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 23, 2012        

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.)

4401 Colwick Road Charlotte, North Carolina	28211
(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 23, 2012, we issued a press release announcing results for our fiscal quarter ended March 31, 2012.

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 April 23, 2012, 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 April 23, 2012

            99.2     Earnings call presentation materials

            99.3     Press release of Sonic Automotive, Inc. dated April 23, 2012

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 23, 2012

2

INDEX TO EXHIBITS

Exhibit No.	Description
99.1	Press release of Sonic Automotive, Inc. dated April 23, 2012
99.2	Earnings call presentation materials
99.3	Press release of Sonic Automotive, Inc. dated April 23, 2012

3

EX-99.1

Exhibit 99.1

Sonic Automotive, Inc. Profits up 24%

Same Store Revenue Grows 9% - Record Q1 Revenues

CHARLOTTE, N.C. – April 23, 2012 – Sonic Automotive, Inc. (NYSE: SAH), one of the nation’s largest automotive retailers, today reported 2012 first quarter earnings from continuing operations of $19.5 million for a 24% increase over the prior year results. Earnings from continuing operations per diluted share increased 22% to $0.33 compared to $0.27 in the prior year quarter.

Q1 2012 Highlights – Record Q1 Same Store Revenues; Fixed Operations Revenue and Gross Revenue Growth Despite Lower Warranty Activity; Continue to Invest in Base Business

• Total Q1 revenues up 9.3% over prior year quarter

• New vehicle retail revenue up 12.1% in Q1

• Used vehicle revenue up 9.0% for the quarter

• Parts and Service revenue up 5.1% in Q1

• SG&A to gross profit % down 30 bps to 79.4% for the quarter

B. Scott Smith, the Company’s President, noted, “We are pleased with this quarter’s results. Our overall profitability increased significantly from the prior year quarter due to our strong revenue growth and continued improvement in our SG&A to gross profit metrics. The improvements in these metrics were achieved as we continue substantial investment in our information technology and training initiatives. We have cultivated a culture and team that are mature and stable, allowing us to embrace and execute these processes and technologies. Our goal remains the same, develop predictable, repeatable and sustainable processes through the use of innovative technologies and operating playbooks to create a competitive advantage benefiting Sonic Automotive now and in the years to come.”

Commenting on Sonic’s operating performance, Jeff Dyke, the Company’s EVP of Operations noted, “As a result of our operating disciplines, we achieved record first quarter revenues of nearly $2 billion with our current complement of stores. Our new vehicle retail unit volume, which increased 11.2% versus the first quarter of 2011, outpaced the new vehicle retail industry volume increase. We are excited about the possibilities of further improvement resulting from our continued focus on efficient execution of our selling and customer service processes.”

First Quarter Earnings Conference Call

Senior management will host a conference call today at 11:00 A.M. (Eastern) to discuss the quarter’s results. To access the live broadcast of the call over the Internet go to: www.sonicautomotive.com, then click on “Our Company”, then “Investor Relations”, then “Earnings Conference Calls”.

Presentation materials for the conference call can be accessed on the Company’s website at www.sonicautomotive.com by clicking on the “Investor Relations” tab under “Our Company” and choosing “Webcasts & Presentations”.

A live audio of the 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: 800-585-8367, Conference ID: 70848537, International callers dial (404) 537-3406.

About Sonic Automotive

Sonic Automotive, Inc., a Fortune 500 company based in Charlotte, N.C., is one of the nation’s largest automotive retailers. Sonic can be reached on the web at www.sonicautomotive.com.

Included herein are forward-looking statements, including statements with respect to anticipated growth in new vehicle sales, and future success and impacts from the implementation of our strategic initiatives. 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 in the markets in which we operate, new and used vehicle industry sales volume, the success of our operational strategies, the rate and timing of overall economic recovery or decline, and the risk factors described in the Company’s annual report on Form 10-K for the year ending December 31, 2011. The Company does not undertake any obligation to update forward-looking information.

