The global provider of interconnection and interoperability solutions, Inteliquent (NASDAQ:IQNT), said today that its board has declared a special one time cash dividend of $3 per share, or $97 million in total. The company will fund the dividends entirely from the cash in hand.
Ed Evans, the CEO of Inteliquent (NASDAQ:IQNT), said that the special one-time dividend allows the company to distribute a large portion of its cash balance to shareholders. When determining the size of dividends, Evans kept in mind that the company should also maintain sufficient capital that can be spent on developing and diversifying the company's product and service offerings.
"We believe that a special one time cash dividend of $3.00 per share achieves this objective, while providing a sensible way for our shareholders to realize the benefit of our cash position. As we go forward, we will regularly review our capital management strategies and evaluate opportunities to return capital to our shareholders," Ed Evans said in an official statement. The company generates cash, and it doesn't have any long-term debts on the balance sheet.
The company is currently involved in an ongoing negotiation with one of its biggest clients, which wants to pay Inteliquent a significantly lower rate. The customer also wants Inteliquent (NASDAQ:IQNT) to pay to terminate certain traffic to them.
The dividends will be paid on October 30, 2012. Nasdaq has a rule that if a dividend is declared in per share and the per share amount exceeds 25 percent of the company's stock price, the date on which the company's stocks will start trading without the dividend, is the first day following the payment date. Inteliquent's $3 in dividend per share is about 33 percent of the company's closing price on October 3. So, according to Nasdaq rules, Inteliquent shares will trade without the ex-dividend from October 31.
Additionally, the record date for the special cash dividend is October 16, 2012. Shareholders who sell their shares after the record date and prior to ex-dividend date (between October 16-30) will not be entitled to the special cash dividend.
Inteliquent recently announced the exit of CFO Robert Junkroski and COO Surendra Saboo on October 1. The company has promoted David Zwick from SVP of business development to CFO.