Reddy Ice stops dividend payments, announces personnel changes

By Lisa Kerner

Charlotte, N.C., Sept. 15 - Reddy Ice Holdings, Inc. suspended its quarterly cash dividend indefinitely, effective immediately.

No cash dividend will be declared for the period from July 1 to Sept. 30, a company news release said.

Previously, Reddy Ice paid dividends at a rate of $1.68 per share on an annual basis.

Eliminating the dividend will conserve about $9.3 million of cash per quarter, according to president and chief executive officer Gilbert M. Cassagne.

"The company had the ability to pay a dividend under its covenants, and the liquidity to do so, but after careful consideration the board determined suspending the dividend was the proper course," Cassagne said in the release.

"While this decision is difficult, we believe it is the best course in light of this year's weaker than expected operating results and costs related to the ongoing antitrust investigations and related litigation," Cassagne added.

VP put on leave, COO position filled

Reddy Ice also announced key personnel changes on Monday.

Ben D. Key, executive vice president of sales and marketing, was placed on paid leave of absence on Saturday by the company's special committee under suspicion he violated company policies and in relation to other matters that are under investigation.

Reddy Ice said the Antitrust Division of the Department of Justice and the attorneys general of 19 states and the District of Columbia are investigating possible antitrust violations in the packaged ice industry.

A team of senior Reddy Ice executives led by Cassagne and vice president of business development William A. Tolany will direct the company's sales and marketing efforts.

In addition, former Cadbury Schweppes plc senior vice president Paul D. Smith was appointed executive vice president and chief operating officer of Reddy Ice.

The COO position had been unfilled since January 2008, Reddy Ice said.

According to a form 8-K filed with the Securities and Exchange Commission, Smith will receive a base salary of $290,000 per year and will be eligible for cash incentive compensation.

Smith also entered into a restricted stock agreement in which Reddy Ice will grant him 20,000 shares of restricted stock under the Dallas packaged ice company's 2005 Long Term Incentive and Share Award Plan, as amended.

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