Engaged Capital, an investment firm specializing in small and mid-cap North American equities and beneficial owner of approximately 5.1 percent of the common stock of AeroVironment, Inc. (“AeroVironment” or the “Company”) (NASDAQ:AVAV), today sent a letter to the Company’s Board of Directors (the “Board”), included below and also filed today as an amendment to its SEC form 13-D.
In its letter, Engaged Capital expresses its disappointment with the Board’s unwillingness to enter into a constructive process, seriously consider its highly qualified independent director nominee, and its failure to provide proper governance and protections for the rights of its shareholders. Engaged believes that the Company lacks a sense of urgency to capitalize on the Company’s market position, nor explore alternatives that could change the trajectory of its public market valuation. Engaged believes that recent events and information disclosed in the attached letter reveals a Board that elevates self-interest over its fiduciary duty to shareholders.
Glenn Welling, Principal and Chief Investment Officer of Engaged Capital, commented, “AeroVironment’s failure to deliver meaningful shareholder returns over any relevant time period is a clear indication of a need for change. We have spent the last few months working transparently and constructively towards a solution that would finally elevate the interests of shareholders to the top of the Board’s priority list. At this point, we feel that we have exhausted every possible avenue to finding a solution, as the Company’s offers to address our concerns have no substance. We are resolute in our determination to ensure the Company is governed for the benefit of its shareholders. All shareholders should be intently focused on this Board’s lack of progress in the areas of governance, capital allocation, and long-term strategy.”
Engaged Capital noted that it had also included, as part of its 13-D filing but not appearing below, three additional letters: a cover letter to management, dated July 3, 2013 that accompanied its nominating letter to the Board, a letter, dated August 7, 2013 expressing disappointment at the lack of communication or action regarding previous communications to the Board, and a letter, dated August 12, 2013 expressing further concerns after the meeting with the Nominating and Governance Committee.