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Burton Guns For Creo's Michelson

November 2004
VANCOUVER, BC—Some contend that all is not well in the world of Creo Inc., from its recent financial performance to questions regarding the leadership of its CEO, down to the possibility of a sale.

A group of shareholders led by Robert Burton, the veteran commercial printing executive with a penchant for taking on reclamation projects, is seeking to ouster Creo CEO Amos Michelson. His Burton Capital Management LLC and Goodwood Inc. are attempting to insert new leadership—Burton himself—in a proxy battle after a filing last month with the U.S. Securities and Exchange Commission aimed at removing Michelson and the board of directors.

According to Creo spokesperson Rochelle van Halm, Michelson has no intention of stepping down.

The company did, however, reveal that it engaged Merrill Lynch this past summer to explore its options, including a possible sale.

Creo suffered a loss of $1.57 million in the third quarter ending June 30 because of foreign exchange and restructuring expenses. In an attempt to streamline its operations, the company announced it would reduce its worldwide workforce by 5 percent with the elimination of 200 jobs.

That figure includes the previously announced elimination of 60 positions. The move reduces expenses by an annualized rate of approximately $24 million by the start of the fiscal third quarter of 2005 and is expected to reduce operating expenses and cost of goods sold equally.

The cost-cutting action is designed to streamline operations, strengthen Creo's competitive cost position and provide a strong platform for earnings growth, according to Michelson.

"We are committed to building shareholder value and profitability from our core business and through the execution of the digital media strategy announced a year ago," Michelson said in a statement. "We have systematically examined all parts of the business for both cost and contribution."
 

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