Heico declares special dividend of $1.14 per share

HOLLYWOOD, Fla. (AP) -- Aerospace and defense company Heico declared a special dividend, a step that many companies are taking ahead of impending tax increases and government spending cuts at the start of 2013.

In addition to the special dividend of $1.14 per share, the company is also moving up the payment date of its semi-annual dividend of 6 cents per share.

The White House and GOP congressional leaders are trying to arrange a deal to avoid falling off the fiscal cliff, as the combination of simultaneous tax hikes and spending cuts has been dubbed.

Heico Corp. said Tuesday that the dividends will be paid in one payment on Dec. 21 to shareholders of record on Dec. 10. The Hollywood, Fla. company said that its semi-annual dividend would normally have been paid in January, but that it moved the payment date to December because of the potential tax increases.

The dividends will be funded from borrowings under the company's revolving credit facility.

Heico is the latest company to move up a dividend payout and issue a special end-of-year payment to protect investors from potentially having to pay higher taxes on dividend income starting in January.

Many companies are reviewing their dividend policies now that it appears investors could soon pay higher taxes. Since 2003 investors have paid a maximum 15 percent on dividend income. But that historically low rate will expire in January unless Congress and President Barack Obama reach a compromise on taxes and government spending. As it stands, dividends will be taxed as ordinary income in 2013, the same as wages, so rates will go up depending on which income bracket a taxpayer is in. For the highest earners, the dividend rate would jump to 43.4 percent.

Heico will report its fourth-quarter and full-year financial results on Dec. 18.

Its shares rose 34 cents to $40.71 in morning trading. Its shares are still down 13 percent for the year and 18 percent from its 52-week high of $49.58 in mid-December of 2011.