LOS ANGELES, Nov. 26, 2013 /PRNewswire/ -- A federal court has rejected an attempt by RCM Technologies, Inc. (NASDAQ: RCMT) ("RCM") to block Legion Partners Asset Management, LLC ("Legion Partners"), together with IRS Partners No. 19, L.P. and certain other stockholders (collectively, the "Stockholder Group") from voting proxies obtained through a vigorous solicitation.
The Monday ruling by the U.S. District Court, District of New Jersey (the "Court") followed a report Friday in which Institutional Shareholder Services ("ISS"), a leading independent proxy voting advisory firm, reaffirmed the need for change at RCM and recommended that RCM stockholders vote the Stockholder Group's GOLD proxy card.
The Stockholder Group urges stockholders to vote the GOLD proxy card to support the election of its two highly qualified nominees - Roger H. Ballou and Bradley S. Vizi - to the RCM Board of Directors (the "Board") at the 2013 Annual Meeting of Stockholders scheduled for December 5, 2013 (the "Annual Meeting").
Bradley S. Vizi of Legion Partners commented, "We are very pleased that the Court affirmed our belief that RCM's lawsuit lacks merit. With just days to go before the Annual Meeting, we are deeply disappointed that this Board would approve the wasteful spending of stockholder capital to pursue a frivolous lawsuit designed purely to disrupt the stockholder democratic process and thwart necessary change on behalf of all stockholders. Now that the Court has ruled against RCM, we hope this will put to bed any further attempts by the Board to distract stockholders from the real issues at hand."
After receiving written submissions from all parties and conducting a factual hearing, at which Kevin Miller, RCM's Chief Financial Officer, testified, the Court denied RCM's motion for a preliminary injunction that would have disrupted the Annual Meeting and undermined stockholders' rights.
The Court found that RCM had failed to carry its burden and could not show the likelihood that it would succeed on any of its claims.
Members of the current Board and management team of RCM have overseen a decline in sales from $214.2 million in 2007 to $161.9 million in the last twelve-month period ending September 28, 2013, a drop of approximately 24%. Over the same period, EBITDA (operating earnings excluding depreciation and amortization) has declined from $11.6 million to $7.9 million, a drop of approximately 32%. At the same time, the Board has approved outrageous compensation arrangements for its three top executives - over $8 million ($6.1 million for the Chairman and CEO alone) despite RCM's underperformance.
On Friday, Institutional Shareholder Services ("ISS"), a leading independent proxy voting advisory firm, endorsed the need for change at RCM, recommending that stockholders of RCM vote on the Stockholder Group's GOLD proxy card to support the election of director nominee Roger H. Ballou. The Stockholder Group urges its fellow stockholders to support the election of its two highly qualified nominees to the RCM Board by voting the GOLD proxy card today.
VOTE FOR CHANGE AT RCM -- PLEASE SIGN, DATE AND MAIL THE GOLD PROXY CARD TODAY
If you have any questions, require assistance with submitting your GOLD proxy card or need additional copies of the proxy materials, please contact:
OKAPI PARTNERS LLC
437 Madison Avenue, 28th Floor
New York, NY 10022
Call Toll-Free at: (877) 566-1922
E-mail: [email protected]
SOURCE Legion Partners Asset Management, LLC