SAH Sonic Automotive Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 20, 2015

 

 

SONIC AUTOMOTIVE, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

(State or other jurisdiction

of incorporation)

 

1-13395		56-2010790
(Commission File Number)		(IRS Employer Identification No.)

 

4401 Colwick Road Charlotte, North Carolina		28211
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (704) 566-2400

Not Applicable

(Former name or former address, if changed since last report.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 2.02.

Results of Operations and Financial Condition.

On July 20, 2015, Sonic Automotive, Inc. (the “Company”) issued a press release announcing its financial results for its fiscal second quarter ended June 30, 2015. A copy of the press release is attached hereto as Exhibit 99.1 and a copy of the earnings call presentation materials is attached hereto as Exhibit 99.2.

 

Item 7.01.

Regulation FD Disclosure.

On July 20, 2015, the Company issued a press release announcing the approval of a quarterly cash dividend. A copy of the press release is attached hereto as Exhibit 99.3.

 

Item 9.01.

Financial Statements and Exhibits.

 

(d)

Exhibits.

 

The information in this Form 8-K, including the exhibits attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

				SONIC AUTOMOTIVE, INC.
Date: July 20, 2015				By:		/s/ Stephen K. Coss
						Stephen K. Coss
						Senior Vice President and General Counsel

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INDEX TO EXHIBITS

 

Exhibit No.		Description
99.1		Press release of Sonic Automotive, Inc., dated July 20, 2015, reporting Sonic Automotive, Inc.’s financial results for the fiscal second quarter ended June 30, 2015
99.2		Earnings call presentation materials
99.3		Press release of Sonic Automotive, Inc., dated July 20, 2015, reporting quarterly cash dividend

Exhibit 99.1

FOR IMMEDIATE RELEASE

Sonic Automotive, Inc. Reports Quarterly Adjusted Continuing Operations Earnings per Share of $0.46

All-Time Record Gross Profit and Achieved 100 Pre-Owned Retail Unit Sales per Store per Month

Second Quarter 2015 Results

 

•

Record Q2 total gross profit of $355.6 million, up 2.5% over the prior year quarter

 

•

Achieved milestone of retailing 100 pre-owned units per store per month for the quarter on a same store basis

 

•

All-time record quarterly pre-owned retail sales of 30,301 units, up 6.3% over the prior year quarter

 

•

All-time record quarterly fixed operations gross profit of $170.2 million, up 6.5% over the prior year quarter

 

•

Echo Park® stores retail 881 units, up 221 units, or 33.5%, from the prior quarter

CHARLOTTE, N.C. – July 20, 2015 – Sonic Automotive, Inc. (NYSE: SAH), one of the nation’s largest automotive retailers, today reported adjusted net income from continuing operations for the second quarter of 2015 of $23.4 million, or $0.46 per diluted share. Included in these adjusted amounts are pre-tax expenses of $4.1 million, or $0.05 per diluted share, related to EchoPark^® operations.

Adjusted net income from continuing operations for the second quarter of 2014 was $23.5 million, or $0.44 per diluted share. Included in these adjusted amounts are pre-tax expenses of $3.2 million, or $0.04 per diluted share, related to EchoPark^® operations.

On a GAAP basis, net income from continuing operations and related diluted earnings per share for the second quarter of 2015 were $15.1 million and $0.30 per share, respectively, and net income from continuing operations and related diluted earnings per share for the second quarter of 2014 were $27.1 million and $0.51 per share, respectively. See the accompanying tables for a reconciliation of the adjusted balances to GAAP basis amounts and further details of the quarterly adjustments.

B. Scott Smith, Sonic’s President, noted, “I’m proud of our operations team for achieving the lofty goal of retailing 100 pre-owned vehicles per store per month. We have had quarters in the past when we approached achieving this metric and several months where we surpassed this metric, but it had never been achieved on a quarterly basis. Generating this type of retail activity fuels our fixed operations and F&I areas where we are most profitable.”

“We also worked to build our fixed operations business in the quarter. In addition to the benefits we experienced through the reconditioning work performed to achieve the sale of 100 pre-owned vehicles per store per month, we were able to grow overall same store fixed operations gross profit $13.1 million, or 8.5%, compared to the prior year quarter. Fixed operations growth was achieved in our customer pay, warranty and internal categories. This type of internal growth

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strategy is central to our One Sonic-One Experience (OSOE) initiative which is intended to grow the top-line revenue categories, generate retail activity, and realize benefits over multiple gross profit streams.”

