Drmicrocap
9 years ago
Sonic Same-Store Sales Grow 6.5% for the Quarter Ending February 29
Two Year Winter Quarter Cumulative Sales Growth Totals 18%
Business Wire Sonic Corp.
March 29, 2016 4:05 PM
????
OKLAHOMA CITY--(BUSINESS WIRE)--
Sonic Corp. (SONC), the nation’s largest chain of drive-in restaurants, today announced results for its second fiscal quarter ended February 29, 2016.
Key highlights of the company’s second quarter of fiscal year 2016 included:
Net income per diluted share increased 57% to $0.22 compared with $0.14 in the same period prior year; adjusted net income per diluted share increased 38% to $0.18 compared with adjusted net income per diluted share of $0.13 in the prior-year period;
System same-store sales increased 6.5%, consisting of a 6.5% same-store sales increase at franchise drive-ins and an increase of 6.3% at company drive-ins;
Company drive-in margins improved by 60 basis points;
Five new franchise drive-ins opened; and
The company purchased 0.9 million outstanding shares.
"Our business continues to perform at an exceptional level, generating 6.5% same-store sales growth for the system while lapping our strongest same-store sales comparison in ten years,” said Cliff Hudson, Sonic Corp. CEO. “Continued strength in core menu items, combined with highly effective limited-time-offer and value-based promotions, allowed us to increase market share in a highly competitive environment. The combination of sales leverage and a favorable commodity cost environment helped to generate another quarter of solid margin improvement at the drive-in level.
“As we look to sustain our recent momentum, we continue to invest aggressively in our people and technology initiatives, which we believe will further differentiate the experience we provide to our consumers," continued Hudson. "And we are pleased to have repurchased 2.7 million shares in the first half of 2016, representing 5.2% of shares outstanding. We remain confident in the ability of our multi-layered growth strategy to increase EPS through same-store sales growth, improved margins, increased royalty revenues, accelerated new drive-in development and the deployment of free cash flow1.”
Same-Store Sales
For the second fiscal quarter ended February 29, 2016, system same-store sales increased 6.5%, which was comprised of a 6.5% same-store sales increase at franchise drive-ins and an increase of 6.3% at company drive-ins.
Financial Overview
For the second fiscal quarter of 2016, the company’s net income increased to $10.8 million or $0.22 per diluted share compared with net income of $7.7 million or $0.14 per diluted share in the same period in the prior year. Excluding the items outlined below, net income and net income per diluted share increased 29% and 38%, respectively.
The following analysis of non-GAAP adjustments is intended to supplement the presentation of the company’s financial results in accordance with GAAP. The company believes that the presentation of this analysis provides useful information to investors and management regarding the underlying business trends and the performance of the company’s ongoing operations and is helpful for period-to-period and company-to-company comparisons, which management believes will assist investors in analyzing the financial results of the company and predicting future performance.
Three months ended Three months ended
February 29, 2016 February 28, 2015
Net Diluted Net Diluted Net Income Diluted EPS
Income EPS Income EPS $ Change % Change $ Change % Change
Reported – GAAP $ 10,819 $ 0.22 $ 7,662 $ 0.14 $ 3,157 41 % $ 0.08 57 %
After-tax gain on sale of real estate (1,211 ) (0.03 ) - -
Retroactive benefit of Work Opportunity Tax Credit and resolution of tax matters (585 ) (0.01 ) (666 ) (0.01 )
Adjusted - Non-GAAP $ 9,023 $ 0.18 $ 6,996 $ 0.13 $ 2,027 29 % $ 0.05 38 %
For the first six months of fiscal year 2016, net income totaled $23.3 million or $0.46 per diluted share compared with net income of $17.7 million or $0.32 per diluted share for the same period in 2015. Excluding the items outlined below, net income and net income per diluted share increased 26% and 35%, respectively.
Six months ended Six months ended
February 29, 2016 February 28, 2015
Net Diluted Net Diluted Net Income Diluted EPS
Income EPS Income EPS $ Change % Change $ Change % Change
Reported – GAAP $ 23,277 $ 0.46 $ 17,747 $ 0.32 $ 5,530 31 % $ 0.14 44 %
After-tax gain on sale of real estate (1,211) (0.03) - -
Retroactive benefit of Work Opportunity Tax Credit and resolution of tax matters (585) (0.01) (666) (0.01)
Adjusted - Non-GAAP $ 21,481 $ 0.42 $ 17,081 $ 0.31 $ 4,400 26 % $ 0.11 35 %
Fiscal Year 2016 Outlook
While the macroeconomic environment may impact results, the company is revising its outlook for adjusted earnings per share growth for fiscal year 2016 from 16% to 20% to 20% to 25%. The outlook for fiscal 2016 anticipates the following elements:
4% to 6% same-store sales growth for the system;
Royalty revenue growth from same-store sales improvements and new unit development;
50 to 60 new franchise drive-in openings;
Drive-in-level margin improvement between 50 to 60 basis points, depending upon the degree of same-store sales growth at company drive-ins;
Selling, general and administrative expenses of approximately $84.0 million to $85.0 million reflecting increased investment in human resources and technology to support brand initiatives;
Depreciation and amortization expense of $45.0 million to $46.0 million as a result of capital investment in fiscal 2016;
Capital expenditures of $35 million to $40 million;
Free cash flow of approximately $75 million to $80 million;
An income tax rate between 36.0% to 37.0%;
The planned repurchase of $126 million of stock across the fiscal year; and
An expected quarterly cash dividend of $0.11 per share.
1 Free cash flow is defined as net income plus depreciation, amortization and stock compensation expenses, less capital expenditures.
Earnings Conference Call
The company will host a conference call to review financial results at 5:00 PM ET this evening. The conference call can be accessed live over the phone by dialing (888) 438-5448 or (719) 325-2491 for international callers. A replay will be available one hour after the call and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the conference ID is 8155461. The replay will be available until Tuesday, April 5, 2016. An online replay of the conference call will be available approximately two hours after the conclusion of the live broadcast. A link to this event may be found on the company's investor relations website at http://ir.sonicdrivein.com/.
About Sonic
SONIC, America's Drive-In is the nation's largest drive-in restaurant chain serving more than 3 million customers every day. Nearly 90 percent of SONIC's 3,500 drive-in locations are owned and operated by local business men and women. For more than 60 years, SONIC has delighted guests with signature menu items, more than 1.3 million drink combinations and friendly service by iconic Carhops. To learn more about Sonic Corp. (NASDAQ/NM: SONC), please visit sonicdrivein.com or follow us on Facebook and Twitter.
This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements reflect management’s expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. Factors that could cause actual results to differ materially from those expressed in, or underlying, these forward-looking statements are detailed in the company’s annual and quarterly report filings with the Securities and Exchange Commission. The company undertakes no obligation to publicly release revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.
The tables that follow provide information regarding the number of company drive-ins, franchise drive-ins and system drive-ins in operation as of the end of the periods indicated. In addition, these tables provide information regarding franchise sales, system growth in sales, and both franchise and system average drive-in sales and change in same-store sales. System information includes both company and franchise drive-in information, which we believe is useful in analyzing the growth of our brand. While we do not record franchise drive-in sales as revenues, we believe this information is important in understanding our financial performance since we calculate and record franchise royalties based on a percentage of franchise sales. This information also is indicative of the financial health of our franchisees.
SONC-F
SONIC CORP.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three months ended Six months ended
February 29, February 28, February 29, February 28,
2016 2015 2016 2015
Revenues:
Company Drive-In sales $ 95,313 $ 92,309 $ 199,196 $ 192,447
Franchise Drive-Ins:
Franchise royalties and fees 36,047 32,407 75,969 70,671
Lease revenue 1,399 979 2,991 2,044
Other 401 524 807 913
Total revenues 133,160 126,219 278,963 266,075
Costs and expenses:
Company Drive-Ins:
Food and packaging 26,213 25,828 55,159 54,401
Payroll and other employee benefits 35,359 33,880 71,723 69,151
Other operating expenses, exclusive of
depreciation and amortization included below 20,100 19,924 43,008 42,529
Total cost of Company Drive-In sales 81,672 79,632 169,890 166,081
Selling, general and administrative 20,785 18,138 41,725 36,926
Depreciation and amortization 11,057 11,539 22,056 23,199
Other operating (income) expense, net (2,566 ) (81 ) (2,965 ) 340
Total costs and expenses 110,948 109,228 230,706 226,546
Income from operations 22,212 16,991 48,257 39,529
Interest expense 6,467 6,318 12,689 12,599
Interest income (105 ) (97 ) (205 ) (199 )
Net interest expense 6,362 6,221 12,484 12,400
Income before income taxes 15,850 10,770 35,773 27,129
Provision for income taxes 5,031 3,108 12,496 9,382
Net income $ 10,819 $ 7,662 $ 23,277 $ 17,747
Basic income per share $ 0.22 $ 0.14 $ 0.47 $ 0.33
Diluted income per share $ 0.22 $ 0.14 $ 0.46 $ 0.32
Weighted average basic shares 48,977 53,171 49,599 53,226
Weighted average diluted shares 49,988 54,660 50,656 54,744
SONIC CORP.
Unaudited Supplemental Information
Three months ended Six months ended
February 29, February 28, February 29, February 28,
2016 2015 2016 2015
Drive-Ins in Operation
Company:
Total at beginning of period 382 389 387 391
Opened - - - 1
Acquired from (sold to) franchisees (7 ) 3 (9 ) 1
Closed (net of re-openings) - - (3 ) (1 )
Total at end of period 375 392 375 392
Franchise:
Total at beginning of period 3,147 3,128 3,139 3,127
Opened 5 4 18 16
Acquired from (sold to) the company 7 (3 ) 9 (1 )
Closed (net of re-openings) (6 ) (13 ) (13 ) (26 )
Total at end of period 3,153 3,116 3,153 3,116
System-wide:
Total at beginning of period 3,529 3,517 3,526 3,518
Opened 5 4 18 17
Closed (net of re-openings) (6 ) (13 ) (16 ) (27 )
Total at end of period 3,528 3,508 3,528 3,508
Three months ended Six months ended
February 29, February 28, February 29, February 28,
2016 2015 2016 2015
($ in thousands) ($ in thousands)
Sales Analysis
Company Drive-Ins:
Total sales $ 95,313 $ 92,309 $ 199,196 $ 192,447
Average drive-in sales 253 237 522 496
Change in same-store sales 6.3 % 11.2 % 5.3 % 9.5 %
Franchised Drive-Ins:
Total sales $ 886,313 $ 818,601 $ 1,854,828 $ 1,732,254
Average drive-in sales 283 267 593 561
Change in same-store sales 6.5 % 11.5 % 5.9 % 9.8 %
System-wide:
Change in total sales 7.8 % 12.8 % 6.7 % 10.9 %
Average drive-in sales $ 280 $ 264 $ 585 $ 554
Change in same-store sales 6.5 % 11.5 % 5.9 % 9.8 %
Note: Change in same-store sales based on restaurants open for a minimum of 15 months.
SONIC CORP.
