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Sonic Automotive, Inc. Reports Second Quarter Results - EchoPark Grows Revenue 267%

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Sonic Automotive, Inc. Reports Second Quarter Results - EchoPark Grows Revenue 267%

PR Newswire

CHARLOTTE, N.C., July 27, 2018 /PRNewswire/ -- Sonic Automotive, Inc. (NYSE:SAH), one of the nation's largest automotive retailers, today reported financial results for the second quarter of 2018.

  • Second quarter record revenue and gross profit of $2.5 billion and $362.4 million, respectively
  • All-time record quarterly pre-owned retail unit sales of 35,779 units
  • All-time record quarterly F&I gross profit per retail unit of $1,572
  • All-time record quarterly F&I gross of $104.1 million
  • EchoPark stores retailed 7,459 units during the quarter, up 35.2% sequentially from first quarter 2018

Second Quarter 2018 Results

GAAP Basis

Net income from continuing operations for the second quarter of 2018 was $17.1 million, or $0.40 per diluted share. Comparatively, net income from continuing operations for the second quarter of 2017 was $12.3 million, or $0.27 per diluted share.

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 second quarter of 2018 was $14.8 million, or $0.35 per diluted share. The adjustments in the second quarter of 2018 relate to impairment charges, legal and storm damage charges and long-term compensation related charges, offset partially by gains on the disposal of franchises and adjustments to lease exit accruals. Adjusted net income from continuing operations for the second quarter of 2017 was $17.9 million, or $0.40 per diluted share. The adjustments in the second quarter of 2017 relate to fixed asset impairments, weather-related physical damage costs, legal matters and lease exit charges.

Commentary

Heath Byrd, the Company's Chief Financial Officer, noted, "The second quarter of 2018 fell short of our expectations as we experienced new vehicle gross compression in several of our more significant brands. We anticipate this compression to carry into the third quarter of 2018."

"We remain committed to our pre-owned EchoPark brand and continue to see improvements in that segment's operating performance.  Based on current performance, we will continue to expand the EchoPark brand with new stores opening in Charlotte, North Carolina and Houston, Texas in the fourth quarter of this year."

"As a result of our performance thus far during 2018 and the current operating environment, we expect full year 2018 GAAP diluted earnings per share from continuing operations to be between $1.65 and $1.75. On an adjusted basis, we expect full year earnings per share from continuing operations to be between $1.90 and $2.00. The full year adjusted earnings per share range exclude items such as impairment charges, legal and storm damage charges, long-term compensation-related charges and lease exit adjustments, offset partially by gains from the disposal of franchises."

Dividend

Sonic's Board of Directors approved a quarterly dividend of $0.06 per share payable in cash for our stockholders of record on September 14, 2018.  The dividend will be payable on October 15, 2018.

Second 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: (877) 450-3867
International: (706) 643-0958
Conference ID: 2348946

A conference call replay will be available one hour following the call for seven days and can be accessed by calling:

Domestic: (855) 859-2056
International: (404) 537-3406
Conference ID: 2348946

Presentation materials for the Company's earnings conference call will be accessible beginning the morning of the conference call on the Company's website at www.sonicautomotive.com by clicking on "Our Company," then "Investor Relations," then "Webcasts & Presentations."

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. More information about EchoPark Automotive can be found at www.echopark.com.

Forward-Looking Statements

Included herein are forward-looking statements, including statements with respect to our 2018 earnings expectations, EchoPark brand expansion and new vehicle gross margin performance in the latter half of 2018. 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 ended December 31, 2017.  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 non-GAAP financial 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)

Results of Operations



Three Months Ended June 30,


Six Months Ended June 30, 2018


2018


2017


2018


2017


(Dollars and shares in thousands, except per share amounts)

Revenues:







New vehicles

$

1,238,571


$

1,275,069


$

2,419,416


$

2,447,001

Used vehicles

762,572


641,891


1,471,618


1,276,364

Wholesale vehicles

53,748


40,765


119,148


87,076

Total vehicles

2,054,891


1,957,725


4,010,182


3,810,441

Parts, service and collision repair

346,754


361,113


698,512


713,156

Finance, insurance and other, net

104,104


86,908


197,829


169,971

Total revenues

2,505,749


2,405,746


4,906,523


4,693,568

Cost of Sales:








New vehicles

(1,181,303)


