Commentary By Andrew Tribute Original Tribute Creo Commentary (August 4, 2004) Creo Response (August 19, 2004) October 19, 2004 -- Last week it was announced that there was to be a challenge to Creo’s CEO from industry veteran Robert Burton, where Burton is seeking to replace Amos Michaelson as Creo’s CEO. Based upon his past record of success in turning around ailing companies, it is quite likely that Burton will get a substantial degree of support from Creo’s shareholders. It has not surprised me that this challenge is taking place. I am surprised that there has not been a shareholder revolt before. It has been common knowledge in the Canadian financial community that shareholders have been unhappy for some time with Creo’s financial performance and its low stock price. Recently Creo has made moves to try to improve the situation, but many analysts see these moves as too little, too late. In times of change Michaelson and his Board should perhaps take note that you should act when you see the light, not when you feel the heat. When I recently wrote my piece on Creo’s problems I was only making public the concerns felt in the financial community about Creo. My sin, in Creo’s management eyes, was to bring forward the detail of their problems in front of Creo’s customers in the graphic arts markets. Up to that time Creo had managed in their usual fashion to cover their problems with misinformation. They decided to try to spread further misinformation to cast doubts upon my comments. Instead of having either Amos Michaelson or Dan Gelbart, Creo’s usual spokespersons point out my errors, they used two of Creo’s nice guys, Boudewijn Neijens and Judy Hess, that are highly regarded in the industry, to pour scorn on my writing. As it was, both Boudewijn and Judy totally ignored the principal point of my arguments, and addressed issues that are irrelevant in the situation. When you are pointing the corporate ship at an iceberg, moving the deck chairs does not really have much effect! I decided not to respond to the Creo comments at the time as I felt I had made my point and would leave it to readers to make up their own minds. With recent developments however I felt now was the time to say something more. It will be interesting to watch the ongoing situation. I note that Creo has brought in outside advisors to help them counter the Burton initiative. What plans will they put forward in selling off divisions. A very high-level contact of mine with detailed knowledge of Creo tells me he would be interested to pick up some prime Israeli based assets if they become available. Perhaps the Spire digital front end operation may be one of these. What all this shows is that companies cannot ignore shareholders in their ongoing planning. You have to bring shareholders along with you. It appears to me that Creo has not convinced its shareholders that its strategy is correct in moving into the low margin plate business, and it appears that it is this business that is dragging the company’s results down. With Creo’s very high level of expertise in electro optical systems surely the company could have diversified its business into expanding high margin businesses in this area.