Sonic Reports 4Q Increase

February 19, 2020

Sonic Automotive, Inc. reported consolidated total revenues were $2.7 billion, up 7 percent compared to the fourth quarter of 2018.

EchoPark segment revenues were $308.6 million for the fourth quarter, a 52 percent increase from the fourth quarter of 2018. Franchised dealerships segment revenues were $2.4 billion for the fourth quarter, up 3 percent from the fourth quarter of 2018, despite the disposal of 10 franchised dealerships in 2019 which generated revenues of $165.7 million during the fourth quarter of 2018.

Net income from continuing operations for the fourth quarter was $46.3 million, or $1.04 per diluted share. Comparatively, net income from continuing operations for the fourth quarter of 2018 was $22.0 million, or $0.51 per diluted share.

“Our 2019 performance was exceptional, with record-breaking consolidated total revenues and earnings per diluted share from continuing operations,” said David Smith, Sonic’s and EchoPark’s chief executive officer.

 

ReconVelocity, an auto industry reconditioning software provider, has been selected by Sonic Automotive to install its full suite of products across 100 dealerships representing 25 brands.

ReconVelocity automates the reconditioning process and improves communication between all personnel and departments involved in the process. The ReconVelocity platform is a cloud-based workflow suite of solutions that are customizable to each dealership, allowing dealers to reduce their recon time, thus increasing profitability.

“Saving time in reconditioning adds margin to the bottom line,” says Jeff Dyke, president of Sonic Automotive. “We are very excited to have this tool and believe that it will speed up our cycle times and allow us to sell more cars.”

Sonic Automotive Inc. completed the early retirement of all $289.3 million principal amount of its unsecured 5 percent Senior Subordinated Notes due 2023 on Dec. 30. Altogether, in 2019 the company reduced its total debt by approximately $235 million.

“By capitalizing on market conditions, we have made substantial progress towards our target of reducing debt by $300 million by mid-to-late 2020,” said David Smith, Sonic’s chief executive officer.

“This deleveraging has significantly improved Sonic’s financial position going into 2020 by reducing interest expense and improving our debt-to-EBITDA ratio. Our success in strengthening our balance sheet leaves us well positioned to continue to expand our EchoPark footprint and to explore potential acquisition opportunities for our franchised dealership portfolio.”

Sonic funded the redemption of the notes using available liquidity, including cash flow from operations, proceeds from the opportunistic disposition of underperforming franchised dealerships or those expected to have substantial future capital expenditure requirements and borrowings under the company’s recently completed mortgage facility.

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