Barington Capital Group L.P., a hedge fund that has been agitating for a management shakeup at pipe maker Ameron International Corp., has convinced fellow shareholders to elect the fund’s CEO to Ameron’s board on Wednesday.
James Mitarotonda, chief executive of the New York fund, had 72.6 percent of the votes cast in his favor, according to Barington, which cited a preliminary count of the voting results at the annual meeting by its proxy solicitor, MacKenzie Partners Inc.
Ameron Chief Financial Officer Gary Wagner said his company was not yet ready to release figures, but confirmed that Mitarotonda had been elected to the board and Chief Executive James Marlen had been re-elected. Marlen has led Ameron since 1993.
There were two open seats on the board, with independent director David Davenport also up for re-election and now apparently out.
Pasadena-based Ameron and Barington. which owns 1.3 percent of shares, have engaged in increasingly bitter proxy battle since Mitarotonda late last year began saying that management was not maximizing shareholder value and it was time for Marlen to step down.
“The preliminary results demonstrate that stockholders overwhelmingly agree with us that there is a need for change at Ameron,” said Mitarotonda in a press release issued about 40 minutes before the markets closed. “I look forward to joining the Ameron board and working constructively with all of the company’s incumbent directors to help improve Ameron’s operations, profitability and corporate governance.”
Mitarotonda would only join the board if he was among the two top vote-getters. He was the challenger in the race against Marlen, also chairman of Ameron’s board, and David Davenport, an incumbent independent director.
Before the meeting, Ameron had released its fiscal first quarter results, reporting that the company had moved to a loss in its fiscal first quarter as bad weather and fewer high-margin sales aggravated a typically slow quarter.
The company reported a net loss of $4.33 million (-47 cents per share) in the quarter ended Feb. 28, compared with net income of $1.08 million (12 cents) a year earlier. Sales were up less than 1 percent to under $110 million. Analysts surveyed by Thomson Reuters expected per-share profit of 50 cents on revenue of $116 million.
The company said results were hurt by a 12 percent increase in the cost of sales due to higher raw material prices, and also by greater percentage of lower-margin product sales, which hurt profitability. Marlen said in the release that the first quarter is traditionally the company’s slowest due to cold weather and holiday schedules, but was worse than usual this year. Wet weather, particularly in Hawaii and the West Coast, delayed some anticipated sales.
Shares, which had largely recovered after dipping following the morning earnings report, slid $4.93, or 6.6 percent, to close at $69.83 on the New York Stock Exchange after the Barington announcement.
