KAR Auction Services makes first cash dividend
KAR Auction Services, Inc. stated that its board of directors has approved the initiation of a quarterly cash dividend on the company’s common stock. The initial quarterly dividend of $0.19 per share was paid on December 28, 2012 to stockholders of record at the close of business on December 19, 2012, representing an annualized dividend of $0.76 per share. This is the first dividend paid to stockholders in the company’s history.
The declaration and payment of any future dividend will be subject to the discretion of the board of directors and will depend on a variety of factors, including the company’s financial condition and results of operations, contractual restrictions, including restrictive covenants contained in the company’s credit agreement, Automotive Finance Corporation’s securitization facilities and the indenture governing the company’s outstanding debt securities, capital requirements and other factors that the board of directors deems relevant. Therefore, no assurance can be given as to whether any future dividends will be declared by the board of directors or the amount thereof.
The Company also announced that it has entered into an amendment to its credit agreement. The amendment provides greater flexibility to the company, including modifications to increase the amount of restricted payments (which include, among other things, dividends, stock buybacks and other payments made in respect of the Company’s equity securities) permitted to be paid under the terms of the credit agreement and modifications to a financial covenant to account for such greater flexibility.