Jeff Dyke, Sonic’s EVP of Operations, stated, “We had another very busy quarter at Sonic Automotive. From a franchise store perspective, we executed our playbook and delivered another solid operating performance allowing our team to leverage this performance while we build on our OSOE strategy and our EchoPark^® business model. I am very excited about our pre-owned volume and the continued focus and execution from our team as they achieved 100 units per store per month for the quarter. Our focus on our fixed operations business, and in particular our customer pay business, is beginning to pay off and the result showed in the quarter. Warranty business was also robust.”

“Our OSOE strategy continues to make progress. The associated technology’s performance is working very well and as a result, we have decided to move ahead with the rollout of several of its technology applications that will benefit our guests and associates. Our proprietary CRM, desking and appraisal tools will be added to our stores over the next year and a half in the first wave of three planned waves that will ultimately result in the complete rollout of OSOE. We will roll out our F&I and pricing tools as part of the OSOE strategy once we are comfortable with our performance in the Charlotte test market.”

“EchoPark^® made great strides again this quarter as we ramped up and executed our business plan. We are meeting our goals and have started the acquisition of properties for our next market. We plan to begin construction in this next market before the end of this year. We also plan on adding an additional five locations to our Denver market over the next twelve months. Our associates have created a culture in the stores which allows them to offer our customers an easy, transparent shopping experience and, as a result, our guest feedback is overwhelmingly positive. We expect our initial neighborhood locations in Denver will become cash flow positive prior to the end of this year and we have developed a next generation neighborhood store that further improves our guest experience and operational efficiency.”

Second Quarter 2015 Earnings Conference Call

Senior management will host a conference call today at 10:00 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: 76953618

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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: 76953618

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.

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Contact:

Heath Byrd, Chief Financial Officer (704) 566-2400

C.G. Saffer, Vice President and Chief Accounting Officer (704) 566-2439

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Sonic Automotive, Inc.

Results of Operations (Unaudited)

 

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2015				2014				2015				2014
		(In thousands, except per share and unit data)
Revenues:
New retail vehicles		$	1,285,632			$	1,283,231			$	2,475,847			$	2,395,521
Fleet vehicles			9,656				15,546				21,763				49,876
Total new vehicles			1,295,288				1,298,777				2,497,610				2,445,397
Used vehicles			658,794				603,868				1,252,536				1,163,684
Wholesale vehicles			41,131				44,765				82,789				86,363
Total vehicles			1,995,213				1,947,410				3,832,935				3,695,444
Parts, service and collision repair			346,164				329,134				669,358				647,905
Finance, insurance and other, net			82,363				76,736				156,963				146,317
Total revenues			2,423,740				2,353,280				4,659,256				4,489,666
Gross profit			355,554				346,947				690,513				675,947
Selling, general and administrative expenses			(284,661	)			(268,914	)			(555,523	)			(532,887	)
Impairment charges			(10,469	)			(4	)			(16,661	)			(7	)
Depreciation and amortization			(17,294	)			(14,431	)			(33,703	)			(28,812	)
Operating income (loss)			43,130				63,598				84,626				114,241
Other income (expense):
Interest expense, floor plan			(5,345	)			(4,846	)			(10,123	)			(9,535	)
Interest expense, other, net			(13,054	)			(13,865	)			(26,274	)			(27,683	)
Other income (expense), net			10				3				100				100
Total other income (expense)			(18,389	)			(18,708	)			(36,297	)			(37,118	)
Income (loss) from continuing operations before taxes			24,741				44,890				48,329				77,123
Provision for income taxes for continuing operations- benefit (expense)			(9,649	)			(17,829	)			(18,848	)			(30,078	)
Income (loss) from continuing operations			15,092				27,061				29,481				47,045
Income (loss) from discontinued operations			(311	)			(68	)			(732	)			(666	)
Net income (loss)		$	14,781			$	26,993			$	28,749			$	46,379
Diluted earnings (loss) per common share:
Earnings (loss) per share from continuing operations		$	0.30			$	0.51			$	0.57			$	0.89
Earnings (loss) per share from discontinued operations			(0.01	)			—				(0.01	)			(0.02	)
Earnings (loss) per common share		$	0.29			$	0.51			$	0.56			$	0.87
Weighted average common shares outstanding			51,093				52,930				51,247				52,938
Gross Margin Data (Continuing Operations):
New retail vehicles			5.1	%			5.8	%			5.2	%			5.8	%
Fleet vehicles			(0.1	%)			2.3	%			(0.3	%)			2.5	%
Total new vehicles			5.0	%			5.7	%			5.1	%			5.8	%
Used vehicles			6.2	%			6.2	%			6.5	%			6.7	%
Wholesale vehicles			(6.5	%)			(2.9	%)			(3.5	%)			(1.6	%)
Parts, service and collision repair			49.2	%			48.6	%			48.8	%			48.2	%
Finance, insurance and other			100.0	%			100.0	%			100.0	%			100.0	%
Overall gross margin			14.7	%			14.7	%			14.8	%			15.1	%
SG&A Expenses (Continuing Operations):
Compensation		$	167,811			$	163,109			$	329,669			$	320,263
Advertising			15,358				13,864				30,689				27,982
Rent			18,246				18,643				36,500				37,178
Other			83,246				73,298				158,665				147,464
Total SG&A expenses		$	284,661			$	268,914			$	555,523			$	532,887
SG&A expenses as % of gross profit			80.1	%			77.5	%			80.5	%			78.8	%
Operating Margin %			1.8	%			2.7	%			1.8	%			2.5	%
Unit Data (Continuing Operations):
New retail units			34,676				34,847				66,010				64,876
Fleet units			287				558				642				1,660
Total new units			34,963				35,405				66,652				66,536
Used units			30,301				28,514				58,436				56,171
Wholesale units			8,010				7,738				15,787				15,118

