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): February 26, 2008

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 February 26, 2008, we issued a press release announcing results for our fiscal quarter and fiscal year ended December 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 February 26, 2008, 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 February 26, 2008
99.2	Earnings call presentation materials
99.3	Press release of Sonic Automotive, Inc. dated February 26, 2008

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: February 26, 2008

3

INDEX TO EXHIBITS

Exhibit No.	Description
99.1	Press release of Sonic Automotive, Inc. dated February 26, 2008
99.2	Earnings call presentation materials
99.3	Press release of Sonic Automotive, Inc. dated February 26, 2008

4

EX-99.1

Exhibit 99.1

Sonic Automotive, Inc. Continues Earnings Improvement Trend With Strong Fourth

Quarter Results

CHARLOTTE, N.C. – February 26, 2008 – Sonic Automotive, Inc. (NYSE: SAH), a leader in automotive retailing, today announced that fourth quarter 2007 earnings from continuing operations were $29.4 million, or $0.68 per diluted share, compared to $28.9 million, or $0.64 per diluted share, in the prior year period.

“Our key operating initiatives continue to drive our results even in a challenging new vehicle sales environment,” said President and Chief Strategic Officer, B. Scott Smith. “Continued implementation of our used vehicle merchandising strategy drove same store used vehicle revenue up 19.3% compared to the fourth quarter of last year. Our brand and geographic diversity along with our initiatives in the higher margin segments of our business continue to provide us with the flexibility to respond to changing market conditions.”

Commenting on 2008, Mr. Smith said, “We expect to see continued softness in new vehicle sales during 2008 which will be largely offset by growth in our used vehicle and parts and service revenue. In addition, as part of our ongoing portfolio enrichment and capital allocation strategies, we are considering changes to our group of stores held for sale, including the potential sale of a number of profitable, well-managed stores that no longer fit our business model or which require capital expenditures that do not make sense for us. This change, when enacted, will reduce earnings from continuing operations in 2008 by approximately $0.09 as some profitable stores may now be included in our discontinued operations group. This potential impact has been included in our 2008 earnings per share from continuing operations target of $2.35 – $2.50. A full update on our business and our 2008 earnings target will be provided on our scheduled conference call.”

Presentation materials for the Company’s earnings conference call at 11:00 A.M. (Eastern) on February 26, 2008 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 # 35931851.

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 169 franchises and 34 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, new vehicle market conditions, used vehicle revenue growth, parts and service revenue growth, dealership disposition activity and 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 quarterly report on Form 10-Q for the quarter ended September 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)

