Net income for the second quarter increased 7% to $5.5 million versus $5.2 million last year, while net income per diluted share rose 11% to $0.20 from $0.18 in the year-earlier period. Total revenues for the quarter increased 8% to $63.2 million from $58.4 million in the year-earlier period.
Net income for the first half of fiscal 2001 rose 11% to $14.0 million from $12.7 million in the same period last year. On a diluted per share basis, net income increased 16% to $0.51 compared with $0.44 last year. Total revenues for the first six months of fiscal 2001 increased 8% to $134.2 million from $124.3 million in the same period last year.
"Obviously, we would have preferred to avoid the harsh weather in December, which continued the record or near-record wet and cold conditions that prevailed across many of our markets in November to make the second quarter a difficult period," says Clifford Hudson, chairman and chief executive officer. "While the weather improved as the quarter progressed, we could not fully overcome delays in new drive-in openings and the downturn in sales caused by those conditions. Sales for the quarter also were affected by an extra day in February last year. Consequently, Sonic's system-wide same-store sales declined 2.5% in the second quarter and 1.7% for the first half of 2001.
"We were pleased to note, however, that January and February showed resiliency in both sales and new store development,'' he continued. "Same-store sales since the beginning of the calendar year, excluding the impact of an extra day of sales in February 2000, returned to our targeted growth range of between 2% and 4%. Also, we continued to make up ground in opening new drive-ins, ultimately opening 31 new restaurants during the second quarter. Considering the fact that both sales and new drive-in openings rebounded so strongly, a trend that has continued during the early part of March, and given that the spring and summer are seasonally the strongest times of year for us in terms of sales and development, we believe Sonic is on track to achieve solid growth in the last half of the year. With this and the initiatives we have in place, we anticipate that same-store sales will continue within our targeted range in the coming months. In addition, given our strong development pipeline, we expect to open a record total of 190 to 200 new drive-ins during the year.
"The remainder of our year will be supported by increased media spending, which will reach $80 million this fiscal year, a steady stream of new product news and our ongoing focus on under-penetrated day parts, including an expanded breakfast test. We believe this proven, franchise-driven, multi-layered approach to our business will allow us to achieve solid earnings growth in the range of 18% to 20% during the balance of fiscal 2001,'' Hudson added.
Sonic opened 31 new drive-ins during the second quarter, including 25 franchised restaurants, compared with a total of 36 in the year-earlier period. For the first half of 2001, the company opened 77 new drive-ins, including 65 franchised restaurants, versus 73 in the same period last year. The company's operating division also agreed to acquire 35 franchise drive-ins during the second quarter, all of which are located in the Tulsa, Oklahoma market. Sonic expects to finalize the acquisition of these drive-ins during early April, bringing the total number of franchise drive-in acquisitions to 48 for the year. "This type of acquisition involving core-market drive-ins with a solid operating record is a good way to enhance company-owned restaurant sales and deploy our internally generated cash flow to build our business without the usual risk associated with new unit development," Hudson noted. "We expect that these acquisitions, as well as planned new drive-in openings, will add momentum to Sonic's overall revenue growth, which we expect to be in excess of 20% for the balance of the year."
The five times weekly e-newsletter that keeps you up-to-date on the latest industry news and additions to this website.