Urges Shareholders to Vote Today on the BLUE
Proxy Card FOR All Five of Xperi’s Directors
Xperi Inc. (NYSE: XPER) (the “Company” or “Xperi”), an
entertainment technology company that invents, develops and
delivers technologies that enable extraordinary experiences, today
publicized a letter to shareholders highlighting the actions the
Board of Directors (“Board”) and executive team have taken to
position the Company for sustainable, profitable growth. In the
letter, the Company reaffirmed the mid-range targets announced at
Xperi’s September 2022 Investor Day and confirmed the Board’s plan
to expand the Board and regularly review the Company’s compensation
program to ensure it is consistent with market practice and aligned
with investor interests in long-term performance.
The full text of the letter follows:
Dear Fellow Xperi Shareholders,
This year’s Annual Meeting of Stockholders (the “Annual
Meeting”) of Xperi Inc. (“Xperi” or the “Company”) is fast
approaching. The meeting will be held on Friday, May 24, 2024.
We are writing to encourage you to vote at this year’s Annual
Meeting – only our second since becoming an independent public
company – for the incumbent directors, who are committed to
ensuring strategic focus and operational discipline at Xperi. Since
our last shareholder meeting, we have outperformed our peers on a
total shareholder return basis and have made great strides as a
company toward achieving our revenue growth and margin
objectives.1
Nevertheless, one of Xperi’s shareholders is seeking to replace
half the independent directors with the former CEO of one of our
predecessor companies and his former colleague. We believe electing
them in place of our engaged and experienced directors would slow
the Company’s momentum and lead to the loss of critical skills on
the Board.
We Are Pleased to Have the Support of the
Leading Proxy Advisory Firms
The two leading proxy advisory firms, Institutional Shareholder
Services (“ISS”) and Glass, Lewis & Co. (“Glass Lewis”),
reviewed our performance, plans and director candidates and have
recommended that shareholders vote for all our nominees on the
Company’s BLUE proxy card.
Glass Lewis said, “We believe full support for the incumbent
board is warranted.”
Similarly, ISS concluded, “There does not appear to be a need
for change at the board level at this time.”
We Are Taking Action to Further Improve
Xperi
That is not to say we are satisfied or standing still.
Since the spinoff in October 2022, the Board and executive team
have undertaken a careful review of our businesses, our governance
and our mid-range targets, and have taken action:
- After a thorough review of our uses of capital and expected
returns, we engaged bankers in 2023 to divest one of our
businesses, AutoSense (which was completed in January 2024), and
the bankers assisted with our consideration of strategic
alternatives for our AI business, Perceive (a process we announced
publicly in February 2024). The Board’s review was comprehensive
and aimed at focusing Xperi on its core businesses in
entertainment-based technology.
- The Board identified more than twenty director candidates for
consideration during 2023 and is committed to its goal of expanding
and adding new directors to the Board this year, including
individuals who are expected to enhance diversity and bring deep
expertise in content monetization, the automotive market and
capital allocation.
- We re-examined our plans and forecasts now that we are
approximately eighteen months into the mid-range guidance provided
to our investors, especially in light of the divestiture of
AutoSense (and the potential divestiture of Perceive) and changes
in our business and markets. After our review, we continue to
believe the targets provided at our Investor Day in September 2022
are reasonable within the timeframe to which we committed (i.e.
three-to-five years from September 2022), including a revenue CAGR
from 2022 of 12-15% and adjusted EBITDA margins of 25% to 30%.2 We
are pleased with our progress on margin expansion in 2024 and
expect continued expansion through both topline growth and ongoing
cost management.
After these reviews and actions, the Board is confident in its
belief that the Company is well positioned to create long-term
value. ISS agrees, stating: “There are … signs of building momentum
from an operational performance standpoint, with multiple
indicators that the company is on target for its long-term goals.”
Glass Lewis also noted in its report that “ … Xperi remains on
track to achieve its stated goals …”
We Are Aligned with
Shareholders
The management team has every interest in ensuring that Xperi
delivers for its shareholders: approximately 89% of our CEO’s
target compensation is tied to company performance, with the vast
majority of that compensation also dependent (either as a condition
of vesting or as a determinant of value) on our stock price.
Neither ISS nor Glass Lewis expressed concerns with the
alignment of our executive pay program and shareholder interests or
with our performance. Nevertheless, as our business evolves, the
Board will continue to review our pay practices to ensure that the
interests of the Company’s executive officers remain closely
aligned with stock price performance and the interests of our
shareholders.
We Ask for Your Support
We encourage you to review the information on our Investor
Relations website that describes our plan for continuing Xperi’s
progress and enhancing shareholder value. Once you do, we believe
you will reach the same conclusion as ISS and Glass Lewis: support
for the incumbent directors is the best way to protect and enhance
value at Xperi.
We welcome your support, which can be expressed by voting in
accordance with the instructions on the Company’s BLUE proxy card –
a vote FOR all of the Board’s nominees and a WITHHOLD vote on all
other candidates.
We thank you in advance.
