Broadwind Sends Letter to Shareholders Clarifying Attempts by WM Argyle to Mislead Shareholders
10 Mai 2023 - 12:16AM
Broadwind, Inc. (Nasdaq: BWEN, or the “Company”), has sent a letter
to shareholders in connection with its upcoming annual meeting,
which is scheduled to be held on May 23, 2023 (the “2023 Annual
Meeting”). The full text of the letter follows.
May 9, 2023
Dear Shareholder,
You have likely received proxy vote solicitation
materials from WM Argyle Fund, LLC (“WM Argyle”), an activist hedge
fund that owns 1% of Broadwind, Inc.’s (“Broadwind” or the
“Company”) outstanding common stock. Our Board of Directors (the
“Board”) urges you not to sign, return or vote any proxy card sent
to you by WM Argyle, and instead recommends you vote to support
Broadwind’s directors on the Company’s WHITE proxy
card.
Broadwind strongly believes that WM Argyle’s
opportunistic campaign for Board representation puts shareholder
value at risk. Unfortunately, WM Argyle dismisses the hard work
Broadwind employees have done to position the Company for success –
efforts that are working, as shown by our recent strong stock price
performance and key strategic wins. We believe shareholders should
be very concerned that WM Argyle is manipulating facts about the
directors and officers of Broadwind to hide WM Argyle’s candidates’
total lack of qualifications to serve on the Board.
Here are just a few examples of WM Argyle’s
materially false and misleading statements. We encourage
shareholders to see these statements for what we believe they are:
the blatant efforts of an unqualified opportunistic hedge fund
seeking to deceive its fellow investors for personal gain.
- WM Argyle claims
that its candidate Ryan Bogenschneider’s experience includes
“working with the BWEN board in 2016.” This is
false. Broadwind never hired Mr. Bogenschneider in any
capacity. He submitted a self-enriching consulting proposal with
demands for fees and stock, which the Board rejected due to his
lack of qualifications and credibility.
He has not worked at any company in over a
decade other than WM Argyle, where he is “CEO” of a fund with no
employees that only owns Broadwind stock, and his own private
consulting firm that lacks a website and known client list.
- WM Argyle claims
the Board’s Chairman Cary Wood was terminated from his CEO role at
Sparton Corp. and that Board member Tom Wagner led the development
of a wind turbine product that failed to perform. This is
false. The fact that WM Argyle would publish false and
disparaging statements in public filings speaks volumes about its
lack of judgement, character and willingness to defame respected
public company executives.
- WM Argyle claims
Broadwind is not prioritizing the use of NOL tax benefits, and that
there is a “high likelihood the tax benefits of these NOL’s [sic]
will be wasted.” This is false. The reality is
that Broadwind is on a pathway back to profitability that will help
the Company to realize these tax benefits. The multi-year strategic
turnaround we have executed has positioned the Company for growth
and profitability, as evidenced by Broadwind’s most recent guidance
that projects adjusted EBITDA will grow to $16 – $18 million in
2023, over six times the 2022 results.
- WM Argyle claims
Broadwind’s directors are overpaid. This is false.
The reality is that our Board compensation is less than the 25th
percentile of directors at similar companies. The Board kept Board
pay far lower than the market for years as part of a concerted plan
to manage expenses and preserve liquidity during the downturn.
- WM Argyle claims
its candidates have the experience and skills needed to serve on
the Board. This is false. The reality is that they
do not. They have never led a manufacturing company, or even an
operating division of a manufacturing company. They also have no
board experience. They lack the knowledge and qualifications
required to lead the business during its next chapter of growth.
Shareholders deserve directors that will represent their interests,
who can monitor risks and opportunities to protect your investment
and create value for shareholders. We believe WM Argyle’s
candidates simply cannot offer that.
We urge shareholders to see through WM Argyle’s
false and misleading statements. WM Argyle’s candidates have never
served in senior-level operational roles for a very good reason in
our view: they are wholly unqualified.
WM Argyle has demanded short-sighted and
reckless cost cuts, including cuts to our labor force, to increase
short-term profits at the expense of long-term value creation. The
Board has made strategic decisions to preserve skilled labor and
manufacturing capacity during the downturn, so that Broadwind would
be among the first to benefit from a rebound in demand entering a
cyclical recovery. This strategy is working, and we are
well-positioned to capitalize on the opportunities ahead of
us.
WM Argyle’s campaign to replace directors is –
in our view – a serious risk to shareholder value. At this year’s
annual meeting, we urge shareholders to support your Board and to
vote for Broadwind’s directors on the WHITE proxy
card.
Sincerely,
The Board of Directors
YOUR VOTE IS IMPORTANT
VOTE “FOR” BROADWIND’S DIRECTOR NOMINEES
ON THE WHITE PROXY CARD
TODAY
If you have any questions or require any assistance with respect
to voting your shares, please contact the Company's proxy
solicitor, Morrow Sodali LLC:
509 Madison Avenue Suite 1206New York, New York
10022Shareholders Call Toll Free: (800) 662-5200Banks, Brokers,
Trustees and Other Nominees Call Collect: (203) 658-9400Email:
BWEN@investor.MorrowSodali.com
CORPORATE CONTACT
Noel Ryan, IRCBWEN@val-adv.com
Important Additional
Information
The Company, its directors and certain of its
executive officers are participants in the solicitation of proxies
from the Company’s shareholders in connection with its upcoming
2023 Annual Meeting. The Company filed its definitive proxy
statement and a WHITE proxy card with
the U.S. Securities and Exchange Commission (the “SEC”) on April 7,
2023 in connection with any such solicitation of proxies from the
Company’s shareholders. SHAREHOLDERS OF THE COMPANY
ARE STRONGLY ENCOURAGED TO READ SUCH PROXY STATEMENT,
ACCOMPANYING WHITE PROXY
CARD AND ALL OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN
IMPORTANT INFORMATION. The Company’s definitive proxy
statement for the 2023 Annual Meeting contains information
regarding the direct and indirect interests, by security holdings
or otherwise, of the Company’s directors and executive officers in
the Company’s securities. Information regarding subsequent changes
to their holdings of the Company’s securities can be found in the
SEC filings on Forms 3, 4 and 5, which are available on the
Company’s website at http://investors.bwen.com or through the SEC’s
website at www.sec.gov. Information can also be found in the
Company’s other SEC filings, including its Annual Report on Form
10-K for the year ended December 31, 2022, filed on March 9, 2023.
Shareholders will be able to obtain the definitive proxy statement,
any amendments or supplements to the proxy statement and other
documents filed by the Company with the SEC at no charge at the
SEC’s website atwww.sec.gov. Copies will also be available at no
charge on the Company’s website at http://investors.bwen.com.
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