Sonic Automotive, Inc. Reports Third Quarter Results - Record F&I Results and Total Gross Profit
CHARLOTTE, N.C., Oct. 24, 2017 /PRNewswire/ -- Sonic Automotive, Inc. (NYSE: SAH), one of the nation's largest automotive retailers, today reported financial results for the third quarter of 2017.
Third Quarter 2017 Results
-- EchoPark units retailed up 37.7% over the prior year quarter
-- All-time record quarterly F&I gross profit and gross profit per retail
unit of $92.9 million and $1,408, respectively
-- Record Q3 total gross profit of $362.6 million, up 1.0% over the prior
year quarter
-- Repurchased 0.7 million Class A shares (approximately 1.5% of
outstanding stock) for $11.4 million and declared $0.05/share dividend
-- GAAP continuing operations net income of $19.7 million with EPS of $0.45
per diluted share
-- Adjusted continuing operations net income of $17.4 million with adjusted
EPS of $0.40 per diluted share
GAAP Basis
Net income from continuing operations for the third quarter of 2017 was $19.7 million, or $0.45 per diluted share. These results include a gain related to the disposal of a franchise partially offset by charges related to fixed asset impairments, weather-related physical damage costs and legal matters.
Comparatively, net income from continuing operations for the third quarter of 2016 was $19.0 million, or $0.42 per diluted share. These results include charges related to fixed asset impairments and legal matters which were partially offset by favorable weather-related physical damage accrual adjustments.
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 third quarter of 2017 was $17.4 million, or $0.40 per diluted share. The adjustments in the 2017 quarterly period relate to a gain related to the disposal of a franchise and charges related to fixed asset impairments, weather-related physical damage costs and legal matters. Adjusted net income from continuing operations for the third quarter of 2016 was $21.2 million, or $0.47 per diluted share. The adjustments in the 2016 quarterly period relate to charges for fixed asset impairments and legal matters, which were partially offset by favorable weather-related physical damage accrual adjustments.
Commentary
B. Scott Smith, the Company's Chief Executive Officer, noted, "We would first like to thank all of the first responders and public officials that prepared people and their communities for the storms and then have been tirelessly working to help those in need. We know all of the work is not close to being completed and the road to recovery will be challenging. We will continue working with those affected to help them put their lives back together."
"The retail environment continues to be healthy with what we believe to be an adequate supply of credit and an ample supply of new and pre-owned inventory. We continue to see strong competition between dealers to acquire customers, which is putting pressure on margins notwithstanding the increase in incentives that we have seen in certain brands. Our build-out of EchoPark continues as planned and we anticipate opening in San Antonio, Texas in the first quarter and have an active schedule that will include the opening of approximately 10 additional EchoPark locations by the end of 2018."
Jeff Dyke, Sonic's EVP of Operations, stated, "The third quarter was similar to what we have seen for most of the year prior to the hurricanes in the Texas and Florida markets. Our Houston stores continued to struggle and BMW, which is about 30% of our profit structure, continues to be a major challenge. Hurricane Harvey closed all of our stores in the Houston market for about a week. Nearly 20% of our store count and 30% of our profit comes from the Houston market, which made the end of August a challenge. We were able to have the majority of our stores open within a few days, and by September 15, 2017, all of our stores were open and we began to help people replace and repair vehicles damaged by the hurricane. As a result of our national footprint and scale, we were able to ship in vehicles from around the country to ensure we had an adequate supply of inventory. Business was robust in Houston in the final half of September due to recovery efforts. We anticipate the retail activity in the Houston market in the fourth quarter of 2017 to continue to be favorable as those affected replace and repair vehicles."
"Hurricane Irma's effects on Sonic were less significant than those of Harvey, but still affected our operations from south Florida up into the Carolinas. We believe the threat of the storm kept customers away as they prepared for a storm that had an uncertain track as it approached and proceeded up the west coast of Florida. We did not see the level of sales activity rebound like we experienced in the Houston market as Irma's flooding was not as significant. The loss of power affected our south Florida stores and west coast Florida stores from between seven to nine days, but all stores were back in business by September 15."
"EchoPark continues its robust growth and our six stores combined were cash flow positive during the quarter. Our newest location in Colorado Springs was cash flow positive in its third month of operation, some six months ahead of the original EchoPark stores. We are very excited about the EchoPark brand and what we have been able to accomplish in the Colorado market."
