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): October 30, 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 October 30, 2007, we issued a press release announcing results for our fiscal quarter and nine month period ended September 30, 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 October 30, 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 October 30, 2007
99.2	Earnings call presentation materials
99.3	Press release of Sonic Automotive, Inc. dated October 30, 2007

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: October 30, 2007

2

INDEX TO EXHIBITS

Exhibit No.	Description
99.1	Press release of Sonic Automotive, Inc. dated October 30, 2007
99.2	Earnings call presentation materials
99.3	Press release of Sonic Automotive, Inc. dated October 30, 2007

3

EX-99.1

Exhibit 99.1

Sonic Automotive, Inc. Operating Initiatives Continue Their Positive Impact on Results;

Earnings up 9.4%

CHARLOTTE, N.C. – October 30, 2007 – Sonic Automotive, Inc. (NYSE: SAH), a leader in automotive retailing, today announced that third quarter 2007 earnings from continuing operations were $31.8 million, or $0.70 per diluted share, compared to $29.0 million, or $0.66 per diluted share, in the prior year period.

“In a volatile new vehicle sales environment, we continue to demonstrate the validity and flexibility of our business model,” said President and Chief Strategic Officer, B. Scott Smith. “Our focus on the higher-margin areas of our business continues to drive both revenue and gross profit growth. Our same store used vehicle revenues were up over 11% compared to the third quarter of last year along with continued growth in our parts, service and F&I departments. These strategic operating initiatives, coupled with further reductions in our SG&A expenses as a percentage of gross profit, resulted in a very strong quarter for us. We expect the benefits of these strategies to continue and, as a result, we are reaffirming our full year 2007 earnings per share from continuing operations target of $2.50 to $2.60.”

Sonic’s Board of Directors has authorized an additional $40 million to be used in the Company’s ongoing share repurchase program. Scott Smith said, “We were able to take advantage of both the proceeds from the sale of our Cornerstone subsidiary and the relatively low stock price to significantly increase our share repurchase activity during the third quarter without materially impacting our overall leverage structure. We will continue to execute this program in conjunction with our stated objectives of profitable acquisition growth and managing the Company’s capital structure.”

Presentation materials for the Company’s earnings conference call at 11:00 A.M. (Eastern) on October 30, 2007 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 screen.

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

A live audio of the conference call will be accessible to the public 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 (domestic) or (706) 645-9291 (international), conference call ID # 20685101.

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 174 franchises and 36 collision repair centers. Sonic can be reached on the Web at www.sonicautomotive.com.

Included herein are forward-looking statements, including statements with respect to anticipated benefits of our operating strategy, anticipated earnings per share from continuing operations and potential future share repurchases. 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 quarterly report on Form 10-Q for the quarter ended June 30, 2007. 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)

	Third Quarter Ended						Nine Months Ended
	9/30/2007			9/30/2006			9/30/2007			9/30/2006
Revenues
New retail vehicles	$	1,242,597		$	1,190,843		$	3,482,359		$	3,396,784
Fleet vehicles		99,606			88,831			289,361			272,462
Used vehicles		376,373			325,182			1,073,000			980,882
Wholesale vehicles		108,787			127,324			331,400			391,204
Total vehicles		1,827,363			1,732,180			5,176,120			5,041,332
Parts, service and collision repair		303,313			283,969			889,669			838,156
Finance, insurance and other		55,199			51,681			157,880			142,331
Total revenues		2,185,875			2,067,830			6,223,669			6,021,819
Total gross profit		334,953			315,978			969,207			923,236
SG&A expenses		249,101			236,461			729,749			718,117
Depreciation		5,684			5,638			20,146			17,263
Operating income		80,168			73,879			219,312			187,856
Interest expense, floor plan		17,271			15,435			50,928			43,682
Interest expense, other		10,877			10,067			28,429			30,635
Other (expense) / income		(1	)		20			94			(646	)
Income from continuing operations before taxes		52,019			48,397			140,049			112,893
Income taxes		20,263			19,367			54,619			44,977
Income from continuing operations		31,756			29,030			85,430			67,916
Discontinued operations:
Loss from operations and the sale of discontinued franchises		(8,070	)		(676	)		(18,520	)		(15,800	)
Income tax benefit		2,421			254			5,556			5,762
Loss from discontinued operations		(5,649	)		(422	)		(12,964	)		(10,038	)
Net income	$	26,107		$	28,608		$	72,466		$	57,878
Diluted:
Weighted average common shares outstanding		46,978			45,682			47,631			46,051
Earnings per share from continuing operations	$	0.70		$	0.66		$	1.86		$	1.54
Loss per share from discontinued operations		($0.12	)		($0.01	)		($0.27	)		($0.21	)
Earnings per share	$	0.58		$	0.65		$	1.59		$	1.33
Gross Margin Data (Continuing Operations):
Retail new vehicles		7.4	%		7.6	%		7.4	%		7.7	%
Fleet vehicles		1.5	%		2.4	%		2.1	%		2.7	%
Total new vehicles		7.0	%		7.3	%		7.0	%		7.3	%
Used vehicles retail		8.8	%		9.4	%		9.3	%		9.7	%
Total vehicles retail		7.4	%		7.7	%		7.5	%		7.8	%
Wholesale vehicles		(1.0	%)		(1.0	%)		(0.3	%)		(0.4	%)
Parts, service and collision repair		50.7	%		50.0	%		50.6	%		50.0	%
Finance, insurance and other		100.0	%		100.0	%		100.0	%		100.0	%
Overall gross margin		15.3	%		15.3	%		15.6	%		15.3	%
SG&A Expenses (Continuing Operations):
Personnel	$	138,823		$	135,803		$	414,032		$	411,629
Advertising		17,757			16,760			49,925			47,576
Facility rent		25,967			24,898			77,839			74,454
Other		66,554			59,000			187,953			184,458
Total	$	249,101		$	236,461		$	729,749		$	718,117
SG&A Expenses as % of Gross Profit
Personnel		41.4	%		43.0	%		42.7	%		44.6	%
Advertising		5.3	%		5.3	%		5.2	%		5.2	%
Facility rent		7.8	%		7.9	%		8.0	%		8.1	%
Other		19.9	%		18.6	%		19.4	%		19.9	%
Total		74.4	%		74.8	%		75.3	%		77.8	%
Operating Margin %		3.7	%		3.6	%		3.5	%		3.1	%

