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 21, 2015

SONIC AUTOMOTIVE, INC.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction

of incorporation)

1-13395	56-2010790
(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

Not Applicable

(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 21, 2015, Sonic Automotive, Inc. (the “Company”) issued a press release announcing its financial results for its fiscal first quarter ended March 31, 2015. A copy of the press release is attached hereto as Exhibit 99.1 and a copy of the earnings call presentation materials is attached hereto as Exhibit 99.2.

Item 7.01. Regulation FD Disclosure.

On April 21, 2015, the Company 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 21, 2015, reporting Sonic Automotive, Inc.’s financial results for the fiscal first quarter ended March 31, 2015
99.2	Earnings call presentation materials
99.3	Press release of Sonic Automotive, Inc., dated April 21, 2015, reporting quarterly cash dividend

The information in this Form 8-K, including the exhibits attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.

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.
Date: April 21, 2015	By:	/s/ Stephen K. Coss
		Stephen K. Coss
		Senior Vice President and General Counsel

INDEX TO EXHIBITS

Exhibit No.	Description
99.1	Press release of Sonic Automotive, Inc., dated April 21, 2015, reporting Sonic Automotive, Inc.’s financial results for the fiscal first quarter ended March 31, 2015
99.2	Earnings call presentation materials
99.3	Press release of Sonic Automotive, Inc., dated April 21, 2015, reporting quarterly cash dividend

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Sonic Automotive, Inc. Reports Record Gross Profit

Retailed Record Number of New and Pre-Owned Units

First Quarter 2015 Results

• Record Q1 new retail units of 31,334, up 4.3%, over the prior year quarter

• Record Q1 pre-owned units and gross profit of 28,135 and $40.8 million, respectively

• Record Q1 fixed operations gross profit of $156.4 million, up 2.8% over the prior year quarter

• Record Q1 total gross profit of $335.0 million, up 1.8% over the prior year quarter

• EchoPark^® stores retail 660 units

CHARLOTTE, N.C. – April 21, 2015 – Sonic Automotive, Inc. (NYSE: SAH), one of the nation’s largest automotive retailers, today reported adjusted net income from continuing operations for the first quarter of 2015 of $18.8 million, or $0.37 per diluted share. Included in these adjusted amounts are pre-tax expenses of $4.9 million, or $0.06 per diluted share, related to the Company’s EchoPark^® initiative and $3.8 million, or $0.05 per diluted share, related to its One Sonic-One Experience initiative.

Net income from continuing operations for the first quarter of 2014 was $20.0 million, or $0.38 per diluted share. Included in these amounts are pre-tax expenses of $1.7 million, or $0.02 per diluted share, related to the Company’s EchoPark^® initiative and $2.1 million, or $0.02 per diluted share, related to its One Sonic-One Experience initiative.

On a GAAP basis, net income from continuing operations and related diluted earnings per share for the first quarter 2015 were $14.4 million and $0.28 per share, respectively. There were no adjustments in the first quarter of 2014. See the accompanying tables for details of quarterly adjustments.

Jeff Dyke, Sonic’s EVP of Operations, stated, “We had another solid record setting quarter! Our One Sonic-One Experience stores are making great progress. Our first store that adopted the process, Town & Country Toyota, has gained more than 600 basis points of market share in each of the last two months year-over-year, is tracking to do the same again in April, and has experienced steady growth in profitability. More exciting is the remaining Charlotte stores are following in the same path giving us great confidence that we are on the right track. While the change has been significant, the results from a share and guest satisfaction perspective are adding to our resolve that the decisions we have made to enhance our guest experience are right on target. We are also equally excited about EchoPark^®! We sold 660 units for the quarter, just under 300 units in the month of March, and have grown the business rapidly. These results are a direct reflection of our business plan, our team’s depth of experience, our unmatched guest experience and a response from our customer base that confirms what we were trying to accomplish. As these two strategies come to life, we look for the Sonic Brand to become a household name in the retail world beyond automotive driven by an unmatched customer experience. None of this would be possible without the extraordinary effort of our remarkable team – many thanks to them! We look forward to continued success in the coming years.”

B. Scott Smith, Sonic’s President, remarked, “We have made a lot of progress in the first quarter of the year. Our Charlotte stores have migrated to our One Sonic-One Experience platform and we now have three EchoPark^® retail operating locations in Denver, with progress made to open an additional location by the end of 2015. We are very pleased with how our associates and customers are embracing the technologies and improved transaction processes. Although there is still a lot of work to be done to ensure the long-term sustainability of these initiatives, the cornerstones have been set and we look forward to building upon these in the future.”

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 “Webcasts & Presentations.”

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.”

The conference call will also be available live by dialing in 10 minutes prior to the start of the call at:

Domestic: 1.877.450.3867

International: 1.706.643.0958

Conference ID: 20767539

A conference call replay will be available one hour following the call for seven days and can be accessed by calling:

Domestic: 1.855.859.2056

International: 1.404.537.3406

Conference ID: 20767539

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 future success and impacts from the implementation of our planned customer experience and stand-alone pre-owned store 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, 2014. The Company does not undertake any obligation to update forward-looking information.

###

Contact: Heath Byrd, Chief Financial Officer (704) 566-2400

C.G. Saffer, Vice President and Chief Accounting Officer (704) 566-2439

Sonic Automotive, Inc.

