EXHIBIT 99.1
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FOR IMMEDIATE RELEASE
Sonic Automotive, Inc. Announces Acquisition of Don Massey Dealerships,
Raises Earnings Targets
CHARLOTTE, NC (January 15, 2002) - Sonic Automotive, Inc. (NYSE: SAH) announced
today that it has entered into an agreement to purchase substantially all of the
Don Massey Dealerships, the 19th largest dealership group in the United States.
The Massey group dealerships to be acquired by Sonic represent 16 dealerships
with estimated annual revenues of $1.0 billion. Of the 16 dealerships, 13
represent the Cadillac brand.
O. Bruton Smith, the Company's Chairman and Chief Executive Officer stated,
"This acquisition continues the execution of our strategy to overweight our
representation of luxury brands; in this case, Cadillac. Cadillac has an
outstanding product plan and management team, with a solid future as General
Motors' principal luxury car brand. Cadillac has announced plans to introduce 5
brand new products in the next 18 months. New leadership has reinvigorated
Cadillac and General Motors, and we're pleased to become a bigger part of
General Motors' dealer network. With these acquisitions, we are raising our 2002
earnings per share target to $2.38 to $2.45. For a full year in 2003, we expect
the Massey group acquisition to increase earnings per share $0.30 to $0.40."
The acquisition is subject to customary closing conditions, including
manufacturers' approval, and is expected to close in the second quarter of 2002.
Consideration for the acquisition will be in the form of cash and 1,470,588
shares of Sonic Automotive, Inc. Class A Common Stock. The shares to be issued
will be restricted from sale for one year after closing, but will have certain
piggy-back registration rights in the event of a future underwritten stock
offering.
"I'm pleased to have an opportunity to join with one of the largest and most
successful automotive retailers. Sonic Automotive provides an exciting future
and career path for the employees in our dealerships who have contributed
greatly to our success. We look forward to continuing a tradition of service to
our customers and communities," stated Mr. Don Massey.
Mr. Bruton Smith further stated, "With this announcement, Sonic has exceeded our
previously stated acquisition target for the first three quarters of 2002 to
announce the acquisition of dealerships representing at least $800 million in
annual revenue. We expect our acquisition pace to slow over the next several
quarters as we integrate the Massey dealerships. However, we do expect to
continue acquisition activity with a focus on markets with existing operations
and an established management team."
After completion of these acquisitions, Cadillac is expected to represent
approximately 12% of the Company's brand portfolio. General Motors' (NYSE: GM)
brands will represent approximately 20% of the Company's portfolio. We expect
Cadillac's share of the Company's brand portfolio to diminish over 2002 as
additional acquisitions are completed. The Massey acquisition also includes 13
collision repair centers to be acquired, which would increase Sonic's number of
collision repair centers by 45%.
Of the 16 dealerships to be acquired, 11 are in markets where Sonic has an
established management team and infrastructure. In these existing markets, the
acquisition will improve brand diversity, build local market share and help
Sonic capture the benefit of locally available economies of scale. Two
significant new markets for Sonic will be added with the addition of Denver and
Detroit.
B. Scott Smith, the Company's President and Chief Operating Officer stated,
"Since many of the dealerships to be acquired are in existing markets, we expect
a smooth and quick integration. All of the dealerships to be acquired are large
enough to meet our operating criteria, which will further aid integration. The
addition of 13 body shops and the outstanding service, parts, and used car
business associated with the Cadillac brand, and these dealerships in
particular, is expected to improve the Company's overall sales mix and margins."
The dealerships to be acquired are as follows:
. Don Massey Cadillac - Plymouth, Michigan (Detroit Metropolitan area)
. Don Massey Cadillac - Detroit, Michigan
. Capitol Cadillac - Lansing, Michigan
. Don Massey Cadillac - Lonetree, Colorado (Denver Metropolitan area)
. Don Massey Pontiac-Buick-GMC - Littleton, Colorado (Denver
Metropolitan area)
. Crest Cadillac - Nashville, Tennessee
. Crest Honda - Nashville, Tennessee
. Don Massey Cadillac-Saab - Orlando, Florida
. Don Massey Cadillac - Orlando, Florida
. Don Massey Cadillac-Oldsmobile - Sanford, Florida (Orlando
Metropolitan area)
. Don Massey Cadillac - Downey, California (Los Angeles Metropolitan
area)
. Don Massey Chevrolet - Downey, California
. Don Massey Cadillac - Dallas, Texas
. Arnold Palmer Cadillac - Charlotte, North Carolina
. Arnold Palmer Cadillac - Pineville, North Carolina (Charlotte
Metropolitan area)
. Don Massey Cadillac - Houston, Texas
Mr. Don Massey was represented in the transaction by Stephens, Inc. of Little
Rock, Arkansas.
THE COMPANY WILL HOST A CONFERENCE CALL AT 11:00 A.M. EST ON TUESDAY, JANUARY
15, 2002 TO PROVIDE ADDITIONAL COMMENTS ON THIS ACQUISITION AND ADDRESS INVESTOR
QUESTIONS. TO PARTICIPATE, PLEASE DIAL 888-318-6429, SECURITY CODE: SONIC - OR
YOU CAN ACCESS THE CALL AT WWW.COMPANYBOARDROOM.COM OR WWW.SONICAUTOMOTIVE.COM.
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About Sonic Automotive, Inc.
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Sonic Automotive, Inc., a Fortune 300 company and member of the Russell 2000
Index, is among the largest automotive retailers in the United States operating
154 franchises and 29 collision repair centers in Alabama, California, Florida,
Georgia, Maryland, Nevada, North Carolina, Ohio, Oklahoma, South Carolina,
Tennessee, Texas and Virginia. Sonic Automotive can be reached on the Web at
www.sonicautomotive.com.
Included herein are forward-looking statements, including statements with
respect to anticipated revenues, earnings per share growth, profit margins and
brand mix, as well as the anticipated consummation of the announced acquisition.
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, automotive industry
sales trends, risks associated with acquisitions and the risk factors described
in Exhibit 99.1 to the Company's Quarterly Report on Form 10-Q for the quarter
ending September 30, 2001. The Company does not undertake any obligation to
update forward-looking information.
Contact: Theodore M. Wright, Chief Financial Officer of Sonic Automotive, Inc.
(704) 532-3347.
J. Todd Atenhan, Investor Relations of Sonic Automotive, Inc. (888)
766-4218.
Bill Steers, Media Relations of Sonic Automotive, Inc. (888) 766-4219.