Scott Smith continued, "We are dedicated to returning capital to our stockholders. We again declared a dividend of $0.05 per share in the quarter and repurchased approximately 667,000 shares of stock. Together, these two actions returned approximately $13.6 million to our stockholders."
"As stated in a previous press release, we estimate the negative impact experienced in the third quarter of fiscal 2017 due to the storms to be offset by a lift of increased automotive retail sales and service activity in the fourth quarter. Accordingly, we expect fiscal 2017 GAAP earnings per share from continuing operations to be between $1.55 and $1.65 and expect fiscal 2017 adjusted earnings per share from continuing operations to be between $1.85 and $1.95. We can add more color on this during our call today."
Dividend
Sonic's Board of Directors approved a quarterly dividend of $0.05 per share payable in cash for our stockholders of record on December 15, 2017. The dividend will be payable on January 12, 2018.
Third 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: 93768785
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: 93768785
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 2017 earnings expectations, our long-term strategy, and the anticipated expansion of our EchoPark business. 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, 2016. 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 September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2017 2016 2017 2016
---- ---- ---- ----
(In thousands, except per share and unit data)
Revenues:
New retail vehicles $1,344,941 $1,364,842 $3,739,640 $3,784,122
Fleet vehicles 17,360 10,302 69,662 42,056
Total new vehicles 1,362,301 1,375,144 3,809,302 3,826,178
Used vehicles 659,724 660,974 1,936,088 1,881,514
Wholesale vehicles 43,098 70,522 130,174 153,141
------ ------ ------- -------
Total vehicles 2,065,123 2,106,640 5,875,564 5,860,833
Parts, service and collision repair 347,717 361,709 1,060,873 1,059,093
Finance, insurance and other, net 92,861 89,579 262,832 254,940
------ ------ ------- -------
Total revenues 2,505,701 2,557,928 7,199,269 7,174,866
Gross profit 362,622 359,085 1,073,586 1,057,540
Selling, general and administrative expenses (283,974) (282,141) (870,139) (843,721)
Impairment charges (200) (6,089) (3,315) (6,240)
Depreciation and amortization (22,686) (19,928) (65,751) (57,302)
------- ------- ------- -------
Operating income (loss) 55,762 50,927 134,381 150,277
Other income (expense):
Interest expense, floor plan (8,882) (6,672) (26,413) (19,797)
Interest expense, other, net (13,028) (13,016) (39,200) (37,560)
Other income (expense), net 4 11 (14,490) 120
--- --- ------- ---
Total other income (expense) (21,906) (19,677) (80,103) (57,237)
------- ------- ------- -------
Income (loss) from continuing operations before taxes 33,856 31,250 54,278 93,040
Provision for income taxes for continuing operations - benefit (expense) (14,126) (12,281) (22,254) (36,565)
------- ------- ------- -------
Income (loss) from continuing operations 19,730 18,969 32,024 56,475
Income (loss) from discontinued operations (290) (858) (993) (918)
---- ---- ---- ----
Net income (loss) $19,440 $18,111 $31,031 $55,557
======= ======= ======= =======
Diluted earnings (loss) per common share:
Earnings (loss) per share from continuing operations $0.45 $0.42 $0.72 $1.22
Earnings (loss) per share from discontinued operations (0.01) (0.02) (0.02) (0.02)
Earnings (loss) per common share $0.44 $0.40 $0.70 $1.20
===== ===== ===== =====
Weighted average common shares outstanding 43,811 45,354 44,585 46,130
Gross Margin Data (Continuing Operations):
New retail vehicles 4.9% 4.6% 5.0% 4.9%
Fleet vehicles (0.6%) 0.3% (1.6%) 0.5%
Total new vehicles 4.9% 4.5% 4.9% 4.9%
Used vehicles 5.9% 6.0% 6.2% 6.2%
Wholesale vehicles (7.6%) (3.6%) (4.9%) (3.5%)
Parts, service and collision repair 48.2% 47.0% 48.1% 47.6%
Finance, insurance and other 100.0% 100.0% 100.0% 100.0%
Overall gross margin 14.5% 14.0% 14.9% 14.7%
SG&A Expenses (Continuing Operations):
Compensation $172,691 $171,287 $520,420 $506,894
Advertising 15,846 14,987 46,448 45,834
Rent 17,711 18,037 55,309 55,265
Other 77,726 77,830 247,962 235,728
Total SG&A expenses $283,974 $282,141 $870,139 $843,721
SG&A expenses as % of gross profit 78.3% 78.6% 81.0% 79.8%
Operating Margin % 2.2% 2.0% 1.9% 2.1%
Unit Data (Continuing Operations):
New retail units 35,117 35,715 97,453 99,100
Fleet units 372 339 1,679 1,341
Total new units 35,489 36,054 99,132 100,441
Used units 30,841 30,933 91,749 89,553
Wholesale units 7,832 10,377 23,922 26,012
Sonic Automotive, Inc.
