Sonic Automotive, Inc. · NYSE:SAH
Sonic Automotive — Q4 2012 Earnings Presentation
22 slides from Sonic Automotive's earnings presentation, Feb 20, 2013
Slide 1: Q4 2012 Earnings Review
Sonic Automotive, Inc. 1 Q4 2012 Earnings Review February 20, 2013 Exhibit 99.2
Slide 2: Forward-Looking Statements
Sonic Automotive, Inc. These forward-looking statements, risks, uncertainties and additional factors speak only as of the date of this presentation. We undertake no obligation to update any such statements. You are cautioned that these forward-looking statements are not guarantees of future performa
Slide 3: Sonic Automotive Q4 2012
Sonic Automotive, Inc. 3 Sonic Automotive Q4 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 10.4% New retail vehicle revenue up 15.7% - volume up 14.5% - exceeds industry retail volume growth Pre-owned unit volume up 6.3% F&I revenue up 19.0% Fixed Operations revenue up 3.0% SG&A at 75.4% for quarter and 76.8% for the year – beat
Slide 5: Results
Sonic Automotive, Inc. Results (1) B/(W) than Q4 2011 B/(W) than FY 2011 5 (1) – See appendix for reconciliation of Q4 2011 adjusted amounts and FY 2012 and FY 2011 adjusted amounts to GAAP amounts. Q4 2012 contained no adjusted amounts. (amounts in millions, except per share data) Q4 2012 $ % FY 20
Slide 6: Better than Full Year Target of 78%
Better than Full Year Target of 78% (1) – See appendix for reconciliation to GAAP amounts. Sonic Automotive, Inc. Q4 2011 Q4 2012 FY 2011 FY 2012 75.3% 75.4% 77.0 % 76.8 % SG&A to Gross (1)
Slide 7: Capital Spending
7 (amounts in millions) YTD 2012 Estimated 2013 Capital Spending Sonic Automotive, Inc. Real Estate Acquisitions $ 14.6 $ 59.7 All Other Cap Ex 80.8 102.6 Subtotal $ 95.4 $ 162.3 Less: Mortgage Funding (25.7) (65.6) Total Cash Used – Cap Ex $ 69.7 $ 96.6
Slide 8: Debt Covenants
8 Debt Covenants Compliant with all Covenants Covenant Actual Q4 2012 Sonic Automotive, Inc. Liquidity Ratio >= 1.05 1.15 Fixed Charge Coverage Ratio >= 1.20 1.69 Total Lease Adjusted Leverage Ratio <= 5.50 3.94
Slide 9: Public Debt Maturities
9 Public Debt Maturities (amounts in millions) 9% Notes Sonic Automotive, Inc. No Near Term Maturities 7% Notes $210 $200 2013 2014 2015 2018 2022 $0 $0 $0 The Converts are Gone!
Slide 10: Stock Repurchases
Sonic Automotive, Inc. Stock Repurchases 10 (shares in thousands) Shares Average Price • Approximately $50 million repurchase authorization remaining at 12/31/2012 • Approval granted for an additional $100 million subsequent to year-end for total unused authorization of approximately $144 million to
Slide 11: Share Count
Sonic Automotive, Inc. Share Count 11 (amounts in thousands) YTD 2011 YTD 2012 Expected 2013 Fully Diluted Share Count 65,464 60,406 54,000 Decline of 17.5%
Slide 12: New Retail Vehicles
Sonic Automotive, Inc. New Retail Vehicles Q4 2012 Q4 2011 B/(W) 12 Volume 33,767 29,482 15% Selling Price $ 37,312 $ 36,946 1.0% Gross Margin % 6.1% 6.3% (20 bps) GPU $2,260 $ 2,327 ($67) Gross Profit $76 million $69 million 11.2% SAAR (includes fleet) 15.0 million 13.5 million 11.1%
Slide 13: Used Retail Vehicles
Sonic Automotive, Inc. Used Retail Vehicles Q4 2012 Q4 2011 B/(W) 13 * - Includes front-end gross plus F&I related gross and fixed operations related gross Retail Volume 23,943 22,520 6% Used Retail GPU $ 1,369 $ 1,461 ($ 92) Used Related Retail Gross* $ 73 million $ 70 million $ 3 million Used to N
Slide 14: Fixed Operations
Sonic Automotive, Inc. Fixed Operations 14 QTD YOY Gross Profit Change Breakdown: B/(W) than Q4 2011 • Customer Pay Up 1.0% • Whsl. Parts Down 1.0% • Internal & Sublet Up 8.8% • Warranty Up 3.9% (amounts in millions) Q4 2012 $ % Revenue $ 287 $ 8.4 3.0% Gross Profit $ 141 $ 3.7 2.7%
Slide 15: Summary
Sonic Automotive, Inc. 15 Summary Record Q4 income from continuing operations Record full year 2012 retail units of 231,192 Revenue growth continues at double digit rates Continued investment in the base business while beating our cost target for SG&A as a percent of gross for full year Inventory le
Slide 16: 2013 Outlook
Sonic Automotive, Inc. 16 2013 Outlook • Expect New Vehicle SAAR of 15.0 to 15.5 Million • Pre-Owned Vehicle Growth in Mid-Single Digits • Property Purchases to Continue • Expect SG&A to be Below 77% • Targeting 2013 Diluted EPS from Continuing Operations of $1.93 - $2.03
Slide 17: Sonic Automotive, Inc. 17
Sonic Automotive, Inc. 17
Slide 18: Strategic Focus
Sonic Automotive, Inc. Predictable Repeatable Sustainable • Grow the Base Business - Developing Predictable - Repeatable - Sustainable Business Model • Playbooks - Uniform Best Practices • People - Culture of Customer-Centric Organization • Systems - Stable, Flexible and Secure Delivery Systems • Da
Slide 19: Reconciliation of Non-GAAP Financial Information
Sonic Automotive, Inc. Reconciliation of Non-GAAP Financial Information 19 Fourth Quarter Ended December 31, Adjusted 2012 B/(W) 2012 2011 than Adjusted 2011 ($ in millions, shares in thousands, except per share data) As Reported Adjustments As Adjusted As Reported Adjustments As Adjusted $ % Revenu
Slide 20: Reconciliation of Non-GAAP Financial Information
Sonic Automotive, Inc. Reconciliation of Non-GAAP Financial Information 20 Year Ended December 31, 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 $ % Revenues 8,365.5
Slide 21: Reconciliation of Non-GAAP Financial Information
Sonic Automotive, Inc. Reconciliation of Non-GAAP Financial Information 21 Fourth Quarter Ended December 31, 2012 Continuing Operations Discontinued Operations Total Operations ($ in millions, shares in thousands, except per share data) Net Income (Loss): Numerator Share Count: Denominator Diluted E
Slide 22: Reconciliation of Non-GAAP Financial Information
Sonic Automotive, Inc. Reconciliation of Non-GAAP Financial Information 22 Year Ended December 31, 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 Net Inc