May 1, 1997
DEAR FELLOW SHAREHOLDER:
It is important for you to know that a small group of disgruntled former
employees and associates of PLM International are attempting to personally
benefit -- at your expense -- from the substantial progress your management has
achieved in improving the Company's financial performance. Specifically, this
group, led by Gary Engle, is attempting to gain a disruptive presence on the
board of directors by running an opposing slate against our nominees who have
been instrumental in spearheading the turnaround of our Company. IF YOU RECEIVE
PROXY MATERIALS FROM THESE DISSIDENTS, WE URGE YOU NOT TO TAKE ANY ACTION.
As part of their scheme to gain control of the Company, Equis Limited
Partnership, also led by Gary Engle, recently sent your board of directors a
letter stating that it is "prepared to offer" to acquire all of the outstanding
shares of the Company's common stock for a cash purchase price of $5 per share.
While this letter is subject to many significant contingencies, it clearly does
not constitute a formal offer. Nevertheless, the board of directors intends to
consider the letter carefully in accordance with its fiduciary obligations to
maximize shareholder value. We will be providing you with additional information
as it becomes available.
DON'T TRUST YOUR INVESTMENT TO GARY ENGLE
SUPPORT YOUR BOARD'S PLAN TO BUILD SHAREHOLDER VALUE
Last May, we implemented a strategic plan specifically intended to move the
Company forward in creating sustained, predictable growth in profitability and
shareholder value. This strategic plan, described in the 1996 PLM International
annual report recently mailed to you, consists of three components:
Building the operations of American Finance Group, Inc., our commercial
and industrial equipment leasing and management subsidiary;
Expanding the business of PLM Rental, Inc., our trailer leasing and
management subsidiary which is already the largest short-term, on-demand
refrigerated trailer fleet in the United States;
Continuing to manage our existing equipment leasing investor programs
as well as actively seeking opportunities to manage additional equipment
portfolios.
We are pleased to report solid, measurable progress towards achieving the
Company's growth goals. During 1996, the following was accomplished:
Grew AFG's equipment portfolio to $96.9 million in its first full year
of operation, generating over $8 million in lease revenue;
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Retired the full $11.5 million balance remaining on subordinated debt
and entire $10 million floating rate portion of senior loan;
Reduced operations support and general and administrative expenses by
16% and 26% respectively over 1995 levels;
Continued to repurchase shares by acquiring $6.5 million of common
stock at an average price substantially below book value, reducing the
total number of shares outstanding by 22% since the first repurchase
program began in early 1995.
These improvements continued into the first quarter of 1997 when PLM
International achieved its ninth consecutive quarter of positive results. We are
pleased to enclose a copy of the first quarter earnings press release, which
shows quarterly earnings of $0.14 per share versus $0.07 per share one year ago.
We believe these results are evidence that our strategic plan is working.
Further, the positive results achieved to date are really a culmination of, and
would not have been possible without, the numerous steps taken over the prior
five years to strengthen the Company's financial position. Since year-end 1991,
we have: reduced senior debt by 72% and subordinated debt by 100%; decreased
total company staffing by 37%; and reduced overhead costs substantially.
We are convinced we have chosen the right future course for PLM International,
one which will successfully create continued, long-term growth in earnings and
value. Once again, we urge you not to be misled by a few disgruntled former
employees and associates trying to hinder the forward momentum of your Company
by electing two designees to your board. Please disregard any proxy material
they may send you.
We strongly recommend that you sign, date, and mail the WHITE proxy which we
will be mailing to you shortly.
Should you have any questions, please contact PLM International at (800)
626-7549 or MacKenzie Partners at (800) 322-2885. Thank you for your continued
support.
Sincerely,
/S/ ROBERT N. TIDBALL
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ROBERT N. TIDBALL
President and Chief Executive Officer
Enclosure
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ADDITIONAL INFORMATION
Mr. J Alec Merriam owns beneficially 83,696 shares of Common Stock of the
Company and options to purchase 50,000 additional shares of Common Stock of the
Company. Mr. Merriam's principal office is located in the Company's
headquarters, One Market, 800 Steuart Tower, San Francisco, California 94105.
Mr. Douglas P. Goodrich owns beneficially 42,823 shares of Common Stock of the
Company and options to purchase 75,000 additional shares of Common Stock of the
Company. Mr. Goodrich's principal office is located in the Company's
headquarters, One Market, 800 Steuart Tower, San Francisco, California 94105.
Mr. Walter E. Hoadley owns beneficially 1,000 shares of Common Stock of the
Company and options to purchase 50,000 additional shares of Common Stock of the
Company. Mr. Hoadley's principal office is located at 555 California Street,
11th Floor, San Francisco, California 94104.
Mr. Robert L. Pagel owns beneficially 20,000 shares of Common Stock of the
Company and options to purchase 50,000 additional shares of Common Stock of the
Company. Mr. Pagel's principal office is located in the Company's headquarters,
One Market, 800 Steuart Tower, San Francisco, California 94105.
Mr. Harold R. Somerset owns beneficially 6,000 shares of Common Stock of the
Company and options to purchase 30,000 additional shares of Common Stock of the
Company. Mr. Somerset's principal office is located at 19 Donald Drive, Orinda,
California 94563.
Mr. Robert N. Tidball owns beneficially 105,439 shares of Common Stock of the
Company and options to purchase 170,000 additional shares of Common Stock of the
Company. Mr. Tidball's principal office is located in the Company's
headquarters, One Market, 800 Steuart Tower, San Francisco, California 94105.
Mr. Robert L. Witt owns beneficially 5,000 shares of Common Stock of the
Company. Mr. Witt's principal office is located at 684 Fox Run, Orinda,
California 94563.
Mr. J. Michael Allgood owns beneficially 15,421 shares of Common Stock of the
Company and options to purchase 60,000 additional shares of Common Stock of the
Company. Mr. Allgood's principal office is located in the Company's
headquarters, One Market, 800 Steuart Tower, San Francisco, California 94105.