Results of Operations (Unaudited)
Per Share Data
Three Months Ended September 30, 2017
-------------------------------------
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 43,496 $19,730 $(290) $19,440
Effect of participating securities:
Non-vested restricted stock (18) - (18)
--- --- ---
Basic earnings (loss) and shares 43,496 $19,712 $0.45 $(290) $ - $19,422 $0.45
Effect of dilutive securities:
Stock compensation plans 315
Diluted earnings (loss) and shares 43,811 $19,712 $0.45 $(290) $(0.01) $19,422 $0.44
====== ======= ===== ===== ====== ======= =====
Adjustments:
Impairment charges $198 $ - $198
Storm damage 2,971 - 2,971
Legal and other accruals 959 - 959
Gain on disposal (8,489) - (8,489)
Total adjustments before taxes (4,361) - (4,361)
Income tax effect of adjustments 2,065 - 2,065
Effect of adjustments, net of income taxes $(2,296) $(0.05) $ - $ - $(2,296) $(0.05)
Adjusted:
Earnings (loss) and
diluted earnings (loss) per share (1) $17,434 $0.40 $(290) $(0.01) $17,144 $0.39
===== ====== =====
(1) Net loss attributable to Pre-Owned Stores operations was $0.07 per fully diluted share in the three months ended September 30, 2017.
Three Months Ended September 30, 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 45,118 $18,969 $(858) $18,111
Effect of participating securities:
Non-vested restricted stock (11) - (11)
--- --- ---
Basic earnings (loss) and shares 45,118 $18,958 $0.42 $(858) $(0.02) $18,100 $0.40
Effect of dilutive securities:
Stock compensation plans 236
---
Diluted earnings (loss) and shares (2) 45,354 $18,958 $0.42 $(858) $(0.02) $18,100 $0.40
====== ======= ===== ===== ====== ======= =====
Adjustments:
Impairment charges $6,089 $ - $6,089
Storm damage (2,341) 1,000 (1,341)
Total adjustments before taxes 3,748 1,000 4,748
Income tax effect of adjustments (1,473) (390) (1,863)
Effect of adjustments, net of income taxes $2,275 $0.05 $610 $0.01 $2,885 $0.06
------ ---- ------
Adjusted:
Earnings (loss) and
diluted earnings (loss) per share (2) $21,244 $0.47 $(248) $(0.01) $20,996 $0.46
===== ====== =====
(2) Net loss attributable to Pre-Owned Stores operations was $0.06 per fully diluted share in the three months ended September 30, 2016.
Sonic Automotive, Inc.
Results of Operations (Unaudited)
Per Share Data
Nine Months Ended September 30, 2017
------------------------------------
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 44,281 $32,024 $(993) $31,031
Effect of participating securities:
Non-vested restricted stock (28) - (28)
--- --- ---
Basic earnings (loss) and shares 44,281 $31,996 $0.72 $(993) $(0.02) $31,003 $0.70
Effect of dilutive securities:
Stock compensation plans 304
---
Diluted earnings (loss) and shares 44,585 $31,996 $0.72 $(993) $(0.02) $31,003 $0.70
====== ======= ===== ===== ====== ======= =====
Adjustments:
Impairment charges $3,313 $ - $3,313
Storm damage 9,971 - 9,971
Legal and other accruals 810 - 810
Lease exit adjustments 992 - 992
Gain on disposal (8,489) - (8,489)
Loss on debt extinguishment 15,268 - 15,268
Total adjustments before taxes 21,865 - 21,865
Income tax effect of adjustments (8,229) - (8,229)
Effect of adjustments, net of income taxes $13,636 $0.30 $ - $ - $13,636 $0.30
------- --------------- -------
Adjusted:
Earnings (loss) and
diluted earnings (loss) per share (3) $45,660 $1.02 $(993) $(0.02) $44,667 $1.00
===== ====== =====
(3) Net loss attributable to Pre-Owned Stores operations was $0.21 per fully diluted share in the nine months ended September 30, 2017.
