Welcome to the Wintergreen Advisers, LLC. website   |   Click here to visit WintergreenFund.com

Wintergreen Advisers – Your Home for Global Value®

Established in 2005, Wintergreen is an independent global money manager based in Mountain Lakes, New Jersey. Wintergreen employs a research-driven value style in managing global securities. The firm was co-founded by David J. Winters (bio), who has 30 years of experience in investment advisory services, including management of registered investment companies. David Winters is the firm’s Chief Executive Officer. Wintergreen Adviser’s co-founder is Liz Cohernour (bio), who has over 30 years’ experience in investment advisory business and is the firm’s Chief Operating Officer. All client assets are managed on a discretionary basis. Wintergreen Fund, Inc. is the primary client of the Adviser.

David Winters discusses "look-through expenses" on CNBC's Closing Bell

September 19, 2016

David Winters discusses hidden "look-through expenses" and the implications of the recent flow of investor money into index funds and exchange traded funds ("ETFs") with Kelly Evans on CNBC's Closing Bell.


Back to Top

 


David Winters discusses "look-through expenses" in the New York Times article "Stung Twice By Lavish Pay At the Top"

July 10, 2016

David Winters and Liz Cohernour discuss "look-through expenses" with New York Times columnist Gretchen Morgenson. Winters says, "We realized that dilution was systemic in the Standard & Poor's 500, and that buybacks were being used not necessarily to benefit the shareholder but to offset the dilution from executive compensation."



Research by Wintergreen Advisers reveals that look-through expenses may seriously affect your investment returns.

July 7, 2016

(Click on the graphic for a full size PDF)


Back to Top

 


David Winters appeared on "Bloomberg Surveillance."

June 28, 2016

David Winters talks to Bloomberg's Tom Keene and Francine Lacqua about his investing strategy in the aftermath of the U.K.'s Brexit referendum and the risks of the recent flow of money into index funds. He also discusses why he likes British American Tobacco, Heineken, and Nestle.


Back to Top

 


Liz Cohernour Discusses the Outcome of Consolidated-Tomoka's 2016 Proxy Vote with The Deal's Alicia McElhaney

April 28, 2016

Following Consolidated-Tomoka's Annual Meeting of Shareholders on April 27, 2016, Wintergreen's Liz Cohernour discusses how the votes cast by CTO shareholders have sent a "clear message to the board" by voting against two proposals, and supporting the proposal for CTO to hire an independent adviser to evaluate ways to maximize shareholder value.


Back to Top

 


Wintergreen Advisers, LLC to Oppose Consolidated-Tomoka Land Co. Proposed Share Issuance that It Believes Could Dilute Current Holders by 23%, and Support Proposal to Hire Independent Advisor to Maximize Shareholder Value

Wintergreen Advisers also Files 13D Indicating 26% Deemed Beneficial Ownership of Consolidated-Tomoka Land Co.

April 7, 2016

MOUNTAIN LAKES, NJ - Wintergreen Advisers, LLC ("Wintergreen" or "the Firm") today announced that it intends to vote against certain proxy items proposed by Consolidated-Tomoka Land Co. ("CTO" or "the Company", NYSE: CTO), including the Item 5 proposal to issue additional shares of common stock. According to Wintergreen's analysis of CTO's proxy statement, Wintergreen believes this issuance, if fully exercised, could dilute existing CTO shareholders to the tune of more than 23%. Accordingly, the Firm believes that this proposal is destructive to the interests of CTO shareholders and it plans on voting no to Item 5.

To help illustrate what this dilution means for a shareholder of CTO, if this proposal passes and the Company issues the full amount of the requested shares, a shareholder who owns $1,000 worth of stock would be diluted such that the value of the shares immediately after the additional stock is issued, would be $765.

In a letter filed with the Securities and Exchange Commission ("SEC"), Wintergreen indicated it will support the Wintergreen proposal to request that CTO hire an independent adviser to evaluate ways to maximize shareholder value. Wintergreen believes that shares of CTO are extremely undervalued and that substantial value is available to be unlocked quickly. Wintergreen believes an independent third party would accelerate this process by assisting CTO's Board of Directors (the "Board") in identifying viable opportunities to maximize shareholder value. The letter is included below.

