CHARLOTTE, N.C., Feb. 21 /PRNewswire-FirstCall/ -- Sonic Automotive, Inc.
(NYSE: SAH), a leader in automotive retailing, today reported that its 2005
fourth quarter income from continuing operations was $25.2 million, or $0.58
per diluted share, compared to $19.3 million, or $0.45 per diluted share, in
the prior year period. For the full year 2005, income from continuing
operations was $101.8 million, or $2.33 per diluted share, compared to $93.3
million, or $2.16 per diluted share, in the prior year.
Commenting on fourth quarter performance, Chairman and Chief Executive
Officer O. Bruton Smith said, "Sonic Automotive's earnings reflect the
strength of our operating model as performance improved in a difficult
industry environment. Our strong brand mix yielded a 40 basis point gross
margin improvement over the prior year quarter along with reduced costs as
SG&A as a percentage of gross profit declined 350 basis points over the prior
year quarter. The Sonic management team executed on our strategic operating
initiatives and exceeded the targets previously communicated to the
marketplace."
"Our operating results highlight the benefits of our long-term portfolio
enrichment strategy," said President and Chief Operating Officer Jeffrey C.
Rachor. "During December 2005 and early 2006 we closed on three acquisitions
representing $280 million in annual revenues. These larger luxury and import
dealerships are in key existing markets for Sonic Automotive. They exemplify
the criteria we have outlined in our overall acquisition strategy."
Looking ahead to 2006, Mr. Rachor said, "It is likely that we will add
targeted acquisitions with aggregate annualized revenues of approximately $400
million to $700 million, which will help offset the effect of rising interest
rates on our business. We expect operating execution to continue to improve
as process standardization, technology and management infrastructure mature.
Accordingly, we are targeting earnings per share from continuing operations to
be between $2.40 and $2.50 for 2006."
Sonic Automotive, Inc., a Fortune 300 company based in Charlotte, N.C., is
one of the largest automotive retailers in the United States operating 177
franchises and 38 collision repair centers. Sonic can be reached on the Web at
http://www.sonicautomotive.com.
Included herein are forward-looking statements, including statements
pertaining to anticipated acquisition activity, earnings per share from
continuing operations, operating improvements, as well as anticipated interest
rate environment and industry conditions. There are many factors that affect
management's views about future events and trends of the Company's business.
These factors involve risk and uncertainties that could cause actual results
or trends to differ materially from management's view, including without
limitation, economic conditions, risks associated with acquisitions and the
risk factors described in Exhibit 99.2 to the Company's Current Report on Form
8-K dated November 3, 2005. The Company does not undertake any obligation to
update forward-looking information.
MANAGEMENT WILL HOLD A CONFERENCE CALL ON TUESDAY, FEBRUARY 21, 2006 AT
11:00 A.M. EASTERN TIME. TO PARTICIPATE, PLEASE DIAL 877-791-3416 -- OR YOU
CAN ACCESS THE CALL AT http://WWW.CCBN.COM.
Sonic Automotive, Inc.
