Spectrum Brands Holdings Inc.
) ability to generate ample free cash flow, the board of
directors initiated the payment of regular quarterly dividends to
its shareholders. The company announced its first ever regular
quarterly dividend of 25 cents per share. The dividend is payable
on Mar 12, 2013 to shareholders with record as of Feb 14, 2013.
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The initiation of regular dividends follows the company's
announcement of a one-time special dividend of $1.00 per share in
Sep 2012. The company had then announced that it will begin
regular dividend payments in fiscal 2013.
Spectrum Brands' decision to payout regular dividends not only
mirrors strong and consistent cash generation but supports its
commitment to enhance shareholder value. Looking beyond fiscal
2013, the company expects to evaluate the possibilities of
increasing its dividend rate driven by the amount of growth in
its free cash flow.
Some of the consumer goods companies that have been rewarding its
shareholders via payment of regular dividend over the years
Procter & Gamble Co.
The Clorox Co.
Additionally, Spectrum Brands remains focused on using its free
cash flow to lower its debt burden. In the fourth quarter of
fiscal 2012, the company made voluntary prepayments worth $ 150
million, in order to achieve its targeted total leverage ratio of
about 3.4 times by the end of fiscal 2012. These prepayments
lowered the company's term loan to $370 million from the original
$750 million borrowed in fiscal 2010.
Spectrum Brands is also focused on strengthening its balance
sheet through refinement of its capital structure while also
enhancing its financial flexibility in order to boost shareholder
Further, the company is in the midst of a major cost cutting
process while it looks for opportunities to expand its brand
portfolio. The company is also working well with its game
changing Spectrum Value Model to deliver genuine value to
customers at lower prices compared to its peers. Currently,
Spectrum Brands holds a Zacks Rank #3 (Hold).