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Red Hat Announces Expansion of Stock Repurchase Program and Authorizes Debenture Repurchase Program
RaleighUnited States, March 31, 2005
Red Hat, Inc. (NASDAQ: RHAT), the world's leading provider of open source solutions to the enterprise, today announced that its Board of Directors has authorized the expansion of its previously announced common stock repurchase program. Under the expanded program, the Company is authorized to repurchase in aggregate up to $250 million of the Company's common stock. Based on the previously announced common stock repurchase program, Red Hat has already repurchased approximately $100 million of the expanded $250 million authorization. The Company also announced that its Board of directors has authorized the repurchase of up to $50 million of the Company's 0.5% Convertible Senior Debentures due 2024. Repurchases of common stock and Convertible Debentures may be effected from time to time, either on the open market or in privately negotiated transactions, as appropriate and applicable.
"We believe it is in the best interest of our shareholders for the Company to engage in this repurchase program. In addition, the repurchase program will help to offset dilution associated with our employee stock plans and our Convertible Debentures," said Charles Peters, Chief Financial Officer and Executive Vice President
The timing and the amount of any repurchased common stock and any Convertible Debentures will be determined by the Company's management based on its evaluation of market conditions and other factors. Repurchases of common stock may also be made under a Rule 10b5-1 plan, which would permit common stock to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. The repurchase program may be suspended or discontinued at any time. Any repurchased common stock will be available for use in connection with its stock plans and for other corporate purposes. All Convertible Debentures will be retired and canceled.
The repurchase program will be funded using the Company's working capital. As of February 28, 2005, the Company had cash and investments in debt securities of approximately $929 million.
Red Hat had approximately 177 million shares of common stock outstanding as of February 28, 2005.
About Red Hat, Inc.
Red Hat, the world's leading open source and Linux provider, is headquartered in Raleigh, NC with satellite offices spanning the globe. Red Hat is leading Linux and open source solutions into the mainstream by making high quality, low cost technology accessible. Red Hat provides operating system software along with middleware, applications and management solutions. Red Hat also offers support, training and consulting services to its customers worldwide and through top-tier partnerships. Red Hat's open source strategy offers customers a long term plan for building infrastructures that are based on and leverage open source technologies with focus on security and ease of management. Learn more: http://www.redhat.com
Forward-looking statements in this press release are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. Investors are cautioned that statements in this press release that are not strictly historical statements, including, without limitation, management's plans and objectives for future operations, and management's assessment of market factors, constitute forward-looking statements which involve risks and uncertainties. These risks and uncertainties include, without limitation, reliance upon strategic relationships, management of growth, the possibility of undetected software errors, the risks of economic downturns generally, and in Red Hat's industry specifically, the risks associated with competition and competitive pricing pressures, the viability of the Internet, and other risks detailed in Red Hat's filings with the Securities and Exchange Commission, copies of which may be accessed through the SEC's Web site at http://www.sec.gov.
LINUX is a trademark of Linus Torvalds. RED HAT is a registered trademark of Red Hat, Inc. All other names and trademarks are the property of their respective owners.