To the Board of
The Company’s current CEO,
The cornerstone of Focused Compounding’s plan for
For months now, Focused Compounding has worked behind the scenes to recruit experienced operators committed to working in person – instead of remotely – and to start work the second the new board comes in.
Why are Focused Compounding (long a passive and supportive stockholder) and this Board fighting such a vicious fight over
The answer is
The general investing public may not know this.
But it’s time to drop the pretense.
Both you and we know the one and only reason
We believe Lisa was 100% onboard with pushing Dale out and cementing Chuck’s control of the Company.
Other candidates may not have been so pliable.
This proxy fight is the inevitable fallout from that boardroom coup.
Your lawyers can do a search of public company corporate history to see if the fight you’re fighting to preserve Lisa’s job is literally unprecedented. Based on my reading of thousands of 10-Ks over decades as an investor – I do believe the following sequence of events to be unique in the annals of public company history.
I can think of no other situation in which:
1) a non-manager was brought in as a director by an unelected board;
2) that non-manager was put on the committee tasked with finding a new CEO;
3) the non-manager helped select herself as the new CEO against the wishes of a large stockholder;
4) the non-manager then presided over the worst year of financial results in the Company’s history;
5) in the only election that CEO ever faced: a majority of votes cast specified the removal of the badly performing CEO; and then
6) the board continued on after this clear no-confidence vote from stockholders to fight an expensive proxy fight centered around the objective of preserving the job of that unwanted CEO.
Parks! America’s obsession with preserving who we believe to be an unqualified and badly performing CEO’s job at great cost to stockholders is wrong.
Preserving Lisa Brady’s job should not be the centerpiece of Parks! America’s corporate strategy.
Focused Compounding’s investment in
Lisa was snuck in the back door as a director (not a manager) long after Focused Compounding bought 17% of the Company.
For years, Focused Compounding was a passive and supportive stockholder as you will remember when reading the supportive letter Focused Compounding wrote to this board in 2020 (when Dale, not Lisa, was CEO) right here.
We are not activist investors. We were never involved in any activism of any kind or any dispute with any company in which we invested till the moment (in 2022) when the board of
They hired the wrong CEO.
The break between Focused Compounding and the current board began when Dale (an experienced operator) was maneuvered out as CEO and Lisa (a non-operator) was chosen as CEO. In doing this, the board passed over multiple inside and outside candidates with significant experience running parks.
Prior to joining Parks! America’s board,
How did this board failure happen?
Directors with serious concerns about the CEO selection process remained silent.
This resulted in the board picking a purported strategic thinker like Lisa, instead of an experienced operator.
The nature of this abrupt corporate pivot can be seen in how the Company describes Lisa’s experience:
“…strategic planning, mergers and acquisitions, investor relations, financial modeling…real estate development…M&A activities, resort and adjacent development and implementation of key growth initiatives…(and as) a sell-side analyst…”
For comparison, the CEO (Dale) who was pushed out to make room for Lisa had his experience described by
“… President and CEO of Funtime Parks…from 1982 until 1994. Funtime consisted of three parks in
Since Lisa became CEO,
Other than
They are also the only people at corporate who had experience running actual parks.
In contrast with Lisa’s lack of operating experience,
Lisa had no such operating experience either inside or outside of
Whitfield’s involvement with
Lisa wasn’t.
The board chose Lisa anyway.
In retrospect: I think most stockholders can now see what Focused Compounding saw at the time Lisa was being maneuvered in as CEO.
Lisa’s appointment as CEO represented what we believe to be a drastic and disastrous course change for
Back in 2020, the Company had an experienced operator as CEO (Dale) and an experienced operator as Executive Vice President. Today,
Back in 2020,
Since Lisa took over as CEO,
While
Since Lisa took over,
This is not surprising given Lisa’s lack of operations experience and her firing of all the executives with experience running actual parks.
Lisa’s operating track record is both brief and bad. The executives fired since Lisa became CEO each have individual track records that are both longer and better than Lisa’s.
The Board knew this when they appointed a non-operator like Lisa as CEO. You should have known this when you did not reverse your decision and fire Lisa in the face of ballooning cap-ex, marketing, corporate overhead, and headcount caused by Lisa’s inability to impose financial discipline on a now money losing (and cash burning) business.
Most importantly: you should know this now when you are spending many, many hundreds of thousands of dollars trying to keep Lisa in a job you should now realize she was never right for in the first place.
We believe Parks! America’s great long-term track record is a result of the disciplined decisions of experienced operators totally unlike Lisa.
We believe Parks! America’s terrible short-term track record is a result of Lisa’s recent undisciplined decisions.
Lisa is not an operator. And Lisa is not a numbers person. Her 2024 letter (which you can read here) includes literally zero financial information. Focused Compounding’s plan for
This sounds like a small point. It isn’t. Numbers are the language of business. And when an executive is willing – as Lisa was in her 2024 letter – to totally ignore all numbers, accountability goes out the window.
