Edgewater Technology, Inc. (“Edgewater”) (NASDAQ:EDGW), a leading
consulting firm that helps business leaders drive transformational
change through its unique selection of business and technology
services and specialized product-based solutions, today sent a
letter to stockholders urging them to support the Company’s
highly-qualified Board of Directors and reject Ancora’s nominees by
signing, dating, and returning Edgewater’s BLUE consent revocation
card.
Included below is the full text of the letter to Edgewater
stockholders:
January 17, 2017
Dear EDGW Stockholder:
PROTECT YOUR INVESTMENT IN EDGEWATER
TECHNOLOGY
Please sign, date and return the enclosed BLUE
CONSENT REVOCATION CARD today!
Please DO NOT sign or return any materials sent
to you by Ancora Advisors
DO NOT ALLOW ANCORA TO DISRUPT
EDGEWATER’S MOMENTUM
Ancora Advisors LLC, an investment vehicle holding approximately
9 percent of the Company’s outstanding shares, recently commenced a
process seeking to remove up to four of the current independent
members of the Board of Directors of Edgewater. If successful,
Ancora nominees will:
- Represent half of the seats on the Edgewater
Board, and
- Likely replace senior leadership, which the Board believes
would cause significant distraction and disruption.
Allowing half of Edgewater’s Board seats to be filled by
Ancora’s hand-picked candidates who we believe, not only lack a
reasonable plan to create stockholder value but have limited, if
any, related industry or public board experience, is not in the
best interests of all stockholders.
OUR STRATEGY
We remain steadfast in our commitment to serving the best
interests of all stockholders and enhancing stockholder value. Your
Board is executing on a well-defined strategic plan which has
positioned the Company for growth and created shareholder value.
Consider the following:
- 241 percent total shareholder return delivered
over the past five years – 36 percent in excess of our peers and 17
percent more than the NASDAQ composite index[1].
- Improved efficiency and streamlined cost structure;
- Cloud-based revenue increased from zero in 2014 to $15 million
in 2015. From 2015, cloud-based revenue increased to $20 million
for the trailing twelve months ending September 30, 2016.
Importantly, Edgewater believes it will double the amount of cloud
consulting revenue on a year-over-year basis in 2017;
- Invested prudently to drive organic growth; and
- Executed on a disciplined approach to strategic
acquisitions.
[1] Source: FactSet as of Jan. 7, 2017
An infographic accompanying this announcement is available
at http://www.globenewswire.com/NewsRoom/AttachmentNg/eff44e87-6179-40dc-a95d-6f2802b5f218
Our industry is experiencing a fundamental shift due to growing
adoption of cloud-based software by our partners, peers, and
competitors. Your Board and management team have been proactive,
taking clear and concrete steps to adapt and position Edgewater to
benefit from these emerging market dynamics and the ongoing digital
transformation.
Conversely, Ancora is seeking to abandon Edgewater’s strategy
and break-up the Company before the full benefits of its strategic
plan can be realized. Further, we believe its nominees lack
the relevant experience to guide the Company in executing its
strategic plan.
EDGEWATER’S BOARD SERVES THE INTERESTS OF
ALL STOCKHOLDERS
Edgewater recently completed a robust, eleven-month review of
strategic alternatives following a public announcement in November
2015, including a thorough evaluation of a potential sale, merger,
spin-off, and separation of selected businesses with the assistance
of experienced financial advisors. Throughout the process,
the Board actively participated in 22 meetings and helped conduct
outreach to 66 total potential suitors. At the end of the
review, the Board and its advisors unanimously
determined that any sale or separation of Edgewater and its
businesses was highly unlikely to enhance stockholder value and
concluded that the continued execution of the Company’s stand-alone
strategy provides the best path toward maximizing value for all
stockholders.
ANCORA HAS NO PLAN AND WILL BE DISRUPTIVE
FOR OUR BUSINESS
Ancora has not offered any specifics on how its nominees
would create stockholder value if they are unable to
negotiate a sale, which based on the Board’s recent review, would
likely erode – rather than create – stockholder value. This is
especially worrisome given that three of Ancora’s four
nominees have never worked at or been associated with any company
in a relevant industry and appear to lack the experience
necessary to guide the Company forward.
In contrast, Edgewater has strong, independent, and experienced
directors who are equipped to continue to lead the Company in
executing its strategic plan. Edgewater recently strengthened its
board composition with the addition of two, new independent members
in March 2016 – Stephen Bova and Timothy Whelan.
Furthermore, Edgewater’s CEO Shirley Singleton and Chief
Technology Officer David Clancey – who have been subject to
baseless attacks by Ancora – beneficially own approximately 12.4
percent of the Company’s common stock (and our directors and
management collectively beneficially own 21.8 percent), clearly
aligning their interests with the interest of the Company’s
stockholders.
YOUR TIMELY RESPONSE IS IMPORTANT – DO
NOT ALLOW ANCORA TO TAKE CONTROL OF YOUR INVESTMENT
Edgewater’s Board urges you to reject the solicitation efforts
of Ancora by promptly completing, the enclosed BLUE Consent
Revocation Card. Simply follow the instructions on the BLUE consent
revocation card.In order to ensure that the Board is able to act in
your best interests, please revoke your consent as promptly as
possible.
If you have any questions regarding the Consent Revocation
Statement or about submitting your BLUE Consent Revocation Card, or
otherwise require assistance, please call Alliance Advisors
toll-free at Tel: (855) 973-0097 (Toll Free) or send an email to
edgewatertech@allianceadvisorsllc.com
You are urged NOT to sign any WHITE consent cards. Please be
aware that if you sign a WHITE consent card but do not check any of
the boxes on the card, you will be deemed to have consented to all
of the Proposals in Ancora’s Consent Statement.
