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Sonic Automotive Inc (SAH) SEC Filing 10-Q Quarterly report for the period ending Wednesday, September 30, 2020

Sonic Automotive Inc

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CIK: 1043509 Ticker: SAH

Exhibit 99.1

Sonic Automotive Reports All-Time Record Third Quarter Earnings
Record EchoPark Revenues and Unit Sales Volume As Expansion Kicks Into High Gear

CHARLOTTE, N.C. – October 29, 2020 -
Sonic Automotive, Inc. (“Sonic” or the “Company”) (NYSE:SAH), one of the nation’s largest automotive retailers, today reported financial results for the third quarter ended September 30, 2020.

Third Quarter Highlights

•All-time record earnings per diluted share from continuing operations of $1.35 for the third quarter of 2020, an increase of 105% compared to $0.66 for the third quarter of 2019 (included in the results for the third quarter of 2020 is a pre-tax gain of $3.2 million, or $0.06 per share, related to franchise disposals)
•Selling, general and administrative (“SG&A”) expenses as a percentage of gross profit were 68.3% for the third quarter of 2020, compared to 76.7% for the third quarter of 2019 (results for the third quarter of 2020 include an 80 basis point benefit related to a gain on franchise disposals)
•Total Sonic consolidated third quarter 2020 revenues of $2.5 billion and gross profit of $376.6 million
•All-time record EchoPark quarterly revenues of $385.1 million, up 23.3% from the third quarter of 2019
•All-time record EchoPark quarterly retail sales volume of 15,127 units, up 14.5% from the third quarter of 2019
•Same store Franchised Dealerships Segment operating results for the third quarter of 2020, compared to the third quarter of 2019:
◦Revenues down 5.6%, gross profit up 1.5%
◦New vehicle unit sales volume down 14.6%; new vehicle gross profit per unit up 38.4%, to $2,607
◦Retail used vehicle unit sales volume down 4.6%; retail used vehicle gross profit per unit up 3.9%, to $1,307
◦Parts, service and collision repair gross profit down 3.9%, customer pay gross profit down 0.9%; gross margin up 130 basis points, to 49.2%
◦Finance and insurance (“F&I”) gross profit down 1.4%; total Franchised Dealerships Segment F&I gross profit per retail unit of $1,810, up 10.0%

Commentary

Jeff Dyke, Sonic’s and EchoPark’s President, commented, “Our third quarter results demonstrate the strength and resilience of our business model, driving the highest third quarter profit in our Company’s history. All business lines saw sequential improvement from the second quarter, with a combination of increasing consumer demand and enhanced operating efficiency and profitability as a result of the strategic actions our team took early in the pandemic. We believe the third quarter marks an inflection point in our Company’s path to more than double its total revenues and dramatically increase profitability in the next five years. We remain committed to providing our guests with an industry-leading vehicle purchase experience, offering a variety of options across the omni-channel spectrum to suit each individual’s needs. We continue to enhance our e-commerce platform to offer our guests a fully-integrated online and on-site sales experience at both our franchised dealership websites and EchoPark.com, further supporting the long-term growth plans for our business.”

Mr. Dyke continued, “We are very pleased with our franchised dealerships’ performance during the quarter, which reflects steadily increasing automotive retail consumer demand and the extraordinary dedication of our teammates to continue to deliver exceptional results despite the challenges of the pandemic. As importantly, EchoPark achieved all-time record retail sales volume in the quarter, selling over 15,000 units at our 12 existing locations. Our guests continue to see incredible value in the inventory selection, pricing, and buying experience that EchoPark offers and we remain focused on accelerating the expansion of this brand nationally. Our recent EchoPark expansion in Greenville, South Carolina, Houston, Texas, and Nashville, Tennessee, plus expected new openings by year end in Plano, Texas and Atlanta, Georgia, continue to drive toward a 140-point nationwide distribution network, expected to retail over half a million pre-owned vehicles annually by 2025.”

Heath Byrd, Sonic’s and EchoPark’s Chief Financial Officer, commented, “We have continued to increase operating efficiency at both our franchised dealerships and EchoPark stores, driving improved profitability throughout our operations. Total SG&A expenses for the third quarter were down $39.7 million, or 13.4%, year-over-year, while SG&A expenses as a percentage of gross profit were 68.3%, down 840 basis points from the year-ago quarter. Due to our ongoing cost-management initiatives, we are now a much leaner, more efficient organization than we were prior to the COVID-19 pandemic.”

