Sonic Corp (SONC) Reports In-Line Q4 EPS

Sonic Corp (NASDAQ: SONC) reported Q4 EPS of $0.30, in-line with the analyst estimate of $0.30. Revenue for the quarter came in at $158.8 million versus the consensus estimate of $155.78 million. For the fourth quarter ended August 31, 2013, system-wide same-store sales increased 5.9%.

"Strong same-store sales during our summer quarter highlighted the strength and momentum of our business," said Cliff Hudson, Chairman, Chief Executive Officer and President. "We are very pleased with our sales and profit performance in our fourth quarter and for fiscal year 2013, which resulted in an earnings per share increase for each period of 20% on an adjusted basis. As we look to fiscal year 2014, we will continue to focus on key initiatives such as increased media effectiveness, our innovative product pipeline and layered day-part promotional strategy to continue to drive same-store sales growth and, in turn, margin improvement."

Fiscal Year 2014 Outlook

The company expects its initiatives to drive 14% to 15% earnings per share growth in fiscal 2014 as compared to the adjusted Non-GAAP earnings per share for fiscal 2013. The macroeconomic environment and its impact on consumer confidence, in addition to the pacing of capital investments, may impact results. The outlook for fiscal 2014 anticipates the following elements:

Positive same-store sales in the low single digit range for the system;

Company drive-ins are expected to perform above the system average in the back half of the fiscal year as new digital point-of-purchase technology and a new point-of-sale system are implemented;

40 to 50 new franchise drive-in openings and fewer drive-in closings than in fiscal 2013;

Drive-in-level margins improving between 75 to 100 basis points, depending upon the degree of same-store sales growth at company drive-ins and the implementation of the new point-of-sale system in company drive-ins;

Selling, general and administrative expenses of $69 million to $70 million;

Depreciation and amortization expense of $42.5 million to $43 million;

Net interest expense of approximately $25 million;

An income tax rate of between 37% to 37.5%, which may vary depending upon the reinstatement of employment tax credit programs that are scheduled to expire on December 31, 2013 and pending resolution of certain tax matters;

Capital expenditures of $65 million to $70 million, which assumes the implementation of a new point-of-sale system and digital point-of-purchase technology in company drive-ins during fiscal 2014;

Free cash flow of approximately $15 million to $25 million; and

The repurchase of $40 million of stock across the fiscal year utilizing existing cash and free cash flow.

For earnings history and earnings-related data on Sonic Corp (SONC) click here.

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