Initiates a Share Buyback Program of up to $2 Million
MINNETONKA, Minn.–(BUSINESS WIRE)–Communications Systems, Inc. (NASDAQ: JCS) (“CSI” or the “Company”), a global provider of enterprise network infrastructure, voice and data communication products and services for deployments and management of IT networks, today announced that its Board of Directors has declared a cash dividend of $0.02 per common share. The dividend is payable on October 1, 2019, to shareholders of record as of September 16, 2019. This marks the 68th consecutive quarter that CSI has paid a dividend to its shareholders.
Additionally, the Company’s Board of Directors authorized the repurchase of up to $2,000,000 of the Company’s common stock. Repurchases will be conducted using a variety of methods, including open market purchases or privately negotiated transactions. Shares will be purchased from time to time, depending on price, availability and market conditions and the timing and amount of repurchases will be determined by the Company, based on its evaluation of market conditions, the trading price of its stock and other factors. The stock repurchase program does not obligate the Company to acquire any particular number of shares, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. The Company intends to use available cash balances to fund the share repurchases subject to, among other things, federal and state securities, corporate and other laws and regulations. The stock repurchase authorization is effective immediately and will continue through December 31, 2020. This repurchase program replaces a stock repurchase program that the Company put into place in 2008, but that has been inactive for several years.
Company repurchases of common stock may also be made under a Rule 10b5-1 plan, which would permit common stock to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. Any repurchased common stock will be available for use in connection with the Company’s stock plans and for other corporate purposes.
In its Form 10-Q for the quarter ended June 30, 2019, the Company reported that as of that date, it had cash and investment of $17.2 million, working capital of $35.0 million and approximately 9,325,000 shares of CSI common stock outstanding.
Roger H. D. Lacey, Chief Executive Officer stated, “Supported by a strong balance sheet and cash position, this quarterly dividend payment continues our long history of providing cash returns to our shareholders. The resumption of our share buyback program reflects the confidence of our Board of Directors in the new corporate strategy of focusing on faster-growing and higher-margin solutions for IoT and network edge management, and its belief that the recent trading price of our common stock does not adequately reflect the Company’s current value and strong growth prospects. While we continue to evaluate several opportunities to further expand our business organically and through possible acquisitions, we see this repurchase program as a good investment of our available cash.”
About Communications Systems
Communications Systems, Inc. provides connectivity infrastructure and services for global deployments of broadband networks. Focusing on innovative, cost-effective solutions, CSI provides customers the ability to deliver, manage, and optimize their broadband network services and architecture. From the integration of fiber optics in any application and environment to efficient home voice and data deployments to optimization of data and application access, CSI provides tools for maximum utilization of the network from the edge to the user. With partners and customers in over 50 countries, CSI has built a reputation as a reliable global innovator focusing on quality and customer service.
This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding future financial performance, future growth and future acquisitions. These statements are based on Communications Systems’ current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive or regulatory factors, and other risks and uncertainties affecting the operation of Communications Systems’ business. These risks, uncertainties and contingencies are presented in the Company’s Annual Report on Form 10-K and, from time to time, in the Company’s other filings with the Securities and Exchange Commission. The information set forth herein should be read in light of such risks. Further, investors should keep in mind that the Company’s financial results in any particular period may not be indicative of future results. Communications Systems is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise.
Communications Systems, Inc.
Mark D. Fandrich
Chief Financial Officer
Roger H. D. Lacey
Chief Executive Officer
The Equity Group Inc.
Senior Vice President