Sonic Automotive, Inc. Reports Fourth Quarter Results
CHARLOTTE, N.C., Feb. 27, 2018 /PRNewswire/ -- Sonic Automotive, Inc. (NYSE: SAH), one of the nation's largest automotive retailers, today reported financial results for the fourth quarter and the full year of 2017.
-- All-time record revenue and gross profit in the fourth quarter of 2017
of $2.7 billion and $384.1 million, respectively
-- All-time record revenue and gross profit in the full year of 2017 of
$9.9 billion and $1.5 billion, respectively
-- Record annual retail unit sales in 2017 of 257,217 units
-- Record F&I gross profit per retail unit of $1,473 and $1,411 for the
fourth quarter and the full year of 2017, respectively
-- Benefit of $28.4 million related to the 2017 Tax Cuts and Jobs Act
-- 20% increase in the quarterly dividend to $0.06 per share
Fourth Quarter and Full Year 2017 Results
GAAP Basis
Net income from continuing operations for the fourth quarter of 2017 was $62.1 million, or $1.42 per diluted share. These results include a benefit of approximately $28.4 million related to the change in the federal income tax rate from 35% to 21% in future periods and other items discussed below. Comparatively, net income from continuing operations for the fourth quarter of 2016 was $38.0 million, or $0.84 per diluted share.
Net income from continuing operations for the full year of 2017 was $94.2 million, or $2.12 per diluted share. The full year results for 2017 also include the benefit related to the federal income tax rate change. Comparatively, net income from continuing operations for the full year of 2016 was $94.5 million, or $2.06 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 fourth quarter of 2017 was $36.6 million, or $0.84 per diluted share. The adjustments in the 2017 quarterly period relate to the benefit of the change in the federal income tax rate in future periods, a gain related to the disposal of franchises, adjustments to physical damage accruals and charges related to fixed asset and franchise asset impairments and legal matters. Adjusted net income from continuing operations for the fourth quarter of 2016 was $29.8 million, or $0.66 per diluted share. The adjustments in the 2016 quarterly period relate to gains for a settlement with an original equipment manufacturer ("OEM") and the adjustment of physical damage loss accruals, offset partially by losses related to fixed asset impairments and lease exit charges.
Adjusted net income from continuing operations for the full year of 2017 was $82.2 million, or $1.85 per diluted share. The adjustments in the 2017 annual period relate to the benefit of the change in the federal income tax rate in future periods, gains related to the disposal of franchises and charges related to fixed asset and franchise asset impairments, debt refinance costs and legal matters. Adjusted net income from continuing operations for the full year of 2016 was $92.3 million, or $2.01 per diluted share. The adjustments in the 2016 annual period relate to gains for a settlement with an OEM, partially offset by charges related to physical damage losses, lease exit charges and fixed asset impairments.
Commentary
Jeff Dyke, the Company's Executive Vice President of Operations, noted, "It was another outstanding fourth quarter as we excelled in the execution of our business model. We are very excited about the progress our team continues to make in executing our playbooks across all areas of our business. It is also important to note that our EchoPark business grew by nearly 167%, or over 2,800 units, for the quarter. We sold over 10,600 units for the year with nearly 4,500 units retailed in the fourth quarter as our business model is accelerating volume at a rapid pace. This represents a 100% increase in volume for EchoPark year-over-year. We expect our EchoPark brand to sell in the range of 25,000 cars in 2018, more than doubling 2017 volume. In just a few years, the EchoPark brand has become nearly 20% of Sonic's total pre-owned volume, and, given the volume increase we are experiencing with our model, we fully expect EchoPark to eclipse the volume we currently produce in our Sonic franchised dealerships over the next few years."
B. Scott Smith, the Company's Chief Executive Officer, noted, "We are proud to report all-time record revenues and gross profits in both the fourth quarter and full year of 2017. We value the partnerships we have with our manufacturers and their willingness and ability to continue to offer incentives driving the level of retail activity we've experienced. This level of retail activity enabled us to sell more vehicles than we ever have. We are also pleased to be able to return more capital to stockholders by increasing our quarterly dividend 20% to $0.06 per share."
