Sonic Automotive (SAH) 8-K Sonic Automotive, Inc. Reports Strong Operating Performance for the Second Quarter

Exhibit 99.1

Sonic Automotive, Inc. Reports Strong Operating Performance for the Second Quarter

CHARLOTTE, N.C. –August 2, 2006–Sonic Automotive, Inc. (NYSE: SAH), a leader in automotive retailing, today announced that revenue for the second quarter 2006 increased $181 million or 9.8% from second quarter 2005. This was driven by strong same store sales performance (up 3.7%) and the impact of acquisitions. Sales of used vehicles were very strong, with a total revenue increase of 20.9%. Same store used vehicle revenue was up 15%.

Second quarter 2006 earnings from continuing operations were $18.6 million, or $0.42 per diluted share, compared to $28.3 million, or $0.65 per diluted share, in the prior year period. During the second quarter of 2006, the Company recorded charges of $27.6 million, or $0.27 per diluted share from continuing operations and $0.11 per diluted share from discontinued operations. As discussed on the Company’s conference call on July 19, 2006, these charges resulted primarily from the Company’s decision to exit certain facility leases and cancel various facility improvement projects. The results for the quarter ended June 30, 2006 also include $0.01 per diluted share of stock option expense related to the Company’s adoption of SFAS 123R.

Selling, general and administrative expenses as a percentage of gross profit was 78.7% for the quarter compared with 75.4% a year ago. Absent the charges noted above, it was 74.1%, an improvement of 130 basis points, and the Company’s operating margin would have been the highest since 2002.

“We continue to be excited by the results of our key operating initiatives. During the quarter, we were able to increase our same store revenue while maintaining margin.” said President and Chief Operating Officer Jeffrey C. Rachor. “In an increasingly competitive new vehicle environment, our used vehicle sales initiative and fixed operation performance continues to drive our overall profitability. All segments of our business showed strong growth and we are particularly pleased that, for the first time in the Company’s history, we exceeded a 50% gross margin in our fixed operations business. This is a testament to the strength of our brand mix and the effectiveness of our core operating strategies.”

Presentation materials for the Company’s August 2, 2006 earnings conference call can be accessed on the Company’s website atwww.sonicautomotive.com by clicking on the “For Investors” tab and choosing “Webcasts & Presentations” on the left side of the screen.

About Sonic Automotive

Sonic Automotive, Inc., a Fortune 300 company based in Charlotte, N.C., is one of the largest automotive retailers in the United States operating 173 franchises and 38 collision repair centers. Sonic can be reached on the Web atwww.sonicautomotive.com.

Included herein are forward-looking statements. 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, risks associated with acquisitions and the risk factors described in the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2006. The Company does not undertake any obligation to update forward-looking information.

Sonic Automotive, Inc.

Results of Operations (unaudited)

(in thousands, except per share, unit data and percentage amounts)

