ST. PETERSBURG — HSN Inc. is expanding its debt threshold past the billion-dollar mark so it can offer a $10 per share dividend.
The firm also announced plans to buy back another four million shares the company says will help bolster its equity compensation programs. The St. Petersburg-based multichannel retailer says it replaced a $600 million credit facility with a new one worth $1.25 billion. It includes a $750 million revolving credit plan as well as a $500 million term loan, which expires in 2020.
The dividend will cost HSN $525 million, the company reported in a filing with the U.S. Securities and Exchange Commission. The stock buyback would cost just under $300 million if shares were purchased at Tuesday's closing price of $74.94. Shares are traded on the Nasdaq under the symbol HSNI.
“The $10 per share special cash dividend and share repurchase program demonstrate our continued commitment to return capital to our shareholders in a balanced and disciplined approach while preserving HSNi's liquidity and flexibility to reinvest in our business, and react opportunistically to value creating alternatives for the company,” HSN CEO Mindy Grossman says in a release.
HSN started its capital return plan in September 2011, ultimately spending $590 million in cash dividends and stock repurchases, according to the SEC filing. Dividends accounted for $139 million of those expenditures, while the buyback of 10 million shares cost $451 million, or $45.10 per share.
HSN reported income of $39.5 million, or 75 cents per share, in its most recent quarter ending Sept. 30, compared to a profit of $42.1 million the year before. Revenue this past quarter was $837.5 million.