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Sonic Automotive, Inc.

Results of Operations (Unaudited)

 

Per Share Data

 

		Three Months Ended June 30, 2015
						Income (Loss) From Continuing Operations								Income (Loss) From Discontinued Average								Net Income (Loss)
		Weighted Average Shares				Amount				Per Share Amount				Amount				Per Share Amount				Amount				Per Share Amount
		(In thousands, except per share amounts)
Reported:
Earnings (loss) and shares			50,784			$	15,092							$	(311	)						$	14,781
Effect of participating securities:
Non-vested restricted stock and stock units							(7	)							—								(7	)
Basic earnings (loss) and shares			50,784			$	15,085			$	0.30			$	(311	)		$	(0.01	)		$	14,774			$	0.29
Effect of dilutive securities:
Stock compensation plans			309
Diluted earnings (loss) and shares			51,093			$	15,085			$	0.30			$	(311	)		$	(0.01	)		$	14,774			$	0.29
Adjustments (net of tax):
Gain on disposal						$	(645	)		$	(0.01	)		$	—			$	—			$	(645	)		$	(0.01	)
Impairment charges							6,386				0.12				—				—				6,386				0.12
Storm damage and other							2,555				0.05				—				—				2,555				0.05
Total adjustments						$	8,296			$	0.16			$	—			$	—			$	8,296			$	0.16
Adjusted:
Earnings (loss) and
Diluted earnings (loss) per share (1)						$	23,388			$	0.46			$	(311	)		$	(0.01	)		$	23,077			$	0.45

 

(1)	Expenses attributable to EchoPark® operations were $0.05 per fully diluted share in the three months ended June 30, 2015.

 

