Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Aug. 31, 2016 | Oct. 14, 2016 | Feb. 29, 2016 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Aug. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | SONIC CORP. | ||
Entity Central Index Key | 868,611 | ||
Current Fiscal Year End Date | --08-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 45,758,995 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Public Float | $ 1,371,951,852 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Aug. 31, 2016 | Aug. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 72,092 | $ 27,191 |
Restricted cash | 15,873 | 13,246 |
Accounts and notes receivable, net | 35,437 | 31,577 |
Inventories | 3,321 | 3,824 |
Prepaid expenses | 4,713 | 5,544 |
Other current assets | 6,221 | 4,056 |
Total current assets | 137,657 | 85,438 |
Noncurrent restricted cash | 140 | 6,524 |
Notes receivable, net | 12,562 | 7,216 |
Property, equipment and captial leases, net | 402,162 | 421,406 |
Goodwill | 76,734 | 77,076 |
Debt origination costs, net | 14,427 | 7,056 |
Other assets, net | 16,313 | 15,308 |
Total assets | 659,995 | 620,024 |
Current liabilities: | ||
Accounts payable | 14,372 | 13,860 |
Franchisee deposits | 720 | 870 |
Accrued liabilities | 51,913 | 50,714 |
Income taxes payable | 2,568 | 8,910 |
Current maturities of long-term debt and capital leases | 5,090 | 13,467 |
Total current liabilities | 74,663 | 87,821 |
Obligations under capital leases due after one year | 17,391 | 20,763 |
Long-term debt due after one year | 577,521 | 428,238 |
Deferred income taxes | 42,530 | 43,549 |
Other non-current liabilities | 23,533 | 22,220 |
Commitments and contingencies (Notes 6, 7, 13, 14) | ||
Stockholders' equity (deficit): | ||
Preferred stock, par value $.01; 1,000 shares authorized; none outstanding | ||
Common stock, par value $.01; 245,000 shares authorized; 118,309 shares issued in 2016 and in 2015 | 1,183 | 1,183 |
Paid-in capital | 234,956 | 232,550 |
Retained earnings | 894,442 | 851,715 |
Treasury stock, at cost; 71,670 shares in 2016 and 67,249 shares in 2015 | (1,206,224) | (1,068,015) |
Total stockholders’ equity (deficit) | (75,643) | 17,433 |
Total liabilities and stockholders' equity (deficit) | $ 659,995 | $ 620,024 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Aug. 31, 2016 | Aug. 31, 2015 |
Consolidated Balance Sheets [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 245,000,000 | 245,000,000 |
Common stock, shares issued | 118,309,000 | 118,309,000 |
Treasury stock, shares | 71,670,000 | 67,249,000 |
Consolidated Statements Of Inco
Consolidated Statements Of Income - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2016 | Aug. 31, 2015 | Aug. 31, 2014 | |
Revenues: | |||
Company Drive-In sales | $ 425,795 | $ 436,031 | $ 405,363 |
Franchise Drive-Ins: | |||
Franchise royalties and fees | 170,319 | 161,342 | 138,416 |
Lease revenue | 7,459 | 5,583 | 4,291 |
Other | 2,747 | 3,133 | 4,279 |
Total revenues | 606,320 | 606,089 | 552,349 |
Costs and expenses: | |||
Food and packaging | 118,136 | 121,701 | 116,325 |
Payroll and other employee benefits | 150,260 | 151,801 | 139,939 |
Other operating expenses, exclusive of depreciation and amortization included below | 88,424 | 90,436 | 85,845 |
Total cost of Company Drive-In sales | 356,820 | 363,938 | 342,109 |
Selling, general and administrative | 82,089 | 79,336 | 69,415 |
Depreciation and amortization | 44,418 | 45,892 | 42,210 |
Provision for impairment of long-lived assets | 232 | 1,440 | 114 |
Other operating income, net | (4,691) | (945) | (176) |
Total costs and expenses | 478,868 | 489,661 | 453,672 |
Income from operations | 127,452 | 116,428 | 98,677 |
Interest expense | 26,714 | 25,114 | 25,382 |
Interest income | (516) | (408) | (469) |
Loss from early extinguishment of debt | 8,750 | ||
Net interest expense | 34,948 | 24,706 | 24,913 |
Income before income taxes | 92,504 | 91,722 | 73,764 |
Provision for income taxes | 28,437 | 27,237 | 25,848 |
Net income | $ 64,067 | $ 64,485 | $ 47,916 |
Basic income per share | $ 1.32 | $ 1.23 | $ 0.87 |
Diluted income per share | 1.29 | 1.20 | 0.85 |
Cash dividends declared per common share | $ 0.44 | $ 0.27 | $ 0.09 |
Consolidated Statements Of Stoc
Consolidated Statements Of Stockholders’ Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Paid-In Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Total |
Stockholders' Equity (Deficit), Beginning Balance at Aug. 31, 2013 | $ 1,183 | $ 224,768 | $ 758,138 | $ (906,625) | $ 77,464 |
Balance, shares at Aug. 31, 2013 | 62,025 | ||||
Net income | 47,916 | 47,916 | |||
Cash dividends | (4,852) | (4,852) | |||
Stock-based compensation expense | 3,742 | 3,742 | |||
Purchase of treasury stock | $ (80,045) | (80,045) | |||
Purchase of treasury stock, shares | 4,080 | ||||
Exercise of stock options and issuance of restricted stock | (4,186) | $ 21,593 | 17,407 | ||
Exercise of stock options and issuance of restricted stock, shares | (1,575) | ||||
Other | 680 | $ 363 | 1,043 | ||
Other, shares | (25) | ||||
Stockholders' Equity (Deficit), Ending Balance at Aug. 31, 2014 | 1,183 | 225,004 | 801,202 | $ (964,714) | 62,675 |
Balance, shares at Aug. 31, 2014 | 64,505 | ||||
Net income | 64,485 | 64,485 | |||
Cash dividends | (13,972) | (13,972) | |||
Stock-based compensation expense | 3,520 | 3,520 | |||
Purchase of treasury stock | $ (123,786) | (123,786) | |||
Purchase of treasury stock, shares | 4,201 | ||||
Exercise of stock options and issuance of restricted stock | (1,458) | $ 20,190 | 18,732 | ||
Exercise of stock options and issuance of restricted stock, shares | (1,438) | ||||
Other | 5,484 | $ 295 | 5,779 | ||
Other, shares | (19) | ||||
Stockholders' Equity (Deficit), Ending Balance at Aug. 31, 2015 | 1,183 | 232,550 | 851,715 | $ (1,068,015) | $ 17,433 |
Balance, shares at Aug. 31, 2015 | 67,249 | 67,249 | |||
Net income | 64,067 | $ 64,067 | |||
Cash dividends | (21,340) | (21,340) | |||
Stock-based compensation expense | 3,766 | 3,766 | |||
Purchase of treasury stock | $ (148,345) | (148,345) | |||
Purchase of treasury stock, shares | 5,209 | ||||
Exercise of stock options and issuance of restricted stock | (5,941) | $ 9,783 | 3,842 | ||
Exercise of stock options and issuance of restricted stock, shares | (767) | ||||
Other | 4,581 | $ 353 | 4,934 | ||
Other, shares | (21) | ||||
Stockholders' Equity (Deficit), Ending Balance at Aug. 31, 2016 | $ 1,183 | $ 234,956 | $ 894,442 | $ (1,206,224) | $ (75,643) |
Balance, shares at Aug. 31, 2016 | 71,670 | 71,670 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Cash Flows $ in Thousands | 12 Months Ended | ||
Aug. 31, 2016USD ($) | Aug. 31, 2015USD ($) | Aug. 31, 2014USD ($) | |
Cash flows from operating activities: | |||
Net income | $ 64,067 | $ 64,485 | $ 47,916 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 44,418 | 45,892 | 42,210 |
Stock-based compensation expense | 3,766 | 3,520 | 3,742 |
Loss from early extinguishment of debt | 8,750 | ||
Other | 270 | 9,366 | 735 |
(Increase) decrease in operating assets: | |||
Restricted cash | (2,829) | (61) | (1,428) |
Accounts receivable and other assets | 2,109 | 2,885 | (5,977) |
Increase (decrease) in operating liabilities: | |||
Accounts payable | 380 | (1,288) | 640 |
Accrued and other liabilities | 4,520 | 10,296 | 7,347 |
Income taxes | (9,242) | 1,267 | 8,363 |
Total adjustments | 52,142 | 71,877 | 55,632 |
Net cash provided by operating activities | 116,209 | 136,362 | 103,548 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (46,553) | (42,153) | (79,008) |
Proceeds from sale of assets | 16,206 | 13,701 | 2,148 |
Other | (3,713) | 3,132 | 6,337 |
Net cash used in investing activities | (34,060) | (25,320) | (70,523) |
Cash flows from financing activities: | |||
Payments on debt | (422,090) | (90,290) | (9,976) |
Proceeds from borrowings | 563,000 | 91,000 | |
Restricted cash for securitization obligations | 6,587 | 151 | 181 |
Purchases of treasury stock | (150,444) | (120,463) | (79,786) |
Proceeds from exercise of stock options | 3,842 | 18,732 | 17,407 |
Payment of dividends | (21,309) | (18,808) | |
Debt issuance and extinguishment costs | (18,420) | (12) | (151) |
Other | 1,586 | 145 | (2,902) |
Net cash used in financing activities | (37,248) | (119,545) | (75,227) |
Net increase (decrease) in cash and cash equivalents | 44,901 | (8,503) | (42,202) |
Cash and cash equivalents at beginning of year | 27,191 | 35,694 | 77,896 |
Cash and cash equivalents at end of year | 72,092 | 27,191 | 35,694 |
Cash paid during the year for: | |||
Interest | 24,883 | 23,330 | 23,701 |
Income taxes (net of refunds) | 27,821 | 11,360 | 14,143 |
Non-cash investing and financing activities: | |||
Change in obligation to acquire treasury stock | (2,099) | 3,323 | 259 |
Stock options exercised by stock swap | 6,396 | 3,385 | 4,634 |
Accrued PP&E at period end | 3,471 | 3,346 | 3,297 |
Dividend payable | $ 44 | $ 13 | $ 4,852 |
Summary Of Significant Accounti
Summary Of Significant Accounting Policies | 12 Months Ended |
Aug. 31, 2016 | |
Summary Of Significant Accounting Policies [Abstract] | |
Summary Of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Operations Sonic Corp. (the “Company”) operates and franchises a chain of quick-service restaurants in the United States (“U.S.”). It derives its revenues primarily from Company Drive-In sales and royalty fees from franchisees. The Company also leases real estate and receives equity earnings in noncontrolling ownership in a number of Franchise Drive ‑Ins. Principles of Consolidation The accompanying financial statements include the accounts of the Company, its wholly owned subsidiaries and a number of Company Drive-Ins in which a subsidiary has a controlling ownership interest. All intercompany accounts and transactions have been eliminated. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported and contingent assets and liabilities disclosed in the financial statements and accompanying notes. Actual results may differ from those estimates, and such differences may be material to the financial statements. Reclassifications Certain amounts reported in previous years, which are not material, have been combined and reclassified to conform to the current-year presentation. Segment Reporting In accordance with Accounting Standards Update (“ASU”) 280, “Segment Reporting,” the Company uses the management approach for determining its reportable segments. The management approach is based upon the way that management reviews performance and allocates resources. The Company’s chief operating decision maker and his management team review operating results on a consolidated basis for purposes of allocating resources and evaluating the financial performance of the Sonic brand. Accordingly, the Company has determined that it has one operating segment and, therefore, one reporting segment. Cash Equivalents Cash equivalents consist of highly liquid investments, primarily money market accounts that mature in three months or less from date of purchase, and depository accounts. Restricted Cash As of August 31, 2016 , the Company had restricted cash balances totaling $16.0 million for funds required to be held in trust for the benefit of senior noteholders under the Company’s debt arrangements. The current portion of restricted cash of $15.9 million represents amounts to be returned to Sonic or paid to service current debt obligations. The noncurrent portion of $0. 1 million represents interest reserves required to be set aside for the duration of the debt. Accounts and Notes Receivable The Company charges interest on past due accounts receivable and recognizes income as it is collected. Interest accrues on notes receivable based on the contractual terms of the respective note. The Company monitors all accounts and notes receivable for delinquency and provides for estimated losses for specific receivables that are not likely to be collected. The Company assesses credit risk for accounts and notes receivable of specific franchisees based on payment history, current payment patterns, the health of the franchisee’s business and an assessment of the franchisee’s ability to pay outstanding balances. In addition to allowances for bad debt for specific franchisee receivables, a general provision for bad debt is estimated for the Company’s accounts receivable based on historical trends. Account balances generally are charged against the allowance when the Company believes that the collection is no longer reasonably assured. The Company continually reviews its allowance for doubtful accounts. Inventories Inventories consist principally of food and supplies that are carried at the lower of cost (first-in, first-out basis) or market. Property, Equipment and Capital Leases Property and equipment are recorded at cost, and leased assets under capital leases are recorded at the present value of future minimum lease payments. Depreciation of property and equipment and amortization of capital leases are computed by the straight-line method over the estimated useful lives or the lease term, including cancelable option periods when appropriate, and are combined for presentation in the financial statements. Accounting for Long-Lived Assets The Company reviews long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. Assets are grouped and evaluated for impairment at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets, which generally represents the individual drive-in. The Company’s primary test for an indicator of potential impairment is operating losses of the related drive-in. If an indication of impairment is determined to be present, the Company estimates the future cash flows expected to be generated from the use of the asset and its eventual disposal. If the sum of undiscounted future cash flows is less than the carrying amount of the asset, an impairment loss is recognized. The impairment loss is measured by comparing the fair value of the asset to its carrying amount. Fair value is typically determined to be the value of the land since drive-in buildings and improvements are single-purpose assets and have little value to market participants. The equipment associated with a drive-in can be easily relocated to another drive-in and therefore is not adjusted. Surplus property assets are carried at the lower of depreciated cost or fair value less cost to sell. The majority of the value in surplus property is land. Fair values are estimated based upon management’s assessment as well as independent market value assessments of the assets’ estimated sales values. Goodwill and Other Intangible Assets Goodwill is determined based on an acquisition purchase price in excess of the fair value of identified assets. Intangible assets with lives restricted by contractual, legal or other means are amortized over their useful lives. The Company tests goodwill at least annually for impairment using the fair value approach on a reporting unit basis. Since the Company is one reporting unit, potential goodwill impairment is evaluated by comparing the fair value of the Company to its carrying value. The fair value of the Company is determined using a market approach. If the carrying value of the Company exceeds fair value, a comparison of the fair value of goodwill against the carrying value of goodwill is made to determine whether goodwill has been impaired. During the fourth quarters of fiscal years 2016 and 2015, the annual assessment of the recoverability of goodwill was performed, and no impairment was indicated. The Company’s intangible assets subject to amortization consist primarily of acquired franchise agreements, intellectual property and other intangibles. Amortization expense is calculated using the straight-line method over the asset’s expected useful life. See note 4 - Goodwill and Other Intangibles for additional related disclosures. Refranchising and Closure of Company Drive-Ins Gains and losses from the sale or closure of Company Drive-Ins are recorded as “other operating (income) expense, net” on the Consolidated Statements of Income. Revenue Recognition, Franchise Fees and Royalties Revenue from Company Drive-In sales is recognized when food and beverage products are sold. Company Drive-In sales are presented net of sales tax and other sales-related taxes. The Company’s gift card program serves all Sonic Drive-Ins and is administered by the Company on behalf of a system advertising fund. The Company records a liability in the period in which a gift card is sold. The gift cards do not have expiration dates. As gift cards are redeemed, the liability is reduced with revenue recognized on redemptions at Company Drive-Ins. Breakage is the amount on a gift card that is not expected to be redeemed and that the Company is not required to remit to a state under unclaimed property laws. The Company estimates breakage based upon the historical trend in redemption patterns from previously sold gift cards. The Company’s policy is to recognize the breakage, using the delayed recognition method, when it is apparent that there is a remote likelihood the gift card balance will be redeemed. The Company reduces the gift card liability for the estimated breakage and uses that amount to defray the costs of operating the gift card program. There is no income recognized on unredeemed gift card balances. Costs to administer the gift card program, net of breakage, are included in the receivables from advertising funds as set forth in note 3 – Accounts and Notes Receivable. Such costs were not material in fiscal years 2016, 2015 and 2014. Franchise fees are recognized in income when the Company has substantially performed or satisfied all material services or conditions relating to the sale of the franchise, and the fees are generally nonrefundable. Development fees are nonrefundable and are recognized in income