Leading licensor and global brand management company Cherokee Inc, a, announced that its Board of Directors approved the distribution of a quarterly dividend to shareholders of $0.50 per share. The dividend will be payable on or about September 16, 2008 to shareholders of record on September 2, 2008. In addition, Cherokee has ended its strategic alternatives process with Goldman Sachs.

Robert Margolis, Chairman and CEO, stated, "We are pleased to announce our 20th consecutive quarter of providing dividends to our shareholders. With our unlevered balance sheet, and as a result of continually accumulating retained earnings, from time to time we have distributed dividends in excess of our annual free cash flows.”

“We believe a $0.50 per share quarterly dividend is in line with, and sustainable from, our anticipated free cash flows from operations. We currently believe that our excess cash and unlevered balance sheet can be better used to invest in the further development of our brands, staff and/or to acquire equities at opportunistic prices."

"Fortunately, our international growth, now representing 55% of our total revenues, has helped buttress the revenue declines in North America, which we expect will be 10-15% lower this year while domestic soft goods sales decline and consumers adjust to the price increases in food and oil."

Russell J. Riopelle, CFO of Cherokee, added, "As a result of the general slowdown in M&A activity, and the recent decline in our stock price, although inquiries still continue, we have ended our strategic alternatives process with Goldman Sachs. During that process the Company was advised not to, and did not, repurchase any shares under its existing share repurchase plan. Now with the strategic alternatives process ended, we can once again repurchase stock under our previously authorized stock buyback program, subject to applicable legal requirements."

The payment of any future dividends will be at the discretion of Cherokee's Board of Directors and will be dependent upon Cherokee's financial condition, results of operations, available cash, cash flow, capital requirements and other factors deemed relevant by Cherokee's Board of Directors.

Courtesy: Cherokee Inc, USA

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Posted by Naresh Koshti on 31 July, 2008 11:27:30 AM IST #