Sonic Reports 25% Increase in Fourth Quarter Earnings

  Sonic Reports 25% Increase in Fourth Quarter Earnings

Business Wire

OKLAHOMA CITY -- October 16, 2012

Sonic Corp. (NASDAQ: SONC), the nation's largest chain of drive-in
restaurants, today announced results for the fourth quarter and fiscal year
ended August 31, 2012.

Key highlights of the company's fourth quarter report included:

  *The company's net income per diluted share increased 25% to $0.25 compared
    with net income per diluted share of $0.20 in the fourth quarter of fiscal
    2011; and
  *System-wide same-store sales increased 2.3% during the fourth quarter,
    with an increase of 4.3% at company drive-ins and 2.1% at franchise
    drive-ins.

“We are pleased to conclude fiscal 2012 with solid same-store sales growth in
the fourth quarter, resulting in increased franchising revenue and operating
margins which combined with our share repurchase program, drove a 25% increase
in earnings per share,” said Cliff Hudson, Chairman and Chief Executive
Officer. “In fiscal 2013, we expect to build upon our fiscal 2012 initiatives
with a continued focus on new and differentiated products combined with iconic
creative and a layered day-part promotional strategy to drive consistent
same-store sales growth. This in turn is expected to drive further margin
expansion. In addition, with the strength and flexibility of our business
model, we are able to generate sufficient free cash flow^1 to invest in our
business, pay down debt and repurchase shares to enhance shareholder value.

“Over the next two to three years, initiatives such as our new point-of-sale
system and the new small building prototype will complement our same-store
sales initiatives to increase sales and profits,” added Hudson. “We are
confident our multi-layered growth strategy which incorporates same-store
sales growth, leverage from higher sales, deployment of cash, increasing
royalty revenue and new drive-in development will enable us to achieve
double-digit earnings per share growth in the near and long term.”

Financial Overview

For the fourth fiscal quarter ended August 31, 2012, the company's net income
totaled $14.5 million or $0.25 per diluted share compared with net income of
$12.3 million or $0.20 per diluted share in the year-earlier quarter.

For fiscal 2012, net income totaled $36.1 million or $0.60 per diluted share
compared with net income of $32.6 million or $0.53 per diluted share, on an
adjusted basis for the same period in 2011.

The following non-GAAP adjustments 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.

                Fiscal Year Ended   Fiscal Year Ended       Year-Over-Year
                August 31, 2012      August, 31,2011          Percent Change
                Net       Diluted   Net         Diluted     Net     Diluted
                Income     EPS       Income       EPS         Income   EPS
Reported – GAAP $ 36,085   $  0.60   $ 19,225     $ 0.31      88  %    94   %
After-tax net
loss from early   --          --       14,439       0.24
extinguishment
of debt
Tax benefit
from favorable   --         --      (1,073 )    (0.02 )           
tax settlement
Adjusted -      $ 36,085   $  0.60   $ 32,591    $ 0.53     11  %    13   %
Non-GAAP

Same-Store Sales

For the fourth fiscal quarter ended August 31, 2012, system-wide same-store
sales increased 2.3%, which was comprised of a 4.3% increase at company
drive-ins and a 2.1% increase at franchise drive-ins. For the 12 months ended
August 31, 2012, system-wide same-store sales increased 2.2%, which was
comprised of a 2.8% increase at company drive-ins and a 2.2% increase at
franchise drive-ins.

Development

For fiscal 2012 there were 37 new drive-in openings including 36 new franchise
drive-ins. Across the Sonic system, a total of 18 new drive-ins were opened in
the fourth quarter of fiscal 2012, of which 17 were opened by franchisees,
versus 17 new drive-in openings during the fourth quarter of fiscal 2011, of
which 14 were franchise drive-ins.

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;
  *Slightly more new franchise drive-in openings than fiscal 2012;
  *Restaurant-level margins to improve between 50 to 100 basis points,
    depending upon the degree of same-store sales growth at company drive-ins;
  *Selling, general and administrative expenses of $68 million to $69
    million;
  *Depreciation and amortization expense of $41 million to $42 million;
  *Net interest expense of approximately $29 million;
  *An income tax rate of between 38% and 38.5%, which may vary depending upon
    the reinstatement of employment tax credit programs;
  *Capital expenditures of $30 million to $40 million, which assumes the
    implementation of a new point-of-sale system in company drive-ins during
    calendar year 2013; and
  *Free cash flow of $45 million to $55 million.

About Sonic

Sonic, America's Drive-In, originally started as 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
www.sonicdrivein.com.

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) 600-4883 or (913) 312-1298 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 4719115. The replay will be available until
Tuesday, October 23, 2012. 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, www.sonicdrivein.com.

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.

The tables that follow provide information regarding the number of company
drive-ins, franchise drive-ins and system drive-ins in operation as of the end
of the periods indicated. In addition, these tables provide information
regarding franchise sales, system growth in sales, and both franchise and
system average drive-in sales and change in same-store sales. System
information includes both company and franchise drive-in information, which we
believe is useful in analyzing the growth of our brand. While we do not record
franchise drive-in sales as revenues, we believe this information is important
in understanding our financial performance since we calculate and record
franchise royalties based on a percentage of franchise sales. This information
also is indicative of the financial health of our franchisees.

^1 Free cash flow is defined as net income plus depreciation, amortization and
stock compensation expense, less capital expenditures.

