Sonic Automotive, Inc. · NYSE:SAH
Sonic Automotive — Q3 2013 Earnings Presentation
17 slides from Sonic Automotive's earnings presentation, Oct 21, 2013
Slide 1: Q3 2013 Operations Review
1 Q3 2013 Operations Review October 21, 2013 Sonic Automotive, Inc. Exhibit 99.2
Slide 2: Forward-Looking Statements
2 Forward-Looking Statements Sonic Automotive, Inc. 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: Contents
3 Contents Quarter in Review Financial Results Operations Recap Summary and Outlook As we disclosed in Sonic’s press release issued earlier this morning, Sonic is currently in the process of evaluating the impact of a positive tax gain relating to the extinguishment of Sonic’s 5% Convertible Senior
Slide 4: Overall Results
4 Overall Results Revenue Growth – Up 5.4% New retail revenue up 5.3% - volume up 2.5% Used unit volume up 3.8% F&I revenue up 6.8% Fixed operations revenue up 7.8% Gross Profit Growth – Up 7.1% SG&A at 78.1% - Includes Initiative Expenses Sonic Automotive, Inc.
Slide 5: Q3 2013 Results B/(W) than Q3 2012
Q3 2013 Results B/(W) than Q3 2012 5 Sonic Automotive, Inc. (amounts in millions, except per share data) Q3 2013 $ % Revenue $ 2,242 $ 114 5% Gross Profit $ 326 $ 22 7% Operating Profit $ 58 $ 0 0% SG&A as % of Gross 78.1% (80 bps)
Slide 6: SG&A to Gross
SG&A to Gross 6 Sonic Automotive, Inc. Q3 2013 Q3 2012 78.1% 77.3%
Slide 7: SG&A to Gross Targeting Below 77% for the Full Year
Sonic Automotive, Inc. SG&A to Gross 7 Targeting Below 77% for the Full Year – Adjusted for Initiatives Sonic Automotive, Inc. Q3 2013 Reported Less: Pre- Owned Specialty Retail Less: Customer Experience Less: SOX Q3 2013 Adj for Initiatives 78.1% (0.5%) (0.5%) (0.4%) 76.7%
Slide 8: 2013 Capital Spending
8 (amounts in millions) YTD 2013 Estimated 2013 Capital Spending Note – Spending excludes the effect of franchise acquisitions. Sonic Automotive, Inc. Real Estate Acquisitions $ 46.8 $ 66.4 All Other Cap Ex 80.7 104.6 Subtotal $ 127.5 $ 171.0 Less: Mortgage Funding (53.7) (53.7) Total Cash Used – Ca
Slide 9: Debt Covenants
9 Debt Covenants Compliant with all Covenants Sonic Automotive, Inc. Covenant Actual Q3 2013 Liquidity Ratio >= 1.05 1.15 Fixed Charge Coverage Ratio >= 1.20 1.74 Total Lease Adjusted Leverage Ratio <= 5.50 4.07
Slide 10: Share Repurchases
10 (shares in thousands) Shares Average Price Unused authorization of approximately $135.1 million Share Repurchases Sonic Automotive, Inc. YTD Q3 2013 Activity $22.56
Slide 11: New Retail Vehicles
Q3 2013 Q3 2012 B/(W) 11 New Retail Vehicles Sonic Automotive, Inc. Volume 34,087 33,264 2.5% Selling Price $ 35,777 $ 34,828 2.7% Gross Margin % 5.9% 5.7% 20 bps GPU $ 2,094 $1,995 $ 99 Gross Profit $ 71 million $ 66 million 7.5% SAAR (includes fleet) 15.6 million 14.4 million 8.3%
Slide 12: Used Retail Vehicles
Q3 2013 Q3 2012 B/(W) 12 Used Retail Vehicles Sonic Automotive, Inc. * - Includes front-end gross plus F&I related gross and fixed operations related gross Retail Volume 27,632 26,610 3.8% Used Retail GPU $ 1,411 $ 1,336 $ 74 Used Related Retail Gross* $ 86 million $ 80 million $ 6 million Used to N
Slide 13: Fixed Operations
13 B/(W) than Q3 2012 Fixed Operations Sonic Automotive, Inc. • Customer Pay Up 4.5% • Whsl. Parts Up 8.7% • Internal & Sublet Up 6.7% • Warranty Up 14.8% QTD YOY Gross Profit Change Breakdown: (amounts in millions) Q3 2013 $ % Revenue $ 310 $ 22 7.8% Gross Profit $ 149 $ 9 6.1%
Slide 14: Customer Experience Initiatives
• SCORES (CRM) • CX Electronic Leads Template Updates • E-Sales Process Alignment • eLead Call Center Updates • Sales Process Application Development – Showroom Application – Desking – SIMS Upgrade – Paperless – New Vehicle Delivery Process – F&I • Service Advisor Walk-Around Alignment • Point of Pu
Slide 15: Pre-Owned Specialty Retail
15 Pre-Owned Specialty Retail Sonic Automotive, Inc.
Slide 16: Summary
16 Summary Effects of True Price normalized Inventory positioned for successful Q4 Added to revenue base with Mercedes and BMW acquisitions Pre-owned specialty retail concept leverages one of our core competencies Expect “One Sonic-One Experience” to create a competitive advantage Tighten annual gui
Slide 17: 17 Sonic Automotive, Inc.
17 Sonic Automotive, Inc.