(1,212,547)


(2,305,349)


(2,326,201)

Used vehicles

(725,263)


(601,856)


(1,397,538)


(1,195,497)

Wholesale vehicles

(57,105)


(42,682)


(126,929)


(90,163)

Total vehicles

(1,963,671)


(1,857,085)


(3,829,816)


(3,611,861)

Parts, service and collision repair

(179,703)


(188,043)


(361,833)


(370,742)

Total cost of sales

(2,143,374)


(2,045,128)


(4,191,649)


(3,982,603)

Gross profit

362,375


360,618


714,874


710,965

Selling, general and administrative expenses

(277,462)


(293,931)


(582,387)


(586,165)

Impairment charges

(10,317)


(2,605)


(13,960)


(3,115)

Depreciation and amortization

(23,949)


(21,911)


(47,692)


(43,065)

Operating income (loss)

50,647


42,171


70,835


78,620

Other income (expense):








Interest expense, floor plan

(11,945)


(9,144)


(22,622)


(17,531)

Interest expense, other, net

(13,375)


(12,764)


(26,831)


(26,172)

Other income (expense), net

17


7


106


(14,495)

Total other income (expense)

(25,303)


(21,901)


(49,347)


(58,198)

Income (loss) from continuing operations before taxes

25,344


20,270


21,488


20,422

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

(8,222)


(7,956)


(6,380)


(8,128)

Income (loss) from continuing operations

17,122


12,314


15,108


12,294

Discontinued operations:







Income (loss) from discontinued operations before taxes

(297)


(301)


(545)


(1,168)

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

80


119


148


465

Income (loss) from discontinued operations

(217)


(182)


(397)


(703)

Net income (loss)

$

16,905


$

12,132


$

14,711


$

11,591

Basic earnings (loss) per common share:







Earnings (loss) per share from continuing operations

$

0.40


$

0.28


$

0.35


$

0.27

Earnings (loss) per share from discontinued operations


(0.01)


(0.01)


(0.01)

Earnings (loss) per common share

$

0.40


$

0.27


$

0.34


$

0.26

Weighted average common shares outstanding

42,662


44,570


42,725


44,680

Diluted earnings (loss) per common share:







Earnings (loss) per share from continuing operations

$

0.40


$

0.27


$

0.35


$

0.27

Earnings (loss) per share from discontinued operations

(0.01)



(0.01)


(0.01)

Earnings (loss) per common share

$

0.39


$

0.27


$

0.34


$

0.26

Weighted average common shares outstanding

42,920


44,810


42,948


44,976

Dividends declared per common share

$

0.06


$

0.05


$

0.12


$

0.10

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)


Per Share Data


Three Months Ended June 30, 2018




Income (Loss)


Income (Loss)








From Continuing

Operations


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

42,662



$

17,122





$

(217)





$

16,905




Effect of participating securities:














Non-vested restricted stock



(3)









(3)




Basic earnings (loss) and shares

42,662



$

17,119



$

0.40



$

(217)



$



$

16,902



$

0.40


Effect of dilutive securities:














Stock compensation plans

258














Diluted earnings (loss) and shares

42,920



$

17,119



$

0.40



$

(217)



$

(0.01)



$

16,902



$

0.39
















Adjustments:














Impairment charges



$

10,315





$





$

10,315




Legal and storm damage charges



3,064









3,064




Long-term compensation-related charges



23,333









23,333




Lease exit adjustments



(2,579)









(2,579)




Gain on disposal of franchises



(38,048)









(38,048)




Total adjustments before taxes



(3,915)









(3,915)




Income tax effect of adjustments



1,067









1,067




Non-recurring tax items



550









550




Effect of adjustments, net of income taxes



$

(2,298)



(0.05)



$



$



$

(2,298)



$

(0.05)
















Adjusted:














Earnings (loss) and diluted earnings (loss) per share (1)



$

14,824



$

0.35



$

(217)



$

(0.01)



$

14,607



$

0.34




(1)

Net loss attributable to Pre-Owned Stores operations was $0.07 per fully diluted share in the three months ended June 30, 2018.