Results of Operations (Unaudited)

This release contains certain non-GAAP financial measures as defined under SEC rules, such as, but not limited to, adjusted income from continuing operations and related earnings per share data. The Company has reconciled these measures to the most directly comparable GAAP measures in the release. The Company believes that these non-GAAP financial measures improve the transparency of the Company’s disclosure by providing period-to-period comparability of the Company’s results from operations.

	Three Months Ended March 31,
	2015			2014
	(In thousands, except per share and unit data)
Revenues:
New retail vehicles	$	1,190,215		$	1,112,291
Fleet vehicles		12,108			34,329
Total new vehicles		1,202,323			1,146,620
Used vehicles		593,742			559,816
Wholesale vehicles		41,656			41,598
Total vehicles		1,837,721			1,748,034
Parts, service and collision repair		323,194			318,771
Finance, insurance and other, net		74,600			69,581
Total revenues		2,235,515			2,136,386
Gross profit		334,959			329,000
Selling, general and administrative expenses		(270,862	)		(263,973	)
Impairment charges		(6,192	)		(3	)
Depreciation and amortization		(16,409	)		(14,381	)
Operating income (loss)		41,496			50,643
Other income (expense):
Interest expense, floor plan		(4,778	)		(4,689	)
Interest expense, other, net		(13,219	)		(13,818	)
Other income (expense), net		90			97
Total other income (expense)		(17,907	)		(18,410	)
Income (loss) from continuing operations before taxes		23,589			32,233
Provision for income taxes - benefit (expense)		(9,200	)		(12,249	)
Income (loss) from continuing operations		14,389			19,984
Income (loss) from discontinued operations		(422	)		(598	)
Net income (loss)	$	13,967		$	19,386
Diluted earnings (loss) per common share:
Earnings (loss) per share from continuing operations	$	0.28		$	0.38
Earnings (loss) per share from discontinued operations		(0.01	)		(0.02	)
Earnings (loss) per common share	$	0.27		$	0.36
Weighted average common shares outstanding		51,403			52,946
Gross Margin Data (Continuing Operations):
New retail vehicles		5.3	%		5.9	%
Fleet vehicles		(0.6	%)		2.6	%
Total new vehicles		5.3	%		5.8	%
Used vehicles		6.9	%		7.3	%
Wholesale vehicles		(0.5	%)		(0.2	%)
Parts, service and collision repair		48.4	%		47.7	%
Finance, insurance and other		100.0	%		100.0	%
Overall gross margin		15.0	%		15.4	%
SG&A Expenses (Continuing Operations):
Compensation	$	161,858		$	157,154
Advertising		15,332			14,119
Rent		18,254			18,535
Other		75,418			74,165
Total SG&A expenses	$	270,862		$	263,973
SG&A expenses as % of gross profit		80.9	%		80.2	%
Operating Margin %		1.9	%		2.4	%
Unit Data (Continuing Operations):
New retail units		31,334			30,029
Fleet units		355			1,102
Total new units		31,689			31,131
Used units		28,135			27,657
Wholesale units		7,777			7,380

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Per Share Data

	Three Months Ended March 31, 2015
			Income (Loss) From Continuing Operations					Income (Loss) From Discontinued Average						Net Income (Loss)
	Weighted Average Shares		Amount			Per Share Amount		Amount			Per Share Amount			Amount			Per Share Amount
	(In thousands, except per share amounts)
Reported:
Earnings (loss) and shares		50,854	$	14,389				$	(422	)				$	13,967
Effect of participating securities:
Non-vested restricted stock and stock units				(5	)				—						(5	)
Basic earnings (loss) and shares		50,854	$	14,384		$	0.28	$	(422	)	$	(0.01	)	$	13,962		$	0.27
Effect of dilutive securities:
Stock compensation plans		549
Diluted earnings (loss) and shares		51,403	$	14,384		$	0.28	$	(422	)	$	(0.01	)	$	13,962		$	0.27
Adjustments (net of tax):
Impairment charges			$	3,777		$	0.07		—		$	—		$	3,777		$	0.07
Other				634			0.02		—			—			634			0.02
Total adjustments			$	4,411		$	0.09	$	—		$	—		$	4,411		$	0.09
Adjusted:
Earnings (loss) and
Diluted earnings (loss) per share (1)			$	18,800		$	0.37	$	(422	)	$	(0.01	)	$	18,378		$	0.36

(1) Expenses attributable to the EchoPark^® initiative were $0.06 per fully diluted share in the three months ended March 31, 2015.

	Three Months Ended March 31, 2014
			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
	(In thousands, except per share amounts)
Reported:
Earnings (loss) and shares		52,418	$	19,984				$	(598	)				$	19,386
Effect of participating securities:
Non-vested restricted stock and stock units				(63	)				—						(63	)
Basic earnings (loss) and shares		52,418	$	19,921		$	0.38	$	(598	)	$	(0.01	)	$	19,323		$	0.37
Effect of dilutive securities:
Stock compensation plans		528
Diluted earnings (loss) and shares (2)		52,946	$	19,921		$	0.38	$	(598	)	$	(0.02	)	$	19,323		$	0.36

(2) Expenses attributable to the EchoPark^® initiative were $0.02 per fully diluted share in the three months ended March 31, 2014.

