Industry News | October 3, 2001

Sonic Expects Record Results for Fiscal 2001

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Speaking today at Robertson Stephens' Annual Investment Conference in New York, Pattye Moore, Sonic Corp.'s Executive Vice President, said the company expects to report its 15th consecutive year of same store sales growth later this month when it announces results for the fiscal year ended August 31, 2001.

According to Moore, strong sales results in the third and fourth quarters of fiscal 2001 reflected a number of positive factors in the company's business, including increased media spending, new product news, newly redesigned menus, and an expanded breakfast program. These sales trends, combined with record new drive-in development, are expected to produce earnings per diluted share slightly ahead of the current analysts' consensus earnings estimate of $1.39 per share for fiscal 2001. In fiscal 2000, Sonic reported revenues of $280.1 million and net income of $32.6 million or $1.17 per diluted share. The company plans to report results for its fourth quarter and fiscal year ended August 31, 2001, on October 17, 2001.

Moore also indicated that, in the wake of recent terrorist attacks and shifting consumer confidence, system-wide same-store sales during the month of September are expected to have been below the company's targeted growth range of 2% to 4%. "We have experienced some impact on our business over the last few weeks from these events and conditions,'' she said.

"However, all of our strategies that have successfully driven strong sales results during the last six months continue firmly in place, so we remain optimistic that sales for the full first quarter ended November 30, 2001, may be within our target range.''

Sonic continues to believe that its multi-layered growth strategies can produce 18% to 20% higher earnings per share in the coming year and a return on equity of more than 20%. With another record year expected for drive-in openings and the impact of the acquisition of franchise stores last year, revenues for fiscal 2002 are expected to increase approximately 20%. In addition, because of the ongoing benefit of the company's ascending franchise royalty rate, franchising income also is expected to increase again next year. These factors, as well as the company's ongoing positive cash flow, position Sonic well for the coming year.