SONC Jan 2016 Investor Presentation

8/20/2019 SONC Jan 2016 Investor Presentation

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Cautionary Statement

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Certain information in this presentation may constitute forward-looking

statements under the Private Securities Litigation Reform Act of 1995.These statements involve risks and uncertainties, and actual results may

differ materially from current expectations. These risks are more fully

described in the company’s SEC filings. This presentation also includes

certain non-GAAP information, including system-wide restaurant count and

sales information, which include data for both company and franchisedrive-ins. Management believes that system-wide information is useful in

analyzing the growth of the Sonic brand as well as the company's

revenues, since franchisees pay royalties based on a percentage of sales.

Other non-GAAP measures, such as Free Cash Flow, are defined

elsewhere and, in management’s view, provide additional insight into thecompany's performance.


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Solid Franchise Business with Room to Grow

• 62 Years in Business

• 21st Century Brand

• 89% of Units Franchised

• Well Capitalized Franchisee Base

• Consistent Free Cash Flow* for Share Repurchasesand Dividend

• Flexible Capital Investments

• Significant Long-term Growth Opportunities

3*Free cash flow is defined as net income plus depreciation, amortization and stock compensation expense, less capital expenditures.


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Q1 FY 2016 Highlights

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• 5.3% of system same-store sales growth

• Repurchased $47 million in stock

• 140 bps of company margin improvement

• EPS increased 33%


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A Distinctive Drive-In Experience

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• Fun, retro-future look stands out in acrowded QSR segment

• Drive in, drive-thru or dine on our patio


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Unique and Delightfully Surprising Menu

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• Eclectic menu offersextensive choices oftraditional favorites andSonic classics

• Breadth of menu, fromsandwiches and sidesto drinks and desserts,keeps Sonic relevant tocustomers

• High quality, made afteryou order


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Classic Carhop Service

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• Carhops deliver fast, friendly and

personalized service• Carhops connect with customers and

enhance the Sonic dining experience


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The Most Diverse Menu in QSR

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Based on system drive-in data for 12months ended November 30, 2015

Breakfast

6%

Burgers

16%

Chicken

9%

Coneys

7%

Frozen/Fountain

39%

Faves & Craves

19%

Toasters

2%

Other

2%


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Premium and Value Across Day Parts

$2.3 Billion

Chicken continues to be a significant contributor to growth

After Dinner 18%

Afternoon22%

Morning12%

12 months ended November 30, 2015

Lunch/Dinner 48%

% of System Sales

SOURCE: Sonic System Data

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Increased Share of Voice

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0%

5%

10%

15%

20%

25%

30%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 TTM

May'15

2015

N a t i o n a l + L o c a l T

V

S O V

Source: TV: Kantar, OLV: Competitrack (thru Mar’14), Zenith analysis of Kantar (Apr’14-Current)

Gross Ratings Points


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58

54 54

47

40

28

21

Second Highest Ad Awareness

Total Ad Awareness of Sonic and Competitors Among Total General Population

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New Rules of Engagement

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Customer Connection

Targeted MessagePersonalized Transaction


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Sustaining Same-Store Sales Through 2020

Technologya Key

Driver ofSSS in the

Future

Email &Texting

APP

SocialMedia

POPS

CRM

POS

CurrentMedia

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Average Unit Volumes Continue to Build

$1,037$1,066

$1,109 $1,153

$1,244$1,275+

$1,500

$600

$800

$1,000

$1,200

$1,400

$1,600

2011 2012 2013 2014 2015 2016E Target2020

0.5% 2.2% 2.3% 3.5% 7.3% +2-4% +2-4%CAGR

System same-store sales growth

$ in 000’s

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Company-Drive-In Margins*

Operating Leverage

*includes non-controlling interests (formerly minority interests)

14.1%15.6%

16.5%17%-18%

FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 P(Goal)

16

14.7%


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Development

New states entered since 20053,529 Sonic drive-ins in 45 states

273

123

193

190133

951166

73

226

76

106

53

88

18

80

93

68

25 297

44 1743

3

108

22

5

27

1

11

16

3

98

77

17

17

56

18

11

2

4

4

2

Current Penetration – November 30, 2015

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1


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New Store Development and Investment

40 41

50-60

14

30

30-40

FY 14 FY 15 FY 16E

Relocations and Rebuilds

80-100

54

New Store Openings

71

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Our Franchisees Believe in Our Brand

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Franchisees investing heavily in POPS and POS

( $

i n 0

0 0 ’ s )


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New Store Commitments

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49

79

115

152

2011 2012 2013 2014 2015

Incremental new-store commitments by year obtained

45 new storecommitments inF1Q16 versus 11

in F1Q15.


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Capital Structure

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*Free cash flow is defined as net income plus depreciation, amortization and stock compensation expense, less capitalexpenditures.**Net Debt defined as total debt less unrestricted cash on balance sheet, EBITDA is defined as earnings before interest, tax,depreciation and amortization and stock compensation expense

Significant Free Cash

Flow Generation

Use of Cash to Enhance

Value

Financial Objectives

$36.8 million unrestrictedcash balance

$70 to $75 million of freecash flow* expected in FY2016

Quarterly cash dividend of$0.11 per share ofcommon stock

Authorized $145 millionshare repurchase throughfiscal 2016

Purchased $47 million instock in fiscal Q1

Grow EBITDA withimproved sales

Target 3.0x net debt toEBITDA** (via EBITDAgrowth and additional debtissuance)


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Use of Free Cash Flow

$35

$80

$124 $126

$19 $21

2012 2013 2014 2015 2016E

Share repurchase Dividends

$31

$ in millions

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• Highly differentiated brand

• Sustained business momentum

• Strong free cash flow yield

• Solid business model for consistent EPS growth• Significant long-term growth opportunities

Key Investment Points

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Documents

SONC Jan 2016 Investor Presentation