Parthenon LLC Delivers Open Letter to the Jewett Cameron Board of Directors
Parthenon LLC Delivers Open Letter to the Jewett Cameron Board of Directors
Believes that the Board should immediately begin exploring Strategic Alternatives to maximize Shareholder value
認爲董事會應立即開始探討戰略替代方案,以最大化股東價值
The Performance of the stock has been abysmal
股票表現糟糕
Profitability has collapsed over the past 3 years
利潤能力在過去3年中急劇下降
Insiders own less than 1% of the outstanding stock
內部持有的股份不到總流通股的1%
No insider has purchased a single share of stock in 10 years – an unequivocal vote of "no confidence" in the business
在過去10年中,沒有一位內部人員購買過任何一股股票 - 這是對業務的明確不信任投票
LOUISVILLE, Ky., Aug. 26, 2024 /PRNewswire/ --
肯塔基州路易斯維爾,2024年8月26日 / PRNewswire / -
Jewett Cameron Trading Company LTD.
Attn: The Board of Directors
32275 N.W. Hillcrest
P.O. Box 1010
North Plains, Oregon 97133
Jewett Cameron Trading Company LTD.
致:董事會
N.W. Hillcrest 32275號
郵政信箱1010
俄勒岡州北平原97133
Members of the Board of Directors:
董事會成員:
Parthenon LLC is one of the largest shareholders of Jewett Cameron, with a beneficial ownership of approximately 6.2%. We have been continuous shareholders since 2011. We have generally been very patient and supportive owners. However, over the past two years, we have discussed our growing apprehension and disappointment with the current CEO and the Board Chairman in numerous conversations. Our warnings, which have unfortunately proven even more prescient than we imagined, have largely been ignored. We are writing this letter to express our serious concerns regarding both the business and stock performance and the extremely problematic prospects for the long-term viability of Jewett Cameron as an independent public company. In addition, the near-total lack of ownership by the board and management creates a governance structure with an appalling economic and incentive mismatch between insiders and outside shareholders. Management has failed operationally and strategically, yet continues to implement more of the same failed strategies of the past. Management has not articulated any rational, sound plan to address the serious and growing challenges the company faces. We believe management is in denial about the severity of the hurdles the company must surmount to generate positive returns for shareholders. They seem unaware of the need to act with urgency before more (or all) shareholder value is destroyed.
帕特農有限責任公司是Jewett Cameron的最大股東之一,持有約6.2%的有效所有權。自2011年以來,我們一直是持續的股東。我們一直是非常耐心和支持性的股東。然而,在過去兩年中,我們在多次對話中討論了我們不斷增長的擔憂和對現任CEO及董事會主席的失望。我們的警告比我們想象的更具預見性,但大多被忽視。我們寫這封信是爲了表達我們對業務和股票表現以及Jewett Cameron作爲獨立上市公司長期生存前景極其有問題的嚴重關切。此外,董事會和管理層幾乎完全缺乏持股,造成了一種管理結構,其中內部人員與外部股東之間存在令人震驚的經濟和激勵錯位。管理層在運營和戰略方面失敗,但卻繼續實施更多過往失敗策略。管理層未明示任何合理、明智的計劃來應對公司面臨的嚴重和不斷增長的挑戰。我們認爲管理層對公司必須克服的障礙嚴重程度存在否認。他們似乎沒有意識到在更多(或全部)股東價值被摧毀之前,必須採取緊急行動的需要。
A brief summation of the stock and business performance will serve to illustrate the depth of the problem. Over the past five years ending August 23, Jewett Cameron stock has returned a horrific negative 46.3%, while the Russell 2000 Index is up 62.4% for the same period. For the past 10 years, the total return in the stock has been negative 11.4%. The Russell 2000 is up 118.8% for the same period. The stock collapse has mirrored the business collapse. For the 10 Fiscal Years (FY) ending August 31, 2012 through 2021, Jewett Cameron generated an average of approximately $4 million in EBITDA annually with a low of approximately $3 million in FY 2019. In FY 2022, EBITDA declined to $2.4 million. In FY 2023, EBITDA was slightly below $1 million. This fiscal year, through the first nine months ending May 31, EBITDA was approximately negative $1.2 million. We expect the company to be only marginally profitable (if at all) for the fiscal year ending August 2024. Based on management's comments in the third quarter 10-Q, along with our discussions with management and our own analysis, we fear that Fiscal Year 2025 results are likely to be worse than any of the past three years.
對股票和業績的簡要總結將有助於說明問題的嚴重性。 在截至8月23日的過去五年中,Jewett Cameron股票回報率爲可怕的負46.3%,而同一期間Russell 2000指數上漲了62.4%。在截至8月31日的過去10年中,股票總回報率爲負11.4%。同一期間,Russell 2000上漲了118.8%。股價下跌反映了業務下滑。根據截至2021年8月31日的10個財政年度(FY)止,Jewett Cameron每年平均產生約400萬美元的EBITDA,最低約在2019財年的300萬美元。在2022財年,EBITDA下降至240萬美元。在2023財年,EBITDA略低於100萬美元。今年財年截至5月31日的前九個月,EBITDA約爲負120萬美元。我們預計公司在截至2024年8月的財年中只能實現微薄盈利(如果有)。根據董事會在第三季度10-Q中的評論,以及我們與管理層的討論和自己的分析,我們擔心2025財年的業績可能會比過去三年中的任何一年更糟糕。
The challenges Jewett Cameron must overcome to return to consistent profitability are, we believe, numerous, daunting, and growing. These include supply chain concentration that carries significant geopolitical risks along with rising procurement costs, limited pricing power with its most important customers, and growing competition in several important product lines. The company has introduced few successful new product line extensions over the past decade, and none that have had a meaningful positive impact on profitability. The weight of all these challenges will be difficult, if not impossible, to overcome as a small independent company with limited resources.
