Peerless Systems Corp. : ModusLink Comments on Preliminary Proxy Announcement by Peerless Systems Corporation
10/25/2011 | 03:20pm
ModusLink Global Solutions(TM), Inc. (NASDAQ:
MLNK), today commented on the announcement by Peerless Systems
Corporation (NASDAQ: PRLS) ("Peerless") regarding Peerless' preliminary
proxy statement.
ModusLink issued the following statement:
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ModusLink recommends that stockholders defer making any
determination with respect to the announcement by Peerless, a
ModusLink stockholder for less than three months, until they have
been advised of the Board's evaluation of the Peerless nominees and
proposals. Stockholders should know that Peerless, which has
recently sold approximately nine percent of its ModusLink stock
holdings, acknowledges in its preliminary proxy statement that its
nominees "do not have specific plans as of this date with respect to
enhancing the value of the Company."
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ModusLink values the opinions of all stockholders, has a track
record of working with stockholders and has been reasonable and open
to a resolution in its discussions with Peerless. Peerless has
instead chosen to engage the Company in a potentially expensive and
distracting proxy contest. Furthermore, Peerless has also denied
ModusLink's request to have the Peerless nominees be interviewed by
the Board's Nominating and Corporate Governance Committee, which is
an essential step to ensure that any incoming members of the Board
have the necessary skills, background and experience to create value
for all stockholders.
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ModusLink's Board and management team have worked diligently to
position the Company for success while taking appropriate actions to
respond to economic and market factors affecting our clients and our
industry. Our driving objective has been to transform ModusLink into
a leader in global supply chain management services by pursuing a
strategy of strengthening our core business and adding new
capabilities that provide ModusLink with a durable competitive
advantage. As a result of these efforts, ModusLink has established a
unique value proposition and the Company now plays a vital role in
the advancement of our clients' business.
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Given the Company's strong liquidity and balance sheet, with more
than $110 million in cash and no debt at the end of fiscal 2011, we
believe we are well positioned to continue executing our investing
and cost reduction plan to put ModusLink on a trajectory of
sustained growth in revenue and profits.
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ModusLink noted that its eight member Board of Directors includes seven
independent directors.
During the Company's recent earnings conference call, ModusLink
announced details of its investing and cost reduction plan. Key
components of the plan include investments in sales and marketing and
other initiatives to drive future sales growth, as well as cost
alignment initiatives, working capital improvements and a strengthening
of the Company's leadership team. ModusLink believes that its investing
and cost reduction plan will position the Company for revenue growth and
improved profitability, and ultimately drive enhanced value for
stockholders.
The Company also noted that it has returned more than $96 million to its
stockholders since the beginning of fiscal 2008 in the form of an
aggregate $40 million special dividend, which was distributed to
stockholders in March 2011, and stock buyback programs. Since initiating
its buyback programs in early fiscal 2008, the Company has repurchased
$56.7 million of ModusLink shares, reducing its total shares outstanding
by approximately 12 percent.
About ModusLink
ModusLink Global Solutions, Inc. designs and executes global value chain
strategies to solve clients' cost, time-to-market, customer satisfaction
and revenue objectives. Our supply chain, aftermarket, e-Business and
entitlement management solutions support the end-to-end product
lifecycles of the world's leading technology and consumer goods
companies. ModusLink has more than 25 years of experience executing
complex supply chain processes such as sourcing, configuration and
fulfillment. We can manage these critical functions seamlessly with a
client's global e-Business initiative or an integrated aftermarket
program, including alternative channel recovery for at-risk inventory.
Backed by a footprint of more than 25 solution centers in 15 countries,
ModusLink clients can react quickly to shifting market dynamics
impacting value chain performance and revenues. For more information
about ModusLink's flexible, scalable and sustainable solutions, visit www.moduslink.com
or www.valueunchained.com,
the blog for value chain professionals.
