DEFA14A ADDITIONAL PROXY SOLICITATION MATERIAL
Additional Proxy Solicitation Material Pursuant to Section 14(a)
of the Securities Exchange Act of 934
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[ ] Preliminary Proxy Statement
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COLUMBUS MCKINNON CORPORATION
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(Name of Registrant as specified in its charter)
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NEWS RELEASE
CONTACT:
Robert L. Montgomery, Jr.
Executive Vice President and Chief Financial Officer
Columbus McKinnon Corporation
716-689-5405
Columbus McKinnon Corporation Mails
Second Proxy Solicitation Letter to Shareholders
FOR IMMEDIATE RELEASE
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Amherst, NY, August 4, 1999 ... Columbus McKinnon Corporation (NASDAQ:
CMCO) announced today that it has mailed a second letter in connection with the
Company's Annual Meeting scheduled for August 16, 1999. The mailing included the
following letter to its shareholders in connection with the proxy contest being
waged against the Company by a dissident shareholder group.
[TEXT OF LETTER FOLLOWS]
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[COLUMBUS MCKINNON CORPORATION LETTERHEAD]
SUPPORT YOUR BOARD OF DIRECTORS
AND ITS RECORD OF SUPERIOR PERFORMANCE
July 30, 1999
DEAR FELLOW SHAREHOLDER:
As we previously alerted you, a group of dissidents has now commenced a
proxy contest in an attempt to seize control of your Company. The
self-designated "Shareholders Committee," led by New York City-based stock
traders and risk arbitrageurs, is advocating exploring the sale of Columbus
McKinnon as the best means of maximizing shareholder value. YOUR BOARD OF
DIRECTORS STRONGLY BELIEVES THAT NOW IS NOT THE RIGHT TIME TO SELL YOUR COMPANY.
YOU ARE URGED NOT TO SIGN ANY GOLD PROXY CARD WHICH THIS GROUP MAY SEND TO YOU,
NOT EVEN AS A VOTE OF PROTEST, SINCE DOING SO WOULD CANCEL AN EARLIER VOTE FOR
THE COMPANY.
Your Board of Directors remains committed to maximizing value for all
Columbus McKinnon shareholders and is pursuing a strategic plan which we believe
will best achieve that objective. Our interests are identical to yours--CM's
directors, officers and the Employee Stock Ownership Plan own more than 30% of
Columbus McKinnon's common stock. Your Company is executing a solid operating
plan that is already delivering value to shareholders as evidenced by our record
of superior performance. WE URGE YOU TO SUPPORT YOUR QUALIFIED, EXPERIENCED
DIRECTORS BY SIGNING, DATING AND MAILING PROMPTLY YOUR ENCLOSED WHITE PROXY
CARD. YOUR VOTE IS IMPORTANT, REGARDLESS OF THE SIZE OF YOUR INVESTMENT, SO
PLEASE ACT TODAY.
COLUMBUS MCKINNON'S RECORD OF SUPERIOR PERFORMANCE
Columbus McKinnon's track record of profitable growth is the direct
result of the strategic initiatives designed and implemented by your Board of
Directors and senior management. By remaining focused on its growth strategy,
Columbus McKinnon has achieved a dominant market position with strong brand
names and has posted a record of superior performance. SHAREHOLDERS ARE URGED TO
JUDGE FOR THEMSELVES OUR FIVE-YEAR RECORD BASED ON THREE COMMONLY USED
PERFORMANCE YARDSTICKS:
CASH FLOW FROM
NET SALES NET INCOME* OPERATIONS
(in thousands) (in thousands) (in thousands)
1999 $735,445 1999 $27,436 1999 $57,493
1998 $561,823 1998 $23,978 1998 $38,420
1997 $359,424 1997 $18,352 1997 $28,886
1996 $209,837 1996 $12,987 1996 $18,338
1995 $172,330 1995 $10,504 1995 $15,529
1994 $142,313 1994 $7,029 1994 $5,643
CAGR**= 39% CAGR=31% CAGR=59%
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* BEFORE EXTRAORDINARY CHARGES FOR DEBT EXTINGUISHMENT
** COMPOUND ANNUAL GROWTH RATE OVER THE PAST FIVE YEARS
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Further, we intend to continue to deliver value to shareholders through a
well-conceived growth strategy with the following principal components:
o STRENGTHEN CM'S EXISTING BUSINESS. Current initiatives include productivity
enhancements, cost savings such as combined purchasing efforts and
continued acquisitions synergies, and revenue enhancements through, for
example, the development and sale of new broader lines of products and the
CraneMart(TM) strategy.