You can – as Lisa often does – put out a lot of positivity and platitudes when you don’t have to face any actual figures. This may be why Lisa didn’t take stockholder questions on the Company’s earnings call. In answering questions from investors: you’d have to face the cold, hard facts.
By not taking questions on the earnings call, Lisa pretends there is nothing in her performance to be critical of. By ignoring the fact that 57% of votes cast at the special election were in favor of removing her from the board, Lisa pretends stockholders don’t want her out.
In reality: stockholders do want Lisa out. And they have good reason to.
Lisa’s track record is bad. It is particularly bad in those areas where she has the most direct control: excessive cap-ex, excessive ad spending, excessive corporate overhead, and excessive hiring at the parks.
These are not revenue misses. They are not tornado related adverse events. These are controllable costs. Lisa has not only failed to control them. She shows no interest in reining them in during this year’s budget.
Lisa continues to have a relentlessly unrealistic growth focused mindset combined with a truly warped view of just how badly the Company is performing.
The financials tell Lisa she needs to apply the brakes. Instead she slams down on the gas.
Honestly: this is not just Lisa’s fault. This is also the board’s fault. You can see that in the bio the Company uses to describe Lisa’s experience in the 10-K. We believe the Company needed an experienced operator. They needed someone with financial and operational discipline. Instead they hired someone with experience on the sell-side and in investor relations, M&A, and growth initiatives.
Let’s get real here.
This entire Company consists of nothing more than three drive-thru animal safaris. Two of these have never really made money. One (the
Lisa has not done badly in those limited areas that are her core competencies. Read Lisa’s bio in the 10-K. Then think about those areas she has failed in. Those areas aren’t in the bio. They never were. The problem is that in the Venn diagram of “Lisa’s Skill Set” and “What Parks! America Needs” there is very, very little overlap.
Basically: what
Okay. So Lisa’s the wrong person for the job. That’s fine. But it’s only fine if Lisa recognizes that fact and delegates the operations that really matter to an experienced operator willing to move to
Lisa manages
I can not stress this enough:
Lisa is the wrong person to restore financial discipline at
The Company does not need to pay Lisa
Instead: the Company needs to take the money it wastes on Lisa and use it to put an experienced operator on the ground in
Money now wasted on providing a base salary to Lisa should instead be used to pay a performance based bonus to an experienced on-site operator who can actually make a difference.
It is the park operators – not Lisa – who are going to turn
We believe base salaries for remote corporate workers like Lisa are a waste of money. Pay-for-performance bonuses for the on-site operators is what
This is the only sensible way to impose the kind of operational discipline
Literally the day after Lisa is out as CEO (hopefully to occur on
As a result: we believe there are experienced operators unwilling to work for
Focused Compounding’s plan to restore profitability at
The best way to get experienced operators in at the parks is to get
The current board is dead set on preserving Lisa’s job at any cost to stockholders. You hold the Company’s purse strings till the
We can’t do anything to prevent that kind of wasteful corporate spending. All we can do is prioritize the hiring, paying well, and very heavily incentivizing of truly experienced operators if the Focused Compounding slate is elected at the
These are the people – the experienced operators actually at the parks – who will make or break an investment in
That’s the crux of the Focused Compounding plan. It’s about putting experienced operators in at the parks and incentivizing them to restore the financial discipline Lisa has obliterated these last few years.
It will take time. It will take work. And it will not be easy.
But it is a plan that will be implemented – not by a remote non-operator like Lisa – but by experienced operators paid based on the results they deliver at the parks they themselves run.
It’s very important to understand that Focused Compounding – unlike Lisa – is not pretending it can run these parks remotely.
We know what we can’t do.
Lisa is not an operator, but thinks she is. At Focused Compounding, we know we aren’t operators.
Focused Compounding understands the difference between what a board does, what a CEO does, and what the managers of each profit center do.
Focused Compounding can’t remotely run the parks any better than Lisa can. She’s bad at that. And we’d be bad at that too. What we can do is recruit the right people, incentivize them, and let them do what they do best.
Ultimately, we believe these local leaders are the ones who can get costs under control and profits and free cash flow back in the black.
Lisa’s job is not the most important job at
The problem at
No. What matters is getting the
Lisa can’t do that from halfway across the country. She doesn’t know how to run a park herself. And she is unwilling to hire and incentivize someone who does know how to run a park.
If Lisa makes
Focused Compounding will.
We’ve already said we will work for free. That means we’re very happy to pay the best performer at the Company the most money.
Odds are the best performer won’t be a remote worker. They’ll be at one of the parks.
That’s where experience really matters.
And that is where Focused Compounding is going to bring experience back to
This fight shouldn’t be about saving someone’s cushy
It should be about getting the parks performing again.
Focused Compounding will bring experienced operators in to run the parks. We will offer great pay for great performance.
Lisa won’t.
She needs to go.
Cutting this
Lisa’s
They’re the ones who deserve that
Sincerely,
Contact:
andrew@focusedcompounding.com
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/819e3838-8398-4e72-ab57-922967c678e1
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