SAN FRANCISCO, April 11, 2016 /PRNewswire/ -- Potrero
Capital Research, LLC, together with its affiliates ("Potrero
Capital"), one of the largest shareholders of Datawatch Corporation
("Datawatch" or the "Company") (NASDAQ: DWCH) with ownership of
approximately 5.6% of Datawatch's outstanding shares, today
announced that Glass, Lewis & Co., LLC ("Glass Lewis"), a
leading independent proxy voting advisory firm, has recommended
that Datawatch shareholders vote on Potrero Capital's GOLD
proxy card to withhold votes from the election of directors
David C. Mahoney, Richard de J. Osborne, Terry W. Potter and Christopher T. Cox at Datawatch's 2016
Annual Meeting to be held on April 19,
2016. Potrero Capital urges all Datawatch shareholders to
send a clear message of a need for accountability on the Board of
Directors (the "Board") by following Glass Lewis' recommendation
and voting the GOLD proxy card TODAY.
Jack Ripsteen, the Managing
Member of Potrero Capital, responded to Glass Lewis' report
stating, "We are gratified to receive Glass Lewis' strong
endorsement of our call for accountability at Datawatch. Glass
Lewis recognized our concerns that the incumbent Board has failed
to properly oversee the Company and that withholding votes from
Messrs. Mahoney, Osborne and Potter would send a strong message
that shareholders are dissatisfied with the current leadership
structure."
Glass Lewis recommended that shareholders vote on Potrero
Capital's GOLD proxy card stating:
"Overall, we believe the
Dissident presents a strong case that the incumbent directors have
failed to properly oversee the Company's direction and that
shareholder value has suffered. The three incumbent directors
targeted for removal by the Dissident (Messrs. Mahoney, Osborne and
Potter) are among the longest-serving members of the board with
tenures of 6, 15 and 18 years, respectively. Mr. Osborne is
chairman of the board and Mr. Mahoney is vice-chairman of the board
and chairman of the compensation committee. Given their tenures and
positions, we believe these directors bear a disproportionately
large share of responsibility for the poor state of the Company and
that it would be reasonable for shareholders to hold them
accountable."
"Having considered the
Dissident's arguments in depth, we believe it makes a compelling
case that the board has failed to hold management accountable for
poor performance and failed execution on strategic priorities and
that change to the composition of the board is warranted."
Glass Lewis recognizes Datawatch's poor total shareholder
returns (TSR) under the leadership of the incumbent Board:
"Datawatch underperformed on a
TSR basis relative to all selected benchmarks, including the peer
group, the S&P 600 Software & Services Industry Group Total
Return Index and the Nasdaq Composite Index, over all periods
reviewed."
"Overall, we believe there is
clear evidence that the Company has generated very poor total
shareholder returns on an absolute basis and relative to peers and
relevant market indices, over the near- and longer-term. We believe
this poor performance raises questions about the effectiveness of
the Company's board and management team."
Glass Lewis agrees there are concerns with Datawatch's operating
performance and strategic direction:
"We see that the Company's
revenue growth slowed considerably over the last four years, from
45.5% in FY2012 to 15.8% in FY2014, and that revenues declined
13.9% in FY2015...We are also concerned by the downward trend in
revenue growth from software licenses, from 70.4% in FY2012 to 6.2%
in FY2014, followed by a large decline in software license revenue
in FY2015."
"We recognize the Dissident's
concern that the Company has shifting strategies over the last
several years without meaningful success…These efforts appear to
have been largely ineffective, in our view, given the decline in
FY2015 revenue."
Glass Lewis shares Potrero Capital's concerns with the Board's
unilateral adoption of certain amendments to the Bylaws in
August 2013 that limit stockholders'
rights:
"We agree with the Dissident
that the board appears to have acted contrary to the best interests
of shareholders when it approved bylaw amendments on August 28, 2013...We believe these actions
infringe on the rights of shareholders and that they are indicative
of a board that has limited regard for shareholders'
interests."
Glass Lewis concludes shareholders should vote the GOLD
proxy card:
"In conclusion, we find that
Datawatch has significantly underperformed on a total shareholder
return basis relative to data analytics peers, the small-cap
software & services industry and the broader technology market
over the near- and longer-term. The Company's operating performance
has also been unfavorable, with a downward trend in revenue growth
and mounting losses over the last several years, followed by a very
weak FY2015. The Company appears to lack strong leadership and has
suffered from strategic missteps."
"Accordingly, we recommend that
shareholders vote on the Dissident's GOLD proxy card."
In addition to recommending withhold votes for Messrs. Mahoney,
Osborne and Potter, Glass Lewis recommends a withhold vote for Mr.
Cox due to his poor attendance record at Board meetings.
DATAWATCH SHAREHOLDERS, GLASS LEWIS HAS
SPOKEN, THE TIME FOR ACTION IS NOW. VOTE YOUR GOLD PROXY CARD TODAY
TO WITHHOLD YOUR VOTE FROM THE ELECTION OF MESSRS. MAHONEY, OSBORNE
AND POTTER.
A vote on the GOLD proxy card will have the effect of a
withhold vote with respect to Messrs. Mahoney, Osborne and Potter
in all cases; however, if stockholders would like to withhold votes
from the election of all of the Company's director nominees,
the option "Withhold From All Company Nonobjectionable Nominees"
should be selected on the GOLD proxy card. The GOLD
proxy card also provides stockholders with the opportunity to vote
for, or selectively withhold votes from, each of the Company's
nominees other than Messrs. Mahoney, Osborne and Potter.
If you have any questions, or require
assistance with your vote, please contact Charles Garske or Lydia
Mulyk at Okapi Partners, toll- free at (855) 208-8902 or
direct at (212) 297-0720.
About Potrero Capital Research:
Potrero Capital Research, LLC is an investment firm
headquartered in San Francisco, CA
focused on small-cap equity securities.
Investor contact:
Jack
Ripsteen
Potrero Capital Research, LLC
(415) 576-1103
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SOURCE Potrero Capital Research, LLC