SONIC AUTOMOTIVE INC (SAH): auditor change — Sonic Automotive restates Q1-Q2 2022 fleet revenue; internal control material weakness

SONIC AUTOMOTIVE INC

Restatement corrects overstatement of fleet new vehicle revenue by $130.4M (Q1) and $146.6M (Q2); no impact on gross profit or net income.
Error stemmed from gross vs. net accounting for certain fleet transactions at one RFJ-acquired store; affects 3 months ended Mar 31 and Jun 30, 2022.
Management identified a material weakness in internal control over financial reporting for Q1-Q3 2022; remediation plan to be detailed in Q3 10-Q.
Prior 10-Qs for Mar 31 and Jun 30, 2022 no longer reliable; KPMG informed and Audit Committee authorized restatement.

item 4.02

Key facts

Extracted from this filing and checked against the source text.

Auditor Changes SEC 8-K Item 4.01/4.02 confidence 0.9

SONIC AUTOMOTIVE INC reported that prior financial statements should not be relied upon.

Action: non reliance

Exact text from the filing

Contemporaneously with this Current Report on Form 8-K, the Company intends to restate the unaudited condensed consolidated financial statements included in the Affected 10-Qs for the three months ended March 31, 2022 and the three and six months ended June 30, 2022, which were initially filed with the Affected 10-Qs, in order to correct the identified misstatements contained therein. The tables below reflect the sections of the Company’s unaudited condensed consolidated financial statements that were impacted by the error: Three Months Ended March 31, 2022 (Dollars in millions) As Reported Adjustments As Restated Revenues: Fleet new vehicles $ 148.6 $ (130.4) $ 18.2 Total new vehicles $ 1,499.9 $ (130.4) $ 1,369.5 Total vehicles $ 3,039.5 $ (130.4) $ 2,909.1 Total revenues $ 3,586.6 $ (130.4) $ 3,456.2 Cost of sales: Fleet new vehicles $ (147.8) $ 130.4 $ (17.4) Total new vehicles $ (1,

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Source: SEC EDGAR

accession 0001043509-22-000016

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