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Twelfth Consecutive Quarter of Big Growth Reported by Sonic Automotive

October 31, 2000

Sonic Automotive, Inc. has announced that net income for the third quarter ended Sept. 30, 2000 increased 75 percent to $22.1 million, or $0.51 per diluted share, from $12.6 million, or $0.33 per diluted share, for the third quarter ended Sept. 30, 1999.

For the first nine months of 2000, net income increased 111 percent to $61.9 million, or $1.40 per diluted share, from $29.4 million, or $0.88 per diluted share for the first nine months of 1999. The third quarter of 2000 was Sonic's twelfth consecutive quarter of greater than 50 percent growth in earnings per share.

Net income before tax effected goodwill amortization expense per diluted share was $0.57 in the third quarter of 2000 versus $0.37 in the third quarter of 1999, an increase of 35 percent. For the first nine months of 2000, net income before tax effected goodwill amortization expense per diluted share was $1.60 versus $0.87 in the first nine months of 1999, an increase of 84 percent.

"Since going public Sonic has delivered an exceptional three-year record of greater than 50 percent per share earnings growth," said O. Bruton Smith, Sonic Automotive's chairman and CEO. "We continue to demonstrate the ability to grow the company and earnings per share. We believe our performance through the end of the third quarter will enable us to report earnings per share of $1.84 to $1.87 for the year ended Dec. 31, 2000. Given continuation of current industry trends and no additional acquisitions, we are targeting earnings per share in the range of $2.08 to $2.13 for 2001."

Delivering Growth in Revenues and Margins

Total revenues for the third quarter of 2000 increased 83 percent to $1.6 billion from $870.0 million in the third quarter of 1999. Sonic's top five brands for the quarter were Honda (15 percent), Ford (13 percent), Chrysler-Dodge-Jeep (13 percent), BMW (10 percent), and Toyota (9 percent).

Revenue mix for the quarter remained constant with vehicle sales contributing 86 percent of total revenues and parts, service, collision repair, finance and insurance and other contributing 14 percent.

F&I revenue increased from $686 per unit in the third quarter of 1999 to $790 per unit in the third quarter of 2000.

Gross profits increased 96 percent to $228.7 million in the third quarter of 2000, compared to $116.7 million in the third quarter of 1999. Overall gross margins increased to 14.3 percent in the third quarter of 2000 from 13.4 percent in the third quarter of 1999. Total vehicle gross margins increased from 7.7 percent in the third quarter 1999 to 8.1 percent in the third quarter of 2000. Gross margins for pats, service and collision repair increased from 40.8 percent in the third quarter of 1999 to 44.7 percent in the third quarter of 2000.

Total revenues for the first nine months of 2000 rose 111 percent to $4.6 billion versus $2.2 billiion in the first nine months of 1999. For the first nine months of 2000 vehicle sales contributed 86 percent of total sales compared to 87 percent in the same period in the prior year. Parts, service, collision repair, F&I and other contributed 14 percent of total sales for the first nine months of 2000 compared to 13 percent of total sales in the same period in the prior year.

F&I revenues for the first nine months of 2000 increased $139 per unit or 23 percent from $614 per unit to $753 per unit.

Gross profits increased 127 percent to $656.1 million in the first nine months of 2000, compared to $289.0 million for the same period in the prior year. Overall gross margins increased to 14.2 percent in the first nine months of 2000 from 13.2 percent in the same period in the prior year. Vehicle gross margins increased for the first nine months of 2000 from 7.9 percent to 8.1 percent. Gross margins for parts, service and collision repair increased for the first nine months of 2000 from 41.6 percent to 44.5 percent.

On a same store basis, total revenues in the three months ended Sept. 30, 2000 increased 2.4 percent compared to the same period last year. Same store new vehicle sales declined 2.6 percent for the third quarter while same store used retail vehicle sales increased 14.1 percent for the third quarter compared to the same period last year. Combined vehicle sales on a same store basis increased 1.7 percent for the third quarter compared to the same period last year.

For the three months ended Sept. 30, 2000 same store sales for high margin F&I products increased 10.4 percent compared to the same period last year. Same store operating income increased 4.3 percent for the third quarter of 2000 compared to the same period last year. Same store performance in the third quarter continues to reflect aggressive actions to reduce unprofitable large fleet sales. Fleet sales declined 39.9 percent in the same store base. Without considering fleet sales, same store sales would have been up 3.5 percent in the quarter.

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