NEW YORK, NY - Sonic Drive-In (NASDAQ: SONC) sought to reassure investors today as it presented results for the past year, a period which posed challenges for the company. The stock, which had tumbled in 2008 and drifted lower thru 2009, fell again on higher-than-average volume last week.

After completing a whole-business securitization as the company stock price reached near its all-time high in December of 2006, the company got $800M, but cash dwindled and the company embarked on an ambitious re-franchising program in FY09.

By re-franchising 209 units, the company added $80M to bring cash on hand to around $100M and the percentage of franchised outlets in the 3560-unit chain rose from 80% franchised to 87% franchised.

The company retained most of the real estate underneath the re-franchised units, which should provide an ongoing revenue stream and a valuable asset once real estate prices begin to rise.

The short-term future continues to be challenging for Sonic; new openings dropped between FY08 and FY09 and continue to fall. The company blamed the difficult credit market for the slowdown in expansion, noting that some franchisees were holding off on expansion because they foresee further declines in real estate.

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The presentation by CFO Stephen Vaughan and VP for Investor Relations Claudia San Pedro did little to affect investors, as the stock drifted lower throughout today on light volume.

However, Cowen analyst Paul Westra sees bright spots for SONC, saying the chain has the "most distinct brand" in the QSR category, and noting the "high margin afternoon & late night fountain sales" which bring solid bottom-line revenues.

SONC execs noted that when they are able to open new drive-thru units, the results are impressive. New units average $1.5M, and even allowing for the fall-off after the initial opening, the "normalized volume" of new units is $1.251M. With an initial investment of $1.5M including land, SONC says that new units can garner an 18% pre-tax return on investment.

Vaughan says he may use some of the company's cash to buy up notes, which investors continue to value at a discount.