California Micro Devices (Nasdaq Global: CAMD) (“CMD” or “The
Company”) today announced that it is mailing a letter to the
Company’s stockholders in connection with the Company’s 2009 Annual
Meeting of Stockholders, scheduled for September 17, 2009.
The full text of the letter follows:
RE-ELECT CALIFORNIA MICRO DEVICES’
DIRECTORS –VOTE THE ENCLOSED WHITE PROXY CARD TODAY
August 28, 2009
Dear Fellow California Micro Devices Stockholder:
CMD’s September 17, 2009 Annual Meeting of Stockholders is
rapidly approaching. We urge you to act promptly to re-elect ALL
the nominees of your Board of Directors – Jon Castor, Robert
Dickinson, Wade Meyercord, Ed Ross, David Sear, John Sprague and
David Wittrock – by voting the WHITE proxy card today by Internet,
telephone or mail. If you have already voted on the Gold
card, you may vote now on the enclosed WHITE card and your new vote
will supersede and replace your prior vote.
YOUR BOARD IS COMMITTED TO TAKING
DECISIVE ACTIONS TO DRIVE VALUE CREATION
Your Board believes that the continued execution of CMD’s clear
action plan is in the best interests of the Company and its
stockholders and provides the greatest opportunity to create
long-term stockholder value. There is no question that CMD, like
other companies in our industry, has been sharply impacted by the
economic meltdown, but the Company’s Board and management team have
led CMD through adversity in the past and remain committed to doing
so now. In response to the changed circumstances of the industry
and the economic environment as a whole, we have taken decisive
action to reduce costs and to align our resources to seize the
current large market opportunity we see in our core protection
business.
Over the past quarter alone we have decreased our estimated
non-GAAP operating expense to approximately $5.1 million this
quarter from $6.2 million in the September quarter last year. We
also recently made the decision to discontinue a product line that
didn’t meet expectations, which we expect, together with other
actions we have taken, will further reduce our estimated non-GAAP
operating expense to approximately $4 million. We are confident
that concentrating on our core protection business going forward
will allow for a return to positive cash flow and non-GAAP
profitability more quickly without compromising the investment in
the new protection products needed to strengthen our competitive
position.
YOUR BOARD AND MANAGEMENT TEAM
CONTINUE TO ENHANCE CMD’S PORTFOLIO BY BRINGING INNOVATIVE PRODUCTS
TO MARKET
CMD has a proven record of innovation, which is recognized by
customers and provides a clear path to creating value for our
stockholders. The execution of CMD’s action plan has provided
the Company with the strongest product portfolio and pipeline in
the Company’s history. During the last two months alone, we
have introduced many compelling new products, including:
- The CM1624, which was brought to
market on July 7, is a new interface protection filter specifically
suited for microSD interfaces. The popular microSD flash memory
card is increasingly used in portable devices to allow users to
store or use data across different devices. The CM1624 protects the
microSD memory card user interface against ESD (electrostatic
discharge) damage to the card or to the hardware and suppresses EMI
(electromagnetic interference) while providing the highest level of
performance and digital signal integrity. The CM1624 is currently
designed into multiple headsets at a top 5 handset OEM and into
netbooks that are indicative of new market opportunity to sell
filters into the portable computing market. Additionally, it is
featured in a major baseband CPU reference platform and is expected
to be a part of a leading wireless device providers’ platform in
the near future.
- The PicoGuard CM6100, which was
brought to market on August 18, is a low capacitance electrostatic
discharge (ESD) device. With strong customer demand for smart
phones, handset designers have to deal with providing robust ESD
protection for an increasing number of high-speed serial data
interfaces, while managing their designs within tight form factor
and bill of material budgets. The PicoGuard CM6100 simplifies this
design challenge by offering robust protection and superior signal
integrity in a compact, low cost package. The PicoGuard CM6100 has
already been designed into handsets at two top OEMs and into
products at a leading, high profile smartphone maker.
