Sonic Automotive, Inc. · NYSE:SAH
Sonic Automotive — Q4 2007 Earnings Presentation
19 slides from Sonic Automotive's earnings presentation, Feb 26, 2008
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: Sonic Automotive Fourth Quarter 2007 Earnings Review
Sonic Automotive Fourth Quarter 2007 Earnings Review February 26, 2008
Slide 4: Discussion Topics
Discussion Topics 1. Corporate Culture, People and Vision 2. “Strategy in Motion” – a look back at 2007 3. 2008 Strategic Focus 4. Review Fourth Quarter 2007 Performance 5. Questions 6. Closing Comments
Slide 5: Corporate Culture, People, Vision
Corporate Culture People Vision • Buildings do not Sell Cars…People Do. • Take our People out of our Buildings, and what do we have left? – Nothing; except empty buildings • Our People are our Greatest Assets and we are investing in them • We like to invest where we make money, and that begins with
Slide 6: "Strategy in Motion"
“Strategy in Motion” Used Vehicle Process Standard F&I Menu Fixed Operations Single DMS Digital Marketing (In Progress) Growth through Prudent Acquisitions Customer and Associate Satisfaction Consistent Execution of Strategic Initiatives Results in FY EPS target attainment of $2.54
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Slide 9: The Quarter in Review
The Quarter in Review • Operating Margin 3.7% • EPS up 6.3% • Total revenue up 7.6%; Gross up 5.7% – Same store used vehicle revenue up 19.3% – F&I per unit up 6.9% • Best in peer group SG&A EXECUTION OF KEY INTIATIVES CONTINUES Used vehicles, F&I, fixed operations, cost management
Slide 10: Financial Performance (Q4)
Financial Performance Better/ (Worse) Revenue $2,113 $1,963 $150 Gross Profit $322 $305 $17 – Margin 15.3% 15.5% Operating Profit – Amount $77 $74 $3 – Margin 3.7% 3.8% Net Income – Continuing Operations $29.4 $28.9 $0.5 – Total Operations 23.0 23.2 -0.2 EPS – Continuing Operations $0.68 $0.64 $0.04
Slide 11: Financial Performance (YTD)
Financial Performance (amounts in millions, except per share data) 2006 (1) Better/ (Worse) Revenue $8,337 $7,985 $352 Gross Profit $1,291 $1,228 $63 – Margin 15.5% 15.4% Operating Profit – Amount $296 $262 $34 – Margin 3.6% 3.3% Net Income – Continuing Operations $114.8 $96.8 $18.0 – Total Operatio
Slide 12: Same Store Revenue Growth – Q4
Same Store Revenue Growth – Q4 • Focus on higher margin business more than offsets weaker new vehicle sales • Used retail sales up sharply, wholesale continues to decline (2.6%) 19.3% 2.3% 8.9% 2.0% (11.9%) 1.3% New Used Fixed Operations F&I Sub Total Wholesale Total
Slide 13: SG&A Expenses as % of Gross Profit
SG&A Expenses as % of Gross Profit 8.0% 67.3% 66.8% 65.7% 65.5% 8.0% 8.1% 8.3% Q4 2007 Q4 2006 YTD 2007 YTD 2006 All Other SG&A Rent Q2 Charges 76.8% 73.7% 74.9% 73.8% 1.2%
Slide 14: Capitalization
57.6% 54.0% 60.6% 60.9% 58.8% 58.1% 40.7% 41.3% 40.6% 39.1% 39.4% 46.0% Capitalization Q1 2007 Q2 2007 Q3 2007 Q4 2007 Equity Debt Mortgages Debt to Cap With Mortgages 41.2% 41.9% 42.4% 1.7%
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Slide 16: 2008 Earnings Outlook
2008 Earnings Outlook (Continuing Operations) (1) Includes effect of same store sales, technology/training investment, and floorplan interest improvements. Excludes any 2008 acquisitions. 2007 Reported Results $2.54 Changes in dealerships held for sale (0.09) Adjusted 2007 continuing ops EPS $2.45 2
Slide 17: 2008 Earnings Outlook (assumptions)
2008 Earnings Outlook (Continuing Operations- assumptions) Share Count (mls): Fully Diluted 46.9 Interest Rates: First Second Half: Half: LIBOR (30 Day) 5.26% 3.50% 4.50% Other Interest: Mortgage Notes Capitalized Interest Interest Rate Swaps 2008 B/(W) than 2007 ($0.06) ($0.01) ($0.07) Total Other
Slide 18: Summary
Summary • Strong operating and financial performance in 2007 • Execution of key initiatives continues • Rollout of Phase II of used car strategy continues • Strength of higher margin departments will help offset a soft new vehicle environment. • 2008 Outlook – New vehicle environment challenging – O
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