CHARLOTTE, N.C., April 26, 2016 /PRNewswire/ --
First Quarter 2016 Results
-- Record Q1 pre-owned units of 29,333, up 4.3% over the prior year quarter -- Record Q1 finance and insurance ("F&I") gross profit of $81.3 million, up 8.9% over the prior year quarter -- Record Q1 fixed operations gross profit of $166.0 million, up 6.2% over the prior year quarter -- Record Q1 total gross profit of $345.2 million, up 3.0% over the prior year quarter -- EchoPark(®) stores retailed 941 units
Sonic Automotive, Inc. (NYSE: SAH), one of the nation's largest automotive retailers, today reported adjusted net income from continuing operations for the first quarter of 2016 of $18.2 million, or $0.39 per diluted share. Included in these adjusted amounts are pre-tax expenses of $3.6 million, or $0.05 per diluted share, related to the Company's EchoPark(®) operations. Adjusted net income from continuing operations and related diluted earnings per share are non-GAAP financial measures. The schedules included in this press release reconcile these non-GAAP financial measures to the comparable GAAP financial measures.
Adjusted net income from continuing operations for the first quarter of 2015 was $18.8 million, or $0.37 per diluted share. Included in these adjusted amounts are pre-tax expenses of $4.9 million, or $0.06 per share, related to the Company's EchoPark(®) operations.
On a GAAP basis, net income from continuing operations and related diluted earnings per share for the first quarter of 2016 were $14.5 million and $0.31 per share, respectively, compared to $14.4 million and $0.28 per diluted share, respectively, for the first quarter of 2015.
Jeff Dyke, Sonic's EVP of Operations, stated, "We are pleased with our operating results during the quarter. Strong performances in the fixed operations and the F&I areas drove the overall increase in gross profit to record levels. We continued to see gross profit compression in new vehicles and expect this to continue until inventory supply corrects to more normalized levels. The used vehicle market continues to demonstrate its resiliency despite the compression related to new vehicles. Our EchoPark(®) stores continue to grow and mature. The expansion in Denver is on schedule and we anticipate opening two additional stores in the second quarter of 2016 and another by the end of the year. We are also happy to announce we will be introducing the EchoPark(®) brand to the Texas and Carolinas markets in 2017 where we have been actively accumulating property."
B. Scott Smith, the Company's Chief Executive Officer, noted, "Execution of our core strategies continued in the first quarter. Our commitment to return capital through dividends and share repurchases has rewarded our long-term stockholders. Subsequent to the end of the quarter, we repurchased an additional 363,000 shares for approximately $6.4 million. In addition to the real estate and construction activities related to EchoPark(®), we are aggressively replacing leased properties with image-compliant facilities on owned land. We anticipate investing approximately $250 million in land and facilities in the current year funded by mortgages and cash generated through operations. These hard assets are the cornerstones of our long-term plan. We are maintaining our guidance of adjusted diluted earnings per share from continuing operations for 2016 to be between $2.07 and $2.17 per share."
Dividend
Sonic's Board of Directors approved a quarterly dividend of $0.05 per share payable in cash for stockholders of record on June 15, 2016. The dividend will be payable on July 15, 2016.
First 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: 1.877.450.3867
International: 1.706.643.0958
Conference ID: 81083014
A conference call replay will be available one hour following the call for seven days and can be accessed by calling:
Domestic: 1.855.859.2056
International: 1.404.537.3406
Conference ID: 81083014
About Sonic Automotive
Sonic Automotive, Inc., a Fortune 500 company based in Charlotte, N.C., is one of the nation's largest automotive retailers. Sonic can be reached on the web at www.sonicautomotive.com.
Included herein are forward-looking statements, including statements with respect to anticipated expansion of our EchoPark(®) store initiatives and the anticipated amount of investments related to capital expenditures. There are many factors that affect management's views about future events and trends of the Company's business. These factors involve risk and uncertainties that could cause actual results or trends to differ materially from management's 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 ending December 31, 2015. The Company does not undertake any obligation to update forward-looking information.