Forward-Looking Statements
This release contains forward-looking statements, which address a
variety of subjects including, for example, the Company's investment and
cost reduction plan and timing and impact of the expected benefits of
such program. All statements other than statements of historical fact,
including without limitation, those with respect to the Company's goals,
plans, expectations and strategies set forth herein are forward-looking
statements. The following important factors and uncertainties, among
others, could cause actual results to differ materially from those
described in these forward-looking statements: the Company's success,
including its ability to meet its revenue, operating income and cost
savings targets, maintain and improve its cash position, expand its
operations and revenue, lower its costs, improve its gross margins,
reach and sustain profitability, reach its long-term objectives and
operate optimally, depends on its ability to execute on its business
strategy, including the announced investment and costs savings plan and
the continued and increased demand for and market acceptance of its
services; global economic conditions, especially in the technology
sector are uncertain and subject to volatility; demand for our clients'
products may decline or may not achieve the levels anticipated by our
clients; the Company's management may face strain on managerial and
operational resources as they try to oversee the expanded operations;
the Company may not realize the expected benefits of its restructuring
and cost cutting actions; the Company may not be able to expand its
operations in accordance with its business strategy; the Company's cash
balances may not be sufficient to allow the Company to meet all of its
business and investment goals; the Company may experience difficulties
integrating technologies, operations and personnel in accordance with
its business strategy; the Company derives a significant portion of its
revenue from a small number of customers and the loss of any of those
customers could significantly damage the Company's financial condition
and results of operations; the Company frequently sells to its supply
chain management clients on a purchase order basis rather than pursuant
to contracts with minimum purchase requirements, and therefore its sales
and the amount of projected revenue that is actually realized are
subject to demand variability; risks inherent with conducting
international operations; tax rate expectations are based on current tax
law and current expected income and may be affected by the jurisdictions
in which profits are determined to be earned and taxed, changes in
estimates of credits, benefits and deductions, the resolution of issues
arising from tax audits with various tax authorities, including payment
of interest and penalties and the ability to realize deferred tax
assets; the mergers and acquisitions and IPO markets are inherently
unpredictable and liquidity events for companies in the Company's
venture capital portfolio may not occur; and increased competition and
technological changes in the markets in which the Company competes. For
a detailed discussion of cautionary statements that may affect the
Company's future results of operations and financial results, please
refer to the Company's filings with the Securities and Exchange
Commission, including the Company's most recent Annual Report on Form
10-K and Quarterly Reports on Form 10-Q. Forward-looking statements
represent management's current expectations and are inherently
uncertain. We do not undertake any obligation to update forward-looking
statements made by us.
Important Additional Information
ModusLink, its directors and certain of its executive officers and
employees are participants in a solicitation of proxies in connection
with its 2011 annual meeting of stockholders (the "2011 Annual
Meeting"). Important information concerning the identity and interests
of these persons is available in ModusLink's preliminary proxy statement
filed with the Securities and Exchange Commission (the "SEC") on October
24, 2011. ModusLink plans to file with the SEC and mail to its
stockholders a definitive proxy statement in connection with the 2011
Annual Meeting. Information regarding the identity of the participants,
and their direct or indirect interests, by security holdings or
otherwise, is set forth in the preliminary proxy statement and
ModusLink's Annual Report on Form 10-K for the year ended July 31, 2011.
To the extent holdings of ModusLink securities have changed since the
amounts printed in the preliminary proxy statement for the 2011 Annual
Meeting, such changes have been or will be reflected on Statements of
Change in Ownership on Form 4 filed with the SEC.
Copies of ModusLink's preliminary proxy statement, any other relevant
documents and other materials filed with the SEC concerning ModusLink,
when filed, may be obtained free of charge at http://www.sec.gov
and http://www.ir.moduslink.com.
Stockholders should carefully read the proxy statement and the
accompanying WHITE proxy card when they become available before making
any voting decision.
ModusLink Global Solutions:
Robert Joyce, 781-663-5120
Director,
Investor Relations
ir@moduslink.com
© Business Wire 2011
