OKLAHOMA CITY - (BUSINESS WIRE) - June 26, 2018 - Sonic Corp. (NASDAQ: SONC), the nation's largest chain of drive-in restaurants, today announced results for its third fiscal quarter ended May 31, 2018.
Key highlights of the company's third quarter of fiscal year 2018 included:
"Our third quarter same-store sales performance reflects a material improvement in trend, driven by ongoing initiatives to increase marketing reach, refresh our advertising creative and introduce relevant new products, including the Sonic Signature Slinger and Pretzel Twist," said Cliff Hudson, Sonic Corp. CEO. "We continued to support a simplified everyday value message via the Carhop Classic promotion in April and May, which featured a Quarter-Pound Double Cheeseburger or Signature Slinger and Tots for $2.99. These broadly appealing value options offer compelling price points and are key to our efforts to drive traffic and increase sales.
"Looking ahead, we expect to continue to benefit from fully integrated media strategies and strong product innovation. On the product front, we are now promoting new Chicken Tenders as part of a $3.99 Crispy Tender Dinner, as well as Snow Cone Slushes featuring innovative flavors such as Pickle Juice and Tiger's Blood. We continue to roll out mobile order ahead technology across the system following a successful operational test in the third fiscal quarter. We expect our focus on delighting our guests and delivering a more convenient and personalized experience will continue to drive improved traffic, accelerate operating profit growth and generate strong free cash flow.
"During the quarter, we continued to return capital to shareholders. We repurchased 1.5 million shares in the quarter, bringing the total to 4.3 million shares repurchased for the first nine months of fiscal 2018, or 9.8% of shares outstanding. We expect leverage to remain near the high end of our 3.5-4.5x net-debt-to-EBITDA target and anticipate returning a cumulative $500 to $600 million in capital to investors from fiscal 2018 through fiscal 2021 through a combination of dividends and share repurchases." (a)
Financial Overview
For the third fiscal quarter of 2018, the company's net income totaled $21.6 million or $0.58 per diluted share compared to net income of $18.8 million or $0.44 per diluted share in the same period of the prior year. Excluding the items outlined below, net income increased 7% and net income per diluted share increased 21% to $0.52. The lower tax rate resulting from federal tax reform benefitted adjusted earnings per share by approximately $0.06. Excluding the total impact of federal tax reform, adjusted net income per diluted share improved 7% to $0.46 in the third fiscal quarter of 2018.
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 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.
View Original for Full Data Table
View Original for Full Data Table
For the first nine months of fiscal year 2018, the company's net income totaled $52.6 million or $1.36 per diluted share compared to net income of $42.8 million or $0.96 per diluted share in the same period of the prior year. Excluding the items outlined below, net income increased 5% and net income per diluted share increased 21% to $0.98. The lower tax rate resulting from federal tax reform benefitted adjusted earnings per share by approximately $0.10. Excluding the total impact of federal tax reform, adjusted net income per diluted share improved 9% to $0.88 in the first nine months of fiscal year 2018.
View Original for Full Data Table
View Original for Full Data Table
Fiscal Year 2018 Outlook
While the macroeconomic environment may impact results, the company now expects adjusted earnings per share for fiscal year 2018 to be between $1.45 and $1.49 inclusive of tax reform. Excluding the impact of tax reform, the company now expects an adjusted earnings per share increase of 3% to 6% year over year. The outlook for fiscal 2018 anticipates the following elements:
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) 224-1005 or (323) 994-2093 for international callers. A replay will be available one hour after the call and can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers; the conference ID is 5919718. The replay will be available until Tuesday, July 3, 2018. 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 will be available on the investor section of the company's website, sonicdrivein.com.
About Sonic
SONIC, America's Drive-In is the nation's largest drive-in restaurant chain serving approximately 3 million customers every day. Ninety-five percent of SONIC's nearly 3,600 drive-in locations are owned and operated by local business men and women. For 65 years, SONIC has delighted guests with signature menu items, 1.3 million drink combinations and friendly service by iconic Carhops. Since the 2009 launch of SONIC's Limeades for Learning philanthropic campaign in partnership with DonorsChoose.org, SONIC has donated $10.7 million to public school teachers nationwide to fund essential learning materials and innovative teaching resources to inspire creativity and learning in their students. To learn more about Sonic Corp. (NASDAQ/NM: SONC), please visit sonicdrivein.com and please visit or follow us on Facebook and Twitter. To learn about SONIC's Limeades for Learning initiative, please visit LimeadesforLearning.com.
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
View Original for Full Data Table
View Original for Full Data Table
View Original for Full Data Table
View Original for Full Data Table
Note: Change in same-store sales based on restaurants open for a minimum of 15 months.
View Original for Full Data Table
View Original for Full Data Table
View Original for Full Data Table
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 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.
View Original for Full Data Table
View Original for Full Data Table
View Original for Full Data Table
View Original for Full Data Table
View source version on businesswire.com: https://www.businesswire.com/news/home/20180626006503/en/
Corey Horsch
Sonic Corp.
405-225-4800
Vice President, Chief Financial Officer and Treasurer
Source: Sonic Corp.