Firms beat tax deadline with big payouts

At least four Gulf Coast companies joined a national trend in giving money back to shareholders in a move timed to beat massive potential tax increases in early 2013.

One firm, Clearwater-based Nicholas Financial, a specialty consumer finance company, declared a year-end dividend of $2 a share. Nicholas Chairman and CEO Peter Vosotas says the dividend, for shareholders of record through Dec. 21, is an “effort to return capital to our shareholders in the most tax efficient manner as possible.”

In addition, Sarasota-based Sun Hydraulics Corp., and Tampa-based Kforce Inc., recently announced $1 per share dividends. The Kforce dividend is payable Dec. 27 to shareholders of record by Dec. 17, while the dividend at Sun is payable Dec. 28 to shareholders of record through Dec. 14.

Seminole-based Superior Uniform Group Inc., meanwhile, declared a special dividend of 54 cents a share, payable Dec. 31 to shareholders of record through Dec. 21. The outlay, according to a Dec. 11 Superior Uniform statement, represents a prepayment of the company's 2013 quarterly dividends. The special dividend will cost the firm $3.3 million.

More than 150 companies nationwide have also declared special year-end dividends, according to Bloomberg News. The total amount of payouts, from companies that include Whole Foods and Carnival Corp., the Miami-based cruise ship company, is expected to surpass $20 billon.

Some companies that declared the special dividend provide clear rationale for the move in notes to shareholders: Under current tax law, the top rate on dividends is 15%. That rate expires at the end of 2012, and it could spike to 40% next year, depending on fiscal cliff and other federal government negotiations.

Kforce, a professional staffing services firm, didn't mention the tax uncertainty in its special dividend statement. The company did, however, say the dividend will cost it about $35 million.

“We believe that our present level of liquidity warrants the distribution to shareholders ... and that Kforce has prudently used its credit facility in the past to drive shareholder value while limiting financial leverage,” Kforce Chairman and CEO David Dunkel says in the statement. “We believe that after this distribution the company has adequate financial means to execute future growth strategies, pay down debt and remain opportunistic in repurchasing shares.”

Sun, which designs, manufactures and sells screw-in cartridge valves and manifolds used for hydraulic systems, was more pointed in its statement. “Given Sun's excellent balance sheet and strong cash position, coupled with the likelihood of impending changes to tax law regarding dividends, the board determined it is appropriate to return some cash to shareholders,” Sun Chairman Ferdinand Megerlin says in a release. “In our considerations, we concluded this special dividend does not in any way compromise Sun's ability to carry on with the normal running of its business.”