我們認爲,Jewett Cameron要實現持續盈利需要克服的挑戰非常多,而且令人畏懼且日益增長。這些挑戰包括供應鏈集中化帶來的重大地緣政治風險以及不斷上升的採購成本,與最重要的客戶之間的定價權受限,以及在一些重要產品線上的競爭日益激烈。在過去十年中,該公司幾乎沒有推出過幾個成功的新產品線,也沒有對盈利產生重大積極影響的產品。所有這些挑戰的壓力對於一個資源有限的小型獨立公司來說,將是非常困難,甚至是不可能克服的。
Our fears for the long-term viability of Jewett Cameron as an independent company have been, as the board knows, echoed by the credit market. The company was forced to search for a new lender for its credit line this past spring after being dropped by their then-current lender. Management was able to secure a new line, but will pay interest computed at the prime rate plus 4.75%. That is now equal to a very painful, and telling, 13.25%. This extremely high-cost debt will weigh heavily on already severely diminished pre-tax profits.
我們對Jewett Cameron作爲一家獨立公司的長期生存能力的擔憂,正如董事會所知,得到了信貸市場的回應。該公司在今年春季被其當時的貸款人放棄後,被迫尋找一個新的信貸額度提供者。管理層能夠獲得一個新的信貸額度,但將支付以基本利率加4.75%計算的利息。現在的利率已經上升到非常痛苦和明顯的13.25%。這種極高成本的債務將對已經嚴重減少的稅前利潤造成沉重壓力。
Insiders own only 32,518 shares, or 0.93%. That amounts to $141,453 (at market close on August 23), a shamefully miniscule capital commitment. Even more disturbing, nearly all the shares owned by insiders were obtained through grants and options. Over the past 10 years, based on publicly available information, we think that no board member or senior executive has purchased even a single share of stock. This is a clear, and appalling, vote of "no confidence" in the prospects of the company that insiders manage and oversee.
內部人士僅持有32,518股或0.93%的股份。這相當於141,453美元(根據8月23日的收盤價),是一個令人可恥的微小資本承諾。更令人不安的是,幾乎所有內部人士持有的股份都是通過授予和期權獲得的。根據公開可獲得的信息,過去10年中,我們認爲沒有任何董事會成員或高級主管購買過一股股票。 這是對內部人士管理和監督的公司前景的明顯而令人震驚的"無信任"投票。 此外,我們對董事會在2024年2月實施分層董事會的企圖感到非常失望和憤怒。幸運的是,股東們反對了這一傲慢且爲了自身利益的舉措(這是一個真正的"民間"投票,因爲我們沒有意識到有任何公開競選來反對這個提案)。
In addition, we were incredibly disappointed and angered to see the board attempt to entrench themselves by instituting a staggered board in February 2024. Fortunately, this arrogant and self-serving move was voted down by shareholders (in a true "grassroots" vote, as we are aware of no public campaign waged against the proposal).
此外,我們對董事會試圖通過於2024年2月實施分層董事會的舉措加強他們自身的權益感到非常失望和憤怒。幸運的是,股東們(在一個真正的"草根"投票中,我們沒有意識到有任何公開競選反對這個提案)否決了這個傲慢而爲了自身利益的舉措。
We feel that Jewett Cameron's branded pet containment, area fencing, and wood panel products, along with the company-owned real estate, could have a value well above the public market valuation to a buyer with the capital, expertise, and infrastructure to maximize the returns. The expense synergies in the right "home" are, we believe, potentially quite large. The board should explore, with the assistance of a qualified outside advisor, if the best path forward for the company and shareholders would be for those products to be part of a larger company with much greater resources. We are very concerned this may be the only viable long-term path forward for Jewett Cameron. We believe the board should immediately begin to fulfill its fiduciary duty to consider the best interests of all shareholders.
我們認爲Jewett Cameron的品牌寵物護欄、區域圍欄和木製面板產品,以及公司所擁有的房地產,在有資本、專業知識和基礎設施最大化回報能力的買家手中,其價值可能遠遠超過公開市場評估。我們相信,在合適的"家"中,費用的協同效應潛力可能非常大。董事會應當在合格的外部顧問的協助下探討,公司和股東的最佳發展方向是否是這些產品成爲一個擁有更大資源的大型公司的一部分。我們非常擔心這可能是Jewett Cameron唯一可行的長期發展方向。我們認爲董事會應立即開始履行其法定職責,考慮到所有股東的最佳利益。
Sincerely,
此致敬禮,
Thomas A. Corea
Chief Executive Officer
Parthenon LLC
Thomas A. Corea
首席執行官
Parthenon LLC
SOURCE Parthenon, LLC
消息來源 Parthenon, LLC
譯文內容由第三人軟體翻譯。