Sonic Automotive, Inc. · NYSE:SAH
Sonic Automotive — Q1 2006 Earnings Presentation
14 slides from Sonic Automotive's earnings presentation, Apr 25, 2006
Slide 1: Exhibit 99.2
Exhibit 99.2
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 not h
Slide 3: Sonic Automotive First Quarter 2006 Earnings Review
Sonic Automotive First Quarter 2006 Earnings Review April 25, 2006
Slide 4: The Quarter in Review
The Quarter in Review Net income of $21.8 million from continuing operations, up 9% from year ago. Improvement driven by revenue growth and cost reductions. Continuing operations diluted EPS of $0.50 includes $0.02 charge for stock options. Operating profit was up 19% to $59.7 million, and was 3.3%
Slide 5: Financial Performance
Financial Performance O/(U) (amounts in millions, except per share data) Q1 2006 Q1 2005 Revenue $1,836 $240 Gross Profit $291 $40 Operating Profit $60 $10 Net Income – Continuing Operations $21.8 $1.8 – Total Operations 17.1 - EPS – Continuing Operations $0.50 * $0.03 – Total Operations 0.39 (0.01)
Slide 6: Same Store Results
Same Store Results Strong revenue and profit growth across all business lines despite a challenging industry environment Gross profit margin improved to 15.9%, up from 15.7% last year Sonic’s new vehicle same store results outperformed the industry First Quarter 2006 Over Prior Year Revenue Gross Pr
Slide 7: Used Vehicles
Used Vehicles Implementing used vehicle best practices and inventory management technology Focus on market at both ends Certified Pre-Owned Value Vehicles March MTD Used Retail Volume chg. 2006 vs. 2005 Used/New Ratio 2006 Used/New Ratio 2005 Champion Stores 22.3% 0.61 0.47 Other Same Store 9.9% 0.4
Slide 8: Portfolio Enrichment
Portfolio Enrichment Portfolio enrichment continues, driven by our acquisition strategy and strong growth in luxury and import demand. Acquire to enrich portfolio mix and replace lost revenue Focus on stable dealerships with upside Q1 2006 Q1 2005 % of Total Revenues Luxury and Import 70% 67% Cadill
Slide 9: Discontinued Operations
Discontinued Operations We are in the second year of our portfolio enrichment strategy Proceeds from the sale of discontinued operations will be reinvested in new, higher-margin import and luxury stores Acquisition revenue for 2006 projected at $400-$700 million Q1 2006 Q1 2005 (amounts in millions
Slide 10: SG&A Expenses as % of Gross Profit
SG&A Expenses as % of Gross Profit Reduced SG&A as a percentage of gross profit by 90 basis points – worth $3 million Improvements made in advertising, compensation and other operating expenses 77.8% 78.7% 69.9% 71.2% 7.9% 7.5% Q1 2006 Q1 2005 All Other SG&A Rent
Slide 11: Interest
Interest Higher rates have increased interest costs. A further 25bps increase is assumed in our earnings guidance. Q1 Q1 Change $ Millions Floorplan Interest Expense 12.1 $ 7.4 $ (4.7) $ Other Interest Expense 11.7 $ 10.6 $ (1.1) $
Slide 12: Inventory Management
Inventory Management Days Supply Mar-06 Mar-05 Dec-05 Mar-06 Industry New Vehicles Domestic (excluding Cadillac) Luxury ( including Cadillac) Import Overall Used Vehicles Parts
Slide 13: Summary
Summary Strong results posted for the quarter Improvements achieved in volume, mix of business and cost structure Further opportunity in portfolio enrichment, SG&A expenses and used vehicle sales; interest cost remains a drag on earnings We have a clear strategy and we are executing 2006 Continuing
Slide 14: Slide 14