Sonic Corp. (Nasdaq/NM:SONC) announced March 2 that its board of directors has expanded the company’s current stock repurchase program by $10 million. Under this program, which was originally approved in March 1998 and then expanded on three subsequent occasions, the company was authorized to repurchase up to $42 million of common stock. Since the program’s inception, the company has expended $41.8 million for the repurchase of 1.7 million shares, including $10.3 million during the second quarter of fiscal 2000, which ended February 29, 2000. Because of the program’s success, the board has approved the repurchase of up to an additional $10 million of common stock through calendar year 2000.
“We believe Sonic’s stock continues to represent an attractive investment opportunity at current market prices,” Clifford Hudson, Sonic’s President and Chief Executive Officer, said. “The company’s share repurchase activities have proven to be helpful in deploying excess cash flow, increasing earnings per share, and in improving return on equity, which we expect to surpass 20% during fiscal year 2000,” Hudson added. He noted that, as originally announced, the repurchases may be made from time to time in the open market as deemed appropriate by the company and will depend on market conditions. Sonic intends to finance the repurchase program from internal funds and with debt facilities. Any shares repurchased may be used for future acquisitions and other corporate purposes. The expansion of the program will not affect the company’s current expansion plans.
Sonic Corp. franchises and operates the largest chain of drive-in restaurants in the United States. For more information about the company, visit Sonic’s website at sonicdrivein.com.