	Third Quarter Ended						Nine Months Ended
	9/30/2007			9/30/2006			9/30/2007			9/30/2006
Unit Data (Continuing Operations):
New retail units		37,156			37,653			104,317			106,270
Fleet units		4,312			3,974			12,724			12,388
Used units		18,778			17,334			54,040			51,281
Wholesale units		12,105			14,390			36,694			41,688
Average price per unit:
New retail vehicles	$	33,443		$	31,627		$	33,382		$	31,964
Fleet vehicles		23,100			22,353			22,741			21,994
Used vehicles		20,043			18,760			19,856			19,128
Wholesale vehicles		8,987			8,848			9,031			9,384
Other Data:
Same store revenue percentage changes:
New retail		(1.8	%)					(0.5	%)
Fleet		12.1	%					5.2	%
Total New Vehicles		(0.8	%)					(0.1	%)
Used		11.1	%					6.8	%
Parts, service and collision repair		2.3	%					3.3	%
Finance, insurance and other		3.4	%					9.1	%
Total		0.7	%					0.8	%
Balance Sheet Data:
	9/30/2007			12/31/2006
ASSETS
Current Assets:
Cash and cash equivalents	$	15,687		$	12,696
Receivables, net		326,444			385,849
Inventories		1,048,059			991,984
Assets held for sale		109,002			160,571
Construction in progress expected to be sold		5,673			26,198
Other current assets		31,780			35,834
Total current assets		1,536,645			1,613,132
Property and Equipment, Net		280,017			220,551
Goodwill, Net		1,274,443			1,155,428
Other Intangibles, Net		112,279			94,136
Other Assets		26,747			41,517
TOTAL ASSETS	$	3,230,131		$	3,124,764
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Floor plan notes payable	$	1,059,133		$	1,064,458
Other current liabilities		281,047			268,236
Liabilities associated with assets held for sale		64,116			96,292
Current maturities of long-term debt		3,169			2,707
Total current liabilities		1,407,465			1,431,693
LONG-TERM DEBT		687,493			598,627
OTHER LONG-TERM LIABILITIES		199,750			190,604
STOCKHOLDERS’ EQUITY		935,423			903,840
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	3,230,131		$	3,124,764
Balance Sheet Ratios:
Current Ratio		1.09			1.13
Debt to Total Capital, Net of Cash		41.9	%		39.4	%

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-Q for the quarter ended June 30, 2007.

