Source: Barington Capital Group, L.P. and NYSE Group, New York; CP staff
Citing its belief that NYSE-listed Ameron Corp. should trade above $100/share (against a $76.60/share January 5 quote), investor Barington Capital has called on the company’s board to replace President, CEO and Chairman James S. Marlen. In a letter to directors “as a significant stockholder,” Barington states that it is convinced Ameron has a vast value potential that is not being realized, and positive attributes—healthy, asset-rich balance sheet, valuable joint ventures, attractive end markets and leading market positions for its businesses—to support the $100-plus share price assessment.
The early-2011 motion continues a challenge to Marlen’s leadership Barington Capital raised in spring 2010, in advance of board elections.
Ameron’s Water Transmission Group produces concrete and steel pressure pipe, plus concrete gravity pipe, in West Coast plants; its Infrastructure Products Group includes Hawaii Concrete & Construction, a market-leader in ready mixed, with companion concrete pipe and aggregate operations, and spun-cast prestressed concrete pole and steel pole plants in Alabama, Oklahoma, California and Washington.
Barington officials question Marlen’s contributions to those businesses, contending that credit for much of their financial successes during his June 1993–present tenure would appear attributable to predecessors. The investor further tracks the Water Transmission Group’s earnings before interest and taxes (EBIT) trend over the past 17 years, $3.2 million to $1.9 million, with margins dropping from 3.2 percent to 1.1 percent. Infrastructure Products group EBIT over the same period, Barington notes, has decreased from $16.7 million to $13.2 million, with margins falling from 14.4 percent to 9.2 percent.