o INCREASE CM'S PENETRATION OF INTERNATIONAL MARKETS. Global markets offer
significant growth potential for CM and we have succeeded at increasing
international sales 9 fold in the last five years. In fiscal 1999,
international sales increased 52% and now constitute 26% of CM's total
sales. We fully intend to continue to expand and further leverage global
operations and capitalize on our recent acquisitions.
o PURSUE SELECTIVE ACQUISITION OPPORTUNITIES. To the extent they will enhance
shareholder value, we will continue to pursue complementary acquisitions to
strengthen product lines, broaden distribution channels and increase CM's
international presence. Further, we will divest assets not meeting CM's
stringent criteria.
On July 27, 1999, the Company announced financial results for the first
quarter of fiscal 2000, which ended on July 4, 1999. The results are on target
and reflect increasing strength in the Company's core Products business. Net
income per share met expectations at $0.45 per diluted share on 14.2 million
shares, compared to fiscal 1999 first quarter net income per share of $0.44 per
diluted share and pro forma net income of $0.43 per diluted share, both on 14.5
million shares.* Net sales were $181.6 million, compared to net sales of $184.6
million and pro forma net sales of $183.7 million in the first quarter of fiscal
1999. Cash flow from operating activities, normally weak in the first quarter
due to interest and bonus payments, was a positive $0.23 per diluted share for
the quarter, compared to a negative $0.76 per diluted share in the first quarter
of fiscal 1999.
The Company's Products segment, which currently makes up about 70% of
sales, performed very well in the quarter, producing solid increases in sales
and margins (sales up 8.0%; operating margin before amortization expense
improved from 13.8% to 16.6%). Results in the Solutions--Automotive segment are
still well below the Company's internal objectives for this business, prompting
CM to accelerate integration activities to increase returns from this business
segment and to undertake specific initiatives to improve productivity and
effectiveness at lower cost, to strengthen key business--driving project
management and engineering functions, and to enhance both project management
capabilities and management controls. Implementation of CM's CraneMart(TM)
strategy is also continuing and the Company expects to begin adding independent
participants during the next few quarters. These factors all point to another
strong year for CM.
We believe that Columbus McKinnon's history of superior performance and
proven growth strategy in an industry with favorable long-term trends, and our
commitment to shareholder value, augurs well for the future value of your CM
investment. We urge you to support your Board of Directors by signing, dating
and mailing your WHITE proxy card.
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* Columbus McKinnon's financial results for the first quarter of fiscal 2000
reflect the effect of CM's merger with GL International, Inc. on March 1, 1999,
which was accounted for as a pooling of interests and resulted in a restatement
of all financial results as though both companies were combined for all periods
presented. Pro forma results shown for fiscal 1999 assume all acquisitions and
divestitures occurred at the beginning of the periods presented.
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A CLOSER LOOK AT THE SHAREHOLDERS COMMITTEE
We regret that a costly and disruptive proxy contest has been forced
upon your Company, particularly since our collective energies should be devoted
exclusively to generating additional shareholder value. We believe that turning
over control of Columbus McKinnon to the dissidents could seriously undermine
your Company's operations and is not the best way to maximize the long-term
value of your stock. TAKE A CLOSER LOOK AT THE FACTS:
The dissidents want you to believe that they have a plan to maximize
shareholder value.
THE FACT IS that the dissidents have presented no plan whatsoever,
except to attempt to immediately sell your Company. The dissidents themselves
admit that this is a high-risk strategy. Consider their own words: "There is no
assurance that any such transaction would be consummated, that stockholder value
will be maximized, or that a significant premium will be realized . . ." In
stark contrast, your Board of Directors has a proven strategic plan that is
already generating significant shareholder value with great potential for future
growth.
The dissidents want you to believe that Columbus McKinnon's strategic
plan is flawed and represents a "high-risk strategy."
THE FACT IS that the dissidents have agreed with, and purchased their
Columbus McKinnon shares based on, this very strategy. Remember, the dissidents
do not say that they will do a better job running the Company, and just three
months ago admitted that "operationally the Company has performed well."
Further, we think you will agree that the dissidents do not possess the
requisite experience to run Columbus McKinnon. Ask yourself what will happen to
the value of your investment if the dissidents take control of Columbus
McKinnon, but are unable to sell the Company.
The dissidents want you to believe that their interests are aligned
with yours.
