DALLAS, Nov. 5 /PRNewswire-FirstCall/ -- Centex Construction Products,
Inc. (NYSE: CXP) today announced that its Board of Directors has approved an
increase in its annual cash dividend from $0.20 per share to $1.20 per share
(representing an increase in the regular quarterly cash dividend from $0.05 to
$0.30 per share), effective upon the completion of the proposed spin-off of
CXP shares by Centex Corporation. This 500% increase reflects the Board's
confidence in CXP's financial strength and ability to pay the enhanced
dividend from its cash flow without materially impacting its ability to take
advantage of future growth opportunities. In addition, the recent reduction
in the federal tax rate on dividends makes the higher dividend a more
attractive way of distributing earnings to its shareholders.
The dividend increase will not affect the previously announced quarterly
cash dividend of $0.05 per share payable on January 6, 2004 to shareholders of
record on December 9, 2003. The increased cash dividend would become
effective with the first quarterly cash dividend following the completion of
the spin-off.
CXP also reported that the proposed spin-off of CXP shares by Centex
Corporation was progressing towards completion, which is now anticipated to
occur in January 2004. Under the terms of the previously announced agreement
with Centex Corporation, CXP would reclassify 9,220,000 of the approximately
12 million shares of CXP common stock held by Centex into a new Class B common
stock having the right to elect at least 85% of the directors of CXP. Centex
would then distribute all of these Class B shares and the remaining shares of
CXP common stock held by Centex to its stockholders. CXP would also pay a
special one-time cash dividend of $6.00 per share to all of its shareholders
(including Centex) immediately prior to the spin-off.
The reclassification will require approval by the CXP stockholders
(including the majority of CXP common stock not held by Centex), as well as
approval by the IRS of the tax-free nature of the spin-off. The listing of
the new Class B Common Stock of CXP will also require the approval of the New
York Stock Exchange. Accordingly, there can be no assurance that the spin-off
or any of the other transactions described above will occur on the terms
described above, if at all.
Centex Construction Products is a Dallas-based company that manufactures
and distributes Cement, Gypsum Wallboard, Recycled Paperboard and Concrete and
Aggregates.
Forward-Looking Statements. This press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933,
Section 21E of the Securities Exchange Act of 1934 and the Private Securities
Litigation Reform Act of 1995. Forward-looking statements may be identified
by the context of the statement and generally arise when the Company is
discussing its beliefs, estimates or expectations. These statements are not
guarantees of future performance and involve a number of risks and
uncertainties. Actual results and outcomes may differ materially from what is
expressed or forecast in such forward-looking statements. The principal risks
and uncertainties that may affect the spin-off and related transactions
include the fact that these transactions will be subject to obtaining
stockholder and regulatory approvals as described above and satisfaction of
other customary conditions. With respect to any discussion of the expected
performance and results of operations of the Company, risks and uncertainties
include, but are not limited to: the cyclical and seasonal nature of the
Company's business; public infrastructure expenditures; adverse weather;
availability of raw materials; unexpected operational difficulties;
governmental regulation and changes in governmental and public policy; changes
in economic conditions specific to any one or more of the Company's markets;
competition; announced increases in capacity in the gypsum wallboard and
cement industries; general economic conditions; and interest rates. These and
other factors are described in the Annual Report on Form 10-K for Centex
Construction Products, Inc. for the fiscal year ended March 31, 2003, in its
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2003, and
the current Report on Form 8-K dated July 21, 2003. These reports are filed
with the Securities and Exchange Commission.
Additional Information and Where to Find It. In connection with the
recapitalization of its common stock, CXP has filed a preliminary proxy
statement with the Securities and Exchange Commission. INVESTORS AND SECURITY
HOLDERS ARE ADVISED TO READ SUCH PROXY STATEMENT WHEN IT BECOMES FINAL BECAUSE
IT WILL CONTAIN IMPORTANT INFORMATION. Investors and other security holders
can obtain copies of the definitive proxy statement free of charge when it
becomes available and may also obtain other documents filed by CXP with the
SEC by directing a request to Centex Construction Products, Inc., Investor
Relations, 2728 North Harwood, Dallas, Texas 75201 Telephone: 214/981-6510.
Individuals may also obtain free copies of the definitive proxy statement when
it becomes available and other documents filed with the SEC by accessing the
SEC's website at http://www.sec.gov . CXP, its directors, certain executive
officers, and certain other employees may be deemed under the rules of the SEC
to be "participants in the solicitation" of proxies from the security holders
of CXP in favor of the reclassification. CXP's directors and executive
officers beneficially own, in the aggregate, less than 2% of the outstanding
shares of CXP common stock. Security holders of CXP may obtain additional
information regarding the interests of the "participants in the solicitation"
by reading the proxy statement relating to the recapitalization when it
becomes available.
SOURCE Centex Construction Products, Inc.
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Related links:
http://www.centex-cxp.com
CONTACT:
Steven R. Rowley, President and Chief
Executive Officer, or Arthur R. Zunker, Jr., Senior Vice
President and Chief Financial Officer, both of Centex
Construction Products, Inc., +1-214-981-5000
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