-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CN1Ddx0clhKajQiCj9QRnYP2ozrEqcDtKf6xWlm/VAkIXr9Ge9jnINmbkrCNMSg8 Fghk7ZJmiN5643ZAzgczYA== 0001169232-07-003928.txt : 20071017 0001169232-07-003928.hdr.sgml : 20071017 20071017103020 ACCESSION NUMBER: 0001169232-07-003928 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20071017 DATE AS OF CHANGE: 20071017 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: E-Z-EM, Inc. CENTRAL INDEX KEY: 0000727008 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 111999504 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-35785 FILM NUMBER: 071175610 BUSINESS ADDRESS: STREET 1: 1111 MARCUS AVENUE STREET 2: SUITE LL-26 CITY: LAKE SUCCESS STATE: NY ZIP: 11042 BUSINESS PHONE: 5163338230 MAIL ADDRESS: STREET 1: 1111 MARCUS AVENUE STREET 2: SUITE LL-26 CITY: LAKE SUCCESS STATE: NY ZIP: 11042 FORMER COMPANY: FORMER CONFORMED NAME: EZ EM INC DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ALBERT IRA CENTRAL INDEX KEY: 0000923716 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 1304 SW 160TH AVE STREET 2: STE 209 CITY: FT LAUDERDALE STATE: FL ZIP: 33326 BUSINESS PHONE: 9543844801 MAIL ADDRESS: STREET 1: 1304 SW 160TH AVE STREET 2: STE 204 CITY: FT LAUDERDALE STATE: FL ZIP: 33326 SC 13D/A 1 d72827_sc13da.txt AMENDED SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 2) E-Z-EM, INC. (Name of Issuer) Common Stock, $.01 par value (Title of Class of Securities) 269305207 (CUSIP Number) (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Noah Klarish, Esq. Hutner Klarish LLP 1359 Broadway, Suite 2001 New York, NY 10018 (212) 868-3777 October 16, 2007 (Date of event which requires filing of this statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4) check the following box [ ]. The information required in the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the "Act"), or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act. CUSIP No. 269305207 Page 2 of 6 Pages ________________________________________________________________________________ 1 NAMES OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Ira Albert ________________________________________________________________________________ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (see instructions) (a) [_] (b) [X] ________________________________________________________________________________ 3 SEC USE ONLY ________________________________________________________________________________ 4 SOURCE OF FUNDS* (see instructions) PF, WC ________________________________________________________________________________ 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_] ________________________________________________________________________________ 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States ________________________________________________________________________________ 7 SOLE VOTING POWER NUMBER OF 535,761 shares SHARES _________________________________________________________________ 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 286,562 shares _________________________________________________________________ EACH 9 SOLE DISPOSITIVE POWER REPORTING 535,761 shares PERSON _________________________________________________________________ 10 SHARED DISPOSITIVE POWER WITH: 286,562 shares ________________________________________________________________________________ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 822,323 (includes 505,885 shares owned by Albert Investment Associates, L.P. and 286,562 shares owned by accounts over which the Reporting Person has discretionary voting and dispositive authority.) ________________________________________________________________________________ 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* (see instructions) [_] ________________________________________________________________________________ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.5% ________________________________________________________________________________ 14 TYPE OF REPORTING PERSON* (see instructions) IN ________________________________________________________________________________ 2 Item 1. Security and Issuer. This statement relates to the Common Stock, $.01 value per share (the "Common Stock"), of E-Z-EM, Inc., a Delaware corporation (the "Issuer"). The Issuer maintains its principal executive office at 1111 Marcus Avenue, Suite LL-26, Lake Success, NY 11042. Item 2. Identity and Background. (a) This statement is filed by (i) Ira Albert, an individual, with respect to shares of the Issuer's Common Stock held by him and with respect to shares of the Issuer's Common Stock held in investment accounts over which Mr. Albert has discretionary authority, and (ii) Albert Investment Associates, L.P., a Delaware limited partnership (the "Albert Partnership") with respect to shares of the Issuer's Common Stock held by it. Ira Albert and the Albert Partnership shall sometimes be collectively referred to herein as the "Reporting Person." (b) Ira Albert filed an initial Schedule 13D for an event of January 8, 2002 (the "Initial Schedule") and an Amendment No. 1 for an event of July 16, 2003 (the "Previous Amendment"). Except to the extent set forth in this Amendment, the information in the Initial Schedule and the Previous Amendment remains unchanged. Item 3. Source and Amount of Funds or Other Consideration. Ira Albert (together with members of his immediate family) directly own 29,876 shares of the Issuer's Common Stock for which they paid $209,432. Mr. Albert and the members of his immediate family used personal funds in making the purchases. Mr. Albert has discretionary authority over accounts which own 286,562 shares of the Issuer's Common Stock for which such accounts paid a total of $2,432,131 from the personal funds of the beneficial owners of such accounts. The Albert Partnership directly owns 505,885 shares of the Issuer's Common Stock for which it paid $3,338,841 from its working capital. Item 4. Purpose of Transaction. As previously reported, the Reporting Person has been a long term investor in the Company and continues to have dissatisfaction with current management's desire and ability to take steps to maximize shareholder value. On October 16, 2007, the Reporting Person sent to the Company a letter which requests management to consider specific actions to increase shareholder value. The letter requests management to focus on the Company's core medical business and to use its significant cash balances not for the purpose of pursuing acquisitions which would further distract management from improving core business operations. Instead, the Reporting Person believes the Company should consider one or more of the following actions which would benefit the Company's shareholders: 1. Implementation of a quarterly dividend program; 2. Institution of a share repurchase plan, 3. Evaluation of a sale or spin-off of the Company's RSDL division, and/or 4. Evaluation of a sale of the Company. The full text of the letter is included as Exhibit A to this Amendment. 3 Item 5. Interest in Securities of the Issuer. (a) The number of shares of the Issuer's Common Stock and the percentage of the outstanding shares (based upon 10,976,549 shares of Common Stock outstanding as reported in the Issuer's Quarterly Report on Form 10-Q for the quarter ended September 1, 2007) directly beneficially owned by each Reporting Person is as follows: Percentage of Name Number of Shares Outstanding Shares - ---- ---------------- ------------------ Ira Albert and family 29,876 0.3% Albert Partnership 505,885 4.6% Albert discretionary accounts 286,562 2.6% The numbers set forth in this Report and the above table have been updated from those filed in the Initial Report to reflect the combination of the Issuer's two previous classes of common stock (Class A and Class B) into a single class of Common Stock. The share ownership information contained in the Initial Schedule reflected ownership only of Class A common stock of the Issuer since that was the only class of voting common stock outstanding at that time. (b) Mr. Albert has sole power to vote and to direct the disposition of 535,761 shares of the Issuer's Common Stock. (c) See Appendix 1 annexed hereto. Item 7. Material to be Filed as Exhibits. Letter to E-Z-EM management, dated October 16, 2007. 4 Signatures After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. Dated: October 16, 2007 /s/ Ira Albert -------------------------------- Ira Albert ALBERT INVESTMENT ASSOCIATES, L.P. By: ALBERT INVESTMENT STRATEGIES, INC., general partner By: /s/ Ira Albert -------------------------------- Ira Albert, President 5 APPENDIX 1 TRANSACTIONS IN E-Z-EM, INC. COMMON STOCK WITHIN THE PAST 60 DAYS All transactions were open market purchases and the commissions are included in the price of the shares. Discretionary Accounts No. of Trade Shares Cost of Date Purchased Price Per Share Purchases ---- --------- ----- --------- 08/16/07 8,000 $12.44 $99,540.00 08/16/07 4,000 $13.04 $52,080.00 09/28/07 3,391 $16.15 $54,764.00 EX-99.A 2 d72827_ex99a.txt LETTER TO E-Z-EM MANAGEMENT, DATED OCTOBER 16, 2007. Exhibit 99A ALBERT INVESTMENT STRATEGIES, INC. 1304 SW 160th Avenue, #209 Fort Lauderdale, FL 33326 (954) 384-4801 October 16, 2007 Mr. Paul Echenberg, Chairman Mr. Anthony Lombardo, CEO E-Z-EM, Inc. 1111 Marcus Avenue Lake Success, NY 11042 Dear Messrs. Echenberg and Lombardo: Albert Investment Strategies, its affiliates and Albert Investment Associates, L.P., ("AIA") are shareholders of E-Z-EM, Inc., owning 822,323 shares, which approximates 7.5% of shares outstanding. We became owners of E-Z-EM over the last 14 years. AIA established its initial position in E-Z-EM because we felt the company's prospects were not being adequately valued by the markets. We were attracted by your meaningful market share of barium imaging products, your new product pipeline, the strong macro trends in the healthcare industry, and later by the energy of new members of your senior management team coupled with the opportunity for meaningful gross profit and operating margin improvements. The dialogue that we have had with senior management over the years, both at the company's headquarters and in numerous phone conversations, as well as our own industry research, have increased our conviction that there is significant unappreciated value resident in E-Z-EM. Further, we believe that the strategy that management was pursuing in 2003 through late 2006, of focused product-oriented top-line expansion, new product introduction in the Virtual Colonoscopy and RSDL areas and cost cutting through manufacturing and operational efficiencies was the correct plan for unlocking that value. We are now troubled, however, by management's