UPDATE: JCP Investment Management withdrew its competing slate of directors for Casella, expressing satisfaction with changes that Casella has made with the firm's board and corporate leadership.
In a statement, JCP's James Pappas said: "We are gratified to have served as the catalyst for these positive first steps in the right direction and are inclined to give the new board a chance to deliver on its promises to shareholders. In that regard we have decided to withdraw our nomination of directors ensuring the election of the incumbent slate. We believe this will position us well to monitor the progress of the board's current plan and we fully expect shareholders to hold the board and management accountable for any failure to deliver on their plan - now and in the future."
In response, Casella issued its own statement, in which it said: "JCP’s 11th hour concession reflects the feedback we, and undoubtedly JCP, have received regarding Casella’s strategic direction, the substantial progress we have achieved in improving our financial and operating performance, our refreshed Board and the new independent Board leadership that is now in place to oversee our strategic trajectory."
Dive Brief:
- Casella Waste Systems' 5.8% shareholder, JCP Investment Management, is adamantly calling for a new Casella CEO and changes to the board. Houston, TX-based JCP is fighting for what it says is a need to dramatically improve revenue and look out for shareholders of the Rutland, VT company, which employs about 1,900 people in six northeastern states.
- Casella went public in 1997 at a stock value of $18, which is now down to $6, says James Pappas of JCP Investment who is asking to be voted onto the board, along with colleague Brett Frazier.
- Results of the proxy vote will be announced at the company’s annual meeting Nov. 6.
Dive Insight:
On their website, Fixcasella.com, JCP Investment Management says, "We are here to monitor the management’s execution of the promises [Casella has] made to shareholders … The company’s chances of success are multiplied with JCP’s nominees on the board. If the management plan does not work, we are here to make sure strategic alternatives are explored."
CEO John Casella admits some of the risks the company has taken have failed. But he says the company has a solid growth plan and a 2011 reorganization that he attributes to more than 40% growth this year alone.
"The performance speaks for itself; the stock price speaks for [itself]," says Casella. "And James [Pappas, majority owner of JCP] doesn’t want to talk about the last two years, he wants to talk about 10 years ago."
Last week, Casella reported its third quarter earnings for 2015. Revenues were up 3.0% from Q3 in 2014, while net income increased 112.6% from Q3 in 2014. The earnings report shows a trend of progress at Casella, which may defend the company from JCP claims.
