Sonic Automotive, Inc. · NYSE:SAH
Sonic Automotive — Q3 2007 Earnings Presentation
15 slides from Sonic Automotive's earnings presentation, Oct 30, 2007
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 n
Slide 3: Third Quarter 2007 Earnings Review
Sonic Automotive Third Quarter 2007 Earnings Review October 30, 2007
Slide 4: The Quarter in Review
The Quarter in Review • Profit from continuing operations up 9.4% • Total revenue up 5.7%; Gross up 6.0% – Same store used vehicle revenue up 11.1% – F&I per unit up 5.0% • Operating margin improved 10bps to 3.7% • SG&A 74.4% - down 40bps from Q3 06 EXECUTION OF KEY INTIATIVES CONTINUES Used vehicle
Slide 5: Q3 Performance Overview
Better/ (Worse) (amounts in millions, except per share data) Revenue $2,186 $2,068 $118 Gross Profit $335 $316 $19 – Margin 15.3% 15.3% Operating Profit – Amount $80 $74 $6 – Margin 3.7% 3.6% Net Income – Continuing Operations $31.8 $29.0 $2.8 – Total Operations 26.1 28.6 (2.5) EPS – Continuing Oper
Slide 6: Performance Overview: EPS
$0.60 $0.61 $0.62 $0.63 $0.64 $0.65 $0.66 $0.67 $0.68 $0.69 $0.70 ($0.03) $0.66 $0.70 ($0.02) $0.09 Performance Overview EPS
Slide 7: Performance Overview: Same Store Revenue Growth
Performance Overview Same Store Revenue Growth Execution in Motion Execution in Motion Same store retail used volume up 5.4% Fixed Operations same store customer pay revenue up 5.4% (up 9.8% in total) F&I per unit up $51 on a same store basis (0.8%) 11.1% 2.3% 3.4% 1.8% (15.8%) 0.7% New Used Fixed O
Slide 8: Used Vehicle Performance: Execution in Motion
Maximize Margin Volume Growth Increased Profitability On-line Branding Virtual Lot Sonic “Auto Pilot” Optimizing Inventory Market Shift to Consumer Control Basic Process rollout (best practices) Less Wholesale/Keep more trades Common Technology (S.I.M.S) Technology Introduction Used Vehicle Performa
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Slide 10: Geographic Review
28.6% of Total Revenue Same store used, F&I up New Margin compression remains a concern 7.4% of Total Revenue Impacted by construction at our large Toyota dealership 2.6% Total Revenue Unemployment Rate (as of Sep) 7.5% Excluding Michigan, Sonic Cadillac new unit volume performed better than the Ind
Slide 11: Inventory Management
Inventory Management Days Supply Sep-07 Sep 07 Industry New Vehicles Domestic (excluding Cadillac) 51.9 70.3 Luxury ( including Cadillac) 41.3 40.6 Import 40.9 45.6 Overall 43.6 57.3 Used Vehicles 37.0
Slide 12: Debt to Capital Ratio
Debt to Capital Ratio (1) (1) – Net of Cash 35 -40% 39.1% 39.4% 41.2% 41.9% Q4 2006 Q1 2007 Q2 2007 Q3 2007 Target • Long Beach BMW/Mini • Two mortgages in place; Two more to close in Q4 • CAC sale • Share repurchases
Slide 13: Q4 Outlook
Q4 Outlook • Generally stable operating environment – New vehicle softness offset by other opportunities – Stable margins and expense levels – Strength in certain markets and brands will be offset by softness in others • Reaffirming EPS target to $2.50 – $2.60 – Includes impact of closed acquisition
Slide 14: Summary
Summary • Top priority - Execution of key initiatives • Executing disciplined and prudent acquisition strategy • Strategy is sound; team focused on delivering results Reaffirming Full Year Guidance $2.50 - $2.60
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