Sonic 2013 Annual Report Download - page 21

Download and view the complete annual report

Please find page 21 of the 2013 Sonic annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 58

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58

Management's Discussion and Analysis of Financial Condition and Results of Operations
19
Fiscal Year Ended Fiscal Year Ended
August 31, 2013 August 31, 2012
Net Diluted Net Diluted
Income EPS Income EPS
Reported – GAAP $ 36,701 $ 0.64 $ 36,085 $ 0.60
After-tax loss from early extinguishment of debt (1) 2,798 0.05 ––
Retroactive tax benefit of WOTC and resolution of tax matters (2) (743) (0.02) ––
After-tax loss on closure of Company Drive-Ins (3) 1,510 0.03 ––
After-tax impairment charge for point-of-sale assets (4) 1,013 0.02 ––
Adjusted - Non-GAAP $ 41,279 $ 0.72 $ 36,085 $ 0.60
(1) Loss on early extinguishment of debt including $0.5 million and $3.9 million in the second and fourth quarters
of fiscal year 2013, respectively.
(2) Tax benefit which includes the retroactive reinstatement of the Work Opportunity Tax Credit (“WOTC”) and
resolution of certain income tax matters during the second quarter of fiscal year 2013.
(3) Loss of $2.4 million on the closure of 12 lower-performing Company Drive-Ins as a result of an assessment in
advance of capital expenditures for pending technology initiatives.
(4) Impairment charge of $1.6 million related to the write-off of assets associated with a change in the vendor for
the Sonic system’s new point-of-sale technology.
Fiscal Year Ended Fiscal Year Ended
August 31, 2012 August 31, 2011
Net Diluted Net Diluted
Income EPS Income EPS
Reported – GAAP $ 36,085 $ 0.60 $ 19,225 $ 0.31
After-tax net loss from early extinguishment of debt (1) --14,439 0.24
Tax benefit from favorable tax settlement (2) --(1,073) (0.02)
Adjusted - Non-GAAP $ 36,085 $ 0.60 $ 32,591 $ 0.53
(1) Net loss on early extinguishment of debt including a $5.2 million gain and a $28.2 million loss in the second
and third quarters of fiscal year 2011, respectively.
(2) Tax benefit recognized during the first quarter of fiscal year 2011 relating to the favorable settlement of state tax audits.
The following table provides information regarding the number of Company Drive-Ins and Franchise Drive-Ins
operating as of the end of the years indicated as well as the system-wide change in sales and average unit volume.
System-wide information includes both Company Drive-In and Franchise Drive-In information, which we believe is
useful in analyzing the growth of the brand as well as the Company’s revenues, since franchisees pay royalties
based on a percentage of sales.
System-wide Performance
Year Ended August 31,
($ in thousands) 2013 2012 2011
Increase in total sales 2.4% 2.7% 1.9%
System-wide drive-ins in operation (1):
Total at beginning of year 3,556 3,561 3,572
Opened 27 37 43
Closed (net of re-openings) (61) (42) (54)
Total at end of year 3,522 3,556 3,561
Average sales per drive-in $ 1,109 $ 1,066 $ 1,037
Change in same-store sales (2):2.3% 2.2% 0.5%
(1) Drive-ins that are temporarily closed for various reasons (repairs, remodeling, relocations, etc.) are not
considered closed unless the Company determines that they are unlikely to reopen within a reasonable time.
(2) Represents percentage change for drive-ins open for a minimum of 15 months.