Sonic Automotive, Inc.

Results of Operations (Unaudited)

New Vehicles

	Three Months Ended March 31,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands, except units and per unit data)
Reported:
Revenue	$	1,202,323		$	1,146,620		$	55,703			4.9	%
Gross profit	$	63,350		$	66,673		$	(3,323	)		(5.0	%)
Unit sales		31,689			31,131			558			1.8	%
Revenue per unit	$	37,941		$	36,832		$	1,109			3.0	%
Gross profit per unit	$	1,999		$	2,142		$	(143	)		(6.7	%)
Gross profit as a % of revenue		5.3	%		5.8	%		(50	)  bps
	Three Months Ended March 31,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands, except units and per unit data)
Same Store:
Revenue	$	1,190,252		$	1,110,066		$	80,186			7.2	%
Gross profit	$	62,438		$	64,632		$	(2,194	)		(3.4	%)
Unit sales		31,336			30,082			1,254			4.2	%
Revenue per unit	$	37,984		$	36,901		$	1,083			2.9	%
Gross profit per unit	$	1,993		$	2,149		$	(156	)		(7.3	%)
Gross profit as a % of revenue		5.2	%		5.8	%		(60	)  bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Used Vehicles

	Three Months Ended March 31,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands, except units and per unit data)
Reported:
Revenue	$	593,742		$	559,816		$	33,926			6.1	%
Gross profit	$	40,844		$	40,693		$	151			0.4	%
Unit sales		28,135			27,657			478			1.7	%
Revenue per unit	$	21,103		$	20,241		$	862			4.3	%
Gross profit per unit	$	1,452		$	1,471		$	(19	)		(1.3	%)
Gross profit as a % of revenue		6.9	%		7.3	%		(40	)  bps
	Three Months Ended March 31,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands, except units and per unit data)
Same Store:
Revenue	$	572,759		$	537,639		$	35,120			6.5	%
Gross profit	$	40,013		$	39,286		$	727			1.9	%
Unit sales		27,079			26,601			478			1.8	%
Revenue per unit	$	21,151		$	20,211		$	940			4.7	%
Gross profit per unit	$	1,478		$	1,477		$	1			0.1	%
Gross profit as a % of revenue		7.0	%		7.3	%		(30	)  bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Wholesale Vehicles

	Three Months Ended March 31,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands, except units and per unit data)
Reported:
Revenue	$	41,656		$	41,598		$	58			0.1	%
Gross profit (loss)	$	(210	)	$	(93	)	$	(117	)		(125.8	%)
Unit sales		7,777			7,380			397			5.4	%
Revenue per unit	$	5,356		$	5,637		$	(281	)		(5.0	%)
Gross profit (loss) per unit	$	(27	)	$	(13	)	$	(14	)		(107.7	%)
Gross profit (loss) as a % of revenue		(0.5	%)		(0.2	%)		(30	)  bps
	Three Months Ended March 31,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands, except units and per unit data)
Same Store:
Revenue	$	40,773		$	40,246		$	527			1.3	%
Gross profit (loss)	$	(186	)	$	(23	)	$	(163	)		(708.7	%)
Unit sales		7,523			7,145			378			5.3	%
Revenue per unit	$	5,420		$	5,633		$	(213	)		(3.8	%)
Gross profit (loss) per unit	$	(25	)	$	(3	)	$	(22	)		(733.3	%)
Gross profit (loss) as a % of revenue		(0.5	%)		(0.1	%)		(40	)  bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Parts, Service and Collision Repair (“Fixed Operations”)

	Three Months Ended March 31,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands)
Reported:
Revenue
Customer pay	$	137,623		$	141,121		$	(3,498	)		(2.5	%)
Warranty		53,498			46,591			6,907			14.8	%
Wholesale parts		45,012			47,944			(2,932	)		(6.1	%)
Internal, sublet and other		87,061			83,115			3,946			4.7	%
Total	$	323,194		$	318,771		$	4,423			1.4	%
Gross profit
Customer pay	$	75,678		$	77,999		$	(2,321	)		(3.0	%)
Warranty		29,760			25,238			4,522			17.9	%
Wholesale parts		8,138			8,161			(23	)		(0.3	%)
Internal, sublet and other		42,799			40,748			2,051			5.0	%
Total	$	156,375		$	152,146		$	4,229			2.8	%
Gross profit as a % of revenue
Customer pay		55.0	%		55.3	%		(30	)  bps
Warranty		55.6	%		54.2	%		140	bps
Wholesale parts		18.1	%		17.0	%		110	bps
Internal, sublet and other		49.2	%		49.0	%		20	bps
Total		48.4	%		47.7	%		70	bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Parts, Service and Collision Repair (“Fixed Operations”)

