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from Outstanding Investor Digest's December 31, 1996 Edition

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CENTURY MANAGEMENT'S
ARNOLD VAN DEN BERG

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Van Den Berg: So, you may wonder, "What's going to unlock the value?"

OID: I appreciate you letting us sit in on this interview.
Van Den Berg: Well, it would be wonderful if some major company were to buy them and take over their R&D and their marketing. They'd have $54 per share of sales. And much of their R&D and marketing would probably turn out to be unnecessary duplication.

OID: Begging doesn't help. Believe me, I've tried...
Van Den Berg: There's also a recently arrived catalyst. That catalyst is their new chairman of the board as of June - Edward T. Hurd - the first chairman from outside of the Moore family.

OID: What can you tell us about him?
Van Den Berg: According to a Moore press release, he has 35 years of experience in the global process control area. And prior to joining Moore, he served as president of Honeywell's industrial service division from 1990 to 1995. And that division is one of Moore's primary competitors -probably their prime competitor.

OID: Interesting.
Van Den Berg: So, in effect, they brought in someone who really knows the business and who knows how to compete against them.
Obviously, since he was heading up their major competitor, they were especially happy to get him. Clearly, he had experience within the industry with a major, well-run company. And from everything we can tell, he did a great job at Honeywell.
But the most important thing that he's bringing to the company is a fresh approach and a systematic way of focusing their product line. He's looking at every item in their product line and asking, "Do we want to keep it? Is it material to our operation? Do we want to focus on it more? Or should we eliminate it?"
And, more important still, when a family-run business goes out and brings in someone from outside, I think that it signals something very significant.

OID: That the kids have unrelated interests or that the acorns fell too far from the tree?
Van Den Berg: They're saying, "We're engineers. And we do a good job in that area. And we've done a good job running this company in the past. But it's not as profitable as it should be today. So maybe we should bring somebody in whose primary focus is to run the business."
I think they realized that there may have been too much emphasis on engineering and not enough on marketing and other facets of the business. But they wanted someone who really understood their business, knew their products, knew their competitors, etc.

OID: And, what the heck - if it happened to handicap one of their prime competitors, all the better.
Van Den Berg: I think it came about partially based on the recognition that their margins aren't as good as they should be and partially because they're getting more conscious of their stock.

OID: Sounds familiar...
Van Den Berg: And one of the things that brought it to light is that they needed to fund their recent sales growth and R&D. So they sold some stock to their pension plan, which is mostly them anyway. So I guess that didn't bother 'em.

OID: I imagine not.
Van Den Berg: But I think that they're realizing that, "Geez, if the stock price were up a little higher, maybe we'd sell some to the public and get a real price instead of $16." - which in my opinion is a giveaway.

[Editor's note: The price at which 500,000 shares were sold to their pension fund.]

OID: And they made him chairman?
Van Den Berg: Yes.

OID: That sounds serious.
Van Den Berg: I believe it's very serious. And I think you've put your finger on a key item: They brought him in as chairman of the board and have given him free rein. He presides over many Moores. The fact that they were willing to bring him in as chairman speaks volumes.
And we believe Hurd is going to start stirring the pot.

OID: What makes you say that?
Van Den Berg: As we talk to this management more and more with the first outsider taking over the reins and starting to look at the way they do business, it's becoming increasingly clear to us that they're starting to think about ways of unlocking their shareholder value, too.
Prior to Hurd's arrival, we got the impression that the chief financial officer agreed with us, but that these things just weren't a very high priority. Now they're doing strategic planning and are open to reviewing all options - which may be the very reason that they brought Hurd into the company.

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