Thank you for your continued support.
On Behalf of the Board of Directors of Edgewater Technology,
Inc.,
Shirley Singleton,
Wayne WilsonChairman, President and CEO
Lead Independent Director
Forward Looking StatementsThis document
contains statements that may constitute forward-looking statements
under Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
These statements involve known and unknown risks, uncertainties and
other factors that may cause results, levels of activity, growth,
performance, tax consequences or achievements to be materially
different from any future results, levels of activity, growth,
performance, tax consequences or achievements expressed or implied
by such forward-looking statements. Such factors include, among
other things, those listed below. The forward-looking statements
included in this document are related to future events or the
Company's strategies or future financial performance, future
revenue and growth, customer spending outlook, general economic
trends, IT service demand, future revenue and revenue mix,
utilization, new service offerings, significant customers,
competitive and strategic initiatives, growth plans, potential
stock repurchases, future results, tax consequences and liquidity
needs. In some cases, you can identify forward-looking statements
by terminology such as "may," "should," "believe," "anticipate,"
"anticipated," "expectation," "continued," "future," "forward,"
"potential," "estimate," "estimated," "forecast," "project,"
"encourage," "opportunity," "goal," "objective," "could," "expect,"
"expected," "intend," "plan," "planned," "will," "predict," or the
negative of such terms or comparable terminology. These
forward-looking statements inherently involve certain risks and
uncertainties, although they are based on the Company's current
plans or assessments which are believed to be reasonable as of the
date of this document. Factors that may cause actual results,
goals, targets or objectives to differ materially from those
contemplated, projected, forecasted, estimated, anticipated,
planned or budgeted in such forward-looking statements include,
among others, the following possibilities: (1) failure to
obtain new customers or retain significant existing customers;
(2) the loss of one or more key executives and/or employees;
(3) changes in industry trends, such as a decline in the
demand for Enterprise Resource Planning and Enterprise Performance
Management solutions, custom development and system integration
services and/or declines in industry-wide information technology
spending, whether on a temporary or permanent basis and/or delays
by customers in initiating new projects or existing project
milestones; (4) inability to execute upon growth objectives,
including new services and growth in entities acquired by our
Company; (5) adverse developments and volatility involving
geopolitical or technology market conditions;
(6) unanticipated events or the occurrence of fluctuations or
variability in the matters identified under “Critical Accounting
Policies” in our 2015 Annual Report on Form 10-K filed with the
Securities and Exchange Commission (the “SEC”) on March 11, 2016;
(7) delays in, or the failure of, our sales pipeline being
converted to billable work and recorded as revenue;
(8) termination by customers of their contracts with us or
inability or unwillingness of customers to pay for our services,
which may impact our accounting assumptions; (9) inability to
recruit and retain professionals with the high level of information
technology skills and experience needed to provide our services;
(10) failure to expand outsourcing services to generate
additional revenue; (11) any changes in ownership of the
Company or otherwise that would result in a limitation of the net
operating loss carry forward under applicable tax laws;
(12) the possibility that activist shareholders may wage proxy
or consent contests or gain representation on or control of our
Board of Directors, causing uncertainty about the direction of our
business; (13) the failure of the marketplace to embrace advisory
and product-based consulting services; (14) difficulties and costs
associated with transitioning to the cloud; (15) the inability to
achieve the expected synergies from our 2015 acquisitions; and/or
(16) changes in the Company's utilization levels. In
evaluating these statements, you should specifically consider
various factors described above as well as the risks outlined under
“Part I - Item IA. Risk Factors” in our 2015 Annual Report.
These factors may cause the Company's actual results to differ
materially from those contemplated, projected, anticipated, planned
or budgeted in any such forward-looking statements. Although the
Company believes that the expectations in the forward-looking
statements are reasonable, the Company cannot guarantee future
results, levels of activity, performance, growth, earnings per
share or achievements. However, neither the Company nor any other
person assumes responsibility for the accuracy and completeness of
such statements. Except as otherwise required, the Company
undertakes no obligation to update any of the forward-looking
statements after the date of this document to conform such
statements to actual results.
Additional InformationIn connection with the
consent solicitation initiated by Ancora Advisors, LLC and certain
other participants (collectively, “Ancora”), we have filed a
definitive consent revocation statement on Schedule 14A with the
SEC, intend to file other documents regarding the Ancora proposals
with the SEC, and may mail a consent revocation statement and a
consent revocation card to each shareholder of record entitled to
deliver a written consent with respect to the Ancora proposals.
SHAREHOLDERS ARE ENCOURAGED TO READ ANY CONSENT REVOCATION
STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN
THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Investors and shareholders are able to obtain
available documents free of charge at the SEC’s website,
www.sec.gov, from us at our website, www.edgewater.com, or at 200
Harvard Mill Square, Suite 210, Wakefield, Massachusetts 01880,
Attention: Corporate Secretary.
Participants in SolicitationWe and our
directors and executive officers may be deemed to be participants
in the solicitation of consent revocations in connection with the
Ancora proposals. Information concerning our participants is set
forth in the definitive consent revocation statement on Schedule
14A as filed with the SEC on January 9, 2017.
Contacts
Company/Investor Contact:
Timothy R. Oakes
Chief Financial Officer
Phone: (781) 246-3343
E-mail: toakes@edgewater.com
Media Contact:
Sard Verbinnen & Co
Bryan Locke / Debbie Miller
Phone: (312) 895-4700
E-mail: blocke@sardverb.com/ dmiller@sardverb.com
Edgewater (NASDAQ:EDGW)
Historical Stock Chart
From Mar 2024 to Apr 2024
Edgewater (NASDAQ:EDGW)
Historical Stock Chart
From Apr 2023 to Apr 2024