In its letter, Wintergreen also indicated that it plans to vote against the following Board sponsored proposals:
- Against the re-election of each director
- Against the ratification of the appointment of Grant Thornton, LLP as auditor
- Against the advisory vote to approve executive compensation

Wintergreen's Schedule 13D, filed with the SEC, also indicates Wintergreen's 26% deemed beneficial ownership of CTO as of April 6, 2016. To view the SEC filing, click here.

Wintergreen believes these items are not in the best interest of CTO shareholders, and that shareholders deserve better than this.


Wintergreen to Vote YES to Item 4
Wintergreen Proposal to Hire Independent Advisor to Maximize CTO Shareholder Value
And
Wintergreen to vote NO to Item 5
Board Proposal to Approve Issuance of Additional Shares of Common Stock

April 6, 2016

Wintergreen Advisers, LLC ("Wintergreen") supports its proposal to request that Consolidated-Tomoka Land Co. ("CTO" or "Company") hire an independent adviser to evaluate ways to maximize shareholder value. We believe that shares of CTO are extremely undervalued and that substantial value is available to be unlocked quickly. We believe an independent third party would accelerate this process by assisting CTO's board of directors (the "Board") in identifying viable opportunities to maximize shareholder value.

We plan to vote against certain other proxy items including the Board's Item 5 proposal to issue additional shares of common stock 1. According to our analysis of the proxy statement, we believe this issuance, if fully exercised, could dilute existing CTO shareholders to the tune of more than 23%. Accordingly, we believe that this proposal is destructive to the interests of CTO shareholders and we plan on voting no to Item 5, as described more fully below.

To help illustrate what this dilution means for a shareholder of CTO, if this proposal passes and the Company issues the full amount of the requested shares, a shareholder who owns $1,000 worth of stock would be diluted such that the value of the shares immediately after the additional stock is issued, would be $765.

We plan to vote against the following Board sponsored proposals:
- Against the issuance of additional shares of CTO
- Against the re-election of each director
- Against the ratification of the appointment of Grant Thornton, LLP as auditor
- Against the advisory vote to approve executive compensation

As outlined in detail below, we believe these items are not in the best interest of CTO shareholders, and that shareholders deserve better than this.

Item 1. We intend to vote against the re-election of all 7 directors.

We believe that the Board has failed to look out for the best interests of CTO shareholders. The Board's latest transgression is a proxy statement that includes a proposal to issue more than 1.3 million shares, which could by our calculations, result in dilution of over 23% for existing shareholders. We do not believe there is a beneficial reason to shareholders for this issuance and think that better financing options are clearly available. Additionally, we view the proposal to increase compensation for what we believe to be a failed management team is egregious and another indication that the Board needs to be replaced.

Further, we have reached out to the Board on multiple occasions in an attempt to work with the Board on the issues that we have identified, but we have not received a satisfactory response. In our view the Board has expressed an interest to rubber stamp management's actions and is no longer focused on its true role - to look after the interests of CTO shareholders.

Item 2. We intend to vote against the ratification of the appointment of Grant Thornton as auditor.

In a series of letters to the Board 2, we have identified what we believe to be deficiencies in CTO's publicly filed reports. We also find it alarming that over a two-year period, Grant Thornton's audit fees have doubled without a clear explanation to CTO shareholders as to why this has occurred. We believe that the engagement of a new audit firm that can undertake a thorough review of CTO's financial statements and disclosures would benefit all shareholders.

Item 3. We intend to vote against the approval of executive compensation.

We think increasing John Albright's total compensation (including stock and option awards) by over five times his 2015 compensation is reckless, destructive, and undeserved. We believe CTO's recent share price performance has been abysmal. Its -5.5% performance in 2015 fell well behind both the overall S&P 500's return of +1.4% and the REIT Index's return of +1.4% 3. With the rebound in local real estate prices, and the low interest rate environment, we believe management's actions have detracted from share performance and absolutely no increase in compensation is warranted. We also find it very curious that CTO has shifted the membership of its peer group twice in the last three years, and also uses a different listing of "peers" in CTO's investor presentations than what is contained in CTO's annual report. We think this constant shifting and misdirection has become all too commonplace for this management team and shareholders should not reward this type of behavior.

