Sonic Automotive, Inc. Posts Record Fourth Quarter Profits and Full Year Retail Unit Sales

   Sonic Automotive, Inc. Posts Record Fourth Quarter Profits and Full Year
                              Retail Unit Sales

PR Newswire

CHARLOTTE, N.C., Feb. 20, 2013

CHARLOTTE, N.C., Feb. 20, 2013 /PRNewswire/ --Sonic Automotive, Inc. (NYSE:
SAH), one of the nation's largest automotive retailers, today reported
preliminary diluted earnings per share from continuing operations of $0.52, an
increase of 44.4% compared to $0.36 in the prior year quarter. 2012 fourth
quarter net income from continuing operations were $28.8 million, a 35.5%
increase over prior year results of $21.2 million. When adjusting for charges
recorded in the prior year period related to legal and lease charges, 2012
fourth quarter net income from continuing operations improved $3.4 million, or
13.2%, from an adjusted fourth quarter 2011 result of $25.4 million.

For the full year 2012, the Company grew adjusted net income from continuing
operations by 19.6% to $1.71 per diluted share compared to $1.43 per diluted
share in the prior year. The adjustments for both periods are detailed
further in the attached tables.

During the quarter, the Company repurchased 3.5 million shares of its Class A
common stock at an average price of $19.27 per share. For the year, the
Company repurchased 4.4 million shares of its Class A common stock at an
average price of $19.00 per share. The fully diluted share count was reduced
from 65.5 million shares for the full year of 2011 to 54.0 million shares
going into 2013, a reduction of 17.6%.

Subsequent to the end of the fourth quarter, Sonic's Board of Directors
authorized an additional $100 million to be used in the Company's share
repurchase program. When combined with previously unused authorized amounts,
Sonic has approximately $144.2 million of total authorization from its Board
of Directors to repurchase shares of the Company's Class A Common Stock.

Q4 2012 Highlights – New Retail Volume Outpaces Industry; Annual Cost Lower
than Target

  oRecord retail unit sales in full year 2012 of 231,192 units
  oRecord Q4 Continuing Operations Net Income of $28.8 million (1)
  oTotal Q4 revenues up 10.4% over prior year quarter, up 11.2% for full year
  oNew vehicle retail revenue up 15.7% in Q4, up 17.5% for full year
  oUsed vehicle retail units up 6.3% in Q4, up 6.4% for the full year
  oParts, Service & Collision gross profit up $3.7 million in Q4 to $140.9
    million, a fourth quarter record, up $15.4 million for the full year to
    $568.9 million, an annual record
  oFull year SG&A to gross profit of 76.8%, better than annual target of
    78.0%

(1) – Excluding unusual tax adjustments in the comparative prior year
periods

The Company's EVP of Operations, Jeff Dyke, commented, "We are very pleased
with our performance in the fourth quarter. Our continued execution of our
playbook processes enabled us to achieve record breaking full year total
vehicle unit sales of 231,192 units. The new vehicle retail unit sales
increase of 14.5% in the fourth quarter 2012 over the prior year quarter
outpaced the industry growth of 11.1%. Coupled with growth in all other areas
of our business, we generated over $20 million more gross profit in Q4 2012
than in Q4 2011. As a result of this increase and cost reductions in other
areas, we were able to increase our net income from continuing operations
13.2% from the prior year quarter adjusted total. We would like to thank our
customers, our manufacturer partners, and our associates for working together
to help us achieve this performance."

2013 Outlook

Commenting on the fourth quarter and the 2013 outlook, B. Scott Smith, the
Company's President, noted, "Our work continued in the fourth quarter to
improve our operations, our capital structure, and increase shareholder value
through a combination of operational execution and share repurchases. Looking
into 2013, we believe we can continue to build on the momentum generated last
year to offer our customers an exceptional and unique buying experience and
build customer loyalty. Although we still hold fast to our guiding strategic
initiative to improve our base business, we believe we are now positioned to
take advantage of open point and acquisition opportunities and will explore
these avenues in 2013. We expect the automotive retailing sector to continue
to grow in 2013 and are anticipating 2013 new vehicle industry volume of
between 15.0 million units and 15.5 million units. We currently expect
earnings per share from continuing operations of between $1.93 and $2.03 for
the full year 2013. We will have additional comments on our 2013 outlook in
our earnings call later today."