Nine Months Ended September 30, 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 45,930 $56,475 $(918) $55,557
Effect of participating securities:
Non-vested restricted stock (31) - (31)
--- --- ---
Basic earnings (loss) and shares 45,930 $56,444 $1.23 $(918) $(0.02) $55,526 $1.21
Effect of dilutive securities:
Stock compensation plans 200
---
Diluted earnings (loss) and shares 46,130 $56,444 $1.22 $(918) $(0.02) $55,526 $1.20
====== ======= ===== ===== ====== ======= =====
Adjustments:
Impairment charges $6,089 $ - $6,089
Storm damage 3,702 477 4,179
---
Total adjustments before taxes 9,791 477 10,268
Income tax effect of adjustments (3,818) (187) (4,005)
Effect of adjustments, net of income taxes $5,973 $0.13 $290 $0.01 $6,263 $0.14
------ ---- ------
Adjusted:
Earnings (loss) and
diluted earnings (loss) per share (4) $62,448 $1.35 $(628) $(0.01) $61,820 $1.34
===== ====== =====
(4) Net loss attributable to Pre-Owned Stores operations was $0.15 per fully diluted share in the nine months ended September 30, 2016.
Sonic Automotive, Inc.
Results of Operations (Unaudited)
New Vehicles
Three Months Ended September 30, Better / (Worse)
-------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except units and per unit data)
Reported:
Revenue $1,362,301 $1,375,144 $(12,843) (0.9%)
Gross profit $66,238 $62,388 $3,850 6.2%
Unit sales 35,489 36,054 (565) (1.6%)
Revenue per unit $38,387 $38,141 $246 0.6%
Gross profit per unit . $1,866 $1,730 $136 7.9%
Gross profit as a % of revenue 4.9% 4.5% 40
bps
Nine Months Ended September 30, Better / (Worse)
------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except units and per unit data)
Reported:
Revenue $3,809,302 $3,826,178 $(16,876) (0.4%)
Gross profit $187,038 $186,678 $360 0.2%
Unit sales 99,132 100,441 (1,309) (1.3%)
Revenue per unit $38,427 $38,094 $333 0.9%
Gross profit per unit $1,887 $1,859 $28 1.5%
Gross profit as a % of revenue 4.9% 4.9% -
bps
Three Months Ended September 30, Better / (Worse)
-------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except units and per unit data)
Same Store:
Revenue $1,348,084 $1,365,641 $(17,557) (1.3%)
Gross profit $64,316 $62,202 $2,114 3.4%
Unit sales 35,063 35,639 (576) (1.6%)
Revenue per unit $38,447 $38,319 $128 0.3%
Gross profit per unit $1,834 $1,745 $89 5.1%
Gross profit as a % of revenue 4.6% 20
bps
Nine Months Ended September 30, Better / (Worse)
------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except units and per unit data)
Same Store:
Revenue $3,749,137 $3,799,558 $(50,421) (1.3%)
Gross profit $183,239 $186,356 $(3,117) (1.7%)
Unit sales 97,348 99,275 (1,927) (1.9%)
Revenue per unit $38,513 $38,273 $240 0.6%
Gross profit per unit $1,882 $1,877 $5 0.3%
Gross profit as a % of revenue 4.9% 4.9% - bps
Sonic Automotive, Inc.