new strategy, as detailed on E-Z-EM's April 10th, 2007 and October 10th, 2007 earnings calls and earlier conversations with management. Specifically, in the April conference call, management talked about the company's intention to use its cash position to grow through acquisition and investments in new products. Further, you seemed disinclined to use our excess cash balances to repurchase shares or to begin issuing quarterly dividends. We believe that such an open-ended acquisition and new product strategy is the wrong use of cash for the company today. Rather than burden your shareholders with the execution and integration risks attendant with such a strategy prior to getting our current core competencies on the right track, we believe that there is no better investment that the company could make right now than repurchasing its own shares and instituting a dividend policy. Indeed, with shares currently trading at $15.59 and at a significant discount to competitors based on Price to Book Value, Price to Sales and other metrics, your shares represent one of the most attractive investment opportunities in the healthcare industry. What better opportunities could there be? We urge you and the other members of the Board of Directors to have the company pursue an immediate repurchase of up to $10,000,000.00 of its outstanding shares at prices under $16 per share and declare a $.05 per share quarterly dividend. Such transactions could be financed entirely by the cash and short-term investments on the company's balance sheet, while leaving over $20 million for working capital purposes. With this $10 million, you could repurchase nearly 641,000 shares or approximately 5.8% of the shares outstanding, based on the closing price on October 15, 2007. In addition to the use of cash required for extremely vague new product strategies or an acquisition strategy, we are also concerned about the use of management's time and focus when there is still so much work to do improving the core business. The company has made important strides in taking costs out of the business, both in the cost of goods sold and in operating expenses. But management must continue to focus on current product development and certifications, reimbursement and sales in order to grow revenue and truly demonstrate the operating leverage in the company's business model. Further, given the lack of management experience in Chemical Warfare products, the extreme uncertainties of the government's budget process and for the reasons stated on recent conference calls, we believe it makes sense to seek a buyer for the RSDL division and use the proceeds to further repurchase shares. Alternatively, a spin-off of the RSDL segment could unlock its potential value much like the spin-off of AngioDynamics did. Currently, RSDL has no relation to E-Z-EM's core imaging business and, in our opinion, is not fully valued by the marketplace. RSDL will require substantial increases in sales and marketing in the future and thus, raising money for its growth is best done as a stand alone company. Likewise, scale advantages in GPO contracts by our larger competitors may explain why E-Z-EM appears to tread water despite so many excellent and promising products. As such, the company's efforts in the sales and margin areas are too important to have management's attention diverted away from them via acquisitions, unproven new product development and Chemical Warfare decontaminants. Given E-Z-EM's low valuation relative to its industry and given its ability to generate positive cash-flows over the years, you would be hard-pressed to make a case that you could achieve similar value creation by using the $40 million described above for an acquisition and new product strategy that is fraught with risk and management distraction, particularly when the two levers needed to create significant value via share repurchases and continued margin improvement, are largely under your control. Lastly, if the company is not able to achieve its sales and earnings growth in 2008, and should the prospect of achieving CPT Codes and meaningful VC sales looks likely to be yet another two years away, we believe the Board should conduct a review of strategic alternatives for the company, including a possible sale. There is a history of successful acquisitions in your industry, and given E-Z-EM's prospects, though seeming inability to execute on them over the last decade, the time may have come to hand off the company to a larger industry player who can take E-Z-EM to the next level and bring its great products to the world. Therefore, to summarize our suggestions: 1. Immediately commence a buyback or tender offer for up to $10 million of stock under $16 per share. 2. Curtail any acquisition plans until improvements are seen in the core business. 3. Commence a review of strategic alternatives including a possible sale of the RSDL division and the entire company. 4. Institute a $.05 per share quarterly dividend. It is our intention to continue to discuss our ideas with management and hope to expand our dialogue to include the Board as well. We may also speak to other shareholders and build a strong consensus of opinion in support of our value creating ideas. Very truly yours, /s/ Ira M. Albert Ira M. Albert President Albert Investment Strategies, Inc. -----END PRIVACY-ENHANCED MESSAGE-----