SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
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PACIFIC SCIENTIFIC COMPANY
(Name of Subject Company)
PACIFIC SCIENTIFIC COMPANY
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
(and Associated Preferred Stock Purchase Rights)
(Title of Class of Securities)
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694806
(CUSIP Number of Class of Securities)
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LESTER HILL
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
PACIFIC SCIENTIFIC COMPANY
620 NEWPORT CENTER DRIVE, SUITE 700
NEWPORT BEACH, CALIFORNIA 92660
(714) 720-1714
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf
of the Person(s) Filing Statement)
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With a copy to:
ADAM O. EMMERICH, ESQ. WILLIAM S. SIMPSON, ESQ.
Wachtell, Lipton, Rosen & Katz Paul, Hastings, Janofsky & Walker LLP
51 West 52nd Street 695 Town Center
New York, New York 10019-6150 Costa Mesa, California 92826
(212) 403-1000 (714) 668-6200
<PAGE>
This Amendment No. 1 amends and supplements the Solicitation/
Recommendation Statement on Schedule 14D-9 initially filed with the Securities
and Exchange Commission (the "Commission") on February 6, 1998 (the "Schedule
14D-9"), by Pacific Scientific Company, a California corporation (the "Company"
or "Pacific Scientific"), relating to the tender offer made by ACC Acquisition
Corp. ("Purchaser"), a California corporation and an indirect wholly owned
subsidiary of Danaher Corporation, a Delaware corporation ("Parent"), as set
forth in a Tender Offer Statement on Schedule 14D-1, dated February 6, 1998 (the
"Schedule 14D-1"), to purchase all outstanding Shares at a price of $30.25 per
share, net to the seller in cash, upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated February 6, 1998 (the "Offer to
Purchase"), and the related Letter of Transmittal (which together constitute the
"Offer"). The Offer is being made pursuant to an Agreement and Plan of Merger,
dated as of January 31, 1998 (the "Merger Agreement"), by and among DH Holdings
Corp., a wholly owned subsidiary of Parent ("Holdings"), Purchaser and the
Company. Unless otherwise indicated, all capitalized terms used but not defined
herein shall have the meanings ascribed to them in the Schedule 14D-9.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED
The Company issued a press release on February 9, 1998 with respect
to its fourth quarter earnings. A copy of such press release is attached hereto
as Exhibit 24 and is incorporated herein by reference.
ITEM 9. MATERIAL TO BE FILED ON EXHIBITS
Item 9 is hereby amended and supplemented by adding thereto the
following:
Exhibit 24. Press Release issued by the Company on February 9, 1998 with
respect to fourth quarter earnings.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of its knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
PACIFIC SCIENTIFIC COMPANY
Dated: February 9, 1998 By: /s/ Lester Hill
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Lester Hill
Chairman, President and
Chief Executive Officer
<PAGE>
EXHIBIT INDEX
Exhibit 24. Press Release issued by the Company on February 9, 1998 with
respect to fourth quarter earnings.
[PACIFIC SCIENTIFIC LOGO] NEWS RELEASE
- ------------------------------------------------------------------------
Contact: Winston Hickman 620 Newport Center Drive, Suite 700
Chief Financial Officer Newport Beach, California 92660-8007
(714) 720-1714 (714) 720-1714 Fax (714) 720-1083
PACIFIC SCIENTIFIC FOURTH QUARTER EARNINGS
FROM CONTINUING OPERATIONS RISE 51%
NEWPORT BEACH, CA (February 9, 1998) - Continuing its operational turnaround,
Pacific Scientific Company (NYSE: PSX) today reported a 51% increase in income
from continuing operations on a 10% rise in sales for the fourth quarter ended
December 26, 1997 over the company's 1996 fourth quarter. Income from continuing
operations rose to $3.9 million, or $0.31 per share, versus $2.6 million, or
$0.21 per share, for the fourth quarter of 1996. The divestiture of the
company's Automation Intelligence subsidiary in the fourth quarter reduced the
income from continuing operations to $406,000, or $0.02 per share. This sale
resulted in a one-time after-tax loss of $3.6 million, or $0.29 per share,
primarily due to the write-off of goodwill.
"I am extremely pleased with our results for the fourth quarter of 1997 and
excited about the opportunities Danaher's proposed acquisition of Pacific
Scientific will create for our customers," stated Lester Hill, Chairman and
Chief Executive Officer. "As we announced on February 2, we have entered into a
definitive agreement with Danaher in which Danaher will acquire Pacific
Scientific for $30.25 in cash per share. As previously mentioned, the global
strength of Danaher will allow worldwide customers to enjoy the premium
performance of Pacific Scientific products while accelerating our improvement
process to enhance quality, manufacturing efficiency, and superior customer
service."
"Our new strategic focus on the high-growth, high-profitability markets for our
major business segments has enabled us to achieve higher sales in our motion
control and safety businesses," Mr. Hill continued. "As a result of this
strategic focus, we successfully completed the acquisition of AEG Servo Systems
Ltd., located in Ennis, Ireland, which will give our motion control systems a
larger manufacturing presence in Europe. We also completed the divestiture of
Automation Intelligence, and we sold the assets of the Solium subsidiary,
receiving cash and the benefit of ongoing royalty payments. This strong
performance has resulted in a 25% reduction of debt for the year."