	Three Months Ended						Six Months Ended
	6/30/2006			6/30/2005			6/30/2006			6/30/2005
Revenues
Retail new vehicles	$	1,153,155		$	1,067,403		$	2,172,729		$	1,953,941
Fleet vehicles		96,207			90,411			181,318			169,579
New vehicles		1,249,362			1,157,814			2,354,047			2,123,520
Used vehicles		336,726			278,580			637,352			539,876
Wholesale vehicles		128,451			129,558			257,721			239,143
Total vehicles		1,714,539			1,565,952			3,249,120			2,902,539
Parts, service and collision repair		273,446			240,844			540,394			466,641
Finance, insurance and other		45,755			46,153			91,724			87,619
Total revenues		2,033,740			1,852,949			3,881,238			3,456,799
Total gross profit		307,994			279,023			600,026			530,026
SG&A expenses		242,537			210,429			469,996			408,672
Depreciation		6,870			3,622			11,637			7,025
Operating income		58,587			64,972			118,393			114,329
Interest expense, floor plan		15,610			8,777			27,742			16,167
Interest expense, other		11,022			11,054			22,785			21,672
Other (expense) / income		(1	)		12			(667	)		24
Income from continuing operations before taxes		31,954			45,153			67,199			76,514
Income taxes		13,380			16,873			26,880			28,578
Income from continuing operations		18,574			28,280			40,319			47,936
Discontinued operations:
Loss from operations and the sale of discontinued franchises		(10,299	)		(1,945	)		(17,827	)		(5,927	)
Income tax benefit		3,913			669			6,778			2,107
Loss from discontinued operations		(6,386	)		(1,276	)		(11,049	)		(3,820	)
Net income	$	12,188		$	27,004		$	29,270		$	44,116
Diluted:
Weighted average common shares outstanding		46,270			45,421			46,238			45,440
Earnings per share from continuing operations	$	0.42		$	0.65		$	0.92		$	1.10
Loss per share from discontinued operations	($	0.13	)	($	0.03	)	($	0.24	)	($	0.08	)
Earnings per share	$	0.29		$	0.62		$	0.68		$	1.02
Gross Margin Data (Continuing Operations):
Retail new vehicles		7.7	%		7.7	%		7.6	%		7.6	%
Fleet vehicles		2.5	%		2.8	%		2.9	%		2.9	%
Total new vehicles		7.3	%		7.3	%		7.3	%		7.2	%
Used vehicles retail		10.4	%		10.3	%		10.6	%		10.5	%
Total vehicles retail		8.0	%		7.9	%		8.0	%		7.9	%
Parts, service and collision repair		50.2	%		49.6	%		49.9	%		49.5	%
Finance, insurance and other		100.0	%		100.0	%		100.0	%		100.0	%
Overall gross margin		15.1	%		15.1	%		15.5	%		15.3	%
SG&A Expenses (Continuing Operations):
Personnel	$	139,194		$	124,638		$	273,425		$	241,217
Advertising		16,434			15,075			30,686			28,407
Facility rent		24,526			19,418			47,422			38,111
Other		62,383			51,298			118,463			100,937
Total	$	242,537		$	210,429		$	469,996		$	408,672
Unit Data (Continuing Operations):
New retail units		36,673			34,376			67,908			63,177
Fleet units		4,436			4,232			8,336			7,807
New units		41,109			38,608			76,244			70,984
Used units		17,460			15,052			33,170			29,626
Total units retailed		58,569			53,660			109,414			100,610
Wholesale units		13,582			14,425			26,593			26,536
Average price per unit:
New retail vehicles		31,444			31,051			31,995			30,928
Fleet vehicles		21,688			21,364			21,751			21,721
Total new vehicles		30,391			29,989			30,875			29,915
Used vehicles		19,286			18,508			19,215			18,223
Wholesale vehicles		9,457			8,981			9,691			9,012
Other Data:
Same store revenue percentage changes:
New retail		1.8	%					3.6	%
Fleet		4.8	%					5.4	%
New total		2.0	%					3.8	%
Used		15.0	%					11.7	%
Parts, service and collision repair		5.5	%					6.5	%
Finance, insurance and other		-2.5	%					1.7	%
Total		3.7	%					5.1	%

Balance Sheet Data:
	6/30/2006			12/31/2005
ASSETS
Current Assets:
Cash and cash equivalents	$	18,342		$	7,566
Receivables, net		340,437			396,225
Inventories		1,051,815			1,016,457
Assets held for sale		219,358			73,837
Construction in progress expected to be sold in
sale-leaseback transactions		70,500			95,131
Other current assets		28,293			27,484
Total current assets		1,728,745			1,616,700
Property and Equipment, Net		174,487			148,267
Goodwill, Net		1,153,168			1,122,538
Other Intangibles, Net		80,200			88,696
Other Assets		58,380			49,300
TOTAL ASSETS	$	3,194,980		$	3,025,501
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Floor plan notes payable—trade	$	450,602		$	579,022
Floor plan notes payable—non-trade		649,370			410,296
Trade accounts payable		80,583			91,101
Accrued interest		18,687			17,378
Other accrued liabilities		172,172			167,060
Liabilities associated with assets held for sale—trade		93,334			45,953
Liabilities associated with assets held for sale—non-trade		57,323			6,937
Current maturities of long-term debt		2,727			2,747
Total current liabilities		1,524,798			1,320,494
LONG-TERM DEBT		644,863			712,311
OTHER LONG-TERM LIABILITIES		37,532			29,479
DEFERRED INCOME TAXES		131,140			132,419
STOCKHOLDERS' EQUITY		856,647			830,798
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	3,194,980		$	3,025,501
Balance Sheet Ratios:
Current Ratio		1.13			1.22
Debt to Total Capital, Net of Cash		42.3	%		46.0	%