Emerson Radio (MSN) Declares Extraordinary Cash Dividend of $1.10; Cuts Facility from $45M to $15M
Emerson Radio Corp. (NYSE Amex: MSN) today reported that its Board of Directors this morning declared an extraordinary cash dividend of $1.10 per common share payable on March 24, 2010 to shareholders of record of the Company at the close of trading on March 15, 2010.
In announcing the dividend, Adrian Ma, Chief Executive Officer of the Company, stated that "we are delighted to be in a position as a company to make a cash distribution of this magnitude to our shareholders, as the Board believes its current and forecasted levels of working capital exceed the amount needed for the Company to execute successfully its strategic plan for the future. After the distribution, Emerson will have virtually no debt and approximately $11.5 million in cash with which to run the business."
The Company also announced that, in principle, its lead bank had consented to the dividend payment and had agreed with the Company, consistent with the forecasted borrowing needs of the Company through the facility's December 2010 expiration date, to reduce the maximum credit available under the facility from $45 million to $15 million and to limit credit advances to cash collateralized letters of credit.
The Company is exploring its tax history to determine the portion, if any, of the dividend which will not be subject to United States Federal Income Tax.
In mid February, Emerson reported net income for nine months ended December 31, 2009 of $7.7 million, or $0.29 per diluted share on net revenues of $155.4 million, compared to a net loss of $2.3 million or $0.09 per diluted share on net revenues of $157.4 million for the same period of the prior fiscal year.
In announcing the dividend, Adrian Ma, Chief Executive Officer of the Company, stated that "we are delighted to be in a position as a company to make a cash distribution of this magnitude to our shareholders, as the Board believes its current and forecasted levels of working capital exceed the amount needed for the Company to execute successfully its strategic plan for the future. After the distribution, Emerson will have virtually no debt and approximately $11.5 million in cash with which to run the business."
The Company also announced that, in principle, its lead bank had consented to the dividend payment and had agreed with the Company, consistent with the forecasted borrowing needs of the Company through the facility's December 2010 expiration date, to reduce the maximum credit available under the facility from $45 million to $15 million and to limit credit advances to cash collateralized letters of credit.
The Company is exploring its tax history to determine the portion, if any, of the dividend which will not be subject to United States Federal Income Tax.
In mid February, Emerson reported net income for nine months ended December 31, 2009 of $7.7 million, or $0.29 per diluted share on net revenues of $155.4 million, compared to a net loss of $2.3 million or $0.09 per diluted share on net revenues of $157.4 million for the same period of the prior fiscal year.
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