For the first fiscal quarter ended November 30, 2012, the company's net income totaled $6.1 million or $0.11 per diluted share compared with net income of $5.5 million or $0.09 per diluted share in the same period prior year. Company drive-in sales in the first quarter of fiscal 2013 declined by $3.3 million compared to the first quarter of fiscal 2012 as a result of the refranchising of 34 company drive-ins during the second fiscal quarter of 2012, partially offset by an increase in same-store sales.
For the first fiscal quarter ended November 30, 2012, system-wide same-store sales increased 3.0%, which was comprised of a 4.2% increase at company drive-ins and a 2.9% increase at franchise drive-ins.
Across the Sonic system, one new franchise drive-in was opened in the first quarter of fiscal 2013 versus two new franchise drive-in openings during the first quarter of fiscal 2012. New franchise drive-in openings in fiscal 2013 are expected to be slightly higher than new franchise drive-in openings in fiscal 2012.
Fiscal Year 2013 Outlook
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:
- Positive same-store sales in the low single digit range;
- Restaurant-level margins to improve between 50 to 100 basis points;
- Slightly more new franchise drive-in openings than in fiscal 2012;
- Selling, general and administrative expenses of $68 to $69 million;
- Subsequent to the end of the quarter, the company completed the sale of real estate that was previously leased to a franchisee. As a result, franchise lease revenue is now expected to be $3 to $3.5 million; and depreciation and amortization is expected to be $40 to $41 million. The company realized net cash proceeds of approximately $30 million and a 24 month note of approximately $9 million on the sale;
- Net interest expense of approximately $29 million;
- Subsequent to the end of the quarter, legislation was passed that reinstated and extended certain employment tax credits. The company estimates it will realize a tax benefit of $500 thousand to $1 million related to the retroactive portion of the employment tax credit program in the second fiscal quarter and further expects its tax rate to be reduced to the 37% to 38% range in its third and fourth fiscal quarters from the ongoing impact of the reinstated tax credit program;
- Capital expenditures of $30 to $35 million which includes a partial point-of-sale system implementation in company drive-ins and supply chain management implementation for the system; and
- Free cash flow of $45 to $50 million for fiscal 2013.
Free cash flow is defined as net income plus depreciation, amortization and stock compensation expense, less capital expenditures.
Sonic, America's Drive-In, originally started a
a hamburger and root beer stand in 1953 in Shawnee, Oklahoma called Top Hat Drive-In, and then changed its name to Sonic in 1959. The first drive-in to adopt the Sonic name is still serving customers in Stillwater, Oklahoma. Sonic has more than 3,500 drive-ins coast to coast, where approximately three million customers eat every day. For more information about Sonic Corp. and its subsidiaries, visit Sonic at
Earnings Conference Call
The company will host a conference call and online web simulcast this afternoon beginning at 5:00 p.m. ET. The conference call can be accessed live over the phone by dialing (888) 656-7429 or (913) 981-5525 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 7437689. The replay will be available until Thursday, January 10, 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 will be available on the investor section of the company's website,
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.