1 Q3 2013 Operations Review October 21, 2013 Sonic Automotive, Inc. Exhibit 99.2 |
2 Forward-Looking Statements Sonic Automotive, Inc. This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events, are not historical facts and are based on our current expectations and assumptions regarding our business, the economy and other future conditions. These statements can generally be identified by lead-in words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “foresee”, “may”, “will” and other similar words. Statements that describe our Company’s objectives, plans or goals are also forward-looking statements. Examples of such forward-looking information we may be discussing in this presentation include, without limitation, further implementation of our operational strategies and playbooks, future debt retirement, capital expenditures, operating margins and revenues, inventory levels and new vehicle industry sales volume. You are cautioned that these forward-looking statements are not guarantees of future performance, involve risks and uncertainties and actual results may differ materially from those projected in the forward-looking statements as a result of various factors. These risks and uncertainties include, among other things, (a) economic conditions in the markets in which we operate, (b) the success of our operational strategies, (c) our relationships with the automobile manufacturers and (d) new and pre-owned vehicle sales volume. These risks and uncertainties, as well as additional factors that could affect our forward-looking statements, are described in our Form 10-K for the year ending December 31, 2012. These forward-looking statements, risks, uncertainties and additional factors speak only as of the date of this presentation. We undertake no obligation to update any such statements. |
3 Contents Quarter in Review Financial Results Operations Recap Summary and Outlook As we disclosed in Sonic’s press release issued earlier this morning, Sonic is currently in the process of evaluating the impact of a positive tax gain relating to the extinguishment of Sonic’s 5% Convertible Senior Notes in 2011 and 2012, including the allocation of this gain, if any, over prior reporting periods. Once this process is completed, Sonic will issue a new press release disclosing Net Income and Earnings Per Share amounts for the third quarter of 2013. Accordingly, please understand that management will refrain from answering any questions on this conference call related to Net Income, EPS or any other metrics that may be affected by the final calculation and allocation of this tax gain. Sonic Automotive, Inc. |
4 Overall Results Revenue Growth – Up 5.4% New retail revenue up 5.3% - volume up 2.5% Used unit volume up 3.8% F&I revenue up 6.8% Fixed operations revenue up 7.8% Gross Profit Growth – Up 7.1% SG&A at 78.1% - Includes Initiative Expenses Sonic Automotive, Inc. |
Q3 2013 Results B/(W) than Q3 2012 (amounts in millions, except per share data) Q3 2013 $ % Revenue $ 2,242 $ 114 5% Gross Profit $ 326 $ 22 7% Operating Profit $ 58 $ 0 0% SG&A as % of Gross 78.1% (80 bps) 5 Sonic Automotive, Inc. |
SG&A to Gross 6 Sonic Automotive, Inc. Q3 2013 Q3 2012 78.1% 77.3% |
Sonic Automotive, Inc. SG&A to Gross 7 Targeting Below 77% for the Full Year – Adjusted for Initiatives Sonic Automotive, Inc. Q3 2013 Reported Less: Pre- Owned Specialty Retail Less: Customer Experience Less: SOX Q3 2013 Adj for Initiatives 78.1% (0.5%) (0.5%) (0.4%) 76.7% |
8 (amounts in millions) YTD 2013 Estimated 2013 Real Estate Acquisitions $ 46.8 $ 66.4 All Other Cap Ex 80.7 104.6 Subtotal $ 127.5 $ 171.0 Less: Mortgage Funding (53.7) (53.7) Total Cash Used – Cap Ex $ 73.8 $ 117.3 Capital Spending Note – Spending excludes the effect of franchise acquisitions. Sonic Automotive, Inc. |
9 Debt Covenants Compliant with all Covenants Sonic Automotive, Inc. Covenant Actual Q3 2013 Liquidity Ratio >= 1.05 1.15 Fixed Charge Coverage Ratio >= 1.20 1.74 Total Lease Adjusted Leverage Ratio <= 5.50 4.07 |
10 (shares in thousands) Shares Average Price YTD Q3 2013 Activity 642 $22.56 Unused authorization of approximately $135.1 million Share Repurchases Sonic Automotive, Inc. |
Q3 2013 Q3 2012 B/(W) Volume 34,087 33,264 2.5% Selling Price $ 35,777 $ 34,828 2.7% Gross Margin % 5.9% 5.7% 20 bps GPU $ 2,094 $1,995 $ 99 Gross Profit $ 71 million $ 66 million 7.5% SAAR (includes fleet) 15.6 million 14.4 million 8.3% 11 New Retail Vehicles Sonic Automotive, Inc. |
Q3 2013 Q3 2012 B/(W) Retail Volume 27,632 26,610 3.8% Used Retail GPU $ 1,411 $ 1,336 $ 74 Used Related Retail Gross* $ 86 million $ 80 million $ 6 million Used to New 0.81 : 1 0.80 : 1 0.01 Vehicles / store / month 91 89 2 12 Used Retail Vehicles Sonic Automotive, Inc. * - Includes front-end gross plus F&I related gross and fixed operations related gross |
13 B/(W) than Q3 2012 (amounts in millions) Q3 2013 $ % Revenue $ 310 $ 22 7.8% Gross Profit $ 149 $ 9 6.1% Fixed Operations Sonic Automotive, Inc. • Customer Pay Up 4.5% • Whsl. Parts Up 8.7% • Internal & Sublet Up 6.7% • Warranty Up 14.8% QTD YOY Gross Profit Change Breakdown: |
• SCORES (CRM) • CX Electronic Leads Template Updates • E-Sales Process Alignment • eLead Call Center Updates • Sales Process Application Development – Showroom Application – Desking – SIMS Upgrade – Paperless – New Vehicle Delivery Process – F&I • Service Advisor Walk-Around Alignment • Point of Purchase Materials • CX CRM Communications • True Price Brand Positioning with Sonic Brand • Loyalty Program • Garage Application / Customer Information Portal • Soft Customer Experience Elements • Web User Experience Updates • Social Media • Public Relations • Internal Communications Strategy/ Associate Communication Adoption Plan • Pay Plan Alterations • Network Enhancements at Store Level • Playbook Updates • Sonic Brand Training • Fully Integrated Training • Sonic Retail Branding • CX Advertising Launch 14 Sonic Automotive, Inc. |
15 Pre-Owned Specialty Retail Sonic Automotive, Inc. |
16 Summary Effects of True Price normalized Inventory positioned for successful Q4 Added to revenue base with Mercedes and BMW acquisitions Pre-owned specialty retail concept leverages one of our core competencies Expect “One Sonic-One Experience” to create a competitive advantage Tighten annual guidance for adjusted diluted EPS from continuing operations of $1.96 to $2.03 Sonic Automotive, Inc. |
17 Sonic Automotive, Inc. |