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): May 1, 2007

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 May 1, 2007, we issued a press release announcing results for our fiscal quarter ended March 31, 2007.

A copy of the press release is attached hereto as Exhibit 99.1. A copy of the earnings call presentation materials is attached hereto as Exhibit 99.2.

Item 7.01. Regulation FD Disclosure.

On May 1, 2007, we issued a press release announcing the approval of a quarterly cash dividend.

A copy of the press release is attached hereto as Exhibit 99.3.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

99.1	Press release of Sonic Automotive, Inc. dated May 1, 2007
99.2	Earnings call presentation materials
99.3	Press release of Sonic Automotive, Inc. dated May 1, 2007

2

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: May 1, 2007

3

INDEX TO EXHIBITS

Exhibit No.	Description
99.1	Press release of Sonic Automotive, Inc. dated May 1, 2007
99.2	Earnings call presentation materials
99.3	Press release of Sonic Automotive, Inc. dated May 1, 2007

4

EX-99.1

Exhibit 99.1

Sonic Automotive, Inc. Reports First Quarter Continuing Operations Earnings Up 10%

CHARLOTTE, N.C. – May 1, 2007 – Sonic Automotive, Inc. (NYSE: SAH), a leader in automotive retailing, today reported that its 2007 first quarter earnings from continuing operations were $23.7 million, an increase of 10% from the $21.5 million earned in the first quarter of 2006. Diluted earnings per share from continuing operations was $0.52 for the quarter compared to $0.49 a year ago.

Total revenue for the first quarter of 2007 increased 3.6% with same store revenue up 2.2% over the prior year quarter. On a same store basis compared to the same quarter last year, new vehicle retail revenues were up 2.3%, used vehicle retail revenues were up 5.1%, fixed operations revenue was up 5.4% and finance and insurance revenues were up 6.3%. Luxury and import brands represented 83% of total revenues for the quarter.

B. Scott Smith, the Company’s President said, “Our results this quarter reflect the continued execution of our key operating initiatives. Our same store sales growth in the higher-margin segments of our business demonstrate the effectiveness of our used vehicle merchandising program and our electronic F&I menu rollout along with our core strength in the parts and service business. In addition to these revenue improvements, we continue to focus on our expense structure and ended the quarter with SG&A as a percentage of gross profit at 77.4%, or a 90 basis improvement, compared to the same quarter last year. We remain comfortable with our 2007 continuing operations EPS target of $2.48 to $2.58 per diluted share.”

Presentation materials for the Company’s May 1, 2007 earnings conference call can be accessed on the Company’s website at www.sonicautomotive.com by clicking on the “For Investors” tab and choosing “Webcasts & Presentations” on the left side of the monitor.

To access the live broadcast of the call over the Internet go to: www.ccbn.com or www.sonicautomotive.com

A live audio of the call will be accessible to the public at 11:00 A.M. EST by calling (877) 791-3416. International callers dial (706) 643-0958. Callers should dial in approximately 10 minutes before the call begins. A conference call replay will be available one hour following the call for seven days and can be accessed by calling: 800-642-1687, Conference ID: 5333288, International callers dial (706) 645-9291.

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 175 franchises and 38 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 diluted earnings per share from continuing operations. 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 annual report on Form 10-K for the year ended December 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
	3/31/2007			3/31/2006
Revenues
Retail new vehicles	$	1,075,551		$	1,037,301
Fleet vehicles		88,971			86,485
New vehicles		1,164,522			1,123,786
Used vehicles		331,032			310,208
Wholesale vehicles		115,156			132,476
Total vehicles		1,610,710			1,566,470
Parts, service and collision repair		294,852			273,728
Finance, insurance and other		48,846			45,879
Total revenues		1,954,408			1,886,077
Total gross profit		310,463			298,069
SG&A expenses		240,288			233,451
Depreciation		5,794			4,818
Operating income		64,381			59,800
Interest expense, floor plan		16,291			12,297
Interest expense, other		9,277			11,949
Other (expense) / income		6			(665	)
Income from continuing operations before taxes		38,819			34,889
Income taxes		15,140			13,357
Income from continuing operations		23,679			21,532
Discontinued operations:
Loss from operations and the sale of discontinued franchises		(5,269	)		(7,171	)
Income tax benefit		1,581			2,721
Loss from discontinued operations		(3,688	)		(4,450	)
Net income	$	19,991		$	17,082
Diluted:
Weighted average common shares outstanding		47,938			46,205
Earnings per share from continuing operations		$0.52			$0.49
Loss per share from discontinued operations		($0.08)			($0.10)
Earnings per share		$0.44			$0.39
Gross Margin Data (Continuing Operations):
Retail new vehicles		7.3	%		7.6	%
Fleet vehicles		2.2	%		3.2	%
Total new vehicles		7.0	%		7.3	%
Used vehicles		10.3	%		10.8	%
Total vehicles		7.2	%		7.4	%
Parts, service and collision repair		49.6	%		49.7	%
Finance, insurance and other		100.0	%		100.0	%
Overall gross margin		15.9	%		15.8	%
SG&A Expenses (Continuing Operations):
Personnel	$	136,105		$	136,785
Advertising		15,566			14,491
Facility rent		26,059			23,712
Other		62,558			58,463
Total	$	240,288		$	233,451
Unit Data (Continuing Operations):
New retail units		32,143			31,700
Fleet units		3,745			3,944
New units		35,888			35,644
Used units		17,008			16,144
Total units retailed		52,896			51,788
Wholesale units		12,861			13,377
Average price per unit:
New retail vehicles		33,461			32,722
Fleet vehicles		23,757			21,928
Total new vehicles		32,449			31,528
Used vehicles		19,463			19,215
Wholesale vehicles		8,954			9,903
Other Data:
Same store revenue percentage changes:
New retail		2.3	%
Fleet		0.4	%
New total		2.1	%
Used		5.1	%
Parts, service and collision repair		5.4	%
Finance, insurance and other		6.3	%
Total		2.2	%

