Net income for the fiscal year was $21.2 million or $0.34 per diluted share for fiscal 2010 compared with $49.4 million or $0.81 per diluted share for fiscal 2009. Revenues declined 22% to $550.9 million from $706.3 million in the prior year. The majority of the decline in revenues was attributable to the company's refranchising initiative, which resulted in more than 200 company-owned drive-ins being refranchised during the latter half of fiscal 2009.
"The fourth quarter offered some signs that our initiatives are gaining traction," said Clifford Hudson, chairman and CEO. "One positive indicator was the sales performance of our company-owned drive-ins. After lagging franchise drive-ins significantly for almost three years, our company-owned drive-ins closed much of the gap in same-store sales in the third quarter and pulled slightly ahead of franchise drive-ins in the fourth quarter.
"In addition, since the beginning of September both franchise and company-owned drive-ins have seen improving same-store sales trends," Hudson added. "We are encouraged by this development."
Hudson said the initiatives the company introduced in 2009 and 2010 are re-emphasizing the qualities that make Sonic distinctive – high-quality products, new product news and service differentiation with skating carhops. Backed by new messaging and an innovative media allocation strategy, he expects these initiatives will continue to contribute to improved system-wide same-store sales performance in fiscal 2011.
"Clearly, recent consumer sentiment measures underscore the continuation of a challenging operating environment," Hudson continued. "Still, we expect improving same-store sales in fiscal 2011 as our sales-building initiatives improve traffic.”
Sonic operates more than 3,500 drive-ins coast to coast, where approximately 3 million customers eat every day.