By Melodie Warner And Kristin Jones
Electro Scientific Industries Inc. (ESIO) and PetMed Express
Inc. (PETS) are the latest companies to declare special dividends
ahead of a possible increase in 2013 federal tax rates that may be
triggered by the so-called "fiscal cliff."
President Barack Obama and congressional leaders are discussing
ways to avoid the so-called fiscal cliff, a mix of tax increases
and spending cuts set to begin Jan. 2. Other companies that
recently unveiled similar one-time dividends ahead of possible
changes to dividend taxes include Ethan Allen Interiors Inc. (ETH),
Las Vegas Sands Corp. (LVS), Dillard's Inc. (DDS) and Brown-Forman
Corp. (BFA, BFB). Oracle Corp. (ORCL) said late Monday that it will
pay dividends for the next three quarters early, an accelerated
payment that will cost the company around $867.4 million.
Microtechnology manufacturing company ESI said it will pay a
special $2 dividend, citing a recent successful patent settlement.
The one-time payout will cost the company around $58.8 million.
PetMed said it will pay a special dividend of $1 a share, which
will cost the pet pharmacy around $20 million.
Earlier Monday, Cato Corp. (CATO), HCA Holdings Inc. (HCA) and
Dish Network Corp. (DISH) also unveiled special dividends.
Cato, a seller of value-priced women's apparel, declared a $1
special dividend and accelerated the payment of its annual $1
dividend for 2013. Both dividends are payable on or about Dec. 28.
Cato also said it expects its board to increase its quarterly
dividend by 5 cents, or 20%, in early 2013.
"Given the very unusual circumstances of the fiscal cliff and
uncertainty of the federal tax treatment of dividends, paying both
a special dividend and our 2013 dividend now is in the best
interest of our long-term shareholders," said Chairman and Chief
Executive John P.D. Cato.
HCA, the largest private-sector hospital operator in the U.S.,
declared a special cash dividend of $2 payable on or prior to Dec.
31. The company intends to offer $1 billion of nine-year senior
notes to fund the special dividend.
Meanwhile, the satellite-television operator Dish Network
declared a special $1 dividend payable on or about Dec. 28.
Write to Melodie Warner at melodie.warner@dowjones.com
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