Sonic Automotive, Inc.

Results of Operations (Unaudited)

(Dollars in thousands, except per share data)

		First Quarter Ended March 31,
		2012		2011
Revenues
New retail vehicles	$	1,018,536	$	908,853
Fleet vehicles		45,917		63,640
Total new vehicles		1,064,453		972,493
Used vehicles		517,052		474,555
Wholesale vehicles		45,341		35,046
Total vehicles		1,626,846		1,482,094
Parts, service and collision repair		301,748		287,100
Finance, insurance and other		59,248		49,102
Total revenues		1,987,842		1,818,296
Total gross profit		311,869		287,238
Selling, general and administrative expenses		(247,480)		(229,016)
Impairment charges		(1)		(17)
Depreciation and amortization		(11,071)		(9,895)
Operating income (loss)		53,317		48,310
Interest expense, floor plan		(4,473)		(5,365)
Interest expense, other, net		(15,080)		(15,359)
Interest expense, non-cash, convertible debt		(1,630)		(1,694)
Interest income (expense/amortization), non-cash, cash flow swaps		22		178
Other income (expense), net		19		71
Income (loss) from continuing operations before taxes		32,175		26,141
Provision for income taxes - benefit (expense)		(12,709)		(10,457)
Income (loss) from continuing operations		19,466		15,684
Income (loss) from discontinued operations		1,032		(720)
Net income (loss)	$	20,498	$	14,964
Diluted:
Weighted average common shares outstanding		64,420		65,950
Earnings (loss) per share from continuing operations	$	0.33	$	0.27
Earnings (loss) per share from discontinued operations		0.02		(0.01)
Earnings (loss) per share	$	0.35	$	0.26
Gross Margin Data (Continuing Operations):
New retail vehicles		6.2%		6.3%
Fleet vehicles		3.4%		3.1%
Total new vehicles		6.1%		6.1%
Used vehicles		7.8%		7.9%
Wholesale vehicles		0.5%		(1.3%)
Parts, service and collision repair		48.7%		49.3%
Finance, insurance and other		100.0%		100.0%
Overall gross margin		15.7%		15.8%
SG&A Expenses (Continuing Operations):
Compensation	$	147,534	$	134,802
Advertising		13,044		13,440
Rent and rent related		28,693		29,791
Other		58,209		50,983
Total	$	247,480	$	229,016
SG&A Expenses as % of Gross Profit		79.4%		79.7%
Operating Margin %		2.7%		2.7%
Unit Data (Continuing Operations):
New retail units		29,685		26,703
Fleet units		1,705		2,488
Total new units		31,390		29,191
Used units		26,547		24,895
Wholesale units		7,526		5,583
Other Data:
Continuing Operations revenue percentage changes:
New retail vehicles		12.1%
Fleet vehicles		(27.8%)
Total new vehicles		9.5%
Used vehicles		9.0%
Parts, service and collision repair		5.1%
Finance, insurance and other		20.7%
Total revenues		9.3%

Sonic Automotive, Inc.

Earnings Per Share Reconciliation (Unaudited)

(Dollars in thousands, except per share data)

	First Quarter Ended March 31, 2012
			Income (Loss) From Continuing Operations					Income (Loss) From Discontinued Operations
												Net Income (Loss)
	Weighted Average Shares		Amount			Per Share Amount		Amount		Per Share Amount		Amount			Per Share Amount
Earnings (loss) and shares		52,224	$	19,466				$	1,032			$	20,498
Effect of participating securities:
Non-vested restricted stock and stock units		-		(303	)				-				(303	)
Basic earnings (loss) and shares		52,224	$	19,163		$	0.37	$	1,032	$	0.02	$	20,195		$	0.39
Effect of dilutive securities:
Contingently convertible debt (5.0% Convertible Notes)		11,676		2,167					5				2,172
Stock compensation plans		520
Diluted earnings (loss) and shares		64,420	$	21,330		$	0.33	$	1,037	$	0.02	$	22,367		$	0.35

