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Sonic Corp. has a market cap of $414.8 million; its shares were traded at around $6.69 with a P/E ratio of 12.6 and P/S ratio of 0.8. Sonic Corp. had an annual average earning growth of 10.9% over the past 10 years.
Highlight of Business Operations:System-wide same-store sales for the quarter ended November 30, 2011 showed slight year-over-year improvement; however, we continue to see sales volatility. System-wide and Company Drive-In same-store sales were essentially flat during the first quarter of fiscal year 2012, as compared to declines of 2.4% and 1.9%, respectively, for the same period last year. We believe the initiatives we have implemented, including product quality improvements and a greater emphasis on personalized service, have set a solid foundation for future growth. We continue to refine our promotional and creative strategies to drive a more consistent and sustained same-store sales growth.
Revenues decreased to $128.3 million for the first quarter of fiscal year 2012 from $129.1 million for the same period last year, which was primarily attributable to Company Drive-Ins that were sold or closed since the beginning of fiscal year 2011, partially offset by incremental sales from new stores which were opened during that same period. Margins at Company Drive-Ins decreased by 130 basis points during the first quarter of fiscal year 2012 as a result of an increase in food and packaging costs and other operating expenses, partially offset by an improvement in payroll and other employee benefits costs. Net income and diluted earnings per share for the first quarter of fiscal year 2012 were $5.5 million and $0.09, respectively, as compared to net income of $7.2 million and $0.12 per diluted share for the same period last year. Excluding a $1.1 million tax benefit recognized during the first quarter of fiscal year 2011 relating to the favorable settlement of state tax matters, net income and diluted earnings per share for the first quarter of fiscal year 2011 were $6.2 million and $0.10, respectively.
Same-store sales for Company Drive-Ins were essentially flat for the first quarter of fiscal year 2012, as compared to a decline of 1.9% for the same period last year. Company Drive-In sales decreased by $0.5 million, or 0.5% during the first quarter of fiscal year 2012 which was primarily attributable to Company Drive-Ins that were closed during or subsequent to the first quarter of fiscal year 2011 and the impact of refranchising Company Drive-Ins during fiscal year 2011. These decreases were partially offset by incremental sales from new stores.
Same-store sales for Franchise Drive-Ins increased 0.2% for the first quarter of fiscal year 2012 as compared to a decline of 2.5% for the same period last year, which represents an improving trend that we attribute to the initiatives we have implemented. Franchise royalties declined $0.2 million or 0.8% in the first quarter of fiscal year 2012, which was primarily attributable to a lower effective royalty rate stemming from various royalty incentive programs. Franchise fees decreased slightly to $0.3 million for the first quarter of fiscal year 2012 from $0.4 million for the same period last year primarily related to fewer Franchise Drive-In openings.
Restaurant-level operating costs increased by 130 basis points during the first quarter of fiscal year 2012 as compared to the same period last year primarily due to continued commodity pressures. Food and packaging cost increases during the first quarter of fiscal year 2012 were driven by higher commodity costs for several items, particularly beef. Payroll and other employee benefits costs decreased as a percentage of sales, which was attributable to more efficient labor management. Other operating expenses increased as a result of increases in drive-in level technology support costs and higher credit card fees.
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