Attached files
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8-K - PEERLESS SYSTEMS CORP | v195448_8k.htm |
EX-10.2 - PEERLESS SYSTEMS CORP | v195448_ex10-2.htm |
EX-10.1 - PEERLESS SYSTEMS CORP | v195448_ex10-1.htm |
For
Immediate Release
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Contacts:
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Peerless
Systems Corporation:
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William
R. Neil
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Chief
Financial Officer
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(310)
536-0908 ex 3146
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Peerless
Systems Corporation Announces Self Tender
of
up to $45 Million of its Outstanding Shares at $3.25 Per Share
EL SEGUNDO, Calif., August 27, 2010 — Peerless
Systems Corporation (Nasdaq: PRLS), a provider of imaging and networking
technologies to the digital document market, announced today that it intends to
commence a public tender offer to repurchase from its stockholders up to $45
million (or approximately 13.85 million shares) of its common stock at a
price of $3.25 per share in cash.
Two years
ago, the Company’s Board of Directors was reconstituted in order to ensure that
Peerless was focused on enhancing stockholder value. At that time,
Peerless’ common stock was trading at approximately $1.80 per share and the then
current CEO presented the Board with a proposed budget that projected an
operating LOSS in fiscal year 2009 of approximately $9 million.
Since
then management, with significant oversight by Timothy Brog, the Chairman of the
Board, and the other directors, refocused the Company and was able to preserve,
and then increase, capital, and maximize stockholder value for Peerless’
stockholders.
These
results were achieved through initiatives such as:
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Terminating
money losing projects that would have consumed a significant amount of
Peerless’ cash;
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Negotiating
an exit from a 10 year lease that was costing the Company approximately
$1.5 million per year;
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Reducing
office space from over 50,000 square feet to approximately 2,000 square
feet;
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Slashing
the head count from 27 to 4;
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Generating
a pre-tax profit in excess of $10 million on our investment in Highbury
Financial;
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Reducing
accrued liabilities by restructuring licenses with third
parties;
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Executing
perpetual licenses with customers;
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Negotiating
the early release of escrowed funds from the sale of our assets to Kyocera
Mita Corporation;
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Adding
a new customer for the first time in many years;
and
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Eliminating
unnecessary expenses and generating significant free cash flow in each of
the past two years.
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Timothy
E. Brog, Chairman of Peerless’ Board of Directors, said, "Peerless will continue
to execute its publicly announced strategy. However, we are pleased
to be able to offer the opportunity for liquidity to stockholders who
desire to sell some or all of their shares." As for the future of Peerless,
Mr. Brog added, "For those stockholders that decide to retain some or all of
their shares, we intend to continue to focus on delivering value by seeking
acquisitions and maximizing the value of our historical licensing
business.”
The
tender offer will afford tendering stockholders liquidity for some or all of
their shares and will permit them to have their shares repurchased at a 14.4%
premium over the closing price per share of $2.84 on August 26, 2010, the last
full trading day before the date of this announcement. Stockholders who elect
not to tender their shares in the offer will increase their relative percentage
ownership in Peerless following completion of the offer.
Mr. Brog
has informed the Company that he does not intend to tender any of his
shares. Bandera Partners and Caburn Management, which beneficially
own approximately 22.5% and 2.0% of the Company’s outstanding shares,
respectively, have agreed to tender all of their shares in the
offer.
At the
closing of the tender offer, Gregory Bylinsky, a representative of Bandera, and
Eddie Ramsden, a representative of Caburn, will resign as directors of the
Company and Eric Kuby, a representative of North Star Investment Management
Corporation, which beneficially owns 351,547 shares of Peerless common stock,
will be appointed as a new a director. North Star does not intend to
tender any of its shares. If Bandera owns less than 450,000 shares
following the closing of the tender offer, Robert Frankfurt will be
appointed to the Board. Jefferson Gramm, Bandera’s other Board
representative, will resign if Bandera owns less than 360,000 shares following
the closing of the tender offer. Background information regarding
Messrs. Kuby and Frankfurt is included in the Company’s Form 8-K filed with
the Securities and Exchange Commission today.