Unaudited Supplemental Information
Three months ended Six months ended
February 29, February 28, February 29, February 28,
2016 2015 2016 2015
(In thousands) (In thousands)
Revenues
Company Drive-In sales $ 95,313 $ 92,309 $ 199,196 $ 192,447
Franchise Drive-Ins:
Franchise royalties 35,807 32,236 75,269 69,012
Franchise fees 240 171 700 1,659
Lease revenue 1,399 979 2,991 2,044
Other 401 524 807 913
Total revenues $ 133,160 $ 126,219 $ 278,963 $ 266,075
Three months ended Six months ended
February 29, February 28, February 29, February 28,
2016 2015 2016 2015
Margin Analysis (percentage of Company Drive-In sales)
Company Drive-Ins:
Food and packaging 27.5 % 28.0 % 27.7 % 28.3 %
Payroll and employee benefits 37.1 36.7 36.0 35.9
Other operating expenses 21.1 21.6 21.6 22.1
Cost of Company Drive-In sales 85.7 % 86.3 % 85.3 % 86.3 %
February 29, August 31,
2016 2015
(In thousands)
Selected Balance Sheet Data
Cash and cash equivalents $ 36,106 $ 27,191
Current assets 85,024 85,438
Property, equipment and capital leases, net 411,226 421,406
Total assets $ 606,747 $ 620,024
Current liabilities, including capital lease obligations and
long-term debt due within one year $ 69,484 $ 87,821
Obligations under capital leases due after one year 19,493 20,763
Long-term debt due after one year 484,863 428,238
Total liabilities 639,967 602,591
Stockholders' equity (deficit) $ (33,220 ) $ 17,433
View source version on businesswire.com: http://www.businesswire.com/news/home/20160329006484/en/
Contact:
Sonic Corp.
Corey Horsch, 405-225-4800
Vice President of Investor Relations and Treasurer
Drmicrocap
9 years ago
Sonic Announces 6.1% Same-Store Sales Growth for Third Fiscal Quarter of 2015
Business Wire Sonic Corp.
June 22, 2015 4:01 PM
????
OKLAHOMA CITY--(BUSINESS WIRE)--
Sonic Corp. (SONC), the nation’s largest chain of drive-in restaurants, today announced results for the third fiscal quarter ended May 31, 2015.
Key highlights of the company’s third quarter of fiscal year 2015 included:
Net income per diluted share was $0.38 compared with net income per diluted share of $0.30 in the prior-year period; excluding tax adjustments of $1.1 million, or $0.02 per share in the third fiscal quarter of 2015, earnings per share would have been $0.36, an increase of 20% from the prior-year same period;
System same-store sales increased 6.1%, consisting of a 6.1% same-store sales increase at franchise drive-ins and an increase of 5.5% at company drive-ins; and
Company drive-in margins improved by 100 basis points.
“We are very pleased with our strong sales and financial performance driven by a healthy mix of traffic and check,” said Cliff Hudson, Sonic Corp. CEO. “Our results are especially noteworthy given our strong results from the same quarter prior year. New product news in key categories, effective media and a layered promotional strategy are expected to continue to drive our sales in the near term. Technology initiatives designed to provide a more personalized and customized customer experience are also expected to complement our product and media initiatives and drive sales over the next several years.”
The strategies noted above will continue to drive Sonic’s multi-layered growth strategy which is comprised of initiatives to increase same-store sales, profits, royalty revenues and unit growth. Optimizing shareholder value by deploying free cash flow1 to invest in the brand, quarterly dividends and repurchase shares continues to be a key focus.
Same-Store Sales
For the third fiscal quarter ended May 31, 2015, system same-store sales increased 6.1%, which was comprised of a 6.1% same-store sales increase at franchise drive-ins and an increase of 5.5% at company drive-ins. Weather had a disproportionately adverse impact on company drive-in sales in the third fiscal quarter.
Financial Overview
For the third fiscal quarter of 2015, the company’s net income increased to $20.4 million or $0.38 per diluted share compared with net income of $16.8 million or $0.30 per diluted share in the same period in the prior year. Excluding tax adjustments of $1.1 million or $0.02 per share in the third fiscal quarter of 2015, net income and net income per diluted share increased 15% and 20%, respectively.
The following analysis of non-GAAP adjustments is intended to supplement the presentation of the company’s financial results in accordance with GAAP. The company believes that the presentation of this analysis provides useful information to investors and management regarding the underlying business trends and the performance of the company’s ongoing operations and is helpful for period-to-period and company-to-company comparisons, which management believes will assist investors in analyzing the financial results of the company and predicting future performance.
Three months ended Three months ended
May 31, 2015 May 31, 2014
Net Diluted Net Diluted Net Income Diluted EPS
Income EPS Income EPS
$ Change
% Change
$ Change
% Change
Reported – GAAP $ 20,442 $ 0.38 $ 16,776 $ 0.30 $ 3,666 22 % $ 0.08 27 %
Recognition of prior-period federal tax benefit (1,722 ) (0.03 ) - -
Retroactive effect of federal tax law change 612 0.01 - -
Adjusted - Non-GAAP $ 19,332 $ 0.36 $ 16,776 $ 0.30 $ 2,556 15 % $ 0.06 20 %
For the first nine months of fiscal 2015, net income totaled $38.2 million or $0.70 per diluted share compared with net income of $29.1 million or $0.51 per diluted share for the same period in 2014. Excluding the items outlined below, net income and net income per diluted share increased 27% and 34%, respectively.
Nine months ended Nine months ended
May 31, 2015 May 31, 2014
Net Diluted Net Diluted Net Income Diluted EPS
Income EPS Income EPS
$ Change
% Change
$ Change
% Change
Reported – GAAP $ 38,189 $ 0.70 $ 29,091 $ 0.51 $ 9,098 31 % $ 0.19 37 %
Recognition of prior-period federal tax benefit (1,722 ) (0.03 ) - -
Retroactive effect of federal tax law change 612 0.01 - -
Retroactive benefit of Work Opportunity Tax Credit and resolution of tax matters (666 ) (0.01 ) - -
Benefit from the IRS' acceptance of a federal tax method change - - (484 ) (0.01 )
Adjusted - Non-GAAP $ 36,413 $ 0.67 $ 28,607 $ 0.50 $ 7,806 27 % $ 0.17 34 %
Fiscal Year 2015 Outlook
The company expects its initiatives to drive 27% to 29% earnings per share growth, on an adjusted basis, in fiscal 2015 as compared to the adjusted non-GAAP earnings per share for fiscal 2014. The macroeconomic environment may impact results. The outlook for the fourth fiscal quarter of 2015 anticipates the following elements:
Positive same-store sales in the mid-single digit range for the system;
22 to 27 new franchise drive-in openings, resulting in net unit growth for the system;
Drive-in-level margin improvement of between 100 to 150 basis points, reflecting an improving outlook for commodity cost inflation and leverage from company drive-in same-store sales growth;
Selling, general and administrative expenses of $20.5 million to $21 million, reflecting increased investment in human resources to support the brand initiatives described above;
Depreciation and amortization expense of approximately $11.5 million to $12 million;
Net interest expense of approximately $6 million to $6.5 million; and
An income tax rate of between 36.5% and 37%, reflecting the benefit of various ongoing tax credit programs.
The company anticipates the following elements for fiscal 2015:
Capital expenditures of $35 million to $40 million;
Free cash flow of $70 million to $75 million;
The completion of the planned repurchase of $105 million of stock; and
A quarterly cash dividend of $0.09 per share resulting in an estimated payout of $19 million.
The declaration of quarterly dividends and the establishment of future record and payment dates are subject to the final determination of the company's Board of Directors.
Earnings Conference Call
The company will host a conference call and online web simulcast this afternoon beginning at 5:00 p.m. ET. The conference call can be accessed live over the phone by dialing (800) 946-0782 or (719) 325-2168 for international callers. A replay will be available one hour after the call and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the conference ID is 5977007. The replay will be available until Monday, June 29, 2015. An online replay of the conference call will be available approximately two hours after the conclusion of the live broadcast. A link to this event may be found on the company's investor relations website at http://ir.sonicdrivein.com/.
About Sonic
SONIC®, America’s Drive-In®, is the nation's largest drive-in restaurant chain serving more than 3 million customers every day. Nearly 90 percent of SONIC’s 3,500 drive-in locations are owned and operated by local business men and women. Over the past 60 years, SONIC has delighted guests with signature menu items, more than 1.3 million drink combinations and friendly service by iconic Carhops. To learn more about Sonic Corp. (NASDAQ/NM: SONC), please visit sonicdrivein.com or follow us on Facebook and Twitter.
This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements reflect management’s expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. Factors that could cause actual results to differ materially from those expressed in, or underlying, these forward-looking statements are detailed in the company’s annual and quarterly report filings with the Securities and Exchange Commission. The company undertakes no obligation to publicly release revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.
The tables that follow provide information regarding the number of company drive-ins, franchise drive-ins and system drive-ins in operation as of the end of the periods indicated. In addition, these tables provide information regarding franchise sales, system growth in sales, and both franchise and system average drive-in sales and change in same-store sales. System information includes both company and franchise drive-in information, which we believe is useful in analyzing the growth of our brand. While we do not record franchise drive-in sales as revenues, we believe this information is important in understanding our financial performance since we calculate and record franchise royalties based on a percentage of franchise sales. This information also is indicative of the financial health of our franchisees.
SONC-F
SONIC CORP.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three months ended Nine months ended
May 31, May 31,
2015 2014 2015 2014
Revenues:
Company Drive-In sales $ 118,369 $ 111,014 $ 310,816 $ 286,361
Franchise Drive-Ins:
Franchise royalties and fees 43,704 38,795 114,375 96,598
Lease revenue 1,569 1,081 3,613 2,682
Other 1,106 1,297 2,019 2,939
Total revenues 164,748 152,187 430,823 388,580
Costs and expenses:
Company Drive-Ins:
Food and packaging 32,727 32,175 87,128 81,454
Payroll and other employee benefits 40,898 37,737 110,049 101,108
Other operating expenses, exclusive of
depreciation and amortization included below 22,955 21,805 65,484 62,049
Total cost of Company Drive-In sales 96,580 91,717 262,661 244,611
Selling, general and administrative 20,699 17,639 57,625 50,530
Depreciation and amortization 11,435 11,022 34,634 31,087
Other operating (income) expense, net (336 ) 128 4 (37 )
Total costs and expenses 128,378 120,506 354,924 326,191
Income from operations 36,370 31,681 75,899 62,389
Interest expense 6,382 6,328 18,981 19,095
Interest income (91 ) (112 ) (290 ) (373 )
Net interest expense 6,291 6,216 18,691 18,722
Income before income taxes 30,079 25,465 57,208 43,667
Provision for income taxes 9,637 8,689 19,019 14,576
Net income $ 20,442 $ 16,776 $ 38,189 $ 29,091
Basic income per share $ 0.39 $ 0.31 $ 0.72 $ 0.52
Diluted income per share $ 0.38 $ 0.30 $ 0.70 $ 0.51
Weighted average basic shares 52,022 54,382 52,851 55,544
Weighted average diluted shares 53,391 55,753 54,293 57,020
SONIC CORP.
Unaudited Supplemental Information
Three months ended Nine months ended
May 31, May 31,
2015 2014 2015 2014
Drive-Ins in Operation
Company:
Total at beginning of period 392 388 391 396
Opened 2 1 3 1
Acquired from (sold to) franchisees - - 1 (7 )
Closed (net of re-openings) - - (1 ) (1 )
Total at end of period 394 389 394 389
Franchise:
Total at beginning of period 3,116 3,119 3,127 3,126
Opened 4 9 20 22
Acquired from (sold to) the company - - (1 ) 7
Closed (net of re-openings) (2 ) (7 ) (28 ) (34 )
Total at end of period 3,118 3,121 3,118 3,121
System-wide:
Total at beginning of period 3,508 3,507 3,518 3,522
Opened 6 10 23 23
Closed (net of re-openings) (2 ) (7 ) (29 ) (35 )
Total at end of period 3,512 3,510 3,512 3,510
Three months ended Nine months ended
May 31, May 31,
2015 2014 2015 2014
($ in thousands) ($ in thousands)
Sales Analysis
Company Drive-Ins:
Total sales $ 118,369 $ 111,014 $ 310,816 $ 286,361
Average drive-in sales 301 286 797 738
Change in same-store sales 5.5 % 5.2 % 8.0 % 3.0 %
Franchised Drive-Ins:
Total sales $ 1,065,109 $ 995,259 $ 2,803,391 $ 2,560,933
Average drive-in sales 346 324 906 828
Change in same-store sales 6.1 % 5.3 % 8.3 % 3.2 %
System-wide:
Change in total sales 7.0 % 5.8 % 9.4 % 3.4 %
Average drive-in sales $ 341 $ 320 $ 894 $ 819
Change in same-store sales 6.1 % 5.3 % 8.3 % 3.1 %
Note: Change in same-store sales based on restaurants open for a minimum of 15 months.
