               (4,902)


(3.0%)

Unit sales


117,814


115,549


2,265


2.0%

Revenue per unit


$               21,239


$               21,472


$                  (233)


(1.1%)

Gross profit per unit


$                 1,331


$                 1,400


$                    (69)


(4.9%)

Gross profit as a % of revenue


6.3%


6.5%


(20)


bps

 

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)


Wholesale Vehicles




















Three Months Ended December 31,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except units and per unit data)

Reported:









Revenue


$               57,906


$               34,579


$               23,327


67.5%

Gross profit (loss)


$               (1,890)


$               (2,003)


$                    113


5.6%

Unit sales


9,086


6,594


2,492


37.8%

Revenue per unit


$                 6,373


$                 5,244


$                 1,129


21.5%

Gross profit (loss) per unit


$                  (208)


$                  (304)


$                      96


31.6%

Gross profit (loss) as a % of revenue


(3.3%)


(5.8%)


250


bps












Twelve Months Ended December 31,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except units and per unit data)

Reported:









Revenue


$             211,048


$             155,339


$               55,709


35.9%

Gross profit (loss)


$               (7,316)


$               (7,368)


$                      52


0.7%

Unit sales


35,098


30,168


4,930


16.3%

Revenue per unit


$                 6,013


$                 5,149


$                    864


16.8%

Gross profit (loss) per unit


$                  (208)


$                  (244)


$                      36


14.8%

Gross profit (loss) as a % of revenue


(3.5%)


(4.7%)


120


bps












Three Months Ended December 31,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except units and per unit data)

Same Store:









Revenue


$               56,696


$               34,436


$               22,260


64.6%

Gross profit (loss)


$               (1,762)


$               (1,898)


$                    136


7.2%

Unit sales


8,845


6,569


2,276


34.6%

Revenue per unit


$                 6,410


$                 5,242


$                 1,168


22.3%

Gross profit (loss) per unit


$                  (199)


$                  (289)


$                      90


31.1%

Gross profit (loss) as a % of revenue


(3.1%)


(5.5%)


240


bps












Twelve Months Ended December 31,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except units and per unit data)

Same Store:









Revenue


$             209,323


$             153,705


$               55,618


36.2%

Gross profit (loss)


$               (7,062)


$               (6,969)


$                    (93)


(1.3%)

Unit sales


34,798


29,869


4,929


16.5%

Revenue per unit


$                 6,015


$                 5,146


$                    869


16.9%

Gross profit (loss) per unit


$                  (203)


$                  (233)


$                      30


12.9%

Gross profit (loss) as a % of revenue


(3.4%)


(4.5%)


110


bps

 

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)


Parts, Service and Collision Repair ("Fixed Operations")


















Three Months Ended December 31,


Better / (Worse)



2016


2015


 Change


% Change

Reported:


(In thousands)

Revenue









Customer pay


$             139,550


$             145,787


$               (6,237)


(4.3%)

Warranty


67,656


58,923


8,733


14.8%

Wholesale parts


43,337


44,602


(1,265)


(2.8%)

Internal, sublet and other


100,183


95,756


4,427


4.6%

Total


$             350,726


$             345,068


$                 5,658


1.6%

Gross profit









Customer pay


$               73,958


$               79,475


$               (5,517)


(6.9%)

Warranty


36,973


31,795


5,178


16.3%

Wholesale parts


7,450


7,917


(467)


(5.9%)

Internal, sublet and other


51,519


49,887


1,632


3.3%

Total


$             169,900


$             169,074


$                    826


0.5%

Gross profit as a % of revenue









Customer pay


53.0%


54.5%


(150)


bps

Warranty


54.6%


54.0%


60


bps

Wholesale parts


17.2%


17.8%


(60)


bps

Internal, sublet and other


51.4%


52.1%


(70)


bps

Total


48.4%


49.0%


(60)


bps












Twelve Months Ended December 31,


Better / (Worse)



