Pro-Fac Announces Full Quarterly Dividend, Intention to Reduce Future Dividends
03 Abril 2009 - 11:00AM
PR Newswire (US)
FAIRPORT, N.Y., April 3 /PRNewswire-FirstCall/ -- Pro-Fac
Cooperative, Inc. ("Pro-Fac" or the "Cooperative) (Nasdaq-CM:
PFACP), an agricultural cooperative, today announced a $0.43 per
share dividend, payable April 30, 2009, to shareholders of record
of its Class A cumulative preferred stock at the close of business
on April 15, 2009. The Cooperative also announced that future
quarterly dividends, beginning with the July 31, 2009 dividend, if
declared by its Board of Directors, are expected to be at the rate
of $0.20 per share. The lower $0.20 rate is expected to continue
indefinitely and will preserve approximately $1.2 million in cash
for Pro-Fac on an annual basis. "The Pro-Fac Board understands the
importance of conserving operating funds in order to maintain a
viable enterprise," said General Manager and CEO Stephen R. Wright.
"A quarterly dividend of $0.20 per share represents an annual yield
of over 3%, which is still very competitive in today's market."
Wright noted that several major companies have announced dividend
reductions in recent weeks, but he called attention to one
important difference between those reductions and any Pro-Fac
adjustment. "The dividend on Pro-Fac's Class A preferred stock is
cumulative," he stressed. "Any difference between a quarterly
dividend payment and the full quarterly preferred dividend of $0.43
per share must be paid in full before the payment of dividends on
any other Pro-Fac equity, and before the redemption of any Pro-Fac
equity." ABOUT PRO-FAC: Pro-Fac Cooperative is an agricultural
cooperative that markets crops grown by its member-growers,
including fruits (cherries, apples, blueberries, and peaches),
vegetables (snap beans, beets, peas, sweet corn, carrots, cabbage,
squash, asparagus and potatoes) and popcorn. Only growers of crops
marketed through Pro-Fac (or associations of such growers) can
become members of Pro-Fac. Pro-Fac's Class A cumulative preferred
stock is listed on the Nasdaq Capital Market under the stock
symbol, "PFACP." More information about Pro-Fac can be found on its
web site, http://www.profaccoop.com/. FORWARD LOOKING STATEMENTS:
This release contains "forward-looking statements" - that is,
statements related to future events. The following factors, among
others, could cause actual results to differ from those set forth
in forward-looking statements: the value of its investment in Birds
Eye Holdings, LLC, its principal asset; the availability of cash,
capital surplus and future earnings; and the collection of accounts
receivable from the sale of crops. Reference is made to Pro-Fac's
filings with the SEC for further discussion of risks and
uncertainties regarding its business. Contact: Pro-Fac Cooperative,
Inc. (585) 218-4210 Questions and Answers Concerning the Change in
Expected Dividend Payments 1. Why has Pro-Fac decided to reduce
dividends, if declared, beginning with the July 31, 2009 dividend?
The dividend policy change represents a more conservative approach
toward cash management and cash preservation. Prudent fiscal
policies and decisions now should, in the long run, ultimately
benefit all the stakeholders in Pro-Fac. 2. Do I have any rights to
collect any unpaid dividends? Dividends on the Cooperative's Class
A preferred stock are cumulative. Any dividends which are not paid
on the regular quarterly dividend dates cumulate and must be paid
in full before the Cooperative can (1) resume paying current
dividends on the preferred stock, (2) pay dividends on its lower
priority securities (i.e. its common stock or special membership
interests), or (3) redeem its preferred stock or any lower priority
securities. Whether these cumulative dividends will be paid in the
future depends on the future financial situation of the Cooperative
and decisions to be made by the Board of Directors. 3. Is Pro-Fac
paying dividends on its common stock? No. The Board of Directors
suspended the payment of common stock dividends several years ago.
4. Is the Cooperative guaranteeing it will pay dividends in the
future? No. Future dividends can only be paid if and when declared
by the Board of Directors of the Cooperative. The Board considers
such dividends each quarter. The decision to declare future
dividends or not will be made in advance of each payment based on
all the facts and circumstances which exist at the time such
declaration is considered. This policy will continue to be in
effect. 5. If cumulative dividends are paid in the future, will I
receive interest on the amount paid? No. Under the Cooperative's
Certificate of Incorporation, cumulated dividends on Class A
cumulative preferred stock do not accrue or receive interest. 6.
Have any Pro-Fac directors or management sold preferred stock
recently? No. In November 2005, the Board established a moratorium
on directors selling preferred stock. No member of the Board or
management has traded in the preferred stock since that date. Prior
to that, all trades by directors and executive officers of the
Cooperative were reported publicly on SEC Forms 4. FORWARD-LOOKING
STATEMENTS: The above questions and answers contain
"forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements
include, but are not limited to, statements concerning expected
future dividend declarations, payments and amounts. These
statements are not historical facts or guarantees of the
Cooperative's future declaration or payment of dividends, or of the
Cooperative's future performance, or of future events or results.
There are risks, uncertainties and other factors that could cause
the Cooperative's actual actions (including the declaration and
payment of dividends) or performance to be materially different, or
that could cause actual events or results to be materially
different from those expressed or implied by or in such
forward-looking statements, including: (1) the value of its
investment in Birds Eye Holdings, LLC, its principal asset, (2) the
availability of cash, capital surplus and future earnings and (3)
the collection of accounts receivable from the sale of crops.
Additional information and factors that could cause Pro-Fac's
actual actions or performance to be materially different or that
could cause actual events or results to be materially different are
discussed in Pro-Fac's periodic reports filed with the Securities
and Exchange Commission. Forward-looking statements speak only as
of the date they are made. The Cooperative undertakes no obligation
to publicly update or revise forward-looking information, whether
as a result of new, updated information, future events or
otherwise. DATASOURCE: Pro-Fac Cooperative, Inc. CONTACT: Kevin
Murphy, +1-585-218-4210, or Pro-Fac Cooperative, Inc.,
+1-585-218-4210 Web Site: http://www.profaccoop.com/
Copyright