LANCASTER, PA - Armstrong World Industries, Inc. (NYSE: AWI)says its board is considering a special cash dividend for shareholders of $500 million.
The announcement follows a strong year end for the maker of flooring, cabinets and construction materials. Wood flooring sales rose during the fourth quarter, though cabinetry sales fell, while overall net income soared to $112.4 million, up from $10 million a year ago.
"This approach is a proactive way to efficiently allocate the company's capital and return value to shareholders at time when conditions in the capital markets are favorable," said Matt Espe, CEO, in a statement last week.
Lenders would have to agree to the special cash dividend, paid by May 1, 2012, of around $8.55 per share, since it would be funded in part by surplus cash and by an additional $250 million of debt that the Armstrong is looking to raise by an expansion of its existing senior credit facility.
"We are below our target leverage of 2 to 3 times net debt/EBITDA, and this contemplated action would help to return us to a more efficient capital structure," said Tom Mangas, Armstrong CFO.
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