The
Company intends to commence the tender offer as soon as practicable and it will
remain open for at least 20 business days. Under the terms of the
offer, stockholders may tender all or a portion of their
shares. Neither Peerless nor its Board of Directors anticipates
making any recommendation to stockholders as to whether to tender or, if so, how
many shares to tender. The tender offer is subject to market,
economic and business conditions affecting the Company and other customary
conditions set forth in the Offer to Purchase and related Letter of
Transmittal documents to be sent to the stockholders. Tenders of
shares must be made on or prior to the expiration of the tender offer and shares
may be withdrawn at any time on or prior to the expiration of the tender
offer. If the offer is oversubscribed by stockholders, the Company
will purchase shares on a pro rata basis in accordance with the number of shares
tendered.
Further
information regarding these matters is included in the filings made by the
Company with the Securities and Exchange Commission today, including the Current
Report on Form 8-K.
The
Company has not commenced the tender offer and the description of the tender
offer included in this press release is for informational purposes only and is
neither an offer to purchase nor a solicitation of an offer to sell any of the
Company's common stock. There can be no assurance that any tender offer will be
commenced or if commenced that it will be consummated. The offer to
purchase and the solicitation of the Company's common stock will be made only
pursuant to the Offer to Purchase, the related Letter of Transmittal and other
related materials that the Company expects to mail to its stockholders promptly
after commencement of the offer, at no expense to stockholders. Stockholders
should read those materials and the documents incorporated therein by reference
carefully when they become available because they will include important
information, including the various terms of, and conditions to, the tender
offer. The Company will file a Tender Offer Statement on Schedule TO with the
SEC in connection with the tender offer, which will include as exhibits the
Offer to Purchase and the related Letter of Transmittal, as well as any
amendments or supplements to the Tender Offer Statement when they become
available. The Tender Offer Statement (including the Offer to Purchase, the
related Letter of Transmittal and other related materials) when filed will be
available to stockholders at no charge at the SEC's website at www.sec.gov, or the Investor Relations
section of the Company's website located at www.peerless.com. Stockholders are
urged to read those materials carefully prior to making any decisions with
respect to the tender offer.
About
Peerless Systems Corporation
Founded
in 1982, Peerless Systems Corporation historically licensed imaging and
networking technologies to the digital document markets, which include
manufacturers of color, monochrome and multifunction office products and digital
appliances. Effective April 30, 2008, Peerless sold its imaging and
networking technologies and certain other assets to Kyocera Mita
Corporation. Peerless retains the rights to continue licensing these
technologies to customers in the digital document markets. Peerless
intends to use its cash on hand to explore investment opportunities that it
believes will enhance stockholder value.
Safe Harbor
Statement under the U.S. Private Securities Litigation Reform Act of
1995
Some
statements included in this news release are forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, and, therefore,
involve uncertainties or risks that could cause actual results to differ
materially there from. These statements may contain words such as
"desires," "believes," "anticipates," "plans," "expects," "intends," "estimates"
or similar expressions. These statements are not guarantees of the
Company's future performance and are subject to risks, uncertainties and other
important factors that could cause actual performance or achievements to differ
materially from those expressed or implied by these forward-looking statements.
Such statements include, but are not limited to, the Company’s ability to find
one or more suitable investment opportunities and to successfully complete any
such investment, the Company’s current licensing business, the effects of the
Company’s downsizing, the ability of the Company to commence and complete the
tender offer, and the ability of the Company to achieve the benefits
contemplated by the tender offer. Additional information regarding
factors that could cause results to differ materially from management's
expectations is found in the section entitled "Risk Factors" in the Company's
2010 Annual Report on Form 10-K. The Company intends that the
forward-looking statements included herein be subject to the above-mentioned
statutory safe harbors. Investors are cautioned not to rely on forward-looking
statements. The Company does not undertake, and expressly disclaims
any obligation, to update or alter any forward-looking statements, whether
as a result of new information, future events or otherwise, except as required
by law.