Sonic Increases Share Repurchase Program
OKLAHOMA CITY -- January 17, 2013
Sonic Corp. (NASDAQ: SONC), the nation's largest chain of drive-in
restaurants, today announced that its Board of Directors increased its share
repurchase authorization from $40 million to $55 million.
The company has repurchased approximately $25 million of the original $40
million authorized in August 2012. The increased authorization leaves
approximately $30 million of unspent authorization. Since September 2011, the
Company has expended approximately $55 million for the repurchase of 6.6
million shares representing approximately 11% of its outstanding common stock.
The authorization expires August 31, 2013 and share repurchases may be made
from time to time in the open market or in negotiated transactions depending
on share price, market conditions and other factors.
As previously announced, on December 31, 2012, the company completed the sale
of certain real estate that had been leased to a franchisee. The company
realized net cash proceeds of approximately $30 million and received a
24-month note of approximately $9 million as a result of the sale. In
conjunction with the transaction, the company announced it will use $20
million of the $30 million cash proceeds to pay down debt on January 22, 2013.
This will result in a reduction in interest expense of approximately $700
thousand during fiscal year 2013, partially offset by a charge of
approximately $500 thousand to write-off the pro-rata portion of debt
origination costs in the second quarter of fiscal 2013. The prepayment will be
made at par, as allowed under the terms of the company’s notes.
“Effective use of cash is an important part of our multi-layered growth
strategy. We believe the use of proceeds from the sale of real estate to
reduce our leverage, as well as the Board’s decision to increase our share
repurchase authorization, will maximize shareholder value,” said Cliff Hudson,
Chairman and Chief Executive Officer. “The share repurchase program and debt
reduction, combined with strategic initiatives to sustain positive same-store
sales, expand operating margins and spur new drive-in development, provide the
momentum needed to effect solid growth in our earnings in the near term and
Sonic, America's Drive-In, originally started as a hamburger and root beer
stand in 1953 in Shawnee, Oklahoma called Top Hat Drive-In, and then changed
its name to Sonic in 1959. The first drive-in to adopt the Sonic name is still
serving customers in Stillwater, Oklahoma. Sonic has more than 3,500 drive-ins
coast to coast, where approximately three million customers eat every day. For
more information about Sonic Corp. and its subsidiaries, visit Sonic at
This press release contains forward-looking statements within the meaning of
the federal securities laws. Forward-looking statements reflect management's
expectations regarding future events and operating performance and speak only
as of the date hereof. These forward-looking statements involve a number of
risks and uncertainties. Factors that could cause actual results to differ
materially from those expressed in, or underlying, these forward-looking
statements are detailed in the company's annual and quarterly report filings
with the Securities and Exchange Commission. The company undertakes no
obligation to publicly release revisions to these forward-looking statements
to reflect events or circumstances after the date hereof or to reflect the
occurrence of unforeseen events, except as required to be reported under the
rules and regulations of the Securities and Exchange Commission.
Claudia San Pedro, 405-225-4846
Vice President of Investor Relations, Communications and Treasurer
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