CALABASAS HILLS Calif. The Cheesecake Factory Inc. secured an additional $100 million in credit and earmarked the funds to repurchase company stock, the restaurant operator said Thursday.
The company expects to use the credit, along with its free cash flow, to repurchase between $150 million and $200 million in its common shares this year, it said. After an increase to its stock repurchase authorization last month, Cheesecake can now buyback about 17.5 million shares, or about 25 percent of the company’s 69.2 million outstanding shares as of Feb. 21.
Restaurant securities analyst Steven Kron at Goldman, Sachs & Co. said the share buybacks related directly to the $100 million credit extension could add between 1 cent per share and 2 cents per share to earnings this year and up to 5 cents per share in 2009.
Cheesecake operates or licenses about 150 restaurants under The Cheesecake Factory and Grand Lux Cafe brands.