HNC declares dividend of Retek stock – and $30 million stock repurchase

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HNC directors have declared a dividend on HNC common stock of all the shares of Retek common stock owned by HNC. The Retek shares will be distributed to holders of record of HNC common stock at 5pm Eastern Daylight Time on 15 September. HNC owns 40 million Retek shares, about 84.5% of Retek’s common stock.

HNC’s dividend of its shares of Retek stock will be tax-free to HNC and its stockholders for US income tax purposes.

“We are pleased to have received an Internal Revenue Service ruling allowing us to distribute our Retek shares to our stockholders,” said John Mutch, HNC president and CEO. “Moving forward, this will allow greater visibility into the significant strides we have made in our core markets – financial services, insurance and telecommunications – and enable us to resume a dedicated focus on these markets.”

HNC’s board of directors has authorized the company to repurchase up to $30 million dollars of its common stock from time to time for cash at market prices in open market, negotiated or block transactions. The time and amount of any re-purchases will be determined by HNC. As of 31 July, the company had approximately 27.3 million shares outstanding and 0.1 million shares in treasury stock.

The board decided to authorize this course of action after a review of the company’s financial position and the current market for HNC stock.

“Under current market conditions, we have an opportunity to buy back our shares at what we believe are attractive levels so that the company can continue to issue shares for mergers, acquisitions and option grants while minimizing the dilution to our stockholders,” said Mutch. “We believe our current cash position allows us to implement this repurchase program without adversely affecting our operations or investment plans.”

Headquartered in San Diego, California, HNC Software is a leading provider of predictive software solutions for the financial, insurance, telecommunications, and e-commerce service industries. HNC’s predictive software solutions can provide real-time insight into customer relationships based on transaction-level data, helping companies manage their relationships with individual customers. By accurately predicting customer behaviors, these companies can create initiatives to mitigate risk and attrition; improve customer service; develop marketing programs to enhance profitability; and detect fraudulent customer transactions.

Retek’s solutions enable supplier network orchestration, multi-channel selling, and retail CRM. Retek’s customers include A&P, AnnTaylor, Brooks Brothers, Family Dollar Stores, Kohl’s Department Stores, BhS, Selfridges, Eckerd Corp., The Home Shopping Network and Fogdog Sports.

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