Fourth Quarter Earnings Conference Call

Senior management will host a conference call today at 11:00 A.M. (Eastern) to
discuss the quarter's results. To access the live broadcast of the call over
the Internet go to: www.sonicautomotive.com, then click on "Our Company",
then "Investor Relations", then "Earnings Conference Calls".

Presentation materials for the conference call can be accessed on the
Company's website at www.sonicautomotive.comby clicking on the "Investor
Relations" tab under "Our Company" and choosing "Webcasts & Presentations".

The conference call will also be available live by dialing in 10 minutes prior
to the start of the call at:

Domestic: 1.877.791.3416
International: 1.706.643.0958
Conference ID: 93141081

A conference call replay will be available one hour following the call for
seven days and can be accessed by calling:

Domestic: 1.855.859.2056
International: 1.404.537.3406
Conference ID: 93141081

About Sonic Automotive

Sonic Automotive, Inc., a Fortune 500 company based in Charlotte, N.C., is one
of the nation's largest automotive retailers. Sonic can be reached on the web
at www.sonicautomotive.com.

The results reported in this press release, the accompanying summary tables
and the presentation materials for the conference call today at 11:00 AM
(Eastern) are preliminary and unaudited and are subject to change upon
completion of the audit for our financial statements for the period ended
December 31, 2012.

This release contains certain non-GAAP financial measures as defined under SEC
rules, such as, but not limited to, adjusted income from continuing operations
and related earnings per share data. The Company has reconciled these
measures to the most directly comparable GAAP measures in the accompanying
tables. The Company believes that these non-GAAP financial measures improve
the transparency of the Company's disclosure by providing period-to-period
comparability of the Company's results from operations.

Included herein are forward-looking statements, including statements with
respect to anticipated 2013 industry new vehicle sales volume, anticipated
2013 earnings per share from continuing operations, anticipated acquisition
and growth activity, and anticipated future success and impacts from the
implementation of our strategic initiatives. There are many factors that
affect management's views about future events and trends of the Company's
business. These factors involve risk and uncertainties that could cause
actual results or trends to differ materially from management's view,
including without limitation, economic conditions in the markets in which we
operate, new and used vehicle industry sales volume, the success of our
operational strategies, the rate and timing of overall economic recovery or
decline, and the risk factors described in the Company's annual report on Form
10-K for the year ending December 31, 2011 and quarterly report on Form 10-Q
for the period ended September 30, 2012. The Company does not undertake any
obligation to update forward-looking information.





Sonic Automotive, Inc.

Results of Operations (Unaudited)

