New York-based investor that owns 5.9 percent of Youngsville-based Xerium Technologies is upset with the paper products manufacturing company for replacing its chief executive officer just as its turnaround strategy begins to show results.
In a filing Wednesday with the Securities and Exchange Commission, Wynnefield Capital Management called the departure of CEO Harold Bevis “extremely untimely” and an “astounding chain of events.”
Wynnefield Capital also complained in its filing that shareholders were not allowed to ask questions during the company’s first-quarter earnings conference call on Monday.
“Such restrictions deprive Xerium’s shareholders/owners from the collective probing of the actions of the Issuer’s management, whom are employed by these shareholders,” said Wynnefield Capital. “While providing exclusive access to sell-side analysts to ask questions during the public conference calls, Xerium then allows selective post-call access to large shareholders through ‘one-on-one’ conversations. The dubious approach Xerium has chosen regarding its conference call and selective shareholder communications policy is one, in our opinion, that deserves SEC scrutiny.”
Xerium Technologies did not respond to an email from North Carolina Business News Wire seeking comment.
The company named Mark Staton its new CEO on Monday, replacing Bevis, who had been with the company for five years. From from April 2014 to December 2016, Staton served as executive chairman of Hoffmaster Group Inc., a manufacturer of premium table top décor for retail and food service markets.
Xerium also released first-quarter earnings on Monday that showed a net loss of $2.8 million on $119.9 million in revenue. Bevis had overseen an overhaul of the company in which it introduced approximately 90 new products, opened or acquired four facilities, and the closure of eight facilities.
Wynnefield Capital said in the filing that it “will carefully examine and evaluate the behavior and performance of Xerium and its management as it determines a future course of action.” As of Monday, it owned 947,100 shares of Xerium, or 5.92 percent.
Xerium’s shares fell 1 cent to $7.01 in late Wednesday afternoon trading.
Note: This story is from the North Carolina Business News Wire, a service of UNC-Chapel Hill’s School of Media and Journalism