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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[X] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Columbus McKinnon Corp
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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[LOGO FOR COLUMBUS McKINNON CORP. W/ADDRESS]
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
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performance. SHAREHOLDERS ARE URGED TO JUDGE FOR THEMSELVES OUR FIVE-YEAR
RECORD BASED ON THREE COMMONLY USED PERFORMANCE YARDSTICKS:
NET SALES
(in thousands)
[GRAPHIC]
$142,313 $172,330 $209,837 $359,424 $561,823 $735,445
1994 1995 1996 1997 1998 1999
CAGR**=39%
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NET INCOME*
(in thousands)
[GRAPHIC]
$7,029 $10,504 $12,987 $18,352 $23,978 $27,436
1994 1995 1996 1997 1998 1999
CAGR=31%
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CASH FLOW FROM
OPERATIONS
(in thousands)
[GRAPHIC]
$5,643 $15,529 $18,338 $28,886 $38,420 $57,493
1994 1995 1996 1997 1998 1999
CAGR=59%
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*BEFORE EXTRAORDINARY CHARGES FOR DEBT EXTINGUISHMENT
**COMPOUND ANNUAL GROWTH RATE OVER THE PAST FIVE YEARS
Further, we intend to continue to deliver value to shareholders through a
well-conceived growth strategy with the following principal components:
. 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.
. 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.
. 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.
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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.
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:
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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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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
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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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