B. Scott Smith continued, "Our plans in 2018 include growth in both our franchised and pre-owned businesses with several luxury open points being added in the Atlanta and Houston markets and multiple EchoPark openings in our Pre-Owned Stores Segment. In addition to the two EchoPark stores which have opened in the last 60 days in the San Antonio market, we expect to open a third store in San Antonio, two stores in the Charlotte market, and our first EchoPark store in Houston during 2018. The vast majority of our capital spending in 2018 will support the expansion of our EchoPark brand."
B. Scott Smith added, "We are continually evaluating the landscape of human mobility and the risks and opportunities that are on the horizon that may reshape our business. We believe the dealership model will continue to serve as the primary resource for consumers for quite some time, but as consumers gravitate toward and accept other sources of mobility, we want to position Sonic to participate in those offerings. This would include partnerships or relationships with ride hailing, fractional ownership, subscription service or manufacturer promoted programs that satisfy a customer demand or need."
2018 Outlook
B. Scott Smith also noted, "We anticipate new vehicle industry volume to be between 16.75 million and 17.0 million units. We project diluted earnings per share from continuing operations for 2018 to be between $2.21 and $2.45 per share. This range includes the effect of projected results and expansion of our Pre-Owned Stores Segment, which includes EchoPark. We are projecting a loss related to our Pre-Owned Stores Segment for 2018 of between $0.08 and $0.12 per diluted share. Prior to the change in the federal income tax rate, we expected our annual effective income tax rate to range between 38% and 40% each year. Going forward, and included in our 2018 estimate, we expect our annual effective income tax rate to range between 26% and 28% each year. We will have additional comments on our 2018 outlook in our earnings call later today."
Dividend
Sonic's Board of Directors approved a quarterly dividend of $0.06 per share payable in cash for our stockholders of record on March 15, 2018. The dividend will be payable on April 13, 2018.
Fourth 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: 1288139
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: 1288139
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, our projected annual effective income tax rate, 2018 new vehicle industry volume, projected results for our EchoPark brand, the anticipated expansion of both our franchised and pre-owned businesses in 2018 and our long-term strategy. 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)
This release contains certain non-GAAP financial measures (the "Adjusted" amounts) as defined under SEC rules, such as, but not limited to, adjusted income
from continuing operations and related earnings per share data. The Company has reconciled these measures to the most directly comparable GAAP financial
measures (the "Reported" amounts) in the release. The Company believes that these non-GAAP financial measures improve the transparency of the Company's
disclosure by providing period-to-period comparability of the Company's results from operations.
---
Results of Operations
Three Months Ended December 31, Twelve Months Ended December 31,
------------------------------- --------------------------------
2017 2016 2017 2016
---- ---- ---- ----
(In thousands, except per share and unit data)
Revenues:
New vehicles $1,485,749 $1,408,327 $5,295,051 $5,234,505
Used vehicles 685,965 651,608 2,622,053 2,533,122
Wholesale vehicles 40,890 57,906 171,064 211,048
------ ------ ------- -------
Total vehicles 2,212,604 2,117,841 8,088,168 7,978,675