Three Months Ended June 30, 2017




Income (Loss)


Income (Loss)








From Continuing

Operations


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

44,570



$

12,314





$

(182)





$

12,132




Effect of participating securities:














Non-vested restricted stock



(9)









(9)




Basic earnings (loss) and shares

44,570



$

12,305



$

0.28



$

(182)



$

(0.01)



$

12,123



$

0.27

Effect of dilutive securities:














Stock compensation plans

240














Diluted earnings (loss) and shares

44,810



$

12,305



$

0.27



$

(182)



$



$

12,123



$

0.27















Adjustments:














Impairment charges



$

2,605





$





$

2,605




Legal and storm damage charges



5,618









5,618




Lease exit adjustments



992









992




Total adjustments before taxes



9,215









9,215




Income tax effect of adjustments



(2,982)









$

(2,982)




Effect of adjustments, net of income taxes



$

6,233



$

0.13



$



$



$

6,233



$

0.13















Adjusted:














Earnings (loss) and diluted earnings (loss) per share (2)



$

18,547



$

0.40



$

(182)



$



$

18,365



$

0.40



(2)

Net loss attributable to Pre-Owned Stores operations was $0.07 per fully diluted share in the three months ended June 30, 2017.



 


Six Months Ended June 30, 2018




Income (Loss)


Income (Loss)








From Continuing

Operations


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

42,725



$

15,108





$

(397)





$

14,711




Effect of participating securities:














Non-vested restricted stock



(5)









(5)




Basic earnings (loss) and shares

42,725



$

15,103



$

0.35



$

(397)



$

(0.01)



$

14,706



$

0.34


Effect of dilutive securities:














Stock compensation plans

223














Diluted earnings (loss) and shares

42,948



$

15,103



$

0.35



$

(397)



$

(0.01)



$

14,706



$

0.34
















Adjustments:














Impairment charges



$

13,958





$





$

13,958




Legal and storm damage charges



4,564









4,564




Lease exit adjustments



2,235









2,235




Gain on disposal of franchises



(39,239)









(39,239)




Long-term compensation-related charges



32,522









32,522




Total adjustments before taxes



14,040









14,040




Income tax effect of adjustments



(3,826)









(3,826)




Non-recurring tax items



550









550




Effect of adjustments, net of income taxes



$

10,764



$

0.25



$



$



$

10,764



$

0.25
















Adjusted:














Earnings (loss) and diluted earnings (loss) per share (1)



$

25,872



$

0.60



$

(397)



$

(0.01)



$

25,475



$

0.59




(1)

   Net loss attributable to Pre-Owned Stores operations was $0.17 per fully diluted share in the six months ended June 30, 2018.




Six Months Ended June 30, 2017




Income (Loss)


Income (Loss)








From Continuing

Operations


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

44,680



$

12,294





$

(703)





$

11,591




Effect of participating securities:














Non-vested restricted stock



(9)









(9)




Basic earnings (loss) and shares

44,680



$

12,285



$

0.27



$

(703)



$

(0.01)



$

11,582



$

0.26


Effect of dilutive securities:














Stock compensation plans

296














Diluted earnings (loss) and shares

44,976



$

12,285



$

0.27



$

(703)



$

(0.01)



$

11,582



$

0.26
















Adjustments:














Impairment charges



$

3,115





$





$

3,115




Legal and storm damage charges



6,851









6,851




Lease exit adjustments



992









992




Loss on debt extinguishment



15,268









15,268




Total adjustments before taxes



26,226









26,226




Income tax effect of adjustments



(10,294)









$

(10,294)




Effect of adjustments, net of income taxes



$

15,932



$

0.36



$



$

(0.01)



$

15,932



$

0.35
















Adjusted:














Earnings (loss) and diluted earnings (loss) per share (2)



$

28,226



$

0.63



$

(703)



$

(0.02)



$

27,523



$

0.61




(2)

Net loss attributable to Pre-Owned Stores operations was $0.15 per fully diluted share in the six months ended June 30, 2017.

