Warner Music to Combine Lava Records With Atlantic

Warner Music Group Corp. on Monday said it would combine Lava Records with its Atlantic Records Group and expected to take related one-time charges of $25 million to $30 million in the fourth quarter.

Warner Music said in August that it would fold Lava, home to such acts as Click Five, Simple Plan and Australia’s John Butler Trio, into Warner Music, after the resignation of Jason Flom, chairman and chief executive of Atlantic Records. Lava Records was a joint venture between Flom and Atlantic.

Flom had run Atlantic since shortly after a group of private investors led by Edgar Bronfman Jr. bought the global music company from Time Warner Inc.

As a result of Flom’s resignation, the elimination of a “small number” of jobs at Lava, and other integration costs, Warner expects to incur the one-time charges during the fourth quarter of fiscal 2005. About $20 million will be noncash charges for the write-off of amounts paid to Flom in 2002 as part of the transaction that formed Lava Records.

Warner Music also declared a quarterly dividend of 13 cents a share, which would amount to a total payout of about $19.3 million. The dividend is payable on Nov. 23 to shareholders of record on Oct. 24.

Shares of Warner Music climbed 44 cents, about 2.4%, to $18.95.