Parts, service and collision repair 355,137 350,726 1,416,010 1,409,819
Finance, insurance and other, net 100,198 88,346 363,030 343,285
------- ------ ------- -------
Total revenues 2,667,939 2,556,913 9,867,208 9,731,779
Gross profit 384,089 371,735 1,457,676 1,429,274
Selling, general and administrative expenses (277,634) (267,135) (1,147,773) (1,110,856)
Impairment charges (6,079) (1,824) (9,394) (8,063)
Depreciation and amortization (23,192) (20,144) (88,944) (77,446)
------- ------- ------- -------
Operating income (loss) 77,184 82,632 211,565 232,909
Other income (expense):
Interest expense, floor plan (9,982) (7,919) (36,395) (27,716)
Interest expense, other, net (13,324) (12,546) (52,524) (50,106)
Other income (expense), net (32) 5 (14,522) 125
--- --- ------- ---
Total other income (expense) (23,338) (20,460) (103,441) (77,697)
------- ------- -------- -------
Income (loss) from continuing operations before taxes 53,846 62,172 108,124 155,212
Provision for income taxes for continuing operations - benefit (expense) 8,282 (24,131) (13,971) (60,696)
----- ------- ------- -------
Income (loss) from continuing operations 62,128 38,041 94,153 94,516
Income (loss) from discontinued operations (176) (405) (1,170) (1,323)
---- ---- ------ ------
Net income (loss) $61,952 $37,636 $92,983 $93,193
======= ======= ======= =======
Diluted earnings (loss) per common share:
Earnings (loss) per share from continuing operations $1.42 $0.84 $2.12 $2.06
Earnings (loss) per share from discontinued operations - (0.01) (0.03) (0.03)
Earnings (loss) per common share $1.42 $0.83 $2.09 $2.03
===== ===== ===== =====
Weighted average common shares outstanding 43,682 45,341 44,358 45,948
Gross Margin Data (Continuing Operations):
New vehicles 5.2% 5.2% 5.0% 5.0%
Used vehicles 5.1% 6.4% 5.9% 6.3%
Wholesale vehicles (5.7%) (3.3%) (5.1%) (3.5%)
Parts, service and collision repair 48.8% 48.4% 48.3% 47.8%
Finance, insurance and other 100.0% 100.0% 100.0% 100.0%
Overall gross margin 14.4% 14.5% 14.8% 14.7%
SG&A Expenses (Continuing Operations):
Compensation $172,515 $167,724 $692,935 $674,617
Advertising 15,116 15,840 61,563 61,674
Rent 17,713 18,638 73,022 73,903
Other 72,290 64,933 320,253 300,662
Total SG&A expenses $277,634 $267,135 $1,147,773 $1,110,856
SG&A expenses as % of gross profit 72.3% 71.9% 78.7% 77.7%
Operating Margin % 2.9% 3.2% 2.1% 2.4%
Unit Data (Continuing Operations):
New units 36,531 35,562 135,663 136,003
Used units 31,740 29,621 123,489 119,174
Wholesale units 7,463 9,086 31,385 35,098
Sonic Automotive, Inc.
Results of Operations (Unaudited)
Per Share Data
Three Months Ended December 31, 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 43,156 $62,128 $(176) $61,952
Effect of participating securities:
Non-vested restricted stock (57) - (57)
--- --- ---
Basic earnings (loss) and shares 43,156 $62,071 $1.44 $(176) $(0.01) $61,895 $1.43
Effect of dilutive securities:
Stock compensation plans 526
Diluted earnings (loss) and shares 43,682 $62,071 $1.42 $(176) $ - $61,895 $1.42
====== ======= ===== ===== ============= ======= =====
Adjustments:
Impairment charges $6,080 $ - $6,080
Storm damage (1,378) - (1,378)
Legal and other 1,496 - 1,496
Gain on disposal (1,507) - (1,507)
Total adjustments before taxes 4,691 - 4,691
Income tax effect of adjustments (1,841) - (1,841)
Non-recurring tax items (28,409) - (28,409)
Effect of adjustments, net of income taxes $(25,559) $(0.58) $ - $(0.01) $(25,559) $(0.59)
-------- --------------- --------
Adjusted:
Earnings (loss) and
diluted earnings (loss) per share (1) $36,569 $0.84 $(176) $(0.01) $36,393 $0.83
===== ====== =====
(1) Net loss attributable to Pre-Owned Stores operations was $0.04 per fully diluted share in the three months ended December 31, 2017.
