AFG Industries OKs Dividend in Form of 3-for-2 Stock Split

AFG Industries Inc., the fast-growing Irvine glassmaker, reported that company directors approved a 50% stock dividend that will be executed as a 3-for-2 stock split. The additional shares will be distributed May 14 to stockholders of record on April 23.

AFG directors also voted to apply the regular 4-cents-a-share quarterly cash dividend to the newly split shares, a move that effectively increases dividend payments by 50%. The cash dividend will be paid on July 7 to stockholders of record on June 22.

The stock split comes one day after AFG announced that first-quarter net income set a company record at $9 million and soared 54% above the $5.9 million posted a year earlier. Sales for the quarter of $111.7 million were 31% higher than the year-earlier $85 million.

AFG Chairman R.D. Hubbard said the stock split was approved to “further enhance the marketability and liquidity” of the company’s stock. After the split, there will be approximately 25.4 million outstanding shares.

The company also announced plans to build a $50-million glass-making plant in Kansas, its sixth nationwide. Hubbard said he expects AFG’s Victorville plant, now under construction, to be completed and operating before the end of the year.

AFG stands to earn about $50 million in pretax profits from the sale of stock in Gencorp. Those earnings will be included in the company’s second-quarter results. A company spokesman said they are expected to amount to about $13.5 million, or about 80 cents per share, after taxes.

The profits were generated when General Partners, an investment group that included AFG and Wagner & Brown of Midland, Tex., sold its 2.1 million shares in Gencorp after losing a hostile bid to buy the Ohio conglomerate.