on a pro-rata basis when the conditions for revenue recognition under the individual development agreements are met. Both franchise fees and development fees are generally recognized upon the opening of a Franchise Drive-In or upon termination of the agreement between the Company and the franchisee. The Company’s franchisees pay royalties based on a percentage of sales. Royalties are recognized as revenue when they are earned. Advertising Costs Costs incurred in connection with advertising and promoting the Company’s products are included in other operating expenses and are expensed as incurred. Such costs amounted to $23.4 million, $ 24.5 million and $ 22.4 million in fiscal years 2016, 2015 and 2014, respectively. Under the Company’s franchise agreements, both Company Drive-Ins and Franchise Drive-Ins must contribute a minimum percentage of revenues to a national media production fund (“Sonic Brand Fund”) and spend an additional minimum percentage of gross revenues on advertising, either directly or through Company-required participation in advertising cooperatives. A significant portion of the advertising cooperative contributions is remitted to the System Marketing Fund, which purchases advertising on national cable and broadcast networks and local broadcast networks and also funds other national media expenses and sponsorship opportunities. As stated in the terms of existing franchise agreements, these funds do not constitute assets of the Company, and the Company acts with limited agency in the administration of these funds. Accordingly, neither the revenues and expenses nor the assets and liabilities of the advertising cooperatives, the Sonic Brand Fund or the System Marketing Fund are included in the Company’s consolidated financial statements. However, all advertising contributions by Company Drive-Ins are recorded as an expense on the Company’s financial statements. Under the Company’s franchise agreements, the Company is reimbursed by the Sonic Brand Fund for costs incurred to administer the fund at an amount not to exceed 15% of the Sonic Brand Fund’s gross receipts. Reimbursements from the Sonic Brand Fund are offset against selling, general and administrative expenses and totaled $5.2 million, $5.0 million and $4.4 million in fiscal years 2016, 2015 and 2014, respectively. Technology Costs Under the Company’s franchise agreements, both Company Drive-Ins and Franchise Drive-Ins must pay a set technology fee to the Brand Technology Fund (“BTF”), which was established in the third quarter of fiscal year 2016. The BTF administers cybersecurity and other technology programs for the Sonic system. As stated in the terms of existing franchise agreements, these funds do not constitute assets of the Company, and the Company acts with limited agency in the administration of these funds. Accordingly, neither the revenues and expenses nor the assets and liabilities of the BTF are included in the Company’s consolidated financial statements. However, technology fees paid by Company Drive-Ins are recorded as an expense on the Company’s financial statements. Under the Company’s franchise agreements, the Company is reimbursed by the BTF for costs incurred to administer the fund at an amount not to exceed 15% of the BTF’s gross receipts. Reimbursements from the BTF are offset against selling, general and administrative expenses and totaled $2.5 million in fiscal year 2016. Operating Leases Rent expense is recognized on a straight-line basis over the expected lease term, including cancelable option periods when it is deemed to be reasonably assured that the Company would incur an economic penalty for not exercising the options. Within the terms of some of the leases, there are rent holidays and/or escalations in payments over the base lease term, as well as renewal periods. The effects of the holidays and escalations have been reflected in rent expense on a straight-line basis over the expected lease term, which includes cancelable option periods when appropriate. The lease term commences on the date when the Company has the right to control the use of the leased property, which can occur before rent payments are due under the terms of the lease. Contingent rent is generally based on sales levels and is accrued at the point in time it is probable that such sales levels will be achieved. Stock-Based Compensation The Company grants incentive stock options (“ISOs”), non-qualified stock options (“NQs”) and restricted stock units (“RSUs”). For grants of NQs and RSUs, the Company expects to recognize a tax benefit upon exercise of the option or vesting of the RSU. As a result, a tax benefit is recognized on the related stock-based compensation expense for these types of awards. For grants of ISOs, a tax benefit only results if the option holder has a disqualifying disposition. As a result of the limitation on the tax benefit for ISOs, the tax benefit for stock-based compensation will generally be less than the Company’s overall tax rate and will vary depending on the timing of employees’ exercises and sales of stock. Stock-based compensation is measured at the grant date based on the calculated fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period of the award, generally the vesting period of the grant. For additional information on stock-based compensation see note 12 - Stockholders’ Equity (Deficit). Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period that includes the enactment date. Income tax benefits credited to equity relate to tax benefits associated with amounts that are deductible for income tax purposes but do not affect earnings. These benefits are principally generated from employee exercises of NQs, the vesting of RSUs and disqualifying dispositions of ISOs. The threshold for recognizing the financial statement effects of a tax position is when it is more likely than not, based on the technical merits, that the position will be sustained upon examination by a taxing authority. Recognized tax positions are initially and subsequently measured as the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority. Interest and penalties related to unrecognized tax benefits are included in income tax expense. Additional information regarding the Company’s unrecognized tax benefits is provided in note 11 - Income Taxes. Fair Value Measurements The Company’s financial assets and liabilities consist of cash and cash equivalents, accounts and notes receivable, accounts payable and long-term debt. The fair value of cash and cash equivalents, accounts receivable and accounts payable approximates their carrying amounts due to the short-term nature of these assets and liabilities. The following methods and assumptions were used by the Company in estimating fair values of its financial instruments: · Notes receivable - As of August 31, 2016 and 2015 , the carrying amounts of notes receivable (both current and non-current) approximate fair value due to the effect of the related allowance for doubtful accounts. · Long-term debt - The Company prepares a discounted cash flow analysis for its fixed and variable rate borrowings to estimate fair value each quarter. This analysis uses Level 2 inputs from market information available for public debt transactions for companies with ratings that are similar to the Company’s ratings and from information gathered from brokers who trade in the Company’s notes. The fair value estimate required significant assumptions by management. Management believes this fair value is a reasonable estimate. For more information regarding the Company’s long-term debt, see note 9 - Debt and note 10 - Fair Value of Financial Instruments. Certain nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis, which means these assets and liabilities are not measured at fair value on an ongoing basis but are subject to periodic impairment tests. For the Company, these items primarily include long-lived assets, goodwill and other intangible assets. Refer to sections “ Accounting for Long-Lived Assets” and “Goodwill and Other Intangible Assets,” discussed above, for inputs and valuation techniques used to measure the fair value of these nonfinancial assets. The fair value was based upon management’s assessment as well as independent market value assessments which involved Level 2 and Level 3 inputs. New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, “Revenue from Contracts with Customers,” which requires an entity to recognize revenue in an amount that reflects the consideration to which the entity expects to be entitled for the transfer of promised goods or services to customers. The standard also requires additional disclosure regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The ASU will replace most of the existing revenue recognition requirements in U.S. GAAP when it becomes effective. Further, in March 2016, the FASB issued ASU No. 2016-08, “ Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” which clarifies the guidance in ASU No. 2014-09 for evaluating when another party, along with the entity, is involved in providing a good or service to a customer. In April 2016, the FASB issued ASU No. 2016-10, “ Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing,” which clarifies the guidance in ASU No. 2014-09 regarding assessing whether promises to transfer goods or services are distinct, and whether an entity's promise to grant a license provides a customer with a right to use or right to access the entity's intellectual property. All standards are effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period, which requires the Company to adopt the standard in fiscal year 2019. The standards are to be applied retrospectively or using a cumulative effect transition method, with early application not permitted. The Company does not believe the new revenue recognition standard will impact our recognition of sales from Company Drive-Ins and our recognition of royalty fees from franchisees. We are currently evaluating the effect that this pronouncement will have on the recognition of other transactions on the financial statements, including the initial franchise fee currently recognized upon the opening of a Franchise Drive-In, and related disclosures and have not yet selected a transition method. In April 2015, the FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” This update requires debt issuance costs to be presented in the balance sheet as a reduction of the related liability rather than as an asset. The recognition and measurement guidance for debt issuance costs are not affected by this update. This update is effective for fiscal years beginning after December 15, 2015, including interim periods within that reporting period, and is to be applied retrospectively; early adoption is permitted. The update will be adopted in the first quarter of fiscal year 2017 and will require reclassification of debt issuance costs from other non-current assets to long-term debt within the Company’s consolidated balance sheets. As of August 31, 2016, the carrying amount of unamortized debt issuance costs totaled $14.4 million. Other than this reclassification, the adoption of this ASU will not have any impact on the Company’s consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-05, “Customer's Accounting for Fees Paid in a Cloud Computing Arrangement.” The update provides clarification on whether a cloud computing arrangement includes a software license. If a software license is included, the customer should account for the license consistent with its accounting of other software licenses. If a software license is not included, the arrangement should be accounted for as a service contract. The update is effective for fiscal years beginning after December 15, 2015. The update will be adopted in the first quarter of fiscal year 2017 and will not have a material impact on the Company’s financial statements. In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes” as part of its simplification initiatives. The update requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The update is effective for fiscal years beginning after December 15, 2017; however, early application is permitted. The Company adopted this standard in the first quarter of fiscal year 2016. The Company’s current deferred tax asset balance of $2.2 million was classified as noncurrent and netted with noncurrent deferred tax liabilities as of November 30, 2015, and all future deferred tax asset balances will be recorded as such. No prior periods were retrospectively adjusted, as such the balance of $2.2 million remained in current assets at August 31, 2015. The reclassification did not have a material effect on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases.” The new standard, which replaces existing lease guidance, requires lessees to recognize on the balance sheet a liability to make lease payments and a corresponding right-of-use asset . The guidance also requires certain qualitative and quantitative disclosures designed to assess the amount, timing and uncertainty of cash flows arising from leases. Accounting guidance for lessors is largely unchanged. The standard is effective for fiscal years beginning after December 15, 2018, which will require the Company to adopt the provisions in the first quarter of fiscal 2020, with early application permitted. This standard requires adoption based upon a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with optional practical expedients. Based on a preliminary assessment, the Company expects that most of its operating lease commitments will be subject to the new guidance and recognized as operating lease liabilities and right-of-use assets upon adoption, resulting in a significant increase in the assets and liabilities on our consolidated balance sheet. The Company is continuing its assessment, which may identify additional impacts this standard will have on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-04, “Liabilities—Extinguishments of Liabilities: Recognition of Breakage for Certain Prepaid Stored-Value Products,” which is intended to eliminate current and future diversity in practice related to derecognition of prepaid stored-value product liability in a way that aligns with the new revenue recognition guidance. The update is effective for fiscal years beginning after December 15, 2017; however, early application is permitted. The adoption of the update is not expected to have a material impact on the Company’s financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Compensation—Stock Compensation: Improvements to Employee Share-Based Payment Accounting,” which simplifies several aspects of accounting for share-based payment transactions, including excess tax benefits, an accounting policy election for forfeitures, statutory tax withholding requirements and classification in the statements of cash flows. Upon adoption, any future excess tax benefits or deficiencies will be recorded to the provision for income taxes in the consolidated statements of operations, instead of additional paid-in capital in the consolidated balance sheets. The update is effective for fiscal years beginning after December 15, 2016; however, early application is permitted. The transition method to be applied varies depending on the area of update being adopted. The Company is currently evaluating the effect that this update will have on its financial statements and related disclosures. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses.” The update was issued to provide more decision-useful information about the expected credit losses on financial instruments. The update replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The update is effective for fiscal years beginning after December 15, 2019, with early adoption permitted for fiscal years beginning after December 15, 2018. The update should be adopted using a modified-retrospective approach. The Company is currently evaluating the effect that this update will have on its financial statements and related disclosures. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments.” The update is intended to reduce diversity in practice in how certain transactions are classified and will make eight targeted changes to how cash receipts and cash payments are presented in the statement of cash flows. The update is effective for fiscal years beginning after December 15, 2017. The new standard will require adoption on a retrospective basis unless it is impracticable to apply, in which case the amendments will apply prospectively as of the earliest date practicable. The Company is currently evaluating the effect that this update will have on its financial statements and related disclosures . |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Aug. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 2. Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share: Fiscal Year Ended August 31, 2016 2015 2014 Numerator: Net income $ 64,067 $ 64,485 $ 47,916 Denominator: Weighted average common shares outstanding– basic 48,703 52,572 55,164 Effect of dilutive employee stock options and unvested RSUs 966 1,381 1,455 Weighted average common shares outstanding – diluted 49,669 53,953 56,619 Net income per common share – basic $ 1.32 $ 1.23 $ 0.87 Net income per common share – diluted $ 1.29 $ 1.20 $ 0.85 Anti-dilutive securities excluded (1) 615 342 988 ————————— (1) Anti-dilutive securities consist of stock options and unvested RSUs that were not included in the computation of diluted earnings per share because either the exercise price of the options was greater than the average market price of the common stock or the total assumed proceeds under the treasury stock method resulted in negative incremental shares and thus the inclusion would have been anti-dilutive . |
Accounts And Notes Receivable