Additionally, in our view, Mr. Albright has demonstrated a pattern of taking on dangerous amounts of leverage, both with regards to CTO and his personal dealings. As detailed in the 2016 proxy, Mr. Albright beneficially owns 109,446 4 shares of CTO. However, footnote 7, in much smaller print, reveals that Mr. Albright has pledged most of these shares in a margin trading account and as security for a line of credit. We think leveraging his CTO shares is risky and if CTO's market value declines, Mr. Albright could be subject to a margin call that may force him to liquidate his CTO shares. Under Mr. Albright's leadership, CTO has also taken on what we believe to be a dangerous amount of leverage which could lead to disastrous results for CTO shareholders. As recently as 2010, the Company wrote of the risks of leverage, writing to shareholders that "...The real estate market has always been cyclical. In down markets, significant debt can severely weaken a real estate company by forcing it to sell off valuable assets at a discount..." 5 Given CTO's recent use of leverage, it seems to us that the lessons of the past have been forgotten.

Wintergreen will not support a plan to increase the compensation of Mr. Albright by more than five times his prior year's pay. Nothing we have seen from Mr. Albright justifies this increase.

Item 4. We will vote for the hiring of an independent advisor to evaluate ways to maximize shareholder value.

We are pleased that Deutsche Bank was hired to pursue the directive of our proxy proposal: to explore strategic alternatives to enhance shareholder value, including the possible liquidation of assets or the sale of the company. This is a good first step. At this point, we cannot tell precisely what instructions have been given to Deutsche Bank as investment banker advisor, nor can we know how vigorously it will be permitted by the Board to explore all meaningful strategic paths for maximizing shareholder value. That said, we believe CTO is trading at a massive discount to the value of its underlying assets and that if Deutsche Bank acts in accordance with our proposal, we think it will uncover numerous opportunities to unlock shareholder value.

We question the Company's motives for not supporting the Wintergreen Proposal. We do not believe that the continued pursuit of the Company's business plan is a viable option. We think it is time to initiate, expedite and ultimately finalize a sales process while interest rates remain low in order to take advantage of the ongoing real estate market recovery. We have heard from many other CTO shareholders who support our proposal. We believe prior and current CTO management alike has failed to enhance shareholder value beyond a slight reflection of the recovery of the real estate market and a potential sale could be the best way to unlock CTO's value.

Item 5. We will vote against the issuance of additional shares.

We believe there is absolutely no need to dilute shareholders by issuing common stock - there are several tax efficient transactions that the Company could pursue without diluting shareholders.

The Company's current obligation to bond holders is significant, approximately $75 million. To meet its payment obligations without issuing additional shares and diluting shareholders potentially by over 23%, the Company has available to it:
1. The Raleigh, North Carolina office complex, purchased in November 2015 for $42.3m 6
2. The Commercial Loan Portfolio of approximately $38.3m 7
3. The land pipeline sales of approximately $56m 8 that will be closing in the coming years
4. The approximately $8.7 million in treasury stock (subject to CTO's share price)

We believe the Company could liquidate (or, in the case of the treasury stock, sell) these assets to raise much needed cash. We believe the Company should use any excess proceeds to repay debt and begin the process of deleveraging the Company. The proceeds of the sale of the investment portfolio, which was recently liquidated at a substantial loss 9, should also be used to reduce debt in preparation for the upcoming need for cash. Between now and the bonds' 2020 conversion date, we believe there is ample opportunity for the Board to responsibly meet bond holder obligations while also addressing shareholder concerns. Wintergreen believes that potentially diluting shareholders to the tune of 23% (if the additional shares are fully issued) is NOT the preferred method for CTO to meet its obligations to bond holders.