SONIC CORP.
Unaudited Supplemental Information
Three months ended Nine months ended
May 31, May 31,
2015 2014 2015 2014
(In thousands) (In thousands)
Revenues
Company Drive-In sales $ 118,369 $ 111,014 $ 310,816 $ 286,361
Franchise Drive-Ins:
Franchise royalties 43,541 38,519 112,553 95,807
Franchise fees 163 276 1,822 791
Lease revenue 1,569 1,081 3,613 2,682
Other 1,106 1,297 2,019 2,939
Total revenues $ 164,748 $ 152,187 $ 430,823 $ 388,580
Three months ended Nine months ended
May 31, May 31,
2015 2014 2015 2014
Margin Analysis (percentage of Company Drive-In sales)
Company Drive-Ins:
Food and packaging 27.6 % 29.0 % 28.0 % 28.4 %
Payroll and employee benefits 34.6 34.0 35.4 35.3
Other operating expenses 19.4 19.6 21.1 21.7
Cost of Company Drive-In sales 81.6 % 82.6 % 84.5 % 85.4 %
May 31, August 31,
2015 2014
(In thousands)
Selected Balance Sheet Data
Cash and cash equivalents $ 22,922 $ 35,694
Current assets 80,107 95,712
Property, equipment and capital leases, net 430,308 441,969
Total assets $ 622,985 $ 650,972
Current liabilities, including capital lease obligations and
long-term debt due within one year $ 81,713 $ 79,511
Obligations under capital leases due after one year 21,673 23,050
Long-term debt due after one year 431,182 427,527
Total liabilities 604,379 588,297
Stockholders' equity $ 18,606 $ 62,675
1 Free cash flow is defined as net income plus depreciation, amortization and stock compensation expenses, less capital expenditures.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150622006241/en/
Contact:
Sonic Corp.
Claudia San Pedro, (405) 225-4846
Senior Vice President, Chief Financial Officer and Treasurer
Drmicrocap
10 years ago
Sonic Doubles Earnings Per Share for Second Fiscal Quarter of 2015
Same-Store Sales Increase 11.5%
Business Wire Sonic Corp.
March 24, 2015 4:01 PM
????
OKLAHOMA CITY--(BUSINESS WIRE)--
Sonic Corp. (SONC), the nation’s largest chain of drive-in restaurants, today announced results for the second fiscal quarter ended February 28, 2015.
Key highlights of the company’s second quarter of fiscal year 2015 included:
Net income per diluted share was $0.14 compared with net income per diluted share of $0.07 in the prior-year period; excluding items outlined below, net income per diluted share was $0.13 in the second fiscal quarter of 2015, resulting in an 86% increase, on an adjusted basis;
System same-store sales increased 11.5%, consisting of an 11.5% same-store sales increase at franchise drive-ins and an increase of 11.2% at company drive-ins;
Company drive-in margins improved by 110 basis points; and
The company repurchased $75 million of stock through accelerated stock repurchase transactions representing approximately 4% of its outstanding stock.
“Successful company initiatives combined with an improving macro environment resulted in an exceptionally strong second fiscal quarter with 11.5% same-store sales growth. We are particularly pleased that traffic drove two-thirds of our same-store sales increase,” said Cliff Hudson, Sonic Corp. CEO. “This increase is primarily a result of growth in our core menu items and product innovation, complemented by our national media strategy. As we move into the second half of fiscal 2015 we expect our business momentum to continue. In addition, we expect technology initiatives to provide an additional layer of growth to build sales and profits over the next several years.
“We also executed accelerated share repurchase agreements during the second quarter to purchase $75 million of stock. Our fiscal year-to-date share repurchases now total $95 million, representing approximately 5% of our outstanding shares as of the beginning of the fiscal year. Since our current repurchase program began in fiscal 2012, we have repurchased nearly $242 million of stock representing 23% of our outstanding shares. We have completed these repurchases while strengthening our balance sheet, which reflects the stability of our franchise business model.
"We will continue to focus on our multi-layered growth strategy, which incorporates same-store sales growth, leverage from higher sales, deployment of free cash flow1, increasing royalty revenues and new drive-in development, to build shareholder value. We believe all of these initiatives will enable us to continue to achieve double-digit earnings per share growth for the next several years," concluded Mr. Hudson.
Same-Store Sales
For the second fiscal quarter ended February 28, 2015, system same-store sales increased 11.5%, which was comprised of an 11.5% same-store sales increase at franchise drive-ins and an increase of 11.2% at company drive-ins.
Financial Overview
For the second fiscal quarter of 2015, the company’s net income increased to $7.7 million or $0.14 per diluted share compared with net income of $4.1 million or $0.07 per diluted share in the same period in the prior year. Excluding a $0.7 million tax benefit representing the retroactive reinstatement of the Work Opportunity Tax Credit (WOTC) for fiscal 2014, earnings per share increased 86%.
The following non-GAAP adjustment is intended to supplement the presentation of the company’s financial results in accordance with GAAP. The company believes that the presentation of this item provides useful information to investors and management regarding the underlying business trends and the performance of the company’s ongoing operations and is helpful for period-to-period and company-to-company comparisons, which management believes will assist investors in analyzing the financial results of the company and predicting future performance.
Three months ended Three months ended
February 28, 2015 February 28, 2014
Net Diluted Net Diluted Net Income Diluted EPS
Income EPS Income EPS $ Change % Change $ Change % Change
Reported – GAAP $ 7,662 $ 0.14 $ 4,107 $ 0.07 $ 3,555 87 % $ 0.07 100 %
Retroactive tax benefit of WOTC
and resolution of tax matters
(666 ) (0.01 ) - -
Adjusted - Non-GAAP
$ 6,996 $ 0.13 $ 4,107 $ 0.07 $ 2,889 70 % $ 0.06 86 %
For the first six months of fiscal 2015, net income totaled $17.7 million or $0.32 per diluted share compared with net income of $12.3 million or $0.21 per diluted share for the same period in 2014. Excluding the items outlined below, net income and net income per diluted share increased 44% and 55%, respectively.
Six months ended Six months ended
February 28, 2015 February 28, 2014
Net Diluted Net Diluted Net Income Diluted EPS
Income EPS Income EPS $ Change % Change $ Change % Change
Reported – GAAP $ 17,747 $ 0.32 $ 12,315 $ 0.21 $ 5,432 44 % $ 0.11 52 %
Tax benefit from the IRS'
acceptance of a federal tax method
change
- - (484 ) (0.01 )
Retroactive tax benefit of WOTC
and resolution of tax matters
(666 ) (0.01 ) - -
Adjusted - Non-GAAP $ 17,081 $ 0.31 $ 11,831 $ 0.20 $ 5,250 44 % $ 0.11 55 %
Fiscal Year 2015 Outlook
The company expects its initiatives to drive 25% to 27% earnings per share growth, on an adjusted basis, in fiscal 2015 as compared to the adjusted non-GAAP earnings per share for fiscal 2014. The macroeconomic environment may impact results. The outlook for the second half of fiscal 2015 anticipates the following elements:
Positive same-store sales in the low to mid-single digit range for the system for the third and fourth fiscal quarters;
Company drive-in same-store sales growth expected to outperform franchisees as a result of the recent implementation of new digital menu boards and point-of-sale systems;
Incremental royalty revenue growth from same-store sales improvements, new unit development, and 900 drive-ins converting to a higher royalty rate structure at the beginning of fiscal 2015;
34 to 44 new franchise drive-in openings, resulting in net unit growth for the system;
Drive-in-level margin improvement of between 100 to 150 basis points, reflecting an improving outlook for commodity cost inflation and leverage from company drive-in same-store sales growth;
Selling, general and administrative expenses of $39.5 million to $40.5 million, reflecting increased investment in human resources to support the brand initiatives described above;
Depreciation and amortization expense of $23 million to $23.5 million;
Net interest expense of $13 million to $13.5 million; and
An income tax rate of between 36% and 37%, reflecting the benefit of various ongoing tax credit programs.
The company anticipates the following elements for fiscal 2015:
Capital expenditures of $30 million to $40 million;
Free cash flow of $70 million to $80 million;
The planned repurchase of $105 million of stock; and
A quarterly cash dividend of $0.09 per share resulting in an estimated payout of $19 million.
Earnings Conference Call
The company will host a conference call and online web simulcast this afternoon beginning at 5:00 p.m. ET. The conference call can be accessed live over the phone by dialing (877) 340-7912 or (719) 325-4765 for international callers. A replay will be available one hour after the call and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the conference ID is 2813890. The replay will be available until Tuesday, March 31, 2015. An online replay of the conference call will be available approximately two hours after the conclusion of the live broadcast. A link to this event may be found on the company's investor relations website at http://ir.sonicdrivein.com/.
About Sonic
SONIC®, America’s Drive-In®, is the nation's largest drive-in restaurant chain serving more than 3 million customers every day. Nearly 90 percent of SONIC’s 3,500 drive-in locations are owned and operated by local business men and women. Over the past 60 years, SONIC has delighted guests with signature menu items, more than 1.3 million drink combinations and friendly service by iconic Carhops. To learn more about Sonic Corp. (NASDAQ/NM: SONC), please visit sonicdrivein.com or follow us on Facebook and Twitter.
This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements reflect management’s expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. Factors that could cause actual results to differ materially from those expressed in, or underlying, these forward-looking statements are detailed in the company’s annual and quarterly report filings with the Securities and Exchange Commission. The company undertakes no obligation to publicly release revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.
The tables that follow provide information regarding the number of company drive-ins, franchise drive-ins and system drive-ins in operation as of the end of the periods indicated. In addition, these tables provide information regarding franchise sales, system growth in sales, and both franchise and system average drive-in sales and change in same-store sales. System information includes both company and franchise drive-in information, which we believe is useful in analyzing the growth of our brand. While we do not record franchise drive-in sales as revenues, we believe this information is important in understanding our financial performance since we calculate and record franchise royalties based on a percentage of franchise sales. This information also is indicative of the financial health of our franchisees.
1 Free cash flow is defined as net income plus depreciation, amortization and stock compensation expenses, less capital expenditures.
SONC-F
SONIC CORP.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three months ended Six months ended
February 28, February 28,
2015 2014 2015 2014
Revenues:
Company Drive-In sales $ 92,309 $ 81,848 $ 192,447 $ 175,347
Franchise Drive-Ins:
Franchise royalties and fees 32,407 26,582 70,671 57,803
Lease revenue 979 715 2,044 1,601
Other 524 596 913 1,642
Total revenues 126,219 109,741 266,075 236,393
Costs and expenses:
Company Drive-Ins:
Food and packaging 25,828 23,043 54,401 49,279
Payroll and other employee benefits 33,880 30,031 69,151 63,371
Other operating expenses, exclusive of
depreciation and amortization included below 19,924 18,437 42,529 40,244
Total cost of Company Drive-In sales 79,632 71,511 166,081 152,894
Selling, general and administrative 18,138 15,886 36,926 32,891
Depreciation and amortization 11,539 10,031 23,199 20,065
Other operating (income) expense, net (81 ) (36 ) 340 (165 )
Total costs and expenses 109,228 97,392 226,546 205,685
Income from operations 16,991 12,349 39,529 30,708
Interest expense 6,318 6,384 12,599 12,767
Interest income (97 ) (144 ) (199 ) (261 )
Net interest expense 6,221 6,240 12,400 12,506
Income before income taxes 10,770 6,109 27,129 18,202
Provision for income taxes 3,108 2,002 9,382 5,887
Net income $ 7,662 $ 4,107 $ 17,747 $ 12,315
Basic income per share $ 0.14 $ 0.07 $ 0.33 $ 0.22
Diluted income per share $ 0.14 $ 0.07 $ 0.32 $ 0.21
Weighted average basic shares 53,171 55,958 53,226 56,125
Weighted average diluted shares 54,660 57,408 54,744 57,653
SONIC CORP.
