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Sonic Corp. Reports Operating Results (10-Q)

January 07, 2011 | About:
10qk

10qk

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Sonic Corp. (SONC) filed Quarterly Report for the period ended 2010-11-30.

Sonic Corp. has a market cap of $679.2 million; its shares were traded at around $11.02 with a P/E ratio of 23.3 and P/S ratio of 1.2. Sonic Corp. had an annual average earning growth of 15.1% over the past 10 years. GuruFocus rated Sonic Corp. the business predictability rank of 3.5-star.SONC is in the portfolios of David Dreman of Dreman Value Management, Paul Tudor Jones of The Tudor Group, Jim Simons of Renaissance Technologies LLC, Bruce Kovner of Caxton Associates, Steven Cohen of SAC Capital Advisors, George Soros of Soros Fund Management LLC.

Highlight of Business Operations:

Revenues declined 5.4% to $129.1 million for the first quarter of fiscal year 2011 from $136.5 million for the same period last year. This decrease was primarily attributable to the impact of refranchising 16 Company-owned Drive-Ins in the second quarter of fiscal year 2010 and, to a lesser extent, same-store sales declines at Company-owned and Franchise Drive-Ins. Margins at Company-owned Drive-Ins, adjusted for noncontrolling interests, remained steady while net interest expense declined $1.4 million or 15.1% as a result of debt repurchases and scheduled principal repayments since the first quarter of fiscal year 2010. Net income was $7.2 million or $0.12 per diluted share for the first quarter of fiscal year 2011 versus $6.2 million or $0.10 per diluted share for the same period last year. Excluding a tax benefit of $0.02 per diluted share recognized during the quarter relating to the favorable settlement of state tax matters, net income and dilutive earnings per share remained relatively flat quarter over quarter.

Franchise fees decreased $0.3 million, or 46.7%, to $0.4 million for the first quarter of fiscal year 2011 from $0.7 million for the same period last year. The decline primarily resulted from fewer Franchise Drive-In openings during the first quarter of fiscal year 2011 as compared to the same period last year.

Depreciation and Amortization. Depreciation and amortization expense decreased $0.4 million, or 3.4%, to $10.3 million for the first quarter of fiscal year 2011 from $10.7 million for the same period in fiscal year 2010. This decrease was primarily attributable to the refranchising of 16 Company-owned Drive-Ins in fiscal year 2010. Capital expenditures during the first three months of fiscal year 2011 were $4.3 million.

Interest Expense, Net. Net interest expense decreased $1.4 million, or 15.1%, to $8.1 million for the first quarter of fiscal year 2011 from $9.5 million for the same period in fiscal year 2010. This decrease was primarily attributable to the $58.0 million debt buy-back that occurred during the third quarter of fiscal 2010, as well as the scheduled principal payments of $51.7 million made since the first quarter of fiscal year 2010. See Liquidity and Sources of Capital and Item 3. Quantitative and Qualitative Disclosures About Market Risk below for additional information on factors that could impact interest expense.

Total assets decreased $5.6 million, or 0.8%, to $731.7 million during the first quarter of fiscal year 2011 from $737.3 million at the end of fiscal year 2010. This decrease was primarily the result of an $8.3 million

Total liabilities decreased $14.6 million, or 2.0%, to $700.2 million during the first quarter of fiscal year 2011 from $714.8 million at the end of fiscal year 2010. This decrease was primarily the result of scheduled principal repayments of $13.2 million during the quarter. The Company has reclassified $62.5 million of notes that were repurchased subsequent to the end of the first quarter from long-term debt due after one year to current maturities of long-term debt and capital leases on its condensed consolidated balance sheet at November 30, 2010. See the Liquidity and Sources of Capital section below for additional information on this repurchase.

Read the The complete Report

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