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Sonic Corp. Reports Operating Results (10-Q)

April 06, 2012 | About:
10qk

10qk

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Sonic Corp. (SONC) filed Quarterly Report for the period ended 2012-02-29.

Sonic Corp has a market cap of $465 million; its shares were traded at around $7.4 with a P/E ratio of 14.5 and P/S ratio of 0.9. Sonic Corp had an annual average earning growth of 11.1% over the past 10 years.
This is the annual revenues and earnings per share of SONC over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of SONC.


Highlight of Business Operations:

System-wide same-store sales increased 3.5% during the second quarter and 1.7% during the first six months of fiscal year 2012, an improving trend as compared to an increase of 1.2% and a decline of 0.8%, respectively, for the same periods last year. Same-store sales at Company Drive-Ins increased by 3.1% for the second quarter and 1.4% for the first six months of fiscal year 2012 as compared to an increase of 2.2% and flat sales, respectively, for the same periods last year. Approximately one percentage point of the increase in sales for the second quarter and one-half percentage point of the increase for the first six months of fiscal year 2012 are attributable to one additional day of operations in February 2012 versus February 2011, due to leap year. The second quarter is typically the most volatile for us due to seasonality and weather. Weather was generally favorable during the second fiscal quarter of 2012 as compared to the prior year. Notwithstanding these benefits, 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 going forward.

Revenues increased to $115.1 million for the second quarter of fiscal year 2012 from $113.5 million for the same period last year and increased to $243.4 million for the first six months of fiscal year 2012 from $242.7 million for the same period last year. The increase in revenues was primarily related to an increase in same-store sales, partially offset by a decline from the refranchising of 31 Company Drive-Ins on January 31, 2012. Three additional Company Drive-Ins were refranchised on the last day of the current quarter which had no impact on sales during the period. Restaurant margins at Company Drive-Ins improved by 70 basis points during the second quarter of fiscal year 2012, reflecting the leverage of positive same-store sales as well as a favorable shift in product mix, and declined slightly for the first half of fiscal year 2012 primarily due to higher commodity costs.

Second quarter results for fiscal year 2012 reflected net income of $1.7 million or $0.03 per diluted share as compared to net income of $4.3 million or $0.07 per diluted share for the same period last year, which included a $3.3 million after-tax gain or $0.05 per diluted share from early extinguishment of debt. Net income and diluted earnings per share for the first six months of fiscal year 2012 were $7.2 million and $0.12, respectively, as compared to net income of $11.6 million and $0.19 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 and the $3.3 million after-tax gain on the early extinguishment of debt recognized during the second quarter of fiscal year 2011, net income and diluted earnings per share for the first six months of fiscal years 2011 and 2012 remained steady at $7.2 million and $0.12, respectively.

Same-store sales for Company Drive-Ins increased 3.1% for the second quarter of fiscal year 2012 and increased 1.4% for the first six months of fiscal year 2012, as compared to an increase of 2.2% and flat sales, respectively, for the same periods last year, which represents an improving trend that we attribute to the initiatives we have implemented. Company Drive-In sales increased $0.8 million, or 0.9%, during the second quarter of fiscal year 2012 as compared to the same period last year. This increase was primarily driven by a $2.9 million improvement in same-store sales partially offset by a $2.3 million decrease in sales caused by the refranchising of drive-ins during the second quarter of fiscal year 2012 and during fiscal year 2011. Company Drive-In sales increased $0.3 million for the first six months of fiscal year 2012 as compared to the same period last year. An improvement in same-store sales and, to a lesser extent, new drive-in openings during fiscal year 2011 resulted in a $4.6 million increase in sales which was partially offset by a $2.9 million decrease in sales caused by the refranchising of drive-ins discussed earlier and a $1.4 million decrease related to drive-ins that were closed during or subsequent to the first half of fiscal year 2011.

Same-store sales for Franchise Drive-Ins increased 3.6% for the second quarter of fiscal year 2012 and 1.7% for the first half of fiscal year 2012, as compared to an increase of 1.0% and a decline of 0.9%, respectively, for the same periods last year, which represents an improving trend that we attribute to the initiatives we have implemented. Overall franchising revenues increased $0.7 million, or 2.8%, for the second quarter of fiscal year 2012 and $0.3 million, or 0.6%, for the first half of fiscal year 2012. The increase in franchising revenues was primarily driven by an increase in franchise royalties, partially offset by a decrease in franchise fees. The increase in franchise royalties was primarily attributable to an increase in same-store sales, partially offset by a lower effective royalty rate stemming from a temporary reduction in royalty rates from various development incentives and certain franchisee restructuring efforts.

Read the The complete Report

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