SONIC 2006 AR Final

SONIC 2006 AR Final - 3 00 Johnny B ench Dr ive Ok lahoma...

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1 Financial Highlights 2 Sonic at a Glance 4 To Our Stockholders 6 Drivin’ Our Business 16 Selected Financial Data 17 Management’s Discussion and Analysis of Financial Condition and Results of Operations 32 Consolidated Balance Sheets 33 Consolidated Statements of Income 34 Consolidated Statements of Stockholders’ Equity 35 Consolidated Statements of Cash Flows 36 Notes to Consolidated Financial Statements 53 Report of Independent Registered Public Accounting Firm 54 Management’s Report on Internal Control Over Financial Reporting 55 Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting 56 Directors and Officers IBC Corporate Information Sonic began in 1953 in Shawnee, Oklahoma. Today, we franchise and operate the largest chain of drive-in restaurants in the country, with approximately 3,200 Sonic Drive-Ins from coast to coast and in northern Mexico. Our drive-in restaurant experience, together with a unique menu and personalized carhop service, position us as one of the most highly differentiated concepts in the quick-service restaurant industry (QSR). Sonic Drive-Ins feature signature items, offering made-when-you-order Extra-Long Cheese Coneys, hamburgers, wraps, and other sandwiches, hand-battered Onion Rings,Tater Tots, and a full breakfast menu. We are known for our variety of Frozen Favorites® desserts and Fountain Favorites® drinks, too, like Cherry Limeades, Slushes, and Cream Pie Shakes, making Sonic the Ultimate Drink Stop sm . Sonic also offers a variety of choices for health-conscious customers, including Fresh Tastes™ salads and several low-calorie drinks, including a diet version of our classic Cherry Limeade. At a typical Sonic Drive-In, customers park in one of 24 to 36 canopy-covered spaces and place orders through an intercom speaker system. A carhop delivers the customer’s order curbside, usually within four minutes. Customers also may enjoy drive-thru service at many Sonics.
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2006 2005 Change ($ in thousands, except per share data) Operations (for the year) Total revenues $ 693,262 $ 623,066 11% Income from operations 1 $ 131,627 $ 117,449 12% Net income 1 $ 78,705 $ 70,443 12% Net income per diluted share 1, 2 $ 0.88 $ 0.75 17% Return on average stockholders' equity 1 20.2 % 19.4 % Financial Position (at year's end) Total assets $ 638,018 $ 563,316 13% Stockholders' equity 1 $ 391,693 $ 387,917 1% System Information (for the year or at year's end) Partner Drive-Ins 3 623 574 9% Franchise Drive-Ins 2,565 2,465 4% System-wide drive-ins 4 3,188 3,039 5% System-wide average drive-in sales 4 $ 1,070 $ 1,023 5% Change in system-wide sales 4 10.7 % 12.4 % Change in system-wide same-store sales 4, 5 4.5 % 6.0 % Financial Highlights 1 Prior-year results have been adjusted to implement Statement of Financial Accounting Standards No. 123R, Share-Based Payment, (SFAS 123R), on a modified retrospective basis. 2 Adjusted for stock splits.
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