Sonic Corp. announced that its board of directors authorized a stock repurchase program for up to $40 million worth of common stock through Aug. 31, 2013.
"Our franchise business model continues to generate significant free cash flow, and we believe the share repurchase program supports our objective to maximize shareholder value. The $30 million share repurchase program we completed earlier this year has been accretive to earnings, and this new authorization will continue to add value for shareholders in fiscal 2013," said Clifford Hudson, chairman and CEO.
Sonic expects its operations to generate a free cash flow of $50 to $55 million for fiscal 2012.
"As we have over the years, going forward Sonic will increase shareholder value using a multi-layered growth strategy, which incorporates sales growth, leverage from higher sales, use of cash, increasing franchising revenue and new drive-in development, to achieve double-digit earnings per share growth. The share repurchase program, 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 long term," Hudson added.
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