The Connecticut investment firm that unsuccessfully offered to take Ecology & Environment private last year said the Lancaster-based environmental services company's board of directors has "eviscerated" shareholder value after five years of declining sales and profits.
Mill Road Capital, which owns about 15 percent of E&E's Class A common stock and is seeking two seats on E&E's board of directors, said in a regulatory filing that the company's current directors have "a poor track record of managing [E&E's] performance."
The investment firm has nominated two candidates – Justin Jacobs and Michael El-Hillow – for the two seats on E&E's seven-member board that are reserved for Class A shareholders. E&E's voting rights are dominated by the company's Class B shareholders, who have 10 votes for each share they own, as opposed to one vote per share for Class A shareholders. The Class B shares are largely controlled by company executives and their families, giving them effective control over E&E's board.
E&E, in a separate filing with the Securities and Exchange Commission, urged shareholders to vote for its Class A director candidates, Robert J. Untracht and Michael S. Betrus.
Mill Street executives argued last year that E&E should be taken private because it is too small to be a publicly traded company, forcing it to absorb millions in added costs. Over the past five years, the investment firm noted that E&E's sales have dropped by 35 percent and its operating profits have declined by 38 percent. E&E's share price has fallen by roughly 41 percent during that time.