Unaudited Supplemental Information
Three months ended Six months ended
February 28, February 28,
2015 2014 2015 2014
Drive-Ins in Operation
Company:
Total at beginning of period 389 388 391 396
Opened - - 1 -
Acquired from (sold to) franchisees 3 - 1 (7 )
Closed (net of re-openings) - - (1 ) (1 )
Total at end of period 392 388 392 388
Franchise:
Total at beginning of period 3,128 3,129 3,127 3,126
Opened 4 6 16 13
Acquired from (sold to) the company (3 ) - (1 ) 7
Closed (net of re-openings) (13 ) (16 ) (26 ) (27 )
Total at end of period 3,116 3,119 3,116 3,119
System-wide:
Total at beginning of period 3,517 3,517 3,518 3,522
Opened 4 6 17 13
Closed (net of re-openings) (13 ) (16 ) (27 ) (28 )
Total at end of period 3,508 3,507 3,508 3,507
Three months ended Six months ended
February 28, February 28,
2015 2014 2015 2014
($ in thousands) ($ in thousands)
Sales Analysis
Company Drive-Ins:
Total sales $ 92,309 $ 81,848 $ 192,447 $ 175,347
Average drive-in sales 237 213 496 452
Change in same-store sales 11.2 % 1.3 % 9.5 % 1.6 %
Franchised Drive-Ins:
Total sales $ 818,601 $ 725,270 $ 1,732,254 $ 1,559,540
Average drive-in sales 267 235 561 502
Change in same-store sales 11.5 % 1.5 % 9.8 % 1.8 %
System-wide:
Change in total sales 12.8 % 0.8 % 10.9 % 1.5 %
Average drive-in sales $ 264 $ 234 $ 554 $ 499
Change in same-store sales 11.5 % 1.4 % 9.8 % 1.8 %
Note: Change in same-store sales based on restaurants open for a minimum of 15 months.
SONIC CORP.
Unaudited Supplemental Information
Three months ended Six months ended
February 28, February 28,
2015 2014 2015 2014
(In thousands) (In thousands)
Revenues
Company Drive-In sales $ 92,309 $ 81,848 $ 192,447 $ 175,347
Franchise Drive-Ins:
Franchise royalties 32,236 26,376 69,012 57,288
Franchise fees 171 206 1,659 515
Lease revenue 979 715 2,044 1,601
Other 524 596 913 1,642
Total revenues $ 126,219 $ 109,741 $ 266,075 $ 236,393
Three months ended Six months ended
February 28, February 28,
2015 2014 2015 2014
Margin Analysis (percentage of Company Drive-In sales)
Company Drive-Ins:
Food and packaging 28.0 % 28.2 % 28.3 % 28.1 %
Payroll and employee benefits 36.7 36.7 35.9 36.1
Other operating expenses 21.6 22.5 22.1 23.0
Cost of Company Drive-In sales 86.3 % 87.4 % 86.3 % 87.2 %
February 28, August 31,
2015 2014
(In thousands)
Selected Balance Sheet Data
Cash and cash equivalents $ 27,232 $ 35,694
Current assets 78,720 95,712
Property, equipment and capital leases, net 434,678 441,969
Total assets $ 625,812 $ 650,972
Current liabilities, including capital lease obligations and
long-term debt due within one year $ 64,975 $ 79,511
Obligations under capital leases due after one year 22,367 23,050
Long-term debt due after one year 471,131 427,527
Total liabilities 626,143 588,297
Stockholders' equity (deficit) $ (331 ) $ 62,675
Contact:
Sonic Corp.
Claudia San Pedro, 405-225-4846
Vice President of Investor Relations
Communications and Treasurer
Drmicrocap
11 years ago
Sonic Reports Strong Second Fiscal Quarter Results
Same-Store Sales Grow In Spite of Difficult Weather
Business Wire Sonic Corp.
March 24, 2014 4:05 PM
OKLAHOMA CITY--(BUSINESS WIRE)--
Sonic Corp. (SONC), the nation's largest chain of drive-in restaurants, today announced results for the second fiscal quarter ended February 28, 2014.
Key highlights of the company's second fiscal quarter included:
Net income per diluted share was $0.07 compared with reported net income per diluted share of $0.06 in the second fiscal quarter of 2013; excluding certain adjustments in the second fiscal quarter of 2013 as outlined below, net income per diluted share increased 40% in the second fiscal quarter of 2014;
System-wide same-store sales increased 1.4%, consisting of an increase of 1.5% at franchise drive-ins and an increase of 1.3% at company drive-ins;
Company drive-in margins improved 80 basis points; and
The company repurchased approximately $51 million of stock representing almost 5% of its stock outstanding as of the beginning of the quarter.
“We are very pleased with our second quarter results, especially in light of the difficult weather that impacted many of our markets. Our solid sales and financial performance resulted from multiple system-wide initiatives such as increased media efficiency, innovative products and layered day-part promotions. These initiatives complement our focus on service, products and pricing,” said Cliff Hudson, Chairman, Chief Executive Officer and President. “During the quarter we also began to roll out our technology initiatives, as well as signed new franchise development agreements for the development of 26 new drive-ins.
“In addition to great operating results, we used existing cash and free cash flow1 to repurchase $51 million in shares at an average price of $19.14 per share, representing nearly 5% of our outstanding shares. Since our current repurchase program began in fiscal 2012, we have repurchased more than $125 million of stock representing 17% of our outstanding shares. We have completed these repurchases while improving our balance sheet, which reflects the strength of our franchise business model.
“We will continue to focus on our multi-layered growth strategy, which incorporates same-store sales growth, leverage from higher sales, deployment of free cash flow, increasing royalty revenues and new drive-in development to build shareholder value. We believe all of these initiatives will enable us to continue to achieve double-digit earnings per share growth in the near and long term,” concluded Mr. Hudson.
Same-Store Sales
For the second fiscal quarter ended February 28, 2014, system-wide same-store sales increased 1.4%, which was comprised of a 1.5% same-store sales increase at franchise drive-ins and an increase of 1.3% at company drive-ins.
Financial Overview
For the second fiscal quarter of 2014, the company's net income totaled $4.1 million or $0.07 per diluted share, compared with net income of $3.6 million or $0.06 per diluted share in the same period in the prior year. Net income per diluted share was $0.05 for the second quarter of fiscal year 2013, excluding a $0.9 million tax benefit that included the retroactive reinstatement of the Work Opportunity Tax Credit (“WOTC”) and resolution of certain tax matters, as well as a $0.5 million ($0.3 million after-tax) charge from the write-off of debt origination costs associated with the $20.0 million early extinguishment of debt. Excluding the items outlined below, net income and net income per diluted share increased 35% and 40%, respectively.
The following non-GAAP adjustments are intended to supplement the presentation of the company's financial results in accordance with GAAP. The company believes that the presentation of these items provides useful information to investors and management regarding the underlying business trends and the performance of the company's ongoing operations and is helpful for period-to-period and company-to-company comparisons, which management believes will assist investors in analyzing the financial results of the company and predicting future performance.
Three months ended Three months ended
February 28, 2014 February 28, 2013
Net Diluted Net Diluted Net Income Diluted EPS
Income EPS Income EPS $ Change % Change $ Change % Change
Reported – GAAP $ 4,107 $ 0.07 $ 3,577 $ 0.06 $ 530 15 % $ 0.01 17 %
After-tax loss from early extinguishment of debt - - 315 0.01
Retroactive tax benefit of WOTC and resolution of tax matters - - (857 ) (0.02 )
Adjusted - Non-GAAP $ 4,107 $ 0.07 $ 3,035 $ 0.05 $ 1,072 35 % $ 0.02 40 %
For the first six months of fiscal 2014, net income totaled $12.3 million or $0.21 per diluted share compared with net income of $9.7 million or $0.17 per diluted share for the same period in 2013. Excluding the items outlined below, net income and net income per diluted share increased 27% and 25%, respectively.
Six months ended Six months ended
February 28, 2014 February 28, 2013
Net Diluted Net Diluted Net Income Diluted EPS
Income EPS Income EPS $ Change % Change $ Change % Change
Reported – GAAP $ 12,315 $ 0.21 $ 9,710 $ 0.17 $ 2,605 27 % $ 0.04 24 %
Tax benefit from the IRS' acceptance of a federal tax method change (484 ) (0.01 ) - -
After-tax loss from early extinguishment of debt - - 315 0.01
Retroactive tax benefit of WOTC and resolution of tax matters - - (743 ) (0.02 )
Adjusted - Non-GAAP $ 11,831 $ 0.20 $ 9,282 $ 0.16 $ 2,549 27 % $ 0.04 25 %
Company drive-in sales for the second quarter and first six months of fiscal 2014 decreased by $1.9 million and $1.8 million, respectively, compared to the same period in the prior year primarily as a result of the closure of 12 company drive-ins during the fourth fiscal quarter of 2013 and the refranchising of seven company drive-ins during the first fiscal quarter of 2014, partially offset by an increase in same-store sales.
Development
During the second fiscal quarter, six new franchise drive-ins were opened versus three new franchise drive-in openings during the second quarter of fiscal 2013. Fiscal year-to-date, 13 new franchise drive-ins have opened versus four drive-ins in the first half of fiscal 2013.
Fiscal Year 2014 Outlook
The company expects its initiatives to drive 14% to 15% earnings per share growth in fiscal 2014 as compared to the adjusted non-GAAP earnings per share for fiscal 2013. The macroeconomic environment and its impact on consumer confidence, in addition to the pacing of capital investments, may impact results. The outlook for fiscal 2014 anticipates the following elements:
Positive same-store sales in the low single digit range for the system;
Company drive-ins expected to perform above the system average in the latter half of the fiscal year as new digital point-of-purchase technology and a new point-of-sale system are implemented;
40 to 50 new franchise drive-in openings and fewer drive-in closings than in fiscal 2013;
Drive-in-level margins improving between 50 to 100 basis points, depending upon the degree of same-store sales growth at company drive-ins and the level of commodity cost inflation over the spring and summer months;
Selling, general and administrative expenses of $68.5 million to $69.5 million;
Depreciation and amortization expense of $42 million to $42.5 million;
Net interest expense of approximately $25 million;
An income tax rate between 36% to 37% over the second half of the fiscal year;
Capital expenditures of $70 million to $75 million, which assumes the implementation of a new point-of-sale system and digital point-of-purchase technology in company drive-ins during fiscal 2014 and construction of new and relocated drive-ins;
Free cash flow of approximately $15 million to $25 million; and
The repurchase of $80 million of stock across the fiscal year utilizing existing cash on hand and free cash flow.
Earnings Conference Call
The company will host a conference call and online web simulcast this afternoon beginning at 5:00 p.m. ET. The conference call can be accessed live by dialing (866) 454-4208 or (913) 312-0867 for international callers. A replay will be available one hour after the call and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the conference ID is 6821037. The replay will be available until Monday, March 31, 2014. An online replay of the conference call will be available approximately two hours after the conclusion of the live broadcast. A link to this event may be found on the company's investor relations website at http://ir.sonicdrivein.com/.