Results of Operations (unaudited)
(in thousands, except per share, unit data and percentage amounts)
For the Year Ended
12/31/2005 12/31/2004
Revenues
Retail new vehicles $4,498,010 $4,093,679
Fleet vehicles 319,707 282,609
Total new vehicles 4,817,717 4,376,287
Used vehicles 1,238,586 1,141,431
Wholesale vehicles 540,977 481,873
Total vehicles 6,597,280 5,999,591
Parts, service and collision repair 1,091,172 994,263
Finance, insurance and other 196,390 183,728
Total revenues 7,884,842 7,177,582
Total gross profit 1,211,258 1,102,436
SG&A expenses 939,177 867,450
Depreciation 21,297 16,303
Operating income 250,784 218,683
Interest expense, floor plan 40,209 25,864
Interest expense, other 46,448 42,431
Other income 54 48
Income from continuing operations
before taxes 164,181 150,436
Income taxes 62,390 57,152
Income from continuing operations 101,791 93,284
Discontinued operations:
Loss from operations and the sale
of discontinued franchises (13,439) (10,623)
Income tax benefit 3,509 3,410
Loss from discontinued operations (9,930) (7,213)
Net income $91,861 $86,071
Diluted:
Weighted average common shares
outstanding 45,533 45,217
Earnings per share from
continuing operations $2.33 $2.16
Loss per share from discontinued
operations ($0.21) ($0.16)
Earnings per share $2.12 $2.00
Gross Margin Data:
Retail new vehicles 7.5% 7.6%
Fleet vehicles 3.0% 2.8%
Total new vehicles 7.2% 7.3%
Used vehicles retail 10.6% 10.4%
Total vehicles retail 7.9% 7.9%
Parts, service and collision repair 49.2% 48.7%
Finance, insurance and other 100.0% 100.0%
Overall gross margin 15.4% 15.4%
SG&A Expenses:
Personnel 546,425 505,695
Advertising 64,721 59,258
Facility rent 92,620 78,641
Other 235,411 223,856
Total 939,177 867,450
Unit Data:
New retail units 143,757 134,567
Fleet units 14,363 12,420
Total new units 158,120 146,987
Used units 68,392 64,911
Total units retailed 226,512 211,898
Wholesale units 61,244 57,570
Average price per unit:
New retail vehicles 31,289 30,421
Fleet vehicles 22,259 22,754
Total new vehicles 30,469 29,773
Used vehicles 18,110 17,585
Wholesale vehicles 8,833 8,370
Other Data:
Floorplan assistance (continuing
operations) $37,795 $36,621
Same store revenue percentage changes:
New retail 4.4%
Fleet 13.4%
Total new 5.0%
Used 3.9%
Parts, service and collision repair 3.1%
Finance, insurance and other 4.1%
Total 4.7%
Consolidated Balance Sheet Data:
12/31/2005 12/31/2004
ASSETS
Current Assets:
Cash $7,566 $9,991
Receivables, net 396,225 357,403
Inventories 1,016,457 1,024,342
Assets held for sale 73,837 98,530
Construction in progress expected
to be sold in sale-leaseback
transactions 95,131 77,285
Other current assets 27,484 21,910
Total current assets 1,616,700 1,589,461
Property and Equipment, Net 148,267 134,490
Goodwill, Net 1,122,538 1,056,924
Other Intangibles, Net 88,696 84,777
Other Assets 49,300 33,877
TOTAL ASSETS $3,025,501 $2,899,529
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable - floor plan - trade $579,022 $609,422
Notes payable - floor plan - non-trade 410,296 375,127
Trade accounts payable 91,101 88,616
Accrued interest 17,378 15,421
Other accrued liabilities 167,060 175,511
Liabilities held for sale - trade 41,675 54,513
Liabilities held for sale - non-trade 11,215 11,796
Current maturities of long-term debt 2,747 2,970
Total current liabilities 1,320,494 1,333,376
LONG-TERM DEBT 712,311 668,826
OTHER LONG-TERM LIABILITIES 29,479 28,888
DEFERRED INCOME TAXES 132,419 98,752
STOCKHOLDERS' EQUITY
Class A common stock 403 397
Class B common stock 121 121
Paid-in capital 433,654 441,503
Retained earnings 542,374 470,663
Accumulated other comprehensive
income/(loss) 20 (1,228)
Deferred compensation related to
restricted stock (1,829) (3,408)
Treasury stock, at cost (143,945) (138,361)
Total stockholders' equity 830,798 769,687
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $3,025,501 $2,899,529
Balance Sheet Data:
Current Ratio 1.22 1.19
Debt to Total Capital, Net of Cash 46.0% 46.2%
LTM Return on Stockholders' Equity 11.4% 11.7%
SOURCE Sonic Automotive, Inc.
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Related links:
http://www.sonicautomotive.com
http://www.CCBN.COM
CONTACT:
Jeffrey C. Rachor, President and Chief
Operating, +1-704-566-2400, or J. Todd Atenhan, Investor
Relations, +1-888-766-4218, both of Sonic Automotive, Inc.
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