April 13, 2011
/PRNewswire/ -- Arnaud Ajdler, a Senior Managing Director of Crescendo Partners (a
based value-oriented activist investment firm) and a shareholder of Exceed Company LTD. (Nasdaq: EDS), announced today that he sent a proposal to Exceed to be voted upon at the company’s upcoming annual meeting.
Arnaud Ajdler stated, "I believe it is extremely important for Exceed to initiate a quarterly dividend under a generous dividend policy. The company is very well capitalized and generates a significant amount of free cash flow, which is currently not reflected in its stock price. Pro forma,(1) the company currently trades at a price-to-earnings multiple (net of cash) below 2.5. This is well below the multiple of its peers in
. For Exceed to be valued like its peers in
, Exceed needs to adopt a similar dividend payout policy and share its free cash flow with shareholders. Based on comments on the last earnings call as well as a recent sell-side note,(2) it is obvious that shareholders believe a dividend would highlight the undervaluation of the company and help increase the stock price. A dividend would also expand the potential shareholder base which would increase the liquidity of the stock. By voting in favor of this proposal, shareholders can send a clear message to the Board that returning cash to shareholders through a quarterly dividend is an important and necessary tool to increase shareholder value at Exceed. I urge other shareholders to communicate with management and further reinforce this message."
Arnaud Ajdler further stated, "Assuming 2011 net income of
(earn-out earnings target for 2011) and a 50% dividend payout policy, the annual dividend would be
per share.(1) I conservatively suggest an annual dividend of
per share payable on a quarterly basis (
per share quarterly). Based on the
stock price as of
April 12, 2011
annual dividend per share would represent a very attractive 9.4% dividend yield. Such a yield should play a significant role in raising the stock price."
For Additional Information Please Contact:
Arnaud Ajdler (212) 319-7676
(1) This assumes a fully diluted number of shares of 44 million, which includes the earn-out shares for 2010 and 2011 as well as the exercise of 10 million warrants.