About Sonic
SONIC®, America's Drive-In®, is the nation's largest chain of drive-in restaurants with more than 3,500 drive-ins serving approximately 3 million customers every day. Over the past 60 years, SONIC has delighted guests with signature menu items, more than 1 million drink combinations, friendly service by iconic Carhops and ongoing support of education through its award-winning Limeades for Learning® program. SONIC received top honors as America's “#1 burger quick service restaurant,” ranking in the top 5 of all brands in the 2014 Temkin Experience Ratings report. For more information about Sonic Corp. (NASDAQ/NM:SONC) and its subsidiaries, please visit sonicdrivein.com. Customers can also connect with SONIC at facebook.com/sonicdrivein or on Twitter @sonicdrive_in.
This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. Factors that could cause actual results to differ materially from those expressed in, or underlying, these forward-looking statements are detailed in the company's annual and quarterly report filings with the Securities and Exchange Commission. The company undertakes no obligation to publicly release revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.
The tables that follow provide information regarding the number of company drive-ins, franchise drive-ins and system drive-ins in operation as of the end of the periods indicated. In addition, these tables provide information regarding franchise sales, system growth in sales, and both franchise and system average drive-in sales and change in same-store sales. System information includes both company and franchise drive-in information, which we believe is useful in analyzing the growth of our brand. While we do not record franchise drive-in sales as revenues, we believe this information is important in understanding our financial performance since we calculate and record franchise royalties based on a percentage of franchise sales. This information also is indicative of the financial health of our franchisees.
1 Free cash flow is defined as net income plus depreciation, amortization and stock compensation expenses, less capital expenditures.
SONC-F
SONIC CORP.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three months ended Six months ended
February 28, February 28,
2014 2013 2014 2013
Revenues:
Company Drive-In sales $ 81,848 $ 83,706 $ 175,347 $ 177,162
Franchise Drive-Ins:
Franchise royalties and fees 26,582 25,996 57,803 55,916
Lease revenue 715 949 1,601 2,435
Other 596 490 1,642 1,636
Total revenues 109,741 111,141 236,393 237,149
Costs and expenses:
Company Drive-Ins:
Food and packaging 23,043 23,546 49,279 50,178
Payroll and other employee benefits 30,031 31,448 63,371 64,913
Other operating expenses, exclusive of
depreciation and amortization included below 18,437 18,811 40,244 40,787
Total cost of Company Drive-In sales 71,511 73,805 152,894 155,878
Selling, general and administrative 15,886 15,467 32,891 31,597
Depreciation and amortization 10,031 10,069 20,065 20,664
Other operating income, net (36 ) (218 ) (165 ) (211 )
Total costs and expenses 97,392 99,123 205,685 207,928
Income from operations 12,349 12,018 30,708 29,221
Interest expense 6,384 7,448 12,767 15,123
Interest income (144 ) (168 ) (261 ) (309 )
Loss from early extinguishment of debt - 492 - 492
Net interest expense 6,240 7,772 12,506 15,306
Income before income taxes 6,109 4,246 18,202 13,915
Provision for income taxes 2,002 669 5,887 4,205
Net income $ 4,107 $ 3,577 $ 12,315 $ 9,710
Basic income per share $ 0.07 $ 0.06 $ 0.22 $ 0.17
Diluted income per share $ 0.07 $ 0.06 $ 0.21 $ 0.17
Weighted average basic shares 55,958 55,798 56,125 56,735
Weighted average diluted shares 57,408 56,423 57,653 57,254
SONIC CORP.
Unaudited Supplemental Information
Three months ended Six months ended
February 28, February 28,
2014 2013 2014 2013
Drive-Ins in Operation
Company:
Total at beginning of period 388 409 396 409
Opened - - - -
Sold to franchisees - - (7 ) -
Closed (net of re-openings) - (4 ) (1 ) (4 )
Total at end of period 388 405 388 405
Franchise:
Total at beginning of period 3,129 3,140 3,126 3,147
Opened 6 3 13 4
Acquired from the company - - 7 -
Closed (net of re-openings) (16 ) (22 ) (27 ) (30 )
Total at end of period 3,119 3,121 3,119 3,121
System-wide:
Total at beginning of period 3,517 3,549 3,522 3,556
Opened 6 3 13 4
Closed (net of re-openings) (16 ) (26 ) (28 ) (34 )
Total at end of period 3,507 3,526 3,507 3,526
Three months ended Six months ended
February 28, February 28,
2014 2013 2014 2013
($ in thousands) ($ in thousands)
Sales Analysis
Company Drive-Ins:
Total sales $ 81,848 $ 83,706 $ 175,347 $ 177,162
Average drive-in sales 213 207 452 437
Change in same-store sales 1.3 % 1.9 % 1.6 % 3.1 %
Franchised Drive-Ins:
Total sales $ 725,270 $ 712,934 $ 1,559,540 $ 1,527,736
Average drive-in sales 235 232 502 494
Change in same-store sales 1.5 % (0.3 ) % 1.8 % 1.3 %
System-wide:
Change in total sales 0.8 % (0.5 ) % 1.5 % 1.6 %
Average drive-in sales $ 234 $ 229 $ 499 $ 487
Change in same-store sales 1.4 % - % 1.8 % 1.5 %
Note: Change in same-store sales based on restaurants open for a minimum of 15 months.
SONIC CORP.
Unaudited Supplemental Information
Three months ended Six months ended
February 28, February 28,
2014 2013 2014 2013
Revenues (in thousands)
Company Drive-In sales $ 81,848 $ 83,706 $ 175,347 $ 177,162
Franchise Drive-Ins:
Franchise royalties 26,376 25,821 57,288 55,736
Franchise fees 206 175 515 180
Lease revenue 715 949 1,601 2,435
Other 596 490 1,642 1,636
Total revenues $ 109,741 $ 111,141 $ 236,393 $ 237,149
Three months ended Six months ended
February 28, February 28,
2014 2013 2014 2013
Margin Analysis (percentage of Company Drive-In sales)
Company Drive-Ins:
Food and packaging 28.2 % 28.1 % 28.1 % 28.3 %
Payroll and employee benefits 36.7 37.6 36.1 36.6
Other operating expenses 22.5 22.5 23.0 23.1
Cost of Company Drive-In sales 87.4 % 88.2 % 87.2 % 88.0 %
February 28, August 31,
2014 2013
Selected Balance Sheet Data (In thousands)
Cash and cash equivalents $ 35,117 $ 77,896
Current assets 87,784 140,722
Property, equipment and capital leases, net 415,334 399,661
Total assets $ 618,623 $ 660,794
Current liabilities, including capital lease obligations and
long-term debt due within one year $ 61,105 $ 72,930
Obligations under capital leases due after one year 25,020 22,458
Long-term debt due after one year 432,485 437,380
Total liabilities 572,353 583,330
Stockholders' equity $ 46,270 $ 77,464
Contact:
Claudia San Pedro
Vice President of Investor Relations, Communications and Treasurer
405-225-4846
Drmicrocap
11 years ago
Sonic Reports Strong First Quarter of Fiscal 2014 Financial Results
Business Wire Sonic Corp.
9 hours ago
OKLAHOMA CITY--(BUSINESS WIRE)--
Sonic Corp. (SONC), the nation's largest chain of drive-in restaurants, today announced results for the first fiscal quarter ended November 30, 2013.
Key highlights of the company's first fiscal quarter included:
The company's net income was $0.14 per diluted share compared with net income per diluted share of $0.11 in the first quarter of fiscal 2013;
Excluding the benefit from a favorable tax ruling detailed below, net income per diluted share for the first quarter of fiscal 2014 was $0.13, an 18% increase in earnings per share on an adjusted basis compared to the same period prior year;
System-wide same-store sales increased 2.2% during the first fiscal quarter, consisting of a 2.3% same-store sales increase at franchise drive-ins and an increase of 1.9% at company drive-ins;
Company drive-in margins improved by 80 basis points; and
The company purchased $7.5 million of stock as part of a previously announced $40 million share repurchase program.
“Fiscal year 2014 is off to a solid start as we focus on key initiatives such as increased media effectiveness, our innovative product pipeline and layered day-part promotional strategy to drive same-store sales growth and, in turn, margin improvement,” said Cliff Hudson, Chairman, Chief Executive Officer and President. “During the first quarter we built on our solid foundation of service, products and pricing with increased media effectiveness, which is having a positive impact across all markets. We also continued to have strong promotions during the quarter with the continuation of the Summer of Shakes promotion into September, our new Spicy Chicken Sandwich and our popular Cheesecake Bites.
“For the remainder of 2014 we will focus on our multi-layered growth strategy, which incorporates same-store sales growth, leverage from higher sales, deployment of free cash flow1, increasing royalty revenues and new drive-in development to build shareholder value. Over the next few years, we are implementing a number of technology initiatives such as a new digital point-of-purchase technology and a new point-of-sale system to drive improved sales and profits for our brand. We believe these initiatives will fuel our multi-layered growth strategy and will enable us to achieve double-digit earnings per share growth in the near and long term,” concluded Mr. Hudson.
Same-Store Sales
For the first fiscal quarter ended November 30, 2013, system-wide same-store sales increased 2.2%, which was comprised of a 2.3% same-store sales increase at franchise drive-ins and an increase of 1.9% at company drive-ins.
Financial Overview
For the first fiscal quarter ended November 30, 2013, the company's net income totaled $8.2 million or $0.14 per diluted share, compared with net income of $6.1 million or $0.11 per diluted share in the same period in the prior year. During the first quarter of fiscal 2014, the company recognized a $0.5 million tax benefit from a favorable tax ruling. Excluding this tax benefit, net income and net income per diluted share for the first fiscal quarter increased 26% and 18%, respectively.
The following non-GAAP adjustments are intended to supplement the presentation of the company's financial results in accordance with GAAP. The company believes that the presentation of these items provides useful information to investors and management regarding the underlying business trends and the performance of the company's ongoing operations and is helpful for period-to-period and company-to-company comparisons, which management believes will assist investors in analyzing the financial results of the company and predicting future performance.
Three months ended Three months ended
November 30, 2013 November 30, 2012
Net Diluted Net Diluted Net Income Diluted EPS
Income EPS Income EPS
$ Change
% Change
$ Change
% Change
Reported – GAAP $ 8,208 $ 0.14 $ 6,133 $ 0.11 $ 2,075 34 % $ 0.03 27 %
Tax benefit from the IRS’ acceptance of a federal tax method change (484 ) (0.01 ) - -
Adjusted - Non-GAAP $ 7,724 $ 0.13 $ 6,133 $ 0.11 $ 1,591 26 % $ 0.02 18 %
Development
During the first fiscal quarter, seven new franchise drive-ins were opened versus one new franchise drive-in opening during the first quarter of fiscal 2013.
Fiscal Year 2014 Outlook
The company expects its initiatives to drive 14% to 15% earnings per share growth in fiscal 2014 as compared to the adjusted non-GAAP earnings per share for fiscal 2013. The macroeconomic environment and its impact on consumer confidence, in addition to the pacing of capital investments, may impact results. The outlook for fiscal 2014 anticipates the following elements:
Positive same-store sales in the low single digit range for the system;
Company drive-ins expected to perform above the system average in the latter half of the fiscal year as new digital point-of-purchase technology and a new point-of-sale system are implemented;
40 to 50 new franchise drive-in openings and fewer drive-in closings than in fiscal 2013;
Drive-in-level margins improving between 75 to 100 basis points, depending upon the degree of same-store sales growth at company drive-ins and the timing of implementation of the new point-of-sale system in company drive-ins;
Selling, general and administrative expenses of $69 million to $70 million;
Depreciation and amortization expense of $42 million to $42.5 million;
Net interest expense of approximately $25 million;
An income tax rate of between 36.5% to 37.5%, excluding the benefit from the federal tax method change;
Capital expenditures of $65 million to $70 million, which assumes the implementation of a new point-of-sale system and digital point-of-purchase technology in company drive-ins during fiscal 2014 and construction of new and relocated drive-ins;
Free cash flow of approximately $15 million to $25 million; and
The repurchase of $40 million of stock across the fiscal year utilizing existing cash and free cash flow.
