Sonic Automotive, Inc. · NYSE:SAH
Sonic Automotive — Q2 2009 Earnings Presentation
20 slides from Sonic Automotive's earnings presentation, Jul 28, 2009
Slide 1: Exhibit 99.2
Exhibit 99.2
Slide 2: 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 not historical facts, but only predictions by our c
Slide 3: Second Quarter 2009 Earnings Review
Second Quarter 2009 Earnings Review July 28, 2009
Slide 4: Conference Call Topics
Sonic Automotive Q2 2009 Conference Call Topics • Quarter in Review • Financial Review • Operations Review • Closing Comments
Slide 5: Quarter in Review
Quarter in Review Once again, posted strong operating results Gained new vehicle market share Record used retail volume Improving service customer pay Expanding fixed operations margins SG&A costs reduced Building on our solid foundation Profitable, generated cash
Slide 6: Financial Review
Financial Review ( amounts in millions, except per share data) Operating Margin before impairments was 2.9%, down 10bps from last year 6/30/2009 6/30/2008 Revenue 1,392.6 $ 1,796.6 $ Gross Profit 241.8 $ 282.4 $ Gross Margin 17.4% 15.7% SG&A as % of Gross Profit 79.7% 77.8% Operating Margin 2.6% 3.0
Slide 7: Operating Results - Q2 vs. Q1
Operating Results - Q2 vs. Q1 Q1 Q2 Better / (Worse) 6.8 $ 5.6 $ - 3.8 4.9 10.6 1,266.9 $ 1,392.6 $ 9.9% 230.4 241.8 5.0% 192.4 192.8 (0.2%) (amounts in millions) Adjusted Pre-tax income calculated as follows: As Reported Impairment Charges Non-cash Interest/Debt Restructure Costs Quarter-to-quarter
Slide 8: Sequential Diluted Earnings per Share
Sequential Diluted Earnings per Share (1) Includes the impact of 12.2M shares related to the conversion feature on our new 6% notes as if these notes were outstanding and dilutive in both quarters. Q1 Q2 As Reported 0.09 $ 0.07 $ Adjusted for Unusual Items 0.16 $ 0.26 $ Memo: Diluted Shares - Actual
Slide 9: Debt Restructuring
Debt Restructuring (amounts in millions) Face Value of Debt $85.6 Discount related to Embedded Derivatives 11.3* * Amortized over 16 months ($2-$3 million per quarter) Debt Discount
Slide 10: Debt Structure
Debt Structure (amounts in millions) 6/30/2009* 3/31/2009* 12/31/2008* Revolver 80.0 $ 99.9 $ 70.8 $ 5 1/4% Notes - 105.3 105.3 6 % Notes 85.6 - - 4 1/4% Notes 160.0 160.0 160.0 8 5/8% Notes 275.0 275.0 275.0 Falcon Notes 18.8 19.3 19.7 Mortgages Payable 112.3 113.2 114.1 Other 6.5 6.6 6.6 Total Deb
Slide 11: Debt Covenants
Debt Covenants Covenant Actual Q2 Liquidity Ratio >= 1.10 1.18 Fixed Charge Coverage Ratio >= 1.15 1.36 Secured Debt to EBITDA Ratio <= 2.25 1.63 Compliant with all covenants
Slide 12: Capital Spending
Capital Spending Q1 2009 Q2 2009 Projected Capital Spending Facility Improvement $14.6 $4.0 $48.7 Maintenance Cap Ex 5.8 2.2 13.8 Total $20.4 $6.2 $62.5 Memo: Mortgage Funding $0.0 $0.0 $40.2 Spending Contingent Upon Mortgage Funding (amounts in millions)
Slide 13: SG&A as Percentage of Gross Profit
10.6% 14.5% 13.5% 66.2% 67.2% 69.0% Q2 2008 Q1 2009 Q2 2009 All Other Rent & Related SG&A Continuing Operations 83.5% 77.8% 79.7% • Total SG&A expenses were down 12.2% or $27 million from the prior year • Excluding rent, all other cost was down 100bps, despite drop in gross profit. Substantial reduc
Slide 14: Operations Review: Our People
Operations Review Our People Results Results – – Q2 Q2 and and beyond beyond Associate engagement up Execution improved High productivity Goal: Goal: Employer of Choice Employer of Choice = Address Causes of Turnover Record Low Turnover IMPROVED PROFITABILITY
Slide 15: Operations Review: Sonic vs. Local Market
April May June South East Texas Central California Total Sonic* Operations Review Sonic vs. Local Market * Bps difference between Sonic and the local market competition.
Slide 16: Operations Review: Used Vehicles
Operations Review Used Vehicles Q2 used to new ratio 1.01 – all time record Preliminary July – retail unit volume up 20% Q1:09 Q2:09 Change Retail Volume 16,253 19,449 19.7% YOY % better/(worse) (4.0)% 12.8% Used Retail Margin 9.3% 8.0% (142) bps Used to New Ratio 0.93 1.01 777 bps Days Supply 29.4
Slide 17: Operations Review: Fixed Operations Revenue Year-over-Year
Operations Review Fixed Operations Revenue - Year-over-Year Customer Pay Total Q2: Luxury Imports 3.0% Non Luxury Imports (1.9%) Detroit 3 (6.6%) (1.1%) (1.1%) (12.3%) (3.3%) (15.0%) (9.0%) (3.0%) Customer Pay Warranty Internal Total
Slide 18: Operations Review: Fixed Operations Trend
Operations Review Fixed Operations Trend Fixed Operations Trend -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% (120) (100) (80) (60) (40) (20) Service CP -0.4% 0.6% 1.5% 1.7% Overall Margin (99) (20) (30) Q3 08 Q4 08 Q1 09* Q2 09 *adjusted for business days Pct chg. Basis point chg. Steady year- over-year and
Slide 19: Summary
Summary The results speak for themselves Great performance in a tough economic climate Profitable and generating cash Business is sound Building operationally and culturally for the long term We will continue to focus on: Our people Our strategies
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