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Sonic Corp SONC
Q1 2013 Earnings Call Transcript

Transcript Call Date 01/03/2013

Operator: Hello and good afternoon ladies and gentlemen, and thank you for standing by. Welcome today's Sonic Corporation First Quarter 2013 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the formal remarks, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue for questions. As a reminder, today's conference is being recorded.

I would now like to turn the conference over to Ms. Claudia San Pedro, Vice President of Investor Relations. Please go ahead, Ms. San Pedro.

Claudia San Pedro - VP of IR and Treasurer: Good afternoon, everyone. We are pleased to host this conference call regarding results issued this afternoon for the fourth quarter of fiscal year 2013, which ended on November 30, 2012. Before we begin, I would like to remind everyone that comments made during this conference call that are not based on historical facts are forward-looking statements. These statements are made in reliance on the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to uncertainties and risks.

It should be noted that the Company's future results may differ materially from those anticipated and discussed in the forward-looking statements. Some of the factors that could cause or contribute to such differences have been described in the news release issued this afternoon and the Company's Annual Reports on Form 10-K, quarterly reports on Form 10-Q, and in other filings with the Securities and Exchange Commission. We refer you to these sources for more information.

Lastly, I would like to point out that remarks made during this conference call are based on time-sensitive information that is accurate only as of today's date, January 3, 2013. The archived replay of this conference call webcast will be available through January 10, 2013. This call is the property of Sonic Corp. Any distribution, transmission, broadcast, or rebroadcast of this call in any form without the expressed written consent of the Company is prohibited.

Finally, we have scheduled this call, which includes the Q&A portion, to last one hour. If we have not gotten to your question within that hour time slot, please contact me at 405-225-4846, and I'll make the appropriate arrangements to answer your questions.

With that out of the way, I'll turn the call over to Cliff Hudson, The Company's Chairman and Chief Executive Officer.

J. Clifford Hudson - Chairman and CEO: Thank you, Claudia. Thanks to all of you for joining us this afternoon. We appreciate your interest in Sonic and we're happy to report another solid quarter. Few of the highlights before moving to the other parts of the presentation, few of the highlights include, as you see and you know now, a 22% increase in earnings per share to $0.11 a share from $0.09 a year ago same quarter.

Our system-wide same-store sales increased 3% during the quarter. This is an increase of 4.2% at our Company drive-ins and 2.9% at franchise, so again a nice quarter, nice movement of the business there. These same-store sales in turn resulted in a 80 basis-point improvement in our drive-in level margins, a nice development of the business, and then also as you see repurchase of more than 1.8 million shares of common stock and it represents over 3% of our outstanding shares. So, our results continue to reflect the improvements that we've made on business over the last several years that include improved customer service that we've talked about over time, more effective product pricing, improved product quality, our refined media buying effort that we've described previously and we'll talk more about today, layered day-part promotions, and then more effective creative in the last number of months. All these initiatives have provided us solid foundation to help move our business to another level in our view, and it's important to note from our perspective and to come back to time and again that our sales and profit improvements over the last two years are as a result of the series of initiatives, not just one initiative or one promotion or one kind of activity in the quarter. So, a series of initiatives over couple of years that really laid a different foundation, helped move our business to another level.

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