UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 8)*
Westell Technologies Inc
(Name of Issuer)
Common Stock Class A, $.01 par value
(Title of Class of Securities)
957541204
(CUSIP Number)
Merihan Tynan,
Cove Street Capital LLC,
2101 East El Segundo Boulevard, Suite 302
El Segundo, CA 90245
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 29, 2017
(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 that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. x
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
**The Amendment No 8. (“Amendment No. 8”) dated August 29, 2017 adds a press release documentation. This supplements Amendment No 7 dated August 21, 2017 which amends and supplements Amendment No 6. dated July 21, 2017 which amends and supplements Amendment No. 5 dated May 31, 2017 which amends and supplements Amendment No. 4 dated February 28, 2017 which amends and supplements Amendment No. 3 dated September 22, 2016, which amends and supplements Amendment No. 2 dated August 23, 2016 which amends and supplements Amendment No. 1 dated August 11, 2016 which amends and supplements the statement on Schedule 13D filed with the Securities and Exchange Commission (the “SEC”) on August 1, 2016 with respect to Common Stock Class A, $.01 par value (“Common Stock”) of Westell Technologies Inc, (the “Issuer”). Capitalized terms used herein and not otherwise defined in this Amendment No. 5 have the meanings set forth in the Schedule 13D. The information required on 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 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
The information required on 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 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
| CUSIP No. 957541204 | 13D | Page 2 of 3 Pages | ||
| 1. | NAMES OF REPORTING PERSONS I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Cove Street Capital, LLC I.R.S IDENTIFICATION NO 27-5376591 |
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| 2. | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see instructions) (a) ¨ (b) ¨ |
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| 3. | SEC USE ONLY |
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| 4. | SOURCE OF FUNDS (see instructions) OO |
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| 5. | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ¨ | |||
| 6. | CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7. | SOLE VOTING POWER 1,005,687 | ||
| 8. | SHARED VOTING POWER 250,000 | |||
| 9. | SOLE DISPOSITIVE POWER 1,005,687 | |||
| 10. | SHARED DISPOSITIVE POWER 250,000 |
| 11. | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,255,687 |
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| 12. | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |
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| 13. | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.46% |
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| 14. | TYPE OF REPORTING PERSON (see instructions)
IA |
| CUSIP No. 957541204 | 13D | Page 2 of 3 Pages | ||
Item 1. Security and Issuer.
This statement related to the common stock class A, $.01 par value per share (the “Shares”), of Westell Technologies, Inc (the “Issuer”). The address of the principal executive offices of the Issuer is 750 North Commons Drive, Aurora, IL 60504
Item 2. Identity and Background.
a) This statement on Schedule 13D is being filed pursuant to Rule 13d-1 under the Securities Exchange Act of 1934, as amended, by Cove Street Capital, LLC (CSC).
b) The address of the principal office of CSC is 2101 East El Segundo Boulevard, Suite 302, El Segundo, CA 90245
c) The principal business of CSC is as an Investment Adviser.
d) CSC, nor any of its members has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
e) CSC, nor any of its members was, during the last five years, a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and, as a result of such proceeding, was or is subject to a judgment, decree or final order (1) enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws, or (2) finding any violation with respect to such laws.
f) CSC is a Delaware limited liability company.
Item 3. Source or Amount of Funds or Other Consideration.
CSC in its capacity as an Investment Adviser will purchase on behalf of its clients. No monies were borrowed for such an acquisition. The aggregate purchase price of the 1,255,687 Shares beneficially owned by CSC is approximately $10,190,097 including brokerage commissions.
Item 4. Purpose of Transaction.
Item 4 of the Schedule 13D is hereby amended and supplemented by the addition of the following:
Attached hereto as Exhibit 99 to this Amendment No. 7 of Schedule 13D is a Press Release.
Item 5. Interest in Securities of the Issuer.
The aggregate percentage of Shares reported owned by each person named herein is based upon 12,004,975 Shares outstanding, which is the total number of Shares outstanding as of July 28, 2017 as reported in the Issuer’s Form 10-K filed with the Securities and Exchange Commission on August 11, 2017.
| Date of Transaction | Buys/Sell | Quantity | Amount | Unit Price |
| 5/31/2017 | Sell | 2,400.00 | 1,778.84 | 0.74 |
| 6/1/2017 | Sell | 2,300.00 | 1,718.06 | 0.74 |
| 6/23/2017 | Sell | 38,900.00 | 123,710.95 | 3.18 |
| 6/26/2017 | Sell | 16,800.00 | 52,268.68 | 3.11 |
| 6/27/2017 | Sell | 16,498.00 | 51,748.14 | 3.13 |
| 6/28/2017 | Sell | 13,931.00 | 42,432.90 | 3.04 |
| 7/11/2017 | Sell | 15,000.00 | 45,471.44 | 3.03 |
| 7/12/2017 | Sell | 27,068.00 | 80,552.49 | 2.97 |
| 7/25/2017 | Sell | 19,448.00 | 69,824.56 | 3.59 |
| 7/26/2017 | Sell | 4,033.00 | 14,140.98 | 3.50 |
| 7/27/2017 | Sell | 287.00 | 1,004.48 | 3.50 |
| 7/28/2017 | Sell | 1,976.00 | 6,836.41 | 3.46 |
| 8/14/2017 | Sell | 30,738.00 | 93,453.65 | 3.04 |
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.