Earnings Conference Call
The company will host a conference call and online web simulcast this afternoon beginning at 5:00 p.m. ET. The conference call can be accessed live by dialing (888) 601-3862 or (913) 312-6664 for international callers. A replay will be available one hour after the call and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the conference ID is 8332005. The replay will be available until Monday, January 13, 2014. An online replay of the conference call will be available approximately two hours after the conclusion of the live broadcast. A link to this event may be found on the company's investor relations website at http://ir.sonicdrivein.com/.
About Sonic
SONIC®, America's Drive-In®, is the nation's largest chain of drive-in restaurants with more than 3,500 drive-ins serving approximately 3 million customers every day. Over the past 60 years, SONIC has delighted guests with signature menu items, more than 1 million drink combinations, friendly service by iconic Carhops and ongoing support of education through its award-winning Limeades for Learning® program. SONIC received top honors as America's “#1 burger quick service restaurant” in the 2013 Temkin Experience Ratings report. For more information about Sonic Corp. (NASDAQ/NM: SONC) and its subsidiaries, please visit sonicdrivein.com. Customers can also connect with SONIC at facebook.com/sonicdrivein or on Twitter @sonicdrive_in.
This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. Factors that could cause actual results to differ materially from those expressed in, or underlying, these forward-looking statements are detailed in the company's annual and quarterly report filings with the Securities and Exchange Commission. The company undertakes no obligation to publicly release revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.
The tables that follow provide information regarding the number of company drive-ins, franchise drive-ins and system drive-ins in operation as of the end of the periods indicated. In addition, these tables provide information regarding franchise sales, system growth in sales, and both franchise and system average drive-in sales and change in same-store sales. System information includes both company and franchise drive-in information, which we believe is useful in analyzing the growth of our brand. While we do not record franchise drive-in sales as revenues, we believe this information is important in understanding our financial performance since we calculate and record franchise royalties based on a percentage of franchise sales. This information also is indicative of the financial health of our franchisees.
SONC-F
1 Free cash flow is defined as net income plus depreciation, amortization and stock compensation expenses, less capital expenditures.
SONIC CORP.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three months ended
November 30,
2013 2012
Revenues:
Company Drive-In sales $ 93,499 $ 93,456
Franchise Drive-Ins:
Franchise royalties and fees 31,221 29,920
Lease revenue 886 1,486
Other 1,046 1,146
Total revenues 126,652 126,008
Costs and expenses:
Company Drive-Ins:
Food and packaging 26,236 26,632
Payroll and other employee benefits 33,340 33,465
Other operating expenses, exclusive of
depreciation and amortization included below 21,807 21,976
Total cost of Company Drive-In sales 81,383 82,073
Selling, general and administrative 17,005 16,130
Depreciation and amortization 10,034 10,595
Other operating (income) expense, net (129 ) 7
Total costs and expenses 108,293 108,805
Income from operations 18,359 17,203
Interest expense 6,383 7,675
Interest income (117 ) (141 )
Net interest expense 6,266 7,534
Income before income taxes 12,093 9,669
Provision for income taxes 3,885 3,536
Net income $ 8,208 $ 6,133
Basic income per share $ 0.15 $ 0.11
Diluted income per share $ 0.14 $ 0.11
Weighted average basic shares 56,292 57,672
Weighted average diluted shares 57,897 58,085
SONIC CORP.
Unaudited Supplemental Information
Three months ended
November 30,
2013 2012
Drive-Ins in Operation
Company:
Total at beginning of period 396 409
Opened - -
Sold to franchisees (7 ) -
Closed (net of re-openings) (1 ) -
Total at end of period 388 409
Franchise:
Total at beginning of period 3,126 3,147
Opened 7 1
Acquired from the company 7 -
Closed (net of re-openings) (11 ) (8 )
Total at end of period 3,129 3,140
System-wide:
Total at beginning of period 3,522 3,556
Opened 7 1
Closed (net of re-openings) (12 ) (8 )
Total at end of period 3,517 3,549
Three months ended
November 30,
2013 2012
($ in thousands)
Sales Analysis
Company Drive-Ins:
Total sales $ 93,499 $ 93,456
Average drive-in sales 239 230
Change in same-store sales 1.9 % 4.2 %
Franchised Drive-Ins:
Total sales $ 829,995 $ 808,660
Average drive-in sales 270 262
Change in same-store sales 2.3 % 2.9 %
System-wide:
Change in total sales 2.4 % 2.7 %
Average drive-in sales $ 266 $ 258
Change in same-store sales 2.2 % 3.0 %
Note: Change in same-store sales based on restaurants open for a minimum of 15 months.
SONIC CORP.
Unaudited Supplemental Information
Three months ended
November 30,
2013 2012
Revenues (in thousands)
Company Drive-In sales $ 93,499 $ 93,456
Franchise Drive-Ins:
Franchise royalties 30,912 29,914
Franchise fees 309 6
Lease revenue 886 1,486
Other 1,046 1,146
Total revenues $ 126,652 $ 126,008
Three months ended
November 30,
2013 2012
Margin Analysis (percentage of Company Drive-In sales)
Company Drive-Ins:
Food and packaging 28.1 % 28.5 %
Payroll and employee benefits 35.6 35.8
Other operating expenses 23.3 23.5
Cost of Company Drive-In sales 87.0 % 87.8 %
November 30, August 31,
2013 2013
Selected Balance Sheet Data (In thousands)
Cash and cash equivalents $ 95,893 $ 77,896
Current assets 140,717 140,722
Property, equipment and capital leases, net 396,766 399,661
Total assets $ 656,581 $ 660,794
Current liabilities, including capital lease obligations and
long-term debt due within one year $ 62,697 $ 72,930
Obligations under capital leases due after one year 21,473 22,458
Long-term debt due after one year 434,932 437,380
Total liabilities 571,258 583,330
Stockholders' equity $ 85,323 $ 77,464
Contact:
Sonic Corp.
Claudia San Pedro, 405-225-4846
Vice President of Investor Relations,
Communications and Treasurer
Drmicrocap
11 years ago
Sonic Corp. (SONC), the nation's largest chain of drive-in restaurants, today announced results for the fourth quarter and fiscal year ended August 31, 2013.
Key highlights of the company's fourth fiscal quarter included:
• The company's net income was $0.21 per diluted share compared with net income per diluted share of $0.25 in the fourth fiscal quarter of fiscal 2012;
• Excluding certain adjustments, which are detailed below, net income per diluted share increased 20% to $0.30 from $0.25 in the fourth fiscal quarter of 2012; and
• As previously announced, system-wide same-store sales increased 5.9% during the fourth fiscal quarter, constore sales increase at franchise drive-ins and an increase of 5.2% at company drive-ins.
Key highlights of the company's fiscal year 2013 included:
• The company's net income was $0.64 per diluted share compared with net income per diluted share of $0.60 in fiscal 2012;
• Excluding certain adjustments, which are detailed below, net income per diluted share increased 20% to $0.72 from $0.60 in fiscal 2012;
• System-wide same-store sales increased 2.3%, consisting of a 2.3% same-store sales increase at franchise drive-ins and an increase of 2.5% at company drive-ins;
• Company drive-in margins improved by 60 basis points; and
• The company purchased $35.5 million in stock representing 6% of the company’s outstanding shares.
“Strong same-store sales during our summer quarter highlighted the strength and momentum of our business,” said Cliff Hudson, Chairman, Chief Executive Officer and President. “We are very pleased with our sales and profit performance in our fourth quarter and for fiscal year 2013, which resulted in an earnings per share increase for each period of 20% on an adjusted basis. As we look to fiscal year 2014, we will continue to focus on key initiatives such as increased media effectiveness, our innovative product pipeline and layered day-part promotional strategy to continue to drive same-store sales growth and, in turn, margin improvement.”
In the fourth fiscal quarter, the company refinanced a portion of its fixed rate debt with the issuance of $155 million of 2013-1 Senior Secured Fixed Rate Notes in a private transaction at an interest rate of 3.75% per annum, resulting in annual interest savings of $2.5 million. The board also extended the existing share repurchase program through August 31, 2014 with a total authorization of $40 million. During fiscal year 2013, the company repurchased $35.5 million of stock representing approximately 6% of its outstanding shares. Hudson added, “In fiscal 2014, we will continue to utilize the strength and flexibility of our business model to grow operating income and use our free cash flow1 to invest in our brand, repurchase stock and pay down debt.
“Our success is the result of our long-standing initiatives to improve customer service, product quality and value perception, which in fiscal 2014 will include new technology investments to enhance the guest experience,” added Hudson. “All of these initiatives drive our multi-layered growth strategy which incorporates same-store sales growth, leverage from higher sales, deployment of free cash flow, increasing royalty revenues and new drive-in development over the next few years. This strategy is expected to result in solid double-digit earnings per share growth in the near and long term.”
Same-Store Sales
For the fourth quarter ended August 31, 2013, system-wide same-store sales increased 5.9%, which was comprised of a 6.0% same-store sales increase at franchise drive-ins and an increase of 5.2% at company drive-ins. For the 12 months ended August 31, 2013, system-wide same-store sales increased 2.3%, including a 2.3% same-store sales increase at franchise drive-ins and a 2.5% increase at company drive-ins.
Financial Overview
For the fourth fiscal quarter ended August 31, 2013, the company's net income totaled $12.2 million or $0.21 per diluted share compared with net income of $14.5 million or $0.25 per diluted share in the same period in the prior year. Excluding the adjustments noted below, net income and net income per diluted share for the fourth fiscal quarter increased 19% and 20%, respectively.
During the fourth fiscal quarter of fiscal 2013, the company recognized a $3.9 million ($2.5 million after-tax) debt extinguishment charge in connection with the partial debt refinancing described above, a $2.4 million ($1.5 million after-tax) write-down associated with the closure of 12 lower-performing company drive-ins and a $1.6 million ($1.0 million after-tax) impairment charge for the write-down of assets associated with a change in the vendor that is implementing the Sonic system’s new point-of-sale technology.
For fiscal 2013, net income totaled $36.7 million or $0.64 per diluted share compared with net income of $36.1 million or $0.60 per diluted share for fiscal 2012. Excluding the adjustments noted below, net income and net income per diluted share for fiscal 2013 increased 14% and 20%, respectively.
In fiscal 2013, the company recognized $4.4 million ($2.8 million after-tax) in debt extinguishment charges in connection with a prepayment of debt and partial debt refinancing, a $2.4 million ($1.5 million after-tax) write-down associated with the closure of 12 lower-performing company drive-ins and a $1.6 million ($1.0 million after-tax) impairment charge for the write-down of assets associated with the change in the vendor that is implementing the system’s new point-of-sale technology, offset by a $0.7 million tax benefit associated with the reinstatement of the Work Opportunity Tax Credit (“WOTC”) and the resolution of certain tax matters.
The following non-GAAP adjustments are intended to supplement the presentation of the company's financial results in accordance with GAAP. The company believes that the presentation of these items provides useful information to investors and management regarding the underlying business trends and the performance of the company's ongoing operations and is helpful for period-to-period and company-to-company comparisons, which management believes will assist investors in analyzing the financial results of the company and predicting future performance.
