Sonic (SONC) 8-K Results of Operations and Financial Condition

Exhibit 99

Contact: Stephen C. Vaughan
   Vice President and
   Chief Financial Officer
   (405) 225-4800

SONIC’S SECOND QUARTER EARNINGS INCREASE 28%

Sales Initiatives Continue to Generate Strong Momentum

OKLAHOMA CITY (March 22, 2005) – Sonic Corp. (NASDAQ/NM: SONC) today reported record results for its second fiscal quarter ended February 28, 2005. Highlights of the quarter included:

• A 28% increase in net income for the period, to $12.6 million;

• A 25% increase in earnings per diluted share, to $0.20;

• A 19% increase in total revenues, to $132.6 million;

• System-wide same-store sales growth of 7.0% – remaining well above the company’s long-term target of 2% to 4% growth; and

• The opening of 32 new Sonic Drive-Ins during the quarter, including 26 by franchisees.

        Commenting on the news, Clifford Hudson, Chairman and Chief Executive Officer, said, “Sonic’s strong sales trends, reflecting higher traffic counts and solid growth across all day parts, continue to provide a catalyst for record financial results and produce healthy growth for the Sonic brand.”

        Net income for the second quarter increased 28% to $12.6 million versus $9.8 million last year, while net income per diluted share rose 25% to $0.20 from $0.16 in the year-earlier period. Total revenues for the quarter increased 19% to $132.6 million from $111.6 million in the year-earlier period.

        Net income for the first half of fiscal 2005 rose 27% to $28.6 million from $22.6 million in the same period last year. On a diluted per share basis, net income increased 24% to $0.46 compared with $0.37 last year. Total revenues for the first six months of fiscal 2005 increased 19% to $274.8 million from $230.3 million in the same period last year.

        “Because of the ongoing success of our sales-driving initiatives,” Hudson added, “same-store sales growth accelerated significantly throughout fiscal 2004, exceeding our target range of 2% to 4% growth. With this momentum extending through the first half of fiscal 2005 and into the month of March, we are raising our same-store sales growth target for the next two quarters, which are seasonally the strongest periods of our fiscal year. Unless we encounter unanticipated industry or weather issues, we believe the company is positioned to achieve same-store sales growth in the range of 4% to 6% during the second half of fiscal 2005.”

        System-wide same-store sales increased 7.0% in the second quarter versus 6.6% in the year-earlier period and increased 7.5% for the first six months of the fiscal year. Same-store sales growth at partner drive-ins continued to outpace that of franchise drive-ins, rising 9.8% in the second quarter and

10.0% for the first six months of the fiscal year, reflecting ongoing investment in store-level labor, as well as the completion of installation of the Pay At Your Stall (“PAYS”) program in all partner drive-ins. Under the PAYS program, a credit card payment terminal is added to each drive-in stall to facilitate credit card transactions. The company began the rollout of the PAYS program to franchised drive-ins in February and expects to complete its system-wide implementation over the next 24 months. Same-store sales in developing markets also continued their strong trend, exceeding core markets with an increase of 8.8% for the quarter.

        Hudson pointed out that Sonic’s sales-driving strategies have included greater emphasis on national cable advertising. In fiscal 2005, the company is increasing its media expenditures to over $120 million from $110 million last year and almost doubling the amount spent on network cable to approximately $60 million. Cable advertising has proven to be especially effective in reaching new customers and has particularly benefited developing markets, as seen in their same-store sales growth, which has outpaced that for Sonic’s core markets for five consecutive quarters. New product news also remains a centerpiece in Sonic’s multi-layered growth strategy, helping the company stay relevant and compelling to consumers and supporting Sonic’s ongoing push to expand its morning and evening day parts. These sales strategies have continued to produce higher sales and profits for franchisees that, in turn, drive higher franchising income for the company because of Sonic’s ascending royalty rates.

        Sonic’s solid revenue performance, Hudson added, has helped blunt the impact of higher food and packaging costs this year, as well as higher expenses at the company’s partner drive-ins related to Sonic’s ongoing investment in store-level management and its credit card initiative. “Sonic continues to translate increasing sales leverage into record earnings and strong cash flow,” he said. “As we pass the midpoint of the year and enter the stronger spring and summer months, we are enthusiastic about our prospects for continued momentum in our operations. Our brand is strong and growing, our sales strategies are producing excellent results, and the health of our business has never been better.”