Accounts And Notes Receivable | 12 Months Ended |
Aug. 31, 2016 | |
Accounts And Notes Receivable [Abstract] | |
Accounts And Notes Receivable | 3 . Accounts and Notes Receivable Accounts and notes receivable consist of the following: August 31, 2016 2015 Current Accounts and Notes Receivable: Royalties and other trade receivables $ 19,994 $ 19,713 Notes receivable from franchisees 5,531 996 Receivables from system funds 4,372 4,965 Other 6,507 6,977 Accounts and notes receivable, gross 36,404 32,651 Allowance for doubtful accounts and notes receivable (967) (1,074) Current accounts and notes receivable, net $ 35,437 $ 31,577 Noncurrent Notes Receivable: Receivables from franchisees $ 7,170 $ 5,676 Receivables from system funds 5,466 1,571 Allowance for doubtful notes receivable (74) (31) Noncurrent notes receivable, net $ 12,562 $ 7,216 The Company’s receivables are primarily due from franchisees, all of whom are in the restaurant business. Substantially all of the n otes receivable from franchisees are collateralized by real estate or equipment. The increase in current notes receivable from franchisees is due to short - term financing for refranchised drive-ins and newly constructed drive-ins sold to franchisees. The receivables from system funds represent transactions in the normal course of business. The increase in noncurrent receivables from system funds relates to the BTF established in the third quarter of fiscal year 2016, as discussed in note 1 – Summary of Significant Accounting Policies. |
Goodwill And Other Intangibles
Goodwill And Other Intangibles | 12 Months Ended |
Aug. 31, 2016 | |
Goodwill And Other Intangibles [Abstract] | |
Goodwill And Other Intangibles | 4 . Goodwill and Other Intangibles As of August 31, 2016 , the Company had $76. 7 million of goodwill. The changes in the carrying amount of goodwill were as follows: August 31, 2016 2015 Balance at beginning of year $ 77,076 $ 77,093 Goodwill acquired during the year - 65 Goodwill disposed of related to the sale of Company Drive-Ins (342) (82) Balance at end of year $ 76,734 $ 77,076 The gross carrying amount of franchise agreements, intellectual property, franchise fees and other intangibles subject to amortization was $9.2 million and $10. 4 million at August 31, 2016 and 2015, respectively . Accumulated amortization related to these intangible assets was $5.7 million and $ 5. 9 million at August 31, 2016 and 2015 , respectively. Intangible assets amortization expense was $0.9 million for each of the fiscal years ended August 31, 2016, 2015 and 2014. At August 31, 2016 , the remaining weighted-average life of amortizable intangible assets was approximately 11 years. Estimated intangible assets amortization expense is $ 0.9 million annually for fiscal year 2017 and $0.3 million for fiscal years 2018, 2019 and 2020 and $0.2 million for fiscal year 2021 . |
Refranchising of Company Drive-
Refranchising of Company Drive-Ins | 12 Months Ended |
Aug. 31, 2016 | |
Disposal Group, Not Discontinued Operation, Disposal Disclosures [Abstract] | |
Refranchising of Company Drive-Ins Text Block | 5. Refranchising of Company Drive-Ins During fiscal year 2016, the Company refranchised the operations of 38 Company Drive-Ins and recorded a gain of $1.8 million. The Company retained a non-controlling operating interest in 25 of these refranchised drive-ins. Gains and losses are recorded as other operating income (expenses), net on the Consolidated Statements of Income. The Company plans to refranchise other operations as part of its refranchising initiative to move toward an approximately 95% -franchised system . |
Leases
Leases | 12 Months Ended |
Aug. 31, 2016 | |
Leases [Abstract] | |
Leases | 6 . Leases Leasing Arrangements as a Lessor The Company’s leasing activities consist principally of leasing certain land and buildings as well as subleasing certain buildings to franchise operators. The land and building portions of all leases are classified as operating leases with lease terms expiring through August 2031 . These leases include provisions for contingent rentals that may be received on the basis of a percentage of sales in excess of stipulated amounts. Income is not recognized on contingent rentals until sales exceed the stipulated amounts. Some leases contain escalation clauses over the lives of the leases. For property owned by third parties, the lease term runs concurrently with the term of the third-party lease arrangement. Most of the leases contain renewal options at the end of the initial term for periods of five years. Future minimum rental payments receivable as of August 31, 2016 , are as follows: Operating Years ended August 31: 2017 $ 7,738 2018 8,339 2019 8,890 2020 9,382 2021 8,990 Thereafter 50,709 $ 94,048 Leasing Arrangements as a Lessee Certain Company Drive-Ins lease land and buildings from third parties. These leases, with lease terms expiring through August 2031 , include provisions for contingent rents that may be paid on the basis of a percentage of sales in excess of stipulated amounts . For the majority of leases, the land portions are classified as operating leases, and the building portions are classified as capital leases. Future minimum rental payments required under operating leases and maturities under capital leases that have initial or remaining noncancel l able lease terms in excess of one year as of August 31, 2016 , are as follows: Operating Capital Years ended August 31: 2017 $ 10,914 $ 5,051 2018 10,864 4,448 2019 10,840 3,596 2020 10,754 3,256 2021 10,030 3,134 Thereafter 63,733 7,018 Total minimum lease payments (1) $ 117,135 26,503 Less amount representing interest averaging 6.2% (5,439) Present value of net minimum lease payments 21,064 Less amount due within one year (3,673) Amount due after one year $ 17,391 ————————— (1) Minimum payments have not been reduced by future minimum rentals receivable under noncance l lable operating and capital subleases of $16.8 million and $0.6 million , respectively. They also do not include contingent rentals which may be due under certain leases. Contingent rentals for capital leases amounted to $0.9 million, $ 1.0 million and $0.8 million in fiscal year s 2016, 2015 and 2014 , respectively . Total rent expense for all operating leases consists of the following for the years ended August 31: 2016 2015 2014 Minimum rentals $ 12,441 $ 12,659 $ 12,449 Contingent rentals 284 174 161 Total rent expense 12,725 12,833 12,610 Less sublease rentals (2,372) (2,235) (1,905) Net rent expense $ 10,353 $ 10,598 $ 10,705 |
Property, Equipment And Capital
Property, Equipment And Capital Leases | 12 Months Ended |
Aug. 31, 2016 | |
Property, Equipment And Capital Leases [Abstract] | |
Property, Equipment And Capital Leases | 7 . Property, Equipment and Capital Leases Property, equipment and capital leases consist of the following at August 31: Estimated Useful Life 2016 2015 Property, equipment and capital leases: Land $ 154,420 $ 157,861 Buildings and improvements 8 – 25 yrs 341,956 343,598 Drive-In equipment 5 – 7 yrs 132,678 139,494 Brand technology development and other equipment 2 – 5 yrs 110,364 92,825 Property and equipment, at cost 739,418 733,778 Accumulated depreciation (352,390) (330,219) Property and equipment, net 387,028 403,559 Capital leases Life of lease 43,991 48,079 Accumulated amortization (28,857) (30,232) Capital leases, net 15,134 17,847 Property, equipment and capital leases, net $ 402,162 $ 421,406 Depreciation expense for property and equipment was $40.4 million, $41.7 million and $37.6 million for fiscal years 2016 , 2015 and 2014 , respectively. Land, buildings and equipment with a carrying amount of $ 156.6 million at August 31, 2016 , were leased under operating leases to franchisees and other parties. The accumulated depreciation related to these buildings and equipment was $62.5 million at August 31, 2016 . Amortization expense related to capital leases is included within “ d epreciation and amortization” on the Consolidated Statements of Income. As of August 31, 2016 , the Company had 11 drive -ins under construction with costs to complete. Interest incurred in connection with the construction of new drive-ins and technology projects is capitalized. Capitalized interest was $0.6 million, $0.4 million and $ 0.5 million for fiscal years 2016 , 2015 and 2014 , respectively. |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Aug. 31, 2016 | |
Accrued Liabilities [Abstract] | |
Accrued Liabilities | 8 . Accrued Liabilities Accrued liabilities consist of the following at August 31: 2016 2015 Wages and employee benefit costs $ 23,416 $ 20,501 Property taxes, sales and use taxes and employment taxes 8,936 9,282 Unredeemed gift cards 10,571 9,285 Other 8,990 11,646 $ 51,913 $ 50,714 |
Debt
Debt | 12 Months Ended |
Aug. 31, 2016 | |
Debt [Abstract] | |
Debt | 9. Debt Long-term debt consists of the following at August 31: 2016 2015 Class A-2 2016-1 senior secured fixed rate notes $ 423,938 $ - Class A-1 2016-1 senior secured variable funding notes - - Class A-2 2013-1 senior secured fixed rate notes 155,000 155,000 Class A-2 2011-1 senior secured fixed rate notes - 272,488 Class A-1 2011-1 senior secured variable funding notes - 10,500 Other - 40 578,938 438,028 Less long-term debt due within one year (1,417) (9,790) Long-term debt due after one year $ 577,521 $ 428,238 At August 31, 2016 , future maturities of long-term debt were $1.4 million for fiscal year 2017, no maturities for fiscal years 2018 and 2019, $155.0 million for fiscal year 2020 and no maturities for fiscal year 2021. During fiscal year 2013, in a private transaction, various subsidiaries of the Company (the “Co-Issuers”) refinanced and paid $155.0 million of the Series 2011 Senior Secured Fixed Rate Notes, Class A-2 (the “2011 Fixed Rate Notes”) with the issuance of $155.0 million of Series 2013-1 Senior Secured Fixed Rate Notes, Class A-2 (the “2013 Fixed Rate Notes”), which bear interest at 3.75% per annum. The 2013 Fixed Rate Notes have an expected life of seven years, interest payable monthly, no scheduled principal amortization and an anticipated repayment date in July 2020 . On May 17, 2016, in a private transaction, the Co-Issuers issued $425.0 million of Series 2016-1 Senior Secured Fixed Rate Notes, Class A-2 (the “2016 Fixed Rate Notes”), which bear interest at 4.47% per annum. The 2016 Fixed Rate Notes have an expected life of seven years with an anticipated repayment date in May 2023 . The Co-Issuers also entered into a securitized financing facility of Series 2016-1 Senior Secured Variable Funding Notes, Class A-1 (the “2016 Variable Funding Notes” and, together with the 2016 Fixed Rate Notes, the “2016 Notes”) to replace the Series 2011-1 Senior Secured Variable Funding Notes, Class A-1 (the “2011 Variable Funding Notes”). The 2016 revolving credit facility provides access to a maximum of $150.0 million of 2016 Variable Funding Notes and certain other credit instruments, including letters of credit. Interest on the 2016 Variable Funding Notes is based on the one-month London Interbank Offered Rate or Commercial Paper, depending on the funding source, plus 2.0% , per annum. An annual commitment fee of 0.5% is payable monthly on the unused portion of the 2016 Variable Funding Notes facility. The 2016 Variable Funding Notes have an expected life of five years with an anticipated repayment date in May 2021 with two one -year extension options available upon certain conditions including meeting a minimum debt service coverage ratio threshold. Sonic used a portion of the net proceeds from the issuance of the 2016 Fixed Rate Notes to repay its existing 2011 Fixed Rate Notes and 2011 Variable Funding Notes in full and to pay the costs associated with the securitized financing transaction, including prepayment premiums. Loan origination costs associated with the Company’s 2016 transaction totaled $12. 5 million and were allocated among the 2016 Notes. Loan costs are being amortized over each note’s expected life, and the unamortized balance is categorized as “debt origination costs, net” on the Consolidated Balance Sheets. In connection with the 2016 transaction described above, the Company recognized an $8.8 million loss from the early extinguishment of debt during the third quarter of fiscal year 2016, which primarily consisted of a $5.9 million prepayment premium and the $2.9 million write-off of unamortized deferred loan fees remaining from the refinanced debt. As of August 31, 2016, the weighted-average interest cost of the 2013 Fixed Rate Notes and the 2016 Fixed Rate Notes was 4.1% and 4.8% , respectively. The weighted-average interest cost includes the effect of the loan origination costs. While the 2013 Fixed Rate Notes and the 2016 Fixed Rate Notes are structured to provide for seven-year lives from their original issuance dates, they have legal final maturity dates of July 2043 and May 2046 , respectively. The 2016 Variable Funding Notes are structured to provide for a five-year life with two one-year options available under certain conditions and with a legal final maturity date of May 2046 . The Company intends to repay or refinance the 2013 Fixed Rate Notes and the 2016 Notes on or before the end of their expected lives. If the Company prepays the debt prior to the anticipated repayment date the Company may be required to pay a prepayment penalty under certain circumstances. In the event the 2013 Fixed Rate Notes and the 2016 Notes are not paid in full by the end of their expected lives, they are subject to an upward adjustment in the annual interest rate of at least 5% . In addition, principal payments will accelerate by applying all of the royalties, lease revenues and other fees securing the debt, after deducting certain expenses, until the debt is paid in full. Also, any unfunded amount under the 2016 Variable Funding Notes will become unavailable. The Co-Issuers and Sonic Franchising LLC (the “Guarantor”) are existing special purpose, bankruptcy remote, indirect subsidiaries of Sonic Corp. that hold substantially all of Sonic's franchising assets and real estate. As of August 31, 2016 , assets for these combined indirect subsidiaries totaled $308.5 million, including receivables for royalties, certain Company and Franchise Drive-In real estate, intangible assets and restricted cash balances of $16.0 million. The 2013 Fixed Rate Notes and the 2016 Notes are secured by franchise fees, royalty payments and lease payments, and the repayment of the 2013 Fixed Rate Notes and the 2016 Notes is expected to be made solely from the income derived from the Co-Issuer's assets. In addition, the Guarantor, a Sonic Corp. subsidiary that acts as a franchisor, has guaranteed the obligations of the Co-Issuers under the 2013 Fixed Rate Notes and the 2016 Notes and pledged substantially all of its assets to secure those obligations. Neither Sonic Corp., the ultimate parent of the Co-Issuers and the Guarantor, nor any other subsidiary of Sonic, guarantees or is in any way liable for the obligations of the Co-Issuers under the 2013 Fixed Rate and the 2016 Notes. The Company has, however, agreed to cause the performance of certain obligations of its subsidiaries, principally related to managing the assets included as collateral for the 2013 Fixed Rate Notes and the 2016 Notes and certain indemnity obligations relating to the transfer of the collateral assets to the Co-Issuers. The 2013 Fixed Rate and the 2016 Notes are subject to a series of covenants and restrictions customary for transactions of this type, including (i) required actions to better secure collateral upon the occurrence of certain performance-related events, (ii) application of certain disposition proceeds as note prepayments after a set time is allowed for reinvestment, (iii) maintenance of specified reserve accounts, (iv) maintenance of certain debt service coverage ratios, (v) optional and mandatory prepayments upon change in control, (vi) indemnification payments for defective or ineffective collateral, and (vii) covenants relating to recordkeeping, access to information and similar matters. If certain covenants or restrictions are not met, the 2013 Fixed Rate Notes and the 2016 Notes are subject to customary accelerated repayment events and events of default. Although management does not anticipate an event of default or any other event of noncompliance with the provisions of the debt, if such event occurred, the unpaid amounts outstanding could become immediately due and payable. |
Fair Value Of Financial Instrum
Fair Value Of Financial Instruments | 12 Months Ended |
Aug. 31, 2016 | |
Fair Value Of Financial Instruments [Abstract] | |
Fair Value Of Financial Instruments | 10 . Fair Value of Financial Instruments The fair value of financial instruments is the amount at which the instrument could be exchanged in a current transaction between willing parties. The Company has no financial liabilities that are required to be measured at fair value on a recurring basis. The Company categorizes its assets and liabilities recorded at fair value based upon the following fair value hierarchy established by FASB: · Level 1 valuations use quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date. An active market is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. · Level 2 valuations use inputs other than actively quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include: (a) quoted prices for similar assets or liabilities in active markets, (b) quoted prices for identical or similar assets or liabilities in markets that are not active, (c) inputs other than quoted prices that are observable for the asset or liability such as interest rates and yield curves observable at commonly quoted intervals and (d) inputs that are derived principally from or corroborated by observable market data by correlation or other means. · Level 3 valuations use unobservable inputs for the asset or liability. Unobservable inputs are used to the extent observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The Company’s cash equivalents are carried at cost which approximates fair value and totaled $ 59.2 million and $ 41 . 1 million at August 31, 2016 and 2015 , respectively. This fair value is estimated using Level 1 methods. At August 31, 2016 , the fair value of the Company’s 201 3 Fixed Rate Notes and 201 6 Fixed Rate Notes approximated the carrying value of $579.6 million , including accrued interest. The fair value of the 201 3 Fixed Rate Notes and 201 6 Fixed Rate Notes is estimated using Level 2 inputs from market information available for public debt transactions for companies with ratings that are similar to the Company’s ratings and from information gathered from brokers who trade in the Company’s notes. |