Results of Operations (Unaudited)
Used Vehicles
Three Months Ended September 30, Better / (Worse)
-------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except units and per unit data)
Reported:
Revenue $659,724 $660,974 $(1,250) (0.2%)
Gross profit $39,145 $39,622 $(477) (1.2%)
Unit sales 30,841 30,933 (92) (0.3%)
Revenue per unit $21,391 $21,368 $23 0.1%
Gross profit per unit $1,269 $1,281 $(12) (0.9%)
Gross profit as a % of revenue 5.9% 6.0% (10) bps
Nine Months Ended September 30, Better / (Worse)
------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except units and per unit data)
Reported:
Revenue $1,936,088 $1,881,514 $54,574 2.9%
Gross profit $120,012 $117,121 $2,891 2.5%
Unit sales 91,749 89,553 2,196 2.5%
Revenue per unit $21,102 $21,010 $92 0.4%
Gross profit per unit $1,308 $1,308 $ - 0.0%
Gross profit as a % of revenue 6.2% 6.2% 0 bps
Three Months Ended September 30, Better / (Worse)
-------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except units and per unit data)
Same Store:
Revenue $640,993 $654,938 $(13,945) (2.1%)
Gross profit $36,541 $37,841 $(1,300) (3.4%)
Unit sales 29,854 30,554 (700) (2.3%)
Revenue per unit $21,471 $21,435 $36 0.2%
Gross profit per unit $1,224 $1,238 $(14) (1.1%)
Gross profit as a % of revenue 5.7% 5.8% (10) bps
Nine Months Ended September 30, Better / (Worse)
------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except units and per unit data)
Same Store:
Revenue $1,867,337 $1,867,041 $296 0.0%
Gross profit $111,547 $112,153 $(606) (0.5%)
Unit sales 88,211 88,592 (381) (0.4%)
Revenue per unit $21,169 $21,075 $94 0.4%
Gross profit per unit $1,265 $1,266 $(1) (0.1%)
Gross profit as a % of revenue 6.0% 6.0% 0 bps
Sonic Automotive, Inc.
Results of Operations (Unaudited)
Wholesale Vehicles
Three Months Ended September 30, Better / (Worse)
-------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except units and per unit data)
Reported:
Revenue $43,098 $70,522 $(27,424) (38.9%)
Gross profit (loss) $(3,292) $(2,507) $(785) (31.3%)
Unit sales 7,832 10,377 (2,545) (24.5%)
Revenue per unit $5,503 $6,796 $(1,293) (19.0%)
Gross profit (loss) per unit $(420) $(242) $(178) (73.6%)
Gross profit (loss) as a % of revenue (7.6%) (3.6%) (400) bps
Nine Months Ended September 30, Better / (Worse)
------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except units and per unit data)
Reported:
Revenue $130,174 $153,141 $(22,967) (15.0%)
Gross profit (loss) $(6,381) $(5,425) $(956) (17.6%)
Unit sales 23,922 26,012 (2,090) (8.0%)
Revenue per unit . $5,442 $5,887 $(445) (7.6%)
Gross profit (loss) per unit $(267) $(209) $(58) (27.8%)
Gross profit (loss) as a % of revenue (4.9%) (3.5%) (140) bps
Three Months Ended September 30, Better / (Worse)
-------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except units and per unit data)
Same Store:
Revenue $41,946 $69,898 $(27,952) (40.0%)
Gross profit (loss) $(3,069) $(2,382) $(687) (28.8%)
Unit sales 7,572 10,240 (2,668) (26.1%)
Revenue per unit $5,540 $6,826 $(1,286) (18.8%)
Gross profit (loss) per unit $(405) $(233) $(172) (73.8%)
Gross profit (loss) as a % of revenue (7.3%) (3.4%) (390) bps
Nine Months Ended September 30, Better / (Worse)
------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except units and per unit data)
Same Store:
Revenue $126,330 $152,022 $(25,692) (16.9%)
Gross profit (loss) $(6,042) $(5,222) $(820) (15.7%)
Unit sales 23,111 25,671 (2,560) (10.0%)
Revenue per unit $5,466 $5,922 $(456) (7.7%)
Gross profit (loss) per unit $(261) $(203) $(58) (28.6%)
Gross profit (loss) as a % of revenue (4.8%) (3.4%) (140) bps
Sonic Automotive, Inc.
