Sonic Reports Record Second Quarter 2008 Earnings Monday March 24, 5:46 pm ET Accelerating Development and Retrofit Programs, Other Initiatives Continue to Build Momentum for Fiscal 2008 Sales and Earnings
OKLAHOMA CITY, March 24 /PRNewswire-FirstCall/ -- Sonic Corp. (Nasdaq: SONC - News), the nation's largest chain of drive-in restaurants, today announced results for the second quarter ended February 29, 2008. Highlights of the company's second quarter performance included: Net income per diluted share of $0.15 versus $0.09 in the prior year; excluding special items outlined below, this represents a 15% increase in earnings per share;
-- 3.2% increase in system-wide same-store sales; -- The opening of 34 new drive-ins during the second quarter, the relocation or rebuild of 16 existing drive-ins, and the completion of 239 retrofits; -- Improved operating margins including a 57-basis-point improvement in restaurant-level margins; and -- The benefit of continued accretion from the company's recapitalization and ongoing share repurchases.
"Our multi-layered growth strategy with elements focused on driving revenues, increasing profitability and using capital efficiently, continues to enhance shareholder value," said Clifford Hudson, Chairman and Chief Executive Officer. "Successful sales-driving initiatives, such as the retrofit, Happy Hour and new product news were strong contributors to system-wide same-store sales growth of 3.2%, with a healthy increase in traffic. These initiatives, along with strong development activity and the increasingly accretive effect of our share repurchases, remain key drivers that position us well for continued strong earnings growth.
"Going forward, we expect the positive impact of Happy Hour, combined with the launch of our new line of coffee products this month, will further set Sonic apart as the Ultimate Drink Stop®," Hudson added. "In addition, our increased investment in media, projected to reach $190 million in fiscal 2008 - with over $95 million dedicated to system-wide advertising - will drive a strong brand message to increase sales in both existing and new markets. We'll continue to enhance these sales-driving strategies, layering opportunities to grow sales with new products such as our Java Chillers and monthly offers such as Cinnasnacks(TM), along with other new products, to emphasize the wide variety of offerings during non-traditional day parts."
Income Statement Overview
Net income per diluted share for the second quarter of fiscal 2008 increased 15% to $0.15 from $0.13 in the year-earlier period, excluding special items outlined below. The non-GAAP adjustments outlined below 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.