Clarion Appealing Nasdaq Delisting
Clarion Technologies Inc. will “vigorously” appeal its potential delisting from the Nasdaq stock exchange, a move that would return the company’s shares to a bulletin board stock.
Clarion, reeling in the past year from steep operating losses and a sharp drop in its share price that’s attributed to the recession, will present Nasdaq with a plan detailing how it will achieve minimum listing requirements on the Small Cap Market. Nasdaq staff notified Clarion executives on Dec. 21 of the exchange’s intent to delist the company’s stock.
“Clarion has been impacted by many of the economic and market factors impacting the industries we serve, as well as the markets in general. We intend to pursue this appeal with the intent of presenting an acceptable plan to the Nasdaq to achieve the continued listing requirements,” Clarion President Bill Beckman said in a statement issued Jan. 2.
“While we would regret any delisting, we do not believe that such an occurrence would have any adverse impact on our suppliers, customers or employees. We also believe that the many advancements made in information technology would allow the company’s stock to trade in a viable, fair market,” Beckman said.
The Nasdaq Small Cap Market requires stocks to bid at a minimum of $1 per share to continue trading, as well as for member companies to have a market cap of $35 million, or net income in the latest fiscal year, or two of the last three fiscal years, of $500,000, or shareholders’ equity of $2.5 million.
On the day before Clarion’s announcement, the company’s shares — which reached a 52-week high of $3.12 in mid-January 2001 — closed at 35 cents per share, putting its market cap at $8.4 million. Clarion reported a net loss of $5.5 million, or 27 cents per share, in the third quarter of 2001, the most recent quarter for which it reported financial results.
The potential delisting is the latest challenge for the company, founded in 1999 by executives of the former Prince Corp. in Holland and highly leveraged after being built largely through acquisitions. The company last year moved its corporate headquarters from Holland to Grand Rapids.
After experiencing strong growth in its first year, and at one point setting its sights on becoming a $1 billion corporation, the plastics injection company saw its fortunes falter beginning in late 2000 and into 2001. Through the first three quarters of 2001, Clarion lost $24.6 million, or $1.12 per share, on sales of $83.4 million. The company, which serves the automotive, heavy truck and consumer products industries, lost $1.7 million on revenues of $85.5 million during the first nine months of 2000.
If Clarion’s appeal is unsuccessful, its stock would transfer to the OTC Bulletin Board electronic quotation system, where it traded before moving to the Nasdaq Small Cap Market in March 2000. The company expects Nasdaq to hold a hearing on its appeal within 45 days from Jan. 2. For now the delisting, initially planned to occur on Jan. 3, is stayed until the outcome of the hearing.
Nasdaq reinstated enforcement of its minimum bid price and market value requirements on Jan. 2 following a moratorium implemented after the Sept. 11 terror attacks.