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G&K Services announces $100mn share repurchase program

May '07
G&K Services Inc announced that its Board of Directors has authorized the repurchase of up to $100 million of the Company's outstanding common stock.

"The share repurchase program further demonstrates our confidence in our strategic plan, the strength of our business model and our commitment to delivering increasing shareholder value," said Richard Marcantonio, G&K's chairman and chief executive officer.

"Our strong balance sheet and solid cash flow generation provides the flexibility to continue to invest in our business, to pursue strategic growth opportunities including acquisitions, and to repurchase our shares."

The Company plans to repurchase shares from time to time in open market, privately negotiated or other transactions in accordance with applicable federal securities laws. The timing and the amount of the repurchases will be determined by the Company's management based on its evaluation of market conditions, share price and other factors.

"The share repurchase program will enhance earnings per share growth and strengthen our capital structure by taking advantage of low cost debt markets and lowering G&K's overall cost of capital," said Jeffrey Wright, G&K's senior vice president and chief financial officer.

"G&K's strong cash flow and available debt capacity will continue to provide the financial flexibility to fund the needs of our business while maintaining a strong credit profile."

The Company intends to use the authorization to repurchase shares as a means to return cash to shareholders, as well as offsetting earnings per share dilution from the issuance of Company stock under employee benefit plans. The Company plans to fund the share repurchase program with its current revolving credit facility.

G&K Services Inc

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