2016


2015


 Change


% Change

Reported:


(In thousands)

Revenue









Customer pay


$             582,557


$             577,265


$                 5,292


0.9%

Warranty


240,415


228,093


12,322


5.4%

Wholesale parts


176,870


181,296


(4,426)


(2.4%)

Internal, sublet and other


409,977


378,293


31,684


8.4%

Total


$          1,409,819


$          1,364,947


$               44,872


3.3%

Gross profit









Customer pay


$             314,791


$             316,026


$               (1,235)


(0.4%)

Warranty


129,924


126,571


3,353


2.6%

Wholesale parts


30,754


32,249


(1,495)


(4.6%)

Internal, sublet and other


198,657


190,575


8,082


4.2%

Total


$             674,126


$             665,421


$                 8,705


1.3%

Gross profit as a % of revenue









Customer pay


54.0%


54.7%


(70)


bps

Warranty


54.0%


55.5%


(150)


bps

Wholesale parts


17.4%


17.8%


(40)


bps

Internal, sublet and other


48.5%


50.4%


(190)


bps

Total


47.8%


48.8%


(100)


bps

 

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)


Parts, Service and Collision Repair ("Fixed Operations")


















Three Months Ended December 31,


Better / (Worse)



2016


2015


 Change


% Change

Same Store:


(In thousands)

Revenue









Customer pay


$             138,954


$             145,057


$               (6,103)


(4.2%)

Warranty


67,386


58,637


8,749


14.9%

Wholesale parts


43,320


44,353


(1,033)


(2.3%)

Internal, sublet and other


98,692


95,272


3,420


3.6%

Total


$             348,352


$             343,319


$                 5,033


1.5%

Gross profit









Customer pay


$               73,667


$               79,057


$               (5,390)


(6.8%)

Warranty


36,802


31,641


5,161


16.3%

Wholesale parts


7,448


7,864


(416)


(5.3%)

Internal, sublet and other


50,876


49,713


1,163


2.3%

Total


$             168,793


$             168,275


$                    518


0.3%

Gross profit as a % of revenue









Customer pay


53.0%


54.5%


(150)


bps

Warranty


54.6%


54.0%


60


bps

Wholesale parts


17.2%


17.7%


(50)


bps

Internal, sublet and other


51.6%


52.2%


(60)


bps

Total


48.5%


49.0%


(50)


bps












Twelve Months Ended December 31,


Better / (Worse)



2016


2015


 Change


% Change

Same Store:


(In thousands)

Revenue









Customer pay


$             581,642


$             569,924


$               11,718


2.1%

Warranty


240,065


225,572


14,493


6.4%

Wholesale parts


176,850


178,958


(2,108)


(1.2%)

Internal, sublet and other


407,371


374,003


33,368


8.9%

Total


$          1,405,928


$          1,348,457


$               57,471


4.3%

Gross profit









Customer pay


$             314,342


$             311,926


$                 2,416


0.8%

Warranty


129,721


125,255


4,466


3.6%

Wholesale parts


30,752


31,770


(1,018)


(3.2%)

Internal, sublet and other


196,758


188,423


8,335


4.4%

Total


$             671,573


$             657,374


$               14,199


2.2%

Gross profit as a % of revenue









Customer pay


54.0%


54.7%


(70)


bps

Warranty


54.0%


55.5%


(150)


bps

Wholesale parts


17.4%


17.8%


(40)


bps

Internal, sublet and other


48.3%


50.4%


(210)


bps

Total


47.8%


48.8%


(100)


bps

 

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)


Finance, Insurance and Other, Net ("F&I")



















Three Months Ended December 31,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except per unit data)

Reported:









Revenue


$               88,346


$               83,796


$                 4,550


5.4%

Gross profit per retail unit (excludes fleet)


$                 1,363


$                 1,321


$                      42


3.2%





















Twelve Months Ended December 31,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except per unit data)

Reported:









