Second quarter net income increased 21% to $5.2 million versus $4.3 million last year. On a diluted per share basis, net income for the second quarter rose 27% to $0.28 from $0.22 in the year-earlier period. Sonic's total revenues for the second quarter increased to $58.4 million from $54.2 million in the year-earlier period. These results, however, are not fully comparable because of the company's sale of 36 drive-ins to franchisees last year. Adjusting for the disposition of these restaurants, total revenues increased 13% in the second quarter of 2000.
Net income for the first half of fiscal 2000 rose 24% to $12.7 million from $10.2 million in the same period last year. On a diluted per share basis, net income increased 26% to $0.67 compared with $0.53 last year. Total revenues for the first six months of fiscal 2000 increased to $124.3 million versus $113.8 million last year. Adjusting for the disposition of restaurants last year, total revenues increased 16% for the six-month period.
Clifford Hudson, president and chief executive officer, commmented that, "Sonic's multi-layered growth strategies continue to drive solid top- and bottom-line growth. Strong promotions and product news, together with increased media spending, have helped us increase brand awareness and sustain strong sales momentum this year, producing a 3.3% increase in system-wide same-store sales in the second quarter and 3.9% increase for the first half of 2000. These efforts, coupled with our sale of restaurants to franchisees at the end of last year and the impact of successful new restaurant openings, also have enhanced average unit volumes at company-owned stores, which were up 6.9% in the second quarter and 7.6% for the first six months of the year. Sales trends accelerated as the quarter came to a close, with February finishing as our best month so far this fiscal year in terms of same-store sales growth and with March same-store sales running slightly ahead of our year-to-date performance.
"We also are pleased to report that the franchising side of our business remains very strong," Hudson continued. "The increasing mix of franchised drive-ins, coupled with higher average unit volume and the ongoing implementation of our newest license agreement, which carries a higher initial fee and royalty rate, resulted in a 14% increase in franchising income in the second quarter and a 17% gain for the year to date. Our emphasis remains on franchise development as the principal means for expanding our chain because it allows us to produce strong earnings growth, due to the disproportionately lower cost associated with franchise sales, while minimizing the capital risk we take. We believe Sonic's franchising business will continue to grow as a powerful catalyst for future earnings growth."
Hudson noted that, during the second quarter, Sonic opened 36 new drive-ins, including 30 franchised restaurants. This rate of new store openings is expected to increase over the latter part of this fiscal year, and with a strong development pipeline in place, has Sonic solidly on track to open about 180 new restaurants this year.
Additionally, he said that franchisees have remained enthusiastic in the implementation of the Sonic 2000 program, completing 260 retrofits thus far in fiscal 2000. "Our franchisees have embraced this initiative because of its significant positive impact, both immediate and long-term, on the performance of our drive-ins. At this rate, we expect that close to 90% of our drive-ins will have the new Sonic 2000 look by the end of our fiscal year."
The company also said that it successfully completed its transition from AmeriServe Food Distribution, Inc. to alternative food distributors during its second quarter and that it has no ongoing relationship with AmeriServe. During the second quarter, Sonic's Board of Directors expanded the company's stock repurchase program by $10 million. Under this program, which was originally approved in March 1998 and then expanded on three subsequent occasions, the company was authorized to repurchase up to $42 million of common stock.
Since the program's inception and through the end of February, the company has expended $41.8 million for the repurchase of 1.7 million shares, including $10.3 million during the second quarter of fiscal 2000. Because of the program's success, the board has approved the repurchase of up to an additional $10 million of common stock through calendar year 2000. "We believe Sonic's stock continues to represent an attractive investment opportunity at current market prices," Hudson added. "The company's share repurchase activities have proven to be an attractive use of excess cash flow, increasing earnings per share and improving return on equity, which we expect will surpass 20% during fiscal year 2000."
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