Sonic Automotive, Inc. Results of Operations (Unaudited) This release contains certain non-GAAP financial measures 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 measures 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. ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Three Months Ended March 31, ---------------------------- 2016 2015 ---- ---- (In thousands, except per share and unit data) Revenues: New retail vehicles $1,149,437 $1,190,215 Fleet vehicles 15,133 12,108 Total new vehicles 1,164,570 1,202,323 Used vehicles 598,355 593,742 Wholesale vehicles 44,374 41,656 ------ ------ Total vehicles 1,807,299 1,837,721 Parts, service and collision repair 346,054 323,194 Finance, insurance and other, net 81,273 74,600 ------ ------ Total revenues 2,234,626 2,235,515 Gross profit 345,150 334,959 Selling, general and administrative expenses (284,375) (270,862) Impairment charges - (6,192) Depreciation and amortization (18,470) (16,409) ------- ------- Operating income (loss) 42,305 41,496 Other income (expense): Interest expense, floor plan (6,436) (4,778) Interest expense, other, net (12,339) (13,219) Other income (expense), net 104 90 --- --- Total other income (expense) (18,671) (17,907) ------- ------- Income (loss) from continuing operations before taxes 23,634 23,589 Provision for income taxes for continuing operations - benefit (expense) (9,170) (9,200) ------ ------ Income (loss) from continuing operations 14,464 14,389 Income (loss) from discontinued operations 160 (422) --- ---- Net income (loss) $14,624 $13,967 ======= ======= Diluted earnings (loss) per common share: Earnings (loss) per share from continuing operations $0.31 $0.28 Earnings (loss) per share from discontinued operations - (0.01) Earnings (loss) per common share $0.31 $0.27 ===== ===== Weighted average common shares outstanding 47,122 51,403 Gross Margin Data (Continuing Operations): New retail vehicles 5.1% 5.3% Fleet vehicles 0.2% (0.6%) Total new vehicles 5.0% 5.3% Used vehicles 6.8% 6.9% Wholesale vehicles (2.4%) (0.5%) Parts, service and collision repair 48.0% 48.4% Finance, insurance and other 100.0% 100.0% Overall gross margin 15.4% 15.0% SG&A Expenses (Continuing Operations): Compensation $169,041 $161,858 Advertising 15,347 15,332 Rent 18,720 18,254 Other 81,267 75,418 Total SG&A expenses $284,375 $270,862 SG&A expenses as % of gross profit 82.4% 80.9% Operating Margin % 1.9% 1.9% Unit Data (Continuing Operations): New retail units 30,156 31,334 Fleet units 449 355 Total new units 30,605 31,689 Used units 29,333 28,135 Wholesale units 8,423 7,777
Sonic Automotive, Inc. Results of Operations (Unaudited) Per Share Data Three Months Ended March 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 46,950 $14,464 $160 $14,624 Effect of participating securities: Non-vested restricted stock (6) - (6) --- --- --- Basic earnings (loss) and shares 46,950 $14,458 $0.31 $160 $ - $14,618 $0.31 Effect of dilutive securities: Stock compensation plans 172 Diluted earnings (loss) and shares 47,122 $14,458 $0.31 $160 $ - $14,618 $0.31 ====== ======= ===== ==== =============== ======= ===== Adjustments (net of tax): Storm damage and other $3,698 $0.08 $(320) $(0.01) $3,378 $0.07 Total adjustments $3,698 $0.08 $(320) $(0.01) $3,378 $0.07 Adjusted: Earnings (loss) and diluted earnings (loss) per share (1) $18,162 $0.39 $(160) $(0.01) $18,002 $0.38 ===== ====== ===== (1) Net loss attributable to EchoPark(R) operations was $0.05 per fully diluted share in the three months ended March 31, 2016. Three Months Ended March 31, 2015 --------------------------------- 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 50,854 $14,389 $(422) $13,967 Effect of participating securities: Non-vested restricted stock and stock units (5) - (5) --- --- --- Basic earnings (loss) and shares 50,854 $14,384 $0.28 $(422) $(0.01) $13,962 $0.27 Effect of dilutive securities: Stock compensation plans 549 --- Diluted earnings (loss) and shares 51,403 $14,384 $0.28 $(422) $(0.01) $13,962 $0.27 ====== ======= ===== ===== ====== ======= ===== Adjustments (net of tax): Storm damage and other $634 $0.02 $ - $ - $634 $0.02 Impairment charges 3,777 0.07 - - 3,777 0.07 Total adjustments $4,411 $0.09 $ - $ - $4,411 $0.09 Adjusted: Earnings (loss) and diluted earnings (loss) per share (2) $18,800 $0.37 $(422) $(0.01) $18,378 $0.36 ===== ====== ===== (2) Net loss attributable to EchoPark(R) operations was $0.06 per fully diluted share in the three months ended March 31, 2015.
