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"The Senior Note offering allows us to take advantage of a favorable interest rate environment by locking in today's attractive interest rates for up to 10 years, '' said Sonic's Chairman and Chief Executive Officer, Clifford Hudson. "In addition, this transaction frees up availability under our Bank line of credit and reduces the amount of interest rate risk on the company's income statement.''
Separately, the company reported that strong sales momentum, which began in the company's third fiscal quarter, continued during June and July. Fourth quarter system-wide same-store sales, through July, are estimated to have been slightly ahead of the anticipated range of 2% to 4%. The company also remains comfortable with the market's expectations for earnings growth in the fourth quarter of fiscal 2001, as indicated by the current analysts' consensus earnings estimate of $0.47 per diluted share. In the fourth quarter last year, Sonic reported revenues of $81.5 million and net income of $10.8 million or $0.40 per diluted share. The company expects to report results for the fourth quarter ended August 31, 2001, in mid-October.
"We are pleased that our brand continues to resonate strongly with customers,'' Hudson commented. "Our success in driving sales is a direct result of rising brand awareness fueled by increased media spending and other initiatives, including successful new product introductions and a redesigned menu. Our efforts to expand our penetration of under-served day parts, including an expanded breakfast test and, during June and July, a Sonic Nights program featuring extended evening hours, also have played a key role in our ongoing sales strength.''