Three Months Ended December 31, 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 44,764 $38,041 $(405) $37,636
Effect of participating securities:
Non-vested restricted stock (22) - (22)
--- --- ---
Basic earnings (loss) and shares 44,764 $38,019 $0.85 $(405) $(0.01) $37,614 $0.84
Effect of dilutive securities:
Stock compensation plans 577
---
Diluted earnings (loss) and shares (2) 45,341 $38,019 $0.84 $(405) $(0.01) $37,614 $0.83
====== ======= ===== ===== ====== ======= =====
Adjustments:
Impairment charges $1,824 $ - $1,824
OEM settlement (14,836) - (14,836)
Storm damage (612) - (612)
Legal and other 201 450 651
Total adjustments before taxes (13,423) 450 (12,973)
Income tax effect of adjustments 5,210 (153) 5,057
Effect of adjustments, net of income taxes $(8,213) $(0.18) $297 $0.01 $(7,916) $(0.17)
------- ---- -------
Adjusted:
Earnings (loss) and
diluted earnings (loss) per share (2) $29,828 $0.66 $(108) $ - $29,720 $0.66
===== ============= =====
(2) Net loss attributable to Pre-Owned Stores operations was $0.03 per fully diluted share in the three months ended December 31, 2016.
Per Share Data
Twelve Months Ended December 31, 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 43,997 $94,153 $(1,170) $92,983
Effect of participating securities:
Non-vested restricted stock (85) - (85)
--- --- ---
Basic earnings (loss) and shares 43,997 $94,068 $2.14 $(1,170) $(0.03) $92,898 $2.11
Effect of dilutive securities:
Stock compensation plans 361
---
Diluted earnings (loss) and shares 44,358 $94,068 $2.12 $(1,170) $(0.03) $92,898 $2.09
====== ======= ===== ======= ====== ======= =====
Adjustments:
Impairment charges $9,393 $ - $9,393
Storm damage 8,593 - 8,593
Legal and other 2,306 - 2,306
Lease exit adjustments 992 - 992
Gain on disposal (9,997) - (9,997)
Loss on debt extinguishment 15,268 - 15,268
Total adjustments before taxes 26,555 - 26,555
Income tax effect of adjustments (10,423) - (10,423)
Non-recurring tax items (28,055) - (28,055)
Effect of adjustments, net of income taxes $(11,923) $(0.27) $ - $0.01 $(11,923) $(0.26)
-------- --------------- --------
Adjusted:
Earnings (loss) and
diluted earnings (loss) per share (3) $82,230 $1.85 $(1,170) $(0.02) $81,060 $1.83
===== ====== =====
(3) Net loss attributable to Pre-Owned Stores operations was $0.25 per fully diluted share in the twelve months ended December
31, 2017.
Twelve Months Ended December 31, 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 45,637 $94,516 $(1,323) $93,193
Effect of participating securities:
Non-vested restricted stock (52) - (52)
--- --- ---
Basic earnings (loss) and shares 45,637 $94,464 $2.07 $(1,323) $(0.03) $93,141 $2.04
Effect of dilutive securities:
Stock compensation plans 311
---
Diluted earnings (loss) and shares 45,948 $94,464 $2.06 $(1,323) $(0.03) $93,141 $2.03
====== ======= ===== ======= ====== ======= =====
Adjustments:
Impairment charges $7,913 $ - $7,913
OEM settlement (14,836) - (14,836)
Storm damage 2,990 - 2,990
Legal and other 100 - 100
Lease exit adjustments 200 927 1,127
Total adjustments before taxes (3,633) 927 (2,706)
Income tax effect of adjustments 1,394 (341) 1,053
Effect of adjustments, net of income taxes $(2,239) $(0.05) $586 $0.01 $(1,653) $(0.04)
------- ---- -------
Adjusted:
Earnings (loss) and
diluted earnings (loss) per share (4) $92,277 $2.01 $(737) $(0.02) $91,540 $1.99
===== ====== =====
(4) Net loss attributable to Pre-Owned Stores operations was $0.17 per fully diluted share in the twelve months ended December
31, 2016.
