SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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(X) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ESKIMO PIE CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
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(X) No fee required
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[Eskimo Pie Corporation Logo]
August 30, 1999
Dear Fellow Eskimo Pie Shareholders,
You have most likely received material from Yogen Fruz World Wide, Inc.
a Canadian firm, as part of its attempt to seize control of your Company. Yogen
Fruz has stated that its sole strategy is to try to break up your Company and
sell each of its assets to different buyers.
As your Board of Directors, we have a responsibility to address some of
the unfounded projections and misrepresentations contained in the Yogen Fruz
communications. Yogen Fruz has either: 1) failed to understand the nature of the
Company's businesses, or 2) performed an inaccurate and incomplete financial
analysis of the steps required to complete the proposed break-up strategy, or 3)
and even possibly, both.
CAN YOU REALLY EXPECT TO RECEIVE $15.00 PER SHARE
FROM YOGEN FRUZ'S BREAK UP STRATEGY?
IF YOGEN FRUZ REALLY BELIEVES THE COMPANY CAN BE BROKEN UP
AND SOLD FOR $15.00 PER SHARE,
WHY WON'T THEY BUY THE COMPANY AND SELL IT THEMSELVES?
Your Board has asked Yogen Fruz this very question this week and
received no answer!
THE YOGEN FRUZ STRATEGY HAS PROBLEMS
o Yogen Fruz's valuation is based on its creatively defined "Cash Flow" of
$21.3 million. The Company's actual EBITDA for the 12 months ended June 30,
1999 was approximately $5.0 million or far less than what would be needed
to support a $65 million valuation.
o Yogen Fruz also claims that it can generate $20.2 million from the "sale"
of licensing rights that the Company does not even own. These rights can
only be "transferred" and then only with the consent of the respective
owners. The Company believes that it is unlikely that the owners of the
licensed brands will allow Yogen Fruz to achieve significant profit from
the "sale" of their brands.
o Yogen Fruz doesn't tell you how it will honor the Company's $14.5 million
in outstanding debt and other long term and severance obligations. Payments
required under these obligations could further reduce the return to
shareholders by another $4.00 per share.
o Yogen Fruz also appears to ignore the tax implications and closing costs
associated with its break-up strategy.
In short, we believe the actual cash available for distribution to shareholders
under the break-up strategy proposed by Yogen Fruz's
may be as low as $7 per share.
YOUR BOARD HAS MADE SIGNIFICANT ACCOMPLISHMENTS FOR YOU!
Contrary to what Yogen Fruz wants you to believe, your Board and management have
taken significant steps toward improving the Company's operations and are
working hard to maximize shareholder value. Recently, the Company has:
o Solicited purchasers, negotiated with several parties and entered into a
Letter of Intent for the sale of the non-core Flavors Division for $9.5
million,
o Pursued offers to purchase part or all of the Company,
o Most recently, with assistance from its financial advisors, considered an
offer to acquire all of the Company's outstanding common stock at $10.125
per share,
o Developed and implemented a plan to restore prominence to the Eskimo Pie
Brand and the other nationally recognized brands under management by the
Company,
o Eliminated unprofitable Packaging operations,
o Reduced corporate overhead, and
o Engaged a new advertising agency to rejuvenate the Eskimo Pie brand.
SIGNIFICANT STRIVES HAVE BEEN MADE IN ESKIMO PIE'S FINANCIAL RESULTS!
Here again, Yogen Fruz has attempted to distort the fact that the plan developed
and implemented by your Board and management has resulted in substantial
financial improvements.
o Sales have increased by $5.0 million (8.25%) over the past four quarters, o
Profitability has increased 300% over the past four quarters, o Sales and
profitability have increased by 6% and 30%, respectively, over the past six
months, and o These trends are continuing!
CONSIDER THE CONTRAST IN YOGEN FRUZ'S PERFORMANCE!
o Yogen Fruz earnings for the nine months ending May 31, 1999 (the latest
publicly reported period) shows an erosion of profitability from C$10.4
million in 1998 to only C$124,000 in 1999.
o The Yogen Fruz stock price has declined from C$8.00 per share on September
11, 1998 to C$2.60 on August 25, 1999 - a 68% decline.
<TABLE>
<CAPTION>
Graph Comparing Net Earnings Graph Comparing Stock Quotes
---------------------------- ----------------------------
1999 1998 Price Quote as of Sept. 11, 1998 Aug. 24, 1999
---- ---- ----------------- -------------- -------------
<S> <C> <C> <C> <C>
Eskimo Pie - $1,631,000 $1,250,000 Eskimo Pie $8.00 $10.13
6 months ending June 30,
Yogen Fruz- 124,000 10,433,000 Yogen Fruz 8.00 2.60
9 months ending May 31,
</TABLE>
YOGEN FRUZ'S PURCHASE OFFERS SHOULD NOT BE CONSIDERED SERIOUSLY!
Yogen Fruz would have you believe that the Board would not accept its offers
for the Company, while, in fact, Yogen Fruz has actually
withdrawn all of its offers.
As recently as this week, the Board asked Yogen Fruz to make an offer
for the Company and they have not responded.
o All of Yogen Fruz's offers to purchase the Company were conditioned upon
Yogen Fruz's ability to obtain the licensing rights to brands that the
Company does not own. As discussed previously, Eskimo Pie does not have the
authority to transfer these rights without the consent of others. Based
upon contacts with our licensors, it appeared that the consents would not
be granted and thus, the Yogen Fruz conditions could not be met.
o The highest Yogen Fruz offers had unrealistic time constraints and required
the Company to cease discussions with other parties who were interested in
purchasing the Company. Considering the licensing conditions, your Board
concluded that it was more prudent to continue discussions with the others
who were considered to be more likely to bring forth a more realistic and
executable proposal.
o If Yogen Fruz was sincere in its offers to acquire the Company, why did it
impose conditions that the Company had no ability to resolve?
o And why do they not make an offer for the Company now if they are so
confident in the break up strategy?