Income Taxes
Income Taxes | 12 Months Ended |
Aug. 31, 2016 | |
Income Taxes [Abstract] | |
Income Taxes | 11. Income Taxes The Company’s income before the provision for income taxes is classified by source as domestic income. The components of the provision for income taxes consist of the following for the years ended August 31: 2016 2015 2014 Current: Federal $ 20,137 $ 14,597 $ 16,580 State 3,791 3,576 3,490 23,928 18,173 20,070 Deferred: Federal 4,372 10,592 5,328 State 137 (1,528) 450 4,509 9,064 5,778 Provision for income taxes $ 28,437 $ 27,237 $ 25,848 The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate due to the following for the fiscal years ended August 31: 2016 2015 2014 Amount computed by applying a tax rate of 35% $ 32,377 $ 32,103 $ 25,818 State income taxes (net of federal income tax benefit) 2,553 1,330 2,562 Employment related and other tax credits, net (2,324) (2,096) (1,537) Change in uncertain tax positions (3,027) - - Federal tax benefit of statutory tax deduction - (4,093) - Other (1,142) (7) (995) Provision for income taxes $ 28,437 $ 27,237 $ 25,848 Deferred tax assets and liabilities consist of the following at August 31: 2016 2015 Deferred tax assets: Allowance for doubtful accounts and notes receivable $ 387 $ 411 Leasing transactions 3,222 3,260 Deferred income 2,991 2,810 Accrued liabilities 6,187 5,630 Stock compensation 2,446 2,831 Other 685 541 State net operating losses 16,303 14,222 Total deferred tax assets 32,221 29,705 Valuation allowance (14,638) (12,041) Total deferred tax assets after valuation allowance $ 17,583 $ 17,664 Deferred tax liabilities: Prepaid expenses $ (1,119) $ (1,315) Investment in partnerships, including differences in capitalization, depreciation and direct financing leases (4,125) (3,711) Property, equipment and capital leases (31,565) (31,167) Intangibles and other assets (21,628) (20,341) Debt extinguishment (1,676) (2,515) Total deferred tax liabilities (60,113) (59,049) Net deferred tax liabilities $ (42,530) $ (41,385) Net deferred tax assets and liabilities are classified as follows: Current $ - $ 2,164 Noncurrent (42,530) (43,549) Total $ (42,530) $ (41,385) State net operating loss carryforwards expire beginning in December 2016 through May 2037 . Management does not believe the Company will be able to realize the state net operating loss carryforwards utilizing future income exclusive of the reversal of existing deferred tax liabilities and therefore has provided a valuation allowance of $14 .6 million and $12.0 million as of August 31, 2016 and 2015 , respectively. As of August 31, 2016 and 2015 , respectively, the Company had approximately $ 0 . 6 million and $ 3 . 7 million of unrecognized tax benefits, including approximately $0.3 million and $0.4 million of accrued interest and penalty. If recognized, these benefits would favorably impact the effective tax rate. The liability for unrecognized tax benefits decreased $3.0 million in fiscal year 2016 . The de crease was primarily related to the favorable resolution of a federal tax audit and a statute of limitations expiration of a federal tax position . This entire change in balance impacted the Company’s tax rate. The Company recognizes estimated interest and penalties as a component of its income tax expense, net of federal benefit, as a component of “provision for income taxes” in the Consolidated Statements of Income. During the year s ended August 31, 201 6 and 2015 , the Company recognized a net benefit of $0.1 million and net expense of $0.1 million, respectively , and negligible net expenses in fiscal year 2014 . A reconciliation of unrecognized tax benefits is as follows for fiscal years ended August 31: 2016 2015 Balance at beginning of year $ 3,652 $ 2,461 Additions based on tax positions related to the current year - 254 Additions for tax positions of prior years 725 937 Reductions for tax positions of prior years (2,838) - Reductions due to settlement (212) - Reductions due to statute expiration (702) - Balance at end of year $ 625 $ 3,652 The Company or one of its subsidiaries is subject to U.S. federal income tax and income tax in multiple U.S. state jurisdictions. At August 31, 201 6 , the Company was subject to income tax examinations for its U.S. federal income taxes and for state and local income taxes generally after fiscal year 20 12 . The Company anticipates that the results of any examinations or appeals, combined with the expiration of applicable statutes of limitations and the additional accrual of interest related to unrecognized benefits on various return positions taken in years still open for examination, could result in a change to the liability for unrecognized tax benefits during the next 12 months ranging from a negligible increase t o a decrease of $0.6 million depending on the timing and terms of the examination resolutions. |
Stockholders_ Equity
Stockholders’ Equity | 12 Months Ended |
Aug. 31, 2016 | |
Stockholders’ Equity [Abstract] | |
Stockholders’ Equity | 12. Stockholders’ Equity (Deficit) Employee Stock Purchase Plan The Company has an employee stock purchase plan (“ESPP”) that permits eligible employees to purchase the Company’s common stock at a 15% discount from the stock’s fair market value. Participating employees may purchase shares of common stock each year up to the lesser of 10% of their base compensation or $25 thousand in the stock’s fair market value. At August 31, 2016 , 0.8 million shares were available for grant under the ESPP. Stock-Based Compensation The Sonic Corp. 2006 Long-Term Incentive Plan (the “2006 Plan”) provides flexibility to award various forms of equity compensation, such as stock options, stock appreciation rights, performance shares, RSUs and other share-based awards. At August 31, 2016 , 7.0 million shares were available for grant under the 2006 Plan. The Company grants stock options to employees with a seven -year term and a three - year vesting period and grants RSUs to employees with a minimum vesting period of three years. The Company grants stock options to its Board of Directors with a seven -year term and one - year vesting period and also grants RSUs to its Board of Directors that vest over one year. The Company’s policy is to issue shares from treasury stock to satisfy stock option exercises, the vesting of RSUs and shares issued under the ESPP. Total stock-based compensation cost recognized for fiscal years 2016 , 2015 and 2014 was $3.8 million, $3.5 million and $3.7 million, respectively, net of related income tax benefits of $1.2 million, $1.0 million and $1.7 million, respectively. At August 31, 2016 , the total remaining unrecognized compensation cost related to unvested stock-based arrangements was $7.1 million and is expected to be recognized over a weighted average period of 2.0 years. The Company measures the compensation cost associated with stock option-based payments by estimating the fair value of stock options as of the grant date using the Black-Scholes option pricing model. The Company believes the valuation technique and approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of the Company’s stock options granted during fiscal year s 2016 , 2015 and 2014 . Estimates of fair value are not intended to predict actual future events or the value ultimately realized by the employees who receive equity awards. The fair value of RSUs granted is equal to the Company’s closing stock price on the date of the grant. The per share weighted average fair value of stock options granted during 2016 , 2015 and 2014 was $8.23 , $ 8.83 and $6.82 , respectively. In addition to the exercise and grant date prices of the awards, certain weighted average assumptions that were used to estimate the fair value of stock option grants in the respective periods are listed in the table below: 2016 2015 2014 Expected term (years) 5.3 5.0 4.7 Expected volatility 34 % 34 % 37 % Risk-free interest rate 1.4 % 1.3 % 1.5 % Expected dividend yield 1.5 % 1.2 % - % The Company estimates expected volatility based on historical daily price changes of the Company’s common stock for a period equal to the current expected term of the options. The risk-free interest rate is based on the U.S. treasury yields in effect at the time of grant corresponding with the expected term of the options. The expected option term is the number of years the Company estimates that options will be outstanding prior to exercise considering vesting schedules and historical exercise patterns. Stock Options A summary of stock option activity under the Company’s stock-based compensation plans for the year ended August 31, 2016 , is presented in the following table: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Yrs.) Aggregate Intrinsic Value Outstanding September 1, 2015 2,873 $ 14.00 Granted 494 29.28 Exercised (976) 10.49 Forfeited or expired (57) 27.51 Outstanding at August 31, 2016 2,334 $ 18.37 3.90 $ 25,279 Exercisable at August 31, 2016 1,548 $ 13.23 2.89 $ 24,304 Proceeds from the exercise of stock options for fiscal years 2016 , 2015 and 2014 were $3.8 million, $18.7 million and $17.4 million, respectively. The total intrinsic value of options exercised during the years ended August 31, 2016 , 2015 and 2014 was $18.9 million, 21.8 million and $13.0 million, respectively. Restricted Stock Units A summary of the Company’s RSU activity during the year ended August 31, 2016 is presented in the following table: Restricted Stock Units Weighted Average Grant Date Fair Value Outstanding September 1, 2015 66 $ 28.49 Granted 51 28.07 Vested (13) 31.32 Forfeited (12) 31.69 Outstanding at August 31, 2016 92 $ 28.90 The aggregate fair value of RSUs that vested was $0.4 million during the fiscal year ended August 31, 2016 and $1.1 million during the fiscal years ended August 31, 2015 and 2014. Share Repurchase Programs In August 2014, the Board of Directors extended the Company’s share repurchase program, authorizing the Company to purchase up to $ 105.0 million of its outstanding shares of common stock beginning September 1, 2014 through August 31, 2015. In October 2014, the Company entered into an accelerated share repurchase (“ASR”) agreement with a financial institution to purchase $15.0 million of the Company’s common stock. In exchange for a $15.0 million up-front payment, the financial institution delivered approximately 0.6 million shares. During January 2015, the ASR purchase period concluded. The Company paid an additional $0.1 million with no additional shares delivered, resulting in an average price per share of $26.32 . In February 2015, the Company entered into additional ASR agreements with a financial institution to purchase $75.0 million of the Company’s common stock. In exchange for a $75.0 million up-front payment, the financial institution delivered approximately 2.1 million shares. The ASR transactions completed in July 2015 with 0.3 million additional shares delivered, resulting in an average price per share of $31.38 . The Company reflected the ASR transactions as a repurchase of common stock for purposes of calculating earnings per share and as a forward contract indexed to its own common stock. The forward contract met all of the applicable criteria for equity classification. Including shares repurchased through the ASR transactions described above, during the fiscal year 2015, approximately 4.2 million shares were repurchased for a total cost of $123.8 million, resulting in an average price per share of $29.46 . In August 2015, the Board of Directors extended the Company’s share repurchase program, authorizing the Company to purchase up to $145.0 million of its outstanding shares of common stock through August 31, 2016. The Board of Directors further extended the share repurchase program effective May 2016, authorizing the purchase of up to an additional $155.0 million of our outstanding shares of common stock through August 31, 2017. During fiscal year 2016, approximately 5.2 million shares were repurchased for a total cost of $148.3 million, resulting in an average price per share of $28.48 . The total remaining amount authorized under the share repurchase program, as of August 31, 2016, was $132.9 million. Share repurchases will be made from time to time in the open market or otherwise, including through an ASR transaction, under the terms of a Rule 10b5-1 plan, in privately negotiated transactions or in round lot or block transactions. The share repurchase program may be extended, modified, suspended or discontinued at any time. We plan to fund the share repurchase program from existing cash on hand at August 31, 2016, cash flows from operations and borrowings under our 2016 Variable Funding Notes. Dividends In August 2014, the Company initiated a quarterly cash dividend program and paid a quarterly dividend of $0.09 per share of common stock, totaling $18.8 million for fiscal year 2015, and paid a quarterly dividend of $0.11 per share of common stock, totaling $21.3 million for fiscal year 2016. Subsequent to the end of fiscal year 2016, the Company declared a quarterly dividend of $0.14 per share of common stock to be paid to stockholders of record as of the close of business on November 9, 2016 , with a payment date of November 18, 2016 . The future declaration of quarterly dividends and the establishment of future record and payment dates are subject to the final determination of the Company’s Board of Directors. |
Employee Benefit And Cash Incen
Employee Benefit And Cash Incentive Plans | 12 Months Ended |
Aug. 31, 2016 | |
Employee Benefit And Cash Incentive Plans [Abstract] | |
Employee Benefit And Cash Incentive Plans | 1 3 . Employee Benefit and Cash Incentive Plans The Company sponsors a qualified defined contribution 401(k) plan for employees meeting certain eligibility requirements. Under the plan, employees are entitled to make pre-tax contributions. The Company matches an amount equal to the employee’s contributions up to a maximum of 6% of the employee’s salaries depending on years of service. The Company’s contributions during fiscal years 2016 , 2015 and 2014 were $ 1.8 million , $1. 6 million and $1. 3 million, respectively. The Company has short-term and long-term cash incentive plans (the “Incentive Plans”) that apply to certain employees , and grants of awards under the Incentive Plans are at all times subject to the approval of the Company’s Board of Directors. Under certain awards pursuant to the Incentive Plans, if predetermined earnings goals are met, a predetermined percentage of the employee’s salary may be paid in the form of a bonus. The Company recognized as expense incentive bonuses of $1 3 .4 million, $ 12.4 million and $ 9 . 5 million during fiscal years 2016 , 2015 and 2014 , respectively. |
Commitments And Contingencies
Commitments And Contingencies | 12 Months Ended |
Aug. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | 1 4 . Commitments and Contingencies Litigation The Company is involved in various legal proceedings and has certain unresolved claims pending. Based on the information currently available, management believes that all claims currently pending are either covered by insurance or would not have a material adverse effect on the Company’s business, operating results or financial condition. Note Repurchase Agreement On December 20, 2013, the Company extended a note purchase agreement to a bank that serves to guarantee the repayment of a franchisee loan, with a term through 2018 , and also benefits the franchisee with a lower financing rate. In the event of default by the franchisee, the Company would purchase the franchisee loan from the bank, thereby becoming the note holder and providing an avenue of recourse with the franchisee. The Company recorded a liability for this guarantee which was based on the Company’s estimate of fair value. As of August 31, 2016 , the balance of the franchisee’s loan was $5.8 million. Lease Commitments The Company has obligations under various operating lease agreements with third-party lessors related to the real estate for certain Company Drive-In operations that were sold to franchisees. Under these agreements, which expire through 2029 , the Company remains secondarily liable for the lease payments for which it was responsible as the original lessee. As of August 31, 2016 , the amount remaining under these guaranteed lease obligations totaled $7.4 million. At this time, the Company does not anticipate any material defaults under the foregoing leases; therefore, no liability has been provided. Purchase Obligations At August 31, 2016 , the Company had purchase obligations of approximately $23 5 .8 million which primarily related to its estimated share of system-wide commitments for food products. The Company has excluded agreements that are cancelable without penalty. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data | 12 Months Ended |
Aug. 31, 2016 | |
