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Mar 31, 2020
Sonic Automotive Q1 2020 Earnings Report
Reported financial results for the first quarter ended March 31, 2020, with all-time record EchoPark revenue and unit sales, and strengthened balance sheet and liquidity.
Key Takeaways
Sonic Automotive reported a GAAP loss per diluted share of $4.67 for Q1 2020, compared to earnings per diluted share of $0.99 for Q1 2019, which includes a non-cash goodwill impairment charge of $268.0 million. Excluding this charge, adjusted earnings per diluted share were $0.40, up nearly 3% from $0.39 in Q1 2019. Total revenues were $2.3 billion, with record EchoPark revenues of $331.7 million.
Adjusted earnings per diluted share from continuing operations were $0.40 for Q1 2020, compared to $0.39 for Q1 2019.
Total Sonic consolidated first quarter 2020 revenues reached $2.3 billion with a gross profit of $350.6 million.
EchoPark revenues hit a record $331.7 million, up 33% from Q1 2019.
Total available liquidity was $418.4 million as of April 28, 2020, an increase from $311.5 million as of March 31, 2020.
Sonic Automotive
Sonic Automotive
Forward Guidance
The company continues to take steps to strengthen its balance sheet and fortify the business by enhancing liquidity, lowering operating costs, postponing certain capital expenditures, and working with manufacturer and lending partners to access additional sources of liquidity.
Positive Outlook
- Ensuring that first responders and other essential workers have safe, reliable access to transportation
- Implementing CDC-recommended social distancing protocols
- Enhancing sanitization procedures at dealerships
- Providing no-contact vehicle pick-up and delivery services for both vehicle sales and vehicle service
- The company believes that they have the operating procedures and financial resources in place to manage the current economic climate and to quickly recover when consumer and commercial activity resumes.
Challenges Ahead
- Experienced a significant reduction in customer foot traffic in both service and sales businesses
- The COVID-19 pandemic is having a widespread effect on worldwide commerce, including the automotive industry.
- Since mid-March, Sonic has experienced a significant decrease in overall vehicle sales volumes and service department revenue compared to the prior year
- Decrease is mainly due to lower consumer demand related to the COVID-19 pandemic and related government-imposed restrictions and uncertainty around the overall economic outlook.
- The one-time, non-cash goodwill impairment charge was related to our franchised dealerships only and was triggered by the decrease in our stock market value from the time period between the official announcement of the COVID-19 pandemic on March 11, 2020 and the end of the first quarter, March 31, 2020.