Sonic Automotive, Inc. · NYSE:SAH

Sonic Automotive — Q2 2008 Earnings Presentation

20 slides from Sonic Automotive's earnings presentation, Jul 29, 2008

  1. Slide 1: Exhibit 99.2

    Exhibit 99.2

  2. 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

  3. Slide 3: Second Quarter 2008 Earnings Review

    Second Quarter 2008 Earnings Review July 29, 2008

  4. Slide 4: Building for the Long-Term

    Building for the Long-Term The Quarter in Review Produced solid results in tough environment • Outperformed industry • Expanded used retail volume, F&I PUR • Controlled inventory What are we doing now? PLENTY! • Ongoing expense initiatives • Streamlined field operations • Refined focus on fixed oper

  5. Slide 5: Sonic Automotive

    Sonic)

  6. Slide 6: Slide 6

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  8. Slide 8: Financial Performance

    Financial Performance (1.7%) (1.0%) (18.0%) (30.2%) (59.0%) (21.0%) (52.6%) 60bps 10bps 2008 2007 Better/ (Worse) Revenue $1,980 $2,015 ($35) Gross Profit $311 $314 ($3) – Margin 15.7% 15.6% Operating Income – Amount $60 $73 ($13) – Margin 3.0% 3.6% Net Income – Continuing Operations $20.1 $28.8 ($8

  9. Slide 9: Discontinued Operations: Amount After Taxes

    Q2 2008 Amount After Taxes (000's) Loss from Operations (3,369) $ Asset Impairments (3,010) Lease Exit Accruals (529) Loss on Disposal (2,414) Subtotal (5,953) Total (9,322) $ Discontinued Operations Non-Cash

  10. Slide 10: New Vehicle Industry/Consumer Confidence Trends

    New Vehicle Industry/Consumer Confidence Trends Year over Year (60.0%) (40.0%) (20.0%) 0.0% Cons Conf (39.6%) (46.5%) (51.5%) Car 5.2% 2.4% (7.9%) Truck (17.4%) (23.6%) (28.4%) Total (6.9%) (10.7%) (18.3%) Apr May June

  11. Slide 11: Days Supply

    Days Supply Jun-08 Jun 08 Industry New Vehicles Domestic 61.2 77.7 Luxury 65.9 58.3 Import 48.9 49.0 Overall 60.1 62.8 Used Vehicles 30.4 Note: Industry truck days supply was 90 at the end of June, while car inventory was 41.

  12. Slide 12: Gross Margin %

    Gross Margin % (Continuing Operations) New vehicle factors: • Industry days supply on trucks, shortage of hot selling models • Shift to less expensive vehicles Used vehicle factors: • Less trades coming in, more purchases • Large % CPO • Truck / SUV values plunged Fixed Operations: • Softening deman

  13. Slide 13: Same Store Revenue Change – Q2 2008

    Same Store Revenue Change – Q2 2008 • F&I per unit increased $27 or 2.7% • Certified pre-owned volume up 23.9% (11.7%) 2.7% (0.8%) (2.1%) (7.2%) (18.8%) (7.8%) New Used Fixed Operations F&I Sub Total Wholesale Total

  14. Slide 14: New, Used, & CPO Retail Unit Sales

    New, Used, & CPO Retail Unit Sales Same Store vs. Industry *National Franchised Dealers *National franchise dealers **Excluding fleet – with fleet, industry off 12.0% (25.0%) (20.0%) (15.0%) (10.0%) (5.0%) 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Sonic (9.2%) 4.3% 23.9% Industry (20.0%) (6.5%) 4.6% Q2 New*

  15. Slide 15: Fixed Operations

    Fixed Operations Same Store 0.4% (4.0%) (0.8%) (5.0%) (3.0%) (1.0%) 1.0% Customer Pay Warranty Total

  16. Slide 16: SG&A Expenses as % of Gross Profit

    8.3% 70.3% 70.9% 66.2% 6.9% 7.9% Q2 2007 Q1 2008 Q2 2008 All Other SG&A Q2 08 Hail Damage Rent SG&A Expenses as % of Gross Profit 74.1% 77.9% 79.2% 0.7%

  17. Slide 17: Capitalization

    Capitalization 54.8% 53.7% 57.6% 60.6% 54.0% 46.0% 39.4% 39.5% 43.6% 39.2% 2005 2006 2007 Q1 2008 Q2 Proforma Equity Debt Mortgages 46.3% 42.4% 45.2% Debt to Cap With Mortgages 2.9% 2.7% 6.0%* *includes mortgages set to close in August

  18. Slide 18: Forecast Assumptions

    Forecast Assumptions Original Revised Forecast Forecast Same Store Sales: New Units* (4.5%) (7.2%) Used Units 3.0% 4.4% Fixed Operations Revenue 3.5% (0.5%) Hail Loss - $2.0M Bond Redemption Premium (Int Exp) - $1.0M LIBOR Rate 3.5% - 4.5% 2.5% - 3.0% SAAR 15.5M 14.5M *Includes fleet

  19. Slide 19: Summary

    Summary • Delivered sound results in a difficult environment • Sticking to our strategy – Focus on higher margin business – Investing in our people, alignment of regional teams – Digital marketing – Technology • Q3 Outlook – New vehicle environment will continue to be very challenging – New and Used

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