The Xperi Inc. Board of Directors
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements contained in this press release that do not
relate to matters of historical fact should be considered
forward-looking statements, including without limitation statements
regarding: expectations regarding our future results of operations
and financial position, margin expansion and overall growth,
including, without limitation, anticipated Adjusted EBITDA and
revenue growth, objectives for future operations, and ongoing
strategies, including, without limitation, relating to our
compensation program, continued cost management, the expansion of
our board and our pursuit of strategic alternatives for and
potential divestiture of Perceive. These forward-looking statements
are based on information available to the Company as of the date
hereof, as well as the Company’s current expectations, assumptions,
estimates and projections that involve risks and uncertainties. In
some cases, you can identify forward-looking statements by the
words “expect,” “anticipate,” “intend,” “plan,” “believe,” “could,”
“seek,” “see,” “will,” “may,” “would,” “might,” “potentially,”
“estimate,” “continue,” “expect,” “target,” and similar expressions
or the negatives of these words or other comparable terminology
that convey uncertainty of future events or outcomes. These
statements involve risks, uncertainties and other factors that may
cause actual results, levels of activity, performance, or
achievements to be materially different from the information
expressed or implied by these forward-looking statements. These
risks, uncertainties and other factors are described under the
captions “Risk Factors” and “Management's Discussion and Analysis
of Financial Condition and Results of Operations” in our Annual
Report on Form 10-K for the year ended December 31, 2023 filed with
the Securities and Exchange Commission (the “SEC”) and our other
filings with the SEC from time to time. Any forward-looking
statements speak only as of the date of this press release and are
based on information available to the Company as of the date of
this press release, and the Company does not assume any obligation
to, and does not intend to, publicly provide revisions or updates
to any forward-looking statements, whether as a result of new
information, future developments or otherwise, should circumstances
change, except as otherwise required by securities and other
applicable laws.
Additional Information and Where to Find It
Xperi has filed with the SEC a definitive proxy statement on
Schedule 14A, containing a form of BLUE proxy card, with respect to
its solicitation of proxies for Xperi’s 2024 Annual Meeting of
Stockholders. This communication is not a substitute for any proxy
statement or other document that Xperi may file with the SEC in
connection with any solicitation by Xperi.
Permission was neither sought nor obtained to quote third
parties.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ CAREFULLY AND
IN THEIR ENTIRETY THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR
SUPPLEMENTS THERETO) FILED BY XPERI AND ANY OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT ANY SOLICITATION.
Investors and security holders may obtain copies of these
documents and other documents filed with the SEC by Xperi free of
charge through the website maintained by the SEC at www.sec.gov.
Copies of the documents filed by Xperi are also available free of
charge by accessing Xperi’s website at www.xperi.com.
Endnotes:
1 Source: FactSet. As of May 10, 2024. “Peers” refers to the
comparable public companies referenced during Xperi’s 2022 Investor
Day presentation on September 20, 2022, and include Amdocs,
Brightcove, Cerence, Dolby Laboratories, Harmonic, Roku and Vizio.
Peer data refers to median.
2 Non-GAAP Measures: Adjusted EBITDA and Adjusted EBITDA margin
are non-GAAP financial metrics. Adjusted EBITDA is defined as GAAP
Net Income/Loss, less the impact of interest expense, income taxes,
stock-based compensation, depreciation expense, amortization of
intangible assets, amortization of capitalized cloud computing
costs, goodwill impairment, impairment of long-lived assets, and
one-time costs associated with transaction, separation, integration
or restructuring. Adjusted EBITDA margin is defined as Adjusted
EBITDA divided by revenue. Management believes that the non-GAAP
measures used in this press release provide investors with
important perspectives into the Company’s ongoing business and
financial performance and provide an understanding of our core
operating results reflecting our normal business operations. The
non-GAAP financial measures disclosed by the Company should not be
considered a substitute for, or superior to, financial measures
calculated in accordance with GAAP.
With respect to Adjusted EBITDA margin, the Company has
determined that it is unable to provide a quantitative
reconciliation of this forward-looking non-GAAP measure to the most
directly comparable forward-looking GAAP measure with a reasonable
degree of confidence in its accuracy without unreasonable effort,
as items including restructuring and impacts from discrete tax
adjustments and tax law changes are inherently uncertain and depend
on various factors, many of which are beyond the Company's
control.
About Xperi Inc.
Xperi invents, develops, and delivers technologies that enable
extraordinary experiences. Xperi technologies, delivered via its
brands (DTS®, HD Radio™, TiVo®), and by its startup, Perceive, are
integrated into billions of consumer devices and media platforms
worldwide, powering smart devices, connected cars and entertainment
experiences, including IMAX® Enhanced, a certification and
licensing program operated by IMAX Corporation and DTS, Inc. Xperi
has created a unified ecosystem that reaches highly engaged
consumers, driving increased value for partners, customers and
consumers.
©2024 Xperi Inc. All Rights Reserved. Xperi, TiVo, DTS, HD
Radio, DTS Play-Fi, Perceive and their respective logos are
trademark(s) or registered trademark(s) of Xperi Inc. or its
subsidiaries in the United States and other countries. IMAX is a
registered trademark of IMAX Corporation. All other trademarks and
content are the property of their respective owners.
XPER-C
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version on businesswire.com: https://www.businesswire.com/news/home/20240517906824/en/
Xperi Investor Contact: Mike Iburg VP, Investor Relations
+1 408-321-3827 ir@xperi.com
Media Contact: Amy Brennan Senior Director, Corporate
Communications +1 949-518-6846 amy.brennan@xperi.com
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