ISS Highlights Xperi’s Recent Outperformance
and Concludes that Change at the Board Level Is Not Needed
Xperi Encourages All Stockholders to Vote “FOR”
All Five of the Company’s Nominees
Xperi Inc. (NYSE: XPER) (the “Company” or “Xperi”) today
announced that leading proxy advisory firm Institutional
Shareholder Services (“ISS”) has recommended that Xperi
stockholders vote “FOR” all of the Company’s nominees on the
BLUE proxy card ahead of the
Company’s 2024 Annual Meeting of Stockholders (the “Annual
Meeting”), to be held on May 24, 2024.
In its report, ISS concluded that “there does not appear to be a
need for change at the board level at this time.” Specifically, ISS
highlighted the fact that Xperi “appears to be executing on its
long-term strategic plan” and that “the board appears receptive to
shareholders, and appears to have engaged in good faith with
[Rubric Capital].”
ISS noted that Xperi’s strong financial results have driven
recent outperformance relative to peers, stating:
- “Though it is less than two years since the spin-off
transaction, there are multiple indications that the company is on
pace to achieve its long-term plan presented in September 2022. The
company has posted revenue growth and margin expansion over the
last two years and appears on pace to hit multiple operating
metrics in its key growth businesses.”
- “There are… signs of building momentum from an operational
performance standpoint, with multiple indicators that the company
is on target for its long-term goals.”
- “Over the year prior to the unaffected date, XPER shares
outperformed peers, a trend that has continued to date.”
- “The company's TSR indicates there is recent momentum in the
stock after the sharp decline following the spin-off, with recent
outperformance against its peers.”
ISS also pointed out the merit of Xperi’s recent capital
allocation decisions, including the sale of AutoSense, the
announcement of a strategic review process for Perceive, and the
approval of a share repurchase program:
- “The company's decision to sell AutoSense and explore a sale of
Perceive appear to have strategic merit and refocus the company on
its long-term strategic growth plan. There do not appear to be any
concerns with the sale process of either business, while the
AutoSense offer seems to have been the best available.”
- “The company's announcement of a share repurchase program was
met with a positive reaction and can be seen as an indication of
the company's intention to only focus on its key businesses rather
than invest in concepts out of its core competencies.”
Notably, ISS highlighted several concerns with respect to
Rubric’s candidates:
- “The board's concerns regarding dissident nominee [Thomas]
Lacey as a potential director appear to have merit… [H]is last
formal involvement with the company was in 2017… [Today] XPER [is]
a materially different company than when Lacey was last
involved.”
- “It is understandable why the board would be hesitant to bring
back a former CEO as a director, a situation which has the
potential to undermine confidence in the current CEO.”
- “Lacey's seemingly haphazard attempt to acquire the company in
the closing moments of the TiVo transaction reinforces the board's
position and raises questions about his motives in this
campaign.”
- “[T]he board has reasonable concerns regarding Lacey's motives
in this campaign and regarding the close ties between Lacey and
[Rubric’s other nominee, Deborah] Conrad.”
ISS was supportive of the recent refreshment efforts of Xperi’s
Board of Directors (the “Board”), which have culminated in the
identification of two new highly-qualified individuals:
- “[T]he board appears to have undertaken a thoughtful search for
new director candidates, and its decision to hold off on their
appointment until the resolution [of this proxy contest] appears
prudent in this case.”
- “While the identities of the two new directors have yet to be
disclosed, the board seems to have focused on skills that appear
reasonably additive to the needs of the company.”
ISS also noted that Xperi had attempted in good faith to reach a
resolution with Rubric. According to ISS, the Board “appears to
have been earnest in its attempts to reach a settlement with the
dissident” including having “made two different settlement
offers.”
Finally, ISS highlighted the alignment of pay and performance at
Xperi:
- “Annual incentives were primarily based on pre-set financial
metrics and… payouts were aligned with recent company performance…
[O]ver half of the CEO's FY23 grant was in performance
equity.”
- “[P]ay and performance were reasonably aligned for the year in
review.”
Commenting on the ISS recommendation, the Board issued the
following statement:
We are pleased that ISS has recommended that
stockholders support the Board’s highly qualified nominees. These
nominees have played a critical role in overseeing Xperi’s
successful, multiyear transformation from a business that was
dependent on IP licensing to one that is product-, technology- and
customer-focused. ISS’ recommendation reinforces our confidence in
the strength and effectiveness of our Board and validates our
strategic plan.