Accordingly, Wintergreen intends to vote "AGAINST"
- Item 1: Against each of the seven directors nominated for one year terms
- Item 2: Against the ratification of the appointment of Grant Thornton, LLP as auditor
- Item 3: Against the advisory vote to approve executive compensation
- Item 5: Against the issuance of additional shares of CTO

Wintergreen intends to vote "FOR"
- Item 4: For the hiring of an independent advisor to evaluate ways to maximize shareholder value

Liz Cohernour, COO
David J. Winters, CEO

THIS IS NOT A SOLICITATION OF DIRECT OR INDIRECT AUTHORITY TO VOTE YOUR PROXY. PLEASE DO NOT SEND US YOUR PROXY CARD; WINTERGREEN ADVISERS, LLC AND ITS AFFILIATES ARE NOT ABLE TO VOTE YOUR PROXIES AND THIS COMMUNICATION DOES NOT CONTEMPLATE SUCH AN EVENT. THE INFORMATION CONTAINED HEREIN IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE, AND DOES NOT PURPORT TO BE AND DOES NOT EXPRESS ANY OPINION AS TO THE PRICE AT WHICH THE SECURITIES OF CONSOLIDATED-TOMOKA LAND CO. MAY TRADE AT ANY TIME. THE INFORMATION AND OPINIONS PROVIDED HEREIN SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION. INVESTORS SHOULD MAKE THEIR OWN DECISIONS REGARDING CONSOLIDATED-TOMOKA LAND CO. AND ITS PROSPECTS BASED ON SUCH INVESTORS' OWN REVIEW OF PUBLICLY AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED HEREIN. NEITHER WINTERGREEN ADVISERS, LLC, NOR ANY OF ITS AFFILIATES ACCEPTS ANY LIABILITY WHATSOEVER FOR ANY DIRECT OR CONSEQUENTIAL LOSS HOWSOEVER ARISING, DIRECTLY OR INDIRECTLY, FROM ANY USE OF THE INFORMATION CONTAINED HEREIN. MANY OF THE STATEMENTS IN THIS LETTER REFLECT OUR SUBJECTIVE BELIEF.

1. CTO is proposing issuing up to 1,387,860 shares. As of February 19, 2016, CTO had 5,905,313 shares outstanding.
2. Wintergreen has written to the Board on multiple occasions, including our letters dated December 17, 2015: "Wintergreen Sees Possible Securities Law Violations at CTO", January 12, 2016: "Wintergreen Cites What It Sees as Further Disclosure Failings at CTO", and February 17, 2016: "Wintergreen Pleased That CTO has hired Deutsche Bank to pursue the directive of Wintergreen's Proxy Proposal", among others.
3. Consolidated-Tomoka Land Co: Investor Presentation, March 7, 2016, page 8.
4. Consolidated-Tomoka Land Co: Definitive Proxy, March 15, 2016, page 18.
5. Consolidated-Tomoka Land Co: 10-K, 2010.
6. Consolidated-Tomoka Land Co: 8-K, November 12, 2015.
7. Consolidated-Tomoka Land Co: 10-K, March 1, 2016.
8. Consolidated-Tomoka Land Co: Investor Presentation, March 7, 2016.
9. Consolidated-Tomoka Land Co. 8-K, March 31, 2016.

---------------------------------------------------------------


About Wintergreen Advisers

Established in 2005 by Liz Cohernour and David J. Winters, Wintergreen is an independent global money manager that employs a research-driven value style in managing global securities. As of March 31, 2016, Wintergreen Advisers had approximately $710 million under management on behalf of individuals and institutions through its mutual fund and other clients, and is based in Mountain Lakes, New Jersey.

For further information on Wintergreen Advisers, please call 973-263-4500 or visit www.wintergreenadvisers.com. For information, forms and documents regarding our U.S. mutual fund, please visit www.wintergreenfund.com.


Contacts

John McInerney
Makovsky
jmcinerney@makovsky.com
212.508.9628

Wintergreen Advisers
press@wintergreen.com
973-263-4500

Back to Top

 

David Winters quoted in Bloomberg article about Coca-Cola's revamped equity compensation plan

March 10, 2016

Winters said, "Wintergreen is ecstatic that Coca-Cola finally took action on our analysis of Coke's bloated equity bonus plan," in the Bloomberg article, "Coca-Cola Cuts CEO Kent's Pay After Revamping Equity Program" by Anders Melin and Jennifer Kaplan.


