Sonic 2015 Annual Report Download - page 18

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Management’s Discussion and Analysis of Financial Condition
and Results of Operations
Revenues Percent
Year Ended August 31, Increase Increase
($ in thousands) 2014 2013 (Decrease) (Decrease)
Revenues:
Company Drive-In sales $ 405,363 $ 402,296 $ 3,067 0.8 %
Franchise Drive-Ins:
Franchise royalties 137,125 130,009 7,116 5.5
Franchise fees 1,291 728 563 77.3
Lease revenue 4,291 4,785 (494) (10.3)
Other 4,279 4,767 (488) (10.2)
Total revenues $ 552,349 $ 542,585 $ 9,764 1.8 %
The following table reflects the changes in sales and same-store sales at Company Drive-Ins. It also presents information
about average unit volumes and the number of Company Drive-Ins, which is useful in analyzing the growth of Company
Drive-In sales.
Company Drive-In Sales
Year Ended August 31,
($ in thousands) 2015 2014 2013
Company Drive-In sales $ 436,031 $ 405,363 $ 402,296
Percentage increase (decrease) 7.6% 0.8% (0.5)%
Company Drive-Ins in operation(1):
Total at beginning of year 391 396 409
Opened 3 3 2
Acquired from (sold to) franchisees, net (6) (7) 1
Closed (net of re-openings) (1) (1) (16)
Total at end of year 387 391 396
Average sales per Company Drive-In $ 1,116 $ 1,043 $ 990
Change in same-store sales(2) 6.9% 3.5% 2.5%
(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.
Same-store sales for Company Drive-Ins increased 6.9% for fiscal year 2015 and 3.5% for fiscal year 2014, showing
continued momentum from the Company’s successful implementation of initiatives to improve product quality, service and
value perception. Furthermore, we continued to focus on our innovative product pipeline, multi-day-part promotions and
increased media effectiveness while implementing new technology initiatives. Company Drive-In sales increased $30.7
million, or 7.6%, during fiscal year 2015 compared to fiscal year 2014. This improvement was primarily attributable to an
increase of $27.4 million in same-store sales and $3.3 million in incremental sales from new drive-in openings.
For fiscal year 2014, Company Drive-In sales increased $3.1 million, or 0.8%, as compared to 2013. This improvement
was primarily attributable to an increase of $14.4 million in same-store sales and $2.0 million in incremental sales from new
drive-in openings. These increases were partially offset by an $8.9 million sales decrease primarily related to the closure of
12 lower-performing drive-ins on August 31, 2013 and a $4.4 million decrease related to the refranchising of seven drive-ins
during the first quarter of fiscal year 2014.
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