Viacom (VIAB) Interim CEO Dooley to Depart; Q4 EPS Guidance Cut; Will End Paramount Stake Sale
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Following a comprehensive review of Viacom’s (Nasdaq: VIAB)(Nasdaq: VIA) capital structure and operating budget, the Viacom Board today announced measures to improve the Company's financial flexibility and position it for future growth. Specifically, the Company is reducing its dividend payout to preserve capital and will proceed to access debt capital markets in the near term to improve liquidity. These actions are designed to balance the Company’s focus on a strong balance sheet and its strategy to invest in world class content and pursue opportunities to grow its core businesses.
The Company also announced that Tom Dooley, Interim President and Chief Executive Officer, has informed the Board of his decision to depart the Company. He has agreed to remain in that position through November 15, 2016, to facilitate an orderly transition.
In particular, the Board today announced that:
- Viacom’s quarterly dividend will be adjusted to $0.20 per share, and the Company will shortly access debt markets in order to improve liquidity and financial flexibility;
- The Company expects that adjusted diluted earnings per share for the fiscal fourth quarter will be in the range of $0.65 to $0.70. (The Street sees $0.89.) This revision accounts for a programming impairment charge of $115 million in its filmed entertainment segment in its fiscal fourth quarter related to the expected performance of an unreleased film; reported earnings per share are expected to be $0.55 to $0.60, primarily reflecting severance expenses incurred as a result of the settlement agreement; and
- The Company has ended the process of seeking a minority investor in Paramount Pictures at this time, in order to consider all options available to the Company.
“The Board believes Viacom has a product strategy that is among the best in the industry. The steps we are taking will make the Company financially stronger and more flexible and will position Viacom to take advantage of future growth opportunities,” said Tom May, Chairman of the Board. “I am pleased that Tom Dooley has agreed to stay on as Interim President and CEO through November 15 to allow the Board to conduct an orderly succession process.’’
Shari Redstone, Vice Chair of the Board, said, “I have been energized by the passion, commitment and ideas put forward by our newly-expanded board and members of Viacom’s senior team. While there is more work to do, the actions announced today are an important first step towards realizing the value of Viacom’s exceptional assets and positioning the Company for the future. I also want to thank Tom Dooley for his service and his willingness to stay on through this transition period.”
Tom Dooley, Interim President and CEO, said “While this was a difficult decision for me, I have great admiration for our new Board and I feel that they will be best able to execute on their vision for the Company in the hands of a new President and CEO. I am certain that the Board will make the most of the Company’s extraordinary potential. I want to thank Sumner, Shari and the members of the Board for the opportunities they have provided me. I look forward to working with them to deliver Viacom into the hands of new leadership in excellent shape and poised for a remarkable future.”
Viacom will provide additional information regarding its fourth quarter and full-year results and business outlook during its regular quarterly earnings call.
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