CHARLOTTE, N.C., July 19 /PRNewswire-FirstCall/ -- Sonic Automotive,
Inc. (NYSE: SAH), announced today that it has revised its earnings target
for the year ending December 31, 2006. The Company now expects that its
diluted earnings per share from continuing operations for the year will be
in the range of $2.05 to $2.15, including $0.08 of stock option expense.
The Company expects earnings from continuing operations, including stock
option expense, for the quarter ended June 30, 2006 to be in the range of
$0.41 to $0.43. These lower earnings targets are primarily the result of
charges based on the Company's decision to exit certain facility leases and
cancel various facility improvement projects.
Jeffrey C. Rachor, the Company's President and Chief Operating Officer,
stated, "Our ongoing core operations continue to show the same positive
trends we have reported over the previous four quarters. Absent these
charges, for the second quarter of 2006 we expect to report the highest
operating margin since 2002 which is driven by continued same store sales
growth, improved margins, lower expenses as a percentage of gross profit
and lower leverage. I believe this is a reflection of the strength of our
core strategy, strong brand mix and continued execution of our key
operating initiatives. While these charges are disappointing, they
demonstrate our commitment to focus our energy and allocate our capital
toward those activities that will generate the highest return for our
stockholders over the long term."
Mr. David Cosper, the Company's Chief Financial Officer, stated, "We
have examined our non-core business activities, ongoing capital improvement
projects and various lease commitments and have decided not to continue
those projects that will not earn an acceptable rate of return or which
present higher-than-acceptable risk levels. These decisions require us to
write off costs that have already been incurred or to accrue for future
losses as we exit those projects or facilities. Going forward, I believe
Sonic's stable operating platform combined with a disciplined approach to
capital allocation will provide a solid foundation for improved
profitability and growth."
A detail of the various charges is as follows:
Diluted Earnings Per
Share Impact
Pretax
Impact (in Continuing Discontinued
millions) Operations Operations
Real estate and other asset
impairments/writeoffs
and lease exit accruals $18.7 $0.14 $0.10
Finance chargeback reserves 6.2 0.08 -
Legal accruals 1.7 0.03 0.01
Effective income tax rate adjustment * 1.0 0.02 -
Total $27.6 $0.27 $0.11
* After-tax impact
Senior management will hold a conference call to discuss these items on
July 19, 2006 at 11:00 A.M. (Eastern).
A live audio of the conference call will be accessible to the public by
calling (877) 791-3416. International callers dial (706) 643-0958. Callers
should dial in approximately 10 minutes before the call begins.
A conference call replay will be available one hour following the call
for seven days and can be accessed by calling: (800) 642-1687 (domestic) or
(706) 645-9291 (international), conference call ID # 3155083
About Sonic Automotive
Sonic Automotive, Inc., a Fortune 300 company based in Charlotte, N.C.,
is one of the largest automotive retailers in the United States operating
175 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 diluted earnings per share from continuing
operations and anticipated operating margin, sales growth, expense levels,
leverage levels and margins. 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 the Company's quarterly
report on Form 10-Q for the quarter ended March 31, 2006. The Company does
not undertake any obligation to update forward-looking information.
SOURCE Sonic Automotive, Inc.
 back to top
Related links:
http://www.sonicautomotive.com
http://www.prnewswire.com/comp/125546.html /
CONTACT:
David Cosper, Chief Financial Officer, or
Greg Young, Chief Accounting Officer-Investor Relations, both of
Sonic Automotive, Inc., +1-704-566-2400
|
