Sonic Reports Year-End 2009 Earnings

Sonic Corp. (NASDAQ: SONC), the nation's largest chain of drive-in restaurants, today announced results for the fourth quarter and fiscal year ended August 31, 2009. Key aspects of the company's fourth quarter report included:

- Net income per diluted share for the quarter totaled $0.28 versus $0.33 in the year-earlier quarter;

- System-wide same-store sales declined 4.5% for the fourth quarter; same-store sales at partner drive-ins (those in which the company owns a majority interest) declined 5.3% in the quarter;

- System-wide new drive-in openings totaled 41 compared with 58 in the fourth quarter last year, reflecting primarily the company's recent decision to slow partner drive-in development in conjunction with its refranchising initiative; franchisees opened 40 drive-ins versus 45 drive-ins in the same period last year; and

- The refranchising of 11 partner drive-ins during the quarter; these transactions bring to 205 the total number of drive-ins refranchised during fiscal 2009.

"The past quarter and year have been challenging for us," said Clifford Hudson, Chairman and Chief Executive Officer. "While sales performance is not where we would like it to be, we do feel positive about our ability to maintain traffic at a relatively flat level. Given the level of consumer confidence and the state of the restaurant industry, we think this is a notable achievement.

"Clearly, the past year has been a period of rebuilding," Hudson added. "We are pleased with the concrete steps we have taken to strengthen our sales and operating performance over time, and move our brand forward in difficult times. We believe these steps will position us for improved sales and operational performance as consumer discretionary spending improves."

Last year at this time, Sonic responded to a changing market by implementing a number of new initiatives, including refranchising, a new strategic pricing program and renewed emphasis on customer service. The refranchising program, aimed at improving the performance of partner drive-ins, reduces the overall risk of Sonic's business and provides a less volatile financial model for stockholders.

The refranchising initiative was originally envisioned as a multi-year program to increase the mix of franchise drive-ins from 80% to 86%-88% of the chain. Because of the favorable response this program received among new and existing franchisees, the bulk of the planned refranchising was completed in just one year with the sale of 205 partner drive-ins. The success of this program, together with the planned moderation of partner drive-in development and ongoing expansion of franchise drive-ins, has increased the mix of franchised drive-ins to approximately 87% of the chain at fiscal year-end 2009.

Although Sonic experienced a slowdown in the pace of new franchise drive-in openings during the past year as the credit markets tightened, management was pleased to see the company's overall development program remain at a solid level and well above the industry average. Continuing the momentum seen in recent years with new market expansion, Sonic opened its first Sonic Drive-Ins in Maryland, Massachusetts, Montana, New York, and Wisconsin during fiscal 2009, helping to increase the breadth of the company's brand footprint to 42 states, up from 29 just four years ago. Importantly, these new drive-ins have received very warm receptions from avid customers, with great crowds that continue to drive record sales volumes and demonstrate the effectiveness of Sonic's national cable advertising strategy.

Over the next year, the company will continue to build upon its fiscal 2009 initiatives, emphasizing Sonic's core strengths of product and service differentiation by promoting distinctive products with a compelling value to the consumer.



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