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NETRO CORPORATION
(Name of Registrant as Specified in its Charter)
C. ROBERT COATES
----------------
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3) Filing Party: C. Robert Coates
4) Date Filed: May 30, 2002
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Press Release
Source: C. Robert Coates
C. ROBERT COATES ASKS NETRO'S CEO AND CFO TO TELL THE TRUTH
LAKE FOREST, Ill., May 30 -- C. Robert ("Bob") Coates, a major Netro Corporation
(NASDAQ: NTRO) stockholder, said today that Netro management should stop making
incomplete and misleading statements, and that they should improve their overall
communication with shareholders.
Coates said today that, "In an April 17 conference call with analysts, Netro CEO
Gideon Ben-Efraim and CFO Sanjay Khare stated that they expected 'Angel revenues
to commence late in the 3rd quarter of 2002.' Netro management also stated that
revenues from 'Angel will represent more than 15% of total revenues by the 4th
quarter of 2002 . . . and we continue to expect that by early 2003 between 40
and 50% of our revenues will come from the new Angel product line.' "
"Then", continued Coates, "at the company's annual shareholder meeting on May
21, Ben-Efraim stated that Angel would not generate any revenue in 2002. We
believe this statement violated Fair Disclosure regulations." Fair Disclosure
prohibits the selective disclosure of material information by a public company
to certain individuals or institutions. These individuals or institutions could
then benefit unduly in trading the company's securities.
Next, in an interview with Dow Jones on May 29, Netro's CFO Sanjay Khare stated
that Robert Coates' statements about Angel revenues are "just false."
"Had any of Netro's six directors attended the annual meeting, we could ask them
what they heard Ben-Efraim say", continued Coates. "Unfortunately, that just
isn't possible."
Coates said that he and four other individuals who attended Netro's annual
meeting are prepared to sign sworn affidavits confirming that Ben-Efraim stated
Angel would not generate revenue this year. Three of these individuals are
employees of The Robert Coates Group: Wilhelm Ruiz, Managing Director; Robert
Schwartz, Marketing Communications Director; and Todd Martin, Analyst. The
fourth is Rick Grubaugh, Senior Vice President of D.F. King & Company, Inc.,
a proxy solicitation firm. Coates stated that notes taken by a Coates Group
employee at the meeting refer to Ben-Efraim's remark. In addition, an
individual stockholder who attended the meeting confirmed to the Coates Group
that he too had heard Ben-Efraim say Angel would generate no revenue in 2002.
In the Dow Jones interview, Sanjay Khare went on to say that Angel would
generate revenue in 2002, but that it would not be substantial. Khare stated
that revenue from Project Angel would constitute "40% to 50% [of total company
revenue] in 2002."
"Even in an interview with a major news service, Netro management can't get the
year right - unless they've changed their forecast again", said Coates.
Coates called upon Netro management to respond in several ways.
* "First, I ask Netro to clarify statements made about future Angel
revenues and expenses. Why has Netro made statements about revenues,
which it cannot control, without making statements about expenses, which
it can control? How much does Netro plan to spend on R&D for Project
Angel this year and how much for Airstar? How much of the shareholders'
cash do they plan to spend chasing sales in the severely depressed
telecom business? And why? We want them to ride out the telecom storm
by dramatically slowing expenditures."
* "Second, I ask Ben-Efraim to repeat his presentation from the annual
meeting in a webcast. The annual meeting should have been broadcast
live on the internet."
* "Third, I ask Netro to explain why they have made two filings with the
SEC about the possibility of AT&T Wireless, a major Netro stockholder,
selling its shares. Did Netro strike a deal with AT&T Wireless in which
AT&T agreed to vote for two incumbent directors?" Coates and his
associate, David Kennedy, ran for election to Netro's board in
opposition to the incumbent directors. No specific numbers regarding
the tally have been released.
"At the very least, all shareholders deserve to be told the truth", said Coates.
"Shareholders also deserve to hear a well-defined plan of action from
management, and they deserve directors who hold management accountable for the
execution of that plan."
"We can't understand why management won't buy back 10-20 million shares,
particularly at today's depressed prices. We think it would increase share
value substantially."
"We want the company to survive and succeed", said Coates. "With full and fair
disclosure of all material information by management, and with greatly improved
corporate governance, we think it can."
Source: C. Robert Coates