CHARLOTTE, N.C., Dec. 3, 2012 /PRNewswire/ -- In anticipation of increased federal tax rates in 2013 and other uncertainties associated with the "fiscal cliff", The Cato Corporation's (NYSE: CATO) Board of Directors has declared a special dividend of $1.00 per share as well as an acceleration of the 2013 full year dividend of $1.00 per share.
Both dividends are payable on December 28, 2012 to its shareholders of record at the close of business on December 14, 2012. These dividends are in addition to the Company's regular quarterly $.25 dividend declared on November 20, resulting in a total dividend of $2.25 per share, or approximately $66 million in total, to be paid on December 28.
In addition, the Board anticipates increasing the quarterly dividend by $.05 (or $.20 on an annualized basis) in early 2013, a 20% increase over the current dividend. This increase, if approved, would be payable on a quarterly basis next year.
"Given the very unusual circumstances of the fiscal cliff and uncertainty of the federal tax treatment of dividends, paying both a special dividend and our 2013 dividend now is in the best interest of our long-term shareholders," stated John P.D. Cato, Chairman, President and Chief Executive Officer. "Cato has long been committed to providing value to its shareholders through an increasing dividend. The board's anticipated dividend increase in 2013 demonstrates that commitment.""Our balance sheet remains strong," Mr. Cato continued. "Even in this period of financial and political uncertainty, we remain confident in our business and these payments will not affect our ability to fund new store development, invest in infrastructure and technology and opportunistically repurchase stock."