"We believe Rimage is on a dangerous path, and should immediately implement a share buyback program or a large special dividend," says Managing Director Richard Rofé.
NEW YORK, June 22, 2011 (GLOBE NEWSWIRE) -- Arcadia Capital Advisors, LLC ("Arcadia"), a shareholder of Rimage Corporation ("RIMG" or the "Company") (Nasdaq:RIMG), and its Managing Director, Richard S. Rofé ("Rofé"), have released an open letter to shareholders of Rimage Corporation to highlight some of the concerns Arcadia has regarding the current strategy of the Company's senior management team ("Management") and the Board of Directors of Rimage ("Board"). Arcadia's letter outlined the dangers of the Company pursuing a virtual publishing solution using the cash on its balance sheet, and advocated instead that the Company's cash should be returned to shareholders through a large share buyback program, a special dividend, or combination of the two.
"We think the senior management team is asking shareholders to fund a startup, using shareholder money as their own venture capital fund," stated Rofé. "Trying to supply a virtual publishing solution is a complete shift away from their core skills of building and selling equipment that makes CDs and DVDs, with very little synergies between the two businesses."
"We think the management team is underestimating the number of competitors that exist or can enter the market tomorrow," Rofé continued. "Management will be richly rewarded on the slim chance they pull this off, so they will keep trying at any cost. However, if they fail, shareholders will be the only ones suffering. Look at the punishment the stock price has taken, and you have a good indication of what the public thinks of Management's plan."
"We strongly urge the Board to limit the resources used to pursue this strategy to only $15M, which is enough for Management to see if their plan will be viable, while at the same time limiting risk to shareholders," Rofé said. "This leaves cash of $85M after factoring for working capital and other needs, which should be used to implement a large share buyback program or special dividend."
"We implore the Board to fulfill their obligation of protecting shareholders," concluded Rofé. "We believe that Arcadia, shareholders, Management, and the Board can work constructively to create a winning and acceptable situation for all."
Click the attached link for the letter:
https://irm.ipreo.com/OpenFileLink.aspx?ID1=6b6647e8d89d48329dfff5c975f45155&ID2=78126306
About Arcadia Capital Advisors, LLC
Arcadia Capital Advisors, LLC is a private investment firm based in New York that employs a value-oriented investment philosophy in the management of long/short hedge funds focused on small and micro-cap companies. The firm is led by Richard Rofé and is sponsored by M.D. Sass-Macquarie Financial Strategies.