Urges Stockholders to Reject Minority Stockholder’s Proposals by
Signing the GOLD Consent Revocation Card
MILPITAS, Calif.--(BUSINESS WIRE)--Oct. 30, 2009--
Adaptec, Inc. (NASDAQ:ADPT), the global leader in I/O innovation, today
responded to a news release issued Oct. 29 by Steel Partners II LP.
“In claiming the Board’s independent financial advisor has called for
‘selling the business operations,’ Steel has once again attempted to
shade the truth. The advisor made no such recommendation, and in fact
has yet to present an analysis of the best ways to create value for
stockholders,” said Joseph S. Kennedy, Adaptec’s Board Chairman. “This
misrepresentation typifies Steel’s campaign, which has offered up
creative distortions in press releases at the expense of presenting a
clear vision of prudent strategies to create value for stockholders.
“Steel’s distortion relates to the Board’s strategic review process. The
Board asked its advisor to evaluate a number of alternatives, a subset
of which were alternatives for separating the Company’s assets, ranging
from a spin-off to a split of the corporation into multiple entities.
The advisor found that, within that subset of alternatives, a sale was
the best – but the advisor did not compare the separation of assets
against other alternatives, nor did the advisor determine that a sale of
the business was the best way to create value for stockholders. The
advisor is also considering other scenarios outside of that subset,”
added Mr. Kennedy.
“While the Board majority is open to all options to maximize value, and
has tried on several occasions over the years to find buyers for the
business, the Board recognizes that the success of such strategic
actions depends on timing to get the best value,” he noted. “In the
meantime, the Board majority is committed to a significant cash dividend
to stockholders after taking into account Adaptec’s needs for working
capital and for other strategic opportunities. A cash dividend is an
alternative Steel has consistently resisted.
“Steel’s vague plan suggests value-destroying approaches similar to
those followed by CoSine Communications, of which Steel has been an
investor at least since 2005. The Company ceased its technology customer
service operations in 2006 and has been pursing an ‘opportunistic,
value-focused investment strategy and is not targeting any specific
industries.’ To date, CoSine has made no acquisition nor has it returned
cash to stockholders, as would be the case in a properly structured SPAC
(Special Purpose Acquisition Company). CoSine now trades on the Pink
Sheets at a current market value that is slightly less than the value of
its cash and cash equivalents,” he added.
In response to Steel’s comments on Adaptec’s quarterly results, Mary
Dotz, Chief Financial Officer, said:
“Our results, excluding one-time costs relating to Steel’s consent
solicitation, were in line with the operating plan that was approved by
the Board – including by Steel’s representatives. The results we believe
underscore our strong financial foundation and demonstrate the rising
acceptance of Adaptec’s new products, which have now grown to account
for 48% of our revenues and are close to outrunning the decline of our
legacy revenues.
“While Steel confuses the issue by citing projections of our cash burn
that are based on GAAP numbers, which include non-cash and one-time
charges, we generated close to $5 million in cash from our operations
last quarter. Our plan projects a positive cash flow from operations
this year and a modest operating cash burn in the next fiscal year,
excluding the impact of the Board’s decision to declare a cash
dividend,” she added.
About Adaptec
Adaptec provides innovative data center I/O solutions that protect,
accelerate, optimize, and condition data in today's most demanding data
center environments. Adaptec products are used in IT environments
ranging from traditional enterprise environments to fast-growing,
on-demand cloud computing data centers. The company's products enable
data center managers, channel partners and OEMs to deploy best-in-class
storage solutions to meet their customers' evolving IT and business
requirements. Around the world, leading corporations, government
organizations, and medium and small businesses trust Adaptec technology.
More information is available at www.adaptec.com,
on its blog, storageadvisors.adaptec.com, and at adaptec.com/facebook
and twitter.com/Adaptec_Inc.
Cautionary Statement
This press release contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934. All statements, other than
statements of historical fact, are statements that could be deemed to be
forward-looking statements, including but not limited to statements
related to: Adaptec's new products may outrun the decline of the
company’s legacy product revenues; and the company’s cash flow
projections. Adaptec cautions that a variety of factors, including but
not limited to the following, could cause results to differ materially
from those expressed or implied in the forward-looking statements:
continued or increased economic weakness and declines in customer
spending; the potential failure of anticipated long-term benefits from
new products to materialize; the potential impact of adverse changes in
the global credit markets; the impact of industry technology
transitions; fluctuating operating results; and other risks detailed
from time to time in filings Adaptec makes with the SEC, including in
the section entitled “Risk Factors” in its latest Annual Report on Form
10-K and Quarterly Report on Form 10-Q.
Important Notice Regarding Availability of Consent Revocation
Materials
The Consent Revocation Statement and the Additional Solicitation
Materials are available free of charge at www.adaptec.com/investor/proxy.
Stockholders may also contact Georgeson Inc. with questions or requests
for additional copies of the consent revocation materials by calling
toll free at (800) 223-2064.
Source: Adaptec, Inc.
The Abernathy MacGregor Group (Media)
Tom Johnson, 212-371-5999
Ian
Campbell and Jim Lucas, 213-630-6550
or
Georgeson (Investors)
800-223-2064
adaptecinfo@georgeson.com