	Three Months Ended March 31,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands)
Same Store:
Revenue
Customer pay	$	135,768		$	136,486		$	(718	)		(0.5	%)
Warranty		52,971			44,774			8,197			18.3	%
Wholesale parts		44,580			46,667			(2,087	)		(4.5	%)
Internal, sublet and other		84,956			80,559			4,397			5.5	%
Total	$	318,275		$	308,486		$	9,789			3.2	%
Gross profit
Customer pay	$	74,689		$	75,558		$	(869	)		(1.2	%)
Warranty		29,457			24,269			5,188			21.4	%
Wholesale parts		8,052			7,907			145			1.8	%
Internal, sublet and other		41,809			39,145			2,664			6.8	%
Total	$	154,007		$	146,879		$	7,128			4.9	%
Gross profit as a % of revenue
Customer pay		55.0	%		55.4	%		(40	)  bps
Warranty		55.6	%		54.2	%		140	bps
Wholesale parts		18.1	%		16.9	%		120	bps
Internal, sublet and other		49.2	%		48.6	%		60	bps
Total		48.4	%		47.6	%		80	bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Finance, Insurance and Other, Net (“F&I”)

	Three Months Ended March 31,				Better / (Worse)
	2015		2014		Change		% Change
	(In thousands, except per unit data)
Reported:
Revenue	$	74,600	$	69,581	$	5,019		7.2	%
Gross profit per retail unit (excludes fleet)	$	1,254	$	1,206	$	48		4.0	%
	Three Months Ended March 31,				Better / (Worse)
	2015		2014		Change		% Change
	(In thousands, except per unit data)
Same Store:
Revenue	$	73,129	$	67,182	$	5,947		8.9	%
Gross profit per retail unit (excludes fleet)	$	1,260	$	1,209	$	51		4.2	%

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Selling, General and Administrative (“SG&A”) Expenses

	Three Months Ended March 31,						Better / (Worse)
	2015			2014			Change			% Change
	(In thousands)
Reported:
Compensation	$	161,858		$	157,154		$	(4,704	)		(3.0	%)
Advertising		15,332			14,119			(1,213	)		(8.6	%)
Rent		18,254			18,535			281			1.5	%
Other		75,418			74,165			(1,253	)		(1.7	%)
Total	$	270,862		$	263,973		$	(6,889	)		(2.6	%)
SG&A expenses as a % of gross profit
Compensation		48.3	%		47.8	%		(50	)  bps
Advertising		4.6	%		4.3	%		(30	)  bps
Rent		5.4	%		5.6	%		20	bps
Other		22.6	%		22.5	%		(10	)  bps
Total		80.9	%		80.2	%		(70	)  bps

EX-99.2

Q1 2015 EARNINGS REVIEW

April 21, 2015

Exhibit 99.2

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, anticipated 2015

industry new vehicle sales volume, the implementation of growth and operating strategies, including

acquisitions of dealerships and properties, the development of open points and stand-alone pre-owned

stores, the return of capital to shareholders , anticipated future success and impacts from the

implementation of our strategic initiatives and earnings per share expectations.

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, (d) new and pre-owned vehicle sales volume, and (e)

earnings expectations for the year ending December 31, 2015. 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 ended December 31, 2014.

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.

CONTENT

•

STRATEGIC FOCUS

•

FINANCIAL RESULTS

•

OPERATIONS REVIEW

•

SUMMARY AND OUTLOOK

3

4

STRATEGIC FOCUS

1.

Growth

•

One Sonic-One Experience

•

EchoPark

®

•

Acquisitions & Open Points

2.

Own Our Properties

3.

Return Capital to Shareholders

STRATEGIC FOCUS

ONE SONIC-ONE EXPERIENCE (OSOE)

5

•

Goals

•

Pilot Stores Underway

•

36 Month Implementation

•

Charlotte Market Rollout in

Progress

Result -

Increase Market Share and Customer Retention

1 Associate, 1 Price, 1 Hour

Improve Transparency; Increase Trust

Operational Efficiencies

6

STRATEGIC FOCUS

EchoPark

®

•

Hub Opened November 3

•

2 Neighborhood Stores

Opened in January 2015

•

Expect at least 1 more in 2015

and another in 2016

7

STRATEGIC FOCUS

ACQUISITIONS & OPEN POINTS

•

Open Points

Mercedes Benz in Dallas Market

Operational in 2016

Audi in Pensacola Market

Operational in 2016

Nissan in TN Market

Operational in late 2016 / early 2017

•

Exploring Acquisition and Open Point

Opportunities in Other Markets

8

STRATEGIC FOCUS

OWN OUR PROPERTIES

2007

2008

2011

2012

2013

2014

Q1

2015

Proj. -

2017

0%

12%

18%

23%

31%

36%

37%

49%

9

STRATEGIC FOCUS

RETURN CAPITAL TO SHAREHOLDERS

•

Unused Authorization of Approximately $ 68 million

•

Quarterly Dividend of $0.025 Per Share

Shares

(in thousands)

Average Price /

Share

$

(in millions)

2015 Activity

447

$ 24.89

$ 11.1

Q1 2015

FINANCIAL REVIEW

Q1 2015 FINANCIAL REVIEW

FRANCHISE DEALERSHIPS

ADJUSTED FRANCHISED OPERATIONS

B/(W) than Q1 2014

(amounts in millions, except per share data)

Q1 2015

$

%

Revenue

$ 2,220

$ 83

3.9%

Gross Profit

$ 333

$ 4

1.3%

SG&A as % of Gross

(1)

79.2%

50 bps

Operating Profit

(1)

$ 54

$ 1

2.2%

Interest & Other

$ 18

$ 1

3.4%

Pretax

(1)

$ 36

$ 2

5.2%

Diluted EPS

(1)

$ 0.43

$ .03

7.5%

12

Note –

Continuing operations includes results of sold stores after March 31, 2014.