Results of Operations (Unaudited)
Parts, Service and Collision Repair ("Fixed Operations")
Three Months Ended September 30, Better / (Worse)
-------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
Reported: (In thousands)
Revenue
Customer pay $137,850 $146,365 $(8,515) (5.8%)
Warranty 70,575 60,388 10,187 16.9%
Wholesale parts 40,927 44,202 (3,275) (7.4%)
Internal, sublet and other 98,365 110,754 (12,389) (11.2%)
Total $347,717 $361,709 $(13,992) (3.9%)
======== ======== ========
Gross profit
Customer pay $74,302 $79,153 $(4,851) (6.1%)
Warranty 38,821 32,176 6,645 20.7%
Wholesale parts 6,958 7,566 (608) (8.0%)
Internal, sublet and other 47,589 51,108 (3,519) (6.9%)
Total $167,670 $170,003 $(2,333) (1.4%)
======== ======== =======
Gross profit as a % of revenue
Customer pay 53.9% 54.1% (20) bps
Warranty 55.0% 53.3% 170 bps
Wholesale parts 17.0% 17.1% (10) bps
Internal, sublet and other 48.4% 46.1% 230 bps
Total 48.2% 47.0% 120 bps
Nine Months Ended September 30, Better / (Worse)
------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
Reported: (In thousands)
Revenue
Customer pay $415,179 $443,007 $(27,828) (6.3%)
Warranty 213,155 172,759 40,396 23.4%
Wholesale parts 127,014 133,533 (6,519) (4.9%)
Internal, sublet and other 305,525 309,794 (4,269) (1.4%)
Total $1,060,873 $1,059,093 $1,780 0.2%
========== ========== ======
Gross profit
Customer pay $222,086 $240,833 $(18,747) (7.8%)
Warranty 117,809 92,951 24,858 26.7%
Wholesale parts 21,839 23,305 (1,466) (6.3%)
Internal, sublet and other 148,351 147,137 1,214 0.8%
Total $510,085 $504,226 $5,859 1.2%
======== ======== ======
Gross profit as a % of revenue
Customer pay 53.5% 54.4% (90) bps
Warranty 55.3% 53.8% 150 bps
Wholesale parts 17.2% 17.5% (30) bps
Internal, sublet and other 48.6% 47.5% 110 bps
Total 48.1% 47.6% 50 bps
Sonic Automotive, Inc.
Results of Operations (Unaudited)
Parts, Service and Collision Repair ("Fixed Operations")
Three Months Ended September 30, Better / (Worse)
-------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
Same Store: (In thousands)
Revenue
Customer pay $136,879 $145,282 $(8,403) (5.8%)
Warranty 69,959 59,924 10,035 16.7%
Wholesale parts 40,790 43,950 (3,160) (7.2%)
Internal, sublet and other 96,716 109,740 (13,024) (11.9%)
Total $344,344 $358,896 $(14,552) (4.1%)
======== ======== ========
Gross profit
Customer pay $73,781 $78,528 $(4,747) (6.0%)
Warranty 38,508 31,893 6,615 20.7%
Wholesale parts 6,935 7,525 (590) (7.8%)
Internal, sublet and other 46,632 50,388 (3,756) (7.5%)
Total $165,856 $168,334 $(2,478) (1.5%)
======== ======== =======
Gross profit as a % of revenue
Customer pay 53.9% 54.1% (20) bps
Warranty 55.0% 53.2% 180 bps
Wholesale parts 17.0% 17.1% (10) bps
Internal, sublet and other 48.2% 45.9% 230 bps
Total 48.2% 46.9% 130 bps
Nine Months Ended September 30, Better / (Worse)
------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
Same Store: (In thousands)
Revenue
Customer pay $411,036 $439,677 $(28,641) (6.5%)
Warranty 210,795 171,379 39,416 23.0%
Wholesale parts 126,069 132,758 (6,689) (5.0%)
Internal, sublet and other 297,807 307,475 (9,668) (3.1%)
Total $1,045,707 $1,051,289 $(5,582) (0.5%)
========== ========== =======
Gross profit
Customer pay $219,890 $238,929 $(19,039) (8.0%)
Warranty 116,493 92,221 24,272 26.3%
Wholesale parts 21,638 23,181 (1,543) (6.7%)
Internal, sublet and other 144,116 145,196 (1,080) (0.7%)
Total $502,137 $499,527 $2,610 0.5%
======== ======== ======
Gross profit as a % of revenue
Customer pay 53.5% 54.3% (80) bps
Warranty 55.3% 53.8% 150 bps
Wholesale parts 17.2% 17.5% (30) bps
Internal, sublet and other 48.4% 47.2% 120 bps
Total 48.0% 47.5% 50 bps
Sonic Automotive, Inc.
