SM&A Board Provides Specifics on Strategy to Enhance Stockholder Value
May 08 2008 - 7:28AM
Business Wire
SM&A (NASDAQ:WINS) announces open letter to SM&A
stockholders on strategy to enhance stockholder value. Current
Board Provides Specifics on Strategy to Enhance Stockholder Value;
Myers Asks Stockholders to "Trust Me" With His Vague Plan - Choice
is Clear � Sign and return your White Card supporting SM&A's
Board. � May 8, 2008 � To Our Stockholders: � This week saw the
latest in a series of disingenuous statements from former CEO
Steven Myers about your company. It comes amid our ongoing efforts
to transition to a well-positioned, profit-driven company focused
on enhancing stockholder value from a tactically driven company
that for years enriched its CEO while producing inadequate results
for its stockholder and employees. � Today when we release our
first-quarter earnings, we are prepared to provide you with more
specific details of our strategic plan. � -- The plan is designed
to--and we are confident will--enhance stockholder value. Financial
targets which this plan supports have already been established and
were previously disclosed in our 2008 Proxy Statement. � -- We
believe our investors will have the same reaction to this plan that
our employees did when it was presented at an off-site conference
in March. They fully embraced it. When presented, it was met with a
two-minute standing ovation. � -- As we will detail in our
discussions, this strategy has already produced positive results. �
Myers has been quick to criticize our comprehensive strategic plan
without even knowing, understanding or asking about the details. He
has been away from the company for more than one year and is no
longer intimately familiar with the competitive focus under which
we operate, as it has evolved substantially. You would think a
major stockholder would at least want to understand the facts
before criticizing and disparaging the plans of your board and
leadership team. � But then, this behavior is not new for Myers -
at least during this proxy contest. He has shown a propensity for
not letting the facts get in his way - either in his criticism of
your board and leadership team or of his own past performance.
Rather than own up to the problems that were created under his
watch, he would prefer to have you ignore his past performance and
instead ask you to believe his vague promises of cost reductions,
management assessments/changes and operational changes. � It
doesn't matter to Myers that your board and management were saddled
with problems created during his tenure. Myers says things will be
different now -- "trust me". Your board, our leadership team and
our employees have heard this before. We know Myers and his
leadership style well: his lack of strategic direction and the
self-serving activities which facilitated his departure
significantly harmed this company. We strongly believe that, based
on his past performance and the limited details of his ambiguous
plans, his taking control of the board would be damaging to the
company and stockholder value again. We also strongly believe that
Myers' return would trigger a loss of customers and that employee
departures would rise again, thereby nullifying our efforts over
the past six months to solidify both our customer and employee
base. � As we brief our strategic plan today, we fully expect Myers
to criticize it again -- no matter what it says. After all, he has
a vested interest in doing so. To acknowledge its potential for
enhancing stockholder value would get in the way of his effort to
take control of the company. � We would ask that you judge for
yourself. The webcast of our earnings call will begin at 1:30 p.m.
PDT today (Thursday, May 8, 2008), accessible at www.smawins.com by
clicking on the investor relations tab and selecting the webcast
link. A replay of the conference call will be available at
www.smawins.com or by dialing 800-405-2236 or 303-590-3000,
reference access code 11113199#. � After you hear what we have to
say, we would then ask you to compare our strategy to Myers'
"approach." Some of his approach has already been instituted, some
of it in our opinion is unnecessary and some is already included
and implemented in our plan. Myer's should provide answers to the
following: � -- Myers claims he will raise the stock price, but
won't say how. Why didn't he raise the stock price when he was
here? What happened in 2004, 2005 and 2006? � -- He conveniently
ignores industry, economic and current market conditions that have
hurt all companies, yours included. � -- He also won't, or can't,
reconcile his promise of a higher stock price with his long history
of disastrous share price performances, including overseeing a
plunge from more than $32 a share to 62 cents that led to a
de-listing of the company. � -- Myers continues to conveniently
ignore the legacy of problems with which he saddled the company and
which were inherited by the current new management team. Instead,
he blames the current board and new management for the consequences
of those problems without acknowledging the time needed to take
corrective action. � -- Myers has yet to explain how he can
override unambiguous accounting rules to change the treatment of an
acquisition he approved. � -- Myers has yet to reconcile his long
history of profligate spending on his own salary and flying jets
through a company he co-owned with his sudden, new-found desire to
contain costs. � -- If Myers' effort is not a de facto takeover
effort so he can run the company again, why does he take an
uncompromising, all-or-nothing position in which he will only be
satisfied when he and all three of his friends replace four highly
qualified, independent directors? Is there any serious doubt that
it is Myers who wants to again run your company? � Make no mistake:
this is a de facto takeover attempt by Myers to return SM&A to
a past that was much better for him, but not all stockholders. �
Myers is telling you what he thinks you want to hear, not what he
can or will do. Unlike Myers, your board recognizes there are no
short cuts to better revenue, improved earnings, a higher stock
price and, eventually, long-term stockholder value. It takes hard
work. � We believe our stock has been hurt by a number of factors,
including the soft economy and continued stock market volatility
that has punished small companies such as yours. In addition, we
continue to deal with problems that had their origins in the Myers
era and which affected guidance--among them the PPI accounting
treatment, account executive turnover and a softened pipeline.