Sonic Automotive

Third Quarter 2007

Earnings Review

October 30, 2007

The Quarter in Review

•

Profit from continuing operations up 9.4%

•

Total revenue up 5.7%; Gross up 6.0%

–

Same store used vehicle revenue up 11.1%

–

F&I per unit up 5.0%

•

Operating margin improved 10bps to 3.7%

•

SG&A 74.4% -

down 40bps from Q3 06

1

EXECUTION OF KEY INTIATIVES CONTINUES

Used vehicles, F&I, fixed operations, cost management

2007

2006

Better/

(Worse)

(amounts in millions, except per share data)

Revenue

$2,186

$2,068

$118

Gross Profit

$335

$316

$19

   – Margin

15.3%

15.3%

Operating Profit

   – Amount

$80

$74

$6

   – Margin

3.7%

3.6%

Net Income

   – Continuing Operations

$31.8

$29.0

$2.8

   – Total Operations

26.1

28.6

(2.5)

EPS

   – Continuing Operations

$0.70

$0.66

$0.04

   – Total Operations

0.58

0.65

(0.07)

Q3

Performance Overview

2

5.7%

6.0%

8.5%

10bps

9.4%

(8.7%)

6.0%

(10.8%)

$0.60

$0.61

$0.62

$0.63

$0.64

$0.65

$0.66

$0.67

$0.68

$0.69

$0.70

($0.03)

$0.66

$0.70

($0.02)

$0.09

Performance Overview

EPS

3

Performance Overview

Same Store Revenue Growth

Execution in Motion

Execution in Motion

Same store retail used volume up 5.4%

Fixed Operations same store customer pay revenue up 5.4% (up 9.8% in total)

F&I per unit up $51 on a same store basis

(0.8%)

11.1%

2.3%

3.4%

1.8%

(15.8%)

0.7%

New

Used

Fixed Operations

F&I

Sub Total

Wholesale

Total

4

Used Vehicle Performance

Execution in Motion

Trade Desk

Phase II

Phase III

Web-Tail

Maximize Margin

Volume Growth

Increased Profitability

Right inventory, Right Location, Right Price

On-line

Branding

Virtual Lot

Sonic “Auto

Pilot”

Optimizing

Inventory

Market Shift to

Consumer

Control

•7 Quarters of Same store

volume improvement

•Net Margin up

•CPO % stable

Basic Process rollout (best practices)

Less Wholesale/Keep more trades

Common Technology (S.I.M.S)

5

Inventory

Control

Technology

Introduction

Phase I

SG&A Expenses

Execution in Motion

7.9%

66.9%

66.6%

7.8%

Q3 2007

Q3 2006

All Other SG&A

Rent

74.4%

74.8%

40 bps

6

28.6% of Total 

Revenue

Same store

used, F&I up

New Margin

compression

remains a

concern

7.4% of Total Revenue

Impacted by construction

at our large Toyota

dealership

2.6% Total Revenue

Unemployment Rate (as of Sep) 7.5%

Excluding Michigan, Sonic Cadillac

new unit volume performed better

than the Industry

Geographic Review

24.9% of Total Revenue

Overall good performance

14.8% of Total

Revenue

Improvement in

all areas

Difficult Sales Environment

Stable Sales Environment

7

Inventory Management

Days Supply

Sep-07

Sep 07

Industry

New Vehicles

Domestic

(excluding Cadillac)

51.9

70.3

Luxury (

including Cadillac)

41.3

40.6

Import

40.9

45.6

Overall

43.6

57.3

Used Vehicles

37.0

8

Debt to Capital Ratio

(1)

(1) –

Net of Cash

35 -40%

39.1%

39.4%

41.2%

41.9%

Q4 2006

Q1 2007

Q2 2007

Q3 2007

Target

9

•Long Beach BMW/Mini

•Two mortgages in place; 

Two more to close in Q4

•CAC sale

•Share repurchases

Q4 Outlook

•

Generally stable operating environment

–

New vehicle softness offset by other opportunities

–

Stable margins and expense levels

–

Strength in certain markets and brands will be offset by softness in others

•

Reaffirming

EPS

target

to

$2.50

–

$2.60

–

Includes impact of closed acquisitions

–

Continued execution of key initiatives and expense control

•

Increased share repurchase authorization by $40 million

–

$33 million repurchased in the quarter; $43 million year to date

–

Prudent and opportunistic purchases; continue to pick away at dilution

10

Summary

•

Top priority -

Execution of key initiatives

•

Executing disciplined and prudent acquisition

strategy

•

Strategy is sound; team focused on delivering

results

11

Reaffirming Full Year Guidance                

$2.50 -

$2.60

EX-99.3

Exhibit 99.3

SONIC AUTOMOTIVE, INC. DECLARES QUARTERLY CASH DIVIDEND

CHARLOTTE, N.C. – October 30, 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 December 15, 2007. The dividend will be payable January 15, 2008.

Sonic Automotive, Inc., a Fortune 300 company based in Charlotte, N.C., is one of the largest automotive retailers in the United States operating 174 franchises and 36 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 quarterly report on Form 10-Q for the quarter ended June 30, 2007. The Company does not undertake any obligation to update forward-looking information.