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Sonic Corp., the nation's largest chain of drive-in restaurants, today announced that it has entered into an agreement with a franchisee for the acquisition of 15 drive-ins located in the company's core markets. The transaction is scheduled to close by September 1.
"We believe the acquisition of these franchise drive-ins -- proven performers with higher-than-average unit volumes and capable management already in place -- represents a solid, lower-risk means to deploy our excess cash flow and expand our base of partner drive-ins," says Clifford Hudson, chairman, CEO, and president. "As has been the case with similar acquisitions completed in the last four years, we expect the transaction to boost revenue growth and to be accretive to our earnings over time."
Hudson also commented on Sonic's outlook for continued solid trends in same-store sales for the fourth fiscal quarter ending August 31, 2005, and for the upcoming fiscal year 2006. Regarding the company's fourth quarter performance, Hudson says same-store sales growth at partner drive-ins is expected to be within the company's targeted range of a 4 percent to 6 percent increase.
Also, he noted that Sonic expects fourth quarter development activity to result in the opening of a total of approximately 175 new drive-ins during fiscal 2005, in line with earlier guidance. As a result, Hudson said the company remains comfortable with earnings expectations of $1.21 to $1.22 per diluted share for the full fiscal year. Sonic expects to report results for fiscal 2005 in mid-October.
"The continued momentum we have seen in our business throughout fiscal 2005 has been very gratifying and reflects the strength of our brand, the growth of our chain, and the success of our sales-driving strategies," Hudson says.