		Three Months Ended June 30, 2014
						Income (Loss) From Continuing Operations								Income (Loss) From Discontinued Operations								Net Income (Loss)
		Weighted Average Shares				Amount				Per Share Amount				Amount				Per Share Amount				Amount				Per Share Amount
		(In thousands, except per share amounts)
Reported:
Earnings (loss) and shares			52,514			$	27,061							$	(68	)						$	26,993
Effect of participating securities:
Non-vested restricted stock and stock units							(87	)							—								(87	)
Basic earnings (loss) and shares			52,514			$	26,974			$	0.51			$	(68	)		$	—			$	26,906			$	0.51
Effect of dilutive securities:
Stock compensation plans			416
Diluted earnings (loss) and shares			52,930			$	26,974			$	0.51			$	(68	)		$	—			$	26,906			$	0.51
Adjustments (net of tax):
Gain on disposal						$	(4,446	)		$	(0.08	)		$	—			$	—			$	(4,446	)		$	(0.08	)
Storm damage and other							840				0.01				—				—				840				0.01
Total adjustments						$	(3,606	)		$	(0.07	)		$	—			$	—			$	(3,606	)		$	(0.07	)
Adjusted:
Earnings (loss) and
Diluted earnings (loss) per share (2)						$	23,455			$	0.44			$	(68	)		$	—			$	23,387			$	0.44

 

(2)	Expenses attributable to EchoPark® operations were $0.04 per fully diluted share in the three months ended June 30, 2014.

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Sonic Automotive, Inc.

Results of Operations (Unaudited)

 

Per Share Data

 

		Six Months Ended June 30, 2015
						Income (Loss) From Continuing Operations								Income (Loss) From Discontinued Operations								Net Income (Loss)
		Weighted Average Shares				Amount				Per Share Amount				Amount				Per Share Amount				Amount				Per Share Amount
		(In thousands, except per share amounts)
Reported:
Earnings (loss) and shares			50,819			$	29,481							$	(732	)						$	28,749
Effect of participating securities:
Non-vested restricted stock and stock units							(14	)							—								(14	)
Basic earnings (loss) and shares			50,819			$	29,467			$	0.58			$	(732	)		$	(0.01	)		$	28,735			$	0.57
Effect of dilutive securities:
Stock compensation plans			428
Diluted earnings (loss) and shares			51,247			$	29,467			$	0.57			$	(732	)		$	(0.01	)		$	28,735			$	0.56
Adjustments (net of tax):
Gain on disposal						$	(583	)		$	(0.01	)		$	—			$	—			$	(583	)		$	(0.01	)
Impairment charges							10,166				0.20				—				—				10,166				0.20
Storm damage and other							3,132				0.06				—				—				3,132				0.06
Total adjustments						$	12,715			$	0.25			$	—			$	—			$	12,715			$	0.25
Adjusted:
Earnings (loss) and
Diluted earnings (loss) per share (3)						$	42,196			$	0.82			$	(732	)		$	(0.01	)		$	41,464			$	0.81

 

(3)	Expenses attributable to EchoPark® operations were $0.11 per fully diluted share in the six months ended June 30, 2015.

 

		Six Months Ended June 30, 2014
						Income (Loss) From Continuing Operations								Income (Loss) From Discontinued Operations								Net Income (Loss)
		Weighted Average Shares				Amount				Per Share Amount				Amount				Per Share Amount				Amount				Per Share Amount
		(In thousands, except per share amounts)
Reported:
Earnings (loss) and shares			52,466			$	47,045							$	(666	)						$	46,379
Effect of participating securities:
Non-vested restricted stock and stock units							(151	)							—								(151	)
Basic earnings (loss) and shares			52,466			$	46,894			$	0.89			$	(666	)		$	(0.01	)		$	46,228			$	0.88
Effect of dilutive securities:
Stock compensation plans			472
Diluted earnings (loss) and shares			52,938			$	46,894			$	0.89			$	(666	)		$	(0.02	)		$	46,228			$	0.87
Adjustments (net of tax):
Gain on disposal						$	(4,446	)		$	(0.08	)		$	—			$	—			$	(4,446	)		$	(0.08	)
Storm damage and other							840				0.01				—				—				840				0.01
Effect of two-class method & rounding							—				—				—				0.01				—				0.01
Total adjustments						$	(3,606	)		$	(0.07	)		$	—			$	0.01			$	(3,606	)		$	(0.06	)
Adjusted:
Earnings (loss) and
Diluted earnings (loss) per share (4)						$	43,439			$	0.82			$	(666	)		$	(0.01	)		$	42,773			$	0.81

 

(4)	Expenses attributable to EchoPark® operations were $0.06 per fully diluted share in the six months ended June 30, 2014.

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Sonic Automotive, Inc.

