Sonic Reports First Quarter 2011 Earnings of $0.12 Per Share BY Business Wire — 4:01 PM ET 01/04/2011 OKLAHOMA CITY--(BUSINESS WIRE)-- Sonic Corp. (SONC
Loading... ) , the nation's largest chain of drive-in restaurants, today announced results for the first fiscal quarter ended November 30, 2010. Key highlights of the company's first quarter report included: Net income per diluted share totaled $0.12, including $0.02 per diluted share from a one-time tax benefit, versus net income per diluted share of $0.10 in the year-earlier quarter; System-wide same-store sales declined 2.4% during the first quarter, improving from a decline of 6.4% in the fourth quarter of fiscal 2010; Same-store sales at franchise drive-ins declined 2.5% in the first quarter, while same-store sales at company-owned drive-ins declined 1.9%; and Franchise drive-in openings totaled nine for the quarter. "We are pleased by improvements in Sonic's same-store sales trends, especially the continued strengthening of company-owned drive-in sales that began at the end of last fiscal year," said Clifford Hudson, Chairman and Chief Executive Officer. "These improvements underscore the positive impact of our strategic initiatives, including a greater emphasis on personalized service with skating Carhops and the introduction of premium quality ingredients and products, like real ice cream, Footlong Quarter Pound Coneys and a line-up of bigger burgers – all of which continue to drive higher customer satisfaction scores. "We have a number of initiatives focused on improving both sales at company-owned drive-ins and for the system," Hudson continued. "In the near term, company-owned drive-in sales and margin performance have the potential for the largest impact on earnings and stockholder value. After trailing the system for almost three years, sales at company-owned drive-ins outperformed the system for the past two quarters even as system sales trends have improved." Hudson also pointed out that Sonic continues to use excess cash to reduce debt and strengthen its capital structure, providing the company with additional financing flexibility to manage its business. Subsequent to quarter's end, Sonic repurchased $62.5 million of the company's Class A-1 variable funding senior notes in a privately negotiated transaction, realizing a gain of approximately $5 million on the extinguishment of the notes. Sonic's outstanding debt now totals approximately $520 million, and the company has more than $30 million of unrestricted cash available for general corporate uses. Income Statement Overview For the first quarter ended November 30, 2010, revenues declined 5% to $129.1 million from $136.5 million in the year-earlier period primarily because of refranchising 16 drive-ins since the year-earlier period and lower same-store sales. Net income for the first quarter of fiscal 2011 totaled $7.2 million or $0.12 per diluted share compared with $6.2 million or $0.10 per diluted share in the year-earlier quarter. Excluding a one-time tax benefit of $0.02 per diluted share from a favorable tax settlement, income per diluted share was $0.10 in the first quarter of fiscal 2011. Same-Store Sales For the first fiscal quarter ended November 30, 2010, system-wide same-store sales declined 2.4% versus a decline of 6.4% in the fourth quarter of fiscal 2010. These sales reflected 2.5% lower same-store sales at franchise drive-ins compared with a decline of 6.4% in the fourth quarter of fiscal 2010. Same-store sales at company-owned drive-ins declined 1.9% versus a decline of 6.1% in the fourth quarter of fiscal 2010.