Sonic Automotive, Inc. · NYSE:SAH
Sonic Automotive — Q3 2012 Earnings Presentation
18 slides from Sonic Automotive's earnings presentation, Oct 23, 2012
Slide 1: Q3 2012 Earnings Review
1 Q3 2012 Earnings Review October 23, 2012 Exhibit 99.2 Sonic Automotive, Inc.
Slide 2: Forward-Looking Statements
Sonic Automotive, Inc. 2 Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events, are not historical facts and are based on our current expectations and ass
Slide 3: Sonic Automotive Q3 2012
Sonic Automotive, Inc. 3 Sonic Automotive Q3 2012 o Quarter in Review o Financial Results o Operations Recap o Summary and Outlook
Slide 4: Overall Results
Sonic Automotive, Inc. 4 Overall Results Revenue Growth – up 11.7% New retail vehicle revenue up 20.2% - volume up 25.2% - exceeds industry retail volume growth Pre-owned gross up 7.1% F&I revenue up 18.0% Fixed Operations gross up 1.3% on one less selling day (up 3.3% when adjusted for selling days
Slide 5: Adjusted Results, B/(W) than Q3 2011
Sonic Automotive, Inc. 5 B/(W) than Q3 2011 * - Adjusted results exclude a pretax charge of $18.5M (after-tax of $11.3M), or $0.19 per diluted share related to debt repurchase activity. Adjusted Results * (amounts in millions, except per share data) Q3 2012 $ % Revenue $ 2,152 $ 226 12% Gross Profit
Slide 6: SG&A to Gross Profit
Sonic Automotive, Inc. 30 bps Improvement from PY Qtr Tracking Lower than Full Year Target 6 Q3 2011 Q3 2012 YTD Q3 2012 TARGET 77.9% 77.6% 77.7% 78.0% SG&A to Gross
Slide 7: Capital Spending
Sonic Automotive, Inc. (amounts in millions) YTD Q3 2012 Estimated 2012 7 Capital Spending Real Estate Acquisitions $ 4.8 $ 14.5 All Other Cap Ex 50.4 99.4 Subtotal $ 55.2 $ 113.9 Less: Mortgage Funding (10.7) (25.7) Total Cash Used – Cap Ex $ 44.5 $ 88.2
Slide 8: Debt Covenants: Compliant with all Covenants
Sonic Automotive, Inc. 8 Compliant with all Covenants Covenant Actual Q3 2012 Debt Covenants Liquidity Ratio >= 1.05 1.21 Fixed Charge Coverage Ratio >= 1.20 1.66 Total Lease Adjusted Leverage Ratio <= 5.50 4.01
Slide 9: Maturity Profile
9 $172.5M Convert $210M 9% Bond $210M 9% Bond $200M 7% Bond AFTER Maturity Profile 2013 2014 2015 2016 2017 2018 2022 2013 2015 2016 2017 2018 Sonic Automotive, Inc. BEFORE
Slide 10: Share Count Changes
Sonic Automotive, Inc. Share Count Changes (shares in thousands) Weighting Basic 5% Notes Other Diluted Net Reduction in Dilution of 4.5M Shares $116M of Share Repurchase Authorization Remaining at End of Q3 2012 Weighted Average Shares – 6/30/2012 52,593 10,535 63,506 Issue 4,075 Shares 67% 2,658 -
Slide 11: New Vehicles
New Vehicles 11 Includes Fleet (1) (1) Source: JD Power 25.2% 21.3% 15.1% Sonic - Retail Industry - Retail SAAR Sonic Automotive, Inc. Q3 2012 Q3 2011 B/(W) Retail Revenue $1.2 billion $1.0 billion 20.2% Retail Volume 33,737 26,955 25.2% Selling Price $ 34,741 $ 36,166 (3.9%) Gross Margin % 5.7% 6.7
Slide 12: Pre-Owned Retail Vehicles
Sonic Automotive, Inc. Pre-Owned Retail Vehicles Q3 2012 Q3 2011 B/(W) 12 * - Includes: pre-owned vehicle + reconditioning + F&I gross Continue to make progress toward our goal of 100 per store per month Q3 2012 Q3 2011 87 82 Used Retail Sales Per Store Retail Volume 27,018 25,334 6.6% Revenue $534
Slide 13: Fixed Operations
Sonic Automotive, Inc. 13 B/(W) than Q3 2011 Fixed Operations Sonic Automotive, Inc. Q3 YOY Gross Profit Change Breakdown: • Customer Pay Up 1.1% • Whsl. Parts - flat • Internal & Sublet Up 9.7% • Warranty Down 2.7% (amounts in millions) Q3 2012 $ % Revenue $ 291 $ 4 1.3% Gross Profit $ 142 $ 2 1.7%
Slide 14: Strategic Focus
Sonic Automotive, Inc. • Grow the Base Business - Developing Predictable - Repeatable - Sustainable Business Model • Playbooks - Uniform Best Practices • People - Culture of Customer-Centric Organization • Systems - Stable, Flexible and Secure Delivery Systems • Data - Use to Drive Business Decision
Slide 15: Summary and Outlook
15 Summary and Outlook Double-digit overall revenue growth Anticipate Q4 retail GPU to improve from Q3 levels Luxury mix of stores contributes to higher Q4 performance Automotive retail industry outlook continues to remain positive Full year 2012 adjusted continuing operations diluted earnings per s
Slide 16: 16 Sonic Automotive, Inc.
16 Sonic Automotive, Inc.
Slide 17: Reconciliation of Non-GAAP Financial Information
Sonic Automotive, Inc. Reconciliation of Non-GAAP Financial Information 17 Three Months Ended September 30, Adjusted 2012 B/(W) 2012 2011 than Adjusted 2011 ($ in millions, shares in thousands, except per share data) As Reported Adjustments As Adjusted As Reported Adjustments As Adjusted $ % Revenue
Slide 18: Reconciliation of Non-GAAP Financial Information
Sonic Automotive, Inc. Reconciliation of Non-GAAP Financial Information Three Months Ended September 30, 2012 Continuing Operations Discontinued Operations Total Operations ($ in millions, shares in thousands, except per share data) Net Income (Loss): Numerator Share Count: Denominator Diluted EPS N