Sonic 2015 Annual Report Download - page 4

What a great run for Sonic
throughout fiscal year 2015!
To Our Shareholders
As we worked through fiscal 2015,
we achieved several important
milestones that underscore the
momentum of our business.
These included:
During the past year, we advanced the key initiatives designed to improve all aspects of our
business and strengthen our brand. Extending the work we have discussed over the past
several years, these initiatives focus on further improving the quality and innovation of our
menu and service, enhancing the effectiveness of our messaging to customers and creating
a compelling rationale for ongoing expansion in new and existing markets.
Same-store sales growth for
the fifth consecutive year,
which accelerated to 7.3% for
fiscal 2015 on top of 3.5% in
the prior year;
Steadily strengthening average
sales per drive-in, which set
a new record in each month
last year, and profits, which
returned to pre-recession
highs; and
Positive store count growth in
the Sonic system for the first
time in five years.
As you might imagine, these operational highlights translated into solid
financial results for Sonic in 2015. Adjusted earnings for the year increased
31% over fiscal 2014, continuing a notable upward trend for the fifth straight
year, sustaining the initiatives that enhance shareholder value. Among
these initiatives, the Company repurchased $124 million of common stock
during fiscal 2015 and initiated the payment of cash dividends at a beginning
annual rate of $0.36 per common share. Looking ahead with confidence,
in August the Company’s Board of Directors authorized a new stock
repurchase program through the end of fiscal 2016, under which we plan to
reacquire up to $145 million of our common stock. On top of that, we expect
to increase our dividend 22% in fiscal 2016, with the first quarterly cash
payment already made in the first quarter.
At the heart of this success lies our unrelenting focus on food quality, variety
and innovation – a multi-year mission that continues to excite the tastes
of our customers. Ingredients such as Real Ice Cream, 100% white-meat
chicken choices and premium hot dogs have created a strong foundation
for our menu, and we continue to leverage this competitive distinction in a
number of different ways to drive our day-part strategy. Extending these
pursuits, we recently signed an agreement to offer Green Mountain Coffee®
at Sonic, a significant quality upgrade that we think will place our coffee on
par with the best of the donut-shop coffees. And moving into 2016, we have
added strength to our culinary innovation team, with Scott Uehlein joining us
as Vice President of Product Innovation and Development after 15 years with
Canyon Ranch, where he served as corporate chef and oversaw the culinary
programs for the Canyon Ranch resorts, spa and fitness locations and
living communities.
The framework of technology improvements, now in one-third of our system,
enables Sonic to embrace more fully the ever-evolving means by which
customers interact and connect with us. These advances can be spotted
easily at our drive-ins with interactive menu boards, as we continue to roll
out POPS, our Point of Personalized Service, and in more subtle ways with
the increasing use of digital messaging and mobile technology. Additional
advances in mobile connectivity are on the horizon.
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