(Dollars and shares in thousands, except per share amounts)
This release contains certain non-GAAP financial measures (the "Adjusted" columns) as
defined under SEC rules, such as, but not limited to, adjusted income from continuing
operations and related earnings per share data. The Company has reconciled these
measures to the most directly comparable GAAP measures (the "Reported" columns) in the
release. The Company believes that these non-GAAP financial measures improve the
transparency of the Company's disclosure by providing period-to-period comparability
of the Company's results from operations.
               Fourth Quarter Ended               Fourth Quarter Ended
               December 31, 2012                  December 31, 2011
               Reported   Adjustments  Adjusted   Reported   Adjustments     Adjusted
Revenues:
 New retail  $         $       $         $         $          $ 
vehicles       1,259,924    -       1,259,924  1,089,251    -          1,089,251
 Fleet       43,130     -            43,130     49,782     -               49,782
vehicles
 Total new   1,303,054  -            1,303,054  1,139,033  -               1,139,033
vehicles
 Used        489,063    -            489,063    465,386    -               465,386
vehicles
 Wholesale   44,820     -            44,820     45,946     -               45,946
vehicles
 Total       1,836,937  -            1,836,937  1,650,365  -               1,650,365
vehicles
 Parts,
service and    287,113    -            287,113    278,721    -               278,721
collision
repair
 Finance,
insurance and  64,685     -            64,685     54,360     -               54,360
other
 Total       2,188,735  -            2,188,735  1,983,446  -               1,983,446
revenues
Gross profit   314,119    -            314,119    293,694    -               293,694
Selling,
general and    (236,798)  -            (236,798)  (227,946)  6,816       (1) (221,130)
administrative
expenses
Impairment     (383)      -            (383)      (40)       -               (40)
charges
Depreciation
and            (11,886)   -            (11,886)   (10,252)   -               (10,252)
amortization
Operating      65,052     -            65,052     55,456     6,816           62,272
income (loss)
Other income
(expense):
 Interest
expense, floor (5,534)    -            (5,534)    (4,589)    -               (4,589)
plan
 Interest
expense,       (14,215)   -            (14,215)   (16,329)   -               (16,329)
other, net
 Other
income         183        -            183        (265)      -               (265)
(expense), net
 Total other
income         (19,566)   -            (19,566)   (21,183)   -               (21,183)
(expense)
Income (loss)
from
continuing     45,486     -            45,486     34,273     6,816           41,089
operations
before taxes
Provision for
income taxes - (16,694)   -            (16,694)   (13,032)   (2,617)     (2) (15,649)
benefit
(expense)
Income (loss)
from           28,792     -            28,792     21,241     4,199           25,440
continuing
operations
Income (loss)
from           1,590      -            1,590      (703)      (387)       (3) (1,090)
discontinued
operations
Net income     $       $       $       $       $           $   
(loss)         30,382      -       30,382    20,538    3,812          24,350
Diluted
earnings
(loss) per
common share:
 Earnings
(loss) per     $      $       $      $      $          $    
share from      0.52      -        0.52     0.36    0.07            0.43
continuing
operations
 Earnings
(loss) per
share from     0.03       -            0.03       (0.01)     (0.01)          (0.02)
discontinued
operations
 Earnings    $      $       $      $      $          $    
(loss) per      0.55      -        0.55     0.35    0.06            0.41
common share
 Weighted
average common 54,763                  54,763     64,467                     64,467
shares
outstanding
Gross Margin
Data
(Continuing
Operations):
 New retail  6.1%                    6.1%       6.3%                       6.3%
vehicles
 Fleet       2.4%                    2.4%       3.3%                       3.3%
vehicles
 Total new   5.9%                    5.9%       6.2%                       6.2%
vehicles
 Used        6.7%                    6.7%       7.1%                       7.1%
vehicles
 Wholesale   (3.5%)                  (3.5%)     (2.1%)                     (2.1%)
vehicles
 Parts,
service and    49.1%                   49.1%      49.2%                      49.2%
collision
repair
 Finance,
insurance and  100.0%                  100.0%     100.0%                     100.0%
other
 Overall     14.4%                   14.4%      14.8%                      14.8%
gross margin
SG&A Expenses
(Continuing
Operations):
             $                                $  
Compensation   140,423                           132,641
 Advertising 13,243                             11,120
 Rent and    26,653                             28,240
rent related
 Other       56,479                             55,945
 Total SG&A  $        $       $        $        $            $  
expenses       236,798     -       236,798   227,946   (6,816)        221,130
 SG&A
expenses as %  75.4%                   75.4%      77.6%                      75.3%
of gross
profit
Operating      3.0%                    3.0%       2.8%                       3.1%
Margin %
Unit Data
(Continuing
Operations):
 New retail  33,767                             29,482
units
 Fleet units 1,312                              1,878
 Total new   35,079                             31,360
units
 Used units  23,943                             22,520
 Wholesale   7,452                              6,879
units
(1) Represents lease
exit adjustments and
legal settlement
charges.
(2) Represents
tax-effect of
pre-tax
adjustments
above.
(3) Represents
tax-effected amounts
related to lease exit
adjustments.