SONIC CORP.
Unaudited Supplemental Information
(In thousands, except per share amounts)
                                                              
                         Fourth Quarter Ended        Fiscal Year Ended
                         August 31,                  August 31,
                         2012          2011          2012          2011
Statement of Operations
Revenues:
Company Drive-In sales   $ 110,406     $ 113,366     $ 404,443     $ 410,820
Franchise Drive-Ins:
Franchise royalties        36,009        35,477        125,989       124,127
Franchise fees             1,173         473           2,024         1,744
Lease revenue              1,970         1,676         6,575         6,023
Other                     1,382       192         4,699       3,237   
                           150,940       151,184       543,730       545,951
Costs and expenses:
Company Drive-Ins:
Food and packaging         30,764        31,957        113,775       115,516
Payroll and other          38,168        40,676        144,531       149,417
employee benefits
Other operating
expenses, exclusive of
depreciation and
amortization included     23,265      24,538      89,164      91,303  
below
                           92,197        97,171        347,470       356,236
                                                                   
Selling, general and       16,721        16,165        65,173        64,943
administrative
Depreciation and           10,650        10,419        41,914        41,225
amortization
Provision for impairment  388         511         764         824     
of long-lived assets
                          119,956     124,266     455,321     463,228 
Other operating income    (82     )    330         531         585     
(expense), net
Income from operations     30,902        27,248        88,940        83,308
                                                                   
Interest expense           7,801         8,186         31,608        32,600
Interest income            (153    )     (193    )     (630    )     (706    )
Net loss from early       -           10          -           23,035  
extinguishment of debt
Net interest expense      7,648       8,003       30,978      54,929  
Income before income       23,254        19,245        57,962        28,379
taxes
Provision for income      8,752       6,959       21,877      9,154   
taxes
Net income               $ 14,502     $ 12,286     $ 36,085     $ 19,225  
                                                                   
                                                                   
Net income per share:
Basic                    $ 0.25       $ 0.20       $ 0.60       $ 0.31    
Diluted                  $ 0.25       $ 0.20       $ 0.60       $ 0.31    
Weighted average shares
used in calculation:
Basic                     58,103      61,954      60,078      61,781  
Diluted                   58,386      62,155      60,172      61,943  

SONIC CORP.
Unaudited Supplemental Information
                                                                 
                                      Fourth Quarter Ended   Fiscal Year Ended
                                      August 31,             August 31,
                                      2012        2011     2012     2011  
Drive-Ins in Operation
  Company:
    Total at beginning of period      409          445       446       455
    Opened                            1            3         1         3
    Acquired from (sold to)           -            1         (35   )   (5    )
    franchisees
    Closed (net of re-openings)       (1     )     (3    )   (3    )   (7    )
    Total at end of period            409         446      409     446   
  Franchise:
    Total at beginning of period      3,141        3,114     3,115     3,117
    Opened                            17           14        36        40
    Acquired from (sold to) the       -            (1    )   35        5
    company
    Closed (net of re-openings)       (11    )     (12   )   (39   )   (47   )
    Total at end of period            3,147       3,115    3,147   3,115 
  System-wide:
    Total at beginning of period      3,550        3,559     3,561    3,572
    Opened                            18           17        37       43
    Closed (net of re-openings)       (12    )     (15   )   (42   )  (54   )
    Total at end of period            3,556       3,561    3,556   3,561 

                   Fourth Quarter Ended       Fiscal Year Ended
                     August 31,                  August 31,
                     2012         2011          2012           2011
                     ($ in thousands)            ($ in thousands)
Sales Analysis
  Company drive-ins:
    Total sales      $ 110,406     $ 113,366     $ 404,443       $ 410,820
    Average drive-in   270           255           958             920
    sales
    Change in          4.3     %     0.4     %     2.8       %     1.8       %
    same-store sales
  Franchised
  drive-ins:
    Total sales      $ 946,330     $ 921,758     $ 3,386,218     $ 3,278,208
    Average drive-in   301           296           1,081           1,054
    sales
    Change in          2.1     %     -0.6    %     2.2       %     0.4       %
    same-store sales
  System-wide:
    Change in total    2.1     %     0.9     %     2.7       %     1.9       %
    sales
    Average drive-in $ 297         $ 291         $ 1,066         $ 1,037
    sales
    Change in          2.3     %     -0.5    %     2.2       %     0.5       %
    same-store sales
                                                                 
                                                                 
Note: Change in same-store sales based on restaurants open for a minimum of 15
months.

SONIC CORP.
Unaudited Supplemental Information
                                                              
                             Fourth Quarter Ended      Fiscal Year Ended
                             August 31,                August 31,
                             2012          2011      2012        2011     
Margin Analysis (percentage
of Company
      Drive-In sales)
      Company Drive-Ins:
             Food and        27.9    %      28.2  %    28.1     %   28.1     %
             packaging
             Payroll and
             employee        34.6    %      35.9  %    35.7     %   36.4     %
             benefits
             Other operating 21.0    %      21.6  %    22.1     %   22.2     %
             expenses
                             83.5    %      85.7  %    85.9     %   86.7     %
                                                                    
                                                       August 31,   August 31,
                                                       2012        2011     
Balance Sheet Data                                     (In thousands)
Cash and cash equivalents                              52,647       29,509
Current assets                                         107,151      93,457
Property, equipment and                                443,008      464,875
capital leases, net
Total assets                                           680,760      679,742
                                                                    
Current liabilities, including capital lease           80,516       71,279
obligations and long-term debt due within one year
Obligations under capital                              27,377       30,302
leases due after one year
Long-term debt due after one                           466,613      481,835
year
Total liabilities                                      621,513      628,046
Stockholders' equity                                   59,247       51,696

SONC-G

Contact:

Claudia San Pedro
Vice President of Investor Relations and Treasurer
405-225-4846
 
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