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» Sonic Automotive, Inc. Q1 2010 Earnings Call Transcript
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Certain non-GAAP financial measures as defined under SEC rules, maybe discussed on this call. Management uses non-GAAP financial measures to analyst the underlying operating trends in our business. Reconciliations are provided in our press release and in our earnings conference presentation materials, which are available on our website at www.sonicautomotive.com. Thank you.I would now like to introduce Mr. Scott Smith, Co-Founder and President of Sonic Automotive. Mr. Smith, you may begin your conference. Scott Smith Great. Thank you. Good morning, ladies and gentlemen. I am Scott Smith, Co-Founder, President and Chief Strategic Officer. Welcome to Sonic Automotive's second quarter 2010 earnings conference call. Joining me on the call today are the company's Vice Chairman and Chief Financial Officer, Dave Cosper; and our Executive Vice President of Operations, Mr. Jeff Dyke; our Executive Vice President, Mr. David Smith; Greg Young, our Vice President of Finance. Today, I will discuss an overview of the quarter, and then turn I will the call over to Dave Cosper for a detailed financial review. Jeff will follow Dave and give an update on our operational trends, and I will then summarize and make closing comments. Please turn to the next slide. Overall results Q2 2010; we had solid operating quarter with strong results in every area of our business. The combination of some economic stabilization key areas of our footprint along with the continued execution of our operational playbooks resulted in 16% growth in total revenue. Our new vehicle revenue was up 19% and our used vehicle revenue was up 23%. Our used vehicle playbook continues to drive consistent performance in this area. Jeff will go into more detail but let me give you little color and highlights. Our used to new ratio was at 1 to 1 for the quarter. We have previously stated our goal of averaging 100 used vehicle sold per store for a month. Our store averages 75 vehicles in the second quarter. Our used vehicle playbook continues to also drive growth in parts and service in F&I areas. Our F&I revenue grew by 18% over Q2 of last year, which was driven largely by an increase on our vehicle sales volumes. Jeff will provide you more color on the more recent roll out of our playbooks in other areas of our business.
The SAAR came in at $11.3 million for the quarter which is right in line with our expectations. We continue to build our plan on the $11 million SAAR for the full year. Our balance sheet continued to improve as we completed our refinancing of our senior subordinated notes and also continue to repurchase debt in the open market as we move forward our goal of further de-levering the balance sheet over the next several years. We are beginning to see the results of our interest rate as costs were down $3.3 million for Q2 from last year.With that I'll turn the call over to our Chief Financial Officer, Mr. Dave Cosper. Dave? Dave Cosper Thank you, Scott and good morning everyone. Overall I am pleased with the results for the quarter. We saw a good revenue growth as Scott mentioned in all parts of the business. Total revenue was up 16% and gross was up 10%. Adjusted profit for the quarter was $15.6 million, up 41% from a year ago. Adjusted earnings per share were $0.27 for the quarter. On our last call I mentioned I was comfortable with the low end of analyst expectations for the year, specifically $0.90. I continue to believe $0.90 is appropriate. Seeing the results for Q3 and Q4 it will be about equal $0.24 to $0.25 in each of those quarters. Read the rest of this transcript for free on seekingalpha.com