Sonic Automotive, Inc.

Results of Operations (Unaudited)

(Dollars and shares in thousands, except per share amounts)
               Year Ended December 31, 2012          Year Ended December 31, 2011
               Reported   Adjustments     Adjusted   Reported   Adjustments     Adjusted
Revenues:
 New retail  $         $          $         $         $          $ 
vehicles       4,546,209    -          4,546,209  3,867,978    -          3,867,978
 Fleet       169,715    -               169,715    220,120    -               220,120
vehicles
 Total new   4,715,924  -               4,715,924  4,088,098  -               4,088,098
vehicles
 Used        2,053,477  -               2,053,477  1,930,852  -               1,930,852
vehicles
 Wholesale   183,326    -               183,326    167,075    -               167,075
vehicles
 Total       6,952,727  -               6,952,727  6,186,025  -               6,186,025
vehicles
 Parts,
service and    1,162,319  -               1,162,319  1,125,672  -               1,125,672
collision
repair
 Finance,
insurance and  250,422    -               250,422    209,109    -               209,109
other
 Total       8,365,468  -               8,365,468  7,520,806  -               7,520,806
revenues
Gross profit   1,235,153  -               1,235,153  1,158,611  -               1,158,611
Selling,
general and    (949,026)  -               (949,026)  (899,424)  6,816       (4) (892,608)
administrative
expenses
Impairment     (440)      -               (440)      (200)      -               (200)
charges
Depreciation
and            (45,285)   -               (45,285)   (39,446)   -               (39,446)
amortization
Operating      240,402    -               240,402    219,541    6,816           226,357
income (loss)
Other income
(expense):
 Interest
expense, floor (19,454)   -               (19,454)   (18,405)   -               (18,405)
plan
 Interest
expense,       (60,090)   1,167       (1) (58,923)   (66,857)   -               (66,857)
other, net
 Other
income         (19,625)   19,713      (2) 88         (1,017)    -               (1,017)
(expense), net
 Total other
income         (99,169)   20,880          (78,289)   (86,279)   -               (86,279)
(expense)
Income (loss)
from
continuing     141,233    20,880          162,113    133,262    6,816           140,078
operations
before taxes
Provision for
income taxes - (49,972)   (11,711)    (3) (61,683)   (51,731)   (2,617)     (5) (54,348)
benefit
(expense)
Income (loss)
from           91,261     9,169           100,430    81,531     4,199           85,730
continuing
operations
Income (loss)
from           (2,160)    -               (2,160)    (5,277)    (387)       (6) (5,664)
discontinued
operations
Net income     $       $           $       $       $           $   
(loss)         89,101    9,169          98,270    76,254    3,812          80,066
Diluted
earnings
(loss) per
common share:
 Earnings
(loss) per     $      $          $      $      $          $    
share from      1.56    0.15            1.71     1.37    0.06            1.43
continuing
operations
 Earnings
(loss) per
share from     (0.03)     -               (0.03)     (0.08)     -               (0.08)
discontinued
operations
 Earnings    $      $          $      $      $          $    
(loss) per      1.53    0.15            1.68     1.29    0.06            1.35
common share
 Weighted
average common 60,406                     60,406     65,464                     65,464
shares
outstanding
Gross Margin
Data
(Continuing
Operations):
 New retail  6.0%                       6.0%       6.6%                       6.6%
vehicles
 Fleet       2.8%                       2.8%       3.2%                       3.2%
vehicles
 Total new   5.9%                       5.9%       6.4%                       6.4%
vehicles
 Used        7.0%                       7.0%       7.2%                       7.2%
vehicles
 Wholesale   (3.3%)                     (3.3%)     (3.1%)                     (3.1%)
vehicles
 Parts,
service and    (48.9%)                    (48.9%)    49.2%                      49.2%
collision
repair
 Finance,
insurance and  100.0%                     100.0%     100.0%                     100.0%
other
 Overall     14.8%                      14.8%      15.4%                      15.4%
gross margin
SG&A Expenses
(Continuing
Operations):
             $                                   $  
Compensation   566,886                              527,146
 Advertising 50,349                                49,128
 Rent and    106,628                               115,080
rent related
 Other       225,163                               208,070
 Total SG&A  $        $          $        $        $            $  
expenses       949,026     -          949,026   899,424   (6,816)        892,608
 SG&A
expenses as %  76.8%                      76.8%      77.6%                      77.0%
of gross
profit
Operating      2.9%                       2.9%       2.9%                       3.0%
Margin %
Unit Data
(Continuing
Operations):
 New retail  128,636                               108,564
units
 Fleet units 5,928                                 8,508
 Total new   134,564                               117,072
units
 Used units  102,556                               96,355
 Wholesale   31,188                                25,180
units
(1) Represents
double-carry
interest in
July 2012.
(2) Represents debt extinguishment
charges related to the 5.0%
Convertible Notes.
(3) Represents the tax effect of pre-tax
adjustments above and the effect of the settlement
of a state tax examination.
(4) Represents lease
exit adjustments and
legal settlement
charges.
(5) Represents the tax effect of pre-tax
adjustments above.
(6) Represents
tax-effected amounts
related to lease exit
adjustments.