Selected Quarterly Financial Data [Abstract] | |
Selected Quarterly Financial Data | 1 5 . Selected Quarterly Financial Data (Unaudited) First Quarter Second Quarter Third Quarter Fourth Quarter 2016 2015 2016 2015 2016 2015 2016 2015 Total revenues $ 145,803 $ 139,856 $ 133,160 $ 126,219 $ 165,239 $ 164,748 $ 162,118 $ 175,266 Income from operations 26,045 22,538 22,212 16,991 38,880 36,370 40,315 40,529 Net income (1) $ 12,458 $ 10,085 $ 10,819 $ 7,662 $ 15,353 $ 20,442 $ 25,437 $ 26,296 Basic income per share (2) $ 0.25 $ 0.19 $ 0.22 $ 0.14 $ 0.32 $ 0.39 $ 0.54 $ 0.51 Diluted income per share (2) $ 0.24 $ 0.18 $ 0.22 $ 0.14 $ 0.31 $ 0.38 $ 0.53 $ 0.50 ————————— (1 ) For fiscal year 2016, includes the after tax gain on the sale of real estate of $1.2 million and a tax benefit of $0.6 million from the retroactive reinstatement of the Work Opportunity Tax Credit and resolution of income tax matters in the second quarter, the $5.7 million after tax loss from early extinguishment of debt in the third quarter and the after tax gain on the sale of Company Drive-Ins of $0.7 million and the FIN 48 release of income tax credits and deductions of $3.0 million in the fourth quarter. For fiscal year 2015, includes a tax benefit of $0.7 million from the retroactive reinstatement of the Work Opportunity Tax Credit and resolution of income tax matters in the second quarter , a federal tax benefit of $1.7 million from the recognition of a prior-year statutory tax deduction and a tax expense of $0.6 million from the retroactive effect of federal tax law change during the third quarter and a federal tax benefit of $1.5 million from the recognition of a prior-year statutory tax deduction and $1.7 million from a change in deferred tax valuation allowance during the fourth quarter. (2) The sum of per share data may not agree to annual amounts due to rounding. |
Valuation And Qualifying Accoun
Valuation And Qualifying Accounts | 12 Months Ended |
Aug. 31, 2016 | |
Valuation And Qualifying Accounts [Abstract] | |
Valuation And Qualifying Accounts | Sonic Corp . Schedule II – Valuation and Qualifying Accounts Additions Amounts Balance at Charged to Written Off Beginning of Costs and Against the (Transfers) Balance at Description Year Expenses Allowance Recoveries End of Year (In thousands) Allowance for doubtful accounts and notes receivable Fiscal years ended: August 31, 2016 $ 1,105 (53) (13) 2 $ 1,041 August 31, 2015 1,771 (81) (601) 16 $ 1,105 August 31, 2014 $ 2,347 (434) (142) - $ 1,771 Accrued liability for drive-in closings and disposals Fiscal years ended: August 31, 2016 $ 807 208 (376) (28) $ 611 August 31, 2015 871 367 (422) (9) $ 807 August 31, 2014 $ 1,099 339 (546) (21) 871 See accompanying Report of Independent Registered Pubic Accounting Firm. |
Summary Of Significant Accoun23
Summary Of Significant Accounting Policies (Policy) | 12 Months Ended |
Aug. 31, 2016 | |
Summary Of Significant Accounting Policies [Abstract] | |
Operations | Operations Sonic Corp. (the “Company”) operates and franchises a chain of quick-service restaurants in the United States (“U.S.”). It derives its revenues primarily from Company Drive-In sales and royalty fees from franchisees. The Company also leases real estate and receives equity earnings in noncontrolling ownership in a number of Franchise Drive ‑Ins. |
Principles of Consolidation | Principles of Consolidation The accompanying financial statements include the accounts of the Company, its wholly owned subsidiaries and a number of Company Drive-Ins in which a subsidiary has a controlling ownership interest. All intercompany accounts and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported and contingent assets and liabilities disclosed in the financial statements and accompanying notes. Actual results may differ from those estimates, and such differences may be material to the financial statements. |
Reclassifications | Reclassifications Certain amounts reported in previous years, which are not material, have been combined and reclassified to conform to the current-year presentation. |
Segment Reporting | Segment Reporting In accordance with Accounting Standards Update (“ASU”) 280, “Segment Reporting,” the Company uses the management approach for determining its reportable segments. The management approach is based upon the way that management reviews performance and allocates resources. The Company’s chief operating decision maker and his management team review operating results on a consolidated basis for purposes of allocating resources and evaluating the financial performance of the Sonic brand. Accordingly, the Company has determined that it has one operating segment and, therefore, one reporting segment. |
Cash Equivalents | Cash Equivalents Cash equivalents consist of highly liquid investments, primarily money market accounts that mature in three months or less from date of purchase, and depository accounts. |
Restricted Cash | Restricted Cash As of August 31, 2016 , the Company had restricted cash balances totaling $16.0 million for funds required to be held in trust for the benefit of senior noteholders under the Company’s debt arrangements. The current portion of restricted cash of $15.9 million represents amounts to be returned to Sonic or paid to service current debt obligations. The noncurrent portion of $0. 1 million represents interest reserves required to be set aside for the duration of the debt. |
Accounts and Notes Receivable | Accounts and Notes Receivable The Company charges interest on past due accounts receivable and recognizes income as it is collected. Interest accrues on notes receivable based on the contractual terms of the respective note. The Company monitors all accounts and notes receivable for delinquency and provides for estimated losses for specific receivables that are not likely to be collected. The Company assesses credit risk for accounts and notes receivable of specific franchisees based on payment history, current payment patterns, the health of the franchisee’s business and an assessment of the franchisee’s ability to pay outstanding balances. In addition to allowances for bad debt for specific franchisee receivables, a general provision for bad debt is estimated for the Company’s accounts receivable based on historical trends. Account balances generally are charged against the allowance when the Company believes that the collection is no longer reasonably assured. The Company continually reviews its allowance for doubtful accounts. |
Inventories | Inventories Inventories consist principally of food and supplies that are carried at the lower of cost (first-in, first-out basis) or market. |
Property, Equipment and Capital Leases | Property, Equipment and Capital Leases Property and equipment are recorded at cost, and leased assets under capital leases are recorded at the present value of future minimum lease payments. Depreciation of property and equipment and amortization of capital leases are computed by the straight-line method over the estimated useful lives or the lease term, including cancelable option periods when appropriate, and are combined for presentation in the financial statements. |
Accounting for Long-Lived Assets | Accounting for Long-Lived Assets The Company reviews long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. Assets are grouped and evaluated for impairment at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets, which generally represents the individual drive-in. The Company’s primary test for an indicator of potential impairment is operating losses of the related drive-in. If an indication of impairment is determined to be present, the Company estimates the future cash flows expected to be generated from the use of the asset and its eventual disposal. If the sum of undiscounted future cash flows is less than the carrying amount of the asset, an impairment loss is recognized. The impairment loss is measured by comparing the fair value of the asset to its carrying amount. Fair value is typically determined to be the value of the land since drive-in buildings and improvements are single-purpose assets and have little value to market participants. The equipment associated with a drive-in can be easily relocated to another drive-in and therefore is not adjusted. Surplus property assets are carried at the lower of depreciated cost or fair value less cost to sell. The majority of the value in surplus property is land. Fair values are estimated based upon management’s assessment as well as independent market value assessments of the assets’ estimated sales values. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill is determined based on an acquisition purchase price in excess of the fair value of identified assets. Intangible assets with lives restricted by contractual, legal or other means are amortized over their useful lives. The Company tests goodwill at least annually for impairment using the fair value approach on a reporting unit basis. Since the Company is one reporting unit, potential goodwill impairment is evaluated by comparing the fair value of the Company to its carrying value. The fair value of the Company is determined using a market approach. If the carrying value of the Company exceeds fair value, a comparison of the fair value of goodwill against the carrying value of goodwill is made to determine whether goodwill has been impaired. During the fourth quarters of fiscal years 2016 and 2015, the annual assessment of the recoverability of goodwill was performed, and no impairment was indicated. The Company’s intangible assets subject to amortization consist primarily of acquired franchise agreements, intellectual property and other intangibles. Amortization expense is calculated using the straight-line method over the asset’s expected useful life. See note 4 - Goodwill and Other Intangibles for additional related disclosures. |
Refranchising and Closure of Company Drive-Ins | Refranchising and Closure of Company Drive-Ins Gains and losses from the sale or closure of Company Drive-Ins are recorded as “other operating (income) expense, net” on the Consolidated Statements of Income. |
Revenue Recognition, Franchise Fees and Royalties | Revenue Recognition, Franchise Fees and Royalties Revenue from Company Drive-In sales is recognized when food and beverage products are sold. Company Drive-In sales are presented net of sales tax and other sales-related taxes. The Company’s gift card program serves all Sonic Drive-Ins and is administered by the Company on behalf of a system advertising fund. The Company records a liability in the period in which a gift card is sold. The gift cards do not have expiration dates. As gift cards are redeemed, the liability is reduced with revenue recognized on redemptions at Company Drive-Ins. Breakage is the amount on a gift card that is not expected to be redeemed and that the Company is not required to remit to a state under unclaimed property laws. The Company estimates breakage based upon the historical trend in redemption patterns from previously sold gift cards. The Company’s policy is to recognize the breakage, using the delayed recognition method, when it is apparent that there is a remote likelihood the gift card balance will be redeemed. The Company reduces the gift card liability for the estimated breakage and uses that amount to defray the costs of operating the gift card program. There is no income recognized on unredeemed gift card balances. Costs to administer the gift card program, net of breakage, are included in the receivables from advertising funds as set forth in note 3 – Accounts and Notes Receivable. Such costs were not material in fiscal years 2016, 2015 and 2014. Franchise fees are recognized in income when the Company has substantially performed or satisfied all material services or conditions relating to the sale of the franchise, and the fees are generally nonrefundable. Development fees are nonrefundable and are recognized in income on a pro-rata basis when the conditions for revenue recognition under the individual development agreements are met. Both franchise fees and development fees are generally recognized upon the opening of a Franchise Drive-In or upon termination of the agreement between the Company and the franchisee. The Company’s franchisees pay royalties based on a percentage of sales. Royalties are recognized as revenue when they are earned. |
Advertising Costs | Advertising Costs Costs incurred in connection with advertising and promoting the Company’s products are included in other operating expenses and are expensed as incurred. Such costs amounted to $23.4 million, $ 24.5 million and $ 22.4 million in fiscal years 2016, 2015 and 2014, respectively. Under the Company’s franchise agreements, both Company Drive-Ins and Franchise Drive-Ins must contribute a minimum percentage of revenues to a national media production fund (“Sonic Brand Fund”) and spend an additional minimum percentage of gross revenues on advertising, either directly or through Company-required participation in advertising cooperatives. A significant portion of the advertising cooperative contributions is remitted to the System Marketing Fund, which purchases advertising on national cable and broadcast networks and local broadcast networks and also funds other national media expenses and sponsorship opportunities. As stated in the terms of existing franchise agreements, these funds do not constitute assets of the Company, and the Company acts with limited agency in the administration of these funds. Accordingly, neither the revenues and expenses nor the assets and liabilities of the advertising cooperatives, the Sonic Brand Fund or the System Marketing Fund are included in the Company’s consolidated financial statements. However, all advertising contributions by Company Drive-Ins are recorded as an expense on the Company’s financial statements. Under the Company’s franchise agreements, the Company is reimbursed by the Sonic Brand Fund for costs incurred to administer the fund at an amount not to exceed 15% of the Sonic Brand Fund’s gross receipts. Reimbursements from the Sonic Brand Fund are offset against selling, general and administrative expenses and totaled $5.2 million, $5.0 million and $4.4 million in fiscal years 2016, 2015 and 2014, respectively. |
Technology Costs | Technology Costs Under the Company’s franchise agreements, both Company Drive-Ins and Franchise Drive-Ins must pay a set technology fee to the Brand Technology Fund (“BTF”), which was established in the third quarter of fiscal year 2016. The BTF administers cybersecurity and other technology programs for the Sonic system. As stated in the terms of existing franchise agreements, these funds do not constitute assets of the Company, and the Company acts with limited agency in the administration of these funds. Accordingly, neither the revenues and expenses nor the assets and liabilities of the BTF are included in the Company’s consolidated financial statements. However, technology fees paid by Company Drive-Ins are recorded as an expense on the Company’s financial statements. Under the Company’s franchise agreements, the Company is reimbursed by the BTF for costs incurred to administer the fund at an amount not to exceed 15% of the BTF’s gross receipts. Reimbursements from the BTF are offset against selling, general and administrative expenses and totaled $2.5 million in fiscal year 2016. |
Operating Leases | Operating Leases Rent expense is recognized on a straight-line basis over the expected lease term, including cancelable option periods when it is deemed to be reasonably assured that the Company would incur an economic penalty for not exercising the options. Within the terms of some of the leases, there are rent holidays and/or escalations in payments over the base lease term, as well as renewal periods. The effects of the holidays and escalations have been reflected in rent expense on a straight-line basis over the expected lease term, which includes cancelable option periods when appropriate. The lease term commences on the date when the Company has the right to control the use of the leased property, which can occur before rent payments are due under the terms of the lease. Contingent rent is generally based on sales levels and is accrued at the point in time it is probable that such sales levels will be achieved. |
Stock-Based Compensation | Stock-Based Compensation The Company grants incentive stock options (“ISOs”), non-qualified stock options (“NQs”) and restricted stock units (“RSUs”). For grants of NQs and RSUs, the Company expects to recognize a tax benefit upon exercise of the option or vesting of the RSU. As a result, a tax benefit is recognized on the related stock-based compensation expense for these types of awards. For grants of ISOs, a tax benefit only results if the option holder has a disqualifying disposition. As a result of the limitation on the tax benefit for ISOs, the tax benefit for stock-based compensation will generally be less than the Company’s overall tax rate and will vary depending on the timing of employees’ exercises and sales of stock. Stock-based compensation is measured at the grant date based on the calculated fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period of the award, generally the vesting period of the grant. For additional information on stock-based compensation see note 12 - Stockholders’ Equity (Deficit). |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period that includes the enactment date. Income tax benefits credited to equity relate to tax benefits associated with amounts that are deductible for income tax purposes but do not affect earnings. These benefits are principally generated from employee exercises of NQs, the vesting of RSUs and disqualifying dispositions of ISOs. The threshold for recognizing the financial statement effects of a tax position is when it is more likely than not, based on the technical merits, that the position will be sustained upon examination by a taxing authority. Recognized tax positions are initially and subsequently measured as the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority. Interest and penalties related to unrecognized tax benefits are included in income tax expense. Additional information regarding the Company’s unrecognized tax benefits is provided in note 11 - Income Taxes. |
