<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Confidential, for Use of the
[_] Preliminary Proxy Statement Commission Only (as Permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[X] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
PS Group Holdings, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] No fee required.
[X] 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:
PS Group Holdings, Inc. Common Stock
(2) Aggregate number of securities to which transaction applies: 6,068,313
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): Cash merger
consideration of $12.00 will be exchanged for each of the 6,068,313
shares of PS Group Holdings, Inc. Common Stock. Fee calculated on the
basis of 1/50 of 1% of the aggregate merger consideration of
$72,819,756.
(4) Proposed maximum aggregate value of transaction: $72,819,756
(5) Total fee paid: $14,564
[X] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: $14,564
(2) Form, Schedule or Registration Statement No.: Schedule 14A, Preliminary
Proxy Statement
(3) Filing Party: PS Group Holdings, Inc.
(4) Date Filed: January 21, 2000
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N E W S R E L E A S E
[PS GROUP HOLDINGS LOGO]
PS GROUP HOLDINGS, INC. REPORTS OPERATING RESULTS FOR THE YEAR 1999
San Diego, CA, March 3, 2000 - PS Group Holdings, Inc. (PSGH) reported
today net income for 1999 of $3.8 million - $.63 per share - compared to net
income of $3.2 million - $.52 per share - in 1998. Results from continuing
operations for 1999 were net income of $3.6 million - $.60 per share - compared
to net income of $3.2 million - $.52 per share in 1998. 1998 results included
the benefit of a fourth quarter $8.0 million - $1.32 per share - reduction of
income tax liabilities recorded in prior years. Both 1999 and 1998 included
additional unusual items - all of which are summarized below. Results for 1999
(both fourth quarter and the full year) reflect $.2 million - $.03 per share -
of additional net income from discontinued operations related to the reduction
in close down expenses for the fuel sales divisions.
Results for the Fourth Quarter of 1999
- --------------------------------------
Results for 1999's fourth quarter, which include the small benefit from the
discontinued operations mentioned above and the other unusual item set forth
below, were net income of $.5 million - $.09 per share - in 1999 compared to net
income of $7.2 million - $1.20 per share - in 1998 (including the $8.0 million -
$1.32 per share - gain in 1998 related to the reduction of income tax
liabilities). Results for continuing operations in the fourth quarter were net
income of $.4 million - $.06 per share - in 1999 and net income of $7.2 million
- - $1.20 per share - in 1998's fourth quarter (including the $8.0 million - $1.32
per share - gain mentioned above).
Proposed Merger Transaction Involving PSGH Still Pending
- --------------------------------------------------------
Stockholders of PSGH are scheduled to vote at a special meeting on March
13, 2000 on a proposed merger transaction announced December 20, 1999, with an
affiliate of Integrated Capital Associates, Inc. This transaction would result
in the acquisition of PSGH for $12 per share. Please see the table (shown
below) of unusual items which includes a charge to expense for costs incurred in
1999 related to the pending merger transaction. Additional expenses related to
the pending merger and related litigation (see following) have and will be
incurred subsequent to 1999.
As previously reported in PSGH's Current Report on Form 8-K filed with the
SEC on January 26, 2000, on December 27, 1999 a purported stockholder class
action was filed against PSGH and its directors in the California Superior Court
for the County of San Diego challenging the proposed merger. On February 18,
2000, plaintiff filed an amended complaint in the state court action to add
allegations that the defendants failed to disclose, in PSGH's proxy statement
dated February 11, 2000 related to the proposed merger, certain information
regarding PSGH's subsidiary, Statex Petroleum, Inc. ("Statex"), and PSGH's year-
end and fourth quarter 1999 results. As a result of the filing of the amended
complaint and because plaintiff did not file a motion for expedited discovery,
the previously scheduled February 25, 2000 state court hearing was effectively
vacated. On February 22, 2000,
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plaintiff's counsel notified defendant's counsel that plaintiff intended to
apply for a temporary restraining order to enjoin the proposed transaction. On
the same day, defendants removed the case to U.S. District Court for the
Southern District of California. On March 1, 2000, the plaintiff made a motion
to remand the case back to the state court. The defendants are opposing that
motion.
Proposed Sale of Oil and Gas Subsidiary Still Pending
- -----------------------------------------------------
The previously announced letter of intent to sell Statex to Statex's
management is still in effect. The proposed buyers have obtained a financing
commitment, but the transaction remains subject to the negotiation and execution
of mutually acceptable definitive acquisition and financing documentation and to
the satisfaction of the closing conditions specified therein. If the sale
occurs before the PSGH merger (see above), a loss on sale will be recorded.