Results of Operations (Unaudited)

 

New Vehicles

 

		Three Months Ended June 30,								Better / (Worse)
		2015				2014				Change						% Change
		(In thousands, except units and per unit data)
Reported:
Revenue		$	1,295,288			$	1,298,777			$	(3,489	)					(0.3	%)
Gross profit		$	64,936			$	74,193			$	(9,257	)					(12.5	%)
Unit sales			34,963				35,405				(442	)					(1.2	%)
Revenue per unit		$	37,047			$	36,683			$	364						1.0	%
Gross profit per unit		$	1,857			$	2,096			$	(239	)					(11.4	%)
Gross profit as a % of revenue			5.0	%			5.7	%			(70	)		bps
		Six Months Ended June 30,								Better / (Worse)
		2015				2014				Change						% Change
		(In thousands, except units and per unit data)
Reported:
Revenue		$	2,497,610			$	2,445,397			$	52,213						2.1	%
Gross profit		$	128,285			$	140,866			$	(12,581	)					(8.9	%)
Unit sales			66,652				66,536				116						0.2	%
Revenue per unit		$	37,472			$	36,753			$	719						2.0	%
Gross profit per unit		$	1,925			$	2,117			$	(192	)					(9.1	%)
Gross profit as a % of revenue			5.1	%			5.8	%			(70	)		bps
		Three Months Ended June 30,								Better / (Worse)
		2015				2014				Change						% Change
		(In thousands, except units and per unit data)
Same Store:
Revenue		$	1,282,668			$	1,252,870			$	29,798						2.4	%
Gross profit		$	64,789			$	71,765			$	(6,976	)					(9.7	%)
Unit sales			34,575				34,125				450						1.3	%
Revenue per unit		$	37,098			$	36,714			$	384						1.0	%
Gross profit per unit		$	1,874			$	2,103			$	(229	)					(10.9	%)
Gross profit as a % of revenue			5.1	%			5.7	%			(60	)		bps
		Six Months Ended June 30,								Better / (Worse)
		2015				2014				Change						% Change
		(In thousands, except units and per unit data)
Same Store:
Revenue		$	2,472,920			$	2,362,936			$	109,984						4.7	%
Gross profit		$	127,227			$	136,397			$	(9,170	)					(6.7	%)
Unit sales			65,911				64,207				1,704						2.7	%
Revenue per unit		$	37,519			$	36,802			$	717						1.9	%
Gross profit per unit		$	1,930			$	2,124			$	(194	)					(9.1	%)
Gross profit as a % of revenue			5.1	%			5.8	%			(70	)		bps

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Sonic Automotive, Inc.

Results of Operations (Unaudited)

 

Used Vehicles

 

		Three Months Ended June 30,								Better / (Worse)
		2015				2014				Change						% Change
		(In thousands, except units and per unit data)
Reported:
Revenue		$	658,794			$	603,868			$	54,926						9.1	%
Gross profit		$	40,696			$	37,473			$	3,223						8.6	%
Unit sales			30,301				28,514				1,787						6.3	%
Revenue per unit		$	21,742			$	21,178			$	564						2.7	%
Gross profit per unit		$	1,343			$	1,314			$	29						2.2	%
Gross profit as a % of revenue			6.2	%			6.2	%			0			bps
		Six Months Ended June 30,								Better / (Worse)
		2015				2014				Change						% Change
		(In thousands, except units and per unit data)
Reported:
Revenue		$	1,252,536			$	1,163,684			$	88,852						7.6	%
Gross profit		$	81,540			$	78,167			$	3,373						4.3	%
Unit sales			58,436				56,171				2,265						4.0	%
Revenue per unit		$	21,434			$	20,717			$	717						3.5	%
Gross profit per unit		$	1,395			$	1,392			$	3						0.2	%
Gross profit as a % of revenue			6.5	%			6.7	%			(20	)		bps
		Three Months Ended June 30,								Better / (Worse)
		2015				2014				Change						% Change
		(In thousands, except units and per unit data)
Same Store:
Revenue		$	632,838			$	581,024			$	51,814						8.9	%
Gross profit		$	38,884			$	36,647			$	2,237						6.1	%
Unit sales			28,973				27,397				1,576						5.8	%
Revenue per unit		$	21,842			$	21,208			$	634						3.0	%
Gross profit per unit		$	1,342			$	1,338			$	4						0.3	%
Gross profit as a % of revenue			6.1	%			6.3	%			(20	)		bps
		Six Months Ended June 30,								Better / (Worse)
		2015				2014				Change						% Change
		(In thousands, except units and per unit data)
Same Store:
Revenue		$	1,205,597			$	1,118,663			$	86,934						7.8	%
Gross profit		$	78,897			$	75,933			$	2,964						3.9	%
Unit sales			56,052				53,998				2,054						3.8	%
Revenue per unit		$	21,509			$	20,717			$	792						3.8	%
Gross profit per unit		$	1,408			$	1,406			$	2						0.1	%
Gross profit as a % of revenue			6.5	%			6.8	%			(30	)		bps