Sonic Automotive, Inc. Results of Operations (Unaudited) New Vehicles Three Months Ended March 31, Better / (Worse) ---------------------------- ---------------- 2016 2015 Change % Change ---- ---- ------ -------- (In thousands, except units and per unit data) Reported: Revenue $1,164,570 $1,202,323 $(37,753) (3.1%) Gross profit $58,424 $63,350 $(4,926) (7.8%) Unit sales 30,605 31,689 (1,084) (3.4%) Revenue per unit $38,052 $37,941 $111 0.3% Gross profit per unit $1,909 $1,999 $(90) (4.5%) Gross profit as a % of revenue 5.0% 5.3% (30) bps Three Months Ended March 31, Better / (Worse) ---------------------------- ---------------- 2016 2015 Change % Change ---- ---- ------ -------- (In thousands, except units and per unit data) Same Store: Revenue $1,164,570 $1,189,495 $(24,925) (2.1%) Gross profit $58,375 $62,498 $(4,123) (6.6%) Unit sales 30,605 31,372 (767) (2.4%) Revenue per unit $38,052 $37,916 $136 0.4% Gross profit per unit $1,907 $1,992 $(85) (4.3%) Gross profit as a % of revenue 5.0% 5.3% (30) bps
Sonic Automotive, Inc. Results of Operations (Unaudited) Used Vehicles Three Months Ended March 31, Better / (Worse) ---------------------------- ---------------- 2016 2015 Change % Change ---- ---- ------ -------- (In thousands, except units and per unit data) Reported: Revenue $598,355 $593,742 $4,613 0.8% Gross profit $40,531 $40,844 $(313) (0.8%) Unit sales 29,333 28,135 1,198 4.3% Revenue per unit $20,399 $21,103 $(704) (3.3%) Gross profit per unit $1,382 $1,452 $(70) (4.8%) Gross profit as a % of revenue 6.8% 6.9% (10) bps Three Months Ended March 31, Better / (Worse) ---------------------------- ---------------- 2016 2015 Change % Change ---- ---- ------ -------- (In thousands, except units and per unit data) Same Store: Revenue $598,355 $584,987 $13,368 2.3% Gross profit $40,690 $41,008 $(318) (0.8%) Unit sales 29,333 27,687 1,646 5.9% Revenue per unit $20,399 $21,129 $(730) (3.5%) Gross profit per unit $1,387 $1,481 $(94) (6.3%) Gross profit as a % of revenue 6.8% 7.0% (20) bps
Sonic Automotive, Inc. Results of Operations (Unaudited) Wholesale Vehicles Three Months Ended March 31, Better / (Worse) ---------------------------- ---------------- 2016 2015 Change % Change ---- ---- ------ -------- (In thousands, except units and per unit data) Reported: Revenue $44,374 $41,656 $2,718 6.5% Gross profit (loss) $(1,078) $(210) $(868) (413.3%) Unit sales 8,423 7,777 646 8.3% Revenue per unit $5,268 $5,356 $(88) (1.6%) Gross profit (loss) per unit $(128) $(27) $(101) (374.1%) Gross profit (loss) as a % of revenue (2.4%) (0.5%) (190) bps Three Months Ended March 31, Better / (Worse) ---------------------------- ---------------- 2016 2015 Change % Change ---- ---- ------ -------- (In thousands, except units and per unit data) Same Store: Revenue $44,353 $41,253 $3,100 7.5% Gross profit (loss) $(1,076) $(197) $(879) (446.2%) Unit sales 8,418 7,688 730 9.5% Revenue per unit $5,269 $5,366 $(97) (1.8%) Gross profit (loss) per unit $(128) $(26) $(102) (392.3%) Gross profit (loss) as a % of revenue (2.4%) (0.5%) (190) bps