(1) –

Amounts are adjusted.  See appendix for reconciliation of adjusted amounts to GAAP amounts

FRANCHISED SG&A TO GROSS WALK –

Q1

13

210 bps

Better than

Q1 2014 of

79.7%

(1) –

Amounts are adjusted.  See appendix for reconciliation of adjusted amounts to GAAP amounts

Q1 2015 Adjusted (1)

Less: OSOE

Less: Centralization

Initiatives

79.2%

(1.1%)

(0.5%)

77.6%

Q1 2015 Adj for

Q1 2015 FINANCIAL REVIEW

ECHOPARK

®

ECHOPARK

®

Q1 RESULTS

15

B/(W) than

Q1 2014

(amounts in millions, except per share data)

Q1 2015

$

Revenue

$ 15.7

$ 15.7

Gross Profit

$ 1.8

$ 1.8

Operating Profit (1)

($ 4.8)

($ 3.1)

Interest & Other

($ 0.1)

($ 0.1)

Pre-tax Profit (Loss) (1)

($ 4.9)

($ 3.2)

Store Level (retail units)

660

n/a

Diluted EPS (1)

($ 0.06)

($0.04)

(1) –

Amounts are adjusted.  See appendix for reconciliation of adjusted amounts to GAAP amounts

Q1 2015 FINANCIAL REVIEW

TOTAL ENTERPRISE

ADJUSTED TOTAL Q1 2015 RESULTS

B/(W) than Q1 2014

(amounts in millions, except per share data)

Q1 2015

$

%

Revenue

$ 2,236

$ 99

4.6%

Gross Profit

$ 335

$ 6

1.8%

Operating Profit

(1)

$ 49

($ 2)

(3.8%)

Interest & Other

$ 18

$ 1

2.7%

Continuing Ops:

Profit (after tax)

(1)

$ 19

($ 1)

(5.9%)

Diluted EPS

(1)

$ 0.37

($ 0.01)

(2.6%)

SG&A as % of Gross

(1)

80.6%

(40 bps)

Discontinued Ops Profit/(Loss)  (after tax)

($ 0.4)

$ 0.2

17

Note –

Continuing operations includes results of sold stores after March 31, 2014.

(1) –

Amounts are adjusted.  See appendix for reconciliation of adjusted amounts to GAAP amounts

TOTAL REVENUE & GROSS PROFIT Q1 2015

B/(W) than Q1 2014

(amounts in millions)

Q1 2015

$

%

New Retail Revenue

$ 1,190

$ 78

7.0%

Used Retail Revenue

$ 594

$ 34

6.1%

Fixed Operations Revenue

$ 323

$ 4

1.4%

F&I Revenue

$ 75

$ 5

7.2%

Total Revenue

$ 2,236

$ 99

4.6%

New Retail Gross

$ 63

($ 2)

(3.6%)

Used Retail Gross

$ 41

$ 0

0.4%

Fixed Operations Gross

$ 156

$ 4

2.8%

F&I Gross

$ 75

$ 5

7.2%

Total Gross

$ 335

$ 6

1.8%

18

(1) –

Amounts are adjusted.  See appendix for reconciliation of adjusted amounts to GAAP amounts

ADJUSTED TOTAL SG&A TO GROSS

19

80.6%

80.2%

Note –

2015 amounts are adjusted.  See appendix for reconciliation of adjusted amounts to GAAP amounts

Q1 2015

Q1 2014

4.6%

4.3%

48.1%

47.8%

5.4%

5.6%

22.5%

22.5%

Advertising

Comp

Rent

Other

ADJUSTED AND GAAP EPS SUMMARY

20

(amounts in millions, except per share date)

Q1 2015

Q1 2014

Pre-Tax

EPS

Pre-Tax

EPS

Adjusted Franchised EPS

$35.7

$ 0.43

$ 34.0

$0.40

Adjusted EchoPark®

EPS

($4.9)

($0.06)

($ 1.7)

($ 0.02)

Adjusted Total EPS

$ 30.8

$ 0.37

$32.2

$ 0.38

Adjustments:

Impairment

($ 6.2) 

($ 0.07)

$ 0.0

$ 0.0

Other

($ 1.1)

($ 0.02)

$ 0.0

$ 0.0 

GAAP EPS

$ 0.28

$ 0.38

CAPITAL SPEND

(amounts in millions)

YTD Q1

2015

Estimated

2015

Real Estate & Facility Related

$ 37.2

$200.9

All Other Cap Ex

9.7

46.3

Subtotal

$ 46.9

$ 247.2

Less: Mortgage Funding

(25.6)

(87.1)

Total Cash Used –

Cap Ex

$ 21.3

$ 160.1

Note –

Spending excludes the effect of  franchise acquisitions.

