Jack in the Box Inc. Amends Credit Agreement and Announces Additional $300 Million Share Repurchase Program
September 22 2016 - 4:05PM
Business Wire
Jack in the Box Inc. (NASDAQ: JACK) today announced completion
of an amendment to its existing senior credit facility. Under the
terms of the amendment, the credit facility was increased to $1.6
billion, which consists of a $700 million term loan and $900
million revolving credit facility.
Following the amendment on September 16, 2016, $700 million was
outstanding on the term loan and approximately $307.5 million was
drawn or used for letters of credit under the revolving credit
facility.
The maturity date for both the revolving credit facility and the
term loan will remain in March 2019. The interest rate on the
senior credit facility is based on the company’s leverage ratio and
can range from LIBOR plus 1.25 percent to LIBOR plus 2.25 percent.
The interest rate as of the date of the amendment was LIBOR plus
2.00 percent.
The amendment also raised the maximum leverage ratio covenant
from 3.5 times to 4.0 times, and allows unlimited cash dividends
and share repurchases if pro forma leverage is less than 3.5 times
(from 3.0 times previously), subject also to pro forma fixed charge
covenant compliance.
“The amended credit agreement provides us with more than $400
million of additional borrowing capacity to support the company’s
strategic priorities,” said Jerry Rebel, executive vice president
and chief financial officer. “We are pleased that our lenders have
the confidence in our business model to increase our borrowing
capacity to 4 times EBITDA without waiting for our refranchising
strategy to be completed.”
In addition, the company announced that its Board of Directors
has authorized an additional $300 million stock buyback program
expiring in November 2018. As of the end of the third quarter of
fiscal 2016, the company had $150.0 million remaining under stock
buyback programs previously authorized by its Board of Directors in
February and May 2016 that expire in November 2017.
Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner &
Smith Incorporated, and Co�peratieve Rabobank U.A., New York Branch
(f/k/a Cooperative Centrale Raiffesisen-Boerenleenbank B.A.
“Rabobank International” New York Branch) served as joint lead
arrangers and joint lead bookrunners.
About Jack in the Box Inc.
Jack in the Box Inc. (NASDAQ: JACK), based in San Diego, is a
restaurant company that operates and franchises Jack in the Box®
restaurants, one of the nation’s largest hamburger chains, with
more than 2,200 restaurants in 21 states and Guam. Additionally,
through a wholly owned subsidiary, the company operates and
franchises Qdoba Mexican Eats®, a leader in fast-casual dining,
with more than 600 restaurants in 47 states, the District of
Columbia and Canada. For more information on Jack in the Box and
Qdoba, including franchising opportunities, visit
www.jackinthebox.com or www.qdoba.com.
Safe harbor statement
This press release contains forward-looking statements within
the meaning of the federal securities laws. Such statements are
subject to substantial risks and uncertainties. A variety of
factors could cause the company’s actual results to differ
materially from those expressed in the forward-looking statements,
including the following: the success of new products and marketing
initiatives; the impact of competition, unemployment, trends in
consumer spending patterns and commodity costs; the company's
ability to reduce G&A the company's ability to execute its
refranchising strategy; the company’s ability to achieve and manage
its planned growth, which is affected by the availability of a
sufficient number of suitable new restaurant sites, the performance
of new restaurants, and risks relating to expansion into new
markets; litigation risks; food safety incidents or negative
publicity impacting the reputations of the company's brands; and
stock market volatility. These and other factors are discussed in
the company’s annual report on Form 10-K and its periodic reports
on Form 10-Q filed with the Securities and Exchange Commission
which are available online at http://investors.jackinthebox.com or
in hard copy upon request. The company undertakes no obligation to
update or revise any forward-looking statement, whether as the
result of new information or otherwise.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160922006201/en/
Jack in the Box Inc.Investor Contact:Carol DiRaimo, (858)
571-2407orMedia Contact:Brian Luscomb, (858) 571-2291
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