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Sonic Automotive, Inc.

Results of Operations (Unaudited)

 

Wholesale Vehicles

 

		Three Months Ended June 30,								Better / (Worse)
		2015				2014				Change								% Change
		(In thousands, except units and per unit data)
Reported:
Revenue		$	41,131			$	44,765			$	(3,634	)							(8.1	%)
Gross profit (loss)		$	(2,676	)		$	(1,314	)		$	(1,362	)							(103.7	%)
Unit sales			8,010				7,738				272								3.5	%
Revenue per unit		$	5,135			$	5,785			$	(650	)							(11.2	%)
Gross profit (loss) per unit		$	(334	)		$	(170	)		$	(164	)							(96.5	%)
Gross profit (loss) as a % of revenue			(6.5	%)			(2.9	%)			(360	)			bps
		Six Months Ended June 30,								Better / (Worse)
		2015				2014				Change								% Change
		(In thousands, except units and per unit data)
Reported:
Revenue		$	82,789			$	86,363			$	(3,574	)							(4.1	%)
Gross profit (loss)		$	(2,884	)		$	(1,409	)		$	(1,475	)							(104.7	%)
Unit sales			15,787				15,118				669								4.4	%
Revenue per unit		$	5,244			$	5,713			$	(469	)							(8.2	%)
Gross profit (loss) per unit		$	(183	)		$	(93	)		$	(90	)							(96.8	%)
Gross profit (loss) as a % of revenue			(3.5	%)			(1.6	%)			(190	)			bps
		Three Months Ended June 30,								Better / (Worse)
		2015				2014				Change								% Change
		(In thousands, except units and per unit data)
Same Store:
Revenue		$	39,497			$	43,326			$	(3,829	)							(8.8	%)
Gross profit (loss)		$	(2,344	)		$	(1,307	)		$	(1,037	)							(79.3	%)
Unit sales			7,637				7,476				161								2.2	%
Revenue per unit		$	5,172			$	5,795			$	(623	)							(10.8	%)
Gross profit (loss) per unit		$	(307	)		$	(175	)		$	(132	)							(75.4	%)
Gross profit (loss) as a % of revenue			(5.9	%)			(3.0	%)			(290	)			bps
		Six Months Ended June 30,								Better / (Worse)
		2015				2014				Change								% Change
		(In thousands, except units and per unit data)
Same Store:
Revenue		$	80,270			$	83,573			$	(3,303	)							(4.0	%)
Gross profit (loss)		$	(2,530	)		$	(1,331	)		$	(1,199	)							(90.1	%)
Unit sales			15,160				14,621				539								3.7	%
Revenue per unit		$	5,295			$	5,716			$	(421	)							(7.4	%)
Gross profit (loss) per unit		$	(167	)		$	(91	)		$	(76	)							(83.5	%)
Gross profit (loss) as a % of revenue			(3.2	%)			(1.6	%)			(160	)			bps

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Sonic Automotive, Inc.