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)


New Vehicles



Three Months Ended June 30,


Better / (Worse)


2018


2017


Change


% Change


(In thousands, except unit and per unit data)

Reported new vehicle:








Revenue

$

1,238,571


$

1,275,069


$

(36,498)


(2.9)%

Gross profit

$

57,268


$

62,522


$

(5,254)


(8.4)%

Unit sales

30,877


33,148


(2,271)


(6.9)%

Revenue per unit

$

40,113


$

38,466


$

1,647


4.3%

Gross profit per unit

$

1,855


$

1,886


$

(31)


(1.6)%

Gross profit as a % of revenue

4.6%


4.9%


(30)


bps










Six Months Ended June 30,


Better / (Worse)


2018


2017


Change


% Change


(In thousands, except unit and per unit data)

Reported new vehicle:








Revenue

$

2,419,416


$

2,447,001


$

(27,585)


(1.1)%

Gross profit

$

114,067


$

120,800


$

(6,733)


(5.6)%

Unit sales

60,377


63,643


(3,266)


(5.1)%

Revenue per unit

$

40,072


$

38,449


$

1,623


4.2%

Gross profit per unit

$

1,889


$

1,898


$

(9)


(0.5)%

Gross profit as a % of revenue

4.7%


4.9%


(20)


bps










Three Months Ended June 30,


Better / (Worse)


2018


2017


Change


% Change


(In thousands, except unit and per unit data)

Same store new vehicle:








Revenue

$

1,218,895


$

1,199,305


$

19,590


1.6%

Gross profit

$

56,911


$

60,723


$

(3,812)


(6.3)%

Unit sales

30,314


30,749


(435)


(1.4)%

Revenue per unit

$

40,209


$

39,003


$

1,206


3.1%

Gross profit per unit

$

1,877


$

1,975


$

(98)


(5.0)%

Gross profit as a % of revenue

4.7%


5.1%


(40)


bps










Six Months Ended June 30,


Better / (Worse)


2018


2017


Change


% Change


(In thousands, except unit and per unit data)

Same store new vehicle:








Revenue

$

2,352,999


$

2,301,260


$

51,739


2.2%

Gross profit

$

112,719


$

117,299


$

(4,580)


(3.9)%

Unit sales

58,404


58,973


(569)


(1.0)%

Revenue per unit

$

40,288


$

39,022


$

1,266


3.2%

Gross profit per unit

$

1,930


$

1,989


$

(59)


(3.0)%

Gross profit as a % of revenue

4.8%


5.1%


(30)


bps

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)


Used Vehicles



Three Months Ended June 30,


Better / (Worse)


2018


2017


Change


% Change


(In thousands, except unit and per unit data)

Reported used vehicle:








Revenue

$

762,572


$

641,891


$

120,681


18.8%

Gross profit

$

37,309


$

40,035


$

(2,726)


(6.8)%

Unit sales

35,779


30,536


5,243


17.2%

Revenue per unit

$

21,313


$

21,021


$

292


1.4%

Gross profit per unit

$

1,043


$

1,311


$

(268)


(20.4)%

Gross profit as a % of revenue

4.9%


6.2%


(130)


bps










Six Months Ended June 30,


Better / (Worse)


2018


2017


Change


% Change


(In thousands, except unit and per unit data)

Reported used vehicle:








Revenue

$

1,471,618


$

1,276,364


$

195,254


15.3%

Gross profit

$

74,080


$

80,867


$

(6,787)


(8.4)%

Unit sales

69,518


60,908


8,610


14.1%

Revenue per unit

$

21,169


$

20,956


$

213


1.0%

Gross profit per unit

$

1,066


$

1,328


$

(262)


(19.7)%

Gross profit as a % of revenue

5.0%


6.3%


(130)


bps










Three Months Ended June 30,


Better / (Worse)


2018


2017


Change


% Change


(In thousands, except unit and per unit data)

Same store used vehicle:








Revenue

$

653,646


$

600,181


$

53,465


8.9%

Gross profit

$

36,396


$

36,062


$

334


0.9%

Unit sales

30,395


28,165


2,230


7.9%

Revenue per unit

$

21,505


$

21,309


$

196


0.9%

Gross profit per unit

$

1,197


$

1,280


$

(83)


(6.5)%

Gross profit as a % of revenue

5.6%


6.0%


(40)


bps










Six Months Ended June 30,


Better / (Worse)


2018


2017


Change


% Change


(In thousands, except unit and per unit data)

Same store used vehicle:








Revenue

$

1,266,307


$

1,193,826


$

72,481


6.1%

Gross profit

$

69,588


$

72,738


$

(3,150)


(4.3)%

Unit sales

59,064


56,111


2,953


5.3%

Revenue per unit

$

21,440


$

21,276


$

164


0.8%

Gross profit per unit

$

1,178


$

1,296


$

(118)