21

LIQUIDITY

(amounts in millions)

Q1 2015

Q4 2014

Cash

$4.0 

$ 4.2

Revolver Availability

161.1

165.6

Used floor plan availability

21.6

22.6

Floor plan deposit balance

56.0

57.5

Total

$242.7 

$ 249.9

22

DEBT COVENANTS

Covenant

Actual Q1

2015

Liquidity Ratio

>= 1.05

1.21

Fixed Charge Coverage Ratio

>= 1.20

1.64

Total Lease Adjusted Leverage

Ratio

<= 5.50

4.16

Compliant with all Covenants

23

OPERATIONS

REVIEW

NEW VEHICLE RETAIL

SAME STORE

Q1 2015

Q1 2014

B/(W)

Volume

30,981

28,980

6.9%

Selling Price

$ 38,028

$ 37,120

2.4%

Gross Margin %

5.3%

5.9%

(60 bps)

GPU

$ 2,018

$ 2,199

($ 182)

Gross Profit

$ 63 million

$ 64 million

(1.9%)

SAAR (includes fleet)

16.6 million

15.6 million

6.4%

25

26

Q1 2015 vs. Q1 2014

(1)

(1) –

Industry includes fleet –

Sonic does not

NEW VEHICLE -

BRAND

15.4%

6.9%

2.3%

6.9%

5.2%

24.8%

5.0%

15.3%

3.6%

% Sonic Unit Sales

BMW

MB

Cadillac

Ford

GM

Honda

Lexus

Toyota

Audi

9%

13%

(14%)

(3%)

(4%)

11%

19%

12%

13%

8%

7%

(6%)

2%

6%

2%

19%

9%

14%

Sonic

Industry

USED VEHICLE RETAIL

SAME STORE

27

Q1 2015

Q1 2014

B/(W)

Retail Volume

27,079

26,601

1.8%

Used Retail GPU

$ 1,478

$ 1,477

$ 1

Used to New

0.87:1.00

0.92:1.00

(0.04)

Vehicles / store / month (97 stores)

93

91

2

FIXED OPS

SAME STORE

Q1 2015

B/(W) than 2014

(amounts in millions)

$

%

Revenue

$ 318

$ 10

3.2%

Gross Profit

$ 154

$ 7

4.9%

28

(5.0%)

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Customer Pay

Warranty

Wholesale Parts

Internal & Sublet

(1.2%)