Fair Value Measurements | Fair Value Measurements The Company’s financial assets and liabilities consist of cash and cash equivalents, accounts and notes receivable, accounts payable and long-term debt. The fair value of cash and cash equivalents, accounts receivable and accounts payable approximates their carrying amounts due to the short-term nature of these assets and liabilities. The following methods and assumptions were used by the Company in estimating fair values of its financial instruments: · Notes receivable - As of August 31, 2016 and 2015 , the carrying amounts of notes receivable (both current and non-current) approximate fair value due to the effect of the related allowance for doubtful accounts. · Long-term debt - The Company prepares a discounted cash flow analysis for its fixed and variable rate borrowings to estimate fair value each quarter. This analysis uses Level 2 inputs from market information available for public debt transactions for companies with ratings that are similar to the Company’s ratings and from information gathered from brokers who trade in the Company’s notes. The fair value estimate required significant assumptions by management. Management believes this fair value is a reasonable estimate. For more information regarding the Company’s long-term debt, see note 9 - Debt and note 10 - Fair Value of Financial Instruments. Certain nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis, which means these assets and liabilities are not measured at fair value on an ongoing basis but are subject to periodic impairment tests. For the Company, these items primarily include long-lived assets, goodwill and other intangible assets. Refer to sections “ Accounting for Long-Lived Assets” and “Goodwill and Other Intangible Assets,” discussed above, for inputs and valuation techniques used to measure the fair value of these nonfinancial assets. The fair value was based upon management’s assessment as well as independent market value assessments which involved Level 2 and Level 3 inputs. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, “Revenue from Contracts with Customers,” which requires an entity to recognize revenue in an amount that reflects the consideration to which the entity expects to be entitled for the transfer of promised goods or services to customers. The standard also requires additional disclosure regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The ASU will replace most of the existing revenue recognition requirements in U.S. GAAP when it becomes effective. Further, in March 2016, the FASB issued ASU No. 2016-08, “ Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” which clarifies the guidance in ASU No. 2014-09 for evaluating when another party, along with the entity, is involved in providing a good or service to a customer. In April 2016, the FASB issued ASU No. 2016-10, “ Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing,” which clarifies the guidance in ASU No. 2014-09 regarding assessing whether promises to transfer goods or services are distinct, and whether an entity's promise to grant a license provides a customer with a right to use or right to access the entity's intellectual property. All standards are effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period, which requires the Company to adopt the standard in fiscal year 2019. The standards are to be applied retrospectively or using a cumulative effect transition method, with early application not permitted. The Company does not believe the new revenue recognition standard will impact our recognition of sales from Company Drive-Ins and our recognition of royalty fees from franchisees. We are currently evaluating the effect that this pronouncement will have on the recognition of other transactions on the financial statements, including the initial franchise fee currently recognized upon the opening of a Franchise Drive-In, and related disclosures and have not yet selected a transition method. In April 2015, the FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” This update requires debt issuance costs to be presented in the balance sheet as a reduction of the related liability rather than as an asset. The recognition and measurement guidance for debt issuance costs are not affected by this update. This update is effective for fiscal years beginning after December 15, 2015, including interim periods within that reporting period, and is to be applied retrospectively; early adoption is permitted. The update will be adopted in the first quarter of fiscal year 2017 and will require reclassification of debt issuance costs from other non-current assets to long-term debt within the Company’s consolidated balance sheets. As of August 31, 2016, the carrying amount of unamortized debt issuance costs totaled $14.4 million. Other than this reclassification, the adoption of this ASU will not have any impact on the Company’s consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-05, “Customer's Accounting for Fees Paid in a Cloud Computing Arrangement.” The update provides clarification on whether a cloud computing arrangement includes a software license. If a software license is included, the customer should account for the license consistent with its accounting of other software licenses. If a software license is not included, the arrangement should be accounted for as a service contract. The update is effective for fiscal years beginning after December 15, 2015. The update will be adopted in the first quarter of fiscal year 2017 and will not have a material impact on the Company’s financial statements. In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes” as part of its simplification initiatives. The update requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The update is effective for fiscal years beginning after December 15, 2017; however, early application is permitted. The Company adopted this standard in the first quarter of fiscal year 2016. The Company’s current deferred tax asset balance of $2.2 million was classified as noncurrent and netted with noncurrent deferred tax liabilities as of November 30, 2015, and all future deferred tax asset balances will be recorded as such. No prior periods were retrospectively adjusted, as such the balance of $2.2 million remained in current assets at August 31, 2015. The reclassification did not have a material effect on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases.” The new standard, which replaces existing lease guidance, requires lessees to recognize on the balance sheet a liability to make lease payments and a corresponding right-of-use asset . The guidance also requires certain qualitative and quantitative disclosures designed to assess the amount, timing and uncertainty of cash flows arising from leases. Accounting guidance for lessors is largely unchanged. The standard is effective for fiscal years beginning after December 15, 2018, which will require the Company to adopt the provisions in the first quarter of fiscal 2020, with early application permitted. This standard requires adoption based upon a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with optional practical expedients. Based on a preliminary assessment, the Company expects that most of its operating lease commitments will be subject to the new guidance and recognized as operating lease liabilities and right-of-use assets upon adoption, resulting in a significant increase in the assets and liabilities on our consolidated balance sheet. The Company is continuing its assessment, which may identify additional impacts this standard will have on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-04, “Liabilities—Extinguishments of Liabilities: Recognition of Breakage for Certain Prepaid Stored-Value Products,” which is intended to eliminate current and future diversity in practice related to derecognition of prepaid stored-value product liability in a way that aligns with the new revenue recognition guidance. The update is effective for fiscal years beginning after December 15, 2017; however, early application is permitted. The adoption of the update is not expected to have a material impact on the Company’s financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Compensation—Stock Compensation: Improvements to Employee Share-Based Payment Accounting,” which simplifies several aspects of accounting for share-based payment transactions, including excess tax benefits, an accounting policy election for forfeitures, statutory tax withholding requirements and classification in the statements of cash flows. Upon adoption, any future excess tax benefits or deficiencies will be recorded to the provision for income taxes in the consolidated statements of operations, instead of additional paid-in capital in the consolidated balance sheets. The update is effective for fiscal years beginning after December 15, 2016; however, early application is permitted. The transition method to be applied varies depending on the area of update being adopted. The Company is currently evaluating the effect that this update will have on its financial statements and related disclosures. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses.” The update was issued to provide more decision-useful information about the expected credit losses on financial instruments. The update replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The update is effective for fiscal years beginning after December 15, 2019, with early adoption permitted for fiscal years beginning after December 15, 2018. The update should be adopted using a modified-retrospective approach. The Company is currently evaluating the effect that this update will have on its financial statements and related disclosures. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments.” The update is intended to reduce diversity in practice in how certain transactions are classified and will make eight targeted changes to how cash receipts and cash payments are presented in the statement of cash flows. The update is effective for fiscal years beginning after December 15, 2017. The new standard will require adoption on a retrospective basis unless it is impracticable to apply, in which case the amendments will apply prospectively as of the earliest date practicable. The Company is currently evaluating the effect that this update will have on its financial statements and related disclosures . |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Aug. 31, 2016 | |
Earnings Per Share [Abstract] | |
Computation Of Basic And Diluted Earnings Per Share | Fiscal Year Ended August 31, 2016 2015 2014 Numerator: Net income $ 64,067 $ 64,485 $ 47,916 Denominator: Weighted average common shares outstanding– basic 48,703 52,572 55,164 Effect of dilutive employee stock options and unvested RSUs 966 1,381 1,455 Weighted average common shares outstanding – diluted 49,669 53,953 56,619 Net income per common share – basic $ 1.32 $ 1.23 $ 0.87 Net income per common share – diluted $ 1.29 $ 1.20 $ 0.85 Anti-dilutive securities excluded (1) 615 342 988 ————————— (1) Anti-dilutive securities consist of stock options and unvested RSUs that were not included in the computation of diluted earnings per share because either the exercise price of the options was greater than the average market price of the common stock or the total assumed proceeds under the treasury stock method resulted in negative incremental shares and thus the inclusion would have been anti-dilutive |
Accounts And Notes Receivable (
Accounts And Notes Receivable (Tables) | 12 Months Ended |
Aug. 31, 2016 | |
Accounts And Notes Receivable [Abstract] | |
Schedule Of Accounts And Notes Receivable | August 31, 2016 2015 Current Accounts and Notes Receivable: Royalties and other trade receivables $ 19,994 $ 19,713 Notes receivable from franchisees 5,531 996 Receivables from system funds 4,372 4,965 Other 6,507 6,977 Accounts and notes receivable, gross 36,404 32,651 Allowance for doubtful accounts and notes receivable (967) (1,074) Current accounts and notes receivable, net $ 35,437 $ 31,577 Noncurrent Notes Receivable: Receivables from franchisees $ 7,170 $ 5,676 Receivables from system funds 5,466 1,571 Allowance for doubtful notes receivable (74) (31) Noncurrent notes receivable, net $ 12,562 $ 7,216 |
Goodwill And Other Intangibles
Goodwill And Other Intangibles (Tables) | 12 Months Ended |
Aug. 31, 2016 | |
Goodwill And Other Intangibles [Abstract] | |
Changes In The Carrying Amount Of Goodwill | August 31, 2016 2015 Balance at beginning of year $ 77,076 $ 77,093 Goodwill acquired during the year - 65 Goodwill disposed of related to the sale of Company Drive-Ins (342) (82) Balance at end of year $ 76,734 $ 77,076 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Aug. 31, 2016 | |
Leases [Abstract] | |
Schedule Of Future Minimum Rental Payments Receivable | Operating Years ended August 31: 2017 $ 7,738 2018 8,339 2019 8,890 2020 9,382 2021 8,990 Thereafter 50,709 $ 94,048 |
Schedule Of Future Minimum Rental Payments | Operating Capital Years ended August 31: 2017 $ 10,914 $ 5,051 2018 10,864 4,448 2019 10,840 3,596 2020 10,754 3,256 2021 10,030 3,134 Thereafter 63,733 7,018 Total minimum lease payments (1) $ 117,135 26,503 Less amount representing interest averaging 6.2% (5,439) Present value of net minimum lease payments 21,064 Less amount due within one year (3,673) Amount due after one year $ 17,391 ————————— (1) Minimum payments have not been reduced by future minimum rentals receivable under noncance l lable operating and capital subleases of $16.8 million and $0.6 million , respectively. They also do not include contingent rentals which may be due under certain leases. Contingent rentals for capital leases amounted to $0.9 million, $ 1.0 million and $0.8 million in fiscal year s 2016, 2015 and 2014 , respectively . |
Schedule Of Rent Expense For Operating Leases | 2016 2015 2014 Minimum rentals $ 12,441 $ 12,659 $ 12,449 Contingent rentals 284 174 161 Total rent expense 12,725 12,833 12,610 Less sublease rentals (2,372) (2,235) (1,905) Net rent expense $ 10,353 $ 10,598 $ 10,705 |
Property, Equipment And Capit28
Property, Equipment And Capital Leases (Tables) | 12 Months Ended |
Aug. 31, 2016 | |
Property, Equipment And Capital Leases [Abstract] | |
Schedule Of Property, Equipment And Capital Leases | Estimated Useful Life 2016 2015 Property, equipment and capital leases: Land $ 154,420 $ 157,861 Buildings and improvements 8 – 25 yrs 341,956 343,598 Drive-In equipment 5 – 7 yrs 132,678 139,494 Brand technology development and other equipment 2 – 5 yrs 110,364 92,825 Property and equipment, at cost 739,418 733,778 Accumulated depreciation (352,390) (330,219) Property and equipment, net 387,028 403,559 Capital leases Life of lease 43,991 48,079 Accumulated amortization (28,857) (30,232) Capital leases, net 15,134 17,847 Property, equipment and capital leases, net $ 402,162 $ 421,406 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Aug. 31, 2016 | |
Accrued Liabilities [Abstract] | |
Schedule Of Accrued Liabilities | 2016 2015 Wages and employee benefit costs $ 23,416 $ 20,501 Property taxes, sales and use taxes and employment taxes 8,936 9,282 Unredeemed gift cards 10,571 9,285 Other 8,990 11,646 $ 51,913 $ 50,714 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Aug. 31, 2016 | |
Debt [Abstract] | |
Schedule Of Long-Term Debt | 2016 2015 Class A-2 2016-1 senior secured fixed rate notes $ 423,938 $ - Class A-1 2016-1 senior secured variable funding notes - - Class A-2 2013-1 senior secured fixed rate notes 155,000 155,000 Class A-2 2011-1 senior secured fixed rate notes - 272,488 Class A-1 2011-1 senior secured variable funding notes - 10,500 Other - 40 578,938 438,028 Less long-term debt due within one year (1,417) (9,790) Long-term debt due after one year $ 577,521 $ 428,238 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Aug. 31, 2016 | |
Income Taxes [Abstract] | |
Components Of Provision For Income Taxes | 2016 2015 2014 Current: Federal $ 20,137 $ 14,597 $ 16,580 State 3,791 3,576 3,490 23,928 18,173 20,070 Deferred: Federal 4,372 10,592 5,328 State 137 (1,528) 450 4,509 9,064 5,778 Provision for income taxes $ 28,437 $ 27,237 $ 25,848 |
Provision For Income Taxes Computed By Applying The Statutory Federal Income Tax Rate | 2016 2015 2014 Amount computed by applying a tax rate of 35% $ 32,377 $ 32,103 $ 25,818 State income taxes (net of federal income tax benefit) 2,553 1,330 2,562 Employment related and other tax credits, net (2,324) (2,096) (1,537) Change in uncertain tax positions (3,027) - - Federal tax benefit of statutory tax deduction - (4,093) - Other (1,142) (7) (995) Provision for income taxes $ 28,437 $ 27,237 $ 25,848 |
Schedule Of Deferred Tax Assets And Liabilities | 2016 2015 Deferred tax assets: Allowance for doubtful accounts and notes receivable $ 387 $ 411 Leasing transactions 3,222 3,260 Deferred income 2,991 2,810 Accrued liabilities 6,187 5,630 Stock compensation 2,446 2,831 Other 685 541 State net operating losses 16,303 14,222 Total deferred tax assets 32,221 29,705 Valuation allowance (14,638) (12,041) Total deferred tax assets after valuation allowance $ 17,583 $ 17,664 Deferred tax liabilities: Prepaid expenses $ (1,119) $ (1,315) Investment in partnerships, including differences in capitalization, depreciation and direct financing leases (4,125) (3,711) Property, equipment and capital leases (31,565) (31,167) Intangibles and other assets (21,628) (20,341) Debt extinguishment (1,676) (2,515) Total deferred tax liabilities (60,113) (59,049) Net deferred tax liabilities $ (42,530) $ (41,385) Net deferred tax assets and liabilities are classified as follows: Current $ - $ 2,164 Noncurrent (42,530) (43,549) Total $ (42,530) $ (41,385) |
