SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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Section 240.14a-12
Family Steak Houses of Florida, Inc.
(Name of Registrant as Specified In Its Charter)
Bisco Industries, Inc.
(Name of Person(s) Filing Proxy Statement)
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[BISCO INDUSTRIES, INC. LETTERHEAD]
May 1, 1997
Dear Fellow Shareholder, (Family Steak Houses of Florida, Inc.)
I am writing to ask again, if you have not already done so, for
your vote in favor of all the proposals on your Gold Consent Card.
These proposals repeal the anti-takeover bylaws recently adopted by
Family Steak Houses of Florida, Inc.'s (the "Company") Board of
Directors, and adopt new bylaws that "opt-out" of the Florida
Control Share Act and eliminated the recently adopted Poison Pill.
WHO'S COMPANY IS IT?
The Board is taking the Company away from us, the shareholders, and
giving it to themselves. They are pirating the Company from its
rightful owners. This is America -- the shareholders own the
Company and have the right to control it; not some small non-owner
group who has gained their power in the Company through politics.
This group states that they must protect the shareholders from each
other; large against small, active against inactive, tall against
short. Their real motive: protect themselves from the
shareholders. The Board should not have the power to take the
decision away from the shareholders on whether to sell their shares
through any present or future offer, to any party. The Board is
spending shareholder money to take the Company away from us (the
shareholders) -- over $200,000 -- as much as the Company made all
last year. The shareholders should be allowed to keep their money
and make their own decisions. With over 2 million options and
warrants outstanding, the Board is more concerned with giving away
the shareholder's Company than increasing shareholder value. Our
motives are the same as any other shareholder: increase the value
of our shares. Their motive, as non-owners, is to preserve their
kingdom without pressures from the owners to perform. The Board
calls us a corporate raider - but what they really fear is a
significant representative of the shareholders. The Board only
owns 2%, and they obtained most of that through stock options,
unlike you and I. That is why they need all these restrictions
against the shareholders. You can see whom the Board is
protecting; look how they amended their stock option plans: to
make their options immediately exercisable on the first purchase of
shares under a tender offer. This is how they have been diluting
the shareholder's ownership while rewarding themselves as a penalty
if any of the shareholders decides to sell their shares through our
tender offer.
THE BOARD WILL STOOP PRETTY LOW TO PROTECT THEMSELVES FROM THE
REAL OWNERS
The Board is using scare tactics, misleading comments and
misrepresenting the Bisco team to convince you not to tender or
support our proposals. The Board states that Bisco has no plan or
experience. Please examine the facts:
Bisco's Current Results: $33,000,000 in sales $2,500,000
pre-tax earnings
Family Steakhouse (1996): $38,000,000 in sales $270,000 pre-tax
earnings
As an active investor Bisco's last two investment projects resulted
in the following stock gains from start to finish of project.
1/89 2/90 Increase in Share Price
Bell Industries $12 $16 33%
10/90 2/95 Increase in Share Price
RBW $5 $9 80%
Current Project:
2/97 4/97 Increase in Share Price
Family Steakhouse .56 .80 43%
My personal background:
I am 51 years old, married to my wife Bobbie and have two boys,
Matt (18) and Zach (17). I am a graduate of the University of
Denver, class of 1969, with a B.S. in Economics. I founded Bisco
Industries in 1973 and grew the Company from a one person store
front, to its current size of 120 employees and 11 locations
nationwide. Bisco is the 48th largest wholesale electronic parts
distributor in the United States. I have completed two
acquisitions in the last 3 years. Bisco's current quarterly
results show:
Sales up 10% Profits up 45%
These proposals are in your best interest. Contrary to the Board's
scare tactics, we would not take any action that would hurt
shareholder value such as loss of franchise agreement, loss of
mortgage or leases. We are a major shareholder and want to help
increase shareholder value as we have done successfully in previous
investments as well as with Bisco itself.
WE WANT TO WORK WITH CURRENT MANAGEMENT ON STRATEGIC ALTERNATIVES
Some of the strategic alternatives to enhance shareholder value
that we would consider are as follows:
1. Faster expansion
2. Closure of money losing restaurants
3. Sale of restaurant business
4. Sale of real estate business
5. Acquisitions/mergers
6. New restaurant concepts
7. Employee incentives
8. Other transactions as a result of a closer review of
detailed information that the Board has not yet furnished
us.
The Board insists on repeating that we have no restaurant
experience, no experience in running a public Company, and limited
financial resources. Our answer to these scare tactics is simple:
as a major shareholder we do not intend to run the restaurant
business, we will look for ways to improve current management and
director performance. Public Company or private; you must find
ways to improve shareholder value. Our financial resources are
strong enough to support Bisco's growth and pay cash for any
tendered stock; we are not proposing to loan money to Family Steak
House.
.50 (WE GO AWAY), .90 (WE PAY), $1.25 (ON THE WAY)
If you do not vote for our proposals, it is our judgment you are
looking at a 50 stock with Bisco being forced to go away. At .2
(1996 earnings) and .4 (our 1997 estimate), it's hard to get much
more than 50 as a stock price. Your two other choices are to
tender your stock to our .90 offer, support our consent proposals
and not take the risk that we can improve things, or support our
consent proposals and stick with us while we try to deliver $1.25.
(If you need tender or consent materials, contact George Garland at
(800) 455-6034 or your broker.) You know that the Board never once
asked us to raise our price on your behalf, even though they claim
this is one of the reasons for the Poison Pill. Maybe it was
because their hired financial advisor informed them Bisco's .90
offer is in the range of values it calculated for the Company (we
have reason to believe we are in the top 30% of that range), or
maybe they are just not interested in shareholders, other than
keeping them at bay.
YOUR CHOICES
1. SELL US YOUR STOCK AND VOTE FOR OUR PROPOSALS AND MINIMIZE
YOUR RISK
OR
2. STICK WITH US AND VOTE FOR OUR PROPOSALS AND SHARE THE REWARDS
PLEASE MARK "CONSENT", SIGN AND RETURN YOUR GOLD CARD TODAY!
Sincerely,
Mr. Glen F. Ceiley
President and CEO
For more information, please contact our proxy solicitor: Garland
Associates, (800) 455-6034 or (212) 866-0095 Collect.