Based on PSGH's investment at year-end 1999, the Statex sale would result in a
net loss of approximately $.8 million - ($.14) per share on net proceeds of $4.5
million (whether the proposed sale of Statex closes before or after the proposed
acquisition of PSGH, or does not occur at all, these proceeds will not affect
the $12 per share price in the pending merger transaction).
Unusual Items Included in Results from Continuing Operations
- ------------------------------------------------------------
With the discontinuance of the fuel sales divisions in 1998, PSGH operates,
through subsidiaries, three business segments - aircraft leasing, oil and gas
production and development, and fuel storage and distribution (primarily
facilities operated by third parties at two airports). Both 1999 and 1998
results from these continuing operations included unusual items which are
summarized below (in thousands, except per share data):
<TABLE>
<CAPTION>
Increase (decrease) in earnings after taxes
------------------------------------------------------------------------
Fourth Quarter Year
------------------------------- --------------------------------
Amount Per Share Amount Per Share
------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
1999 Continuing Operations
Unreimbursed transaction costs related to
pending merger transaction $ (450) $(.08) $ (450) $ (.08)
Estimated additional investigation,
remediation and litigation costs related to
environmental issues at San Francisco
International Airport (150) (.02) (150) (.02)
Statex increased deferred compensation
expense for two retirees - - (131) (.02)
Statex loss on swap agreements used to
hedge volatility of oil prices (217) (.04) (349) (.06)
Gains on sale of aircraft:
One MD-80 and one BAe 146 aircraft 187 .03 - -
One MD-80 and six BAe 146 aircraft - - 758 .12
------- ----- ------- ------
$ (630) $(.11) $ (322) $ (.06)
======= ===== ======= ======
</TABLE>
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<TABLE>
<CAPTION>
Increase (decrease) in earnings after tax
--------------------------------------------------------------------
Fourth Quarter Year
--------------------------------------------------------------------
Amount Per Share Amount Per Share
---------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
1998 Continuing Operations
Reduction in income tax liabilities recorded
in prior years and no longer required due
to a revised estimate of settlement for taxes
and interest assessed by the State of
California for the years 1987 through 1990
and a current evaluation of other deferred
tax liabilities $ 8,000 $1.32 $ 8,000 $ 1.32
Impairment loss on oil and gas property
resulting from lower oil and gas prices (1,567) (.26) (7,585) (1.25)
------- ----- ------- ------
$ 6,433 $1.06 $ 415 $ .07
======= ===== ======= ======
</TABLE>
Segment Results
- ---------------
Aircraft Leasing. Excluding the aircraft sale gains and the reduction in
----------------
income tax liabilities in 1998, PSGH's aircraft leasing subsidiary, PS Group,
Inc. ("PSG"), recorded slightly higher net income in 1999's fourth quarter and
full year compared to the comparable periods in 1998 despite lower lease
revenues. PSG's 1999 results were enhanced by lower interest expense (primarily
from debt pay-downs) and an adjustment to lease revenues (primarily resulting
from the sale of five BAe 146's early in 1999). These items more than offset the
reduction in income from financing leases and fewer aircraft on lease due to the
sale of the five BAe 146's in April 1999 and one MD-80 and the last BAe 146 in
the fall of 1999.
Oil and Gas Production and Development. Despite lower production, Statex
--------------------------------------
recorded a small profit in the fourth quarter of 1999 and a "break-even" in the
year 1999 (versus losses in the same periods in 1998) as a result of higher oil
prices, lower depreciation, depletion and amortization (due to the write-down of
oil properties in 1998), and cost controls. Fourth quarter 1999 results were
reduced by after-tax reductions in revenue of $217,000 - $(.04) per share - for
losses on swap agreements used to hedge the volatility of oil prices. 1999
results were reduced by an after-tax expense of $131,000 - $(.02) per share - to
increase the deferred compensation of two retirees and by after-tax reductions
in revenue of $349,000 - $(.06 per share) - for losses on the swap agreements.
Because of these swap agreements, over 40% of the benefit of higher oil prices
did not flow through to Statex in the fourth quarter of 1999. These swap
agreements, which were entered into to protect Statex from a decline in oil
prices, continue through April 2000.
