Priorities are to Maintain a Strong Balance Sheet and Create Value for
OTTAWA, Jan. 20 /CNW/ - Nordion Inc., a leading provider of products and
services to the global health science market, today announced its Board
of Directors has approved the introduction of a quarterly cash dividend
and the reinstatement of a Normal Course Issuer Bid (NCIB) to
repurchase outstanding common shares of the Company on the open market.
"Nordion recognizes the importance of maximizing returns to
shareholders," said Steve West, Chief Executive Officer, Nordion. "Our
dividend and share buyback program underscore our commitment to this
The initial quarterly dividend of US$0.10 per share will be paid on
April 1, 2011, to shareholders of record on March 17, 2011. Nordion's
Board of Directors will review the dividend policy from time to time
taking into consideration the Company's cash flow, earnings, working
capital requirements, financial position and other relevant factors.
"Initiating a dividend at this time reflects our confidence in our
business to generate consistent positive cash flows," continued Mr.
West. "We believe that the dividend is sustainable and appropriate
taking into consideration our expected earnings and the need to
maintain a healthy balance sheet."
All dividends paid or credited by Nordion to Canadian residents will be
designated as eligible dividends in accordance with the Canadian Income
Tax Act. Dividends paid or credited to non-residents of Canada are
subject to a 25% withholding tax unless reduced by treaty. Under the
current Canada-U.S. tax treaty, the withholding tax rate on dividends
is reduced to 15%. Taxation of dividends paid to U.S. residents is
governed by the Internal Revenue Code. It is recommended that
shareholders consult a tax advisor to determine any tax consequences of
receiving dividends from Nordion.
Nordion ended its 2010 fiscal year with cash and cash equivalents of
US$122.8 million. In addition, the Company's outstanding debt is offset
by a financial instrument that meets funding obligation requirements.
Nordion plans to fund dividend payouts from free cash flow, and is
pursuing a credit facility as an additional source of liquidity to
support business operations.
Normal Course Issuer Bid
Nordion has been authorized by the Toronto Stock Exchange (TSX) to
purchase for cancellation up to 5,677,108 common shares of its
67,238,653 common shares outstanding as of January 12, 2011. The
authorized number of shares for repurchase represents approximately 10%
of Nordion's public float and 8% of its outstanding common shares.
Annual purchases to a maximum of US$65 million under the NCIB may begin
on January 26, 2011 and will end no later than January 25, 2012.
Subject to any block purchases made in accordance with the TSX, daily
purchases will be limited to 21,209 common shares, which represent 25%
of the average daily trading volume on the TSX for the most recent six
Nordion intends to enter into an automatic share purchase plan (ASPP)
under which our broker purchases shares in accordance with the policies
of the applicable exchange that the common shares are purchased on and
based on guidelines the Company provides the broker at the time the
ASPP is established. The ASPP may be cancelled or modified only during
periods in which the Company is not in possession of material
non-disclosed information. Subject to required regulatory approvals,
purchases will be made on the open market through the facilities of the
TSX and the New York Stock Exchange (NYSE) in accordance with their
respective rules. Approval of the bid is not required from the NYSE.
The price to be paid will be the market price at the time of
Directors and senior officers of the Company have advised that they
currently do not intend to sell shares during the course of the NCIB.
Nordion believes that, depending on the trading price of its shares and
other factors, the purchase of some of the Company's common shares
under an NCIB for cancellation is an appropriate use of cash and in the
best interest of Nordion and its shareholders.
About Nordion Inc.
Nordion Inc. (TSX: NDN; NYSE: NDZ) is a global specialty health science
company that provides market-leading products and services used for the
prevention, diagnosis and treatment of disease. We are a leading
provider of medical isotopes, targeted therapies and sterilization
technologies that benefit the lives of millions of people in more than
60 countries around the world. Our products are used daily by
pharmaceutical and biotechnology companies, medical-device
manufacturers, hospitals, clinics and research laboratories. Nordion
has more than 600 highly skilled employees in four locations. Find out
more at www.nordion.com.
Forward Looking Statements
Certain statements contained in this news release constitute
"forward-looking statements". These statements are based on current
beliefs and assumptions of management, however are subject to known and
unknown risks, uncertainties and other factors that may cause actual
results to differ materially from the forward-looking statements in
this news release. For additional information with respect to certain
of these beliefs, assumptions, risks and uncertainties, please refer to
Nordion's Annual Information Form for fiscal 2010 available on SEDAR at
www.sedar.com and on EDGAR on www.sec.gov.
SOURCE Nordion Inc.
For further information:
(613) 592-3400 x. 1022