Balance Sheet Data:

	3/31/2007 (1)			12/31/2006
ASSETS
Current Assets:
Cash and cash equivalents	$	14,001		$	12,696
Receivables, net		334,097			385,849
Inventories		1,069,693			991,984
Assets held for sale		152,340			160,571
Construction in progress and land expected to be sold in sale-leaseback transactions		32,294			26,198
Other current assets		41,825			35,834
Total current assets		1,644,250			1,613,132
Property and Equipment, Net		230,639			220,551
Goodwill, Net		1,162,562			1,155,428
Other Intangibles, Net		97,770			94,136
Other Assets		44,774			41,517
TOTAL ASSETS	$	3,179,995		$	3,124,764
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Floor plan notes payable - trade	$	245,163		$	377,943
Floor plan notes payable - non-trade		852,085			686,515
Trade accounts payable		71,063			68,016
Accrued interest		15,980			19,336
Other accrued liabilities (1)		181,476			180,884
Liabilities associated with assets held for sale - trade		55,309			54,229
Liabilities associated with assets held for sale - non-trade		38,908			42,063
Current maturities of long-term debt		2,696			2,707
Total current liabilities		1,462,680			1,431,693
LONG-TERM DEBT		601,272			598,627
OTHER LONG-TERM LIABILITIES (1)		38,548			39,570
DEFERRED INCOME TAXES		149,918			151,034
STOCKHOLDERS’ EQUITY (1)		927,577			903,840
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	3,179,995		$	3,124,764
Balance Sheet Ratios:
Current Ratio (1)		1.12			1.13
Debt to Total Capital, Net of Cash (1)		38.9	%		39.4	%

(1) - Excludes the impact of the adoption of FIN 48

EX-99.2

Exhibit 99.2

Cautionary Notice Regarding

Forward-Looking Statements

•

This presentation contains statements that constitute “forward-looking

statements”

within the meaning of Section 27A of the Securities Act of 1933

and

Section 21E of the Securities Exchange Act of 1934.

•

These forward-looking statements are not historical facts, but only predictions

by our company and/or our company’s management.

•

These statements generally can be identified by lead-in words such as “believe,”

“expect”

“anticipate,”

“intend,”

“plan,”

“foresee”

and other similar words. 

Similarly, statements that describe our company’s objectives, plans or goals are

also forward-looking statements.

•

You are cautioned that these forward-looking statements are not guarantees of

future performance and involve risks and uncertainties, and that

actual results

may differ materially from those projected in the forward-looking statements as

a results of various factors. Among others, factors that could materially

adversely affect actual results and performance include those risk factors that are

listed in Sonic Automotive’s Form 10-K for the year ended December 31, 2006.

Sonic Automotive

First Quarter 2007

Earnings Review

May 1, 2007

The Quarter in Review

•

Earnings from Continuing Operations up

10.0%

•

Fixed Operations, Used Vehicles and F&I

driving top line and profit improvements

•

SG&A as a percent of gross profit

improved 90 basis points to 77.4%

•

Operating margin improved 10bps to

3.3%.