Sonic Automotive, Inc.

Results of Operations (Unaudited)

(In thousands, except per share amounts)
                                           Fourth Quarter Ended December 31, 2012
                                                     Income (Loss)    Income (Loss)
                                                     From Continuing  From Discontinued
                                                     Operations       Operations         Net Income
                                                                                         (Loss)
                                           Weighted           Per               Per               Per
                                           Average            Share             Share             Share
                                           Shares    Amount   Amount  Amount    Amount   Amount   Amount
Reported:
 Earnings (loss) and                     54,289    $               $                $  
shares            28,792          1,590             30,382
 Effect of participating securities:
 Non-vested restricted stock
 and stock                                         (433)            -                  (433)
units
 Basic earnings (loss) and               54,289    $       $      $       $      $      $ 
shares            28,359  0.52   1,590    0.03    29,949   0.55
 Effect of dilutive securities:
 Contingently convertible
 debt (5.0% Convertible                  -         -                -                  -
Notes)
 Stock compensation                      474
plans
 Diluted earnings (loss) and             54,763    $       $      $       $      $      $ 
shares            28,359  0.52   1,590    0.03    29,949   0.55
                                           Fourth Quarter Ended December 31, 2011
                                                     Income (Loss)    Income (Loss)
                                                     From Continuing  From Discontinued
                                                     Operations       Operations         Net Income
                                                                                         (Loss)
                                           Weighted           Per               Per               Per
                                           Average            Share             Share             Share
                                           Shares    Amount   Amount  Amount    Amount   Amount   Amount
Reported:
 Earnings (loss) and                     52,194    $               $               $  
shares            21,241          (703)              20,538
 Effect of participating securities:
 Non-vested restricted stock
 and stock                                         (277)            -                  (277)
units
 Basic earnings (loss) and               52,194    $       $      $      $       $      $ 
shares            20,964  0.40   (703)     (0.01)  20,261   0.39
 Effect of dilutive securities:
 Contingently convertible
 debt (5.0% Convertible                  11,713    2,314            16                 2,330
Notes)
 Stock compensation                      560
plans
 Diluted earnings (loss) and             64,467    $       $      $      $       $      $ 
shares            23,278  0.36   (687)     (0.01)  22,591   0.35
Adjustments (net of tax):
 Lease exit adjustments                            $     $      (387)     $       $     $  
                                                      749    0.01             (0.01)   362    -
 Legal settlement charges                          3,450    0.06    -         -        3,450    0.06
 Total adjustments                                 $      $      $      $       $     $ 
                                                     4,199   0.07   (387)     (0.01)  3,812    0.06
Adjusted:
 Diluted earnings (loss) per share                          $                $                $ 
                                                              0.43             (0.02)           0.41
Sonic Automotive, Inc.