Third Quarter 2020 Operational Summary

For the third quarter of 2020, Sonic’s consolidated total revenues were $2.5 billion, down 5.7% compared to the third quarter of 2019 and up 20.7% sequentially from the second quarter of 2020. EchoPark Segment revenues were $385.1 million for the third quarter of 2020, representing a 23.3% increase from the third quarter of 2019 and a 22.1% increase sequentially from the second quarter of 2020. Franchised Dealerships Segment revenues were $2.2 billion for the third quarter of 2020, representing a 9.5% decrease from the third quarter of 2019 and a 20.4% increase sequentially from $1.8 billion in the second quarter of 2020.


The following information was filed by Sonic Automotive Inc (SAH) on Thursday, October 29, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Sonic Automotive Inc's 10-Q Quarterly Report:

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Details
Document And Entity Information
Condensed Consolidated Balance Sheets (Unaudited)
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical)
Condensed Consolidated Statement Of Stockholders' Equity (Unaudited)
Condensed Consolidated Statements Of Cash Flows (Unaudited)
Condensed Consolidated Statements Of Cash Flows (Unaudited) (Parenthetical)
Condensed Consolidated Statements Of Comprehensive Income (Unaudited)
Condensed Consolidated Statements Of Income (Unaudited)
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss) (Tables)
Accumulated Other Comprehensive Income (Loss) - Summary Of Changes In Accumulated Other Comprehensive Income (Loss) (Details)
Business Acquisitions And Dispositions (Tables)
Business Acquisitions And Dispositions - Additional Information (Details)
Business Acquisitions And Dispositions - Revenues And Other Activities Associated With Disposed Dealerships Classified As Discontinued Operations (Details)
Business Acquisitions And Dispositions - Revenues And Other Activities Associated With Disposed Dealerships That Remain In Continuing Operations (Details)
Business Combinations (Details)
Business Combinations (Details)
Commitments And Contingencies
Commitments And Contingencies - Additional Information (Details)
Fair Value Measurements
Fair Value Measurements (Tables)
Fair Value Measurements - Assets And Liabilities Recorded At Fair Value (Details)
Fair Value Measurements - Fair Value And Carrying Value Of Significant Fixed Rate Long-Term Debt (Details)
Goodwill And Intangible Assets
Goodwill And Intangible Assets - Additional Information (Details)
Inventories
Inventories (Tables)
Inventories - Components Of Inventories (Details)
Leases, Codification Topic 842
Leases, Codification Topic 842 (Details)
Leases, Codification Topic 842 (Tables)
Long-Term Debt (Tables)
Long-Term Debt - 2016 Credit Facilities (Details)
Long-Term Debt - 2019 Mortgage Facility (Details)
Long-Term Debt - Covenants (Details)
Long-Term Debt - Debt Redemption (Details)
Long-Term Debt - Derivative Instruments And Hedging Activities (Details)
Long-Term Debt - Long-Term Debt (Details)
Long-Term Debt - Notes Narrative (Details)
Long-Term Debt - Summary Of Interest Received And Paid Under Term Of Cash Flow Swap (Details)
Per Share Data And Stockholders' Equity - Dilutive Effect On Earnings Per Share (Details)
Property And Equipment (Tables)
Property And Equipment - Additional Information (Details)
Property And Equipment - Components Of Property And Equipment, Net (Details)
Segment Information
Segment Information - Additional Information (Details)
Segment Information - Summary Of Reportable Operating Segment (Details)
Summary Of Significant Accounting Policies (Policies)
Summary Of Significant Accounting Policies (Tables)
Summary Of Significant Accounting Policies - Activity (Details)
Summary Of Significant Accounting Policies - Additional Information (Details)
Summary Of Significant Accounting Policies - Cumulative Effect Of Adjustments For Adoption Of Asc 606 (Details)
Summary Of Significant Accounting Policies - Other Information (Details)
Summary Of Significant Accounting Policies - Recent Accounting Pronouncements (Details)
Summary Of Significant Accounting Policies - Undiscounted Lease Cash Flows (Details)
Ticker: SAH
CIK: 1043509
Form Type: 10-Q Quarterly Report
Accession Number: 0001043509-20-000028
Submitted to the SEC: Thu Oct 29 2020 4:00:24 PM EST
Accepted by the SEC: Thu Oct 29 2020
Period: Wednesday, September 30, 2020
Industry: Retail Auto Dealers And Gasoline Stations

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