	Three Months Ended						Twelve Months Ended
	12/31/2007			12/31/2006			12/31/2007			12/31/2006
Revenues
New retail vehicles	$	1,193,897		$	1,154,984		$	4,676,256		$	4,551,768
Fleet vehicles		90,863			74,277			380,224			346,739
Used vehicles		376,537			301,005			1,449,537			1,281,887
Wholesale vehicles		96,729			105,327			428,129			496,531
Total vehicles		1,758,026			1,635,593			6,934,146			6,676,925
Parts, service and collision repair		301,678			280,210			1,191,347			1,118,366
Finance, insurance and other		53,560			47,457			211,440			189,788
Total revenues		2,113,264			1,963,260			8,336,933			7,985,079
Total gross profit		322,378			305,055			1,291,585			1,228,291
SG&A expenses		237,957			224,773			967,706			942,890
Depreciation		7,160			5,985			27,306			23,248
Operating income		77,261			74,297			296,573			262,153
Interest expense, floor plan		16,710			15,898			67,638			59,580
Interest expense, other		11,366			9,027			39,795			39,662
Other (expense) / income		(21	)		57			73			(589	)
Income from continuing operations before taxes		49,164			49,429			189,213			162,322
Income taxes		19,758			20,513			74,377			65,490
Income from continuing operations		29,406			28,916			114,836			96,832
Discontinued operations:
Loss from operations and the sale of discontinued franchises		(8,065	)		(7,254	)		(26,585	)		(23,054	)
Income tax benefit		1,695			1,577			7,251			7,339
Loss from discontinued operations		(6,370	)		(5,677	)		(19,334	)		(15,715	)
Net income	$	23,036		$	23,239		$	95,502		$	81,117
Diluted:
Weighted average common shares outstanding		44,894			46,902			46,941			46,265
Earnings per share from continuing operations	$	0.68		$	0.64		$	2.54		$	2.18
Loss per share from discontinued operations	$	(0.14	)	$	(0.12	)	$	(0.41	)	$	(0.33	)
Earnings per share	$	0.54		$	0.52		$	2.13		$	1.85
Gross Margin Data (Continuing Operations):
Retail new vehicles		7.2	%		7.6	%		7.3	%		7.7	%
Fleet vehicles		2.1	%		2.1	%		2.1	%		2.6	%
Total new vehicles		6.8	%		7.3	%		6.9	%		7.3	%
Used vehicles retail		8.2	%		9.1	%		9.0	%		9.6	%
Total vehicles retail		7.2	%		7.7	%		7.4	%		7.8	%
Wholesale vehicles		(1.8	)%		(1.0	)%		(0.7	)%		(0.6	)%
Parts, service and collision repair		50.3	%		50.5	%		50.5	%		50.1	%
Finance, insurance and other		100.0	%		100.0	%		100.0	%		100.0	%
Overall gross margin		15.3	%		15.5	%		15.5	%		15.4	%
SG&A Expenses (Continuing Operations):
Personnel	$	131,530		$	128,505		$	545,562		$	540,134
Advertising		18,054			15,990			67,979			63,566
Facility rent		26,599			24,413			104,438			98,867
Other		61,774			55,865			249,727			240,323
Total	$	237,957		$	224,773		$	967,706		$	942,890
SG&A Expenses as % of Gross Profit
Personnel		40.8	%		42.1	%		42.2	%		44.0	%
Advertising		5.6	%		5.2	%		5.3	%		5.2	%
Facility rent		8.3	%		8.0	%		8.1	%		8.0	%
Other		19.2	%		18.2	%		19.3	%		19.5	%
Total		73.8	%		73.7	%		74.9	%		76.8	%
Operating Margin %		3.7	%		3.8	%		3.6	%		3.3	%

	Three Months Ended						Twelve Months Ended
	12/31/2007			12/31/2006			12/31/2007			12/31/2006
Unit Data (Continuing Operations):
New retail units		34,054			33,633			138,371			139,903
Fleet units		3,509			3,264			16,233			15,652
Used units		18,103			15,446			72,143			66,727
Wholesale units		10,851			12,070			47,545			53,758
Average price per unit:
New retail vehicles	$	35,059		$	34,341		$	33,795		$	32,535
Fleet vehicles		25,894			22,756			23,423			22,153
Used vehicles		20,800			19,488			20,093			19,211
Wholesale vehicles		8,914			8,726			9,005			9,236
Other Data:
Same store revenue percentage changes:
New retail		(3.0	)%					(1.1	)%
Fleet		3.8	%					4.9	%
Total New Vehicles		(2.6	)%					(0.7	)%
Used		19.3	%					9.8	%
Parts, service and collision repair		2.3	%					3.0	%
Finance, insurance and other		8.9	%					9.1	%
Total		1.3	%					0.9	%
Balance Sheet Data:
	12/31/2007			12/31/2006
ASSETS
Current Assets:
Cash and cash equivalents	$	16,514		$	12,696
Receivables, net		347,309			385,849
Inventories		1,093,017			991,984
Assets held for sale		87,342			160,571
Construction in progress expected to be sold		6,421			26,198
Other current assets		29,458			35,834
Total current assets		1,580,061			1,613,132
Property and Equipment, Net		286,591			220,551
Goodwill, Net		1,276,074			1,155,428
Other Intangibles, Net		111,342			94,136
Other Assets		28,676			41,517
TOTAL ASSETS	$	3,282,744		$	3,124,764
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Floor plan notes payable	$	1,125,670		$	1,064,458
Other current liabilities		247,658			268,236
Liabilities associated with assets held for sale		48,592			96,292
Current maturities of long-term debt		4,197			2,707
Total current liabilities		1,426,117			1,431,693
LONG-TERM DEBT		697,800			598,627
OTHER LONG-TERM LIABILITIES		83,829			39,570
DEFERRED INCOME TAXES		144,170			151,034
STOCKHOLDERS’ EQUITY		930,828			903,840
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	3,282,744		$	3,124,764
Balance Sheet Ratios:
Current Ratio		1.11			1.13
Debt to Total Capital, Net of Cash		42.4	%		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