Sonic Automotive, Inc. Results of Operations (Unaudited) Parts, Service and Collision Repair ("Fixed Operations") Three Months Ended March 31, Better / (Worse) ---------------------------- ---------------- 2016 2015 Change % Change ---- ---- ------ -------- Reported: (In thousands) Revenue Customer pay $147,394 $137,623 $9,771 7.1% Warranty 57,559 53,498 4,061 7.6% Wholesale parts 45,309 45,012 297 0.7% Internal, sublet and other 95,792 87,061 8,731 10.0% Total $346,054 $323,194 $22,860 7.1% ======== ======== ======= Gross profit Customer pay $80,358 $75,678 $4,680 6.2% Warranty 31,326 29,760 1,566 5.3% Wholesale parts 7,941 8,138 (197) (2.4%) Internal, sublet and other 46,375 42,799 3,576 8.4% Total $166,000 $156,375 $9,625 6.2% ======== ======== ====== Gross profit as a % of revenue Customer pay 54.5% 55.0% (50) bps Warranty 54.4% 55.6% (120) bps Wholesale parts 17.5% 18.1% (60) bps Internal, sublet and other 48.4% 49.2% (80) bps Total 48.0% 48.4% (40) bps
Sonic Automotive, Inc. Results of Operations (Unaudited) Parts, Service and Collision Repair ("Fixed Operations") Three Months Ended March 31, Better / (Worse) ---------------------------- ---------------- 2016 2015 Change % Change ---- ---- ------ -------- Same Store: (In thousands) Revenue Customer pay $147,394 $134,636 $12,758 9.5% Warranty 57,559 52,694 4,865 9.2% Wholesale parts 45,309 44,201 1,108 2.5% Internal, sublet and other 95,792 85,742 10,050 11.7% Total $346,054 $317,273 $28,781 9.1% ======== ======== ======= Gross profit Customer pay $80,358 $74,050 $6,308 8.5% Warranty 31,282 29,300 1,982 6.8% Wholesale parts 7,941 7,988 (47) (0.6%) Internal, sublet and other 46,068 42,165 3,903 9.3% Total $165,649 $153,503 $12,146 7.9% ======== ======== ======= Gross profit as a % of revenue Customer pay 54.5% 55.0% (50) bps Warranty 54.3% 55.6% (130) bps Wholesale parts 17.5% 18.1% (60) bps Internal, sublet and other 48.1% 49.2% (110) bps Total 47.9% 48.4% (50) bps
Sonic Automotive, Inc. Results of Operations (Unaudited) Finance, Insurance and Other, Net ("F&I") Three Months Ended March 31, Better / (Worse) ---------------------------- ---------------- 2016 2015 Change % Change ---- ---- ------ -------- (In thousands, except per unit data) Reported: Revenue $81,273 $74,600 $6,673 8.9% Gross profit per retail unit (excludes fleet) $1,366 $1,254 $112 8.9% Three Months Ended March 31, Better / (Worse) ---------------------------- ---------------- 2016 2015 Change % Change ---- ---- ------ -------- (In thousands, except per unit data) Same Store: Revenue $80,852 $73,689 $7,163 9.7% Gross profit per retail unit (excludes fleet) $1,359 $1,255 $104 8.3%
Sonic Automotive, Inc. Results of Operations (Unaudited) Selling, General and Administrative ("SG&A") Expenses Three Months Ended March 31, Better / (Worse) ---------------------------- ---------------- 2016 2015 Change % Change ---- ---- ------ -------- (In thousands) Reported: Compensation $169,041 $161,858 $(7,183) (4.4%) Advertising 15,347 15,332 (15) (0.1%) Rent 18,720 18,254 (466) (2.6%) Other 81,267 75,418 (5,849) (7.8%) ------ ------ Total $284,375 $270,862 $(13,513) (5.0%) -------- -------- -------- Total pre-tax adjustments (6,042) (1,051) 4,991 NM ------ ------ ----- Adjusted SG&A $278,333 $269,811 (8,522) (3.2%) ======== ======== ====== SG&A expenses as a % of gross profit Compensation 49.0% 48.3% (70) bps Advertising 4.4% 4.6% 20 bps Rent 5.4% 5.4% 0 bps Other 23.6% 22.6% (100) bps Total 82.4% 80.9% (150) bps Total pre-tax adjustments . (1.8%) (0.3%) 150 bps Adjusted SG&A as a % of gross profit 80.6% 80.6% 0 bps NM = Not meaningful
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SOURCE Sonic Automotive, Inc.