OKLAHOMA CITY - March 29, 2016 - (BUSINESS WIRE) - Sonic Corp. (NASDAQ: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:
"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."
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.
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.
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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.
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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:
1Free cash flow is defined as net income plus depreciation, amortization and stock compensation expenses, less capital expenditures.
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/.
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.
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Note: Change in same-store sales based on restaurants open for a minimum of 15 months.
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SOURCE Sonic Corp.
Corey Horsch
Sonic Corp.
Vice President of Investor Relations and Treasurer
405-225-4800