VERO BEACH, Fla., May 31, 2001 (PRIMEZONE) -- Calton, Inc. (AMEX:CN) announced today that its Board of Directors has authorized a special dividend of $5 per share, or approximately $21 million of the Company's cash reserves, payable on July 5, 2001, to shareholders of record as of June 20, 2001.
Commenting on the special dividend, Anthony J. Caldarone, Chairman and Chief Executive Officer of Calton, said, "After careful consideration, the Company's Board of Directors believes that shareholder value can be best enhanced by returning a portion of our equity to shareholders through the special dividend and continuing to pursue our strategic plan. We believe that our shares have significant value above the $5 being distributed and, after the dividend, we will have sufficient resources to fund the continued development of existing businesses, including the opportunities being pursued by our subsidiary ventures Innovation Growth Partners, LLC and PrivilegeONE Networks, LLC. Earlier this month, we acquired our co-venturers' interest in PrivilegeONE and, as a result, this entity, which recently announced a strategic alliance with Fleet Credit Card Services, is now a wholly owned subsidiary. We will also continue the Web strategy and information technology services business currently conducted by our wholly owned subsidiary, eCalton.com, Inc., and, as previously announced, will continue to evaluate other acquisition and business opportunities to build shareholder value."
The special dividend is expected to represent a tax-free return of capital to Calton's shareholders to the extent of their adjusted basis in the common stock. Shareholders should consult their tax advisor to determine the proper characterization of the dividend.
Commenting further on the announcement by Equilink Capital Partners, LLC that it intends to commence an unsolicited tender offer for all of the outstanding Calton shares, Caldarone noted that the $5 per share dividend, which has been under consideration by the Board for several months while it reviewed strategic alternatives with management and outside advisors, approximates the proposed conditional $5.50 Equilink offer while allowing shareholders to retain their stake in the Company and share in future growth. Caldarone added, "We believe that there is unrecognized value inherent in our existing operations and other assets, including our tax loss carry forwards. Since the sale of our homebuilding business in December 1998, we have worked hard to establish a foundation for future growth. The combination of the dividend and the continued pursuit of our strategic plan will provide shareholders with significant liquidity and an opportunity to realize additional value. A complete liquidation of the Company would eliminate this opportunity and, under the terms of the agreement with the purchaser of our homebuilding business, require the establishment of a liquidating trust."
Certain information included in this press release and Company filings (collectively, "SEC filings") under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (as well as information communicated orally or in writing between the dates of such SEC filings) contains or may contain forward-looking information that is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from expected results. Among these risks, trends and uncertainties are matters related to the indemnification provisions in connection with the Company's sale of Calton Homes, Inc., national and local economic conditions, the lack of an established operating history for the company's current business activities, conditions and trends in the Internet and technology industries in general, the effect of governmental regulation on the Company and the risks described under the caption "Certain Risks" in the Company's Annual Report on Form 10-K for the fiscal year ended November 30, 2000.