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Letter to the Editor
Tuesday July 31
Sonic Automotive Reports Strong Q2
Sonic Automotive, Inc. has announced that second quarter 2007 earnings from continuing operations were $30.0 million, compared to $17.8 million in the prior year period."Our performance continues to validate the effectiveness of our key operating initiatives," said President and Chief Strategic Officer B. Scott Smith. "Our gross margin rate increased to 15.6 percent as a result of continuing growth in our higher-margin used vehicle, fixed operations, and F&I departments. In addition to these revenue-oriented initiatives, we continue to see consistent reductions in our SG&A expenses as a percentage of gross profit. As a result of our strong performance over the first half of the year and our outlook for a stable operating environment over the second half, we are increasing our target for 2007 earnings per share from continuing operations to a range of $2.50 to $2.60. This does not include the impact of any unannounced acquisitions."
Sonic's Board of Directors has authorized an additional $30 million to be used in the company's ongoing share repurchase program.
Smith commented, "Sonic Automotive has maintained an active share repurchase program for a number of years as a means of offsetting dilution in the company's stock, returning capital to shareholders, and taking advantage of short-term volatility in the company's share price. We will continue to execute this program in conjunction with our stated objectives for managing the company's capital structure."
Sonic Automotive, Inc., a Fortune 300 company based in Charlotte, North Carolina, is one of the largest automotive retailers in the United States, operating 173 franchises and 37 collision repair centers.
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