News

Sonic's year-end results are in the black

October 18, 2011

Sonic Corp., the nation's largest chain of drive-in restaurants, has announced results for its fourth quarter and fiscal year ended Aug. 31. The company reported system-wide positive same-store sales of 0.5 percent, with an increase of 1.8 percent at company drive-ins and 0.4 percent at franchise drive-ins. This improvement compares to a decline of 7.8 percent for fiscal 2010.

"It is encouraging to see our service and product initiatives making a positive impact on sales," said Clifford Hudson, chairman and CEO. "In addition to showing sales improvements in fiscal 2011, we also refinanced our debt at attractive terms. This new capital structure provides us financial flexibility at a favorable interest rate."

Hudson said the company expects to generate about $35 million to $40 million of free cash flow during fiscal 2012.

"We believe the recently announced $30 million share repurchase program is an effective use of our cash and will optimize shareholder value," he said.

Key highlights of the company's fourth quarter report included:

• The company's net income for the fourth quarter of fiscal 2011 was $0.20 per diluted share compared with net income per diluted share of $0.08 in the fourth quarter of fiscal 2010;
• System-wide same-store sales decreased 0.5 percent during the fourth quarter, with an increase of 0.4 percent at company drive-ins and a decrease of 0.6 percent at franchise drive-ins; and
• Franchise drive-in openings totaled 14 for the quarter, bringing year-to-date openings to 40.

"We are pleased with the overall trajectory of our business," Huson said. "Same-store sales for the system continue to be positive in the current fiscal quarter which is on track with our expectations. While we expect continued sales volatility due to external economic challenges, we believe the improvements we have made to our business will continue to yield positive results in 2012 and for the long term."

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