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Bruton Smith: Bankruptcy? "Not just 'No!' but 'Hell, no!"


Bruton Smith repeats his belief the U.S. economy has already begun a turnaround (Photo: HHR for Lowe's Motor Speedway)

   By Mike Mulhern

   FORT WORTH, Texas
    An angry Bruton Smith denies that his car dealership empire is in any trouble, and emphatically denies any possibility of a bankruptcy.
   In fact Smith repeated his declaration that the U.S. economy has started a dramatic turnaround…despite the bad economic news rolling around on TV.
   "It may be our fault, but a news release was put out Tuesday evening, after the market closed, and it didn't state facts," Smith said Friday at Texas Motor Speedway.
   "Sonic Automotive made money last year. Paid a lot of taxes.
   "What we were reporting was technically a write-off of goodwill. We wrote off some $560 million of goodwill.
   "That has no effect on your bottom line.
   "I read somewhere that we were posting a loss of $600-some million. But that was not the case at all.
   "We made money last year, I would say, pre-taxes, some $70 million to $80 million.
   "We're making money right now. We just ended the best month we've had in five months. Some of our dealerships had a record month.
   "I know of one that sold 72 new cars on Saturday.
   "These are some great numbers….in any kind of economy.
   "I've gone out on a limb and said the economy has bottomed and turned around. We can tell that by the automobile business.
   "The automobile business is the first one to come out. And we've been in it for about 18 months now."
   Smith, when asked about President Obama's Monday White House briefing outlining his plans for General Motors and Chrysler, pointedly snubbed the president's economic game plan: "That was a major, major pooh-pooh," Smith says. "He should not have done that."
   And Smith said he didn't foresee any significant changes in the GM and Chrysler support of NASCAR racing, because of anything Obama might do: "I think you'll look around next year and they'll still be right here."
   Smith added that he didn't even bother watching the President on TV: "I think I was watching Oprah instead."


Should we really put that

Should we really put that much stock into what Bruton Smith says?

Well, maybe not....but he's a

Well, maybe not....but he's a billionaire, and I'm not....yet.

As I recall, according to an

As I recall, according to an unreliable source (FORBES), BSmith is no longer a billionaire.

Uh, I'll let you ask him that

Uh, I'll let you ask him that question.

Now which should you believe

Now which should you believe - Bruton's statements to sports reporters or the statements made in writing by the company he controls in a report filed with the federal government?

Bruton's company, Sonic

Bruton's company, Sonic Automotive (NYSE: SAH), issued a statement Friday April 3rd "to clarify disclosures in its earnings release related to the write-down of goodwill and franchise impairment."
The statement said that the auto dealership operation "was profitable in 2008, with positive income from continuing operations of $42.2 million."
However the statement said the company was "required, under accounting rules" to write-down "goodwill."
I'm not sure I understand all that.
But the statement went on to point to refinancing issues Sonic was currently facing, in the tight credit market.
The statement concludes "Our dealerships continue to perform well, and we are generating cash, despite a very challenging retail environment….We will continue working with our stake-holders to resolve our debt maturity issue."

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