Rubric Capital has offered no meaningful
ideas for improving our business that we are not already pursuing,
and we are grateful that ISS recognized that Rubric’s criticisms do
not support a case for changing a Board or strategy that is working
and delivering results.
Today, Xperi has a more focused business
model than ever before, and one that is well positioned for
sustainable, profitable growth. We are confident that Xperi is on
the right course, and we ask that stockholders support our
continued progress and momentum by voting on the BLUE proxy card
FOR all five of our highly qualified nominees.
The Board urges stockholders to vote “FOR” ALL five of
Xperi’s skilled and experienced director candidates, and “WITHHOLD”
on Rubric’s two candidates, using the BLUE proxy card.
Stockholders who have any questions or need assistance voting
their shares should contact the Company’s proxy solicitor Morrow
Sodali at (203) 658-9400 or XPER@info.morrowsodali.com.
About Xperi Inc.
Xperi invents, develops, and delivers technologies that enable
extraordinary experiences. Xperi technologies, delivered via its
brands (DTS®, HD Radio™, TiVo®), and by its startup, Perceive, are
integrated into billions of consumer devices and media platforms
worldwide, powering smart devices, connected cars and entertainment
experiences, including IMAX® Enhanced, a certification and
licensing program operated by IMAX Corporation and DTS, Inc. Xperi
has created a unified ecosystem that reaches highly engaged
consumers, driving increased value for partners, customers and
consumers.
©2024 Xperi Inc. All Rights Reserved. Xperi, TiVo, DTS, HD
Radio, DTS Play-Fi, Perceive and their respective logos are
trademark(s) or registered trademark(s) of Xperi Inc. or its
subsidiaries in the United States and other countries. IMAX is a
registered trademark of IMAX Corporation. All other trademarks and
content are the property of their respective owners.
Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements contained in this press release that do not
relate to matters of historical fact should be considered
forward-looking statements, including without limitation statements
regarding: expectations regarding our future results of operations
and financial position, margin expansion and overall growth,
including, without limitation, anticipated Adjusted EBITDA growth,
objectives for future operations, and ongoing strategies,
including, without limitation, our pursuit of strategic
alternatives for Perceive. These forward-looking statements are
based on information available to the Company as of the date
hereof, as well as the Company’s current expectations, assumptions,
estimates and projections that involve risks and uncertainties. In
some cases, you can identify forward-looking statements by the
words "expect," "anticipate," "intend," "plan," "believe," "could,"
"seek," "see," "will," "may," "would," "might," "potentially,"
"estimate," "continue," "expect," "target," and similar expressions
or the negatives of these words or other comparable terminology
that convey uncertainty of future events or outcomes. These
statements involve risks, uncertainties and other factors that may
cause actual results, levels of activity, performance, or
achievements to be materially different from the information
expressed or implied by these forward-looking statements. These
risks, uncertainties and other factors are described under the
captions "Risk Factors" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations" in our Annual
Report on Form 10-K for the year ended December 31, 2023 filed with
the Securities and Exchange Commission (the "SEC") and our other
filings with the SEC from time to time. Any forward-looking
statements speak only as of the date of this press release and are
based on information available to the Company as of the date of
this press release, and the Company does not assume any obligation
to, and does not intend to, publicly provide revisions or updates
to any forward-looking statements, whether as a result of new
information, future developments or otherwise, should circumstances
change, except as otherwise required by securities and other
applicable laws.
Additional Information and Where to Find It
Xperi has filed with the SEC a definitive proxy statement on
Schedule 14A, containing a form of BLUE proxy card, with respect to
its solicitation of proxies for Xperi’s 2024 Annual Meeting of
Stockholders. This communication is not a substitute for any proxy
statement or other document that Xperi may file with the SEC in
connection with any solicitation by Xperi.
Permission to quote the ISS report was neither sought nor
obtained.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ CAREFULLY AND
IN THEIR ENTIRETY THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR
SUPPLEMENTS THERETO) FILED BY XPERI AND ANY OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT ANY SOLICITATION.
Investors and security holders may obtain copies of these
documents and other documents filed with the SEC by Xperi free of
charge through the website maintained by the SEC at www.sec.gov.
Copies of the documents filed by Xperi are also available free of
charge by accessing Xperi’s website at www.xperi.com.
XPER-C
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Xperi Investor Contact: Mike Iburg VP, Investor Relations
+1 408-321-3827 ir@xperi.com
Media Contact: Amy Brennan Senior Director, Corporate
Communications +1 949-518-6846 amy.brennan@xperi.com
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