North Pittsburgh Systems, Inc. Mails Letter to Shareholders
March 26 2007 - 2:46PM
PR Newswire (US)
GIBSONIA, Pa., March 26 /PRNewswire-FirstCall/ -- North Pittsburgh
Systems, Inc. (NASDAQ:NPSI) today mailed the following letter to
shareholders. March 26, 2007 Dear Shareholder: You may have
recently received a letter from individuals calling themselves "The
North Pittsburgh Systems Shareholder Committee". Please be aware
that this so-called Committee is not an official NPSI committee
but, rather, is comprised of hedge fund activists with a long
record of disruptive behavior at companies in which they have
purchased stock. IMPORTANT -- Your Board of Directors' goals of
long-term sustainable value for your investment in the Company are
not the same as the solely short-term "for sale" goal of the
so-called Committee. WHO IS THE "COMMITTEE" The four individuals
who signed the letter from the so-called Committee -- Phillip
Goldstein, Andrew Dakos, Lawrence Goldstein, and James Chadwick -
are well-known activists who are part of a group that has
accumulated stock in NPSI (the "Bulldog Group"). An apparent member
of the Bulldog Group, Full Value Partners L.P., has informed us
that it intends at our 2007 annual shareholders meeting (1) to
nominate two of its hand-picked nominees for election to our Board
of Directors and (2) to propose that the Company's shareholder
rights plan be waived for a cash offer for all of the Company's
shares. If you receive proxy solicitation materials from this group
we urge you NOT to grant them your proxy. WE ARE LOOKING OUT FOR
YOUR INTERESTS Our Corporate Governance and Nominating Committee is
considering the composition of the slate of directors that we will
propose for election at the 2007 annual meeting, which we expect to
hold this summer. Our slate will be comprised of highly qualified
candidates who the Board believes will act in the best interests of
all our shareholders. Moreover, the Board believes that it is in
the best interests of NPSI and its shareholders for us to continue
to manage the Company with a view to both short-term and long-term
shareholder value, as well as for the benefit of our customers and
our other constituencies. The proposals by the Bulldog Group are
not consistent with these objectives and ideals. Instead, we
believe that they are the tactics of hedge fund activists working
only to advance their own short-term financial interests. SETTING
THE RECORD STRAIGHT In an effort to undermine our business goals,
the letter mailed to you by the so-called Committee compares NPSI
to another company, Warwick Valley Telephone. It neglects to point
out that at the 2006 annual meeting, Warwick Valley's shareholders
rejected, by substantial margins, the efforts of members of the
Bulldog Group to elect two hand-picked nominees to Warwick Valley's
board of directors - including one individual whom Full Value
Partners has informed us it intends to nominate for election to
NPSI's Board of Directors at our 2007 annual shareholders meeting.
The letter also asks if NPSI's management is "looking out for their
own welfare." Our answer is very simple and very clear: No. Let us
set the record straight. * NPSI has paid dividends for the past 93
consecutive quarters and has declared the 94th dividend to be paid
on April 16, 2007 to shareholders of record on April 2, 2007. Over
this 23 year period, our regular quarterly dividend has increased
from $0.04 to $0.20 per share (adjusted for stock splits) and the
Company has paid special cash dividends aggregating more than $19
million. * The letter implies that your Board and management are
not evolving the Company to meet the requirements of today's
telecommunications customers. While there is no question that there
has been a decline in demand for traditional telecommunications
products and services throughout our industry, we have not stood
idly by. Rather, the Company has and will continue to keep pace
with technology and customer demands, with the ultimate goal of
improving shareholder value. * Over the past decade, the Company
has transformed itself from a traditional telephone company to a
broadband company and has done so utilizing the investment in
infrastructure that is fundamental to the Company's ability to
service its customers with new and innovative products. We believe
that, in many cases, our network is better equipped to ubiquitously
handle broadband services than many of the largest
telecommunications or cable competitors and, due to our size, the
Company can be far more responsive to its customers. Growth in
data-related services has helped to offset the decline in
traditional access lines. * Another example of the Company's
evolution is our initiation of VoIP (Voice over Internet Protocol)
service that provides the latest features and services required to
enable a modern business communications system. Our VoIP service
utilizes the Company's broadband network within the operating areas
of the Company's subsidiaries. It will also work anywhere a
customer has a broadband connection, which we believe may allow
nearly unlimited potential growth of this product in the future. *
The Company's investments in three wireless partnerships in the
Western Pennsylvania region have provided important value to the
Company as they continue to grow and become increasingly
profitable. The cash flow generated from these partnerships has
helped the Company consistently pay dividends to its shareholders.
After more than a century of progress, NPSI companies are still
expanding their horizons and meeting the changes and challenges
that the ever-evolving telecommunications industry presents. We
thank you for your support in the past and look forward to your
continued support. Please do NOT sign any proxy card sent to you by
Full Value Partners, The North Pittsburgh Systems Shareholder
Committee or any other member of the Bulldog Group. In the future,
management will be sending to you a proxy statement along with a
WHITE proxy card. If you have any questions, please call MacKenzie
Partners, Inc., who is assisting us, at 800-322-2885. Very truly
yours, NORTH PITTSBURGH SYSTEMS, INC. By: Charles E. Thomas, Jr.
Chairman of the Board Additional Information The Company will file
a proxy statement with the Securities and Exchange Commission
concerning the Company's 2007 annual meeting of shareholders.
Holders of Company common stock are urged to read the proxy
statement when it becomes available because it will contain
important information. In addition, the Company's directors,
executive officers and certain of its employees may be deemed to be
participants in the solicitation of proxies from the shareholders
of the Company with respect to the 2007 annual meeting. Information
about the directors and executive officers of the Company will be
available in the proxy statement that the Company will file with
the Securities and Exchange Commission and mail to shareholders.
Investors also will be able to obtain a free copy of such proxy
statement, when it is available, and any other relevant documents
filed by the Company, at the Securities and Exchange Commission's
website, http://www.sec.gov/, and by contacting the Company at:
4008 Gibsonia Rd., Gibsonia, PA 15044-9311, Attention: Secretary;
or MacKenzie Partners, Inc. at 800-322-2885. In addition to
historical information, this letter may contain forward- looking
statements regarding events, performance, financial trends and
accounting policies that may affect the Company's future operating
results, financial position or cash flows. Such forward-looking
statements are based on assumptions and estimates and involve risks
and uncertainties. Various factors could affect future results and
could cause actual results to differ materially from those
expressed in or implied by the forward-looking statements. Factors
that could cause such a difference include, but are not limited to:
a change in economic conditions; government and regulatory policies
(at both the federal and state levels); unanticipated higher
capital spending for, or delays in, the deployment of new
technologies; the pricing and availability of equipment, materials
and inventories; changes in the competitive environment; and the
Company's ability to continue to penetrate its edge-out markets.
This information should be read in conjunction with the Company's
periodic reports filed with the Securities and Exchange Commission,
the most recent of which is the Company's Annual Report on Form
10-K for the year ended December 31, 2006. DATASOURCE: North
Pittsburgh Systems, Inc. CONTACT: N. William Barthlow, of North
Pittsburgh Systems, Inc., +1-724-443-9600; or Joe Doherty, or Dan
Sullivan, both of MacKenzie Partners, Inc. for North Pittsburgh
Systems, Inc., +1-212-929-5500
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