Schacht Value Investors LLC
Privacy Statement

Rimage: A Call to Action

Schacht Value Investors often talks about the tenets of our investment process: Circle of Competence, Intrinsic Value, Margin of Safety, Catalysts, Active Ownership, and Sell Discipline.

Our work doesn't end with simply buying and selling shares of stock. We are active owners of our portfolio companies. And when necessary we will engage a company's management and board of directors when we believe it is necessary. In the process, we hope to create a catalyst to bring about greater shareholder value for our clients and other outside investors.

This is the case with Rimage Corporation. For over a year, Schacht Value has tried to engage management in a meaningful dialogue regarding the enormous cash balance held by the company and how they plan to allocate it.

Keep in mind this is a profitable, debt-free company with over $115 million in cash and securities with a market value of only $140 million. Management is determined to invest the excess capital in new ventures and Schacht Value believes shareholders are better served by a focus on the core business and a distribution of this capital to investors.

Our attempts to get a coherent, favorable response from management have failed, so we have taken the further step of contacting the board of directors directly.

Documents of Interest:

Rimage: All That Cash (highlights added)

4th Quarter 2010 Earnings Release (illustrating cash/securities balance)

Long history of shareholders' trying to engage on this issue (conference call excerpts)

Change in management incentives by the Board (SEC filing with highlights)

Schacht Value Investors' Letter to the Rimage Board of Directors

Rimage News Release - March 8, 2011

Rimage's Board Responds (3/11/2011)

Rimage CEO: "We're Ready to Spend & Expand"

Arcadia Capital Joins the Cause (June 22, 2011)

Arcadia Demands Immediate Special Dividend (July 21, 2011)

Rimage Destroys More Shareholder Value (October 10, 2011)

Academic Research on Excess Cash and Management/Board Incentives (Jarrad Harford):

Decoupling CEO Wealth and Firm Performance: The Case of Acquiring CEOs

Corporate governance and firm cash holdings in the US

If you would like more information on this matter, please contact:
Henry W. Schacht, CFA

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The typical management will operate with more capital than necessary, if the stockholders permit it -- which they often do."

- Benjamin Graham, The Intelligent Investor