| -

CHARLOTTE, N.C. — Sonic Automotive's used-vehicle operations ended 2009 on quite a high note as executives highlighted volume and gross profit gains during the fourth quarter.

Sonic revealed overall used-vehicle unit volume climbed 18 percent and total used-vehicle revenue jumped almost 23 percent for the fourth quarter of last year as compared to the same quarter of 2008.

Jeff Dyke, Sonic's executive vice president of operations, shared his assessment about those gains and how the company compiled them.

"The operating playbooks we have been steadily implementing in our used-vehicle business continue to drive improvements," Dyke stated.

"This is not just trimming margins to gain volume. We have rolled out a comprehensive strategy that involves getting the right vehicles at the right stores at the right price," he insisted.

"When we offer our customers the vehicle they want at a fair price everybody wins — our customers are satisfied and our business grows," Dyke added.

Dyke went on to mention some other specific data connected with Sonic's used-vehicle operation.

"The gross profit dollars generated by our used-vehicle business in the fourth quarter increased $4.7 million, or 21.1 percent, compared to the prior year period," Dyke pointed out.

"This is without considering the incremental F&I and service business we gained with every additional used vehicle we sold," he interjected.

Meanwhile, Sonic's performance within its new-vehicle operation fared pretty well in the fourth quarter, too.

"Our new-vehicle retail revenue was up approximately 11 percent compared to the fourth quarter last year as our dealerships continue to gain share in their local markets," explained company president Scott Smith.

"In addition, our new-vehicle retail margin for the quarter at 7.3 percent was up 60 basis points compared to the same period last year," Smith added.

Although Sonic revealed parts and service revenue for the fourth quarter was flat with the prior year quarter, the company said gross margin was up 20 basis points at 50.3 percent. Overall, executives described parts and service as "a steady contributor to the bottom line."

Dyke stated, "Our parts and service business remains a very profitable and stable piece of our business with the potential for future upside as we continue to roll out our comprehensive operational playbook for this area."

When looking at the total figures for the fourth quarter, Sonic noted its total revenue was $1.6 billion with gross profit coming in at $259 million.

"The operating initiatives that our stores have been refining over the course of this year continued to drive value for us in the fourth quarter," Smith stressed.

"Vehicle volume for both our new and used business was up nicely as a result of our e-commerce, advertising and other strategies. Our strong luxury brand mix contributed to our performance as pre-tax profits at our luxury-branded stores were up significantly compared to the prior year quarter," he went on to highlight.

"As we progressed through the fourth quarter and the industry-wide new vehicle sales volume rose, we saw dealership profits rise substantially due to our ability to leverage the cost reductions we've made throughout the year," Smith added.

Along with detailing statistics about the fourth quarter, Sonic also revealed its year-end financial figures.

The company's total revenue was $6.13 billion, while its gross profit totaled $1.04 billion.

Looking deeper into how those figures came to be, Sonic noted that total used-vehicle revenue was $1.45 billion while new-vehicle revenue was $3.26 billion.

Smith also shared an update about Sonic's credit portfolio.

"We were pleased to make our announcement in early January that we had completed the refinancing of our syndicated credit facility," Smith said.

"That marks the completion of another step we have taken over the course of 2009 and early 2010 to improve our capital structure," he continued.

Smith wrapped up his assessment of the company's performance by sharing a positive outlook for Sonic going forward.

"The hard work of our associates and the stability of our business model has been tested and proven once again in the fourth quarter," Smith noted.

"As a result of many actions taken over the course of this year — expense reductions, strengthening the balance sheet, optimizing cash flow — we believe we have set the stage for an even better 2010," he concluded.