Results of Operations (Unaudited)

 

Parts, Service and Collision Repair (“Fixed Operations”)

 

		Three Months Ended June 30,								Better / (Worse)
		2015				2014				Change				% Change
		(In thousands)
Reported:
Revenue
Customer pay		$	146,548			$	145,040			$	1,508				1.0	%
Warranty			57,150				47,050				10,100				21.5	%
Wholesale parts			45,850				47,145				(1,295	)			(2.7	%)
Internal, sublet and other			96,616				89,899				6,717				7.5	%
Total		$	346,164			$	329,134			$	17,030				5.2	%
Gross profit
Customer pay		$	80,286			$	79,606			$	680				0.9	%
Warranty			32,679				25,671				7,008				27.3	%
Wholesale parts			8,148				8,308				(160	)			(1.9	%)
Internal, sublet and other			49,122				46,274				2,848				6.2	%
Total		$	170,235			$	159,859			$	10,376				6.5	%
Gross profit as a % of revenue
Customer pay			54.8	%			54.9	%			(10	)		bps
Warranty			57.2	%			54.6	%			260			bps
Wholesale parts			17.8	%			17.6	%			20			bps
Internal, sublet and other			50.8	%			51.5	%			(70	)		bps
Total			49.2	%			48.6	%			60			bps
		Six Months Ended June 30,								Better / (Worse)
		2015				2014				Change				% Change
		(In thousands)
Reported:
Revenue
Customer pay		$	284,171			$	286,162			$	(1,991	)			(0.7	%)
Warranty			110,648				93,641				17,007				18.2	%
Wholesale parts			90,862				95,089				(4,227	)			(4.4	%)
Internal, sublet and other			183,677				173,013				10,664				6.2	%
Total		$	669,358			$	647,905			$	21,453				3.3	%
Gross profit
Customer pay		$	155,963			$	157,605			$	(1,642	)			(1.0	%)
Warranty			62,440				50,909				11,531				22.7	%
Wholesale parts			16,287				16,469				(182	)			(1.1	%)
Internal, sublet and other			91,919				87,023				4,896				5.6	%
Total		$	326,609			$	312,006			$	14,603				4.7	%
Gross profit as a % of revenue
Customer pay			54.9	%			55.1	%			(20	)		bps
Warranty			56.4	%			54.4	%			200			bps
Wholesale parts			17.9	%			17.3	%			60			bps
Internal, sublet and other			50.0	%			50.3	%			(30	)		bps
Total			48.8	%			48.2	%			60			bps

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Sonic Automotive, Inc.

Results of Operations (Unaudited)

 

Parts, Service and Collision Repair (“Fixed Operations”)

 

		Three Months Ended June 30,								Better / (Worse)
		2015				2014				Change				% Change
		(In thousands)
Same Store:
Revenue
Customer pay		$	145,235			$	140,701			$	4,534				3.2	%
Warranty			56,672				45,065				11,607				25.8	%
Wholesale parts			45,502				45,855				(353	)			(0.8	%)
Internal, sublet and other			93,761				87,105				6,656				7.6	%
Total		$	341,170			$	318,726			$	22,444				7.0	%
Gross profit
Customer pay		$	79,537			$	77,320			$	2,217				2.9	%
Warranty			32,435				24,631				7,804				31.7	%
Wholesale parts			8,082				8,064				18				0.2	%
Internal, sublet and other			47,764				44,676				3,088				6.9	%
Total		$	167,818			$	154,691			$	13,127				8.5	%
Gross profit as a % of revenue
Customer pay			54.8	%			55.0	%			(20	)		bps
Warranty			57.2	%			54.7	%			250			bps
Wholesale parts			17.8	%			17.6	%			20			bps
Internal, sublet and other			50.9	%			51.3	%			(40	)		bps
Total			49.2	%			48.5	%			70			bps
		Six Months Ended June 30,								Better / (Worse)
		2015				2014				Change				% Change
		(In thousands)
Same Store:
Revenue
Customer pay		$	281,002			$	277,187			$	3,815				1.4	%
Warranty			109,644				89,838				19,806				22.0	%
Wholesale parts			90,082				92,522				(2,440	)			(2.6	%)
Internal, sublet and other			178,717				167,665				11,052				6.6	%
Total		$	659,445			$	627,212			$	32,233				5.1	%
Gross profit
Customer pay		$	154,225			$	152,877			$	1,348				0.9	%
Warranty			61,892				48,901				12,991				26.6	%
Wholesale parts			16,135				15,971				164				1.0	%
Internal, sublet and other			89,573				83,821				5,752				6.9	%
Total		$	321,825			$	301,570			$	20,255				6.7	%
Gross profit as a % of revenue
Customer pay			54.9	%			55.2	%			(30	)		bps
Warranty			56.4	%			54.4	%			200			bps
Wholesale parts			17.9	%			17.3	%			60			bps
Internal, sublet and other			50.1	%			50.0	%			10			bps
Total			48.8	%			48.1	%			70			bps

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Sonic Automotive, Inc.

