Stamps.com Announces One-Time Dividend and Anticipated Reverse Stock Split
Dividend Follows Strong Fourth Quarter Results and the Expectation of 2005 Profitability
SANTA MONICA, Calif, — January 28, 2004 – Stamps.com (Nasdaq:STMP – News) today announced that its Board of Directors has declared a one-time return of capital cash dividend of $1.75 per share to shareholders of record as of the close of business on February 9, 2004, to be paid on February 23, 2004. Additionally, Stamps.com announced that at its annual meeting on April 23, 2004, shareholders of Stamps.com will be asked to grant the Board of Directors the authority to select a one-for-two (1:2), one-for-three (1:3) or one-for-four (1:4) reverse split, with the exact ratio determined by the Board of Directors when it effects the split. In a separate release, Stamps.com today announced fourth quarter revenue grew 41% versus the same quarter last year, and that it currently anticipates profitability beginning in the first quarter of 2005.
“With our current financial outlook, including expected 2004 revenue growth of 35% and expected profitability beginning in the first quarter of 2005, the Stamps.com Board of Directors feels that the Company no longer needs such a large cash balance and that the best use of the surplus capital is to return it to the shareholders,” said Ken McBride, CEO of Stamps.com. “The Board believes that Stamps.com will retain a strong balance sheet following the dividend which will provide the flexibility to capitalize on future growth opportunities. Furthermore, the Board believes that a reverse stock split is appropriate for Stamps.com’s capital structure following the dividend, and the Board hopes that the anticipated increase in price level following a reverse split will encourage additional interest in the stock.”
Stamps.com currently believes that the one time dividend paid from surplus capital should qualify as a tax-free return of capital under the Internal Revenue Code. Shareholders are encouraged to consult with their own tax and financial advisors regarding the implications of this dividend on their individual circumstances. Based on the anticipated number of common shares outstanding on February 9, 2004, the total amount of cash distributed in the dividend will be approximately $78 million. After the one time dividend and associated costs, Stamps.com will retain approximately $83 million in cash. Stamps.com expects a one-time expense of approximately $3 million during the first quarter of 2004 related to the one-time dividend and its effect on employee stock options; the actual expense may vary depending on the stock price before and after the ex-dividend date.
If a reverse stock split is approved by the shareholders and is effected by the Stamps.com Board of Directors, the par value of Stamps.com common stock would remain unchanged at $0.001 per share, and the number of authorized shares of common stock and preferred stock would be reduced proportionately by the reverse split ratio from 95,000,000 and 5,000,000, respectively.
The Company also plans to continue its share repurchase program that it announced on October 29, 2003. That program authorized up to $20 million in share repurchases for a 12 month period that began October 15, 2003. The timing of purchases, if any, and the number of shares to be bought at any one time will depend on market conditions.
Information regarding the reverse stock split proposal will be found in Stamps.com’s annual proxy statement to be filed with the Securities and Exchange Commission shortly. Stamps.com stockholders are urged to read the preliminary and the definitive proxy statement when it becomes available because it will contain important information about Stamps.com and the reverse stock split proposal. The proxy statement and other relevant materials (when they become available), as well as any other documents filed by Stamps.com with the SEC, may be obtained free of charge at the Company’s web site at investor.stamps.com/edgar.cfm.
Stamps.com (Nasdaq: STMP) is a leading provider of Internet-based postage services. Stamps.com enables customers to print U.S. Postal Service-approved postage with just a PC, printer and Internet connection. The Company targets its services to small businesses, home offices, and individuals, and currently has partnerships with companies including CompUSA, Earthlink, HP, Microsoft, NCR, Office Depot, Vendio and the U.S. Postal Service.
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This release may contain forward-looking statements that involve risks and uncertainties. Important factors, including the Company’s ability to complete its products and obtain regulatory approval, which could cause actual results to differ materially from those in the forward-looking statements, are detailed in filings with the Securities and Exchange Commission made from time to time by Stamps.com, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2002, its subsequent Quarterly Reports on Form 10-Q, and its Current Reports on Form 8-K. Stamps.com undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Stamps.com, the Stamps.com logo, NetStamps and Hidden Postage are trademarks or registered trademarks of Stamps.com Inc. All other brands and names are property of their respective owners.