result

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 September 30, 2007.

Sonic Automotive

Fourth Quarter 2007

Earnings Review

February 26, 2008

Discussion Topics

1.

Corporate Culture, People and Vision

2.

“Strategy in Motion”

–

a look back at 2007

3.

2008 Strategic Focus

4.

Review Fourth Quarter 2007 Performance

5.

Questions

6.

Closing Comments

1

Corporate Culture

People

Vision

•

Buildings do not Sell Cars…People Do.

•

Take our People out of our Buildings, and

what do we have left? 

–

Nothing; except empty buildings

•

Our People are our Greatest Assets and we

are investing in them

•

We like to invest where we make money,

and that begins with our people

•

Develop and Promote From Within

•

First and Foremost, We are a Sales

Organization

•

75% Sales and 25% Cost Control

•

Nothing happens until we sell a car

•

We are committed to “Take the High Road”

2

“Strategy in Motion”

Used Vehicle Process

Standard F&I Menu

Fixed Operations

Single DMS

Digital Marketing

(In Progress)

Growth through Prudent Acquisitions

Customer and Associate Satisfaction

3

Consistent Execution of Strategic Initiatives

Results in FY EPS target attainment of $2.54

Strategic Focus --

Strategic Focus --

2008

2008

Develop

Associates

Well Run

Operations

Valued

Customers

Grow

the

Business

•Institutionalize Operational

Excellence

•Standardize & Improve

Sales & Marketing processes

•Leverage common systems

and centralize

•Deliver Industry Leading

Customer Experience

•Differentiate through target

based Marketing &

eCommerce Infrastructure

•Acquire, Develop, and

Retain Top Talent

•Launch Phase 1 of Best-

in-class automotive retail

training.

•Strengthen the Balance

Sheet

•Targeted Acquisitions &

disposals

•Optimize Cost Structure

•Strengthen the Balance

Sheet

•Targeted Acquisitions &

disposals

•Optimize Cost Structure

Sonic’s vision is to preserve the core automotive retail principles

that have driven its past success and at the same time

leverage the opportunities of scale.

4

The Quarter in Review

•

Operating Margin 3.7%

•

EPS up 6.3%

•

Total revenue up 7.6%; Gross up 5.7%

–

Same store used vehicle revenue up 19.3%

–

F&I per unit up 6.9%

•

Best in peer group SG&A

5

EXECUTION

OF

KEY

INTIATIVES

CONTINUES

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

Financial Performance

2007

2006

Better/

(Worse)

Revenue

$2,113

$1,963

$150

Gross Profit

$322

$305

$17

   – Margin

15.3%

15.5%

Operating Profit

   – Amount

$77

$74

$3

   – Margin

3.7%

3.8%

Net Income

   – Continuing Operations

$29.4

$28.9

$0.5

   – Total Operations

23.0

23.2

-0.2

EPS

   – Continuing Operations

$0.68

$0.64

$0.04

   – Total Operations

0.54

0.52

0.02

Q4

(amounts in millions, except per share data)

6

7.6%

5.7%

4.0%

1.7%

-0.9%

6.3%

3.8%

10bps

20bps

Financial Performance

(amounts in millions, except per share data)