Except as otherwise described in this Schedule 13D, there are no contracts, arrangements, understandings, or relationships (legal or otherwise) among CSC, or between any third party, with respect to any securities of the Issuer.
Item 7. Material to Be Filed as
Exhibits.
Attached hereto as Exhibit 99 is a
press release.
| CUSIP No. 957541204 | 13D | Page 3 of 3 Pages | ||
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
| COMPANY NAME |
/s/Merihan Tynan Insert Name |
Director of Operations Insert Title |
August 29, 2017 Insert Date |
Cove Street Capital, LLC Urges Fellow Shareholders to Vote for Stockholder Proposal Regarding Equal Share Votes.
EL SEGUNDO, CA, August 21, 2017 - Cove Street Capital, LLC, a Los Angeles based investment management firm whose clients represent the largest independent shareholder in Westell Technologies, urges its fellow shareholders to vote for Proposal Number 5 in the current Westell proxy, which calls for the elimination of the dual class capital structure through a recapitalization plan.
“Once again shareholders have an opportunity to have their voices heard in what remains one of the great cesspools of shareholder value destruction,” states Cove Street Capital principal Eugene Robin, CFA. “The only reason Westell continues as a publicly-traded entity that has lost roughly 65% of its value over the prior 5 years is that the Penny Family Trust retains its B-share class ownership, which provides it with a majority vote well in excess of its economic interest.” Robin adds, “To paraphrase Carl Icahn, our forefathers died fighting tyranny, the least we can do is vote against it.”
At last year’s annual meeting, 72% of Shareholders not affiliated with the Penny family voted against Robert C. Penny III and his nephew Robert Foskett for re-election to the Board of Directors.
Every leading proxy access firm recommends AGAINST A/B structures, which entrench voting control at public companies. In fact, per ISS’s new voting guidelines, ISS will vote against Boards of companies trying to “implement a multi-class capital structure affording unequal voting rights.”
Mr. Robin will once again attend the Westell Annual Meeting at the Sheraton Lisle Hotel outside of Chicago on September 12, 2017 at 10:00am CDT, and urges other shareholders to attend. Cove Street also urges the company’s directors to attend the meeting, a seemingly common corporate governance practice that apparently is not shared by some of Westell’s Directors.
Re-read Mr. Robin’s speech from the 2016 annual meeting: covestreetcapital.com/Westell.
Cove Street also wants to address several issues noted in a company press release dated June 13, 2017 entitled, “Open Letter to Shareholders” and the company’s response to this proxy proposal:
| 1. | Shareholders did not “recommit” to the company by approving a reverse stock split that prevented the company from being kicked off the NASDAQ system from a stock price below $1. We voted for the obvious—kick the can down the road a little more to see if we can survive the latest gasp of futility by the Westell Board. It is interesting to note that the two new Board Members—Mark Zorko and Cary Wood—have not put a single dime of their money into the stock as of this writing since joining the Board. |
| 2. | While we do applaud the efficiency efforts of “former and interim” CEO Kirk Brannock to stem the bleeding of the company, the fact of the matter is that Westell has been free cash flow negative three years in a row and seven of the last ten years. Losing less money than before is not an “exciting inflection point” worthy of a cheer, particularly given the history of Westell. |
| 3. | New CEO, Matthew Brady seems like a fine gentleman who repeats the usual platitudes of a new CEO. However, how can Westell grow at half the staff levels of four years ago when four years ago, with revenues north of $100 million, they failed miserably to execute on all of their growth and profitability initiatives? The industry certainly has not gotten any less competitive and is arguably more cutthroat judging by the stock performance of its competitors. How is the promise of yet another new set of products to save the company believable? |
| 4. | The Company’s argument against our proposal makes no sense. It mentions that the dual class voting structure is in place to provide “stability from outside pressures and influences,” and thus with its very words proves our point. How can Shareholders hope to affect any change when the dual class voting structure prevents our voices from ever changing the Board and direction of the Company? The Company also argues that “stockholder interests have long been protected” by the Board and the current voting structure. Unfortunately, it fails to mention the value destruction perpetuated by any variety of Boards over the past two decades as well as the simple fact that any Board at Westell is still beholden to the singular influence of Robert Penny and the Penny family through its control of the B shares. Instead of protecting our interests, the dual class structure ignores them. |
Our message to shareholders is simple. Westell cannot compete in the current global marketplace given its pitiful size and scale, no matter who is running it. The company does have value to a third party given legacy products and conceptual access to a sales channel, but this value diminishes every day. Our research suggests that the company can be sold at prices in excess of current levels. The only reason this does not happen is that the Penny Family Trust owns the B-shares which provides them with voting control. This is a Board that has refused to meet with its largest shareholder over the past four years.
We urge shareholders to vote for Proxy Proposal No. 5.
Important Information:
Cove Street Capital, LLC, a Delaware Limited Liability Company, is a California based, SEC registered investment advisor. It presently owns 10.46% of the Westell shares outstanding. For questions please contact Questions@covestreetcapital.com.