Del Monte Foods Company (NYSE: DLM) announced today an 80%
increase in its quarterly dividend and the authorization of a $350
million stock repurchase program.
"Based on Del Monte’s higher level of performance and confidence
in our future, we have substantially increased our quarterly
dividend and authorized a significant stock repurchase program,”
said Richard G. Wolford, Chairman and CEO of Del Monte Foods
Company. “Importantly, we are able to do this while achieving our
leverage targets and continuing to invest in our business,
consistent with our growth strategy. We are returning cash and
incremental value to shareholders based on our strong results, the
cash flow we consistently generate, and the overall strength of the
Company.”
Increases Quarterly Dividend
80%
Del Monte’s Board of Directors has approved an 80% increase in
the quarterly dividend from $0.05 to $0.09 per common share. The
dividend is payable on August 5, 2010 to stockholders of record as
of the close of business on July 22, 2010.
The Company expects quarterly dividends to continue to be paid
during the first week of February, May, August and November and
anticipates a total annual dividend of $0.36 per common share. The
aggregate quarterly dividend is expected to be approximately $18
million based on the number of outstanding common shares as of
fiscal 2010 year-end. However, the actual declaration of future
cash dividends, and the establishment of record and payment dates,
will be subject to final determination by the Board of Directors
each quarter, after its review of the Company’s then-current
strategy, applicable debt covenants and financial performance and
position, among other things.
This increase in the dividend follows Del Monte’s 25% increase
in the quarterly dividend announced in June 2009.
Initiates 3-Year, $350 Million
Stock Repurchase Program
The Board of Directors has also authorized the Company to
repurchase up to $350 million of the Company's common stock over
the next 3 years. Repurchases of the Company's common stock may be
made from time to time, through a variety of methods, including
Accelerated Share Buybacks, open market purchases, privately
negotiated transactions, and block transactions.
In fiscal 2011, the Company plans to execute between $100
million and $140 million of this authorization through a
combination of an Accelerated Share Buyback and open market
purchases. The timing, actual number and value of the shares which
are repurchased will be at the discretion of management and will
depend on a number of factors, including the price of the Company's
common stock. The Company may suspend or discontinue repurchases at
any time. The new authorization supersedes and replaces the
Company’s existing $200 million share repurchase authorization that
was scheduled to expire in September 2010.
Currently, the Company has approximately 199.2 million shares of
common stock outstanding.
About Del Monte
Foods
Del Monte Foods is one of the country’s largest and most
well-known producers, distributors and marketers of premium
quality, branded pet products and food products for the U.S. retail
market, generating approximately $3.7 billion in net sales in
fiscal 2010. With a powerful portfolio of brands, Del Monte
products are found in eight out of ten U.S. households. Pet food
and pet snacks brands include Meow Mix®, Kibbles 'n Bits®,
Milk-Bone®, 9Lives®, Pup-Peroni®, Gravy Train®, Nature’s Recipe®,
Canine Carry-Outs ® and other brand names. Food product brands
include Del Monte®, Contadina®, S&W®, College Inn®, and other
brand names. The Company also produces, distributes and markets
private label pet products and food products. For more information
on Del Monte Foods Company (NYSE: DLM) visit the Company’s website
at www.delmonte.com.
Del Monte. Nourishing Families. Enriching Lives. Every
Day.TM
Forward-Looking
Statements
This press release contains forward-looking statements conveying
management’s expectations as to the future based on plans,
estimates and projections at the time the Company makes the
statements. Forward-looking statements involve inherent risks and
uncertainties and the Company cautions you that a number of
important factors could cause actual results to differ materially
from those contained in any such forward-looking statement. The
forward-looking statements contained in this press release include
statements related to the Company’s higher level of performance and
planned investments in its business; statements related to the
Company’s anticipated dividends and aggregate quarterly dividends;
and statements related to the Company’s $350 million, three-year
share buyback authorization, including amounts expected to be
executed in fiscal 2011 and the expected manner of such
execution.