(9.1)%

Gross profit as a % of revenue

5.5%


6.1%


(60)


bps

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)


Wholesale Vehicles



Three Months Ended June 30,


Better / (Worse)


2018


2017


Change


% Change


(In thousands, except unit and per unit data)

Reported used vehicle:








Revenue

$

53,748



$

40,765



$

12,983



31.8%

Gross profit

$

(3,357)



$

(1,917)



$

(1,440)



(75.1)%

Unit sales

8,442



7,783



659



8.5%

Revenue per unit

$

6,367



$

5,238



$

1,129



21.6%

Gross profit per unit

$

(398)



$

(246)



$

(152)



(61.8)%

Gross profit as a % of revenue

(6.2)%



(4.7)%



(150)



bps










Six Months Ended June 30,


Better / (Worse)


2018


2017


Change


% Change


(In thousands, except unit and per unit data)

Reported used vehicle:








Revenue

$

119,148



$

87,076



$

32,072



36.8%

Gross profit

$

(7,781)



$

(3,087)



$

(4,694)



(152.1)%

Unit sales

18,122



16,090



2,032



12.6%

Revenue per unit

$

6,575



$

5,412



$

1,163



21.5

%

Gross profit per unit

$

(429)



$

(192)



$

(237)



(123.4)%


Gross profit as a % of revenue

(6.5)%



(3.5)%



(300)



bps










Three Months Ended June 30,


Better / (Worse)


2018


2017


Change


% Change


(In thousands, except unit and per unit data)

Same store used vehicle:








Revenue

$

49,160



$

37,796



$

11,364



30.1

%

Gross profit

$

(3,455)



$

(1,692)



$

(1,763)



(104.2)%


Unit sales

7,644



7,092



552



7.8

%

Revenue per unit

$

6,431



$

5,329



$

1,102



20.7

%

Gross profit per unit

$

(452)



$

(239)



$

(213)



(89.1)%


Gross profit as a % of revenue

(7.0)%



(4.5)%



(250)



bps










Six Months Ended June 30,


Better / (Worse)


2018


2017


Change


% Change


(In thousands, except unit and per unit data)

Same store used vehicle:








Revenue

$

109,225



$

80,848



$

28,377



35.1

%

Gross profit

$

(7,906)



$

(2,627)



$

(5,279)



(201.0)%


Unit sales

16,440



14,619



1,821



12.5

%

Revenue per unit

$

6,644



$

5,530



$

1,114



20.1

%

Gross profit per unit

$

(481)



$

(180)



$

(301)



(167.2)%


Gross profit as a % of revenue

(7.2)%



(3.2)%



(400)



bps

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)


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



Three Months Ended June 30,


Better / (Worse)


2018


2017


Change


% Change


(In thousands, except unit and per unit data)

Reported:








Revenue








Customer pay

$

140,351



$

139,194



$

1,157



0.8%

Warranty

63,888



72,661



(8,773)



(12.1)%

Wholesale parts

40,844



42,806



(1,962)



(4.6)%

Internal, sublet and other

101,671



106,452



(4,781)



(4.5)%

Total

$

346,754



$

361,113



$

(14,359)



(4.0)%









Gross profit








Customer pay

$

75,100



$

74,344



$

756



1.0%

Warranty

35,871



40,319



(4,448)



(11.0)%

Wholesale parts

6,900



7,331



(431)



(5.9)%

Internal, sublet and other

49,180



51,076



(1,896)



(3.7)%

Total

$

167,051



$

173,070



$

(6,019)



(3.5)%









Gross profit as a % of revenue








Customer pay

53.5

%


53.4

%


10bps



Warranty

56.1

%


55.5

%


60bps



Wholesale parts

16.9

%


17.1

%


(20) bps



Internal, sublet and other

48.4

%


48.0

%


40bps



Total

48.2

%


47.9

%


30bps












Six Months Ended June 30,


Better / (Worse)


2018


2017


Change


% Change


(In thousands, except unit and per unit data)

Reported:








Revenue








Customer pay

$

282,706



$

277,328



$

5,378



1.9%

Warranty

131,489



142,579



(11,090)



(7.8)%

Wholesale parts

83,345



86,087



(2,742)



(3.2)%

Internal, sublet and other

200,972



207,162



(6,190)



(3.0)%

Total

$

698,512



$

713,156



$

(14,644)



