Re: Shareholders oust Forgent’s board - Apples and Tomatoes?
in response to
by
posted on
Aug 31, 2009 04:48PM
WE ARE SEEKING TO ELECT NEW DIRECTORS BECAUSE :
Red Oak does not believe that the current board of directors of ASUR has adequately served in the best interests of ASUR, based in part on the factors described below, and its unaffiliated stockholders and believes change is needed. * ASUR has lost over $35 million since 2003 while the current Board has been in place (except for Ms. Harris who was named to the Board last month). * Since Mr. Snyder, the current chairman, joined the board in December 1997, (with the support of all the members of the current Board, except Ms. Harris), ASUR’s stock has dropped 97% (from $6.13 at December 31, 1997 to $0.17 at July 22, 2009). * The current Board allows what we view as wasteful spending (in our view $360,000 per year on D&O insurance is excessive) and recently embarked on an expensive campaign to take ASUR private and reduce the information it is required to provide stockholders while not disclosing the amount it spent on this failed effort. * The incumbent Board has kept in place a management team that has repeatedly been unable to meet its own forecasts. * The incumbent Board and management have ignored shareholder concerns and limited discussion with holders. * We believe a new board, strongly aligned with stockholder interests by share ownership, should be elected. A History of Losses Under Richard Snyder’s tenure as CEO, ASUR spent in excess of $65 million on selling, general and administrative (SG&A) costs and research and development (R&D) costs since 2003 while reporting aggregate net losses in excess of $35 million during that same time period. This large negative return on investment is across a multi-year time span. Recent results have been no better, having already come in below late 2008 forecasts. Despite this negative return and disappointing recent results, the spending has continued unabated with nearly $14 million in SG&A plus R&D spent in the past twelve months, a full $2.5 million above the Company’s entire reported revenues during that same time period. Management has repeatedly claimed and promised it is building a platform for a $20, $40, and $50 million revenue company. These claims have been met with material failure in almost all instances. At this point Red Oak believes these claims should be disregarded entirely. ASUR’s stock price is 97% lower today than when Mr. Snyder first joined the Board in 1997. We believe that the incumbent Board has destroyed shareholder value by permitting excessive spending including excessive service provider costs, excessive management and employee compensation and generous benefits and we believe they will continue to destroy shareholder value if they are again elected to ASUR’s Board. Even Mr. Snyder’s statement on April 27, 2009 that he would resign has not been honored. He remains as “executive” chair and has a “parachute” contract with terms which were not publicly disclosed until after the failed go-private vote. -http://www.ourmaterials.com/pinnaclefund/ASURDEFC14A.pdf . Be well