Factors that could cause actual results to differ materially
from those described in this press release include, among others:
competition, including pricing and promotional spending levels by
competitors; our ability to maintain or increase prices and
persuade consumers to purchase our branded products versus
lower-priced branded and private label offerings; shifts in
consumer purchases to lower-priced or other value offerings,
particularly during economic downturns; our ability to implement
productivity initiatives to control or reduce costs; cost and
availability of inputs, commodities, ingredients and other raw
materials, including without limitation, energy (including natural
gas), fuel, packaging, fruits, vegetables, tomatoes, grains
(including corn), sugar, spices, meats, meat by-products, soybean
meal, water, fats, oils and chemicals; logistics and other
transportation-related costs; sufficiency and effectiveness of
marketing and trade promotion programs; our ability to launch new
products and anticipate changing pet and consumer preferences;
performance of our pet products business and packaged produce
sales; our debt levels and ability to service our debt and comply
with covenants; the failure of the financial institutions that are
part of the syndicate of our revolving credit facility to extend
credit to us; product distribution; the loss of significant
customers or a substantial reduction in orders from these customers
or the financial difficulties, bankruptcy or other business
disruption of any such customer; industry trends, including changes
in buying, inventory and other business practices by customers;
hedging practices and the financial health of the counterparties to
our hedging programs; currency and interest rate fluctuations;
changes in, or the failure or inability to comply with U.S.,
foreign and local governmental regulations, including packaging and
labeling regulations, environmental regulations and import/export
regulations or duties; impairments in the book value of goodwill or
other intangible assets; strategic transaction endeavors, if any,
including identification of appropriate targets and successful
implementation; adverse weather conditions, natural disasters,
pestilences and other natural conditions that affect crop yields or
other inputs or otherwise disrupt operations; contaminated
ingredients; allegations that our products cause injury or illness,
product recalls and product liability claims and other litigation;
reliance on certain third parties, including co-packers, our
broker, and third-party distribution centers or managers; any
disruption to our manufacturing or supply chain, particularly any
disruption in or shortage of seasonal pack; pension costs and
funding requirements; risks associated with foreign operations;
protecting our intellectual property rights or intellectual
property infringement or violation claims; failure of information
technology systems; transformative plans; general economic and
business conditions; and other factors.
Generally, these factors and other risks and uncertainties are
described in more detail, from time to time, in the Company’s
filings with the Securities and Exchange Commission, including its
annual report on Form 10-K.
There can be no assurance that dividends will be declared or
paid in the future. The actual declaration and payment of future
dividends and the establishment of record and payment dates, if
any, are subject to determination by the Company’s Board of
Directors each quarter after its review of the Company’s
then-current strategy, applicable debt covenants and financial
performance and position, among other things. The Company’s
declaration and payment of future dividends is subject to risks and
uncertainties, including: deterioration of the Company’s financial
performance or position; inability to declare a dividend in
compliance with applicable laws or debt covenants; an increase in
the Company’s cash needs or decrease in available cash; and the
business judgment of the Board of Directors that a declaration of a
dividend is not in Del Monte Foods Company’s best interests, as
well as other risks that may be detailed, from time to time, in the
Company’s filings with the Securities and Exchange Commission.
Factors that could affect the Company’s financial performance or
position, compliance with applicable debt covenants, or cash flow
include those risks and uncertainties listed above and other risks
and uncertainties that may be described from time to time in the
Company’s filings with the Securities and Exchange Commission,
including its annual report on Form 10-K.
Under the Company’s June 2010 $350 million, three-year stock
repurchase authorization, repurchases of the Company’s common stock
may be made from time to time through a variety of methods,
including Accelerated Share Buybacks, open market purchases,
privately negotiated transactions, and block transactions. Del
Monte Foods Company has no obligation to repurchase shares under
the authorization (including any amounts identified as expected to
be executed in fiscal 2011) and the timing, actual number and value
of the shares which are repurchased (and the manner of any such
repurchase) will be at the discretion of management and will depend
on a number of factors, including the price of the Company’s common
stock and other market conditions, an increase in the Company’s
cash needs or decrease in available cash and the Company’s
financial performance and position (including its performance
against its fiscal 2011 expectations), each of which may be
affected by those risks and uncertainties listed above and other
risks and uncertainties that may be described from time to time in
the Company’s filings with the Securities and Exchange Commission,
including its annual report on Form 10-K. The Company may suspend
or discontinue repurchases at any time.
Investors are cautioned not to place undue reliance on the
forward-looking statements included in this release, which speak
only as of the date hereof. The Company does not undertake to
update any of these statements in light of new information or
future events.
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