Sonic Automotive, Inc. Reports Earnings Per Share Increase
26 April 1999
Sonic Automotive, Inc. Reports Earnings Per Share Increase Of 167% To $0.24, Net Earnings Up 213.0%
CHARLOTTE, N.C., April 26 -- Sonic Automotive, Inc.
announced today that net income for the first quarter ended
March 31, 1999 increased 213.0% to $6.7 million, or $0.24 per diluted share,
from $2.1 million, or $0.09 per diluted share, for the first quarter ended
March 31, 1998. Despite a 23% increase in share count, earnings per diluted
share increased 167% for the quarter ended March 31, 1998 over the prior year.
Cash income per diluted share (net income plus goodwill amortization) was
$0.28 in the first quarter of 1999 versus $0.12 in the first quarter of 1998,
an increase of 133.0%.
Sonic Automotive, Inc. is one of the leading automotive retailers in the
United States, with operations in Alabama, Florida, Georgia, North Carolina,
Ohio, South Carolina, Tennessee and Texas. Upon completion of all previously
announced acquisitions, Sonic will operate 111 franchises and 28 collision
repair centers.
O. Bruton Smith, the Company's Chairman and Chief Executive Officer,
stated "Sonic has, once again, exceeded analysts' estimates and continues to
demonstrate the ability to grow earnings from same store improvements and
acquisitions. Our net earnings grew more rapidly than revenues for the first
quarter of 1999."
Growth in Revenues and Margins
Total revenues for the first quarter of 1999 rose 124.8% to $593.5 million
from $264.0 million in the first quarter of 1998. During the first quarter
1999, Sonic sold 14,282 new vehicles and 9,408 retail used vehicles,
representing a 115.8% increase in new vehicles sold from 6,617 and a
117.1% increase in retail used vehicles sold from 4,333.
Gross profits increased 128.6% to $78.1 million in the first quarter of
1999, compared to $34.2 million in the first quarter of 1998, resulting
primarily from additional acquisitions and improvements in gross margins to
13.2% from 12.9%.
Operating income during the quarter rose to $19.0 million from
$7.4 million in the same quarter of last year, representing an increase of
155.3%. As a percentage of total revenues, operating income for the first
quarter of 1999 increased to 3.2% from 2.8% for the first quarter of 1998,
despite an increase of $0.5 million in goodwill amortization.
"Sharing of best practices, benefits of combined purchasing power and
improved management controls have enabled Sonic to consistently improve
operating income margins. We continue to demonstrate consolidation in auto
retailing is generating value for shareholders," stated Mr. Smith.
Same Store Sales
On a same store basis, revenues in the first quarter of 1999 rose 22.3% to
$322.9 million from $264.0 million in the first quarter of 1998. Same store
sales increased in all segments of the business and same store operating
income increased by 45% from the first quarter of the prior year.
Mr. Bruton Smith further stated, "We are growing earnings through same
store revenue gains and operating margin improvements. Economies of scale
such as lower floor plan interest costs are being captured and are driving
bottomline profit increases."
Acquisitions
Sonic Automotive is also pleased to announce that it has closed its
previously announced acquisitions of Sam White Motor City in Houston, Texas.
Sam White Motor City includes Nissan and Oldsmobile franchises and increases
Sonic's dealership total in the Houston market to six dealerships representing
ten franchises.
In 1999, the Company has closed the acquisitions of 13 additional
dealerships representing approximately $560 million in 1998 revenues. Sonic
currently has signed definitive agreements to acquire an additional 17
dealerships representing approximately $630 million in 1998 revenues. All of
those transactions are expected to close by no later than the end of the third
quarter of 1999 and are subject to customary closing conditions including, but
not limited to, manufacturer and other regulatory approval.
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 risk 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 recent filings with
the Securities and Exchange Commission.
Results of Operations (Unaudited)
(in thousands, except per share and unit data amounts)
Three Months Ended
March 31,
1998 1999
New Units 6,617 14,282
Used Units 4,333 9,408
Total Units Retailed 10,950 23,690
Wholesale Units 3,744 7,571
Revenues:
New Vehicles $153,107 $346,992
Used Vehicles 57,765 129,859
Wholesale Vehicles 18,706 44,416
Total Vehicles 229,578 521,267
Parts, Service, and Collision Repair 29,136 59,625
Finance & Insurance 5,264 12,560
Total Revenues 263,978 593,452
Total Gross Profit 34,158 78,074
SG&A Expenses 25,918 57,214
Depreciation & Amortization 815 1,907
Operating Income 7,425 18,953
Interest Expense 3,959 8,113
Other Income 8 8
Income Before Taxes 3,474 10,848
Income Taxes 1,338 4,161
Income Before Minority Interest 2,136 6,687
Minority Interest -
Net Income $2,136 $6,687
Diluted income per share $0.09 $0.24
Diluted weighted average shares
outstanding 22,748 27,998