MONTCLAIR, N.J., June 15, 2017 /PRNewswire/ -- RGJ Capital, LLC ("RGJ") owns 521,000 shares, or 4.7%, of Xplore Technologies Corp. (NASDAQ: XPLR). RGJ reserves the right to hold certain members of Xplore's Board of Directors accountable for the significant deterioration of the company's share price. Under the leadership of Mr. Sasshower, and as of June 8, 2017, the total return of Xplore's stock DECLINED by 41.0%, 67.6%, and 89.7% over the prior 1, 3, and 5 year periods, respectively. Over the same time periods, the total return for the Russell 2000 index ROSE by 20.8%, 26.7%, and 97.3%, respectively.
Against that backdrop, and over the last 3 years, Mr. Sasshower has been paid $1.86 million, or nearly 10% of the current market capitalization of the company. Clearly, the metrics used in deriving compensation have no relationship to shareholder value creation. The Xplore Board should act on behalf of all shareholders in making overall policy decisions and providing oversight. The Xplore Board has a fiduciary responsibility to care for the finances and legal requirements of the corporation. Compensation decisions that have an inverse relationship to value creation is a warning sign that certain members of the Xplore Board do not understand their fiduciary responsibility to shareholders. For too long, certain members of the Xplore Board have operated for the benefit of its Chairman and his private equity firm, The Phoenix Group, and not for the benefit of all shareholders.
Board Members should be held accountable for the shareholder value destruction they have overseen. Immediate action is required at the Board level. We need new perspectives and experiences in Xplore's boardroom. We need fresh eyes and independent views. It is painfully obvious that the elongated tenure of some (coupled with the corresponding dreadful performance of the company's stock) has led to entrenchment and compromised independence. Mr. Brian Usher Jones has been an Xplore Board Member for an incomprehensible 21 years. If a Board Member's tenure were properly linked to shareholder value creation, Mr. Usher Jones would have left a long time ago. As would have other Xplore Board Members. It is time for change.
We seek to actively engage with the Xplore Board to help it enhance the company's corporate governance and strengthen accountability. We are hopeful, in the very near term, we can work with the Board to help ensure proper independence at the Board level. If not, we may take alternative actions to ensure that every shareholder of Xplore is being treated fairly by a board that should hold itself accountable for the company's results.
We believe Xplore is significantly undervalued. The stock is trading at 25% of sales and the company has no debt. In fact, at last sale, Xplore's market capitalization is 1.4x the entire working capital of the company. We believe that changes in the corporate governance of the company is a crucial part of the steps required to unlock shareholder value.
RGJ Capital operates for the sole benefits of its own shareholders and is not part of any group.
RGJ Capital, LLC
Kevin M. Rendino, Chief Executive Officer
About RGJ Capital, LLC:
RGJ Capital, LLC focuses on a blend of long-only ideas and pair trades when a statistical anomaly and inconsistency between two variables is identified. As fundamental investors, RGJ adheres to a Graham and Dodd approach to value investing.
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SOURCE RGJ Capital, LLC