Rich in cash and profitable, Life Technologies Inc. declared yesterday a special dividend of $3.50 a share and adopted a new dividend policy.
The 8-year-old Gaithersburg company, a supplier to the growing biotechnology industry, has not paid dividends before, its president, J. Stark Thompson, said.
The company's cash position was behind its decision to declare the one-time dividend, payable March 26 to shareholders of record March 12, he said.
"We're an unusual company in that over the years we have accumulated a lot of cash and no debt," Mr. Thompson said in a telephone interview from a meeting in New York.
Life Technologies develops, manufactures and supplies more than 2,000 products used mainly in two expanding fields, life-science research and the manufacture of genetically engineered products. "We're the hardware store in the gold-mining town," Mr. Thompson said.
For the year that ended Dec. 31, Life Technologies reported net income of $15.4 million, up 16 percent from 1989, said Joseph C. Stokes, the company's chief financial officer.
Sales for the year increased 13 percent, to $151.3 million, Mr. Stokes said.
"Fully one-third of our asset base is in cash, and we're not a money-market fund. We are an industrial company that makes and sells products, and the return on cash is less than historically we get on our businesses," Mr. Thompson said.
"After payment of the special dividend, Life Technologies will retain about $5 million in cash and is not expected to have any outstanding debt. Life Technologies continues to have the financial resources and flexibility to operate and invest in its core life-science research and industrial-bioprocessing businesses."
Under its new dividend policy, Life Technologies "expects to consider the declaration of regular quarterly dividends based on future operating results," Mr. Thompson said.
"We are in general the market-share leader in the markets in which we participate," he said.
Life Technologies' leading customers include the Bethesda-based National Institutes of Health, and universities and biotechnology companies around the world.
Life Technologies was formed in 1983 from the merger of Bethesda Research Laboratories and the GIBCO Corp.
The company's stock, which trades over the counter, closed yesterday at $26.50 a share, up 50 cents.