Lazarus Investment Partners LLLP Delivers Letter to Perceptron, Inc.

DENVER, Nov. 9, 2011 (GLOBE NEWSWIRE) -- Lazarus Investment Partners LLLP, the largest shareholder of Perceptron, Inc. (Nasdaq:PRCP) with ownership of approximately 9.4% of the outstanding shares, today announced that it delivered a letter to the Company's Chairman, Richard Marz, and the Company's CEO, Harry T Rittenour.

The full text of the letter follows:

Gentlemen:

I am writing to the Board of Directors of the Company to request that Perceptron, Inc. ("PRCP" or "the Company") immediately engage a prominent investment bank with a clear mandate to sell part or all of the Company.

Lazarus Investment Partners LLLP currently owns approximately 9.4% of the outstanding shares of Perceptron. We believe this makes us the Company's largest shareholder. We have owned shares in the Company for over eight years. 

PRCP's stock is deeply undervalued and meaningful opportunities exist to unlock shareholder value which are in the control of the Company's Board of Directors and management. Despite market-leading technology and valuable intellectual property, PRCP's stock has dramatically underperformed its peers and the overall market over an extended time period. We do not feel that the current slate of directors possess the requisite skill sets to assist the Company in evaluating opportunities to improve performance and shareholder value.

I have approached the Company on a number of occasions and asked for some new perspective to be brought to the Board. Currently, the average tenure for the Board's directors is approximately 12 years. In fact, four directors, Mr. Oswald, Mr. DeCocco, Mr. Smith and Mr. Beattie, have served since July 1996 or July 1997 during which time shareholders have witnessed a decline in the value of their holdings of approximately 85% while the Russell 2000 has increased over 150%. The most recently appointed Board member, Mr. Ratigan, previously served on the board prior to 1996. Mr. Ratigan was a board member when the company went public, further demonstrating the Board's inability to go outside of a very shallow well for leadership direction. 

I have also asked for the Company to utilize its sizeable cash position, currently around $2.65 per share, to create shareholder value or to return the money to the shareholders, yet the Company still has not been able to even achieve the previously announced $5 million stock buyback. Simply stated, we have had enough of the inertia that has enveloped the Company. I am tired of the same 'group think' that has only provided shareholders a decreased share price since the majority of the current directors joined the board. I am appalled at management and the Board's inability at monetizing significant intrinsic value of Perceptron's technology and intellectual property. I can no longer accept the persistent tunnel vision and inability to diversify and utilize the Company's technology outside of the auto sector and the current feeble and failing attempt in the construction and trade industry. Thus far, shareholders have no recognizable value for the millions of dollars in salaries and board fees we have born over the years. Enough is enough.

For several years, management has invested in R&D with the promise that a new product is around the corner. Yet, sales have declined from $72.5 million in 2008 when the current Chairman and current CEO took control to $59.3 million in the last fiscal year. The share price has decreased approximately 50% over this time frame and the Company has only entered one new business line. The Company's diversification into the trade sector appears to not only be poorly timed, but ill-conceived with its first major vendor leaving the company. The CBU unit has cost the Company millions of dollars over the last three years in a failed attempt to diversify away from the auto sector. We encourage the Company to diversify and leverage its technological prowess, but pursuing the trade sector when the construction market is in freefall does not seem to be the diversification anyone would desire. Therefore, it is terribly disheartening to learn that our years of trust and patience have been in vain as management has instead expended millions of dollars worth of shareholder's assets and has not successfully diversified or grown the Company. 

As we discussed with the management team on several occasions during 2011, since Perceptron went public nearly 20 years ago, the Company has created virtually ZERO shareholder value. During your time as Chairman, you have made in excess of $430,000 in cash compensation in addition to share grants. During his time as CEO, Mr. Rittenour has received in excess of $1.1 million in cash compensation in addition to share grants. In fact, Mr. Rittenour has received a generous raise every year since becoming CEO, even while the company has struggled during the economic downturn.

It appears that the benefits reaped by the Company's customers, officers & directors, and employees, have come at the expense of its shareholders. Quarter after quarter, year after year, decade after decade, Perceptron has failed its shareholders and it is time to deliver the value for which the shareholder's have so patiently waited. I no longer have any confidence that management or the Board of Directors have the knowledge, interest or skill set necessary for creating shareholder value. A glaring example of management's apathy towards creating shareholder value can be seen on the Company's website where the investor presentation has not been updated since December, 2010. This lack of even the most fundamental investor relations effort is truly astonishing. 

Frankly, the decades of dismal results and the current share price speak for itself. This is a public company and the Board of Directors of Perceptron has a fiduciary responsibility first and foremost to its shareholders. If management and the Board of Directors really believe that the Company is on the proper path to success and we (and the rest of the world) just don't get it, feel free to make the shareholders an offer and take the Company private.

We are confident that Perceptron will find a prominent investment bank that is very eager to take on this transaction. The out-of-pocket expenses for engaging an investment bank to explore the sale of part of all of the Company will be minimal. We have nothing to lose and we can always turn down an offer we deem inadequate. It's time for change and we expect the Board to live up to its fiduciary responsibility to the shareholders and maximize the value of the Company. I have no interest in engaging in a proxy fight where the Company's management and Board of Directors squanders millions of PRCP's cash resources to protect their jobs. After eight long and frustrating years as a patient shareholder of this Company, I am simply requesting that we explore our strategic alternatives. I am very hopeful that management and the Board of Directors will comply with this request and we can continue a friendly and constructive dialogue with the Company.

Please feel free to call me with any questions.

Sincerely,