OKLAHOMA CITY - June 24, 2013 - (BUSINESS WIRE) - Sonic Corp. (NASDAQ: 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:
"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."
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.
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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.
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.
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.
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:
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/.
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/.
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.
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Note: Change in same-store sales based on restaurants open for a minimum of 15 months.
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Sonic Corp.
Claudia San Pedro
405-225-4846
Vice President of Investor Relations, Communications and Treasurer
Source: Sonic Corp.