Reconciliation Of Unrecognized Tax Benefits | 2016 2015 Balance at beginning of year $ 3,652 $ 2,461 Additions based on tax positions related to the current year - 254 Additions for tax positions of prior years 725 937 Reductions for tax positions of prior years (2,838) - Reductions due to settlement (212) - Reductions due to statute expiration (702) - Balance at end of year $ 625 $ 3,652 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 12 Months Ended |
Aug. 31, 2016 | |
Stockholders’ Equity [Abstract] | |
Weighted Average Assumptions Used To Estimate The Fair Value Of Stock Option Grants | 2016 2015 2014 Expected term (years) 5.3 5.0 4.7 Expected volatility 34 % 34 % 37 % Risk-free interest rate 1.4 % 1.3 % 1.5 % Expected dividend yield 1.5 % 1.2 % - % |
Summary Of Stock Option Activity | Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Yrs.) Aggregate Intrinsic Value Outstanding September 1, 2015 2,873 $ 14.00 Granted 494 29.28 Exercised (976) 10.49 Forfeited or expired (57) 27.51 Outstanding at August 31, 2016 2,334 $ 18.37 3.90 $ 25,279 Exercisable at August 31, 2016 1,548 $ 13.23 2.89 $ 24,304 |
Summary Of Restricted Stock Units | Restricted Stock Units Weighted Average Grant Date Fair Value Outstanding September 1, 2015 66 $ 28.49 Granted 51 28.07 Vested (13) 31.32 Forfeited (12) 31.69 Outstanding at August 31, 2016 92 $ 28.90 |
Selected Quarterly Financial 33
Selected Quarterly Financial Data (Tables) | 12 Months Ended |
Aug. 31, 2016 | |
Selected Quarterly Financial Data [Abstract] | |
Schedule Of Selected Quarterly Financial Data | First Quarter Second Quarter Third Quarter Fourth Quarter 2016 2015 2016 2015 2016 2015 2016 2015 Total revenues $ 145,803 $ 139,856 $ 133,160 $ 126,219 $ 165,239 $ 164,748 $ 162,118 $ 175,266 Income from operations 26,045 22,538 22,212 16,991 38,880 36,370 40,315 40,529 Net income (1) $ 12,458 $ 10,085 $ 10,819 $ 7,662 $ 15,353 $ 20,442 $ 25,437 $ 26,296 Basic income per share (2) $ 0.25 $ 0.19 $ 0.22 $ 0.14 $ 0.32 $ 0.39 $ 0.54 $ 0.51 Diluted income per share (2) $ 0.24 $ 0.18 $ 0.22 $ 0.14 $ 0.31 $ 0.38 $ 0.53 $ 0.50 ————————— |
Summary Of Significant Accoun34
Summary Of Significant Accounting Policies (Narrative) (Details) $ in Thousands | 12 Months Ended | |||
Aug. 31, 2016USD ($)segment | Aug. 31, 2015USD ($) | Aug. 31, 2014USD ($) | Nov. 30, 2015USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of operating segments | segment | 1 | |||
Number of reportable segments | segment | 1 | |||
Total restricted cash | $ 16,000 | |||
Restricted cash (current) | 15,873 | $ 13,246 | ||
Restricted cash (noncurrent) | 140 | 6,524 | ||
Goodwill impairment | 0 | 0 | ||
Advertising and promotion costs | $ 23,400 | 24,500 | $ 22,400 | |
Reimbursed Sonic Brand Fund administration costs, percent | 15.00% | |||
Reimbursed Sonic Brand Fund administration costs | $ 5,200 | 5,000 | $ 4,400 | |
Reimbursed Brand Technology Fund administration costs, percent | 15.00% | |||
Reimbursed Brand Technology Fund administration costs | $ 2,500 | |||
Current deferred tax assets reclassified to noncurrent | $ 2,164 | |||
Accounting Standards Update 2015-17 [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Current deferred tax assets reclassified to noncurrent | $ 2,200 |
Earnings Per Share (Computation
Earnings Per Share (Computation Of Basic And Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||||
Aug. 31, 2016 | May 31, 2016 | Feb. 29, 2016 | Nov. 30, 2015 | Aug. 31, 2015 | May 31, 2015 | Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2016 | Aug. 31, 2015 | Aug. 31, 2014 | ||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||
Net income | $ 25,437 | [1] | $ 15,353 | [1] | $ 10,819 | [1] | $ 12,458 | [1] | $ 26,296 | [1] | $ 20,442 | [1] | $ 7,662 | [1] | $ 10,085 | [1] | $ 64,067 | $ 64,485 | $ 47,916 | |
Weighted average common shares outstanding - basic | 48,703 | 52,572 | 55,164 | |||||||||||||||||
Effect of dilutive employee stock options and unvested restricted stock units | 966 | 1,381 | 1,455 | |||||||||||||||||
Weighted average common shares outstanding - diluted | 49,669 | 53,953 | 56,619 | |||||||||||||||||
Net income per common share - basic | $ 0.54 | [2] | $ 0.32 | [2] | $ 0.22 | [2] | $ 0.25 | [2] | $ 0.51 | [2] | $ 0.39 | [2] | $ 0.14 | [2] | $ 0.19 | [2] | $ 1.32 | $ 1.23 | $ 0.87 | |
Net income per common share - diluted | $ 0.53 | [2] | $ 0.31 | [2] | $ 0.22 | [2] | $ 0.24 | [2] | $ 0.50 | [2] | $ 0.38 | [2] | $ 0.14 | [2] | $ 0.18 | [2] | $ 1.29 | $ 1.20 | $ 0.85 | |
Anti-dilutive securities excluded | [3] | 615 | 342 | 988 | ||||||||||||||||
[1] | For fiscal year 2016, includes the after tax gain on the sale of real estate of $1.2 million and a tax benefit of $0.6 million from the retroactive reinstatement of the Work Opportunity Tax Credit and resolution of income tax matters in the second quarter, the $5.7 million after tax loss from early extinguishment of debt in the third quarter and the after tax gain on the sale of Company Drive-Ins of $0.7 million and the FIN 48 release of income tax credits and deductions of $3.0 million in the fourth quarter. For fiscal year 2015, includes a tax benefit of $0.7 million from the retroactive reinstatement of the Work Opportunity Tax Credit and resolution of income tax matters in the second quarter, a federal tax benefit of $1.7 million from the recognition of a prior-year statutory tax deduction and a tax expense of $0.6 million from the retroactive effect of federal tax law change during the third quarter and a federal tax benefit of $1.5 million from the recognition of a prior-year statutory tax deduction and $1.7 million from a change in deferred tax valuation allowance during the fourth quarter. | |||||||||||||||||||
[2] | The sum of per share data may not agree to annual amounts due to rounding. | |||||||||||||||||||
[3] | Anti-dilutive securities consist of stock options and unvested RSUs that were not included in the computation of diluted earnings per share because either the exercise price of the options was greater than the average market price of the common stock or the total assumed proceeds under the treasury stock method resulted in negative incremental shares and thus the inclusion would have been anti-dilutive. |
Accounts And Notes Receivable36
Accounts And Notes Receivable (Schedule Of Accounts And Notes Receivable) (Details) - USD ($) $ in Thousands | Aug. 31, 2016 | Aug. 31, 2015 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Royalties and other trade receivables | $ 19,994 | $ 19,713 |
Current accounts and notes receivable, gross | 36,404 | 32,651 |
Allowance for doubtful accounts and notes receivable, current | (967) | (1,074) |
Current accounts and notes receivable, net | 35,437 | 31,577 |
Receivables from franchisees | 7,170 | 5,676 |
Receivables from system funds | 5,466 | 1,571 |
Allowance for doubtful notes receivable | (74) | (31) |
Noncurrent notes receivable, net | 12,562 | 7,216 |
Notes Receivable From Franchisees [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Current accounts and notes receivable, gross | 5,531 | 996 |
Receivables From System Funds [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Current accounts and notes receivable, gross | 4,372 | 4,965 |
Other [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Current accounts and notes receivable, gross | $ 6,507 | $ 6,977 |
Goodwill And Other Intangible37
Goodwill And Other Intangibles (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2016 | Aug. 31, 2015 | Aug. 31, 2014 | |
Goodwill And Other Intangibles [Abstract] | |||
Goodwill | $ 76,734 | $ 77,076 | $ 77,093 |
Gross carrying amount of franchise agreements, intellectual property franchise fees and other intangibles | 9,200 | 10,400 | |
Accumulated amortization of intangible assets | 5,700 | 5,900 | |
Amortization of intangible assets | $ 900 | $ 900 | $ 900 |
Weighted-average life of amortizable intangible assets | 11 years | ||
Estimated intangible assets amortization expense, 2017 | $ 900 | ||
Estimated intangible assets amortization expense, 2018 | 300 | ||
Estimated intangible assets amortization expense, 2019 | 300 | ||
Estimated intangible assets amortization expense, 2020 | 300 | ||
Estimated intangible assets amortization expense, 2021 | $ 200 |
Goodwill And Other Intangible38
Goodwill And Other Intangibles (Changes In The Carrying Amount Of Goodwill) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Aug. 31, 2016 | Aug. 31, 2015 | |
Goodwill And Other Intangibles [Abstract] | ||
Balance at beginning of year | $ 77,076 | $ 77,093 |
Goodwill acquired during the year | 65 | |
Goodwill disposed of related to the sale of Company Drive-Ins | (342) | (82) |
Balance at end of year | $ 76,734 | $ 77,076 |
Refranchising of Company Driv39
Refranchising of Company Drive-Ins (Details) $ in Millions | 12 Months Ended |
Aug. 31, 2016USD ($) | |
Franchisor Disclosure [Line Items] | |
Gain on sale of Company Drive-Ins | $ 1.8 |
Refranchised Company Drive-Ins | 38 |
Franchise restaurant ownership target | 95.00% |
Non-controlling operating interest [Member] | |
Franchisor Disclosure [Line Items] | |
Refranchised Company Drive-Ins | 25 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) | 12 Months Ended |
Aug. 31, 2016 | |
Leases [Line Items] | |
Lease expiration date | Aug. 31, 2031 |
Lease renewal options, initial term period | 5 years |
Company Drive Ins [Member] | |
Leases [Line Items] | |
Lease expiration date | Aug. 31, 2031 |
Leases (Schedule Of Future Mini
Leases (Schedule Of Future Minimum Rental Payments Receivable) (Details) $ in Thousands | Aug. 31, 2016USD ($) |
Leases [Abstract] | |
Operating, 2017 | $ 7,738 |
Operating, 2018 | 8,339 |
Operating, 2019 | 8,890 |
Operating, 2020 | 9,382 |
Operating, 2021 | 8,990 |
Operating, Thereafter | 50,709 |
Operating, Total | $ 94,048 |
Leases (Schedule Of Future Mi42
Leases (Schedule Of Future Minimum Rental Payments) (Details) - USD ($) $ in Thousands | Aug. 31, 2016 | Aug. 31, 2015 | Aug. 31, 2014 | |
Operating, 2017 | $ 10,914 | |||
Operating, 2018 | 10,864 | |||
Operating, 2019 | 10,840 | |||
Operating, 2020 | 10,754 | |||
Operating, 2021 | 10,030 | |||
Operating, Thereafter | 63,733 | |||
Operating, Total minimum lease payments | [1] | 117,135 | ||
Capital, 2017 | 5,051 | |||
Capital, 2018 | 4,448 | |||
Capital, 2019 | 3,596 | |||
Capital, 2020 | 3,256 | |||
Capital, 2021 | 3,134 | |||
Capital, Thereafter | 7,018 | |||
Capital, Total minimum lease payments | [1] | 26,503 | ||
Less amount representing interest averaging 6.2% | (5,439) | |||
Capital, Present value of net minimum lease payments | 21,064 | |||
Less amount due within one year | (3,673) | |||
Capital, Amount due after one year | 17,391 | $ 20,763 | ||
Minimum operating rentals receivable under noncancelable subleases | 16,800 | |||
Minimum capital rentals receivable under noncancelable subleases | 600 | |||
Capital Leases, Contingent Rental Payments | $ 900 | $ 1,000 | $ 800 | |
Capital Lease Obligations [Member] | ||||
Average interest rate | 6.20% | |||
[1] | Minimum payments have not been reduced by future minimum rentals receivable under noncancellable operating and capital subleases of $16.8 million and $0.6 million, respectively. They also do not include contingent rentals which may be due under certain leases. Contingent rentals for capital leases amounted to $0.9 million, $1.0 million and $0.8 million in fiscal years 2016, 2015 and 2014, respectively. |
Leases (Schedule Of Rent Expens
Leases (Schedule Of Rent Expense For Operating Leases) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2016 | Aug. 31, 2015 | Aug. 31, 2014 | |
Leases [Abstract] | |||
Minimum rentals | $ 12,441 | $ 12,659 | $ 12,449 |
Contingent rentals | 284 | 174 | 161 |
Total rent expense | 12,725 | 12,833 | 12,610 |
Sublease rentals | (2,372) | (2,235) | (1,905) |
Net rent expense | $ 10,353 | $ 10,598 | $ 10,705 |
Property, Equipment And Capit44
Property, Equipment And Capital Leases (Narrative) (Details) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2016USD ($)item | Aug. 31, 2015USD ($) | Aug. 31, 2014USD ($) | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, at cost | $ 739,418 | $ 733,778 | |
Accumulated depreciation related to buildings and equipment | 352,390 | 330,219 | |
Interest costs capitalized | 600 | 400 | $ 500 |
Property And Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | 40,400 | $ 41,700 | $ 37,600 |
Leased To Franchisees And Other Parties [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, at cost | 156,600 | ||
Accumulated depreciation related to buildings and equipment | $ 62,500 | ||
Drive-ins under construction | |||
Property, Plant and Equipment [Line Items] | |||
Drive-ins under construction | item | 11 |
Property, Equipment And Capit45
Property, Equipment And Capital Leases (Schedule Of Property, Equipment And Capital Leases) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Aug. 31, 2016 | Aug. 31, 2015 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | $ 739,418 | $ 733,778 |
Accumulated depreciation | (352,390) | (330,219) |
Property and equipment, net | 387,028 | 403,559 |
Capital leases | 43,991 | 48,079 |
Accumulated amortization | (28,857) | (30,232) |
Capital leases, net | 15,134 | 17,847 |
Property, equipment and capital leases, net | 402,162 | 421,406 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 154,420 | 157,861 |
Buildings And Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 341,956 | 343,598 |
Drive-In Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 132,678 | 139,494 |
Brand Technology Development And Other Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | $ 110,364 | $ 92,825 |
Minimum [Member] | Buildings And Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 8 years | |
Minimum [Member] | Drive-In Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 5 years | |
Minimum [Member] | Brand Technology Development And Other Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 2 years | |
Maximum [Member] | Buildings And Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 25 years | |
Maximum [Member] | Drive-In Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 7 years | |
Maximum [Member] | Brand Technology Development And Other Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 5 years |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Aug. 31, 2016 | Aug. 31, 2015 |
Accrued Liabilities [Abstract] | ||
Wages and employee benefit costs | $ 23,416 | $ 20,501 |
Property taxes, sales and use taxes and employment taxes | 8,936 | 9,282 |
Unredeemed gift cards | 10,571 | 9,285 |
Other | 8,990 | 11,646 |
Accrued liabilities | $ 51,913 | $ 50,714 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) | 3 Months Ended | 12 Months Ended | ||
Aug. 31, 2013USD ($) | Aug. 31, 2016USD ($) | May 17, 2016USD ($) | Aug. 31, 2015USD ($) | |
Debt Instrument [Line Items] | ||||
Future maturities of long-term debt, 2017 | $ 1,400,000 | |||
Future maturities of long-term debt, 2018 | 0 | |||
Future maturities of long-term debt, 2019 | 0 | |||
Future maturities of long-term debt, 2020 | 155,000,000 | |||
Future maturities of long-term debt, 2021 | 0 | |||
Total assets | 659,995,000 | $ 620,024,000 | ||
Restricted cash | 16,000,000 | |||
Loss from early extinguishment of debt | (8,750,000) | |||
Prepayment premium | 5,900,000 | |||
Write-off of unamortized debt origination costs | 2,900,000 | |||
Debt origination costs, net | 14,427,000 | $ 7,056,000 | ||
Co-Issuers And Guarantor [Member] | ||||
Debt Instrument [Line Items] | ||||
Total assets | 308,500,000 | |||
Restricted cash | $ 16,000,000 | |||
2016 Variable Funding Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 150,000,000 | |||
Debt instrument, maturity year | May 20, 2021 | |||
Expected life of debt instrument | 5 years | |||
Interest rate spread | 2.00% | |||
Debt instrument, legal final maturity year | May 20, 2046 | |||
Annual commitment fee payable, percentage | 0.50% | |||
Debt instruments, number of extensions | 2 | |||
Debt instrument, extension period | 1 year | |||
2016 Fixed Rate Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 425,000,000 | |||
Senior secured notes interest rate, percentage | 4.47% | |||
Debt instrument, maturity year | May 20, 2023 | |||
Weighted-average interest cost, percentage | 4.80% | |||
Expected life of debt instrument | 7 years | |||
Debt instrument, legal final maturity year | May 20, 2046 | |||
2016 Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt origination costs, net | $ 12,500,000 | |||
2013 Fixed Rate Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 155,000,000 | |||
Senior secured notes interest rate, percentage | 3.75% | |||
Debt instrument, maturity year | Jul. 20, 2020 | |||
Weighted-average interest cost, percentage | 4.10% | |||
Expected life of debt instrument | 7 years | |||
Debt instrument, legal final maturity year | Jul. 20, 2043 | |||
2011 Fixed Rate Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt prepayment | $ 155,000,000 | |||
Interest Rate Upward Adjustment Due To Nonpayment [Member] | ||||
Debt Instrument [Line Items] | ||||
Senior secured notes interest rate, percentage | 5.00% |
Debt (Schedule Of Long-Term Deb
Debt (Schedule Of Long-Term Debt) (Details) - USD ($) $ in Thousands | Aug. 31, 2016 | Aug. 31, 2015 |
Debt Instrument [Line Items] | ||
Other | $ 40 | |
Total long-term debt | $ 578,938 | 438,028 |
