The Pantry Refutes Proxy Advisory Firm's Report Favoring CPS

Retailer says Glass, Lewis report contains "numerous inaccuracies," defends strategy

Published in CSP Daily News

The Pantry Kangaroo Express Convenience Stores Glass Lewis

It said that the inaccuracies included repeatedly misidentifying Tad Dickson, the director candidate whom the company nominated in Jan. 2014 to stand for election to the board, as Terry McElroy, who has been a board member since 2006 and is one of the company's longest-serving directors.

Also, wrongly asserting that Dickson's extensive experience in the supermarket industry--including serving most recently as chairman and CEO of Harris Teeter Supermarkets, a leading food retailer in the southeastern United States with 216 stores and $4.1 billion of revenue--does not constitute valid retail experience, despite the fact that Harris Teeter is a renowned leader in the supermarket industry offering fresh and prepared food for immediate consumption.

And suggesting that director nominee Kathleen Guion did not have relevant fuel experience, when in fact, she accumulated significant fuel experience through her service as president and COO of E-Z Serve Convenience Stores, a chain of more than 600 stores with fuel operations in the Houston area, and as vice president and general manager of 7-Eleven c-stores. Guion also demonstrated exceptional retail experience as an executive with Dollar General, which under her leadership significantly expanded its food merchandise offering, The Pantry said.

"We believe these gross inaccuracies indicate that Glass, Lewis did not give careful consideration to our business, strategy and board constitution. Accordingly, we strongly urge stockholders to disregard the information contained in Glass, Lewis' unreliable report."

The Pantry also pointed to errors in the original CPS press release that resulted from copying and pasting paragraphs from an unrelated document.

"The Pantry is concerned that, if elected, the dissident group's nominees, Messrs. Diener, Pappas and Schechter, would exhibit the same carelessness in serving The Pantry stockholders as they do in their public statements," it said.

The Pantry concluded, "The Pantry's board and management team are successfully executing a strategic plan to improve key areas of the business and create meaningful value for stockholders. The board and management's efforts to implement a major store remodeling and quick-service restaurant program as quickly as practicable, to refocus the company's merchandising strategy, to invest in technology to improve fuel pricing and to accelerate growth through selective acquisitions--all while maintaining a prudent and disciplined approach to capital allocation--are clear evidence of the meaningful progress The Pantry has made and continues to make."

Click here to view the full SEC filing of the press statement from The Pantry.

JCP Investment Management is a Houston-based investment firm that engages in value-based investing across the capital structure. It follows an opportunistic approach to investing across different equity, credit and distressed securities. Greenwich, Conn.-based Lone Star Value Management is an investment firm that invests in undervalued securities and engages with its portfolio companies in a constructive way to help maximize value for all shareholders.

As of Jan. 30, 2014, The Pantry, based in Cary, N.C., operated 1,537 stores in 13 states under select banners, including its primary operating banner Kangaroo Express.

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