Gilead Capital goes activist on Landauer, says Chairman not accountant
Gilead Capital discloses a 5.0% stake in Landauer, which represents over 480,000 shares. Landauer is a provider of technical and analytical services to determine occupational and environmental radiation exposure. The filing allows for activism. Gilead today issued an open letter to Landauer's board expressing concerns regarding the company's corporate governance and "poor" long-term financial performance. In the letter, Gilead first addressed the issue of Executive Chairman Michael Leatherman. The fund said it discovered that Leatherman was a not Certified Public Accountant, contrary to statements in the company's filings. Gilead added, "The Reporting Persons had brought this information to Mr. Leatherman's attention and the attention of the full Board, but no action has been taken to date to make Mr. Leatherman account for this misrepresentation. The Reporting Persons also detailed other governance concerns in the letter, such as (i) the Issuer's accounting restatement and revision processes for the fiscal years ending 2011 through 2014, which occurred while Mr. Leatherman acted as interim Chief Financial Officer and as a member of the Audit Committee, (ii) the Board's capital allocation, including with respect to the implementation of the Enterprise Resource Planning system which budget ballooned from $10 million to $57 million and the Board's decision to acquire a medical products business without obvious synergies, which was ultimately sold at a loss of more than 88%, and (iii) the Board's failure thus far to execute on wireless dosimetry technology despite publicly disclosing plans to pursue such technology since 2010. The Reporting Persons stated their belief that the Issuer's governance issues have taken a toll on the Issuer's financial health, noting the Issuer's precipitous decline in adjusted operating margins, from nearly 40% to 20% since 2008, and net cash, from a net cash position of $29 million in 2008 to a net debt position of $100 million as of June 30, 2016."