Healthways is making its case to shareholders for why it should retain its current board of directors despite financial losses and a tumultuous ride in the stock market.
The Franklin, Tenn.-based company, which designs wellness programs for insurers and providers, is under pressure from one of its largest shareholders, North Tide Capital. The hedge fund is seeking to install four new directors to Healthways' board and gain more say over the company's operations.
It previously rejected a compromise slate
that would have combined nominees from Healthways' current board with two candidates of its choosing.
With the annual shareholder meeting set for June 24, both Healthways and North Tide have been reaching out to investors
In a 58-slide presentation, Healthways on Thursday laid out its case for voting against
North Tide's board nominees--arguing that bringing in new directors would derail the company's momentum as it seeks new growth opportunities.
The company said it is transforming into the No. 1 player in population health management in a $50 billion market. In addition, recent customer wins and its partnership with Dr. Dean Ornish, a well-known preventative medicine specialist, should help propel it to double-digit revenue growth this year.
But Healthways' financial performance has continued to falter. Its first quarter net loss
was $9.6 million, widening from a loss of $3.9 million during the first quarter of 2013, even as revenue grew 7%.
The company, however, emphasized that it signed 20 new, expanded or extended contracts in the quarter, including with a Fortune 100 company, and some of its existing contracts have revenue that ramp up through the year.
Its financial struggles have frustrated even company insiders. In February, Healthways co-founder and former CEO Thomas Cigarran resigned from its board, calling its performance “unacceptable” and noting that he could no longer continue to watch Healthways continue to fail to meet its potential.Follow Beth Kutscher on Twitter: @MHbkutscher