Glass Lewis Recommends In Favor Of Crown Crafts Board-Supported Director Nominees; Cites Company's Superior Performance Compared With Peers And In Contrast To Dissident's Assertions
GONZALES, La., July 28 /PRNewswire-FirstCall/ -- Crown Crafts, Inc. (Nasdaq: CRWS) announced today that Glass Lewis & Co., a leading independent governance analysis and proxy voting firm, has made its recommendation in favor of the Company's Board-supported director nominees and against the two candidates nominated by dissident shareholder Wynnefield Partners Small Cap Value, L.P. and certain affiliates (the Wynnefield Group). Glass Lewis recommends that shareholders vote the Company's white proxy card in favor of its four director nominees – E. Randall Chestnut, William T. Deyo, Jr., Richard L. Solar and Sidney Kirschner – for election at the Company's annual meeting of shareholders to be held on August 10, 2010.
Among other things, Glass Lewis cites that the Company's stock has generally outperformed selected peer groups and stock indices, contrary to claims made by the Wynnefield Group. Total shareholder return over the past five years was 54.2% for Crown Crafts, compared with 7.6% for selected industry peers and a loss of 1.8% for the Russell 3000, Glass Lewis notes. The Company's shares also outperformed the peers and selected indices for the one-year and three-year periods ended June 25, 2010.
"The independent analysis by Glass Lewis reaffirms our belief that Crown Crafts has made excellent strategic progress under the strong leadership of Chairman, President and Chief Executive Officer E. Randall Chestnut and the current Board of Directors," said Zenon S. Nie, the Company's independent Lead Director. "Under this Board and management team, the Company has paid down its debt from $48 million to $5.1 million, bought back almost 1 million shares, completed four accretive strategic acquisitions, begun paying a $0.02 per share quarterly cash dividend, and in fiscal 2010 achieved its highest adjusted EBITDA since 1998. Meanwhile, as noted by Glass Lewis, the Wynnefield Group has never proposed an alternative strategic plan for the Company and its director nominees have no experience related to the Company's industry or business."
Glass Lewis also cites that return on equity for the last 12 months was 19.6% for Crown Crafts compared with 15.8% for Kid Brands, Inc., 10.5% for Summer Infant, Inc., and 8.4% for JAKKS Pacific, Inc., companies that Glass Lewis used for peer comparisons. In addition, contrary to the Wynnefield Group's misleading assertions regarding compensation, Glass Lewis notes that the Company's executives and directors receive less compensation than the median for those at comparable companies. "Overall, the Company paid moderately less than its peers, but performed moderately better than its peers," the Glass Lewis report states.
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