KLA-Tencor Declares Special Dividend, Cuts Q2 Adj. EPS Outlook

(RTTNews) - Chip equipment maker KLA-Tencor Corp. (KLAC) on Wednesday declared a special cash dividend, and authorized the redemption of senior notes due in 2018. The company also slashed its adjusted earnings guidance for the second quarter of fiscal 2015, citing the impact of the previously announced leveraged recapitalization transaction.

"We are pleased with the successful completion of the financing of our leveraged recapitalization transaction, and the declaration of our special cash dividend of $16.50 per share. This is a major step forward for the Company in executing our capital allocation strategies in support of our strategic objectives, and fueling strong stockholder returns," President and CEO Rick Wallace said in a statement.

Milpitas, California-based KLA-Tencor's board of directors declared a special cash dividend of $16.50 per share on its common stock, payable on December 9 to KLA-Tencor stockholders of record as of the close of business on December 1, 2014.

Of the $16.50 per share distribution, KLA-Tencor currently expects between $11.50 to $12.50 per share to be characterized as a dividend, and the remaining amount of the distribution to be characterized as a return of capital.

The company had on October 23 approved the payment of the special dividend, subject to the completion of its $4 billion leverage recapitalization. The special cash dividend is an addition to the company's regular $0.50 per share quarterly dividend.

The company's board also authorized the redemption of $750.0 million outstanding principal amount of its 6.900% Senior Notes due 2018. The company added that the estimated loss on extinguishment of $750.0 million outstanding principal amount of the Senior Notes is expected to be about $131 million or $0.80 per share.

Further, the company said it now expects second-quarter results between a loss of $0.19 per share and earnings of $0.05 per share, as well as adjusted earnings in a range of $0.37 to $0.61 per share.

On average, 18 analysts polled by Thomson Reuters expect the company to report earnings of $0.58 per share for the quarter. Analysts' estimates typically exclude special items.

The company had previously during its first-quarter earnings call on October 23 anticipated adjusted earnings in the range of $0.46 to $0.70 per share, exclusive of the impact of the recapitalization. The company also at that time projected revenues between $620 million and $700 million, and order bookings between $700 million and $900 million for the second quarter.

KLAC closed Wednesday's regular trading session at $81.01, up $0.30 or 0.37% on a volume of 1.83 million shares.