Standex International (NYSE: SXI) individual shareholder Bill Coons, a private investor from Dallas, traveled to Boston to express his disappointment and seek reform in the company's performance and governance at today's SXI Annual Meeting.
BOSTON (Business Wire EON) October 30, 2007 --
Standex International (NYSE: SXI) individual shareholder
Bill Coons, a private investor from Dallas, traveled to Boston to
express his disappointment and seek reform in the company’s
performance and governance at today’s SXI
Annual Meeting.
As a sign of his growing disapproval of the company’s
continuing insider, conflict and lack of accountability issues, Mr.
Coons also voted his shares against the election of an insider to the
Standex Board of Directors.
Standex International Corporation is a multi-industry manufacturer in
five business segments—food service equipment,
air distribution products, engineered products, engraving and hydraulics
products. It has operations in the United States, Europe, Canada,
Australia, Singapore, Mexico, Brazil and China.
Referring to SXI’s “dismal
performance” and “lack
of a coherent plan to improve,” Mr. Coons1
said the Board is “failing in this basic duty”
of watching out for the interests of shareholders. He challenged both
Board and management to “align itself with
shareholder interests.”
Overall, Mr. Coons said SXI’s:
-
Share price is going nowhere;
-
Real revenue is masked by acquisitions;
-
Executive Compensation is not correlated to performance;
-
Board is heavily weighted to insiders; and
-
Senior Management and Board lack suitable equity investment.
Core Management and Governance Issues
Mr. Coons cited several company policies and practices as indicative of
the core problem – that no one at Standex is
holding management accountable for the company’s
poor performance:
-
Executive Compensation. At Standex, executive compensation is
not related to performance. During this period of “dismal
performance,” Standex CEO Roger Fix “has
received almost $9 million” over the past
six years.”
-
Diamond-Studded Parachute. The CEO “will
receive almost $10 million upon a change in control of Standex.”
-
Board Compensation. During the past year, Board members “paid
themselves about 3.25 percent of the profits”
while owning only one percent of the company’s
equity.
-
Corporate Governance. Following Board retirements this year,
four of the 10 Directors are insiders, including the current and one
former CEO. “This barely squeaks by the
test of independence.”
-
Acquisitions Masking Poor Performance. “If
revenues attributed to the acquisitions are backed out of company
sales, Standex experienced an 11 percent revenue decrease.”
-
Failure to Align with Shareholders. Taken together, “the
CEO, the senior executives and the Board own less than two percent of
the company.” With such low equity
participation, management and the Board are less likely to be aligned
with shareholders.”
Symbolic Vote
Concerned with an apparent conflict of interest and with the continued
insider weighting of SXI’s Board of
Directors, Mr. Coons withheld his shares from approval of the proposed
re-election of the company’s Chief Legal
Officer to the Board. “As a member of
management, as Chief Legal Officer and as a Director, she has multiple
conflicts which preclude her from acting in the best interests of
shareholders,” Mr. Coons said. “My
grocery list gets more scrutiny than directors’
appointments at Standex,” he added.
Mr. Coons also urged the company’s employee
retirement plan Trustee to also vote against retaining “the
director who is also in management.” He
cautioned Fidelity that as “trustee of these
employees’ retirement, you need to be aligned
with their interests, not the interests of the Board.”
History of Poor Performance
Believing these management and governance problems have led to poor
performance, Mr. Coons called shareholder attention to Standex’
performance over the past six years, during which Standex has “repeated
the same, tired and grim story.”
Six years ago, Standex “stock price was about
$21. Today, the stock price is still about $21, and last week our stock
hit a 4-year low.” During the past five years:
-
SXI stock is down 8 percent;
-
The S&P is up more than 70 percent;
-
NASDAQ is up more than 106 percent;
-
The Russell 2000 is up more than 114 percent.
-
SXI’s main competitor, Middleby Corp.,
is up more than 1,300 percent, split-adjusted, and 23 percent last
year.
Call to Action
Mr. Coons proposed to shareholders that “we
begin the process of getting this company back on track; of holding our
management accountable; and, if they do not perform, of instituting
management who will produce a coherent and successful strategy.”
From Mr. Coons’ background and experience in
corporate finance, he expressed confidence, saying “these
steps will result in a nimble, profitable and competitive company.”
About Bill Coons
Bill Coons is a Standex International shareholder. During his career, he
has built and operated successful companies. Before focusing on his
entrepreneurial ventures, Mr. Coons worked in corporate finance, first
at Maryland National Industrial Finance, then moving to BT Commercial
Corp. in Dallas. From there, he became Vice President –
Leveraged Finance at First Continental Capital Markets Group, later
serving as a Vice President at Citicorp North America.
To arrange a conversation with Bill Coons, or to obtain a full copy of
Mr. Coons’ remarks to fellow shareholders,
contact Alexandra Corriveau at Sommerfield Communications at
212-255-8386 or at alexandra@sommerfield.com
or go to the website www.sxi-shareholders.com.
1 Note: All statements appearing in quotation
marks in this news release are those of SXI shareholder Bill Coons, in
his remarks during the SXI shareholder’s
meeting on October 30, 2007.
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