Sonic 2013 Annual Report Download - page 5

We expect the entire Sonic system to implement and significantly benefit from these digital and
technology initiatives over the next three years. In fact, I expect the entire brand to benefit
significantly from their implementation and usage for years to come.
As we have continued to lay the groundwork for future growth, we also have worked to build our
bench strength and enhance our already solid management team. During fiscal 2013, we named
John Budd to the newly created role of Chief Development and Strategy Officer, overseeing our
corporate strategy as well as drive-in development, including franchise sales, real estate and
construction. John brings a strong background in corporate development and restaurant strategy to
this role, after 16 years with the Boston Consulting Group, where he was a partner and managing
director. We think his experience directly with Sonic over the last three years as a consultant, and
generally in brand management, unit growth strategies, menu innovation and operations, will be a
great asset for our company, and we look forward to his contributions to our ongoing growth.
What does all this mean for you as a shareholder? The positive impact of these initiatives is already
evident in our strengthening sales and profits. The consistent cash flow created by our improving
business enabled us to repurchase $35.5 million of common stock and refinance $155 million of our
senior debt during 2013 to achieve interest expense savings of up to $2.5 million per year. This
strong cash flow also supports our push to adopt new technology that will drive sales and service
improvements well into the future.
Just as important, the success of our sales-driving initiatives signals good things ahead for our
brand. We are excited to see growing enthusiasm among existing and prospective franchisees for new
development throughout the country. Our ability to attract seasoned operators who possess deep
experience in the restaurant business is a testament to the strength of the
strategies that differentiate Sonic from other concepts. Last year, we signed
several new area development agreements that will increase our
penetration of current markets and take us to attractive new markets.
With this expected growth, we remain on track to engage the full power
of our multi-layered growth strategies during fiscal year 2014. We already
have reinvigorated same-store sales growth, achieved increased operating
leverage and benefitted from the use of free cash flow. Now we are poised
to see the final elements of our strategy – increased momentum in new
drive-in development and the value of our ascending royalty rate –
combine with other aspects of our multi-layered growth strategy in
the coming years as we continue to build our brand.
With our company marking its 60th anniversary in 2013,
I look back and marvel at what Sonic has accomplished
and how far we have come. Yet, considering the pay-off we
are seeing from our strategic initiatives and how we have
positioned our company for future growth, it feels as if we
are only getting started!
Hang on as we move into overdrive. It should be a
fun ride!
Sincerely,
Clifford Hudson
Chairman, Chief Executive Officer and President
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