Less long-term debt due within one year | (1,417) | (9,790) |
Long-term debt due after one year | 577,521 | 428,238 |
2016 Fixed Rate Notes [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 423,938 | |
2013 Fixed Rate Notes [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 155,000 | 155,000 |
2011 Fixed Rate Notes [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 272,488 | |
2011 Variable Rate Notes [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 10,500 |
Fair Value Of Financial Instr49
Fair Value Of Financial Instruments (Narrative) (Details) - USD ($) $ in Millions | Aug. 31, 2016 | Aug. 31, 2015 |
Cash equivalents carried at cost | $ 59.2 | $ 41.1 |
2016 and 2013 Fixed Rate Notes [Member] | ||
Long-term debt, fair value | 579.6 | |
Long-term debt, carrying value, including accrued interest | $ 579.6 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2016 | Aug. 31, 2015 | Aug. 31, 2014 | |
Income Tax Contingency [Line Items] | |||
State net operating loss carryforwards, valuation allowance | $ 14,600 | $ 12,000 | |
Unrecognized tax benefits | 625 | 3,652 | $ 2,461 |
Unrecognized tax benefits, accrued interest and penalty | 300 | 400 | |
Decrease in unrecognized tax benefits | (3,000) | ||
Unrecognized tax benefits, income tax penalties and interest net benefit | 100 | ||
Unrecognized tax benefits, income tax penalties and interest net expense | $ 100 | ||
Possible change in unrecognized tax benefits, upper bound | $ (600) | ||
Minimum [Member] | |||
Income Tax Contingency [Line Items] | |||
Operating Loss Carryforwards, Expiration Dates | Dec. 1, 2016 | ||
Maximum [Member] | |||
Income Tax Contingency [Line Items] | |||
Operating Loss Carryforwards, Expiration Dates | May 31, 2037 |
Income Taxes (Components Of Pro
Income Taxes (Components Of Provision For Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2016 | Aug. 31, 2015 | Aug. 31, 2014 | |
Income Taxes [Abstract] | |||
Federal, Current | $ 20,137 | $ 14,597 | $ 16,580 |
State, Current | 3,791 | 3,576 | 3,490 |
Current | 23,928 | 18,173 | 20,070 |
Federal, Deferred | 4,372 | 10,592 | 5,328 |
State, Deferred | 137 | (1,528) | 450 |
Deferred | 4,509 | 9,064 | 5,778 |
Provision for income taxes | $ 28,437 | $ 27,237 | $ 25,848 |
Income Taxes (Provision For Inc
Income Taxes (Provision For Income Taxes Computed By Applying The Statutory Federal Income Tax Rate) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2016 | Aug. 31, 2015 | Aug. 31, 2014 | |
Income Taxes [Abstract] | |||
Amount computed by applying a tax rate of 35% | $ 32,377 | $ 32,103 | $ 25,818 |
State income taxes (net of federal income tax benefit) | 2,553 | 1,330 | 2,562 |
Employment related and other tax credits, net | (2,324) | (2,096) | (1,537) |
Change in uncertain tax positions | (3,027) | ||
Federal tax benefit of statutory tax deduction | (4,093) | ||
Other | (1,142) | (7) | (995) |
Provision for income taxes | $ 28,437 | $ 27,237 | $ 25,848 |
Statutory federal income tax rate | 35.00% |
Income Taxes (Schedule Of Defer
Income Taxes (Schedule Of Deferred Tax Assets And Liabilities) (Details) - USD ($) $ in Thousands | Aug. 31, 2016 | Aug. 31, 2015 |
Deferred tax assets: | ||
Allowance for doubtful accounts and notes receivable | $ 387 | $ 411 |
Leasing transactions | 3,222 | 3,260 |
Deferred income | 2,991 | 2,810 |
Accrued liabilities | 6,187 | 5,630 |
Stock compensation | 2,446 | 2,831 |
Other | 685 | 541 |
State net operating losses | 16,303 | 14,222 |
Total deferred tax assets | 32,221 | 29,705 |
Valuation allowance | (14,638) | (12,041) |
Total deferred tax assets after valuation allowance | 17,583 | 17,664 |
Deferred tax liabilities: | ||
Prepaid expenses | (1,119) | (1,315) |
Investment in partnerships, including differences in capitalization, depreciation and direct financing leases | (4,125) | (3,711) |
Property, equipment and capital leases | (31,565) | (31,167) |
Intangibles and other assets | (21,628) | (20,341) |
Debt extinguishment | (1,676) | (2,515) |
Total deferred tax liabilities | (60,113) | (59,049) |
Net deferred tax liabilities | (42,530) | (41,385) |
Net deferred tax assets and liabilities are classified as follows: | ||
Current | 2,164 | |
Noncurrent | (42,530) | (43,549) |
Net deferred tax liabilities | $ (42,530) | $ (41,385) |
Income Taxes (Reconciliation Of
Income Taxes (Reconciliation Of Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Aug. 31, 2016 | Aug. 31, 2015 | |
Income Taxes [Abstract] | ||
Balance at beginning of year | $ 3,652 | $ 2,461 |
Additions based on tax positions related to the current year | 254 | |
Additions for tax positions of prior years | 725 | 937 |
Reductions for tax positions of prior years | (2,838) | |
Reductions due to settlements | (212) | |
Reductions due to statute expiration | (702) | |
Balance at end of year | $ 625 | $ 3,652 |
Stockholders_ Equity (Deficit)
Stockholders’ Equity (Deficit) (Narrative) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Oct. 16, 2015 | Jul. 31, 2015 | Feb. 28, 2015 | Jan. 31, 2015 | Oct. 31, 2014 | Aug. 31, 2016 | May 31, 2016 | Feb. 29, 2016 | Nov. 30, 2015 | Aug. 31, 2015 | May 31, 2015 | Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2016 | Aug. 31, 2015 | Aug. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Stock-based compensation cost recognized | $ 3,766 | $ 3,520 | $ 3,742 | |||||||||||||
Excess tax benefits | 1,200 | $ 1,000 | $ 1,700 | |||||||||||||
Unvested unrecognized compensation cost | $ 7,100 | $ 7,100 | ||||||||||||||
Unvested unrecognized compensation cost, period | 2 years | |||||||||||||||
Weighted average fair value of stock options granted | $ 8.23 | $ 8.83 | $ 6.82 | |||||||||||||
Proceeds from exercise of stock options | $ 3,842 | $ 18,732 | $ 17,407 | |||||||||||||
Total intrinsic value of options exercised | 18,900 | 21,800 | 13,000 | |||||||||||||
Shares repurchase authorized amount | $ 155,000 | $ 145,000 | 145,000 | 105,000 | ||||||||||||
Total cost for shares acquired through stock repurchase program | $ 148,345 | $ 123,786 | $ 80,045 | |||||||||||||
Weighted-average price per share | $ 28.48 | $ 29.46 | ||||||||||||||
Remaining amount authorized for repurchase through stock repurchase program | $ 132,900 | $ 132,900 | ||||||||||||||
Cash dividends declared per common share | $ 0.11 | $ 0.11 | $ 0.11 | $ 0.11 | $ 0.09 | $ 0.09 | $ 0.09 | $ 0.09 | $ 0.44 | $ 0.27 | $ 0.09 | |||||
Payment of dividends | $ 21,309 | $ 18,808 | ||||||||||||||
Dividends Payable | $ 44 | $ 13 | 44 | 13 | $ 4,852 | |||||||||||
Treasury Stock [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Total cost for shares acquired through stock repurchase program | $ 148,345 | $ 123,786 | $ 80,045 | |||||||||||||
Shares acquired through stock repurchase program | 5,209 | 4,201 | 4,080 | |||||||||||||
October 2014 Accelerated Share Repurchase Program [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Shares repurchase authorized amount | $ 15,000 | |||||||||||||||
Total cost for shares acquired through stock repurchase program | $ 15,000 | |||||||||||||||
Shares acquired through stock repurchase program | 0 | 600 | ||||||||||||||
Cash payment at completion of accelerated share repurchase program | $ 100 | |||||||||||||||
Final price paid per share | $ 26.32 | |||||||||||||||
February 2015 Accelerated Share Repurchase Program [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Shares repurchase authorized amount | $ 75,000 | $ 75,000 | ||||||||||||||
Total cost for shares acquired through stock repurchase program | $ 75,000 | |||||||||||||||
Shares acquired through stock repurchase program | 300 | 2,100 | ||||||||||||||
Final price paid per share | $ 31.38 | |||||||||||||||
Subsequent Event [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Cash dividends declared per common share | $ 0.14 | |||||||||||||||
Dividends Payable, Date of Record | Nov. 9, 2016 | |||||||||||||||
Dividends Payable, Date to be Paid | Nov. 18, 2016 | |||||||||||||||
Restricted Stock Units [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period | 3 years | |||||||||||||||
Aggregate fair value of vested restricted stock | $ 400 | $ 1,100 | $ 1,100 | |||||||||||||
2006 Plan [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Shares available for grant | 7,000 | 7,000 | ||||||||||||||
Employee Stock Option [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Contractual term | 7 years | |||||||||||||||
Vesting period | 3 years | |||||||||||||||
Board of Director Stock Option [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Contractual term | 7 years | |||||||||||||||
Vesting period | 1 year | |||||||||||||||
Board of Director Restricted Stock Unit [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period | 1 year | |||||||||||||||
Employee Stock [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Discount price percentage | 15.00% | |||||||||||||||
Shares available for grant | 800 | 800 | ||||||||||||||
Employee Stock [Member] | Maximum [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Compensation percentage | 10.00% | 10.00% | ||||||||||||||
Stock’s fair market value | $ 25 | $ 25 |
Stockholders_ Equity (Deficit56
Stockholders’ Equity (Deficit) (Weighted Average Assumptions Used To Estimate The Fair Value Of Stock Option Grants) (Details) | 12 Months Ended | ||
Aug. 31, 2016 | Aug. 31, 2015 | Aug. 31, 2014 | |
Stockholders’ Equity [Abstract] | |||
Expected term | 5 years 3 months 18 days | 5 years | 4 years 8 months 12 days |
Expected volatility | 34.00% | 34.00% | 37.00% |
Risk-free interest rate | 1.40% | 1.30% | 1.50% |
Expected dividend yield | 1.50% | 1.20% | 0.00% |
Stockholders_ Equity (Deficit57
Stockholders’ Equity (Deficit) (Summary Of Stock Option Activity) (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Aug. 31, 2016USD ($)$ / sharesshares | |
Stockholders’ Equity [Abstract] | |
Options, Outstanding at September 1, 2015 | shares | 2,873 |
Options, Granted | shares | 494 |
Options, Exercised | shares | (976) |
Options, Forfeited or expired | shares | (57) |
Options, Outstanding at August 31, 2016 | shares | 2,334 |
Options, Exercisable at August 31, 2016 | shares | 1,548 |
Weighted Average Exercise Price, Outstanding at September 1, 2015 | $ / shares | $ 14 |
Weighted Average Exercise Price, Granted | $ / shares | 29.28 |
Weighted Average Exercise Price, Exercised | $ / shares | 10.49 |
Weighted Average Exercise Price, Forfeited or expired | $ / shares | 27.51 |
Weighted Averae Exercise Price, Outstanding at August 31, 2016 | $ / shares | 18.37 |
Weighted Average Exercise Price, Exercisable at August 31, 2016 | $ / shares | $ 13.23 |
Weighted Average Remaining Contractual Life, Outstanding at August 31, 2016 | 3 years 10 months 24 days |
Weighted Average Remaining Contractual Life, Exercisable at August 31, 2016 | 2 years 10 months 21 days |
Aggregate Intrinsic Value, Outstanding at August 31, 2016 | $ | $ 25,279 |
Aggregate Intrinsic Value, Exercisable at August 31, 2016 | $ | $ 24,304 |
Stockholders_ Equity (Deficit58
Stockholders’ Equity (Deficit) (Summary Of Restricted Stock Units) (Details) shares in Thousands | 12 Months Ended |
Aug. 31, 2016$ / sharesshares | |
Stockholders’ Equity [Abstract] | |
Restricted Stock Units, Outstanding at September 1, 2015 | shares | 66 |
Restricted Stock Units, Granted | shares | 51 |
Restricted Stock Units, Vested | shares | (13) |
Restricted Stock Units, Forfeited | shares | (12) |
Restricted Stock Units, Outstanding at August 31, 2016 | shares | 92 |
Weighted Average Grant Date Fair Value, Outstanding at September 1, 2016 | $ / shares | $ 28.49 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 28.07 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 31.32 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 31.69 |
Weighted Average Grant Date Fair Value, Outstanding at August 31, 2016 | $ / shares | $ 28.90 |
Employee Benefit And Cash Inc59
Employee Benefit And Cash Incentive Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Aug. 31, 2016 | Aug. 31, 2015 | Aug. 31, 2014 | |
Defined Contribution Plans [Line Items] | |||
Employer contributions | $ 1.8 | $ 1.6 | $ 1.3 |
Incentive bonus expense | $ 13.4 | $ 12.4 | $ 9.5 |
Maximum [Member] | |||
Defined Contribution Plans [Line Items] | |||
Employer contributions, percentage | 6.00% |
Commitments And Contingencies (
Commitments And Contingencies (Details) $ in Millions | 12 Months Ended |
Aug. 31, 2016USD ($) | |
Loss Contingencies [Line Items] | |
System-wide purchase obligations | $ 235.8 |
Note Repurchase Agreement [Member] | |
Loss Contingencies [Line Items] | |
Guarantor Obligations, Term | 2,018 |
Guaranteed obligations | $ 5.8 |
Guarantee Operating Lease Obligations [Member] | |
Loss Contingencies [Line Items] | |
Guarantor Obligations, Term | 2,029 |
Guaranteed obligations | $ 7.4 |
Guaranteed lease liability | $ 0 |
Selected Quarterly Financial 61
Selected Quarterly Financial Data (Schedule Of Selected Quarterly Financial Data) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Aug. 31, 2016 | May 31, 2016 | Feb. 29, 2016 | Nov. 30, 2015 | Aug. 31, 2015 | May 31, 2015 | Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2016 | Aug. 31, 2015 | Aug. 31, 2014 | |||||||||
Selected Quarterly Financial Data [Line Items] | |||||||||||||||||||
Total revenues | $ 162,118 | $ 165,239 | $ 133,160 | $ 145,803 | $ 175,266 | $ 164,748 | $ 126,219 | $ 139,856 | $ 606,320 | $ 606,089 | $ 552,349 | ||||||||
Income from operations | 40,315 | 38,880 | 22,212 | 26,045 | 40,529 | 36,370 | 16,991 | 22,538 | 127,452 | 116,428 | 98,677 | ||||||||
Net income | $ 25,437 | [1] | $ 15,353 | [1] | $ 10,819 | [1] | $ 12,458 | [1] | $ 26,296 | [1] | $ 20,442 | [1] | $ 7,662 | [1] | $ 10,085 | [1] | $ 64,067 | $ 64,485 | $ 47,916 |
Basic income per share | $ 0.54 | [2] | $ 0.32 | [2] | $ 0.22 | [2] | $ 0.25 | [2] | $ 0.51 | [2] | $ 0.39 | [2] | $ 0.14 | [2] | $ 0.19 | [2] | $ 1.32 | $ 1.23 | $ 0.87 |
Diluted income per share | $ 0.53 | [2] | $ 0.31 | [2] | $ 0.22 | [2] | $ 0.24 | [2] | $ 0.50 | [2] | $ 0.38 | [2] | $ 0.14 | [2] | $ 0.18 | [2] | $ 1.29 | $ 1.20 | $ 0.85 |
After tax gain on sale of real estate [Member] | |||||||||||||||||||
Selected Quarterly Financial Data [Line Items] | |||||||||||||||||||
Quarterly charges and credits that affect comparability | $ (1,200) | ||||||||||||||||||
Retroactive benefit of Work Opportunity Tax Credit and resolution of tax matters [member] | |||||||||||||||||||
Selected Quarterly Financial Data [Line Items] | |||||||||||||||||||
Tax expense (benefit) | $ (600) | $ (700) | |||||||||||||||||
After tax loss from early extinguishment of debt [Member] | |||||||||||||||||||
Selected Quarterly Financial Data [Line Items] | |||||||||||||||||||
Quarterly charges and credits that affect comparability | $ 5,700 | ||||||||||||||||||
After tax gain on sale of Company Drive-Ins [Member] | |||||||||||||||||||
Selected Quarterly Financial Data [Line Items] | |||||||||||||||||||
Quarterly charges and credits that affect comparability | $ (700) | ||||||||||||||||||
FIN 48 release of income tax credits and deductions [Member] | |||||||||||||||||||
Selected Quarterly Financial Data [Line Items] | |||||||||||||||||||
Tax expense (benefit) | $ (3,000) | ||||||||||||||||||
Federal tax benefit of prior-year statutory tax deduction [Member] | |||||||||||||||||||
Selected Quarterly Financial Data [Line Items] | |||||||||||||||||||
Tax expense (benefit) | $ (1,500) | $ (1,700) | |||||||||||||||||
Retroactive effect of federal tax law change [Member] | |||||||||||||||||||
Selected Quarterly Financial Data [Line Items] | |||||||||||||||||||
Tax expense (benefit) | $ 600 | ||||||||||||||||||
Change in deferred tax valuation allowance [Member] | |||||||||||||||||||
Selected Quarterly Financial Data [Line Items] | |||||||||||||||||||
Tax expense (benefit) | $ (1,700) | ||||||||||||||||||
[1] | For fiscal year 2016, includes the after tax gain on the sale of real estate of $1.2 million and a tax benefit of $0.6 million from the retroactive reinstatement of the Work Opportunity Tax Credit and resolution of income tax matters in the second quarter, the $5.7 million after tax loss from early extinguishment of debt in the third quarter and the after tax gain on the sale of Company Drive-Ins of $0.7 million and the FIN 48 release of income tax credits and deductions of $3.0 million in the fourth quarter. For fiscal year 2015, includes a tax benefit of $0.7 million from the retroactive reinstatement of the Work Opportunity Tax Credit and resolution of income tax matters in the second quarter, a federal tax benefit of $1.7 million from the recognition of a prior-year statutory tax deduction and a tax expense of $0.6 million from the retroactive effect of federal tax law change during the third quarter and a federal tax benefit of $1.5 million from the recognition of a prior-year statutory tax deduction and $1.7 million from a change in deferred tax valuation allowance during the fourth quarter. | ||||||||||||||||||
[2] | The sum of per share data may not agree to annual amounts due to rounding. |
Valuation And Qualifying Acco62
Valuation And Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2016 | Aug. 31, 2015 | Aug. 31, 2014 | |
Allowance For Doubtful Accounts And Notes Receivable [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Year | $ 1,105 | $ 1,771 | $ 2,347 |
Additions Charged to Costs and Expenses | (53) | (81) | (434) |
Amounts Written Off Against the Allowance | (13) | (601) | (142) |
(Transfer) Recoveries | 2 | 16 | |
Balance at End of Year | 1,041 | 1,105 | 1,771 |
Accrued Carrying Costs For Drive-In Closings And Disposals [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Year | 807 | 871 | 1,099 |
Additions Charged to Costs and Expenses | 208 | 367 | 339 |
Amounts Written Off Against the Allowance | (376) | (422) | (546) |
(Transfer) Recoveries | (28) | (9) | (21) |
Balance at End of Year | $ 611 | $ 807 | $ 871 |