Fuel Storage and Distribution. As a result of the environmental related
-----------------------------
expenses shown in the above table, PS Trading, Inc., PSGH's fuel storage and
distribution subsidiary, recorded a net loss for the fourth quarter versus a net
profit in 1998's fourth quarter. Net profits for 1999 were also reduced from
1998 due to added maintenance expenses.
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Utilization of Tax Benefits
- ---------------------------
With the sale of the seven aircraft in 1999, it is estimated that PSG
has fully utilized its substantial federal net operating loss carryforwards and
partially utilized its investment tax credit carryforwards ("ITC's"). As of
year-end 1999, the estimated remaining tax benefits carryforwards total
approximately $7.7 million for ITC's and $3.5 million for the alternative
minimum tax.
Forward-Looking Statements
- --------------------------
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Certain information included in this
release may be deemed forward-looking, such as: the status of the proposed
acquisition of PSGH; the status of the letter of intent to sell Statex and the
effect of such sale, if it occurs, on the financial statements of PSGH; the
usage and future availability of certain tax benefits; and the potential
liability for environmental contamination at the San Francisco International
Airport (SFIA), the related cost of remediation and pending potential
litigation; the revised estimate of income tax liabilities due to the State of
California and for other deferred tax liabilities; the estimated income tax
liability; and the estimated fair value of oil and gas properties that was used
in computing the impairment loss. Investors are cautioned that all forward-
looking statements involve risks and uncertainties, including, but not limited
to: the possibility that the proposed acquisition of PSGH will not close; the
possibility that the preliminary agreement regarding the proposed sale of Statex
will not be completed; PSGH's ability to realize the remaining tax benefits; the
uncertainties inherent in estimating the cost of environmental remediation and
related pending and potential litigation at SFIA; the possibility of future
adjustments to income tax liability; the possibility of future impairment losses
related to oil and gas properties; the impact of the volatility of the prices of
crude oil and natural gas prices on Statex; the amount of additional
unreimbursed transaction and litigation expenses related to the pending merger
transaction; the impact of economic conditions on each business segment; the
impact of competition; the impact of governmental legislation and regulation and
possible future changes therein; and other risks discussed in this press release
and in filings PSGH has made with the Securities and Exchange Commission.
Should any of such risks or uncertainties materialize or should other
assumptions prove incorrect, actual results or outcomes may vary materially from
those contemplated in such forward-looking statements. PSGH does not undertake
to publicly update or revise its forward-looking statements.
# # #
CONTACT - LAWRENCE A. GUSKE, PS GROUP HOLDINGS, INC. - 858.642.2982
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PS Group Holdings, Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Year
Ended Dec. 31, Ended Dec. 31,
-------------------------- ---------------------------
1999 1998 1999 1998
--------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Continuing operations:
Revenues:
Aircraft leasing $3,360 $ 5,525 $17,300 $ 23,855
Gains on aircraft sales 313 - 1,280 -
Oil and gas production 2,008 1,232 6,825 6,054
Fuel storage and distribution 206 192 812 790
Interest and other income 403 341 1,220 1,552
--------- ---------- ---------- ---------
6,290 7,290 27,437 32,251
--------- ---------- ---------- ---------
Costs and expenses:
Cost of sales 1,381 1,058 4,517 5,131
Depreciation, depletion and 1,274 2,448 7,256 11,892
amortization
Impairment loss on oil & gas - 2,600 - 12,800
properties
Environmental remediation 253 - 253 -
expenses
General and administrative 1,741 1,307 4,396 3,452
expenses
Interest expense 977 1,336 4,654 6,957
--------- ---------- ---------- ---------
5,626 8,749 21,076 40,232
--------- ---------- ---------- ---------
Income (loss) from continuing
operations before taxes 664 (1,459) 6,361 (7,981)
Provision (credit) for taxes 299 (8,689) 2,700 (11,142)
--------- ---------- ---------- ---------
Income from continuing 365 7,230 3,661 3,161
operations
Discontinued operations, net of tax 185 - 185 -
--------- ---------- ---------- ---------
Net income $ 550 $ 7,230 $ 3,846 $ 3,161
========= ========== ========== =========
Basic and diluted net income per
share:
Continuing operations $.06 $1.20 $.60 $.52
Discontinued operations .03 - .03 -
--------- ---------- ---------- ---------
Net income per share $.09 $1.20 $.63 $.52
========= ========== ========== =========
Shares used in determining basic and
diluted net income per share 6,068 6,068 6,068 6,068
========= ========== ========== =========
</TABLE>
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