Results of Operations (Unaudited)
Finance, Insurance and Other, Net ("F&I")
Three Months Ended September 30, Better / (Worse)
-------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except per unit data)
Reported:
Revenue $92,861 $89,579 $3,282 3.7%
Gross profit per retail unit (excludes fleet) $1,408 $1,344 $64 4.8%
Nine Months Ended September 30, Better / (Worse)
------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except per unit data)
Reported:
Revenue $262,832 $254,940 $7,892 3.1%
Gross profit per retail unit (excludes fleet) $1,389 $1,351 $38 2.8%
Three Months Ended September 30, Better / (Worse)
-------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except per unit data)
Same Store:
Revenue $90,602 $88,254 $2,348 2.7%
Gross profit per retail unit (excludes fleet) $1,404 $1,340 $64 4.8%
Nine Months Ended September 30, Better / (Worse)
------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except per unit data)
Same Store:
Revenue $253,957 $251,204 $2,753 1.1%
Gross profit per retail unit (excludes fleet) $1,381 $1,346 $35 2.6%
Sonic Automotive, Inc.
Results of Operations (Unaudited)
Selling, General and Administrative ("SG&A") Expenses
Three Months Ended September 30, Better / (Worse)
-------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands)
Reported:
Compensation $172,691 $171,287 $(1,404) (0.8%)
Advertising 15,846 14,987 (859) (5.7%)
Rent 17,711 18,037 326 1.8%
Other 77,726 77,830 104 0.1%
------ ------
Total SG&A expenses $283,974 $282,141 $(1,833) (0.6%)
-------- -------- -------
Adjustments:
Storm damage $(2,971) $2,341
Legal and other accruals (959) -
Gain on disposal 8,489 -
Total SG&A adjustments $4,559 $2,341
Adjusted:
Total adjusted SG&A expenses $288,533 $284,482 $(4,051) (1.4%)
======== ========
Reported:
SG&A expenses as a % of gross profit
Compensation 47.6% 47.7% 10 bps
Advertising 4.4% 4.2% (20) bps
Rent 4.9% 5.0% 10 bps
Other 21.4% 21.7% 30 bps
Total SG&A expenses as a % of gross profit 78.3% 78.6% 30 bps
---- ---- ---
Adjustments:
Storm damage (0.8%) 0.6%
Legal and other accruals (0.3%) 0.0%
Gain on disposal 2.4% 0.0%
Total effect of adjustments 1.3% 0.6%
Adjusted:
Total adjusted SG&A as a % of gross profit 79.6% 79.2% (40) bps
==== ====
Sonic Automotive, Inc.
Results of Operations (Unaudited)
Selling, General and Administrative ("SG&A") Expenses
Nine Months Ended September 30, Better / (Worse)
------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands)
Reported:
Compensation $520,420 $506,894 $(13,526) (2.7%)
Advertising 46,448 45,834 (614) (1.3%)
Rent 55,309 55,265 (44) (0.1%)
Other 247,962 235,728 (12,234) (5.2%)
Total SG&A expenses $870,139 $843,721 $(26,418) (3.1%)
-------- -------- --------
Adjustments:
Storm damage $(9,971) $(3,702)
Legal and other accruals (810) -
Gain on disposal 8,489 -
Lease exit adjustments (992) -
Total SG&A adjustments $(3,284) $(3,702)
Adjusted:
Total adjusted SG&A expenses $866,855 $840,019 $(26,836) (3.2%)
======== ========
Reported:
SG&A expenses as a % of gross profit
Compensation 48.5% 47.9% (60) bps
Advertising 4.3% 4.3% 0 bps
Rent 5.2% 5.2% 0 bps
Other 23.0% 22.4% (60) bps
Total SG&A expenses as a % of gross profit 81.0% 79.8% (120) bps
---- ---- ----
Adjustments:
Storm damage (0.9%) (0.4%)
Legal and other accruals (0.1%) 0.0%
Gain on disposal 0.8% 0.0%
Lease exit adjustments (0.1%) 0.0%
Total effect of adjustments (0.3%) (0.4%)
Adjusted:
Total adjusted SG&A as a % of gross profit 80.7% 79.4% (130) bps
==== ====
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SOURCE Sonic Automotive, Inc.