2007

2006 (1)

Better/

(Worse)

Revenue

$8,337

$7,985

$352

Gross Profit

$1,291

$1,228

$63

   – Margin

15.5%

15.4%

Operating Profit

   – Amount

$296

$262

$34

   – Margin

3.6%

3.3%

Net Income

   – Continuing Operations

$114.8

$96.8

$18.0

   – Total Operations

95.5

81.1

14.4

EPS

   – Continuing Operations

$2.54

$2.18

$0.35

   – Total Operations

2.13

1.85

0.28

YTD

7

4.4%

5.2%

13.1%

18.6%

17.7%

16.0%

15.1%

30bps

10bps

(1) Includes Q2 2006 pretax charge of $27.6m.

Same Store Revenue Growth –

Q4

•

Focus on higher margin business more than offsets weaker new vehicle sales

•

Used retail sales up sharply, wholesale continues to decline

8

(2.6%)

19.3%

2.3%

8.9%

2.0%

(11.9%)

1.3%

New

Used

Fixed

Operations

F&I

Sub Total

Wholesale

Total

SG&A Expenses as % of Gross Profit

8.0%

67.3%

66.8%

65.7%

65.5%

8.0%

8.1%

8.3%

Q4 2007

Q4 2006

YTD 2007

YTD 2006

All Other SG&A

Rent

Q2 Charges

76.8%

73.7%

74.9%

73.8%

1.2%

9

Capitalization

10

57.6%

54.0%

60.6%

60.9%

58.8%

58.1%

40.7%

41.3%

40.6%

39.1%

39.4%

46.0%

2005

2006

Q1 2007

Q2 2007

Q3 2007

Q4 2007

Equity

Debt

Mortgages

Debt to Cap With Mortgages

41.2%

41.9%

42.4%

1.7%

Inventory Management

Days Supply

11

Dec-07

Dec 07

Industry

New Vehicles

   Domestic (excluding Cadillac)

62.1

69.4

   Luxury (including Cadillac)

43.6

37.2

   Import

48.9

52.7

   Overall

48.5

58.9

Used Vehicles

36.2

2008 Earnings Outlook

(Continuing Operations)

12

(1) Includes effect of same store sales, technology/training investment, and

floorplan interest improvements.  Excludes any 2008 acquisitions.

2007 Reported Results

$2.54

Changes in dealerships held for sale

(0.09)

Adjusted 2007 continuing ops EPS

$2.45

2008 Activity:

Operations (1)

(0.06)

-

0.09

Other Interest

(0.14)

Income Tax Rate

(0.02)

Share Count

0.12

2008 Continuing Operations EPS Target

$2.35 -

$2.50

2008 Earnings Outlook

(Continuing Operations-

assumptions)

13

Share Count (mls):

2007

Fully Diluted

46.9

Interest Rates:

2007

First

Second

Half:

Half:

LIBOR (30 Day)

5.26%

3.50%

4.50%

Other Interest:

Mortgage Notes

Capitalized Interest

Interest Rate Swaps

2008 B/(W)           

than 2007

($0.06)

($0.01)

($0.07)

Total Other Interest:

Memo: Floorplan

Interest

2008

2008

44.6

($0.14)

$0.16

Summary

•

Strong operating and financial performance in 2007

•

Execution of key initiatives continues

•

Rollout of Phase II of used car strategy continues

•

Strength of higher margin departments will help offset a soft

new vehicle environment.

•

2008 Outlook

–

New vehicle environment challenging

–

Our strategy is unchanged; our strong performance will continue

–

Investment in our people underway

•

We are building for the long term

14

EX-99.3

Exhibit 99.3

SONIC AUTOMOTIVE, INC. DECLARES QUARTERLY CASH DIVIDEND

CHARLOTTE, N.C. – February 26, 2008 – 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 March 15, 2008. The dividend will be payable April 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 169 franchises and 34 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 September 30, 2007. The Company does not undertake any obligation to update forward-looking information.