THE FACT IS that, unlike you, three of the five dissident nominees do
not own even one single share of Columbus McKinnon stock. In contrast, consider
that your directors, officers and the CM ESOP hold over 30% of CM's stock -- a
collective investment worth more than $100 million. Further, each of the three
nominees is being paid a $10,000 fee by the Committee just to serve as nominees
in the proxy contest, and the Committee's own proxy materials state that the
Committee intends to seek reimbursement from the Company for its proxy
solicitation expenses--without a vote of CM's shareholders. Ask yourself if the
Committees' nominees' interests are the same as yours.
The Committee wants you to believe, through its convenient selection of
market price intervals, that your investment has not fared well.
THE FACT IS that since going public in 1996, Columbus McKinnon has
posted strong financial performance and CM shareholders have enjoyed an average
return on their investment in excess of 15% per year. You be the judge of
Columbus McKinnon's performance.
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Your Board members, all of whom are also shareholders and with an
average of 10 years experience in the materials handling industry, urge you not
to be misled by the misplaced criticism of the dissidents. It is the unanimous
and strongly held view of your Board of Directors that the election of the
dissidents would not be in your interest. We urge you not to sign any GOLD proxy
card the dissidents may send to you, not even as a vote of protest, since doing
so would cancel an earlier vote for CM.
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In closing, we thought you might be interested in what three
independent equity research analysts have had to say about Columbus McKinnon.
Consider the following:
"OUR CONVICTION IN COLUMBUS MCKINNON'S ABILITY TO PROSPER IS
REINFORCED BY ITS HISTORICALLY STRONG PERFORMANCE . . ."
"MOST OF SENIOR MANAGEMENT HAS SPENT AN ENTIRE CAREER AT THE
COMPANY. EXTENSIVE EXPERIENCE WITH INDUSTRY CYCLES, OPPORTUNISTIC
APPRECIATION FOR GROWTH POTENTIAL AND THE CASH-LEAN HABITS
NECESSARY TO OPERATE AS AN LBO COMBINE TO CREATE UNIQUE MANAGEMENT
CAPABILITY."
"COLUMBUS MCKINNON--A GOOD LITTLE COMPANY"
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We will continue to operate Columbus McKinnon in your best interests,
working diligently to generate superior performance and committed to maximizing
value for all Columbus McKinnon shareholders. We very much appreciate your
support by signing, dating and mailing your WHITE proxy card today. As always,
we welcome your questions or comments. Please call Lois Demler, our Corporate
Secretary, at (716) 689-5409.
On behalf of your entire Board of Directors, thank you for your
continued support and trust.
Sincerely,
/s/ Timothy T. Tevens /s/ Robert L. Montgomery, Jr.
Timothy T. Tevens Robert L. Montgomery, Jr.
PRESIDENT & CHIEF EXECUTIVE OFFICER EXECUTIVE VICE PRESIDENT &
CHIEF FINANCIAL OFFICER
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IMPORTANT
YOUR VOTE IS IMPORTANT. Please take a moment to sign, date and promptly
mail your WHITE proxy card in the postage paid envelope provided. Please be
certain that your latest dated proxy card is a WHITE proxy card voting "FOR"
Columbus McKinnon's Directors. Remember, do not return any GOLD proxy card sent
to you by the Shareholders Committee, not even as a vote of protest.
If your shares are registered in the name of a broker, only your broker
can execute a proxy and vote your shares and only after receiving your specific
instructions. Please mail your WHITE proxy card at once in the envelope
provided. If you have any questions or need further assistance in voting, please
call:
D.F. KING & CO., INC.
77 Water Street
New York, NY 10005
(212) 269-5550 (Collect)
CALL TOLL-FREE -- 1-800-697-6974
This letter includes "forward looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements involve known
and unknown risks, uncertainties and other factors that could cause the actual
results of the Company to differ materially from the results expressed or
implied by such statements, including general economic and business conditions,
conditions affecting the industries served by the Company and its subsidiaries,
conditions affecting the Company's customers and suppliers, competitor responses
to the Company's products and services, the overall market acceptance of such
products and services, the integration of acquisitions and other factors
disclosed in the Company's periodic reports filed with the Securities and
Exchange Commission. Consequently such forward looking statements should be
regarded as the Company's current plans, estimates and beliefs. The Company does
not undertake and specifically declines any obligation to publicly release the
results of any revisions to these forward-looking statements that may be made to
reflect any future events or circumstances after the date of such statements or
to reflect the occurrence of anticipated or unanticipated events.
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