Sonic Corp.'s results for its third fiscal quarter ended May 31 include a net loss of $4.7 million, or 8 cents per share, compared to the same period last year; however the drive-in restaurant chain's adjusted profits from its successful debt refinancing helped boost revenue up 4.1 percent.
Revenue jumped to $152.1 million, from $146 million.
Excluding the debt extinguishment costs, Sonic's profit was 21 cents per share, compared to 15 cents for the same quarter in 2010.
Additionally, Sonic's systemwide same-store sales increased 3.9 percent for Q3 versus a decline of 6 percent in Q3 '10.
Same-store sales at franchise drive-ins increased 3.6 percent in Q3, while same-store sales at company-owned drive-ins increased 6.5 percent.
Franchise drive-in openings totaled 12 for the quarter, bringing year-to-date openings to 26.
"We are pleased with Sonic's positive sales trends, which reflect the impact of service and product quality initiatives implemented over the past few years, as well as a slightly improving economy," said Clifford Hudson, chairman and CEO of Sonic Corp.
Hudson attributed some of the quarter's success to the chain's new line of 6-inch premium beef hot dogs, which he calls a "distinctive product at a great price point."
Also, Sonic's company-owned same-store sales growth's outperforming its franchised locations present a good opportunity for enhanced earnings and shareholder value, Hudson said.
"Notably, the effect of strong same-store sales momentum for company-owned drive-ins in the third quarter produced a 240-basis-point year-over-year improvement in restaurant-level margins and has more than offset the effects of higher commodity costs," Hudson said. "Positive system sales in turn drive other aspects of our multi-layered growth strategy, such as our ascending royalty rate and increased operating cash flow."
For the fourth quarter of fiscal 2011, Sonic plans to open approximately 15 new franchise drive-ins and continue to experience positive same-store sales.
"It is encouraging to see that the product and service initiatives we implemented over the past few years are having a positive impact on sales and operating leverage," Hudson said. "These improved results, combined with the increased financial flexibility the refinancing transaction provides, create a strong foundation for increased shareholder value ... We believe the steps we have taken to strengthen our business position us to sustain these sales and margin gains over the longer term."