Revenue


$             343,285


$             326,588


$               16,697


5.1%

Gross profit per retail unit (excludes fleet)


$                 1,354


$                 1,279


$                      75


5.9%












Three Months Ended December 31,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except per unit data)

Same Store:









Revenue


$               85,445


$               83,393


$                 2,052


2.5%

Gross profit per retail unit (excludes fleet)


$                 1,342


$                 1,322


$                      20


1.5%





















Twelve Months Ended December 31,


Better / (Worse)



2016


2015


Change


% Change



(In thousands, except per unit data)

Same Store:









Revenue


$             338,733


$             323,556


$               15,177


4.7%

Gross profit per retail unit (excludes fleet)


$                 1,346


$                 1,281


$                      65


5.1%

 

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)


Selling, General and Administrative ("SG&A") Expenses


















Three Months Ended December 31,


Better / (Worse)



2016


2015


 Change


% Change



(In thousands)

Reported:









Compensation


$             167,724


$             169,510


$                 1,786


1.1%

Advertising


15,840


15,470


(370)


(2.4%)

Rent


18,638


18,481


(157)


(0.8%)

Other


64,933


71,541


6,608


9.2%

Total SG&A expenses


$             267,135


$             275,002


$                 7,867


2.9%










Adjustments:









OEM Settlement


$               14,836


$                      -





Storm damage and other


411


-





Gain on disposal


-


2,323





Total SG&A adjustments


$               15,247


$                 2,323














Adjusted:









Total adjusted SG&A expenses


$             282,382


$             277,325


$               (5,057)


(1.8%)










Reported:









SG&A expenses as a % of gross profit








Compensation


45.1%


46.6%


150


bps

Advertising


4.3%


4.3%


0


bps

Rent


5.0%


5.1%


10


bps

Other


17.5%


19.6%


210


bps

Total SG&A expenses as a % of gross profit


71.9%


75.6%


370


bps










Adjustments:









OEM Settlement


4.0%


0.0%





Storm damage and other


0.1%


0.0%





Gain on disposal


0.0%


0.6%





Total effect of adjustments


4.1%


0.6%














Adjusted:









Total adjusted SG&A as a % of gross profit


76.0%


76.2%


20


bps












Twelve Months Ended December 31,


Better / (Worse)



2016


2015


 Change


% Change



(In thousands)

Reported:








Compensation


$             674,617


$             666,668


$               (7,949)


(1.2%)

Advertising


61,674


61,630


(44)


(0.1%)

Rent


73,903


73,539


(364)


(0.5%)

Other


300,662


308,728


8,066


2.6%

Total SG&A expenses


$          1,110,856


$          1,110,565


$                  (291)


(0.0%)









Adjustments:









OEM Settlement


$               14,836


$                      -





Storm damage and other


(3,290)


(5,138)





Gain on disposal


-


3,279





Total SG&A adjustments


$               11,546


$               (1,859)














Adjusted:









Total adjusted SG&A expenses


$          1,122,402


$          1,108,706


$             (13,696)


(1.2%)










Reported:









SG&A expenses as a % of gross profit








Compensation


47.2%


47.1%


(10)


bps

Advertising


4.3%


4.4%


10


bps

Rent


5.2%


5.2%


0


bps

Other


21.0%


21.8%


80


bps

Total SG&A expenses as a % of gross profit


77.7%


78.5%


80


bps










Adjustments:









OEM Settlement


1.0%


0.0%





Storm damage and other


(0.2%)


(0.3%)





Gain on disposal


0.0%


0.2%





Total effect of adjustments


0.8%


(0.1%)














Adjusted:









Total adjusted SG&A as a % of gross profit


78.5%


78.4%


(10)


bps

 

SOURCE Sonic Automotive, Inc.

CONTACT: Heath Byrd, Chief Financial Officer, (704) 566-2400; C.G. Saffer, Vice President and Chief Accounting Officer, (704) 566-2439

RELATED LINKS
http://www.sonicautomotive.com