Sonic Automotive, Inc.
Results of Operations (Unaudited)
New Vehicles
Three Months Ended December 31, Better / (Worse)
------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except units and per unit data)
Reported:
Revenue $1,485,749 $1,408,327 $77,422 5.5%
Gross profit $77,888 $73,916 $3,972 5.4%
Unit sales 36,531 35,562 969 2.7%
Revenue per unit $40,671 $39,602 $1,069 2.7%
Gross profit per unit $2,132 $2,079 $53 2.5%
Gross profit as a % of revenue 5.2% 5.2% - bps
Twelve Months Ended December 31, Better / (Worse)
-------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except units and per unit data)
Reported:
Revenue $5,295,051 $5,234,505 $60,546 1.2%
Gross profit $264,926 $260,594 $4,332 1.7%
Unit sales 135,663 136,003 (340) (0.2%)
Revenue per unit $39,031 $38,488 $543 1.4%
Gross profit per unit $1,953 $1,916 $37 1.9%
Gross profit as a % of revenue 5.0% 5.0% - bps
Three Months Ended December 31, Better / (Worse)
------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except units and per unit data)
Same Store:
Revenue $1,476,819 $1,390,744 $86,075 6.2%
Gross profit $76,689 $74,198 $2,491 3.4%
Unit sales 36,305 34,920 1,385 4.0%
Revenue per unit $40,678 $39,827 $851 2.1%
Gross profit per unit $2,112 $2,125 $(13) (0.6%)
Gross profit as a % of revenue 5.2% 5.3% (10) bps
Twelve Months Ended December 31, Better / (Worse)
-------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except units and per unit data)
Same Store:
Revenue $5,204,867 $5,170,372 $34,495 0.7%
Gross profit $259,220 $259,668 $(448) (0.2%)
Unit sales 133,047 133,606 (559) (0.4%)
Revenue per unit $39,121 $38,699 $422 1.1%
Gross profit per unit $1,948 $1,944 $4 0.2%
Gross profit as a % of revenue 5.0% 5.0% - bps
Sonic Automotive, Inc.
Results of Operations (Unaudited)
Used Vehicles
Three Months Ended December 31, Better / (Worse)
------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except units and per unit data)
Reported:
Revenue $685,965 $651,608 $34,357 5.3%
Gross profit $34,891 $41,464 $(6,573) (15.9%)
Unit sales 31,740 29,621 2,119 7.2%
Revenue per unit $21,612 $21,998 $(386) (1.8%)
Gross profit per unit $1,099 $1,400 $(301) (21.5%)
Gross profit as a % of revenue 5.1% 6.4% (130) bps
Twelve Months Ended December 31, Better / (Worse)
-------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except units and per unit data)
Reported:
Revenue $2,622,053 $2,533,122 $88,931 3.5%
Gross profit $154,903 $158,585 $(3,682) (2.3%)
Unit sales 123,489 119,174 4,315 3.6%
Revenue per unit $21,233 $21,256 $(23) (0.1%)
Gross profit per unit $1,254 $1,331 $(77) (5.8%)
Gross profit as a % of revenue 5.9% 6.3% (40) bps
Three Months Ended December 31, Better / (Worse)
------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except units and per unit data)
Same Store:
Revenue $625,914 $638,427 $(12,513) (2.0%)
Gross profit $33,068 $36,661 $(3,593) (9.8%)
Unit sales 28,685 28,849 (164) (0.6%)
Revenue per unit $21,820 $22,130 $(310) (1.4%)
Gross profit per unit $1,153 $1,271 $(118) (9.3%)
Gross profit as a % of revenue 5.3% 5.7% (40) bps
Twelve Months Ended December 31, Better / (Worse)
-------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except units and per unit data)
Same Store:
Revenue $2,476,967 $2,488,866 $(11,899) (0.5%)
Gross profit $143,690 $148,069 $(4,379) (3.0%)
Unit sales 115,916 116,450 (534) (0.5%)
Revenue per unit. $21,369 $21,373 $(4) (0.0%)
Gross profit per unit $1,240 $1,272 $(32) (2.5%)
Gross profit as a % of revenue 5.8% 5.9% (10) bps
Sonic Automotive, Inc.
