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Sep 30, 2021
Sonic Automotive Q3 2021 Earnings Report
Reported record revenues and earnings per share for Q3 2021.
Key Takeaways
Sonic Automotive reported record third-quarter revenues of $3.1 billion, a 20.6% increase year-over-year. Earnings per share from continuing operations were $1.96, compared to $1.35 in the third quarter of 2020. The company also announced a definitive agreement to acquire RFJ Auto Partners, expected to add $3.2 billion in annualized revenues.
Record third quarter revenues of $3.1 billion, up 20.6% year-over-year
Record third quarter income from continuing operations before taxes of $112.2 million, up 39.1% year-over-year
Record third quarter earnings from continuing operations of $84.7 million ($1.96 per diluted share)
All-time record quarterly EchoPark revenues of $663.3 million, up 72.3% year-over-year
Sonic Automotive
Sonic Automotive
Sonic Automotive Revenue by Segment
Revenue by Segment
Franchised Dealerships Revenue
CapyFin.com Forward Guidance
Sonic Automotive is set to exceed its previously-stated goal of $25 billion in total revenues by 2025, with the acquisition of RFJ Auto expected to add $3.2 billion in annualized revenues.
Positive Outlook
- RFJ Auto acquisition expected to close in December 2021, propelling Sonic Automotive into the top-five largest dealer groups in the U.S.
- Acquisition expected to add $3.2 billion in annualized revenues, exceeding the company's $25 billion revenue target by 2025
- Credit facilities amended to increase revolver and floor plan commitments from $1.8 billion to $2.95 billion
- Upsized offering of $1.15 billion aggregate principal amount of unsecured senior notes due 2029 and 2031 at a blended rate of 4.73%
- Focus on expanding EchoPark distribution and digital network, aiming for 25% U.S. population coverage by the end of 2021 and 90% by 2025
Challenges Ahead
- Industry-wide inventory headwinds and supply chain disruptions
- EchoPark pre-tax loss of $32.9 million and Adjusted EBITDA loss of $28.5 million (including market expansion-related losses of $18.0 million and $16.8 million, respectively)
- EchoPark loss reflects expansion-related losses and the effect of strategic price management to grow top line sales and market share amidst temporary used market pricing inversion
- Franchised dealerships new vehicle inventory of approximately 2,400 units, or 10 days’ supply, and used vehicle inventory of approximately 8,200 units, or 27 days’ supply
- EchoPark used vehicle inventory of approximately 9,800 units, or 41 days’ supply