Sonic Automotive, Inc. Announces Record Earnings for 1997
2 March 1998
Sonic Automotive, Inc. Announces Record Earnings for 1997
CHARLOTTE, N.C., March 2 -- Sonic Automotive, Inc.
reported gains in revenues, net income and earnings per share for
the year ended December 31, 1997. Proforma net income per share increased
21% from 1996 to $0.87.
For the year ended December 31, 1997 the Company's proforma (including the
results of the Dyer & Dyer, Ken Marks Ford, Lake Norman and Bowers Group
acquisitions, the reorganization and the Company's Initial Public Offering)
revenues were $949.2 million with unit sales of 51,680. This represented a
5.5% increase in revenues from $899.6 million and a 3.2% increase in unit
sales from 50,066 in 1996.
Proforma operating income, earnings before taxes and net income for the
year ended December 31, 1997 were $27.3 million, $15.7 million and
$9.8 million, respectively. Proforma shares outstanding totaled 11,250,000
and resulted in earnings per share of $0.87 for the year ended December 31,
1997. Proforma cash net income (net income plus goodwill amortization) was
$0.99 per share for the year ended December 31, 1997.
For the three months ended December 31, 1997 the Company's proforma total
revenues were $217.3 million with unit sales of 11,662. As compared to the
three month period ended December 31, 1996, this represented a 2.2% decrease
in revenues from $222.1 million and a 4.7% decrease in unit sales from 12,241.
Proforma operating income, earnings before taxes and net income for the
three months ended December 31, 1997 were $7.3 million, $3.9 million and
$2.4 million, respectively. Proforma earnings per share were $0.22 for the
quarter ended December 31, 1997. Proforma cash net income (net income plus
goodwill amortization) was $0.24 per share for the three months ended
December 31, 1997.
"Our performance in the fourth quarter was particularly strong given this
quarter's weakness in unit sales with two of our major brands. Our service,
parts and collision repair business continued to improve and revenues in these
businesses increased. Plans to improve finance and insurance operations
through our relationship with Automobile Protection Corp., Inc.
began to be realized in the fourth quarter. We expect continued improvement
in the high margin finance and insurance business in 1998," stated 0. Bruton
Smith, Chairman and Chief Executive Officer of Sonic Automotive, Inc.
Mr. Smith stated, "The benefits of purchasing power and economies of scale
are just beginning. We will realize cost savings from our purchasing power in
interest costs, supplies, services, fees and other significant expenses for
our dealerships in 1998."
Acquisitions
"Attractive acquisitions are in our pipeline and we are well on our way to
meeting our 1998 acquisition target," stated Mr. Smith. Sonic Automotive,
Inc. previously announced the acquisition of two dealerships in Clearwater,
Florida with over $120 million in annual sales. Mr. Smith stated,
"Acquisition opportunities are available at accretive pricing, both in new
markets and in our existing markets. Obtaining two new dealership franchises
from Volvo in the Atlanta market (previously announced) is an indication of
our relationship with manufacturers. We're pleased to be one of the first
public companies to be granted new franchises."
Historical Results
The Company's revenues for the twelve months ended December 31, 1997 were
$536.0 million representing an increase of $159.1 million or 42.2% from 1996.
Same store sales growth for the twelve months ended December 31, 1997
was 10.1%.
Operating income, earnings before income taxes and net income for the
twelve months ended December 31, 1997 were $14.9 million, $6.0 million and
$3.7 million, respectively, representing increases of $3.8 million or 34.7%,
$1.0 million or 19.5% and $0.7 million or 24.1%.
Revenues for the quarter ended December 31, 1997 were $195.8 million
representing an increase of $102.5 million or 110.0% from 1996. These
increases are due principally to acquisitions completed in the fourth quarter.
Same store sales growth for the three months ended December 31, 1997 was zero
percent.
Operating income, earnings before income taxes and net income after taxes
for the quarter ended December 31, 1997 were $5.8 million, $2.0 million and
$1.3 million, respectively, representing increases of $2.8 million or 94.5%,
$0.9 million or 89.0% and $0.7 million or 116.3% from the prior year
respectively. These increases are primarily due to the completed acquisitions
and an increase in gross profit and a decrease in floorplan interest expense
as a percentage of total revenues.
Included herein are forward-looking statements, including statements with
respect to anticipated revenue growth. There are many factors which 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 view, including without
limitation economic conditions, risks associated with acquisitions and the
risk factors set forth from time to time in the Company's filings with the
Securities and Exchange Commission.
Sonic Automotive, Inc.
Results of Operations (Unaudited)
(in thousands, except per share and unit data amounts)
Twelve Months Ended Three Months Ended
December 31, December 31,
1996 1997 1996 1997
New Units 11,693 15,715 1,629 5,367
Used Units 5,488 6,712 1,410 2,467
Total Units Retailed 17,181 22,427 3,039 7,834
Wholesale Units 5,344 7,287 808 2,602
Revenues
New Vehicles $233,979 $343,941 $60,921 $125,978
Used vehicles 68,054 85,132 15,197 32,387
Wholesale Vehicles 25,641 38,785 6,033 13,614
Total Vehicles 327,674 467,858 82,151 171,979
Parts & Service 42,075 57,537 10,178 21,220
Finance & Insurance 7,118 10,605 924 2,560
Total Revenues $376,867 $536,000 $93,253 $195,759
Total Gross Profit $ 45,820 $ 64,731 $11,726 $ 25,162
SG&A Expenses $ 33,677 $ 48,522 $ 8,468 $ 18,848
Depreciation & Amortization $ 1,076 $ 1,303 $ 285 $ 531
Operating Income $ 11,067 $ 14,906 $ 2,973 $ 5,783
Interest Expense $ 6,402 $ 9,206 $ 2,008 $ 3,819
Other Income $ 355 $ 298 $ 76 $ 5
Income Before Taxes $ 5,020 $ 5,998 $ 1,041 $ 1,969
Income Taxes $ 1,923 $ 2,249 $ 399 $ 718
Income Before Minority Int. $ 3,097 $ 3,749 $ 642 $ 1,251
Minority Interest $ 114 $ 47 $ 64 --
Net Income $ 2,983 $ 3,702 $ 578 $ 1,251
Earnings per share $ 0.48 $ 0.53 $ 0.09 $ 0.14
Weighted average shares
outstanding 6,250,000 6,948,630 6,250,000 9,021,739
SOURCE Sonic Automotive, Inc.