Sonic Automotive(SAH) - 2024 Q4 - Annual Results

Financial Performance - Fourth quarter total revenues reached an all-time record of $3.9 billion, up 9% year-over-year; total gross profit was $574.0 million, up 6% year-over-year[2] - Reported net income for the fourth quarter was $58.6 million, a 51% increase year-over-year, translating to $1.67 earnings per diluted share, up 50% year-over-year[2] - Full year total revenues were $14.2 billion, down 1% year-over-year; gross profit was $2.2 billion, down 2% year-over-year[4] - Reported full year net income was $216.0 million, up 21% year-over-year, with $6.18 earnings per diluted share, up 24% year-over-year[4] - Total revenues for the twelve months ended December 2024 were $14,224.3 million, down 1% from $14,372.4 million in 2023[25] - Gross profit for the twelve months ended December 2024 was $2,192.8 million, down 2% from $2,245.7 million in 2023[25] - Net income for the twelve months ended December 2024 was $216.0 million, up 21% from $178.2 million in 2023[25] - Basic earnings per share for the twelve months ended December 2024 was $6.34, up 25% from $5.09 in 2023[25] - Reported net income for the three months ended December 31, 2024, was $35.2 million, with diluted earnings per share of $1.67, compared to $34.8 million and $1.11 for the same period in 2023[43] - Adjusted net income for the twelve months ended December 31, 2024, was $195.8 million, with diluted earnings per share of $5.60, compared to $244.0 million and $6.81 for the same period in 2023[43] Segment Performance - EchoPark Segment adjusted EBITDA for the fourth quarter was $4.2 million, a 146% increase year-over-year, compared to a $9.1 million adjusted EBITDA loss in the prior year[2] - Same store revenues in the Franchised Dealerships Segment were up 12%, with same store retail new vehicle unit sales volume up 13%[9] - EchoPark Segment retail used vehicle unit sales volume was 16,674 units, down 5% year-over-year[2] - Retail new vehicle revenues increased by 15% to $1,914.8 million for the three months ended December 31, 2024, compared to $1,664.1 million in 2023[26] - Total revenues for the Franchised Dealerships Segment rose by 12% to $3,359.0 million in Q4 2024, up from $3,001.1 million in Q4 2023[26] - Retail new vehicle unit sales volume increased by 13% to 32,250 units in Q4 2024, compared to 28,491 units in Q4 2023[26] - Used vehicle revenues showed a slight increase of 4% to $757.0 million in Q4 2024, compared to $727.5 million in Q4 2023[26] - Total gross profit for the Franchised Dealerships Segment increased by 5% to $517.4 million in Q4 2024, compared to $491.3 million in Q4 2023[26] - Total gross profit for the EchoPark segment increased by 14% to $49.0 million for the three months ended December 31, 2024, compared to $42.8 million in 2023[28] - Total gross profit for the Powersports segment increased to $7.5 million in Q4 2024, a 7% increase from $7.0 million in Q4 2023[38] Expenses and Profitability - SG&A expenses for Q4 2024 totaled $399.6 million, a 3% increase from $386.3 million in Q4 2023, with total adjusted SG&A expenses rising by 6% to $408.6 million[32] - Total SG&A expenses for the Franchised Dealerships Segment increased to $348.5 million in Q4 2024, up from $329.1 million in Q4 2023, representing a 6% increase[34] - Total SG&A expenses for the EchoPark Segment decreased to $42.6 million in Q4 2024, down from $48.0 million in Q4 2023, marking an 11% reduction[36] - Total adjusted SG&A expenses for the EchoPark Segment were $165.5 million for the twelve months ended December 31, 2024, a 30% decrease from $237.3 million in 2023[37] - Total gross profit margin as a percentage of gross profit improved to 69.6% in Q4 2024 from 71.4% in Q4 2023, reflecting a 180 basis points improvement[32] Future Outlook and Strategic Moves - Sonic acquired the remaining 50% equity in a joint venture in North Point Volvo and additional dealerships, expected to add approximately $145.0 million in annualized revenues[5] - The company anticipates future growth in each of its operating segments, subject to various risks and uncertainties[21] - The used-to-new vehicle sales ratio improved to 0.55 in Q4 2024 from 0.30 in Q4 2023, indicating a shift in sales strategy[31] Awards and Recognition - EchoPark Automotive received the 2023 Consumer Satisfaction Award from DealerRater, highlighting its customer-centric approach[20] Adjustments and Other Financial Metrics - Total pre-tax adjustments for the twelve months ended December 31, 2024, amounted to $14.6 million, compared to $79.9 million for the same period in 2023[43] - The company incurred storm damage charges of $3.2 million for the three months ended December 31, 2024, and $8.3 million for the twelve months ended December 31, 2024[44] - Cyber insurance proceeds of $10.0 million were recorded for the three months ended December 31, 2024[44] - The company reported a provision for income taxes of $23.5 million for the three months ended December 31, 2024, compared to $16.0 million for the same period in 2023[44]