Three months ended Three months ended
August 31, 2013 August 31, 2012
Net Diluted Net Diluted Net Income Diluted EPS
Income EPS Income EPS
$ Change
% Change
$ Change
% Change
Reported – GAAP $ 12,198 $ 0.21 $ 14,502 $ 0.25 $ (2,304 ) (16 )% $ (0.04 ) (16 )%
After-tax loss from early extinguishment of debt 2,483 0.04 - -
After-tax loss on closure of Company Drive-Ins 1,510 0.03 - -
After-tax impairment charges for point-of-sale assets 1,013 0.02 - -
Adjusted - Non-GAAP $ 17,204 $ 0.30 $ 14,502 $ 0.25 $ 2,702 19 % $ 0.05 20 %
Fiscal year ended Fiscal year ended
August 31, 2013 August 31, 2012
Net Diluted Net Diluted Net Income Diluted EPS
Income EPS Income EPS
$ Change
% Change
$ Change
% Change
Reported – GAAP $ 36,701 $ 0.64 $ 36,085 $ 0.60 $ 616 2 % $ 0.04 7 %
After-tax loss from early extinguishment of debt 2,798 0.05 - -
Retroactive tax benefit of WOTC and resolution of tax matters (743 ) (0.02 ) - -
After-tax loss on closure of Company Drive-Ins 1,510 0.03 - -
After-tax impairment charge for point-of-sale assets 1,013 0.02 - -
Adjusted - Non-GAAP $ 41,279 $ 0.72 $ 36,085 $ 0.60 $ 5,194 14 % $ 0.12 20 %
For the fourth fiscal quarter ended August 31, 2013, company drive-in sales increased by $6.3 million, or 5.7% compared to the same period in the prior year. Company drive-in sales for fiscal 2013 decreased by $2.1 million compared to the same period in the prior year primarily as a result of the refranchising of 34 company drive-ins during the second fiscal quarter of 2012.
Development
For the fourth fiscal quarter ended August 31, 2013, 17 new drive-ins were opened, of which 16 were opened by franchisees, similar to drive-in openings during the fourth fiscal quarter of 2012. For fiscal 2013 there were 27 new drive-in openings including 25 new franchise drive-ins.
Fiscal Year 2014 Outlook
The company expects its initiatives to drive 14% to 15% earnings per share growth in fiscal 2014 as compared to the adjusted Non-GAAP earnings per share for fiscal 2013. The macroeconomic environment and its impact on consumer confidence, in addition to the pacing of capital investments, may impact results. The outlook for fiscal 2014 anticipates the following elements:
• Positive same-store sales in the low single digit range for the system;
• Company drive-ins are expected to perform above the system average in the back half of the fiscal year as new digital point-of-purchase technology and a new point-of-sale system are implemented;
• 40 to 50 new franchise drive-in openings and fewer drive-in closings than in fiscal 2013;
• Drive-in-level margins improving between 75 to 100 basis points, depending upon the degree of same-store sales growth at company drive-ins and the implementation of the new point-of-sale system in company drive-ins;
• Selling, general and administrative expenses of $69 million to $70 million;
• Depreciation and amortization expense of $42.5 million to $43 million;
• Net interest expense of approximately $25 million;
• An income tax rate of between 37% to 37.5%, which may vary depending upon the reinstatement of employment tax credit programs that are scheduled to expire on December 31, 2013 and pending resolution of certain tax matters;
• Capital expenditures of $65 million to $70 million, which assumes the implementation of a new point-of-sale system and digital point-of-purchase technology in company drive-ins during fiscal 2014;
• Free cash flow of approximately $15 million to $25 million; and
• The repurchase of $40 million of stock across the fiscal year utilizing existing cash and free cash flow.
Earnings Conference Call
The company will host a conference call and online web simulcast this afternoon beginning at 5:00 p.m. EDT. The conference call can be accessed live by dialing (888) 806-6221 or (913) 312-0830 for international callers. A replay will be available one hour after the call and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the conference ID is 8270295. The replay will be available until Monday, October 28, 2013. An online replay of the conference call will be available approximately two hours after the conclusion of the live broadcast. A link to this event may be found on the company's investor relations website at http://ir.sonicdrivein.com/.
About Sonic
SONIC®, America's Drive-In®, is the nation's largest chain of drive-in restaurants with more than 3,500 drive-ins serving approximately 3 million customers every day. Over the past 60 years, SONIC has delighted guests with signature menu items, more than 1 million drink combinations, friendly service by iconic Carhops and ongoing support of education through its award-winning Limeades for Learning® program. SONIC received top honors as America's “#1 burger quick service restaurant” in the 2013 Temkin Experience Ratings report. For more information about Sonic Corp. (NASDAQ/NM: SONC) and its subsidiaries, please visit sonicdrivein.com. Customers can also connect with SONIC at facebook.com/sonicdrivein or on Twitter @sonicdrive_in.
This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. Factors that could cause actual results to differ materially from those expressed in, or underlying, these forward-looking statements are detailed in the company's annual and quarterly report filings with the Securities and Exchange Commission. The company undertakes no obligation to publicly release revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.
The tables that follow provide information regarding the number of company drive-ins, franchise drive-ins and system drive-ins in operation as of the end of the periods indicated. In addition, these tables provide information regarding franchise sales, system growth in sales, and both franchise and system average drive-in sales and change in same-store sales. System information includes both company and franchise drive-in information, which we believe is useful in analyzing the growth of our brand. While we do not record franchise drive-in sales as revenues, we believe this information is important in understanding our financial performance since we calculate and record franchise royalties based on a percentage of franchise sales. This information also is indicative of the financial health of our franchisees.
1 Free cash flow is defined as net income plus depreciation, amortization and stock compensation expenses, less capital expenditures.
SONC-F
SONIC CORP.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three months ended Fiscal year ended
August 31, August 31,
2013 2012 2013 2012
Revenues:
Company Drive-In sales $ 116,689 $ 110,406 $ 402,296 $ 404,443
Franchise Drive-Ins:
Franchise royalties and fees 38,988 37,182 130,737 128,013
Lease revenue 1,261 1,970 4,785 6,575
Other 1,864 1,382 4,767 4,699
Total revenues 158,802 150,940 542,585 543,730
Costs and expenses:
Company Drive-Ins:
Food and packaging 33,591 30,764 114,545 113,775
Payroll and other employee benefits 39,674 38,168 142,511 144,531
Other operating expenses, exclusive of
depreciation and amortization included below 24,010 23,265 86,153 89,164
Total cost of Company Drive-In sales 97,275 92,197 343,209 347,470
Selling, general and administrative 17,482 16,721 66,022 65,173
Depreciation and amortization 9,940 10,650 40,387 41,914
Provision for impairment of long-lived assets 1,776 388 1,776 764
Other operating (income) expense, net 2,296 82 1,943 (531 )
Total costs and expenses 128,769 120,038 453,337 454,790
Income from operations 30,033 30,902 89,248 88,940
Interest expense 6,805 7,801 29,098 31,608
Interest income (130 ) (153 ) (592 ) (630 )
Loss from early extinguishment of debt 3,951 - 4,443 -
Net interest expense 10,626 7,648 32,949 30,978
Income before income taxes 19,407 23,254 56,299 57,962
Provision for income taxes 7,209 8,752 19,598 21,877
Net income $ 12,198 $ 14,502 $ 36,701 $ 36,085
Basic income per share $ 0.22 $ 0.25 $ 0.65 $ 0.60
Diluted income per share $ 0.21 $ 0.25 $ 0.64 $ 0.60
Weighted average basic shares 56,061 58,103 56,384 60,078
Weighted average diluted shares 57,408 58,386 57,191 60,172
SONIC CORP.
Unaudited Supplemental Information
Three months ended Fiscal year ended
August 31, August 31,
2013 2012 2013 2012
Drive-Ins in Operation
Company:
Total at beginning of period 407 409 409 446
Opened 1 1 2 1
Acquired from (sold to) franchisees - - 1 (35 )
Closed (net of re-openings) (12 ) (1 ) (16 ) (3 )
Total at end of period 396 409 396 409
Franchise:
Total at beginning of period 3,119 3,141 3,147 3,115
Opened 16 17 25 36
Acquired from (sold to) the company - - (1 ) 35
Closed (net of re-openings) (9 ) (11 ) (45 ) (39 )
Total at end of period 3,126 3,147 3,126 3,147
System-wide:
Total at beginning of period 3,526 3,550 3,556 3,561
Opened 17 18 27 37
Closed (net of re-openings) (21 ) (12 ) (61 ) (42 )
Total at end of period 3,522 3,556 3,522 3,556
Three months ended Fiscal year ended
August 31, August 31,
2013 2012 2013 2012
($ in thousands) ($ in thousands)
Sales Analysis
Company Drive-Ins:
Total sales $ 116,689 $ 110,406 $ 402,296 $ 404,443
Average drive-in sales 286 270 990 958
Change in same-store sales 5.2 % 4.3 % 2.5 % 2.8 %
Franchised Drive-Ins:
Total sales $ 1,003,216 $ 946,330 $ 3,479,880 $ 3,386,218
Average drive-in sales 327 301 1,125 1,081
Change in same-store sales 6.0 % 2.1 % 2.3 % 2.2 %
System-wide:
Change in total sales 6.0 % 2.1 % 2.4 % 2.7 %
Average drive-in sales $ 322 $ 297 $ 1,109 $ 1,066
Change in same-store sales 5.9 % 2.3 % 2.3 % 2.2 %
Note: Change in same-store sales based on restaurants open for a minimum of 15 months.
SONIC CORP.
Unaudited Supplemental Information
Three months ended Fiscal year ended
August 31, August 31,
2013 2012 2013 2012
Revenues (in thousands)
Company Drive-In sales $ 116,689 $ 110,406 $ 402,296 $ 404,443
Franchise Drive-Ins:
Franchise royalties 38,518 36,009 130,009 125,989
Franchise fees 470 1,173 728 2,024
Lease revenue 1,261 1,970 4,785 6,575
Other 1,864 1,382 4,767 4,699
Total revenues $ 158,802 $ 150,940 $ 542,585 $ 543,730
Three months ended Fiscal year ended
August 31, August 31,
2013 2012 2013 2012
Margin Analysis (percentage of Company Drive-In sales)
Company Drive-Ins:
Food and packaging 28.8 % 27.9 % 28.5 % 28.1 %
Payroll and employee benefits 34.0 34.6 35.4 35.7
Other operating expenses 20.6 21.0 21.4 22.1
Cost of Company Drive-In sales 83.4 % 83.5 % 85.3 % 85.9 %
August 31, August 31,
2013 2012
Selected Balance Sheet Data (In thousands)
Cash and cash equivalents $ 77,896 $ 52,647
Current assets 140,722 107,151
Property, equipment and capital leases, net 399,661 443,008
Total assets $ 660,794 $ 680,760
Current liabilities, including capital lease obligations and
long-term debt due within one year $ 72,930 $ 80,516
Obligations under capital leases due after one year 22,458 27,377
Long-term debt due after one year 437,380 466,613
Total liabilities 583,330 621,513
Stockholders' equity $ 77,464 $ 59,247
.
.
Contact:.
.
Sonic Corp.
Claudia San Pedro, 405-225-4846
Vice President of Investor Relations, Communications and Treasurer
Drmicrocap
11 years ago
Sonic Reports Third Fiscal Quarter 2013 Financial Results
Business WirePress Release: Sonic Corp. – Mon, Jun 24, 2013 4:01 PM EDT..
Sonic Corp. (SONC), the nation's largest chain of drive-in restaurants, today announced results for the third fiscal quarter ended May 31, 2013.
Key highlights of the company's third quarter report included:
• The company's net income per diluted share increased 8% to $0.26 in the third quarter of fiscal 2013 compared with net income per diluted share of $0.24 in the third quarter of fiscal 2012;
• System-wide same-store sales increased 0.1% during the third quarter, consisting of 0.2% same-store sales increase at franchise drive-ins and a decrease of 1.1% at company drive-ins; weather is estimated to have had a 300 to 400 basis point adverse impact on system-wide same-store sales for the quarter; and
• The company purchased $11 million of stock during the third fiscal quarter bringing fiscal year-to-date purchases to $35.5 million representing approximately 6% of its outstanding stock as of the beginning of the fiscal year.
“While challenging weather in March and April had a significant impact on our third quarter results, we were pleased to see our same-store sales return to positive in April and May,” said Clifford Hudson, Chairman, Chief Executive Officer and President. “Our new product pipeline and the increased efficiency of our media spending, including the shift to increased national advertising, continue to be positive drivers of our business.
