Sonic, After Avoiding Bankruptcy, Posts Q4 Profit
Sonic Automotive Inc., which was on the verge of bankruptcy less than a year ago, said today it posted fourth-quarter net income from continuing operations of $9.3 million or 18 cents a share, Automotive News reported.
That compares with a fourth-quarter 2008 loss of $8.5 million or 21 cents a share from continuing operations.
Total revenue improved to $1.59 billion, up 9.6 percent from $1.45 billion during the same quarter of 2008.
The nation’s fourth-largest dealership group sold 24,902 new vehicles during the quarter, accounting for $869.1 million in revenue. That compares with 24,025 new vehicles sold during the same quarter of 2008, generating $795.7 million in revenue.
Sonic last spring restructured its debts and was allowed to postpone a $90 million debt payment until 2012. In Sonic's 10-K annual report last year, auditors questioned whether the company could continue to operate as a going concern. This "going concern" notice put Sonic in violation of some of its debt covenants.
But the company survived the industrywide 21 percent plunge in U.S. vehicle sales and refinanced its credit lines last month.
In a statement, Sonic President Scott Smith said operating initiatives in e-commerce, advertising and “other strategies” helped improve sales volumes for new and used vehicles.
“Our strong luxury brand mix contributed to our performance as pretax profits at our luxury-branded stores were up significantly compared to the prior-year quarter,” he said.
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