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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
For Annual Meeting for Fiscal Year Ending September 30, 1999
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Harvard Industries, Inc.
(Name of Registrant as Specified in its Charter)
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Fellow Shareholder:
Reinhold Meissner, thought by many to be the greatest mountain climber living
today, was asked what his first thought was when reaching a summit. His
reply?
"How to get down."
When I was recruited as chief operating officer in 1997, Harvard was in
bankruptcy. Bankruptcy claims totaled $7.3 billion. Many operations were
bleeding, some in fact hemorrhaging, with the workforce dispirited and lacking
clear direction. Moreover, it was the Company's second reorganization in five
years.
My thought?
"How do we get out? And, how do we get out with a clear vision and the team to
successfully implement it?"
Now, Harvard is "out". With the reorganization in our rearview mirror, we have a
clear vision of the future, an outstanding team to execute our plans, and have
concluded a year of deeply gratifying accomplishment.
Let me note a few of them.
o We divested operations with 1998 sales of $372 million and negligible
operating profit, for total proceeds of approximately $159 million. We used
these proceeds to further enhance our balance sheet, eliminated debt, and
repurchase 762,000 shares of our new common stock, about 7% of the shares
outstanding.
o As our financial highlights show, Harvard had a remarkable turnaround in the
recently concluded fiscal year. Most important, our increased cash flow was a
big improvement over the prior year. With growing cash flow, some large and
vital capital projects behind us (including our $17 million ERP installation)
and a debt-free balance sheet, we are in an excellent position to pursue
internal growth and explore promising acquisitions.
o Our intent is to build higher value based business. What does that mean?
Utilizing our core technology and design capabilities to build complete
products for the automotive and industrial markets. This product strategy
will temper the cyclicality (and seasonality) associated with the automotive
industry--and also earns the higher margins characteristic of industrial
markets. Our recent contract with Outboard Marine Corporation gets us closer
to our strategic objective of lessening our reliance on original equipment
business. We will increasingly employ value-added product marketing
strategies; seeking to de-couple price from cost by pursuing niche product
and market opportunities through advantaging design and engineering skills.
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o Being a world-class company requires world-class systems and infrastructure
to empower our people to manage better. We have those tools now.
o It all comes down to people. We have been successfully recruiting outstanding
managers to our new team. Many of us have worked together before; we share a
legacy together. And now we're building a new one. It will be anchored in the
same values--a bottom-line focus; continued margin enhancement;
diversification of our markets and customers; accountability for each one of
us; open communication and respect for the individual and for innovation; for
in the end this is among the most important endowments of any pathfinding
organization, which we aspire to be.
o Together these factors point to a very new and different culture at Harvard.
What we're after--a business with a higher intrinsic value than our
automotive peers, tempering cyclicality and improving profitability, and
capital spreads.
How will we demonstrate that model? By leveraging our human, intellectual and
financial capital.
o Hence, the need for the culture change, as I have described. We've
established recognition programs--and have begun to systematically recognize
our "heroes".
We must improve our returns and capital "spreads"--the difference between
what we pay for the capital in the business and when we earn on it. Our
investors should focus on EBITDA, as we do, because GAAP earnings must
reflect substantial non-cash charges, principally the amortization of
intangibles.
o Are we optimistic? You bet. For several reasons.
- It's a great team. We've done it before, together. We each share two
common attributes. We're team players with top-notch professional
skills.
- Our core operations, with the reorganization behind us, can now turn to
growth and innovation. Their early success can be seen already.
- Attractive acquisition candidates abound. We have the resources and
discipline to consummate value-enhancing transactions and intend
to do so.
Our optimism is why we repurchased our stock--and why senior management boosted
their own stakes, buying shares in the open market.
We'll be working hard to close what we see to be a value gap between the market
and intrinsic values of Harvard by building a higher intrinsically valued, more
profitable company--one that means more to our customers and is an exciting
place to work and prosper for our employees. To that end, we pledge our very
best effort.
Sincerely,
/s/ Roger Pollazzi
Roger Pollazzi
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Photo of Roger.
