Tim Hortons Q4 Profit Edges Up, To Buy Back Up To C$440 Mln Shares; Ups Dividend

(RTTNews) - Canadian quick-service restaurant chain Tim Hortons Inc. (THI, THI.TO) said that its fourth-quarter net income attributable to the company was C$100.6 million, a slight increase from C$100.3 million a year earlier, as the impact of a lower effective tax rate, due to certain discrete items recognized in the latest-quarter, was offset by reduced operating income.

Earnings per share of C$0.69 grew by C$0.04 or 6.2% due to the expanded share repurchase program, which led to a decrease of 8.6 million shares outstanding year-over-year.

Analysts polled by Thomson Reuters expected the company to report earnings of C$0.76 per share for the quarter. Analysts' estimates typically exclude special items.

The Cold Stone Creamery de-branding costs and corporate reorganization expenses negatively impacted Earnings per share by C$0.11 in the latest-quarter, and corporate reorganization expenses negatively impacted Earnings per share by C$0.04 in the prior year quarter.

Quarterly revenues rose to C$898.50 million from C$811.60 million in the prior year quarter. Eight analysts had consensus revenue estimate of C$836.81 million for the quarter.

In 2014 the company anticipates continued growth, but it will also be investing in key drivers intended to facilitate accelerated growth beyond 2014, which will be outlined at the Investor Conference.

For 2014, the company expects earnings per share to be in the range of C$3.17 to C$3.27, and same-store sales growth of 1% to 3% in Canada and 2% to 4% in the U.S. Analysts project annual earnings per share of C$3.33.

Tim Hortons also announced that the Board of Directors has approved a 23.1% increase in the quarterly dividend to C$0.32 per common share, which is within our targeted annual dividend payout range of 35% to 40% of prior year, normalized net income attributable to Tim Hortons Inc. The dividend is payable on March 18, 2014, to shareholders of record as of March 3, 2014.

Inaddition, Tim Hortons announced that it plans to commence a new share repurchase program for up to C$440 million in common shares.

The Company has obtained regulatory approval from the Toronto Stock Exchange (TSX) to commence a new share repurchase program or "bid" for up to C$440 million in common shares, not to exceed the regulatory maximum of 13,726,219 shares, representing 10% of the Company's public float as of February 14, 2014, as defined under TSX rules. The bid is planned to commence on February 28, 2014 and is due to terminate on the earlier of February 27, 2015 or the date the maximum share or dollar amount is reached.

"The new share repurchase program is comprised of the remaining portion of our previously announced target of repurchasing C$1 billion of shares in the 12 months ended August 2014, plus an additional amount of approximately C$200 million," said Cynthia Devine, Chief Financial Officer.

As of February 14, 2014, Tim Hortons had 138.165 million common shares outstanding.