- The CM1238, which also was
introduced on August 18, is a new ESD protection device
specifically suited for next generation deep submicron high speed
data line protection. At a time when consumer electronics designers
face a broad array of design challenges in meeting consumer
requirements for greater functionality and higher performance at
ever decreasing prices, the CM1238 creates customer value by
providing better performance and a smaller size at a lower price
point. It is ideal for digital TVs, LCD displays, notebook
computers, set top boxes, and HD DVD recorders, and CMD has already
secured an agreement with a top 5 LCD television manufacturer to
design the CM1238 into a well known line of LCD TVs.
DIALECTIC AND ITS NOMINEES LACK
THE EXPERIENCE AND KNOWLEDGE TO APPRECIATE AND CAPITALIZE ON THE
OPPORTUNITIES AHEAD FOR CMD
It is telling that in a recent letter to CMD stockholders,
Dialectic said that its nominees will join the Board “with a
mandate to fully and objectively explore all strategic alternatives
with one goal - the maximization of stockholder value.” We believe
that Dialectic is insinuating that it would like to put the Company
up for sale, a belief bolstered by Dialectic’s continued silence on
its strategy for CMD. While the Board is open to all paths to
increased stockholder value, we firmly believe that now is not the
right time to pursue a sale process.
Our business is at a crucial inflection point. CMD has a clear
action plan in place and is well positioned to capitalize on our
strong product portfolio and solid financial condition, which will
enable us to build customer relationships and increase share in
targeted growth markets. By shifting our focus to CMD’s core
protection business we will be able to return to positive cash flow
and profitability more quickly without compromising the investment
in the new protection products needed to strengthen our competitive
position. If Dialectic’s nominees were elected to the CMD Board
and able to initiate a sale process at such an inopportune time,
CMD stockholders could lose the considerable potential value of
these initiatives.
DIALECTIC HAS NO PLAN – JUST EMPTY
WORDS
Throughout this process, Dialectic has made it clear that it
will say anything to gain your vote and get its nominees on
CMD’s board:
- Dialectic has said that it has a
plan to create value for all CMD stockholders, yet has never
offered a single concrete operational or financial step to
improve CMD’s performance and profitability.
- Although it now tries to
backpedal from its earlier statements, the only specific plans
Dialectic has ever proposed are to sell the company (which as we
have already noted, would be dangerously ill-timed) or to strip the
company of its cash reserves, which are vital in maintaining our
operations and attracting and retaining customers.
- At the same time, Dialectic has
bizarrely criticized CMD for cutting expenses in order to return
to positive cash flow, an action we would expect to be
applauded by a stockholder that describes itself as “focused on
achieving profitability.”
- In the same breath, Dialectic
questions the CMD Board’s willingness to listen to stockholders and
then attacks us for doing exactly that when we recently decided
to redeem CMD stockholder rights plan in response to input from our
stockholders.
- Dialectic would like to claim
that it has tried to negotiate a settlement to this costly and
distracting proxy contest, but in fact, Dialectic has twice
unilaterally stopped active negotiations, insisting on its
unreasonable demands.
- If Dialectic believes its
nominees are qualified to serve on the CMD Board, why has it
repeatedly refused to allow your Board’s Nominating and Corporate
Governance Committee to meet with its nominees?
- Dialectic contends that its
nominees have the right experience to enhance your Board but the
only specific example it has provided to support this claim is
nominee Michael Gullard’s role in selling Transmeta Corporation
after joining the Transmeta Board as part of a proxy contest
settlement.
- Not only does this reinforce
that Dialectic’s only plan is still to seek a misguided sale but it
also fails to mention that the Transmeta Board of Directors – which
happened to include Bob Dickinson, the CEO of your company – had
already begun the process that culminated in the sale of Transmeta
well before Gullard was appointed. Dialectic not only presents
nominees with the wrong kind of experience, but also isn’t telling
you the whole story and is trying to take credit where
credit is not due.
RE-ELECT YOUR EXPERIENCED
DIRECTORS BY VOTING THE WHITE
PROXY CARD TODAY
Your vote is important, no matter how many shares you own.
