In an amended 13D filing on Electro Scientific Industries Inc. (NASDAQ:ESIO), 11.8% holder Nierenberg Investment Management said it is pleased that the company booked strong Q3 orders and approved a $50 million share repurchase program. The firm said, at present, they do not anticipate nominating their own alternate board candidates, as they had previously threatened.
We are pleased with ESIO's announcement on April 10 that it booked strong orders in its third fiscal quarter and that its board approved a $50 million share repurchase program. We expressed our enthusiasm for these developments during the company's conference call.
The concerns which we had expressed in our prior 13D amendment related to ESIO's balance sheet management, financial strategy, and investor communications. ESIO's announcements on April 10 were responsive to our concerns. Though the initial size of the company's share repurchase program is smaller than we had proposed, we recognize the deliberation which has gone into the board's decision, appreciate the change in their direction, and view their initial commitment as tangible and substantial. As we said during the conference call, we view ESIO's commitment to repurchasing shares as being shareholder-friendly and accretive. We hope and trust that the program will be carried out effectively and expeditiously and that it will have the intended impact on ESIO's return on equity. Evidently ESIO's board anticipates this as well. If our thinking proves right, then we also hope that the company will continue with an enlarged and ongoing share repurchase program in the future.
As we have said before, we have been patient, supportive, and constructive shareholders of ESIO for a long time. The company's April 10 announcement has refreshed our patience. As long term investors, we are now prepared to wait and watch the company's performance. We recognize that boosting ROE into the mid-teens, through repurchases and improving operating performance, will taketime. At present, we do not anticipate nominating our own alternate board candidates at the company's 2007 annual shareholder meeting.