8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 26, 2005

SONIC AUTOMOTIVE, INC.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

1-13395	56-201079
(Commission File Number)	(IRS Employer Identification No.)

6415 Idlewild Road, Suite 109 Charlotte, North Carolina	28212
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (704) 566-2400

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On April 26, 2005, we issued a press release announcing results for our fiscal quarter ended March 31, 2005.

A copy of the press release is attached hereto as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits.

99.1 Press release of Sonic Automotive, Inc. dated April 26, 2005

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

SONIC AUTOMOTIVE, INC.
By:	/s/ Stephen K. Coss
	Stephen K. Coss
	Senior Vice President and General Counsel

Dated: April 26, 2005

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INDEX TO EXHIBITS

Exhibit No.	Description
99.1	Press release of Sonic Automotive, Inc. dated April 26, 2005

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EX-99.1

Exhibit 99.1

Sonic Automotive, Inc. Reports First Quarter Earnings

CHARLOTTE, N.C. – April 26 – Sonic Automotive, Inc. (NYSE: SAH), a leader in automotive retailing, today reported that its 2005 first quarter income from continuing operations was $19.4 million, or $0.45 per diluted share, compared to $22.3 million, or $0.51 per diluted share, in the prior year period. The results for the quarter include charges of $0.02 from hail damage in two Southeast markets.

“As previously indicated, first quarter challenges were expected. The shortfall, caused by excess inventory in the industry, sales pulled forward in December, and higher interest costs, occurred in January and February. Although these challenges continued, our performance in March improved over prior year,” said Chairman and Chief Executive Officer O. Bruton Smith. “While uncertainty exists around the second quarter retail environment and industry inventory levels, we continue to believe that notable year-over-year performance improvement will occur in the second half of the year.”

Revenue for the period increased 8.8% from the prior year first quarter to $1.8 billion. On a same store basis, total revenue in the quarter increased 1.7% from the same quarter last year and represents growth across the business.

“While we are disappointed by results in January and February, we continue to focus on operating process improvements,” said President and Chief Operating Officer Jeffrey C. Rachor. “Same store sales improved, new vehicle inventory was well managed to 55 days supply, work continues on operating processes and we selected a single dealer management system vendor as a platform to drive standardization. We remain confident and on course in our long-term strategy.”

Consistent with its portfolio enrichment strategy, the company completed the acquisition of Mercedes-Benz of Nashville, Tenn. The acquisition represents $55 million in annualized revenue. Two dealerships were sold in the quarter and five others are pending.

Debt-to-total capital, net of cash, at March 31, 2005 was 47.3%, with a continued long-term goal of 40%. At the end of the quarter, the company had $214 million available under its revolving credit facility. At quarter-end, the company had $31 million authorization available for stock repurchases. Moody’s Investors Service announced April 14 that it upgraded Sonic Automotive’s senior secured credit facility rating and confirmed other ratings. Additionally, Moody’s reported that the company’s overall rating outlook was improved to stable from negative.

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 187 franchises and 39 collision repair centers. Sonic can be reached on the Web at www.sonicautomotive.com.