Results of Operations (Unaudited)
Wholesale Vehicles
Three Months Ended December 31, Better / (Worse)
------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except units and per unit data)
Reported:
Revenue $40,890 $57,906 $(17,016) (29.4%)
Gross profit (loss) $(2,334) $(1,890) $(444) (23.5%)
Unit sales 7,463 9,086 (1,623) (17.9%)
Revenue per unit $5,479 $6,373 $(894) (14.0%)
Gross profit (loss) per unit $(313) $(208) $(105) (50.5%)
Gross profit (loss) as a % of revenue (5.7%) (3.3%) (240) bps
Twelve Months Ended December 31, Better / (Worse)
-------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except units and per unit data)
Reported:
Revenue $171,064 $211,048 $(39,984) (18.9%)
Gross profit (loss) $(8,714) $(7,316) $(1,398) (19.1%)
Unit sales 31,385 35,098 (3,713) (10.6%)
Revenue per unit $5,451 $6,013 $(562) (9.3%)
Gross profit (loss) per unit $(278) $(208) $(70) (33.7%)
Gross profit (loss) as a % of revenue (5.1%) (3.5%) (160) bps
Three Months Ended December 31, Better / (Worse)
------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except units and per unit data)
Same Store:
Revenue $40,134 $56,784 $(16,650) (29.3%)
Gross profit (loss) $(2,297) $(1,644) $(653) (39.7%)
Unit sales 7,170 8,776 (1,606) (18.3%)
Revenue per unit $5,597 $6,470 $(873) (13.5%)
Gross profit (loss) per unit $(320) $(187) $(133) (71.1%)
Gross profit (loss) as a % of revenue (5.7%) (2.9%) (280) bps
Twelve Months Ended December 31, Better / (Worse)
-------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except units and per unit data)
Same Store:
Revenue $165,308 $207,263 $(41,955) (20.2%)
Gross profit (loss) $(8,181) $(6,694) $(1,487) (22.2%)
Unit sales 29,978 34,108 (4,130) (12.1%)
Revenue per unit $5,514 $6,077 $(563) (9.3%)
Gross profit (loss) per unit $(273) $(196) $(77) (39.3%)
Gross profit (loss) as a % of revenue (4.9%) (3.2%) (170) bps
Sonic Automotive, Inc.
Results of Operations (Unaudited)
Parts, Service and Collision Repair ("Fixed Operations")
Three Months Ended December 31, Better / (Worse)
------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
Reported: (In thousands)
Revenue
Customer pay $140,285 $139,550 $735 0.5%
Warranty 69,771 67,656 2,115 3.1%
Wholesale parts 41,445 43,337 (1,892) (4.4%)
Internal, sublet and other 103,636 100,183 3,453 3.4%
Total $355,137 $350,726 $4,411 1.3%
======== ======== ======
Gross profit
Customer pay $74,748 $73,958 $790 1.1%
Warranty 38,273 36,973 1,300 3.5%
Wholesale parts 7,149 7,450 (301) (4.0%)
Internal, sublet and other 53,277 51,519 1,758 3.4%
Total $173,447 $169,900 $3,547 2.1%
======== ======== ======
Gross profit as a % of revenue
Customer pay 53.3% 53.0% 30 bps
Warranty 54.9% 54.6% 30 bps
Wholesale parts 17.2% 17.2% 0 bps
Internal, sublet and other 51.4% 51.4% 0 bps
Total 48.8% 48.4% 40 bps
Twelve Months Ended December 31, Better / (Worse)
-------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
Reported: (In thousands)
Revenue
Customer pay $555,463 $582,557 $(27,094) (4.7%)
Warranty 282,926 240,415 42,511 17.7%
Wholesale parts 168,459 176,870 (8,411) (4.8%)
Internal, sublet and other 409,162 409,977 (815) (0.2%)
Total $1,416,010 $1,409,819 $6,191 0.4%
========== ========== ======
Gross profit
Customer pay $296,834 $314,791 $(17,957) (5.7%)
Warranty 156,082 129,924 26,158 20.1%
Wholesale parts 28,989 30,754 (1,765) (5.7%)
Internal, sublet and other 201,626 198,657 2,969 1.5%
Total $683,531 $674,126 $9,405 1.4%
======== ======== ======
Gross profit as a % of revenue
Customer pay 53.4% 54.0% (60) bps
Warranty 55.2% 54.0% 120 bps
Wholesale parts 17.2% 17.4% (20) bps
Internal, sublet and other 49.3% 48.5% 80 bps
Total 48.3% 47.8% 50 bps
Sonic Automotive, Inc.
