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Sonic Automotive (SAH) Offers Senior Notes Worth $250M
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Sonic Automotive, Inc. (SAH - Free Report) has announced a private offering of $250 million aggregate principal amount of Senior Subordinated Notes due 2027. The notes will be available to qualified institutional buyers and in offshore transactions subject to applicable laws.
Sonic Automotive has offered the notes at a price of 100% of the principal amount and will bear an interest rate of 6.125% per annum. The company expects the offering to close on Mar 10, subject to market and other customary closing conditions.
Proceeds from the offering will be used by Sonic Automotive to repay $200 million in aggregate principal amount of 7.0% senior subordinated notes due 2022 as well as related fees and expenses. Any remaining amount will be utilized for general corporate purposes, including acquisition as well as development of dealerships and related real property, share buybacks of the company's Class A common stock along with other working capital requirements.
Sonic Automotive recorded adjusted earnings per share of 66 cents in the fourth quarter of 2016, up from 61 cents recorded in the year-ago quarter. Earnings also surpassed the Zacks Consensus Estimate of 62 cents. Total revenue in the reported quarter increased 3.5% to $2.56 billion. The figure also surpassed the Zacks Consensus Estimate of $2.50 billion.
As of Dec 31, 2016, Sonic Automotive’s cash and cash equivalents were $3.1 million, down 18.4% from Dec 31, 2015 while long-term debt rose 7.5% to $839.7 million as of that date.
Sonic Automotive expects new vehicle industry volumes in the range of 17–17.5 million units in 2017. The company expects earnings per share in 2017 in the band of $2.00–$2.10 compared to $2.01 earned in 2016. Earnings include the projected EchoPark results. However, the company expects to incur a loss of 23 cents–27 cents in 2017 due to EchoPark.
Price Performance
Sonic Automotive has underperformed the Zacks categorized Retail/Wholesale Auto/Truck industry over the last three months. During this period, the company’s share price decreased 9.4% while the industry saw a 5.7% decline.
Zacks Rank & Key Picks
Sonic Automotive currently carries a Zacks Rank #4 (Sell).
Some better-ranked companies in the auto space include Fiat Chrysler Automobiles N.V. , Renault SA (RNLSY - Free Report) and Honda Motor Co., Ltd. (HMC - Free Report) .
Renault, also sporting a Zacks Rank #1, has an expected long-term growth rate of 4.6%.
Honda, carrying a Zacks Rank #2 (Buy), has an expected long-term growth rate of 26%.
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Sonic Automotive (SAH) Offers Senior Notes Worth $250M
Sonic Automotive, Inc. (SAH - Free Report) has announced a private offering of $250 million aggregate principal amount of Senior Subordinated Notes due 2027. The notes will be available to qualified institutional buyers and in offshore transactions subject to applicable laws.
Sonic Automotive has offered the notes at a price of 100% of the principal amount and will bear an interest rate of 6.125% per annum. The company expects the offering to close on Mar 10, subject to market and other customary closing conditions.
Proceeds from the offering will be used by Sonic Automotive to repay $200 million in aggregate principal amount of 7.0% senior subordinated notes due 2022 as well as related fees and expenses. Any remaining amount will be utilized for general corporate purposes, including acquisition as well as development of dealerships and related real property, share buybacks of the company's Class A common stock along with other working capital requirements.
Sonic Automotive recorded adjusted earnings per share of 66 cents in the fourth quarter of 2016, up from 61 cents recorded in the year-ago quarter. Earnings also surpassed the Zacks Consensus Estimate of 62 cents. Total revenue in the reported quarter increased 3.5% to $2.56 billion. The figure also surpassed the Zacks Consensus Estimate of $2.50 billion.
As of Dec 31, 2016, Sonic Automotive’s cash and cash equivalents were $3.1 million, down 18.4% from Dec 31, 2015 while long-term debt rose 7.5% to $839.7 million as of that date.
Sonic Automotive expects new vehicle industry volumes in the range of 17–17.5 million units in 2017. The company expects earnings per share in 2017 in the band of $2.00–$2.10 compared to $2.01 earned in 2016. Earnings include the projected EchoPark results. However, the company expects to incur a loss of 23 cents–27 cents in 2017 due to EchoPark.
Price Performance
Sonic Automotive has underperformed the Zacks categorized Retail/Wholesale Auto/Truck industry over the last three months. During this period, the company’s share price decreased 9.4% while the industry saw a 5.7% decline.
Zacks Rank & Key Picks
Sonic Automotive currently carries a Zacks Rank #4 (Sell).
Some better-ranked companies in the auto space include Fiat Chrysler Automobiles N.V. , Renault SA (RNLSY - Free Report) and Honda Motor Co., Ltd. (HMC - Free Report) .
Fiat has an expected long-term growth rate of 21.7% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Renault, also sporting a Zacks Rank #1, has an expected long-term growth rate of 4.6%.
Honda, carrying a Zacks Rank #2 (Buy), has an expected long-term growth rate of 26%.
8 Stocks with Huge Profit Potential
Just released: Driverless Cars: Your Roadmap to Mega-Profits Today. In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>