Ryder System Inc. (R), the world's largest provider of integrated logistics and transportation solutions, announced a new five-year revolving credit line of $900 million, expiring in June 2016.
The new credit facility, effective June 8, was issued to replace an $875 million line of credit, expiring in April 2012.
Management believes that the current credit facility will secure long-term liquidity position and ensure sufficient cash flows to support working capital requirements, capital expenditures and other financial activities of the business.
Ryder’s total debt increased by approximately $62 million from the end of 2010 as it continues to invest in vehicles and rental fleet. The company’s investments are expected to propel revenue and earnings growth going forward. Ryder had invested more than $1 billion in 2010 and $448 million in the first three months of 2011. For 2011, Ryder plans to invest a total of $1.75 billion in both lease and rental fleets. The investments are expected to expand the company’s footprint through organic growth and acquisitions as well as help it to stay ahead of competitors like Con-Way Inc. (CNW).
In order to enjoy a sound financial position with ample liquidity, Ryder focuses on maintaining a debt to tangible net worth ratio of less than or equal to 300%. Currently, the ratio is 191%.
Further, the company’s leverage ratio (debt to equity) remained unchanged from year-end 2010 at 202%. This ensures consistent returns to shareholders through dividend payments and share buybacks at regular intervals. Ryder repurchased shares worth $12 million during the first quarter and has 2 million shares in an anti-dilutive repurchase program. For more than 34 years, the company has been paying dividends to its shareholders. Currently, Ryder pays an annual dividend of $1.08 per share that equates to a dividend yield of 1.96%.
CON-WAY INC (CNW): Free Stock Analysis Report
Be the first to comment