Pirate Capital urges Angelica shareholders to vote for investor's board nominees

By Lisa Kerner

Charlotte, N.C., Sept. 10 - Pirate Capital Group reached out to Angelica Corp. shareholders, asking them to elect the investor's two nominees to the company's board on Oct. 30 citing Angelica's "dismal operating results" as a sign that change is needed.

According to Pirate Capital, it is time for representation on the board by individuals committed to:

• Promoting accountability of senior management for weak management; and

• Overseeing efforts to improve profitability and maximize shareholder value.

Pirate Capital's nominees are Thomas R. Hudson, Jr., founder and manager of Pirate Capital, and Pirate Capital's general counsel and chief compliance officer Christopher Kelly.

In a Sept. 10 open letter to fellow shareholders, the 9.8% shareholder said, "In our opinion, Angelica's current management team has continually fallen short of its stated projections and goals."

Pirate Capital noted the company's second-quarter losses of $1.45 million, compared with $715,000 for the second quarter of 2006, as well as chief executive officer Stephen M. O'Hara's failure to deliver on "lofty prognostications."

"Management is clearly having a difficult time figuring out how to make a profit, and we believe that the addition of new directors will help steer Angelica back on the right course," the investor's letter said. The letter was included in a statement released by Pirate Capital.

It was previously reported that Pirate Capital questioned Angelica's board about the re-engagement of Morgan Joseph & Co. as Angelica's strategic adviser. According to Pirate, Morgan Joseph has been leading Angelica's "recent failing corporate initiatives."

Pirate Capital had reiterated its demand in a July 12 letter that the board "promptly retain the services of a nationally recognized investment banking firm for the purpose of effecting a sale of the company, through sales of assets, an extraordinary transaction or otherwise, and to publicly identify the investment banking firm and its mandate." At that time, the investor said if its demands were not met, it would nominate one or more people to Angelica's board.

Angelica is a Chesterfield, Mo.-based provider of textile rental and linen management services principally to the health care industry.

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