Dissident Zoran Shareholder Renews Push to Have Board Replaced

Dissident shareholder Ramius renewed its push to replace Zoran’s board, accusing it of overseeing “massive destruction of shareholder value,” Ramius said in an SEC filing. Ramius, which owns 9.3 percent of Zoran, is offering a six-member slate to replace the current board, which has overseen money-losing DTV and DVD businesses at Zoran, the investment firm said. The DTV business, which includes set-top boxes, has lost $51.6 million during the past 12 months. Zoran is scheduled to report its Q4 earnings Thursday.

Zoran has said the DTV business could break even on quarterly revenue of $30 million to $35 million after operating expenses are cut 13 percent. Ramius replied that with the cuts, operating expenses would drop to $78.5 million from $90.3 million, but the company still would have $25 million in annual losses. Zoran officials weren’t available for comment.

To stem the losses, Ramius said it will explore “alternatives” for the DTV and DVD businesses. Zoran has maintained that closing the DTV and DVD segments would produce an operating loss in 2011. Zoran said it had been reviewing alternatives for the DTV and DVD businesses before Ramius raised its criticisms, but the company’s “actual statements say otherwise,” the investment firm said. Zoran CEO Levy Gerzberg boasted of Blu-ray player design wins last year, including “several” for portable models, Ramius said.

"Rather than actually admitting substantial losses in the DTV and DVD businesses so shareholders could make an informed opinion about the businesses, Zoran has instead attempted to confuse shareholders as to the true losses of the businesses,” Ramius said.

In digital still cameras and printers, Zoran posted $51.2 million in operating income the past 12 months, against a $5.2 million operating loss for the company overall, Ramius said. DSC and printer revenue totaled $171.6 million and $58.4 million during that time, Ramius said.

Ramius’ board slate is Jon Castor, TeraLogic CEO; Dale Fuller, MokaFive CEO; Thomas Lacey, Phoenix Technologies CEO; Jeffrey McCrearey, independent management consultant; Jeffrey Smith, Ramius partner; and Edward Terino, GET Advisory Services CEO.