ADVO declares special cash dividend of $10 per share.WINDSOR, Conn.--(BUSINESS WIRE)--Jan. 17, 1996--ADVO Inc. (NYSE NYSE See: New York Stock Exchange :AD) announced today that its board of directors has declared a special cash dividend of $10 per share of common stock. The special dividend is expected to be paid on March 5, 1996, to shareholders of record on February 20, 1996. In order to provide the funds necessary to pay the special dividend, and to pay the transaction expenses incurred in connection therewith there·with adv. 1. With that, this, or it. 2. In addition to that. 3. Archaic Immediately thereafter. Adv. 1. and for working capital, ADVO has received a commitment from the Chase Manhattan Bank The Chase Manhattan Bank, now part of JPMorgan Chase, was formed by the merger of the Chase National Bank and the Bank of the Manhattan Company in 1955. The bank is headquartered in New York City. (National Association) to provide up to $220 million in senior credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities . The company expects to enter into a definitive loan agreement with Chase Manhattan and other lenders immediately prior to the payment of the special dividend. The commitment provides that $195 million of the credit may be used to pay the special dividend and related expenses. The company expects that the balance of the funds for the special dividend will be provided by cash on hand. Payment of the special dividend is subject to availability of financing as described above. In September 1995, ADVO announced that its board of directors had engaged Goldman, Sachs & Co. to assist in exploring strategic alternatives aimed at enhancing shareholder value. Subsequent to that announcement, the company received and considered preliminary proposals and indications of interest from various financial buyers relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc a possible combination with or acquisition of the company. However, none of these discussions led to a definitive offer for a transaction involving the company at an acceptable price. Robert Kamerschen, Chairman and Chief Executive Officer of ADVO, stated: "This plan will enable all of the company's shareholders to realize in cash a significant portion of the current value of their shares, while at the same time allowing them to retain their ownership interest in the Company and participate in its future growth." Kamerschen also said, "In light of the size of the special dividend, the board of directors has decided to suspend ADVO's regular quarterly dividend at the current $.025 per quarter per share of common stock until the 1997 Annual Shareholders Meeting, at which time the Board of Directors will again consider the Company's dividend policy." The special dividend is anticipated to be taxable as a dividend for federal income tax purposes to the extent of the company's current and accumulated earnings and profits through fiscal 1996, which the company anticipates to be between $2-$4 per share. The remainder of the special dividend will reduce the tax basis of the shares, and, to the extent of the excess over the tax basis, will represent a taxable gain Taxable Gain The portion of a sale that is liable to taxation. Notes: When redistributing mutual fund shares that have increased in value, returns may be subject to taxation. See also: Capital gain, Income Tax . The company will disclose its current and accumulated earnings and profits per share through fiscal 1996 to shareholders receiving the special dividend when such information becomes available. Shareholders should consult their own tax advisors A tax advisor is a financial expert especially trained in tax law. Some countries require tax advisors to verify the balance sheets of companies above a certain size. Individuals usually require tax advisors to minimize taxation, to avoid learning the details of tax law in with respect to the tax treatment of the special dividend. Warburg, Pincus Capital Partners, L.P., the company's largest shareholder, which holds approximately 2.92 million shares of ADVO's common stock and a warrant to purchase approximately 2.66 million shares of ADVO's common stock, has advised the company that it intends to exercise its warrant in order to receive the special dividend. In connection with the special dividend, as contemplated by the company's benefit plans, the board of directors is also making equitable adjustments to outstanding employee stock options. Giving effect to these adjustments and the exercise of the Warburg warrants, the company estimates that shares outstanding will be in the range of 23,850,000 shares. As a result of adjustments to the employee stock options as described above, the company expects to record a one-time noncash charge Noncash charge A cost, such as depreciation, depletion, and amortization, that does not involve any cash outflow. That is, this is treated as an accounting expense -- not a real expense that demands cash. in the second quarter. The amount of the charge will depend principally upon the market price of the stock after the dividend is declared. In addition, certain other charges related to the special dividend and the company's exploration of strategic alternatives will be taken in future periods, principally in the second quarter. Simultaneously, with the announcement of the special dividend, the company also reported its first quarter results pursuant to a separate release. Revenues from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the were up $256.5 million, up 3% over prior year. Earnings per share, excluding results from its discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: Marketing Force segment, were $0.29, a 22% decline from the comparable period in fiscal 1995. The estimated loss on disposal from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. was $1.0 million or $0.04 per share during the quarters. ADVO is the nation's largest full-service direct marketing services company with annual revenues of in excess of billion. ADVO specializes in shared and solo direct mail services, to provide customized Microtargeting(TM) solutions for its clients' needs. The company's Mailbox A simulated mailbox in the computer that holds e-mail messages. Mailboxes are stored on disk as a file of messages, a database of messages or as an individual file for each message. The standard mailboxes are usually In, Out, Trash and Junk (Spam). Values(R) branded shared mail program is distributed nationally to over 61 million households weekly. ADVO also offers limited transportation services. It has 20 production facilities and 70 sales offices nationwide. ADVO's corporate headquarters are located at One Univac Lane, Windsor, CT 06095. CONTACT: ADVO Inc., Windsor Donald McCombs Vice President, Investor Relations Investor relations The process by which the corporation communicates with its investors. 860/285-6391 or David Stigler Sr. Vice President, Legal and Public Affairs Those public information, command information, and community relations activities directed toward both the external and internal publics with interest in the Department of Defense. Also called PA. See also command information; community relations; public information. 860/285-6120 or Lowell Robinson Executive Vice President, Chief Financial Officer 860/285-6101 |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion