MILPITAS, Calif., Jan 30, 2007 (BUSINESS WIRE) -- Phoenix Technologies Ltd. (NASDAQ:PTEC) announced today that its board of directors has urged shareholders to reject the Ramius Group's solicitation by voting Phoenix's BLUE proxy form.
The text of the letter follows:
January 30, 2007
Dear Stockholders:
Vote Your BLUE Proxy Today
Reject the Ramius Group
Your vote for the February 14, 2007 Annual Meeting is very important.
Phoenix Technologies Ltd. ("Phoenix" or the "Company") is facing a
proxy fight being waged by a group calling itself the Ramius Group.
The Ramius Group is attempting to elect their own director nominees
to your Board in opposition to nominees recommended by your Board's
nominating committee. The Ramius Group has made proposals to acquire
the Company at prices below where the Company is currently trading.
We believe the Ramius Group's nominees have a single, self-serving
agenda -- to promote a sale of Phoenix to the Ramius Group at a price
which your Board believes is unfairly low and which would give most of
the value of the Company to the Ramius Group. As explained below, we
strongly urge stockholders to reject the Ramius Group's solicitation
and to support your Board and management.
At this critical time, it is very important that every shareholder
vote. Please vote the BLUE proxy form today, supporting your Board.
The Ramius Group's Self-Serving Agenda
The agenda of the Ramius Group could not be clearer -- in their proxy
material, the Ramius Group states:
"The Ramius Nominees, if elected, will... take those steps that they
deem are necessary or advisable to facilitate the consummation of a
sale of the Company to Admiral Advisors, an affiliate of Ramius
Capital, or one of its other affiliates."
If the Ramius Group's nominees were to be elected to your Board they
would pursue the sale of Phoenix to an affiliate of the Ramius Group.
They are not presenting a strategic plan or suggestions to improve the
Company's performance. They are not saying that the strategic plan
currently adopted by your Board and being successfully implemented by
the Company's new management team is the wrong plan. The only
objective of the Ramius Group nominees is to seek to acquire the
Company at a price that your Board believes is inadequate, and that
would give most of the value of Phoenix to the Ramius Group.
We do not believe it is in the best interest of all stockholders to
have one-third of your Board controlled by directors seeking to
advance their interests and the interests of their sponsors at the
expense of all of the Company's other shareholders.
Don't Let the Ramius Group Take Away Your Upside
Over the past six months, the Ramius Group has made various proposals
to acquire the Company. The initial proposal was contained in a
letter dated July 5, 2006, in which a Ramius Group affiliate proposed
to acquire Phoenix at a price of $5.05 per share. After considering
this proposal in good faith, your Board decided that it undervalued
the Company and rejected it. Apparently agreeing that this offer was
too low, the Ramius Group has recently made a number of other
proposals to acquire Phoenix, at prices ranging from $5.25 to $5.35
per share.
Your Board has considered all of the Ramius Group's offers in good
faith, and after lengthy deliberation determined that these offers
do not represent fair value for the Company. Your Board has rejected
the Ramius Group's proposal because we are confident in the Company's
potential to yield significantly more value to stockholders than the
proposed offer. It should be noted that the closing price of Phoenix
on January 29, 2007 was $6.26, 19% above the Ramius Group's most
recent proposal.
You should also be aware that in July of last year, your Board
appointed a strategy committee to investigate and recommend
alternatives for the Company's ownership. We also retained Savvian
Advisors, LLC as an advisor to assess strategic alternatives and
present the Company to prospective strategic and financial buyers
who were encouraged to make offers to acquire the Company. Your Board
remains very committed to act in the best interests of the Company
and all of its shareholders, but is not willing to allow the Company
to be acquired at a price which does not fairly value the Company.
In December 2006, your Board concluded that the strategic plan of the
new management team, led by Woody Hobbs, represented the best value
for stockholders. Our confidence in this management team has been
rewarded in the increased value of the Company's stock, which has
risen from $5.05 per share at the time Woody Hobbs joined the Company,
to $6.26 per share on January 29, 2007, an increase of 24%.
A New Team and a New Direction
We have taken affirmative steps to change the direction of Phoenix.
The Board itself has been revamped, with half of the Board having been
appointed in the last two years -- two new directors were appointed in
2006 and one new director was appointed in 2005. Your Board has also
sought to improve business practices and has overseen the retention of
a new management team. In September of 2006, Woody Hobbs joined the
Company as President and CEO. Woody recently completed the successful
turnaround and sale of Intellisync to Nokia. Woody was joined in
October, 2006 by Rich Arnold as EVP, Strategy and Corporate
Development and Chief Financial Officer, and Dr. Gaurav Banga as
Chief Technology Officer.
Our new management team has:
-- Reduced expenses in line with revenues.
-- Returned the focus of the Company to its core business by:
-- Eliminating fully paid-up license sales ; and
-- Eliminating an unprofitable enterprise applications business
and associated go-to-market infrastructure.
-- Developed a new vision and plan to dramatically increase the
Company's value by:
-- Creating a new architecture to extend core business and
capitalizing on market opportunity;
-- Taking advantage of market opportunity, and tailwinds like
Vista, multi-core, and new high function chipsets; and
-- Solving problems that are persistent across the hundreds of
millions of installed PCs.
-- Begun successful execution on our approved strategic plan.
We are Seeing Results
We are encouraged by the progress that has been made. Below are some
of the highlights of the results we are seeing.
-- Financial
-- Revenues are above internal plans (though guidance was not
given for Q1).
-- Revenues in the first quarter of '07 increased by 17% over
previous quarter.
-- Gross margins increased 36% over the previous quarter.
-- Net loss on a GAAP basis was reduced from $14.3 million in
the fourth quarter to $8.0 million in the first quarter.
-- New revenue contracts have been signed at higher ASPs.
-- Expenses are below internal plans.
-- There has been a dramatic reduction of operating loss.
-- Customers and Partners
-- Relationships with major ecosystem players have been
materially improved.
-- Rigorous product pricing/deal terms including first
re-monetization of fully paid up license customers.
-- Rationalization of service revenues.
-- Senior management is engaged with customers directly.
-- Market is recognizing the importance of our systems software
layer and using our existing 'stack' in new ways.
-- We have made new customer penetration at major OEMS.
Your Board has Confidence in Phoenix's Potential
Your Board's overriding objective is to build and enhance stockholder
value. After considering many options and alternatives, your Board
has confidence in the Company's potential to yield significantly more
value to stockholders than the Ramius Groups' proposed offer. The
Ramius Group's nominees admit that their interests on the Board will
be to pursue a sale of the Company to the Ramius Group. Your Board
believes that such an agenda is fundamentally inconsistent with the
role of the Board to act in the interests of all shareholders rather
than a select group. Accordingly, your Board strongly and unanimously
urges you to reject the Ramius Group and vote to elect directors who
will act on behalf of all of the Company's shareholders. You can
support your Board and management by voting your BLUE proxy today.
Thank you for your continued support.
On Behalf of the Board of Directors,
David S. Dury
Chairman
About Phoenix
Phoenix Technologies Ltd. (NASDAQ:PTEC) is the global market leader in system firmware that provides the most secure foundation for today's computing environments. The Company established industry leadership with its original BIOS product in 1983, and today has 149 technology patents, has shipped in over one billion systems, and continues to ship in over 125 million new systems each year. The company's breakthrough solution, TrustedCore, enables hardware vendors to bring secure devices to market with the latest advances in Microsoft operating systems. The PC industry's top builders and specifiers trust Phoenix to pioneer open standards and deliver innovative solutions to help them accelerate time to market, differentiate products and increase profits. Phoenix is headquartered in Milpitas, California with offices worldwide. For more information, visit www.phoenix.com.
Phoenix, Phoenix Technologies, the Phoenix Technologies logo, and Recover Pro are trademarks and/or registered trademarks of Phoenix Technologies Ltd. All other trademarks are the property of their respective owners.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
With the exception of historical information, the statements set forth above include forward-looking statements that involve risk and uncertainties. All forward-looking statements included in this document are based upon information available to the Company as of the date hereof, and the Company assumes no obligation to update any such forward-looking statement. Factors that could cause actual results to differ materially from those in the forward looking statements are discussed in the Company's filings with the Securities and Exchange Commission, including its recent filings on Form 10-K, filed December 14, 2006.
SOURCE: Phoenix Technologies Ltd.
Phoenix Technologies Ltd.
Shauli Chaudhuri, 408-570-1060
Shauli_chaudhuri@phoenix.com
Copyright Business Wire 2007
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