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I would now like to introduce Mr. Scott Smith, Co-Founder and President of Sonic Automotive. Mr. Smith, you may now begin your conference.Scott Smith Thank you, [Jodie]. Good morning. And welcome ladies and gentlemen to Sonic Automotive’s first quarter 2012 earnings call. I’m Scott Smith, the company’s President and Co-Founder. Joining me on the call today are Dave Cosper, our CFO; and Jeff Dyke, our Executive Vice President of Operations. I’ll start the call today with an overview of the quarter and then I’ll turn the call over to Dave for his review of our financial results, followed by Jeff with some outlook at our operating results. We’ll then have closing comments and open the call for your questions. If you please turn to the first slide, overall results. We’ve been on a path for [technical difficulty] Sonic Automotive that I believe will ultimately differentiate us greatly from the peer group. At its core, our strategy is built on our people and our culture. Relative to our priorities, we continue to focus on investing in our base business, acquiring our real estate and opportunistically reducing our debt. Our commitment to being predictable, repeatable and sustainable through the execution of our playbooks and the development, and deployment of our proprietary technologies to support our processes will yield higher returns and acquisitions at this time. The overall result for the first quarter met our expectations and has us on track for the high-end of our annual guidance for the year. Allow me to repeat, our overall results for the first quarter met our expectations and has us on track for the high-end of our annual guidance for the year. We posted record revenues with sales almost $2 billion and our income from continuing operations rose just over 24% to $19.5 million. Growth was experienced in all revenue categories. This translated into diluted EPS from continuing operations of $0.33 share or 22% improvement over the prior year period.
I’ll now turn the call over to Dave to review our financial results. Dave?Dave Cosper Thanks Scott, and good morning, everyone. As Scott mentioned, revenue for the quarter was $2 billion, up 9% from a year ago, operating profit was up 10% and net income at $19 million was up 24%. I’m very pleased with the profit growth we’re achieving through improved operations at our existing stores without acquisitions. It shows me what this business can do when you get the people and processes right and take care of the customer. Continuing ops EPS was $0.33 for the quarter, up 22% from last year. Next slide please, SG&A as a percent of gross improved 30 basis points to 79.4%. As I mentioned on our last call, this year and into next is a fairly heavy investment period for us. We’re investing in technology and training for our people to improve even further our sales efficiency and effectiveness, and our ability to take care of our customers. Obviously, our investment spending puts pressure on cost but our success in selling is driving higher gross profit. And frankly, we’re just getting started. We expect SG&A as a percent of gross to be below 78% for the year. Next slide please, our gross capital spending for the first quarter was $12 million, which is fairly light given the outlook for the year. We have several projects we’re getting underway presently. Suspending is going to ramp up for the balance of the year. We closed on two mortgages in the quarter providing funding of almost $11 million, so net cash used for CapEx was $1 million for the quarter. Next slide please, this slide shows the covenants for our syndicated credit facility. As you can see, we’re comfortably compliant with all our covenants and expect to be compliant going forward. In terms of capital allocation, as Scott mentioned, we remain focused on investing in our base business, owning our properties and reducing our debt. Read the rest of this transcript for free on seekingalpha.com