DO NOT RELY ON YOGEN FRUZ'S STRATEGY!
o The break-up strategy laid out by Yogen Fruz is full of inaccuracies and
oversights.
o Many of the same nominees that Yogen Fruz is asking you to support have
demonstrated an inability to profitably run its own company.
o You may not get any further chances to vote on the transactions proposed by
Yogen Fruz until substantially all of the assets of the Company have been
liquidated.
How can you believe that Yogen Fruz can or will execute the break-up
strategy that it is proposing for your Company? And if it cannot, you will be
left with the Yogen Fruz management team that has been unable to profitably run
its own business.
Imagine how Yogen Fruz will perform trying to direct the operations of
two companies, one of which it knows nothing about!?!?!
DON'T BE MISLED!
Your Board has and will continue to protect the value of your
investment in Eskimo Pie Corporation through the objective consideration of any
and all alternatives, including any potential sale transactions, that are in the
best interests of the Company and all of its shareholders. In the meantime,
management will continue to seek increased shareholder value through the
implementation of the recently announced Growth and Restructuring Plan.
YOUR VOTE IS IMPORTANT!
o No matter how many or how few shares of Eskimo Pie Corporation you own,
please vote FOR the Board's nominees and AGAINST the Yogen Fruz proposals
by signing, dating and mailing the enclosed WHITE PROXY CARD.
o Do not return any BLUE proxy card sent to you by Yogen Fruz, even to vote
against its nominees. Doing so may cancel your vote for your Board's
nominees.
o If you have already returned a proxy card sent to you by Yogen Fruz, you
have every right to change your vote by signing and returning the enclosed
WHITE PROXY CARD. Only your latest dated, properly executed card will
count.
o If you own your shares in the name of a brokerage firm, your broker cannot
vote such shares unless they receive your specific instructions. Please
sign, date and return the enclosed WHITE PROXY CARD in the postage-paid
envelope that has been provided.
Please contact the Company directly at 804-560-8490
(or through Corporate Investor Communications, Inc., its Proxy
Solicitor, toll free at 877-460-4351)
if you wish to discuss these matters on a personal basis.
PROTECT YOUR INVESTMENT
VOTE MANAGEMENT'S WHITE PROXY CARD TODAY
DO NOT VOTE ON YOGEN FRUZ'S BLUE PROXY CARD
DISCARD IT IMMEDIATELY!
<PAGE>
- FOLD AND DETACH HERE -
ESKIMO PIE CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints David B. Kewer, Thomas M. Mishoe, Jr. and
F. Claiborne Johnston, Jr., jointly and severally, proxies, with full power to
act alone, and with full power of substitution, to represent the undersigned and
to vote, as designated below and upon any and all other matters which may
properly be brought before such meeting, voting as specified on the reverse side
of this card with respect to the matters set forth in the Proxy Statement, and
voting in the discretion of the above-named persons on such other matters as may
properly come before the Annual Meeting, all shares of Common Stock which the
undersigned would be entitled to vote at the Annual Meeting of Shareholders of
Eskimo Pie Corporation to be held on September 8, 1999, or any adjournment or
postponement thereof.
PLEASE COMPLETE, SIGN AND DATE THE REVERSE SIDE OF THIS PROXY CARD AND PROMPTLY
RETURN IT IN THE ENCLOSED ENVELOPE.
YOU MAY SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE REVERSE SIDE,
BUT YOU NEED NOT MARK ANY BOX IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD
OF DIRECTORS' RECOMMENDATIONS. THE PERSONS NAMED ABOVE AS PROXIES CANNOT VOTE
YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
(continued on reverse side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2 AND
AGAINST PROPOSALS 3 AND 4.
The Board of Directors Recommends a Vote FOR Proposals 1 and 2
PROPOSAL ONE: Election Of Directors to serve until 2000 Annual Meeting of
Shareholders.
Nominees: Arnold H. Dreyfuss, Wilson H. Flohr, Jr., F. Claiborne Johnston,
Jr., David B. Kewer, Daniel J. Ludeman, Judith B. McBee and Robert
C. Sledd
[ ] FOR all nominees listed above [ ] WITHHOLD AUTHORITY to vote for
(except as written on the line to all nominees listed above
the right)
(INSTRUCTION: To withhold authority to vote for any individual nominee listed
above, write that nominee's name on the space provided below.)
- --------------------------------------------------------------------------------
<PAGE>
PROPOSAL TWO: Ratification of the selection of Ernst & Young LLP as the
independent auditors for the Corporation and its subsidiaries
for the current fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The Board of Directors Recommends a Vote AGAINST Proposals 3 and 4
PROPOSAL THREE: Yogen Fruz Proposal Regarding the Shareholder Rights Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL FOUR: Yogen Fruz Proposal Regarding Shareholder's Ability to Call
Special Meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
I plan to attend the meeting. [ ]
SIGNATURE(S) _______________________________________ DATE __________, 1999
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, give
full title as such. If signing on behalf of a corporation, sign the full
corporate name by authorized officer. The signer hereby revokes all proxies
heretofore given by the signer to vote at the 1999 Annual Meeting of
Shareholders of Eskimo Pie Corporation and any adjournment or postponement
thereof.