Included herein are forward-looking statements, including statements pertaining to anticipated disposition activity, anticipated improvements in operating performance, and anticipated industry conditions, including domestic inventory levels. 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 Exhibit 99.1 to the company’s annual report on Form 10-K for the year ended December 31, 2004. 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
	3/31/2004			3/31/2005
Revenues
Retail new vehicles	$	924,680		$	996,725
Fleet vehicles		70,443			82,658
Total new vehicles		995,123			1,079,383
Used vehicles		285,657			305,860
Wholesale vehicles		111,096			126,282
Total vehicles		1,391,876			1,511,525
Parts, service and collision repair		242,895			267,415
Finance, insurance and other		43,330			46,536
Total revenues		1,678,101			1,825,476
Total gross profit		265,064			287,341
SG&A expenses		210,529			232,125
Depreciation		3,572			4,082
Operating income		50,963			51,134
Interest expense, floor plan		5,865			9,028
Interest expense, other		9,702			11,130
Other income		28			17
Income from continuing operations before taxes		35,424			30,993
Income taxes		13,171			11,622
Income from continuing operations		22,253			19,371
Discontinued operations:
Loss from operations and the sale of discontinued franchises		(248	)		(3,615	)
Income tax benefit		180			1,356
Loss from discontinued operations		(68	)		(2,259	)
Net income	$	22,185		$	17,112
Diluted:
Weighted average common shares outstanding		45,375			45,460
Income per share from continuing operations	$	0.51		$	0.45
Loss per share from discontinued operations	$	0.00		$	(0.05	)
Net income per share	$	0.51		$	0.40
Gross Margin Data:
Retail new vehicles		7.6	%		7.5	%
Fleet vehicles		3.0	%		2.9	%
Total new vehicles		7.3	%		7.1	%
Used vehicles retail		11.1	%		10.9	%
Total vehicles retail		8.1	%		8.0	%
Parts, service and collision repair		48.6	%		48.5	%
Finance and insurance		100.0	%		100.0	%
Overall gross margin		15.8	%		15.7	%
SG&A Expenses:
Personnel		126,373			134,367
Advertising		13,458			15,774
Facility rent		19,311			22,643
Other		51,387			59,341
Total		210,529			232,125
Unit Data:
New retail units		31,115			32,481
Fleet units		3,081			3,649
Total new units		34,196			36,130
Used units		17,036			17,334
Total units retailed		51,232			53,464
Wholesale units		13,917			14,264
Average price per unit:
New retail vehicles		29,718			30,686
Fleet vehicles		22,864			22,652
Total new vehicles		29,101			29,875
Used vehicles		16,768			17,645
Wholesale vehicles		7,983			8,853
Other Data:
Net cash used in operating activities	$	(2,234	)	$	(15,515	)
Floorplan assistance (continuing operations)	$	8,857		$	8,809
Same store revenue percentage changes:
New retail					1.0	%
Fleet					18.0	%
Total new					2.2	%
Used					-0.5	%
Parts, service and collision repair					0.9	%
Finance, insurance and other					2.7	%
Total					1.7	%

Balance Sheets:

	12/31/2004			3/31/2005
ASSETS
Current Assets:
Cash	$	9,991		$	5,974
Receivables, net		357,403			330,764
Inventories		1,095,057			1,132,568
Assets held for sale		105,100			110,210
Other current assets		23,992			27,591
Total current assets		1,591,543			1,607,107
Property and Equipment, Net		134,490			139,344
Goodwill, Net		1,056,924			1,065,003
Other Intangibles, Net		84,777			87,206
Other Assets		33,877			35,981
TOTAL ASSETS	$	2,901,611		$	2,934,641
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Notes payable - floor plan	$	1,050,858		$	1,050,896
Trade accounts payable		88,616			87,466
Accrued interest		15,421			12,067
Other accrued liabilities		175,510			157,383
Current maturities of long-term debt		2,970			3,016
Total current liabilities		1,333,375			1,310,828
LONG-TERM DEBT		668,826			707,556
OTHER LONG-TERM LIABILITIES		28,888			31,299
DEFERRED INCOME TAXES		100,835			101,256
STOCKHOLDERS’ EQUITY
Class A common stock		397			398
Class B common stock		121			121
Paid-in capital		441,503			443,970
Retained earnings		470,663			482,736
Accumulated other comprehensive loss		(1,228	)		(569	)
Deferred compensation related to restricted stock		(3,408	)		(3,089	)
Treasury stock, at cost		(138,361	)		(139,865	)
Total stockholders’ equity		769,687			783,702
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,901,611		$	2,934,641
Balance Sheet Data:
Current Ratio		1.19			1.23
Debt to Total Capital, Net of Cash		46.2	%		47.3	%
LTM Return on Stockholders’ Equity		11.7	%		10.7	%