Now that Mace Security International Inc.'s (NASDAQ: MACE) largest shareholder Andrew Shapiro has added to his holdings in the beleagured security products company, he demands to know how he can reach out to fellow shareholders of the Mt. Laurel security firm.
Shapiro's firm, Lawndale Capital Management L.L.C., intends to "communicate with Mace's shareholders with respect to matters relating to their mutual interests," Shapiro said in a SEC filing, adding that could include "nominating various individuals to Mace's Board of Directors as alternatives to current board members and/or to take other such action as Lawndale believes, in its sole judgment, may be necessary and/or appropriate to address Mace's governance weaknesses for the purpose of enhancing Mace's long-term sustainable value."
Along with other shareholders, Shapiro, who now owns 1.53 million shares, up from 1.42 million in June, has long complained that Mace's board of directors is too deferential to Chief Executive Louis Paolino. They have also claimed that Paolino is overpaid and receives unusual bonuses for both buying and selling companies. A Mace spokesman didn't immediately return a phone call to PhillyInc.
In June, Shapiro asked the board to remove Paolino's brother Matthew, who is also a company vice president, from the board and to expand its membership from five to seven people. He also recommended Eugene I. Davis, Gerald T. LaFlamme and Donald R. Raefield to be appointed as replacement board members.
One of the few things that Mace and Shaprio agree on is that the company's stock is cheap. Mace said yesterday that it would buyback as much as $2 million worth of its stock because it's currently trading under its book value (total assets excluding tangible assets and liabilities such as debt).
Shares of Mace have tumbled more than 20 percent this year amid concerns about the continued poor performance of its security business. During the six months ended June 30, security sales fell 11% to $11.06 million from $12.44 million.
The latest quarterly earnings weren't so hot either. Mace had a net loss of $1.26 million, or 8 cents, compared with $1.88 million, or 12 cents. Revenue fell to $11.3 million.
Mace, which released its earnings yesterday, has scheduled its earnings conference call for Thursday at 11 a.m. People can access the by calling 1-888-751-6352. A Web cast is available at the Web site
As usual, there will be plenty to talk about.