Net sales for the fourth quarter were $83 million, an increase of 10% over the
fourth quarter of 1996. Of the increase, $2 million, or approximately 3%,
resulted from an extra four weeks reported by the Company's European
subsidiaries in the fourth quarter in order to conform their fiscal month- and
year-ends with those of the domestic operations. The extra four weeks of sales
had negligible impact on profits, as they occurred during the holiday shutdown
period. Sales in the Motion Control segment increased 21% in the fourth quarter
of 1997 from the same period in 1996, primarily due to strong domestic sales in
the semiconductor and electronic assembly markets, and increased sales in
European markets. Process Control sales were essentially flat as compared to the
fourth quarter in 1996. The Safety segment sales increased 6%, or $1 million,
over the same period last year as a result of an increase in sales of commercial
restraints and other improvements.
-more-
<PAGE>
For fiscal 1997, net income from continuing operations increased by 25% to $12.9
million, or $1.05 per share. The divestiture of Automation Intelligence reduced
net income from continuing operations by $0.29 per share. The previously
reported discontinuation of the Solium subsidiary operation on March 27, 1997 --
a1ong with the sale of Automation Intelligence -- resu1ted in a loss of $4.3
million, or $0.35 per share, for 1997. For 1996, the Company reported net income
of $169,000, or $0.01 per share. As previously reported, the assets of the
Solium subsidiary were sold on December 4,1997 to Chicago Miniature Lamp, which
was granted the exclusive worldwide license for the advanced Solium technology
line of electronic fluorescent ballast products. In addition, under the license
agreement, Pacific Scientific will receive royalty payments from future sales of
the Solium product.
Record sales from continuing operations of $310 million in 1997 increased $18
million, or 6.2%, from $292 million in 1996. Motion Control accounted for
essentially all of the increase primarily due to greater demand for motors and
drives in the semiconductor and electronic assembly markets, increased sales
from the Company's new Powermax II series of stepper motors, and a general
increase across all product lines. Process Control sales in 1997 were up 6%,
excluding a $1.8 million decline over 1996 due to lower international military
vehicle fire detection sales. Safety sales were also essentially flat in 1997,
with increases in commercial sales offset by declines in military sales
associated with the de-emphasis of that market segment.
Pacific Scientific Company is an international business that designs,
manufactures, and markets motion control, process control, and safety products.
# # #
This news release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 2lE of the
Securities Act of 1934, as amended. The Company intends that such statements
shall be protected by the safe harbors provided for in such sections.
Such statements are subject to risks and uncertainties that could cause actual
results to vary materially from those projected in the forward-looking
statements. The Company may experience significant fluctuations in future
operating results due to a number of economic, competitive and other factors,
including, among other things, the size and timing of customer orders, changes
in laws, new or increased competition, delays in new products, changes in market
demand, market acceptance of new products, seasonality in product purchasers,
changes in foreign exchange rates and others.
These factors and others, including the outcome of certain 1egal proceedings
pending against the Company and the merger of the Company with Danaher, could
cause operating results to vary significantly from those in prior periods, and
those projected in forward-1ooking statements. Additional information with
respect to these and other factors that could materially affect the Company and
its operations are included in the Company's filings with the Securities and
Exchange Commission and are incorporated herein.
<PAGE>
<TABLE>
<CAPTION>
PACIFIC SCIENTIFIC COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
QUARTER ENDED TWELVE MONTHS ENDED
12/26/97 12/27/96 12/26/97 12/27/96
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<S> <C> <C> <C> <C>
CONTINUING OPERATIONS
Sales:
Motion Control $37,761 $31,267 $142,858 $124,850
Process Control 25,394 25,590 97,785 98,433
Safety 19,561 18,393 69,817 69,080
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Total Sales 82,716 75,250 310,460 292,363
Cost of Sales 56,643 51,999 210,468 198,348
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Gross Profit 26,073 23,251 99,992 94,015
Selling & Administration 17,570 14,773 65,600 59,790
Research & Development 2,851 3,325 12,284 14,281
Loss on Sale of Automation Intelligence 4,892 0 4,892 0
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Operating Income 760 5,153 17,216 19,944
Interest & Other (470) 777 1,578 2,845
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Income before Income Taxes 1,230 4,376 15,638 17,099
Income Taxes (824) (1,792) (6,359) (6,766)
Income from Continuing Operations $406 $2,584 $9,279 $10,333
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DISCONTINUED OPERATIONS
Net Loss from Discontinued Operations,
Net of Income Tax Benefit of $0 and
$1,023 for the Quarters, and $8,286
and $6,635 for the Years Ended
12/26/97 and 12/26/96,
Respectively. $0 ($1,438) ($13,563) ($10,164)
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Net Income (Loss) $406 $1,146 $(4,284) $169
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BASIC EARNINGS (LOSS) PER SHARE
Continuing Operations, Excluding Loss
On Sale of Automation Intelligence $0.31 $0.21 $1.05 $0.85
Loss on Sale of Automation
Intelligence ($0.29) $0.00 ($0.29) $0.00
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Total Continuing Operations $0.02 $0.21 $0.76 $0.85
Discontinued Operations $0.00 ($0.12) ($1.11) ($0.84)
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Total $0.02 $0.09 ($0.35) $0.01
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Weighted Average Common Shares
Outstanding 12,396 12,186 12,274 12,157
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</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PACIFIC SCIENTIFIC COMPANY
CONSOLIDATED BALANCE SHEET HIGHLIGHTS
(UNAUDITED)
(IN THOUSANDS)
DECEMBER 26,1997 DECEMBER 27, 1996
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<S> <C> <C>
ASSETS
Current Assets $115,920 $124,062
Other Assets 88,581 104,029
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Total Assets $204,501 $228,091
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $33,928 $32,548
Bank Borrowing and Other Debt 62,902 83,108
Other Long-Term Liabilities 2,909 5,625
StockhoIders' Equity 104,762 106,810
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Total Liabilities and StockhoIders' $204,501 $228,091
Equity
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</TABLE>