Results of Operations (Unaudited)
Parts, Service and Collision Repair ("Fixed Operations")
Three Months Ended December 31, Better / (Worse)
------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
Same Store: (In thousands)
Revenue
Customer pay $139,804 $137,954 $1,850 1.3%
Warranty 69,420 66,722 2,698 4.0%
Wholesale parts 41,372 42,870 (1,498) (3.5%)
Internal, sublet and other 101,080 98,393 2,687 2.7%
Total $351,676 $345,939 $5,737 1.7%
======== ======== ======
Gross profit
Customer pay $74,495 $73,080 $1,415 1.9%
Warranty 38,141 36,461 1,680 4.6%
Wholesale parts 7,135 7,369 (234) (3.2%)
Internal, sublet and other 52,255 50,637 1,618 3.2%
Total $172,026 $167,547 $4,479 2.7%
======== ======== ======
Gross profit as a % of revenue
Customer pay 53.3% 53.0% 30 bps
Warranty 54.9% 54.6% 30 bps
Wholesale parts 17.2% 17.2% 0 bps
Internal, sublet and other 51.7% 51.5% 20 bps
Total 48.9% 48.4% 50 bps
Twelve Months Ended December 31, Better / (Worse)
-------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
Same Store: (In thousands)
Revenue
Customer pay $548,768 $575,641 $(26,873) (4.7%)
Warranty 278,882 236,931 41,951 17.7%
Wholesale parts 166,831 174,962 (8,131) (4.6%)
Internal, sublet and other 396,702 403,654 (6,952) (1.7%)
Total $1,391,183 $1,391,188 $(5) (0.0%)
========== ========== ===
Gross profit
Customer pay $293,272 $310,919 $(17,647) (5.7%)
Warranty 154,025 128,161 25,864 20.2%
Wholesale parts 28,669 30,443 (1,774) (5.8%)
Internal, sublet and other 195,432 194,835 597 0.3%
Total $671,398 $664,358 $7,040 1.1%
======== ======== ======
Gross profit as a % of revenue
Customer pay 53.4% 54.0% (60) bps
Warranty 55.2% 54.1% 110 bps
Wholesale parts 17.2% 17.4% (20) bps
Internal, sublet and other 49.3% 48.3% 100 bps
Total 48.3% 47.8% 50 bps
Sonic Automotive, Inc.