(2.1)%









Gross profit








Customer pay

$

151,449



$

147,784



$

3,665



2.5%

Warranty

73,772



78,989



(5,217)



(6.6)%

Wholesale parts

14,165



14,881



(716)



(4.8)%

Internal, sublet and other

97,293



100,760



(3,467)



(3.4)%

Total

$

336,679



$

342,414



$

(5,735)



(1.7)%









Gross profit as a % of revenue








Customer pay

53.6

%


53.3

%


30bps



Warranty

56.1

%


55.4

%


70bps



Wholesale parts

17.0

%


17.3

%


(30) bps



Internal, sublet and other

48.4

%


48.6

%


(20) bps



Total

48.2

%


48.0

%


20bps



 

Sonic Automotive, Inc.

Results of Operations (Unaudited)


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



Three Months Ended June 30,


Better / (Worse)


2018


2017


Change


% Change


(In thousands, except unit and per unit data)

Same Store:








Revenue








Customer pay

$

139,871



$

131,447



$

8,424



6.4%

Warranty

63,709



69,369



(5,660)



(8.2)%

Wholesale parts

40,288



40,779



(491)



(1.2)%

Internal, sublet and other

97,287



100,114



(2,827)



(2.8)%

Total

$

341,155



$

341,709



$

(554)



(0.2)%









Gross profit








Customer pay

$

74,910



$

69,979



$

4,931



7.0%

Warranty

35,667



38,582



(2,915)



(7.6)%

Wholesale parts

6,837



6,996



(159)



(2.3)%

Internal, sublet and other

47,674



47,705



(31)



(0.1)%

Total

$

165,088



$

163,262



$

1,826



1.1%









Gross profit as a % of revenue








Customer pay

53.6

%


53.2

%


40bps



Warranty

56.0

%


55.6

%


40bps



Wholesale parts

17.0

%


17.2

%


(20) bps



Internal, sublet and other

49.0

%


47.7

%


130bps



Total

48.4

%


47.8

%


60bps












Six Months Ended June 30,


Better / (Worse)


2018


2017


Change


% Change


(In thousands, except unit and per unit data)

Same Store:








Revenue








Customer pay

$

276,278



$

262,639



$

13,639



5.2%

Warranty

129,554



135,041



(5,487)



(4.1)%

Wholesale parts

81,400



81,770



(370)



(0.5)%

Internal, sublet and other

190,633



194,575



(3,942)



(2.0)%

Total

$

677,865



$

674,025



$

3,840



0.6%









Gross profit








Customer pay

$

148,092



$

139,662



$

8,430



6.0%

Warranty

72,502



74,764



(2,262)



(3.0)%

Wholesale parts

13,872



14,173



(301)



(2.1)%

Internal, sublet and other

93,124



93,773



(649)



(0.7)%

Total

$

327,590



$

322,372



$

5,218



1.6%









Gross profit as a % of revenue








Customer pay

53.6

%


53.2

%


40bps



Warranty

56.0

%


55.4

%


60bps



Wholesale parts

17.0

%


17.3

%


(30) bps



Internal, sublet and other

48.8

%


48.2

%


60bps



Total

48.3

%


47.8

%


50bps



 

 

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)


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



Three Months Ended June 30,


Better / (Worse)


2018


2017


Change


% Change


(In thousands, except per unit data)

Reported:








Revenue

$

104,104



$

86,908



$

17,196



19.8

%

Gross profit per retail unit (excludes fleet)

$

1,572



$

1,379



$

193



14.0

%










Six Months Ended June 30,


Better / (Worse)


2018


2017


Change




(In thousands, except per unit data)

Reported:








Revenue

$

197,829



$

169,971



$

27,858



16.4

%

Gross profit per retail unit (excludes fleet)

$

1,532



$

1,379



$

153



11.1

%










Three Months Ended June 30,


Better / (Worse)


2018


2017


Change




(In thousands, except per unit data)

Same Store:








Revenue

$

89,344



$

79,575



$

9,769



12.3

%

Gross profit per retail unit (excludes fleet)

$

1,481



$

1,366



$

115



8.4

%










Six Months Ended June 30,


Better / (Worse)


2018


2017


Change




(In thousands, except per unit data)

Same Store:








Revenue

$

169,985



$

155,646



$

14,339



9.2

%

Gross profit per retail unit (excludes fleet)

$

1,456



$

1,367



$

89



6.5

%

 

Sonic Automotive, Inc.