Back to Top

 

Wintergreen Advisers pleased that Consolidated-Tomoka has hired Deutsche Bank to pursue the directive of Wintergreen's Proxy Proposal

February 17, 2016

New York, NY - (Business Wire) - Wintergreen Advisers, LLC ("Wintergreen") is pleased that Consolidated-Tomoka Land Co. (NYSE: CTO, "CTO") has hired Deutsche Bank to pursue the directive of Wintergreen's Proxy Proposal: to explore strategic alternatives to enhance shareholder value, including the possible liquidation of assets or the sale of the company. We believe CTO is trading at a massive discount to the value of its underlying assets and that a liquidation or substantial asset sale is in the best interests of the CTO shareholders.

We believe it is time to expedite and finalize any sales process while interest rates remain low and the ongoing real estate market recovery remains strong. We think prior and current CTO management has failed to enhance shareholder value beyond a slight reflection of the recovery of the real estate market and CTO needs strong, experienced outside advisers to point the company in a proper direction for the benefit of all shareholders.

At this point we cannot tell precisely what instructions have been given to Deutsche Bank as investment banker adviser, nor can we know how vigorously it will be permitted by CTO's Board of Directors to explore all meaningful strategic paths for maximizing shareholder value through the sales process. We would welcome CTO's support of Wintergreen's Proposal on CTO's forthcoming proxy statement.

We note that CTO also announced that its review of company activities and disclosures, conducted by CTO's Audit Committee, had not uncovered any violations of securities laws. We question this finding and reiterate that we believe CTO management has violated both the letter and the spirit of multiple laws.


Back to Top

 

Wintergreen Advisers Cites What it Sees as Further Disclosure Failings at Consolidated-Tomoka

Urges Board of Directors to expedite sale process to maximize value for shareholders

January 12, 2016

New York, NY - (Business Wire) - Wintergreen Advisers, LLC ("Wintergreen") sent the following letter to the board of Directors of Consolidated-Tomoka Land Co. (NYSE: CTO, "CTO") to draw attention to what Wintergreen believes are continuing failures by CTO to make full disclosures to its shareholders about the financial condition of the company.

The Wintergreen letter notes that CTO's recent announcement of a new share repurchase program fails to mention that the company's share count has increased since John Albright was named CEO in August 2011, depriving shareholders of the benefits typically associated with share repurchases. In fact, we believe CTO's share repurchases are being used to make stock grants to management instead of reducing CTO's share count and increasing each shareholder's equity in the company. Indeed, Mr. Albright has been granted options for 314,000 shares of CTO stock, which represent over 5% of the company's outstanding shares, since he was hired in 2011.

The Wintergreen letter adds: "We call upon the Board to expedite the sales process and maximize value for shareholders. We believe now is the time to act, while interest rates remain low and to realize the benefit of the ongoing and escalating recovery of real estate values in Daytona Beach which we believe has been the primary reason for the recent increases in CTO's share price."

---------------------------------------------------------------

January 12, 2016

Consolidated-Tomoka Land Co.
c/o William L. Olivari, Audit Committee Chairman
8 Creekview Way
Ormond Beach, FL 32174

Memorandum to: Consolidated-Tomoka Land Co. Independent Directors (the "Board")

On December 22, 2015, Consolidated-Tomoka Land Co. ("CTO" or the "Company") issued a press release that announced that the Company had completed an $8 million share repurchase program and approved a new $10 million share repurchase program. Wintergreen Advisers, LLC ("Wintergreen") believes that this release continues a pattern of misleading disclosure by CTO that fails to properly convey what is actually going on at the Company. Wintergreen believes that truly full disclosure to all shareholders would have also included the following material points:

  1. CTO's outstanding share count has increased since John Albright has been appointed CEO. According to the Company's latest Form 10-Q filing, outstanding shares have increased by over 210,000 or 3.5% since Mr. Albright was hired in August 2011 --- despite the ongoing share repurchases. The typical benefit of a share repurchase program is that the outstanding share count shrinks, increasing each shareholder's equity in the company. However, since CTO's share repurchases aren't nearly enough to offset the shares being issued by the Company since Mr. Albright was hired (between August 2011 and September 30, 2015 CTO has repurchased 100,732 shares), CTO's shareholders only see continued dilution.
  2. CTO's share counts continue to increase due in part to stock grants to management. Since he was hired in August 2011, Mr. Albright alone has been granted options for 314,000 shares of stock which represent over 5% of the Company's outstanding shares. Overall, since Mr. Albright was hired, CTO has authorized stock grants for over 430,000 shares of stock which represents over 7.3% of the Company's outstanding shares. CTO has continued to transfer company assets to what we view as an underperforming management team.
  3. CTO holds repurchased shares in treasury, instead of retiring them. We believe this shows that the Company has no intention of reducing outstanding shares and benefiting shareholders - apparently the Board's goal for buybacks is simply to have more shares available to issue to management in future grants.

Wintergreen believes that management's goal is to extend its tenure as long as possible, including by delaying the sale of the Company and its assets. The longer that management can extend the sales process, the more opportunities it will have to acquire CTO shares via stock grants that dilute every other CTO shareholder. We believe CTO's management, with the Board's approval, repeatedly puts its personal interests ahead of shareholders. We again remind the Board of its true constituency --- the Board works for shareholders and not for management. We call upon the Board to expedite the sales process and maximize value for shareholders. We believe now is the time to act, while interest rates remain low and to realize the benefit of the ongoing and escalating recovery of real estate values in Daytona Beach which we believe has been the primary reason for the recent increases in CTO's share price.

Management's pattern of communicating what we view as half-truths and misrepresentations must be immediately corrected. Shareholders deserve a full and accurate picture of the Company - not the fairy tale that management has published. For example, we believe the Company intentionally misled shareholders in its November 24, 2015 press release announcing the inclusion in the Company's proxy materials of our shareholder proposal to hire an independent adviser to evaluate the sale or liquidation of the Company. We had been in contact with the Board and management during the months preceding the submission of our shareholder proposal and had very clearly voiced our concerns about CTO's management and the change of the Company's strategic direction. Therefore, we believe that to say the Company "appreciated Wintergreen's support" when CTO management and the Board were well aware of our dissatisfaction was an attempt to intentionally mischaracterize our position in an attempt to mislead shareholders.

Wintergreen also calls upon the Board to provide detailed disclosure to all shareholders about what advisors have been hired to oversee the sales process and also the process that was undertaken to determine the independence of these advisors. For what precise reason has the advisory firm been hired? Is the focus on the best interests of shareholders or of management? Are the advisors who have been engaged to evaluate the sale of the Company also recipients of the commissions and other fall-out benefits from the Company's transactions? Further, the Company has announced almost $120 million in transactions related to income properties, loan investments, and "venture interests" for 2015. Wintergreen believes shareholders should be provided a full accounting of all commissions, brokerage fees, and any other transaction related expenses that have been incurred in conjunction with the previously referenced $120 million in transactions, along with details as to who is being paid. We would expect that the Board would have the courtesy and respect for all shareholders to provide this full disclosure ahead of the Board's January 2016 meeting so that shareholders have more complete information to evaluate management and the Board.

Recently, CTO director Jeff Fuqua stated that "the Board has been consistently and appropriately involved in the oversight of the Company's management and the review of financial disclosures". Based on the issues we have raised to the Board's attention over the past few months, including granting Mr. Albright options for over 5% of the Company's outstanding shares, possible securities law violations and what we view as grossly inadequate disclosure regarding the Company's expanded investment and derivative portfolios, we are puzzled by Mr. Fuqua's statement. It seems to us that either the Board is not receiving from management the information it needs to effectively do its job or it is rubber-stamping whatever management puts in front of it for approval. Neither option is palatable and neither sounds to us like appropriate oversight. Mr. Fuqua also indicated that the Board and management have worked together to "create significant shareholder value." Wintergreen believes that shareholders are not seeing any benefit - all we see are increased overhead and expenses, continued dilution as shares are gifted to management, and a flurry of commissions and expenses that benefit the advisors and brokers - all at the expense of shareholders.

Regards,

David J. Winters CEO                  Liz Cohernour, COO


Back to Top