Sonic Automotive, Inc. · NYSE:SAH
Sonic Automotive — Q2 2006 Earnings Presentation
15 slides from Sonic Automotive's earnings presentation, Aug 2, 2006
Slide 1: Sonic Automotive
Sonic) Automotive ,
Slide 2: Cautionary Notice Regarding Forward-Looking Statements
Cautionary Notice Regarding Forward-Looking Statements • This presentation contains statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. • These forward-looking statements are n
Slide 3: Second Quarter 2006 Earnings Review
Sonic Automotive Second Quarter 2006 Earnings Review August 2, 2006
Slide 4: The Quarter in Review
The Quarter in Review • Total revenue increased $181 million, or 9.8%, for the quarter. Total same store revenue increased 3.7% driven by used vehicles increase of 15% and fixed operations growth of 5.5% • Brand mix continues to drive results – Luxury was 49.4% of total revenues – Combined luxury an
Slide 5: Financial Performance
Financial Performance Better/(Worse) Better/(Worse) (amounts in millions, except per share data) Than 2005 Than 2005 Revenue $2,034 $181 $3,881 $424 Gross Profit $308 $29 $600 $70 Operating Profit $59 $(6) $118 Net Income – Continuing Operations $18.6 $(9.7) $40.3 $(7.6) – Total Operations 12.2 (14.
Slide 6: Same Store Results
Same Store Results • Solid results overall driven by strong used vehicle and fixed operations performance • Sonic’s new vehicle same store results continue to outperform the industry • F&I same store revenue and gross profit growth without the Q2 reserve adjustment was 10.1% Second Quarter 2006 vs P
Slide 7: Used Vehicles
Used Vehicles • Growth at our Champion stores continues to outperform our other stores • Certified pre-owned sales were 34.7% of our overall unit sales Overall Same Store Revenue Growth (vs Q2 2005) 20.9% 15.0% % of total revenue 16.6% 16.8% Gross Profit Growth (vs Q2 2005) 21.4% 13.6% Gross Margin
Slide 8: Fixed Operations
Fixed Operations Q2 2006 Revenue Growth Overall 13.5% Same Store 5.5% Gross Profit Growth Overall 14.8% Same Store 6.6% Dealership level fixed absorption 88.2%
Slide 9: Portfolio Enrichment
Portfolio Enrichment • Portfolio enrichment continues, driven by our acquisition strategy and strong growth in luxury and import sales. Q2 2006 Q2 2005 % of Total Revenues Luxury and Import 74% 69% Cadillac 8% 11% Subtotal 82% 80% Other Domestic 17% 19% Non-Franchised 1% 1% Total 100% 100% Memo: Lux
Slide 10: Large Adjustments
Large Adjustments F&I Per Unit Gross Margin SG&A to Gross Continuing Operations Discontinued Operations $ Impact BP Impact BP Impact Real estate and other asset impairments/writeoffs and lease exit accruals - - 0.14 $ 0.10 $ Finance chargeback reserves $ 0.08 - Legal accruals - - 0.03 0.01 Effective
Slide 11: SG&A Expenses as % of Gross Profit
SG&A Expenses as % of Gross Profit Q2 2006 Q2 2005 All Other SG&A Rent Q2 Charges 78.7% 75.4% 4.6% 8.0% 66.1% 7.0% 68.4% •Continued improvements in variable compensation and other operating expenses •Favorable brand mix should continue to improve this metric 74.1%
Slide 12: Inventory Management
Inventory Management Days Supply Jun-06 Jun-05 Dec-05 Jun-06 Industry New Vehicles Domestic (excluding Cadillac) Luxury (including Cadillac) Import Overall Used Vehicles Parts
Slide 13: Capitalization
54.0% 55.6% 57.7% 46.0% 44.4% 42.3% Capitalization Q4 2005 Q1 2006 Q2 2006 Debt Equity 100% 100% 100%
Slide 14: Summary
Summary • Core operating trends remain strong – Continue our used vehicle sales initiative – Stall capacity and best practices should drive fixed operations growth • Brand mix continues to drive improvements, especially in the higher margin segments of the business • Expense reduction trends continu
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