United States Of America : G&K announces $75 mn expansion of Share Repurchase Program

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G&K announces $75 mn expansion of Share Repurchase Program

14
May '08

G&K Services Inc announced that its Board of Directors has authorized an expansion of its existing share repurchase program. This authorization increases the share repurchase program previously approved by the company's Board of Directors in May 2007 from $100 million to $175 million.

"The expansion of our share repurchase program further demonstrates our confidence in our strategic plan, the strength of our business, and our opportunities to drive increasing long-term growth and profitability, said Richard Marcantonio, G&K's chairman and chief executive officer."

"Solid operating performance, combined with a strong balance sheet and excellent free cash flow production, provides us the flexibility to launch an expanded share repurchase program. We remain committed to increasing shareholder returns by investing to deliver long-term revenue and earnings growth, while also returning value to our shareholders through share repurchases."

Since inception of the share repurchase program, the company has bought back approximately 2.3 million shares, or about 10.6 percent of the total shares outstanding at the beginning of the program, at a cost of approximately $86.3 million. Accordingly, there remains approximately $13.7 million available under the previously authorized share repurchase, which, when combined with the additional $75.0 million, provides a total of approximately $88.7 million available to buyback additional shares.

At the current stock price, the company could repurchase approximately 2.8 million additional shares, bringing the total potential share repurchase to about 23.4 percent of the total shares outstanding at the inception of the program.

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