Please vote by Internet or phone by following the simple
instructions on your WHITE proxy card or vote by mail by
signing, dating and returning the WHITE proxy card in the
enclosed pre-addressed, stamped envelope.
We thank you for your continued support. If you have any
questions or need any assistance voting your shares, please contact
Innisfree M&A Incorporated, which is assisting the Company in
this matter, toll-free at (877) 456-3442.
If you have any question about CMD itself or its direction,
please contact our Chief Financial Officer, Kevin Berry, at (408)
934-3144 or by email at kevinb@cmd.com.
On behalf of the Board of Directors, we thank you for your
continued support of California Micro Devices.
Sincerely, /s/ Wade Meyercord Chairman California
Micro Devices
Your Vote Is Important, No Matter
How Many Or How Few Shares You Own.
If you have questions about how to
vote your shares, or need additional assistance, please contact the
firm assisting us in the solicitation of proxies:
INNISFREE M&A
INCORPORATEDStockholders Call Toll-Free: (877)
456-3442Banks and Brokers May Call Collect: (212)
750-5833
IMPORTANTWe urge you NOT to
sign any GOLD proxy card sent to you by Dialectic Capital.If you
have already done so, you have every legal right to change your
vote by using the enclosed WHITE proxy card to vote
TODAY—by telephone, by Internet, or by signing, dating and
returning the WHITE proxy card in the postage-paid envelope
provided.
About California Micro Devices Corporation
California Micro Devices Corporation is a leading supplier of
protection devices for the mobile handset, high brightness LED
(HBLED), digital consumer electronics and personal computer
markets. Detailed corporate and product information may be accessed
at www.cmd.com.
Additional Information
In connection with its 2009 annual meeting of stockholders,
California Micro Devices Corporation has established a website,
http://annualmeeting.cmd.com,
where stockholders may obtain information related to our annual
meeting, including our proxy statement and annual report, and may
vote.
Forward Looking Statement Disclaimer and Non-GAAP Financial
Measure Use
All statements contained in this letter that are not historical
facts are forward-looking statements which are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. They are not guarantees of future performance or
events. Rather, they are based on current expectations, estimates,
beliefs, assumptions, and goals and objectives and are subject to
uncertainties that are difficult to predict. As a result, our
actual results may differ materially from the statements made.
Often such statements can be identified by their use of words such
as will, intends, expects, plans, believes, anticipates, and
estimates. Forward-looking statements made in this letter include
that there is a large market opportunity in the protection
business; that our action plan provides the greatest opportunity to
create long-term stockholder value; our expected non-GAAP operating
expense reductions; that we can return to positive cash flow and
non-GAAP profitability; that design wins and reference platforms
for our recently introduced products will result in material
revenues for those products; and that our strong product portfolio
and solid financial condition will enable us to build customer
relationships and increase share in targeted growth markets. These
forward-looking statements are based upon our assumptions about and
assessment of the future, which may or may not prove true, and
involve a number of risks and uncertainties including, but not
limited to whether our customers experience the demand we
anticipate for their products, whether we incur unexpected
operating expenses or obstacles to our cost reductions, whether
there is increasing global economic stability, whether the designed
performance of our devices satisfies our customers’ requirements so
that they continue to design our devices into their products,
whether our devices perform to their design specification, whether
competitors introduce devices at lower prices than our devices
causing price erosion and/or loss of market share for us, and
whether we encounter any difficulty in obtaining the requisite
supply of quality product from our contract manufacturers, contract
assemblers and test houses without interruption or unanticipated
price increases as well as the risk factors detailed in the
company’s Form 8K, 10K, and 10Q filings with the Securities and
Exchange Commission. Due to these and other risks, the company’s
future actual results could differ materially from those discussed
above. These forward-looking statements speak only as of the date
of this letter, and, except as required by law, we undertake no
obligation to publicly release updates or revisions to these
statements whether as a result of new information, future events,
or otherwise. Reference is made to our fiscal 2010 first quarter
earnings release and August 4, 2010, Form 8-K for a discussion of
our calculation and use of the non-GAAP measures such as non-GAAP
operating expenses and non-GAAP profitability.
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