	First Quarter Ended March 31, 2011
			Income (Loss) From Continuing Operations					Income (Loss) From Discontinued Operations
														Net Income (Loss)
	Weighted Average Shares		Amount			Per Share Amount		Amount			Per Share Amount			Amount			Per Share Amount
Earnings (loss) and shares		52,416	$	15,684				$	(720	)				$	14,964
Effect of participating securities:
Non-vested restricted stock and stock units		-		(205	)				-						(205	)
Basic earnings (loss) and shares		52,416	$	15,479		$	0.30	$	(720	)	$	(0.02	)	$	14,759		$	0.28
Effect of dilutive securities:
Contingently convertible debt (5.0% Convertible Notes)		12,890		2,296					14						2,310
Stock compensation plans		644
Diluted earnings (loss) and shares		65,950	$	17,775		$	0.27	$	(706	)	$	(0.01	)	$	17,069		$	0.26

EX-99.2

Sonic Automotive, Inc.

1

Q1 2012 Earnings Review

April 23, 2012

Exhibit 99.2

Sonic Automotive, Inc.

2

Forward-Looking Statements

This

presentation

contains

“forward-looking

statements”

within

the

meaning

of

the

Private

Securities

Litigation Reform Act of 1995.  These statements relate to future events, are not historical facts and

are based on our current expectations and assumptions regarding our business, the economy and

other future conditions.  These statements can generally be identified by lead-in words such as

“believe”,

“expect”,

“anticipate”,

“intend”,

“plan”,

“foresee”,

“may”

,”will”

and

other

similar

words. 

Statements that describe our Company’s objectives, plans or goals are also forward-looking

statements.  Examples of such forward-looking information we may be discussing in this

presentation

include,

without

limitation,

further

implementation

of

our

operational

strategies

and

playbooks, future debt retirement, capital expenditures, operating margins and revenues, inventory

levels and new vehicle industry sales volume. 

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

involve risks and uncertainties and actual results may differ materially from those projected in the

forward-looking statements as a result of various factors.  These risks and uncertainties include,

among other things, (a) economic conditions in the markets in which we operate, (b) the success of

our operational strategies, (c) our relationships with the automobile manufacturers and (d) new and

pre-owned vehicle sales volume. These risks and uncertainties, as well as additional factors that

could affect our forward-looking statements, are described in our Form 10-K for the year ending

December 31, 2011.

These forward-looking statements, risks, uncertainties and additional factors speak only as of the

date

of

this

presentation.

We

undertake

no

obligation

to

update

any

such

statements.

Sonic Automotive, Inc.

3

Sonic Automotive Q1 2012

o

Quarter in Review

o

Financial Results

o

Operations Recap

o

Summary and Outlook

Sonic Automotive, Inc.

4

Overall Results

Record

Revenue

Growth

–

up

9.3%

New

retail

vehicle

revenue

up

12.1%

-

volume

up

11.2%

-

exceeds industry retail volume growth

Pre-owned revenue up 9.0%

F&I revenue up 20.7%

Fixed Operations revenue up 5.1%

SG&A to gross declined to 79.4%

Income from continuing operations of $19.5 million up 24.1% 

Q1 2012 diluted EPS from continuing operations was $0.33 per

share vs. $0.27 in prior year period

Sonic Automotive, Inc.

Q1 2012 Results

5

B/(W)

than Q1

2011

(amounts in millions,

except per share data)

Q1

2012

$

%

Revenue

$

1,988

$ 170

9%

Gross Profit

$ 312

$ 25

9%

Operating Profit

$ 53

$

5

10%

Continuing Ops:

Profit (after tax)

$ 19

$ 4

24%

Diluted EPS

$ 0.33

$

0.27

22%

Sonic Automotive, Inc.