Nonetheless, we are putting in the time and sacrifices necessary to
fix the Myers legacy problems. With our strategic plan, we are well
on our way. � Lastly, from the feedback we are receiving from some
of our stockholders it is clear that Myers is grossly
misrepresenting the facts to suit his position. To name a few such
instances, he has mischaracterized factors which created turnover
in 2007, his ability to re-hire people who have resigned, the
continual quality of our offering - our win rate in 2007 was the
best it was in years - and how others have committed to vote. This
is his style--don't let him fool you or charm you into thinking he
can magically save the day. If he had that capability, he should
have put it to work for stockholders while he was still here. � We
urge you to get the facts. Don't rely on inaccurate,
unsubstantiated statements from Myers. They not only are materially
incorrect, they do a disservice to stockholders, our employees and
our clients. � Knowing all of this, we ask stockholders to consider
the statement they are sending to SM&A employees about what is
important to stockholders when they cast their vote. � � Sincerely,
� � Dwight L. Hanger Chairman of the Board � We urge you to Vote
your White Proxy Card today to re-elect your current Board and
empower them to continue to guide SM&A to future success. � �
The Stockholder meeting will be on Friday, May 23, 2008 with
stockholders of record as of April 9, 2008 eligible to vote. � If
you have any questions or need assistance in voting, contact
MacKenzie Partners, Inc. Toll-Free: (800) 322-2885
winsproxy@mackenziepartners.com � Please discard and do not sign
any gold proxy cards sent to you by Myers. About SM&A SM&A
is the world's foremost management consulting firm providing
leadership and mentoring solutions to PLAN for business capture,
WIN competitive procurements and profitably PERFORM on the projects
and programs won. Our proven processes, people and tools have
delivered significant top-line and bottom-line growth across
markets, products and services. From the largest aerospace and
defense contractors, through the major software providers, to
healthcare and financial/audit service providers, SM&A is the
partner many companies turn to WHEN THEY MUST WIN. All stockholders
of SM&A are advised to read the definitive proxy statement and
other documents related to the solicitation of proxies by SM&A
for use at the 2008 annual meeting of stockholders of SM&A.
They contain important information regarding the election of
directors and other matters. The definitive proxy statement and
form of proxy have been mailed to stockholders of record of
SM&A along with other relevant documents. They are available at
no charge on the SEC�s website at http://www.sec.gov In addition,
SM&A will provide copies of the definitive proxy statement
without charge upon request. Some statements made in this news
release refer to future actions, strategies, or results that
involve a number of risks and uncertainties. Any number of factors
could cause actual results to differ materially from expectations,
including a shift in demand for SM&A's Competition Management
and Program services; fluctuations in the size, timing, and
duration of client engagements; delays, cancellations, or shifts in
emphasis for competitive procurement activities; declines in future
defense, information technology, homeland security, new systems,
and research and development expenditures, and other risk factors
listed in SM&A's SEC reports, including the report on Form 10-K
for the year ended December 31, 2007. Actual results may differ
materially from those expressed or implied. The company does not
undertake any duty to update forward-looking statements.
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