Sonic Automotive, Inc. · NYSE:SAH
Sonic Automotive — Q4 2013 Earnings Presentation
30 slides from Sonic Automotive's earnings presentation, Feb 19, 2014
Slide 1: Q4 Earnings Review
Exhibit 99.2 Q4 2012 EARNINGS REVIEW February 19, 2014
Slide 2: Forward-Looking Statements
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 assumptions regarding our
Slide 3: Content
3 CONTENT • QUARTER IN REVIEW • FINANCIAL RESULTS • OPERATIONS RECAP • SUMMARY AND OUTLOOK
Slide 4: Quarter in Review
QUARTER IN REVIEW
Slide 5: Q4 Results
Q4 RESULTS 5 Revenue growth – Up 5.8% New retail revenue up 3.1% - volume up 0.7% Pre-owned revenue up 12.7% - unit volume up 10.1% F&I revenue up 6.6% Fixed operations revenue up 10.4% Gross profit growth – Up 7.8% SG&A at 75.2% - Includes 180 bps of initiative expenses Adjusted income from continu
Slide 6: Financial Results
FINANCIAL RESULTS
Slide 7: Adjusted Q4 2013 Results
ADJUSTED Q4 2013 RESULTS B/(W) than Q4 2012 B/(W) than 2012 7 (1) – Amounts are adjusted. See appendix for reconciliation of adjusted amounts to GAAP amounts (amounts in millions, except per share data) Q4 2013 $ % 2013 $ % Revenue $ 2,315 $ 127 6% $ 8,843 $ 478 6% Gross Profit $ 339 $ 25 8% $ 1,302
Slide 8: SG&A to Gross
SG&A TO GROSS 8 Targeted 77% for FY 2013 Q4 2012 Q4 2013 FY 2012 FY 2013 75.4% 75.2% 76.8% 77.1% 20 bps Better
Slide 9: SG&A to Gross – Q4 2013
SG&A TO GROSS – Q4 2013 200 bps Better Than Q4 2012 Q4 2013 Reported Less: Stand- Alone Concept Less: Customer Experience Less: SOX Remediation Q4 2013 Adj for Initiatives 75.2% (1.0%) (0.6%) (0.2%) 73.4% 9
Slide 10: SG&A to Gross – FY 2013
SG&A TO GROSS – FY 2013 10 120 bps Better 2013 Reported Less: Stand- Alone Concept Less: Customer Experience Less: Standardize 2013 Adj for Initiatives 77.1% (0.6%) (0.5%) (0.4%) 75.6%
Slide 11: Capital Spending
CAPITAL SPENDING 11 (amounts in millions) YTD 2013 Real Estate Acquisitions $ 52.5 All Other Cap Ex 105.1 Subtotal $ 157.6 Less: Mortgage Funding (53.7) Total Cash Used – Cap Ex $ 103.9
Slide 12: Debt Covenants
DEBT COVENANTS 12 Covenant Actual Q4 2013 Compliant with all Covenants Liquidity Ratio >= 1.05 1.16 Fixed Charge Coverage Ratio >= 1.20 1.83 Total Lease Adjusted Leverage Ratio <= 5.50 3.96
Slide 13: Share Repurchases
SHARE REPURCHASES 13 (shares in thousands) Shares Average Price Unused authorization of approximately $132.5 million 2013 Activity $22.50
Slide 14: Operations Review
OPERATIONS REVIEW
Slide 15: New Vehicle Retail
NEW VEHICLE RETAIL 15 Q4 2013 Q4 2012 B/(W) Volume 34,001 33,767 0.7% Selling Price $ 38,218 $ 37,312 2.4% Gross Margin % 6.3% 6.1% 20 bps GPU $ 2,415 $ 2,260 $ 154 Gross Profit $ 82 million $ 76 million 7.6% SAAR (includes fleet) 15.6 million 14.9 million 4.5%
Slide 16: Used Vehicle Retail
USED VEHICLE RETAIL 16 Q4 2013 Q4 2012 B/(W) * - Includes front-end gross plus F&I related gross and fixed operations related gross Retail Volume 26,354 23,943 10.1% Used Retail GPU $ 1,358 $ 1,369 ($ 11) Used Related Retail Gross* $ 82 million $ 73 million $ 9 million Used to New 0.78 : 1 0.71 : 1
Slide 17: Fixed Ops
FIXED OPS QTD YOY Gross Profit Change Breakdown: Customer Pay Up 6.6% Whsl. Parts Up 11.6% Internal & Sublet Up 3.6% Warranty Up 21.5% 17 Q4 2013 B/(W) than 2012 (amounts in millions) 2013 $ % Revenue $ $ 30 10.4% Gross Profit $ 153 $ 12 8.3%
Slide 18: Pre-Owned Stores
PRE-OWNED STORES Break Ground Hiring & Training Merchandising & Advertising Q1 Q2 Q3 Q4 Grand Opening
Slide 19: One Sonic-One Experience
ONE SONIC-ONE EXPERIENCE Begin rollout at pilot store in July 2014 Test Technologies Train Associates Gauge Guest Acceptance Additional stores will be introduced once perfected at the pilot store Anticipate at least an 18 month roll-out period once pilot store is perfected
Slide 20: Recap & Outlook
RECAP & OUTLOOK
Slide 21: Summary
Continued to grow the base business achieving record results Refinancing activities will benefit future periods Continued strategy of dealership property acquisitions Growths & Operating Strategies Stand-alone pre-owned stores One Sonic-One Experience Continue franchise acquisitions Own our properti
Slide 22: 2014 Plan
2014 PLAN 2014 Plan Expect new car industry volume to be between 15.75M to 16.25M units We will continue to increase pre-owned volume in the mid- single digits Expect fixed operations to grow at mid-single digits Expenses related to pre-owned and customer experience initiatives to continue 2014 Cont
Slide 23: Slide 23
Slide 24: Appendix
APPENDIX
Slide 25: Reconciliation of Non-GAAP Financial Information – Q4
Reconciliation of Non-GAAP Financial Information Fourth Quarter Ended December 31, Adjusted 2013 B/(W) 2013 2012 than Adjusted 2012 ($ in millions, shares in thousands, except per share data) Reported Adjustments Adjusted Reported Adjustments Adjusted $ % Revenues 2,315.4 $ - $ 2,315.4 $ 2,188.7 $ -
Slide 26: Reconciliation of Non-GAAP Financial Information – Year
Reconciliation of Non-GAAP Financial Information Year Ended December 31, Adjusted 2013 B/(W) 2013 2012 than Adjusted 2012 ($ in millions, shares in thousands, except per share data) Reported Adjustments Adjusted Reported Adjustments Adjusted $ % Revenues 8,843.2 $ - $ 8,843.2 $ 8,365.5 $ - $ 8,365.5
Slide 27: Reconciliation of Non-GAAP Financial Information – Q4 2013
Reconciliation of Non-GAAP Financial Information Fourth Quarter Ended December 31, 2013 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 Income (Loss): Nume
Slide 28: Reconciliation of Non-GAAP Financial Information – Q4 2012
Reconciliation of Non-GAAP Financial Information 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 EPS Net Income (Loss): Nume
Slide 29: Reconciliation of Non-GAAP Financial Information – Year 2013
Reconciliation of Non-GAAP Financial Information Year Ended December 31, 2013 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 Income (Loss): Numerator Shar
Slide 30: Reconciliation of Non-GAAP Financial Information – Year 2012
Reconciliation of Non-GAAP Financial Information 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 Income (Loss): Numerator Shar