        During the second quarter, Sonic opened 32 new drive-ins, including 26 franchised restaurants, compared with a total of 32 in the year-earlier period, which included 30 by franchisees. For the first half of 2005, the company opened 66 new drive-ins, including 56 franchised restaurants, compared with 70 drive-ins opened during the same period last year. The company remains on track to open about 200 new drive-ins in fiscal 2005, including approximately 170 by franchisees.

        Looking ahead to the third quarter of fiscal 2005, Sonic expects its net income to increase in the range of 18% to 20% over the same period last year. This growth should translate into diluted earnings per share of approximately $0.36 for its third fiscal quarter ending May 31, 2005, versus $0.31 in the year-earlier period, which included a previously reported gain of approximately $800 thousand or $.01 per share on the sale of real estate to a franchisee. The company bases its outlook on the following assumptions:

• Total revenue growth of 15% to 17% over the comparable 2004 period, reflecting:

o System-wide same-store sales growth in the range of 4% to 6%;

o Approximately 50 to 55 new drive-in openings in the third quarter, including approximately 40 by franchisees;

o Growth of $2.5 million to $3.0 million in franchising income resulting from new franchise drive-ins, higher average unit volumes, and increased royalties due to the company’s unique ascending royalty rate; and

o The contribution of 22 franchise drive-ins acquired in the summer of 2004.

• Flat to slightly lower restaurant-level costs, as a percentage of sales, versus the same quarter last year as the benefit of increased sales volume leverage is expected to offset higher credit card costs resulting from the company’s credit card initiative;

• Continued leverage from the bottom part of the income statement, with corporate overhead expenses expected to increase in the range of 10% to 12% over the year-earlier quarter, and with depreciation and amortization experiencing a high single-digit increase; and

• Continued significant growth in cash flow from operations, which is expected to be used in the third quarter (and future quarters) to fund capital expenditures and, on an opportunistic basis, reduce outstanding debt, repurchase company stock (the company had $60 million authorized for stock repurchases at the end of the second quarter), or purchase franchise drive-ins.

        This press release contains forward-looking statements within the meaning of the federal securities laws. There are certain important factors that could cause actual results to differ materially from those anticipated by the statements made herein. Among the factors that could cause actual results to differ from predicted or expected results are: delays in opening new stores because of weather, strikes, local permitting or other reasons; increased competition; cost increases or shortages in raw food products; risks of and publicity surrounding foodborne illness; and the possibility of unforeseen events affecting the industry generally. The company undertakes no obligation to publicly release revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.

        Sonic Corp. franchises and operates the largest chain of drive-in restaurants in the United States. For more information about the company, visit Sonic’s website atsonicdrivein.com. A listen-only simulcast of Sonic’s second quarter conference call can be accessed at the company’s web site. The simulcast will begin at approximately 9:00 a.m. Central Time tomorrow, March 23, 2005. An on-demand replay, using the same link, will be available at approximately noon tomorrow and will continue until April 23, 2005.

SONIC CORP.
Summary Unaudited Financial Highlights
(In thousands, except per share amounts)

	Second Quarter Ended				Six Months Ended
	February 28, 2005		February 29, 2004		February 28, 2005		February 29, 2004
Revenues	$	132,613	$	111,595	$	274,840	$	230,303
Income from operations		21,614		17,352		48,158		39,264
Net income		12,595		9,835		28,595		22,594
Net income per share - diluted		0.20		0.16		0.46		0.37
Weighted average shares - diluted		62,788		61,689		62,587		61,442

SONIC CORP.
Unaudited Supplemental Information

	Second Quarter Ended						Six Months Ended
	February 28, 2005			February 29, 2004			February 28, 2005			February 29, 2004
Restaurants in operation:
Partner Drive-Ins:
Total at beginning of period		544			499			539			497
Opened		6			2			10			4
Acquired from (sold to) franchisees		(2	)		2			–			2
Closed		–			–			(1	)		–
Total at end of period		548			503			548			503
Franchise Drive-Ins:
Total at beginning of period		2,373			2,244			2,346			2,209
Opened		26			30			56			66
Acquired from (sold to) company		2			(2	)		–			(2	)
Closed (net of reopening)		(15	)		(2	)		(16	)		(3	)
Total at end of period		2,386			2,270			2,386			2,270
System-wide:
Total at beginning of period		2,917			2,743			2,885			2,706
Opened		32			32			66			70
Closed (net of reopening)		(15	)		(2	)		(17	)		(3	)
Total at end of period		2,934			2,773			2,934			2,773
Core markets		2,094			2,004			2,094			2,004
Developing markets		840			769			840			769
All markets		2,934			2,773			2,934			2,773

Note: Partner Drive-Ins are those Sonic Drive-Ins in which the company owns a majority interest, typically at least 60%. Most supervisors and managers of Partner Drive-Ins own a minority equity interest.

