Citing growing debt and less-than-expected revenues, Revolution Lighting Technologies CEO and Chairman Robert LaPenta has proposed taking the company off the NASDAQ and making it private.
The Stamford company has revised its third-quarter revenue guidance from $40-41 million to $33 million and its full-year 2018 numbers from $160-170 million to $140-145 million.
LaPenta has provided approximately $15 million of capital to fund operations, bringing Revolution”™s total debt, including bank financing, to over $60 million.
In a letter to the company”™s independent directors, LaPenta wrote: “The company”™s ongoing liquidity needs, which we do not believe can be addressed through third-party funding, are likely to require us to provide additional funding, which we are reluctant to do at this time given the company”™s current operations and cost structure.
“Simply put,” he continued, “we do not believe that it is in the best interests of the company and its stockholders to continue as a publicly traded enterprise, as we believe it currently lacks sufficient scale and the ongoing costs of maintaining the reporting and related infrastructure necessary for public reporting are a significant financial burden on the company.
“In addition,” LaPenta wrote, “we believe the constant pressure to meet quarterly earnings targets has been a significant distraction to the company”™s management and has prevented management from appropriately focusing on the long-term growth and the development of the company”™s business.”
LaPenta went on to propose that Revolution Lighting Technologies acquire all of the common stock it doesn”™t already own for $2 per share. He noted that the board is open to exploring and potentially pursuing alternative ways of maximizing stockholder value.
Revolution”™s board has formed a transaction committee composed of independent board members to review the privatization plan and to weigh other solutions. That committee is in the process of engaging a financial adviser to assist in its evaluation. The company said it will not publicly disseminate any further information about the process until the board has approved a specific transaction.