1

Strategy in Motion

•

Used Vehicle (Champion) process

•

Standard F&I menu

•

Fixed Operations

•

Single DMS

•

Digital Marketing

•

Growth through prudent acquisitions

•

ASI + CSI + MSI = ROI

2

Financial Performance

(amounts in millions, except per share data)

2007

2006

Better/

(Worse)

Revenue

$1,954

$1,886

$68

Gross Profit

$310

$298

$12

Operating Profit

   – Amount

$64

$60

$4

   – Margin

3.3%

3.2%

Net Income

   – Continuing Operations

$23.7

$21.5

$2.2

   – Total Operations

20.0

17.1

2.9

EPS

   – Continuing Operations

$0.52

$0.49

$0.03

   – Total Operations

0.44

0.39

0.05

Q1

Up

4.2%

Up

3.6%

Up

7.7%

Up

10.0%

3

Same Store Revenue Growth

•

Solid performance across all business segments

•

Used and F&I processes driving improved performance in both areas

•

Service Capacity investment contributing to growth

2.1%

5.1%

5.4%

6.3%

3.3%

(13.8%)

2.2%

New

Used

Fixed

Operations

F&I

Sub Total

Wholesale

Total

4

Used Vehicles

Process in Motion

5

Q1 07

Q1 06

Change

Champion Stores

Used to new ratio

0.53

0.49

0.04

Used retail volume

12,405

11,355

9.2%

Total Sonic

Used to new ratio

0.53

0.51

0.02

Used retail volume

17,008

16,144

5.4%

Memo:

Used to New Ratio

California

0.33

0.32

0.01

Total Luxury

0.56

0.50

0.06

Progress

Used Vehicles

6

Margin

Gross Per

Unit

Domestic (excl. Cadillac)

11.9%

$1,846

Luxury Imports (incl. Cadillac)

8.6%

$2,311

Other Imports

12.5%

$1,772

Total

10.3%

$1,995

Brand Mix -

Used Revenue

18.4%

54.1%

27.5%

Domestic (excl. Cadillac)

Luxury Imports (incl. Cadillac)

Other Imports

F&I

Process in Motion

7

F&I Per Unit

$959

$969

$994

$940

$950

$960

$970

$980

$990

$1,000

Q1 2006

Q4 2006

Q1 2007

$35

Fixed Operations

Process in Motion

•

Revenue from Fixed Operations reached a sector

leading 15.1% of Total Revenue in Q1.

•

Total Customer Pay revenue grew over 11%;

Gross Profit increased nearly 12%. 

•

A total of 102 incremental stalls were added in

2006;  138 more are planned for 2007. 

8

Spend money where you make money

SG&A Expenses as % of Gross Profit

8.0%

70.3%

69.0%

8.4%

Q1 2007

Q1 2006

All Other SG&A

Rent

78.3%

77.4%

40 bps

130 bps

9

87.9%

86.8%

Fixed Absorption

Inventory Management

Days Supply

Mar-07

Mar-06

Industry

New Vehicles

Domestic (excluding Cadillac)

61

61

80

Luxury (including Cadillac)

49

48

53

Other Imports

53

48

51

Overall

54

53

67

Used Vehicles

37

40

Parts

34

35

10

Debt to Capital Ratio*

39.4%

38.9%

Q1 2007

Q4 2006

50 bps

*Net of cash and excludes impact of FIN 48

11

Portfolio Enrichment

Percent of Total Revenue

18%

17%

51%

52%

31%

31%

Q1 2006

Q1 2007

Domestic

Luxury

Other Imports

12

100%

100%

Luxury and Import at 83%

Summary

•

Execution of key initiatives continues

–

Used vehicles, fixed operations, and F&I

•

Executing disciplined and prudent acquisition

strategy –

targeting 10%-15% of revenue

•

Strategy is sound; team focused on delivering

results

•

Top priority: Improved profits and cash flow

13

Re-affirming Full Year Guidance

$2.48 -

$2.58

EX-99.3

Exhibit 99.3

SONIC AUTOMOTIVE, INC. DECLARES QUARTERLY CASH DIVIDEND

CHARLOTTE, N.C. – May 1, 2007 – Sonic Automotive, Inc. (NYSE: SAH), a leader in automotive retailing, today announced that its Board of Directors approved a quarterly dividend of $0.12 per share payable in cash for shareholders of record on June 15, 2007. The dividend will be payable July 15, 2007.

Sonic Automotive, Inc., a Fortune 300 company based in Charlotte, N.C., is one of the largest automotive retailers in the United States operating 175 franchises and 38 collision repair centers. Sonic can be reached on the Web at www.sonicautomotive.com.

Included herein is a forward-looking statement pertaining to an anticipated cash dividend to shareholders. There are many factors that affect management’s views about future events and trends of the Company’s business. These factors involve risks 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 annual report on Form 10-K for the year ended December 31, 2006. The Company does not undertake any obligation to update forward-looking information.