SG&A to Gross

30 bps Improvement

Q1 2011

Q1 2012

79.7%

79.4%

Sonic Automotive, Inc.

Capital Spending

7

(amounts in millions)

YTD Q1

2012

Estimated 

2012

Real Estate Acquisitions

$ 0.0

$ 14.5

All Other Cap

Ex

12.0

118.9

Subtotal

$ 12.0

$ 133.4

Less: Mortgage Funding

(10.7)

(33.5)

Total Cash Used –

Cap Ex

$ 1.3

$ 99.9

8

Debt Covenants

Compliant with all Covenants

Covenant

Actual Q1

2012

Liquidity Ratio

>= 1.05

1.16

Fixed Charge Coverage Ratio

>= 1.20

1.64

Total Lease Adjusted Leverage

Ratio

<= 5.50

3.95

Sonic Automotive, Inc.

Sonic Automotive, Inc.

New Vehicles

Includes

Fleet

(1)

(1) Source: JD Power

11.2%

10.4%

12.4%

Sonic -

Retail

Industry -

Retail

SAAR

Q1 2012

Q1 2011

B/(W)

Retail Revenue

$1.0 billion

12.1%

$909 million

Retail Volume

Selling Price

Gross Margin %

GPU

Retail Gross Profit

29,685

26,703

11.2%

$ 34,311

$ 34,036

$276

6.2%

6.3%

(10 bps)

$ 2,131

$ 2,155

($ 24)

$ 63 million

$ 58 million

9.9%

9

Sonic Automotive, Inc.

Pre-Owned Retail Vehicles

Q1 2012

Q1 2011

B/(W)

Retail Volume

26,547

24,895

6.6%

Pre-Owned Related Gross*

$

84 million

$

76 million

$

8 million

Pre-Owned to New Ratio

.89 to 1

.93 to 1

10

* -

Includes: pre-owned vehicle + reconditioning + F&I gross

Continue to make

progress toward

our goal of 100

per store per

month

Used Retail Sales Per Store

75

77

74

80

82

90

Jan

Feb

Mar

2011

2012

Sonic Automotive, Inc.

11

B/(W) than Q1

2011

(amounts in millions)

Q1 2012

$

%

Revenue

$ 302

$ 15

5.1%

Gross Profit

$ 147

$ 6

FY YOY Gross Profit Change Breakdown:

Fixed Operations

3.9%

•

Customer Pay Up 8.1%

•

Whsl. Parts Up 7.3%

•

Internal & Sublet Up 10.2%

•

Warranty Down 14.2%

Sonic Automotive, Inc.

12

Summary and Outlook

Continue to grow organically and improve our base

business

Automotive retail industry steadily increased in Q1

Expect new vehicle inventories to normalize in Q2

Investment in technology and training will continue

Confirm 2012 continuing operations diluted earnings per

share guidance of $1.55 -

$1.65.

13

Sonic Automotive, Inc.

EX-99.3

Exhibit 99.3

SONIC AUTOMOTIVE, INC. DECLARES QUARTERLY CASH DIVIDEND

CHARLOTTE, N.C. – April 23, 2012 – Sonic Automotive, Inc. (NYSE: SAH), a leader in automotive retailing, today announced that its Board of Directors approved a quarterly dividend of $0.025 per share payable in cash for stockholders of record on June 15, 2012. The dividend will be payable on July 15, 2012.

Sonic Automotive, Inc., a Fortune 500 company based in Charlotte, N.C., is one of the nation’s largest automotive retailers. 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 risk and uncertainties that could cause actual results or trends to differ materially from management’s view, including without limitation, economic conditions in the markets in which we operate, new and used vehicle sales volume, the success of our operational strategies, the rate and timing of overall economic recovery and the risk factors described in the Company’s annual report on Form 10-K for the year ending December 31, 2011. The Company does not undertake any obligation to update forward-looking information.