Results of Operations (Unaudited)




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







Three Months Ended June 30,


Better / (Worse)


2018


2017


Change


% Change


(In thousands)

Reported:








Compensation

$

197,641



$

171,182



$

(26,459)



(15.5)%

Advertising

16,270



15,344



(926)



(6.0)%

Rent

13,702



19,110



5,408



28.3%

Other

49,849



88,295



38,446



43.5%

Total SG&A expenses

$

277,462



$

293,931



$

16,469



5.6%

Adjustments:








Legal and storm damage charges

$

(3,064)



$

(5,618)






Long-term compensation-related charges

(23,333)








Lease exit adjustments

2,579



(992)






Gain on disposal of franchises

38,048








Total SG&A adjustments

$

14,230



$

(6,610)






Adjusted:








Total adjusted SG&A expenses

$

291,692



$

287,321



$

(4,371)



(1.5)%

Reported:








SG&A expenses as a % of gross profit:








Compensation

54.5%


47.5%


(700) bps



Advertising

4.5%


4.3%


(20) bps



Rent

3.8%


5.3%


150bps



Other

13.8%


24.4%


1,060bps



Total SG&A expenses as a % of gross profit

76.6%


81.5%


490bps



Adjustments:








Legal and storm damage charges

(0.8)%


(1.5)%





Long-term compensation-related charges

(6.5)%


— %





Lease exit adjustments

0.7%


(0.3)%





Gain on disposal of franchises

10.5%


— %





Total effect of adjustments

3.9%


(1.8)%





Adjusted:








Total adjusted SG&A expenses as a % of gross profit

80.5%


79.7%


(80) bps



 

Sonic Automotive, Inc.

Results of Operations (Unaudited)


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



Six Months Ended June 30,


Better / (Worse)


2018


2017


Change


% Change


(In thousands)

Reported:








Compensation

$

382,678



$

347,729



$

(34,949)



(10.1)%

Advertising

32,287



30,602



(1,685)



(5.5)%

Rent

35,570



37,598



2,028



5.4%

Other

131,852



170,236



38,384



22.5%

Total SG&A expenses

$

582,387



$

586,165



$

3,778



0.6%

Adjustments:








Legal and storm damage charges

$

(4,564)



$

(6,851)






Long-term compensation-related charges

(32,522)








Lease exit adjustments

(2,235)



(992)






Gain on disposal of franchises

39,239








Total SG&A adjustments

$

(82)



$

(7,843)






Adjusted:








Total adjusted SG&A expenses

$

582,305



$

578,322



$

(3,983)



(0.7)%

Reported:








SG&A expenses as a % of gross profit:








Compensation

53.5%


48.9%


(460) bps



Advertising

4.5%


4.3%


(20) bps



Rent

5.0%


5.3%


30bps



Other

18.5%


23.9%


540bps



Total SG&A expenses as a % of gross profit

81.5%


82.4%


90bps



Adjustments:








Legal and storm damage charges

(0.7)%


(1.0)%





Long-term compensation-related charges

(4.5)%


— %





Lease exit adjustments

(0.3)%


(0.1)%





Gain on disposal of franchises

5.5%


— %





Total effect of adjustments

— %


(1.1)%





Adjusted:








Total adjusted SG&A expenses as a % of gross profit

81.5%


81.3%


(20) bps



 

Sonic Automotive, Inc.

Results of Operations (Unaudited)


Reconciliation of Other Non-GAAP Financial Measures




Twelve Months Ending
December 31, 2018



Low


High






Expected GAAP diluted earnings per share from continuing operations


$

1.65



$

1.75


Adjustments:





Impairment charges


$

0.24



$

0.24


Legal and storm damage charges


$

0.08



$

0.08


Long-term compensation-related charges


$

0.55



$

0.55


Lease exit adjustments


$

0.04



$

0.04


Gain on disposal of franchises


$

(0.66)



$

(0.66)


Expected adjusted non-GAAP diluted earnings per share from continuing operations


$

1.90



$

2.00


 

Cision View original content:http://www.prnewswire.com/news-releases/sonic-automotive-inc-reports-second-quarter-results---echopark-grows-revenue-267-300687588.html

SOURCE Sonic Automotive, Inc.

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