“We remain confident in our plan to grow shareholder value by way of the company’s multi-layered growth strategy,” added Hudson. “We expect the increased effectiveness of our media, our innovative product pipeline and layered day-part promotional strategy to continue to drive same-store sales growth and in turn margin improvement, which will also be enhanced by technology investments. This, combined with a new lower-cost, small building prototype, will improve the return on investment of new drive-ins, encouraging increased development. Finally, we will continue to utilize the strength and flexibility of our franchise business model to grow operating income and use our free cash flow1 to opportunistically invest in our brand, repurchase stock and pay down debt. We expect each of the layers in our growth strategy to contribute to our ability to grow earnings per share at a rate in the low-to-mid teens in both the near term and long term.”
Financial Overview
For the third fiscal quarter ended May 31, 2013, the company's net income totaled $14.8 million or $0.26 per diluted share compared with net income of $14.4 million or $0.24 per diluted share in the same period of the prior year.
For the first nine months of fiscal 2013, net income totaled $24.5 million or $0.43 per diluted share compared with net income of $21.6 million or $0.36 per diluted share for the same period in 2012 representing a 19% increase fiscal year-to-date.
The following non-GAAP adjustments are intended to supplement the presentation of the company's financial results in accordance with GAAP. The company believes that the presentation of these items provides useful information to investors and management regarding the underlying business trends and the performance of the company's ongoing operations and is helpful for period-to-period and company-to-company comparisons, which management believes will assist investors in analyzing the financial results of the company and predicting future performance.
Nine months ended Nine months ended
May 31, 2013 May 31, 2012
Net Diluted Net Diluted Net Income Diluted EPS
Income EPS Income EPS
$ Change
% Change
$ Change
% Change
Reported – GAAP $ 24,503 $ 0.43 $ 21,583 $ 0.36 $ 2,920 14 % $ 0.07 19 %
After-tax loss from early extinguishment of debt 315 0.01 - -
Retroactive tax benefit of WOTC and resolution of tax matters
(743 ) (0.02 ) - -
Adjusted - Non-GAAP $ 24,075 $ 0.42 $ 21,583 $ 0.36 $ 2,492 12 % $ 0.06 17 %
Company drive-in sales for the first nine months of fiscal 2013 decreased by $8.4 million compared to the same period in the prior year primarily as a result of the refranchising of 34 company drive-ins during the second fiscal quarter of 2012.
Same-Store Sales
For the third quarter ended May 31, 2013, system-wide same-store sales increased 0.1%, which was comprised of 0.2% same-store sales increase at franchise drive-ins and a decrease of 1.1% at company drive-ins. Weather is estimated to have had a 300 to 400 basis point adverse impact on system-wide same-store sales for the quarter. Despite the adverse weather, system-wide same-store sales were positive in April and improved further in May.
Development
Five new franchise drive-ins were opened in the third quarter of fiscal 2013 versus seven new franchise drive-in openings during the third quarter of fiscal 2012.
Fiscal Year 2013 Outlook
The company expects its initiatives to drive sales’ improvements going forward. However, uncertainty with regard to the macroeconomic environment and its impact on consumer confidence may result in sales volatility. The outlook for fiscal 2013 anticipates the following elements:
• Positive same-store sales in the low single digit range;
• Drive-in level margins to improve from 50 to 75 basis points;
• 25 to 30 new franchise drive-in openings;
• Selling, general and administrative expenses of $66 to $66.5 million;
• Depreciation and amortization of $40 to $40.5 million;
• Net interest expense of approximately $28 to $28.5 million excluding the impact of debt extinguishment charges;
• An income tax rate between 36.5% and 37.5% for the fourth fiscal quarter and between 34.5% and 35.5% for fiscal 2013;
• Capital expenditures of $35 to $40 million which includes partial implementation of technology initiatives in company drive-ins and implementation of the supply chain management system; and
• Free cash flow of $45 to $50 million for fiscal 2013.
Investor Day
The company will host an investor day with industry analysts and institutional investors on Thursday, June 27, 2013. The meeting will begin at 8:00 a.m. EDT at the NASDAQ Marketsite. The event will be simulcast over the internet and a link to this event may be found on the company's investor relations website at http://ir.sonicdrivein.com/.
Earnings Conference Call
The company will host a conference call and online web simulcast this afternoon beginning at 5:00 p.m. EDT. The conference call can be accessed live by dialing (888) 811-5427 or (913) 981-5578 for international callers. A replay will be available one hour after the call and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the conference ID is 2939382. The replay will be available until Monday, July 1, 2013. An online replay of the conference call will be available approximately two hours after the conclusion of the live broadcast. A link to this event may be found on the company's investor relations website at http://ir.sonicdrivein.com/.
About Sonic
SONIC®, America's Drive-In®, is the nation's largest chain of drive-in restaurants with more than 3,500 drive-ins serving approximately three million customers every day. Over the past 60 years, SONIC has delighted guests with signature menu items, more than one million drink combinations, friendly service by iconic Carhops and ongoing support of education through its award-winning Limeades for Learning® program. SONIC received top honors as America's "#1 burger quick service restaurant" in the 2013 Temkin Experience Ratings report. For more information about Sonic Corp. (NASDAQ/NM: SONC) and its subsidiaries, please visit www.sonicdrivein.com. Customers can also connect with SONIC at facebook.com/sonicdrivein or on Twitter @sonicdrive_in.
This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. Factors that could cause actual results to differ materially from those expressed in, or underlying, these forward-looking statements are detailed in the company's annual and quarterly report filings with the Securities and Exchange Commission. The company undertakes no obligation to publicly release revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.
The tables that follow provide information regarding the number of company drive-ins, franchise drive-ins and system drive-ins in operation as of the end of the periods indicated. In addition, these tables provide information regarding franchise sales, system growth in sales, and both franchise and system average drive-in sales and change in same-store sales. System information includes both company and franchise drive-in information, which we believe is useful in analyzing the growth of our brand. While we do not record franchise drive-in sales as revenues, we believe this information is important in understanding our financial performance since we calculate and record franchise royalties based on a percentage of franchise sales. This information also is indicative of the financial health of our franchisees.
1 Free cash flow is defined as net income plus depreciation, amortization and stock compensation expenses, less capital expenditures.
SONC-G
SONIC CORP.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three months ended Nine months ended
May 31, May 31,
2013 2012 2013 2012
Revenues:
Company Drive-In sales $ 108,445 $ 110,070 $ 285,607 $ 294,037
Franchise Drive-Ins:
Franchise royalties and fees 35,833 35,801 91,749 90,831
Lease revenue 1,089 2,056 3,524 4,605
Other 1,267 1,500 2,903 3,317
Total revenues 146,634 149,427 383,783 392,790
Costs and expenses:
Company Drive-Ins:
Food and packaging 30,776 30,600 80,954 83,011
Payroll and other employee benefits 37,924 38,539 102,837 106,363
Other operating expenses, exclusive of
depreciation and amortization included below 21,356 22,261 62,143 65,899
Total cost of Company Drive-In sales 90,056 91,400 245,934 255,273
Selling, general and administrative 16,943 16,951 48,540 48,452
Depreciation and amortization 9,783 10,288 30,447 31,264
Provision for impairment of long-lived assets - 203 - 376
Other operating income, net (142 ) (151 ) (353 ) (613 )
Total costs and expenses 116,640 118,691 324,568 334,752
Income from operations 29,994 30,736 59,215 58,038
Interest expense 7,170 7,836 22,293 23,807
Interest income (153 ) (174 ) (462 ) (477 )
Loss from early extinguishment of debt - - 492 -
Net interest expense 7,017 7,662 22,323 23,330
Income before income taxes 22,977 23,074 36,892 34,708
Provision for income taxes 8,184 8,667 12,389 13,125
Net income $ 14,793 $ 14,407 $ 24,503 $ 21,583
Basic income per share $ 0.26 $ 0.24 $ 0.43 $ 0.36
Diluted income per share $ 0.26 $ 0.24 $ 0.43 $ 0.36
Weighted average basic shares 56,005 59,936 56,492 60,736
Weighted average diluted shares 56,845 59,961 57,118 60,767
SONIC CORP.
Unaudited Supplemental Information
Three months ended Nine months ended
May 31, May 31, May 31, May 31,
2013 2012 2013 2012
Drive-Ins in Operation
Company:
Total at beginning of period 405 412 409 446
Opened 1 - 1 -
Acquired from (sold to) franchisees 1 (1 ) 1 (35 )
Closed (net of re-openings) - (2 ) (4 ) (2 )
Total at end of period 407 409 407 409
Franchise:
Total at beginning of period 3,121 3,138 3,147 3,115
Opened 5 7 9 19
Acquired from (sold to) the company (1 ) 1 (1 ) 35
Closed (net of re-openings) (6 ) (5 ) (36 ) (28 )
Total at end of period 3,119 3,141 3,119 3,141
System-wide:
Total at beginning of period 3,526 3,550 3,556 3,561
Opened 6 7 10 19
Closed (net of re-openings) (6 ) (7 ) (40 ) (30 )
Total at end of period 3,526 3,550 3,526 3,550
Three months ended Nine months ended
May 31,
May 31,
May 31,
May 31,
2013
2012
2013
2012
($ in thousands) ($ in thousands)
Sales Analysis
Company Drive-Ins:
Total sales $ 108,445 $ 110,070 $ 285,607 $ 294,037
Average drive-in sales 267 268 704 688
Change in same-store sales (1.1 ) % 3.7 % 1.5 % 2.3 %
Franchised Drive-Ins:
Total sales $ 937,092 $ 934,449 $ 2,469,033 $ 2,431,649
Average drive-in sales 306 298 798 779
Change in same-store sales 0.2 % 2.7 % 0.9 % 2.2 %
System-wide:
Change in total sales 0.1 % 2.4 % 1.0 % 2.9 %
Average drive-in sales $ 301 $ 294 $ 787 $ 768
Change in same-store sales 0.1 % 2.8 % 0.9 % 2.2 %
Note: Change in same-store sales based on restaurants open for a minimum of 15 months.
SONIC CORP.
Unaudited Supplemental Information
Three months ended Nine months ended
May 31, May 31, May 31, May 31,
2013 2012 2013 2012
Revenues (in thousands)
Company Drive-In sales $ 108,445 $ 110,070 $ 285,607 $ 294,037
Franchise Drive-Ins:
Franchise royalties 35,756 35,599 91,491 89,980
Franchise fees 77 202 258 851
Lease revenue 1,089 2,056 3,524 4,605
Other 1,267 1,500 2,903 3,317
Total revenues $ 146,634 $ 149,427 $ 383,783 $ 392,790
Three months ended Nine months ended
May 31, May 31, May 31, May 31,
2013 2012 2013 2012
Margin Analysis (percentage of Company Drive-In sales)
Company Drive-Ins:
Food and packaging 28.4 % 27.8 % 28.3 % 28.2 %
Payroll and employee benefits 35.0 35.0 36.0 36.2
Other operating expenses 19.6 20.2 21.8 22.4
Cost of Company Drive-In sales 83.0 % 83.0 % 86.1 % 86.8 %
May 31, August 31,
2013 2012
Balance Sheet Data (In thousands)
Cash and cash equivalents $ 53,554 $ 52,647
Current assets 110,948 107,151
Property, equipment and capital leases, net 400,968 443,008
Total assets 642,504 680,760
Current liabilities, including capital lease obligations and
long-term debt due within one year 71,865 80,516
Obligations under capital leases due after one year 23,904 27,377
Long-term debt due after one year 436,135 466,613
Total liabilities 582,068 621,513
Stockholders' equity $ 60,436 $ 59,247
.
.
Contact:.
.
Sonic Corp.
Claudia San Pedro, 405-225-4846
Vice President of Investor Relations, Communications and Treasurer
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