Sonic Corp. (NASDAQ: SONC), the nation’s largest chain of drive-in restaurants, today announced its repurchase of $62.5 million of the company’s Class A-1 variable funding senior notes in a privately negotiated transaction.
“We are pleased with the company’s ability and efforts over the past two years to use excess cash effectively to reduce debt and strengthen our balance sheet,” said Clifford Hudson, Chairman and Chief Executive Officer. “These purchases, combined with regularly scheduled principal payments, bolster Sonic’s capital structure and provide additional financing flexibility to manage our business.”
Sonic expects to recognize a gain of approximately $5 million on the extinguishment of the notes. With the completion of this transaction, Sonic’s outstanding debt will total approximately $520 million, and Sonic will have more than $30 million of unrestricted cash available for general corporate uses. Sonic is scheduled to make an additional $58 million in principal payments over the remainder of fiscal year 2011.
Sonic expects to report its results for the first quarter ended November 30, 2010, at the market close on January 4, 2011. The company will provide an online web simulcast of its earnings release conference call that afternoon beginning at 5:00 p.m. ET. During that call, management will comment on Sonic’s financial and operational results for the quarter. An online replay of the conference call will be available approximately two hours after the conclusion of the live broadcast and will continue through February 4, 2011. A link to these events will be available at the investor section of the company’s website, www.sonicdrivein.com.