Point Blank cites Glass Lewis report supporting election of company's nominees over dissident slate

By Lisa Kerner

Charlotte, N.C., Aug. 12 - Point Blank Solutions, Inc. said Glass Lewis & Co. recommended that the company's shareholders vote for Point Blank's slate of nominees on Aug. 19.

According to Point Blank, another independent proxy advisory firm, RiskMetrics Group, also recommends shareholders vote for the company's nominees.

Point Blank noted that in its report, Glass Lewis said it was "reticent to recommend removal of incumbent directors" or to favor dissident nominees unless one of the following occurs:

• There are serious problems at the company and the newly proposed nominees have a clear and realistic plan to solve these problems; or

• The current board has undertaken an action clearly contrary to the interests of shareholders.

In February, Steel Partners II, LP announced its slate of nominees for election to Point Blank's board, including James R. Henderson, Terry R. Gibson, General Merrill A. McPeak, Robert Chefitz and Bernard C. Bailey.

Steel Partners, in a statement released on Tuesday, encouraged shareholders to vote the gold proxy card for its nominees, citing Point Blank's recently announced "appalling" second-quarter 2008 financial results.

"After reviewing Point Blank's second-quarter results, it seems pretty clear to us, and we hope to all stockholders, that operating and stock performance continue to suffer mightily under this board's watch," Steel Partners managing member Warren G. Lichtenstein said in a statement.

"We are not fooled by the company's excuses or rhetoric and stockholders shouldn't be either," Lichtenstein added.

Steel Partners asked shareholders to consider that for the six months ended June 30, Point Blank's net sales were $61.0 million, compared to net sales of $185.6 in the comparable six-month period last year - a decline of almost 70%.

Adjusted EBITDA fell 170% from the prior-year period and gross profit for the 2008 second quarter was negative $0.3 million, or negative 2.5% of net sales, compared to $16.8 million, or 18.0% of net sales for the comparable period in 2007.

According to Steel Partners, Point Blank's stock has lost about half its value over the last 12 months.

Last week, Steel Partners sent a letter to fellow Point Blank shareholders seeking support for its nominees and highlighting Steel Partners' "long-running track record of enhancing value at defense companies."

Steel Partners noted that Point Blank has not held an annual meeting in three years. The company was ordered by the Delaware Court to hold the annual meeting no later than Aug. 19, the letter said.

On April 8, Point Blank postponed its 2008 annual meeting until Aug. 19 from April 22 and said the board will explore strategic alternatives, including a possible sale of the company, with the assistance of Wachovia Securities, a prior news release noted.

The company previously rejected Steel Partners' Oct. 30 offer to acquire Point Blank for $5.50 cash per share.

Point Blank is a Pompano Beach, Fla., producer of body armor systems for law enforcement and the military.

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