SCHAUMBURG, IL – An investment firm that owns more than 2% of outstanding shares of Sparton informed the company today they’d vote against any incumbent directors for the board, except Alan Bazaar.

In a letter, Breach Inlet Capital Management said Sparton’s board has a long history of destroying shareholder value, with the share price declining about 50% over the past three years.

The investment firm believes “better candidates may be available,” including four people who served on the board of TechPrecision. Breach Inlet pointed to Walter Schenker, who has been nominated to public company boards several times by Gamco Asset Management, Sparton’s largest shareholder.

Sparton’s share price is near a six-year low, and the board isn’t aligned with its shareholders, the firm continued. The electronics manufacturer “has been mismanaged since the board appointed Hartnett interim CEO” in February 2016. Breach Inlet says the board “never recruited a permanent CEO with relevant experience,” and poorly managed its first sales process. The board “arguably allowed Ultra Electronics Holdings to disrupt the process and then agreed to sell to Ultra for only $23.50 per share.

“Six months have passed since the board began the second sales process … [but] the board has provided zero relevant updates or even a deadline for ending the process.”

Breach Inlet believes Sparton’s board has allowed two directors too much control and “damaged its most critical customer relationship,” the US Navy.

Finally, the investment firm stated, “If the board is unable to negotiate a sale near SPA’s intrinsic value, then we believe it is time for a meaningful change in leadership and strategy.”

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