Results of Operations (Unaudited)

 

Finance, Insurance and Other, Net (“F&I”)

 

		Three Months Ended June 30,								Better / (Worse)
		2015				2014				Change				% Change
		(In thousands, except per unit data)
Reported:
Revenue		$	82,363			$	76,736			$	5,627				7.3	%
Gross profit per retail unit (excludes fleet)		$	1,268			$	1,211			$	57				4.7	%
		Six Months Ended June 30,								Better / (Worse)
		2015				2014				Change				% Change
		(In thousands, except per unit data)
Reported:
Revenue		$	156,963			$	146,317			$	10,646				7.3	%
Gross profit per retail unit (excludes fleet)		$	1,261			$	1,209			$	52				4.3	%
		Three Months Ended June 30,								Better / (Worse)
		2015				2014				Change				% Change
		(In thousands, except per unit data)
Same Store:
Revenue		$	80,573			$	74,237			$	6,336				8.5	%
Gross profit per retail unit (excludes fleet)		$	1,274			$	1,218			$	56				4.6	%
		Six Months Ended June 30,								Better / (Worse)
		2015				2014				Change				% Change
		(In thousands, except per unit data)
Same Store:
Revenue		$	153,702			$	141,419			$	12,283				8.7	%
Gross profit per retail unit (excludes fleet)		$	1,267			$	1,213			$	54				4.5	%

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Sonic Automotive, Inc.

Results of Operations (Unaudited)

 

Selling, General and Administrative (“SG&A”) Expenses

 

		Three Months Ended June 30,								Better / (Worse)
		2015				2014				Change				% Change
		(In thousands)
Reported:
Compensation		$	167,811			$	163,109			$	(4,702	)			(2.9	%)
Advertising			15,358				13,864				(1,494	)			(10.8	%)
Rent			18,246				18,643				397				2.1	%
Other			83,246				73,298				(9,948	)			(13.6	%)
Total		$	284,661			$	268,914			$	(15,747	)			(5.9	%)
SG&A expenses as a % of gross profit
Compensation			47.2	%			47.0	%			(20	)		bps
Advertising			4.3	%			4.0	%			(30	)		bps
Rent			5.1	%			5.4	%			30			bps
Other			23.5	%			21.1	%			(240	)		bps
Total			80.1	%			77.5	%			(260	)		bps
		Six Months Ended June 30,								Better / (Worse)
		2015				2014				Change				% Change
		(In thousands)
Reported:
Compensation		$	329,669			$	320,263			$	(9,406	)			(2.9	%)
Advertising			30,689				27,982				(2,707	)			(9.7	%)
Rent			36,500				37,178				678				1.8	%
Other			158,665				147,464				(11,201	)			(7.6	%)
Total		$	555,523			$	532,887			$	(22,636	)			(4.2	%)
SG&A expenses as a % of gross profit
Compensation			47.7	%			47.4	%			(30	)		bps
Advertising			4.4	%			4.1	%			(30	)		bps
Rent			5.3	%			5.5	%			20			bps
Other			23.1	%			21.8	%			(130	)		bps
Total			80.5	%			78.8	%			(170	)		bps

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Exhibit 99.3

FOR IMMEDIATE RELEASE

SONIC AUTOMOTIVE, INC. DECLARES QUARTERLY CASH DIVIDEND

CHARLOTTE, N.C. – July 20, 2015 – Sonic Automotive, Inc. (NYSE: SAH), a leader in automotive retailing, today announced that its Board of Directors approved a quarterly dividend of $0.025 per share payable in cash for stockholders of record on September 15, 2015. The dividend will be payable on October 15, 2015.

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 is a forward-looking statement pertaining to an anticipated cash dividend to shareholders. 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 sales volume, the success of our operational strategies 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.

###

 

Contact:

Heath Byrd, Chief Financial Officer (704) 566-2400

C.G. Saffer, Vice President and Chief Accounting Officer (704) 566-2439