21.4%

1.8%

6.8%

YOY Gross % Change

OSOE

30

OSOE –

TOWN & COUNTRY TOYOTA

NEW RETAIL UNITS

155

140

198

156

177

246

251

182

167

182

153

200

257

100

120

140

160

180

200

220

240

260

280

Mar-14

Apr-14

May-14

Jun-14

Jul-14

Aug-14

Sep-14

Oct-14

Nov-14

Dec-14

Jan-15

Feb-15

Mar-15

13.2%

12.9%

14.2%

13.1%

14.6%

18.0%

20.8%

15.8%

16.0%

15.1%

15.8%

22.0%

20.5%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

24.0%

Mar-14

Apr-14

May-14

Jun-14

Jul-14

Aug-14

Sep-14

Oct-14

Nov-14

Dec-14

Jan-15

Feb-15

Mar-15

MARKET SHARE

31

OSOE –

TOWN & COUNTRY FORD

NEW RETAIL UNITS

MARKET SHARE

135

113

138

121

108

141

108

73

93

108

100

83

121

70

80

90

100

110

120

130

140

150

Mar-14

Apr-14

May-14

Jun-14

Jul-14

Aug-14

Sep-14

Oct-14

Nov-14

Dec-14

Jan-15

Feb-15

Mar-15

19.5%

18.3%

17.0%

16.9%

13.9%

18.5%

17.3%

12.3%

16.0%

13.3%

15.9%

15.7%

15.2%

10.0%

15.0%

20.0%

25.0%

30.0%

Mar-14

Apr-14

May-14

Jun-14

Jul-14

Aug-14

Sep-14

Oct-14

Nov-14

Dec-14

Jan-15

Feb-15

Mar-15

32

OSOE –

FORT MILL FORD

NEW RETAIL UNITS

110

121

156

116

133

124

94

86

77

114

108

84

111

50

70

90

110

130

150

170

Mar-14

Apr-14

May-14

Jun-14

Jul-14

Aug-14

Sep-14

Oct-14

Nov-14

Dec-14

Jan-15

Feb-15

Mar-14

15.9%

18.5%

20.1%

16.3%

17.0%

15.4%

16.3%

14.9%

12.4%

14.5%

16.9%

14.8%

14.6%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

24.0%

Mar-14

Apr-14

May-14

Jun-14

Jul-14

Aug-14

Sep-14

Oct-14

Nov-14

Dec-14

Jan-15

Feb-15

Mar-15

MARKET SHARE

33

OSOE –

INFINITI OF CHARLOTTE

NEW RETAIL UNITS

40.7%

51.1%

30.0%

44.4%

43.5%

46.6%

40.5%

50.6%

40.5%

31.7%

42.6%

46.8%

49.5%

30.0%

35.0%

40.0%

45.0%

50.0%

55.0%

Mar-14

Apr-14

May-14

Jun-14

Jul-14

Aug-14

Sep-14

Oct-14

Nov-14

Dec-14

Jan-15

Feb-15

Mar-15

37

45

30

34

31

30

36

40

30

34

30

35

53

25

30

35

40

45

50

55

Mar-14

Apr-14

May-14

Jun-14

Jul-14

Aug-14

Sep-14

Oct-14

Nov-14

Dec-14

Jan-15

Feb-15

Mar-15

MARKET SHARE

34

OSOE –

CADILLAC OF SOUTH CHARLOTTE

NEW RETAIL UNITS

47.5%

41.7%

38.7%

36.7%

40.4%

40.0%

37.1%

45.7%

32.2%

26.5%

41.3%

38.0%

38.8%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

55.0%

60.0%

Mar-14

Apr-14

May-14

Jun-14

Jul

-14

Aug-14

Sep-14

Oct-14

Nov-14

Dec-14

Jan-15

Feb-15

Mar-15

MARKET SHARE

38

40

42

32

39

46

34

39

23

39

32

28

35

20

25

30

35

40

45

50

Mar-14

Apr-14

May-14

Jun-14

Jul-14

Aug-14

Sep-14

Oct-14

Nov-14

Dec-14

Jan-15

Feb-15

Mar-15

35

OSOE –

NEXT STEPS

1.

We are still working on the pricing tool (in particular with Ford) we are a

few months away from completion

Drivers of the slowdown are “man”

hours available and new

technology

opportunities

–

simply

put

this

is

a

first

of

its

kind

and

we

are close to breaking the code

2.

CRM/Desk/F&I and Appraisal system is a major success in the stores all

technologies are running at 100%

3.

Operations team is requesting us to develop a two part rollout of the

technology from OSOE less the pricing (until pricing tool is 100%

operational)

Beginning in Q2 we would start the rollout of the CRM and the Desk

tool

Followed by a rollout out of the F&I and Appraisal tools (3 months

later per location)

4.

A rollout plan of the technology is under development

EchoPark

®

37

EchoPark

®

Openings:

122

183

185

292

6

34

31

69

0

6

19

35

143

135

188

0

50

100

150

200

250

300

350

Dec-14

Jan-15

Feb-15

Mar-15

Unit Volume

Total

Centennial

Highlands Ranch

HUB

Hub –

11/3/2014

Centennial –

12/26/2015

Highlands Ranch –

1/23/2015

Growth experienced in each revenue category

achieving record results

Gaining expense leverage in the franchised dealership

segment including OSOE expenses

Expect open points to drive future growth

Continued share repurchases with excess capital

Monitoring capital requirements as 2017 lease

maturities approach

SUMMARY

38

Appendix

40

NON-GAAP RECONCILIATIONS

41

Consolidated

Franchised Dealerships

EchoPark®

Three Months Ended

Three Months Ended

Three Months Ended

March 31,

March 31,

March 31,

2015

2014

2015

2014

2015

2014

(In millions)

SG&A Reconciliation:

As Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . .

270.9

$              

264.0

$              

265.0

$              

262.3

$              

5.9

$                  

1.7

$                  

Pre-tax Adjustments:

Severance and other . . . . . . . . . . . . . . . . .. . . . . . . . . . . .

(1.1)

-

(1.1)

-

-

-

Total pre-tax adjustments . . . . . . . . . . . . . . . . . . . . .

(1.1)

-

(1.1)

-

-

-

Adjusted SG&A  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

269.8

$              

264.0

$              

263.9

$              

262.3

$              

5.9

$                  

1.7

$                  

SG&A as % of Gross Reconciliation:

As Reported . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . .

80.9%

80.2%

79.5%

79.7%

NM

NM

Pre-tax Adjustments:

Severance and other . . . . . . . . . . . . . . . . . . . . . . . . . . .. .

(0.3%)

0.0%

(0.3%)

0.0%

NM

NM

Total pre-tax adjustments . . . . . . . . . . . . . . . . . . . . ..

(0.3%)

0.0%

(0.3%)

0.0%

NM

NM

Adjusted SG&A as % of Gross . . . . . . . . . . . . . . . . . . . . .. .

80.6%

80.2%

79.2%

79.7%

NM

NM

NM = Not meaningful

This release contains certain non-GAAP financial measures (the "Adjusted" amounts) as defined under SEC rules, such as, but not limited to, adjusted income from continuing

operations and related earnings per share data.  The Company has reconciled these measures to the most directly comparable GAAP measures (the "Reported" amounts) in the release. 

The Company believes that these non-GAAP financial measures improve the transparency of the Company’s disclosure by providing period-to-period comparability of the

Company’s results from operations.

42

NON-GAAP RECONCILIATIONS

Consolidated

Franchised Dealerships

EchoPark®

Three Months Ended

Three Months Ended

Three Months Ended

March 31,

March 31,

March 31,

2015

2014

2015

2014

2015

2014

(In millions)

Operating Profit Reconciliation:

As Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . .

41.5

$                

50.6

$                

47.7

$                

52.3

$                

(6.2)

$                

(1.7)

$                

Pre-tax Adjustments:

Severance and other . . . . . . . . . . . . . . . . . . . . . . . . . . .. .

1.1

-

1.1

-

-

-

Impairment charges . . .. . . . . . . . . . . . . . . . . . . . . . . . . . .

6.2

-

4.8

-

1.4

-

Total pre-tax adjustments . . . . . . . . . . . . . . . . . . . . .

7.3

-

5.9

-

1.4

-

Adjusted Operating Profit  . . . . . . . . . . . . . . . . . . . . . . . . . .