Results of Operations (Unaudited)

(In thousands, except per share amounts)
                                           Year Ended December 31, 2012
                                                     Income (Loss)    Income (Loss)
                                                     From Continuing  From Discontinued
                                                     Operations       Operations         Net Income
                                                                                         (Loss)
                                           Weighted           Per               Per               Per
                                           Average            Share             Share             Share
                                           Shares    Amount   Amount  Amount    Amount   Amount   Amount
Reported:
 Earnings (loss) and                     53,550    $               $                 $  
shares            91,261          (2,160)           89,101
 Effect of participating securities:
 Non-vested restricted stock
 and stock                                         (1,381)          -                  (1,381)
units
 Basic earnings (loss) and               53,550    $       $      $        $       $      $ 
shares            89,880  1.68   (2,160)  (0.04)  87,720   1.64
 Effect of dilutive securities:
 Contingently convertible
 debt (5.0% Convertible                  6,411     4,617            64                 4,681
Notes)
 Stock compensation                      445
plans
 Diluted earnings (loss) and             60,406    $       $      $        $       $      $ 
shares            94,497  1.56   (2,096)  (0.03)  92,401   1.53
Adjustments (net of tax):
 Double-carry interest                             $     $      $      $     $     $ 
                                                      712    0.01      -    -      712   0.01
 Debt extinguishment charges                       12,025   0.20    -         -        12,025   0.20
 Settlement of state tax examination               (3,568)  (0.06)  -         -        (3,568)  (0.06)
 Total adjustments                                 $      $      $      $     $     $ 
                                                     9,169   0.15      -    -     9,169    0.15
Adjusted:
 Diluted earnings (loss) per share                          $                $                $ 
                                                              1.71             (0.03)           1.68
                                           Year Ended December 31, 2011
                                                     Income (Loss)    Income (Loss)
                                                     From Continuing  From Discontinued
                                                     Operations       Operations         Net Income
                                                                                         (Loss)
                                           Weighted           Per               Per               Per
                                           Average            Share             Share             Share
                                           Shares    Amount   Amount  Amount    Amount   Amount   Amount
Reported:
 Earnings (loss) and                     52,358    $               $                 $  
shares            81,531          (5,277)           76,254
 Effect of participating securities:
 Non-vested restricted stock
 and stock                                         (1,056)          -                  (1,056)
units
 Basic earnings (loss) and               52,358    $       $      $        $       $      $ 
shares            80,475  1.54   (5,277)  (0.10)  75,198   1.44
 Effect of dilutive securities:
 Contingently convertible
 debt (5.0% Convertible                  12,517    9,093            207                9,300
Notes)
 Stock compensation                      589
plans
 Diluted earnings (loss) and             65,464    $       $      $        $       $      $ 
shares            89,568  1.37   (5,070)  (0.08)  84,498   1.29
Adjustments (net of tax):
 Lease exit adjustments                            $     $      (387)     $     $     $ 
                                                      749    0.01              -      362   0.01
 Legal settlement charges                          3,450    0.05    -         -        3,450    0.05
 Total adjustments                                 $      $      $      $     $     $ 
                                                     4,199   0.06   (387)      -     3,812    0.06
Adjusted:
 Diluted earnings (loss) per share                          $                $                $ 
                                                              1.43             (0.08)           1.35





SOURCE Sonic Automotive, Inc.

Website: http://www.sonicautomotive.com
Contact: David Cosper, Chief Financial Officer, +1-704-566-2400 or C.G.
Saffer, Vice President and Chief Accounting Officer +1-704-566-2439
 
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