VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 12, 2012) - Coast Wholesale Appliances Inc. (TSX:CWA) (Coast or the company) today announced that it will not be declaring a cash dividend for the month of December 2012. In addition, the company announced that, beginning with the January 2013 dividend expected to be declared on or about January 16th, it will reduce the amount of its monthly cash dividend to $0.025 per share from the $0.035 per share declared through November 2012. The new dividend rate equates to $0.30 per share on an annualized basis. At recent Coast share trading prices, this represents a yield of approximately 8% per annum.
"The Board has determined that it is prudent to reduce Coast's rate of shareholder dividends in light of ongoing financial performance and the company's current and future business needs," said Donald J.A. Smith, CA, MBA, a director of Coast and interim Chairman of the Board. "We have reviewed operating budgets for the coming year and are confident that the new dividend level is sustainable."
Coast's monthly cash dividends are paid to shareholders on or about the fifth day of the month following declaration. The company's Board will continue to regularly review Coast's level of dividends relative to both its financial performance, and its current and anticipated future business needs.
Coast is a leading independent supplier of major household appliances and accessories to developers and builders of multi-family and single-family housing, and to retail customers. Founded in 1978, Coast currently operates 16 stores, with 15 locations across the four western provinces and one store in the Greater Toronto Area.
This news release may include forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause actual results, performance, or achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are identified by the use of terms and phrases such as "anticipate", "believe", "estimate", "expect", "may", "plan", "will", and similar terms and phrases, including references to assumptions. Such statements may involve, but are not limited to, comments with respect to the payment and sustainability of Coast's dividends to shareholders, economic performance in Canada and Coast's sales expectations.
These forward-looking statements reflect current expectations of Coast's management regarding future events and operating performance as of the date of this news release. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to: sensitivity to general economic conditions; changes in consumer confidence in the economy; maintenance of profitability and management of changes to the company's business; competition; increases to interest rates; reliance on suppliers and their ability to supply product for sale on a timely basis; changes in consumer preferences; changes in the mix of product sales; fluctuations in fuel and commodity pricing; usage of extended warranty programs and the costs to deliver these services; changes to planning and supply chain processes; lack of long-term supplier agreements; reliance on key personnel; and foreign exchange rates as they relate to imported products.
Although the forward-looking statements contained in this news release are based upon what management believes to be reasonable assumptions, Coast cannot assure investors that actual results will be consistent with these forward-looking statements. The forward-looking statements reflect management's current beliefs and are based on information currently available to Coast. They speak only as of the date of this news release, and reflect current assumptions regarding future events and operating performance. These assumptions include, without limitation: slow economic growth well into 2013 in both Western Canada and the GTA, Coast's current markets; continued fluctuations in exchange rates with the Canadian dollar trading near par with the US dollar; continued low interest rates through 2013; continuing cautious credit markets for Coast's major builder customers to obtain financing; weak consumer confidence due to the slow economic recovery; and no significant change to total housing starts recorded in 2012 compared to 2011. These forward-looking statements are made as of the date of this news release and Coast assumes no obligation to update or revise them to reflect new events or circumstances, other than as required by law.
Coast Wholesale Appliances Inc.
Chief Financial Officer