48.8

$                

50.6

$                

53.6

$                

52.3

$                

(4.8)

$                

(1.7)

$                

Pre-tax Profit from Continuing Operations Reconciliation:

As Reported . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . .

23.5

$                

32.2

$                

29.8

$                

33.9

$                

(6.3)

$                

(1.7)

$                

Pre-tax Adjustments:

Severance and other . . . . . . . . . . . . . . . . . . . . . . . . . . .. .

1.1

-

1.1

-

-

-

Impairment charges . . .. . . . . . . . . . . . . . . . . . . . . . . . . . .

6.2

-

4.8

-

1.4

-

Total after-tax adjustments . . . . . . . . . . . . . . . . . . . .

7.3

-

5.9

-

1.4

-

Adjusted Profit from Continuing Operations (after-tax) . . .

30.8

$                

32.2

$                

35.7

$                

33.9

$                

(4.9)

$                

(1.7)

$                

Profit from Continuing Operations (after-tax) Reconciliation:

As Reported . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . .

14.4

$                

20.0

$                

After-tax Adjustments:

Severance and other . . . . . . . . . . . . . . . . . . . . . . . . . . .. .

0.6

-

Impairment charges . . .. . . . . . . . . . . . . . . . . . . . . . . . . . .

3.8

-

Total after-tax adjustments . . . . . . . . . . . . . . . . . . . .

4.4

-

Adjusted Profit from Continuing Operations (after-tax) . . .

18.8

$                

20.0

$                

NON-GAAP RECONCILIATIONS

43

Three Months Ended March 31, 2015

Income (Loss)

Income (Loss)

From Continuing

From Discontinued

Operations

Average

Net Income (Loss)

Weighted

Per

Per

Per

Average

Share

Share

Share

Shares

Amount

Amount

Amount

Amount

Amount

Amount

(In millions, except per share amounts)

Reported:

Earnings (loss) and shares . . . . . . . . . . . . . . .

50.9

14.4

$         

(0.4)

$        

14.0

$         

Effect of participating securities:

Non-vested restricted stock

and stock units . . . . . . . . . . . . . . . . . . . .

-

-

-

Basic earnings (loss) and shares . . . . . . . . . .

50.9

14.4

$         

0.28

$       

(0.4)

$        

(0.01)

$     

14.0

$         

0.27

$       

Effect of dilutive securities:

Stock compensation plans . . . . . . . . . . . . .

0.5

Diluted earnings (loss) and shares . . . . . .. . . .

51.4

14.4

$         

0.28

$       

(0.4)

$        

(0.01)

$     

14.0

$         

0.27

$       

Adjustments (net of tax):

Impairment charges . . . . . . . . . . . . . . . . . . . .

3.8

$           

0.07

$       

-

$              

-

$        

3.8

$           

0.07

$       

Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0.6

0.02

-

-

0.6

0.02

Total adjustments . . . . . . . . . . . . . . . . . . .

4.4

$           

0.09

$       

-

$              

-

$        

4.4

$           

0.09

$       

Adjusted:

Earnings (loss) and

Diluted earnings (loss) per share (1) . . . . .

18.8

$         

0.37

$       

(0.4)

$        

(0.01)

$     

18.4

$         

0.36

$       

(1) Expenses attributable to the EchoPark® initiative were $0.06 per fully diluted share in the three months ended March 31, 2015.

44

NON-GAAP RECONCILIATIONS

Three Months Ended March 31, 2014

Income (Loss)

Income (Loss)

From Continuing

From Discontinued

Operations

Operations

Net Income (Loss)

Weighted

Per

Per

Per

Average

Share

Share

Share

Shares

Amount

Amount

Amount

Amount

Amount

Amount

(In millions, except per share amounts)

Reported:

Earnings (loss) and shares . . . . . . . . . . . . . . .

52.4

20.0

$         

(0.6)

$        

19.4

$         

Effect of participating securities:

Non-vested restricted stock

and stock units . . . . . . . . . . . . . . . . . . . .

(0.1)

-

(0.1)

Basic earnings (loss) and shares . . . . . . . . . .

52.4

19.9

$         

0.38

$       

(0.6)

$        

(0.01)

$     

19.3

$         

0.37

$       

Effect of dilutive securities:

Stock compensation plans . . . . . . . . . . . . .

0.5

Diluted earnings (loss) and shares  (2). .. . . . .

52.9

19.9

$         

0.38

$       

(0.6)

$        

(0.02)

$     

19.3

$         

0.36

$       

(2) Expenses attributable to the EchoPark® initiative were $0.02 per fully diluted share in the three months ended March 31, 2014.

EX-99.3

Exhibit 99.3

FOR IMMEDIATE RELEASE

SONIC AUTOMOTIVE, INC. DECLARES QUARTERLY CASH DIVIDEND

CHARLOTTE, N.C. – April 21, 2015 – 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, 2015. The dividend will be payable on July 15, 2015.

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 and the risk factors described in the Company’s annual report on Form 10-K for the year ending December 31, 2014. The Company does not undertake any obligation to update forward-looking information.

###

Contact: Heath Byrd, Chief Financial Officer (704) 566-2400

C.G. Saffer, Vice President and Chief Accounting Officer (704) 566-2439