SONIC CORP.
Unaudited Supplemental Information
($ in thousands)

	Second Quarter Ended						Six Months Ended
	February 28, 2005			February 29, 2004			February 28, 2005			February 29, 2004
Sales Analysis
Partner Drive-Ins:
Total sales	$	112,655		$	94,105		$	232,866		$	193,850
Average drive-in sales		208			188			431			388
Change in same-store sales		9.8	%		7.4	%		10.0	%		6.6	%
Franchise Drive-Ins:
Total sales	$	533,982		$	476,665		$	1,115,078		$	986,086
Average drive-in sales		226			211			471			439
Change in same-store sales		6.3	%		6.4	%		7.0	%		6.3	%
System-wide:
Change in total sales		13.3	%		12.9	%		14.2	%		13.3	%
Average drive-in sales		222			207			463			430
Change in same-store sales		7.0	%		6.6	%		7.5	%		6.3	%
Core and Developing Markets
System-wide average drive-in sales:
Core markets	$	232		$	218		$	483		$	451
Developing markets		194			177			410			374
System-wide change in same-store sales
Core markets		6.5	%		6.5	%		7.2	%		6.4	%
Developing markets		8.8	%		6.9	%		8.6	%		5.9	%

Note: Change in same-store sales based on drive-ins open for at least 15 months.

SONIC CORP.
Unaudited Supplemental Information
(In thousands, except per share amounts)

	Second Quarter Ended						Six Months Ended
	February 28, 2005			February 29, 2004			February 28, 2005			February 29, 2004
Income Statement Data
Revenues:
Partner Drive-In sales	$	112,655		$	94,105		$	232,866		$	193,850
Franchise Drive-In sales:
Franchise royalties		18,169			15,906			38,275			33,040
Franchise fees		874			833			1,809			1,867
Other		915			751			1,890			1,546
		132,613			111,595			274,840			230,303
Costs and expenses:
Partner Drive-Ins:
Food and packaging		29,415			24,505			61,988			50,709
Payroll and other employee benefits		34,910			29,527			71,875			59,723
Minority interest in earnings
of Partner Drive-Ins		4,048			3,693			8,627			7,414
Other operating expenses		23,309			18,595			46,976			38,326
		91,682			76,320			189,466			156,172
Selling, general and administrative		10,060			9,083			19,553			18,204
Depreciation and amortization		8,870			8,165			17,276			15,988
Provision for impairment of long-lived assets		387			675			387			675
		110,999			94,243			226,682			191,039
Income from operations		21,614			17,352			48,158			39,264
Interest expense		1,712			1,989			3,491			3,910
Interest income		(180	)		(310	)		(354	)		(652	)
Net interest expense		1,532			1,679			3,137			3,258
Income before income taxes		20,082			15,673			45,021			36,006
Provision for income taxes		7,487			5,838			16,426			13,412
Net income	$	12,595		$	9,835		$	28,595		$	22,594
Net income per share:
Basic	$	0.21		$	0.17		$	0.48		$	0.38
Diluted	$	0.20		$	0.16		$	0.46		$	0.37
Weighted average shares used in calculation:
Basic		60,263			59,237			60,136			59,073
Diluted		62,788			61,689			62,587			61,442

SONIC CORP.
Unaudited Supplemental Information

	Second Quarter Ended						Six Months Ended
	February 28, 2005			February 29, 2004			February 28, 2005			February 29, 2004
Margin Analysis
Partner Drive-Ins:
Food and packaging		26.1	%		26.0	%		26.6	%		26.2	%
Payroll and employee benefits		31.0			31.4			30.9			30.8
Minority interest in earnings of Partner
Drive-Ins		3.6			3.9			3.7			3.8
Other operating expenses		20.7			19.8			20.2			19.8
		81.4	%		81.1	%		81.4	%		80.6	%

	February 28, 2005		August 31, 2004
	(In thousands)
Balance Sheet Data
Total assets	$	538,706	$	518,633
Current assets		39,168		34,583
Current liabilities		59,293		49,120
Obligations under capital leases, long-term debt,
and other non-current liabilities		104,498		134,751
Stockholders' equity		374,915		334,762