Results of Operations (Unaudited)
Finance, Insurance and Other, Net ("F&I")
Three Months Ended December 31, Better / (Worse)
------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except per unit data)
Reported:
Revenue $100,198 $88,346 $11,852 13.4%
Gross profit per retail unit (excludes fleet) $1,473 $1,363 $110 8.1%
Twelve Months Ended December 31, Better / (Worse)
-------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except per unit data)
Reported:
Revenue $363,030 $343,285 $19,745 5.8%
Gross profit per retail unit (excludes fleet) $1,411 $1,354 $57 4.2%
Three Months Ended December 31, Better / (Worse)
------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except per unit data)
Same Store:
Revenue $92,015 $85,224 $6,791 8.0%
Gross profit per retail unit (excludes fleet) $1,421 $1,344 $77 5.7%
Twelve Months Ended December 31, Better / (Worse)
-------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands, except per unit data)
Same Store:
Revenue $343,987 $334,205 $9,782 2.9%
Gross profit per retail unit (excludes fleet) $1,392 $1,345 $47 3.5%
Sonic Automotive, Inc.
Results of Operations (Unaudited)
Selling, General and Administrative ("SG&A") Expenses
Three Months Ended December 31, Better / (Worse)
------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands)
Reported:
Compensation $172,515 $167,724 $(4,791) (2.9%)
Advertising 15,116 15,840 724 4.6%
Rent 17,713 18,638 925 5.0%
Other 72,290 64,933 (7,357) (11.3%)
------ ------
Total SG&A expenses $277,634 $267,135 $(10,499) (3.9%)
-------- -------- --------
Adjustments:
OEM settlement $ - $14,836
Storm damage 1,378 612
Legal and other (1,496) (201)
Gain on disposal 1,507 -
Total SG&A adjustments $1,389 $15,247
Adjusted:
Total adjusted SG&A expenses $279,023 $282,382 $3,359 1.2%
======== ========
Reported:
SG&A expenses as a % of gross profit
Compensation 44.9% 45.1% 20 bps
Advertising 3.9% 4.3% 40 bps
Rent 4.6% 5.0% 40 bps
Other 18.9% 17.5% (140) bps
Total SG&A expenses as a % of gross profit 72.3% 71.9% (40) bps
---- ---- ---
Adjustments:
OEM settlement 0.0% 4.0%
Storm damage 0.3% 0.2%
Legal and other (0.3%) (0.1%)
Gain on disposal 0.3% 0.0%
Total effect of adjustments 0.3% 4.1%
Adjusted:
Total adjusted SG&A as a % of gross profit 72.6% 76.0% 340 bps
==== ====
Selling, General and Administrative ("SG&A") Expenses
Twelve Months Ended December 31, Better / (Worse)
-------------------------------- ----------------
2017 2016 Change % Change
---- ---- ------ --------
(In thousands)
Reported:
Compensation $692,935 $674,617 $(18,318) (2.7%)
Advertising 61,563 61,674 111 0.2%
Rent 73,022 73,903 881 1.2%
Other 320,253 300,662 (19,591) (6.5%)
Total SG&A expenses $1,147,773 $1,110,856 $(36,917) (3.3%)
---------- ---------- --------
Adjustments:
OEM settlement $ - $14,836
Storm damage (8,593) (2,990)
Legal and other (2,306) (100)
Gain on disposal 9,997 -
Lease exit adjustments (992) (200)
Total SG&A adjustments $(1,894) $11,546
Adjusted:
Total adjusted SG&A expenses $1,145,879 $1,122,402 $(23,477) (2.1%)
========== ==========
Reported:
SG&A expenses as a % of gross profit
Compensation 47.5% 47.2% (30) bps
Advertising 4.2% 4.3% 10 bps
Rent 5.0% 5.2% 20 bps
Other 22.0% 21.0% (100) bps
Total SG&A expenses as a % of gross profit 78.7% 77.7% (100) bps
---- ---- ----
Adjustments:
OEM settlement 0.0% 1.0%
Storm damage 0.5% (0.2%)
Legal and other 0.1% (0.0%)
Gain on disposal (0.7%) 0.0%
Lease exit adjustments 0.1% (0.0%)
Total effect of adjustments (0.1%) 0.8%
Adjusted:
Total adjusted SG&A as a % of gross profit 78.6% 78.5% (10) bps
==== ====
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SOURCE Sonic Automotive, Inc.
