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SCHEDULE 14A INFORMATION
Consent Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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Check the appropriate box:
[_] Preliminary Consent Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
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[_] Definitive Consent Statement
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[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Oregon Steel Mills, Inc.
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(Name of Registrant as Specified In Its Charter)
Committee to Restore Shareholders Value at Oregon Steel Mills, Inc.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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[LETTERHEAD APPEARS HERE]
COMMITTEE TO RESTORE SHAREHOLDER VALUE AT OREGON STEEL MILLS, INC.
UNLOCK SHAREHOLDER VALUE AT OREGON STEEL MILLS, INC.
RESTORE MANAGEMENT ACCOUNTABILITY TO SHAREHOLDERS
VOTE FOR PROPOSALS 1, 2 AND 3
ON THE ENCLOSED GOLD CONSENT CARD
January 29, 1999
Dear Fellow Shareholder:
We are writing to urge you to vote for three proposals to restore shareholder
value at Oregon Steel Mills, Inc. (Ticker: OS). As you know, over the past year
the company's performance has been remarkably poor by industry standards. In
fact, Oregon Steel's shares are trading below the company's book value -- a
dramatic vote of no confidence in management, and a sign that the company's
assets are not being managed effectively.
Restoring management accountability is the key to unlocking shareholder value at
Oregon Steel. But instead, management has entrenched itself through anti-
takeover devices and a compliant board. As long as management is able to ignore
the interests of shareholders, we believe the value of the company's stock will
remain depressed. We strongly urge you, therefore, to act now to restore the
value of your investment by signing and returning the GOLD consent card today.
Consider the following:
. OREGON STEEL HAS UNDERPERFORMED ITS PEER GROUP. The company's stock fell 44%
in 1998, compared to a decline of only 15% for the S&P Iron and Steel Index.
From 1993 to 1997, shareholders saw a 2.6% decrease in the value of their
holdings while the S&P Steel Index appreciated approximately 7.5%.
. OREGON STEEL HAS REPEATEDLY FAILED TO MEET ANALYSTS' EXPECTATIONS. In 1998,
Oregon Steel delivered negative earnings surprises in each quarter. In the
most recent quarter ending December 31, 1998, earnings trailed Wall Street
analysts' consensus earnings forecast by $8.8 million dollars, or $0.34 per
share [Multex Professional Investment Review, 1/3/99 and Oregon Steel Mills
Press Release, 1/26/99].
HOW LOW WILL IT GO?
OREGON STEEL STOCK COMPARED TO THE
S&P IRON AND STEEL INDEX IN 1998
[GRAPH APPEARS HERE]
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[LETTERHEAD APPEARS HERE]
COMMITTEE TO RESTORE SHAREHOLDER VALUE AT OREGON STEEL MILLS, INC.
. MANAGEMENT HAS REPEATEDLY FAILED TO DELIVER ON ITS PROMISES TO SHAREHOLDERS.
While management has consistently assured shareholders that it will improve
operating efficiencies at its production facilities, the company has failed to
meet its own performance targets and goals over the last year. For example,
Tom Boklund -- Chairman and CEO of Oregon Steel -- promised shareholders in
April of last year that the company expected "1998 shipments to reach
approximately 2 million tons...[and] achieve an operating margin of $70 per
ton." Instead, the company fell short of its 1998 shipping goal by over
320,000 tons, and achieved an operating margin of only $35 a ton [Salomon
Smith Barney Transcript of Tom Boklund, June 26, 1998; Oregon Steel Mills
Press Release, 1/26/99].
. OREGON STEEL HAS HAD A TROUBLED YEAR IN THE CREDIT MARKETS. From February 12,
1998 to November 6, 1998 Standard & Poors placed the company on CreditWatch
with negative implications [S&P CreditWire, 11/6/98], and over the last year
and a half the company was forced to amend its credit agreement twice with its
bank lenders [Oregon Steel Mills 10-K as filed with the SEC on 3/25/98]. In
addition, Oregon Steel continues to shoulder an above average debt load. As of
the third quarter 1998 -- the most recent industry data available -- long term
debt to capitalization at year-end was 51%, compared to 20% for companies in
the S&P Iron and Steel Index [Baseline Financial Services, 1/26/99].
The proposals on the GOLD consent card seek to reverse this unacceptable
performance by holding management accountable to shareholders and the
marketplace, thus unlocking the company's underlying value.
THE PROPOSALS
PROPOSAL 1 calls for establishment of annual director elections to help restore
dynamism to the leadership of the company. A classified board of directors
deprives shareholders of the important right to pass judgement on the
performance of the board each year. We believe that right is especially
important at Oregon Steel: the average Oregon Steel director has served on the
Board for over a decade and two individuals have occupied Board seats for over
20 years.
DASHED EXPECTATIONS:
OREGON STEEL EARNINGS VS.
WALL STREET ANALYSTS' ESTIMATES
[GRAPH APPEARS HERE]
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[LETTERHEAD APPEARS HERE]
COMMITTEE TO RESTORE SHAREHOLDER VALUE AT OREGON STEEL MILLS, INC.
PROPOSAL 2 asks the Board to require shareholder approval of poison pills that
prevent changes in control of the company without the Board's approval of the
board of directors. Given Oregon Steel's depressed stock price, and the Board's
recent bylaw amendment making it more difficult for shareholders to raise
matters at the annual meeting, we are concerned that the Board may attempt to
further insulate itself from the competitive pressures of the marketplace by
adopting a poison pill. Shareholders should have a say in the adoption of any
poison pill.
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"OREGON STEEL MILLS' SHARES DURING THE LAST YEAR HAVE BEEN A DYSPEPTIC
EXPERIENCE FOR INVESTORS."
MULTEX PROFESSIONAL INVESTMENT REVIEW, 1/23/99
================================================================================
PROPOSAL 3 urges the board to establish confidential voting to ensure that all
Oregon Steel shareholders feel free to vote in whatever way they believe will
best enhance shareholder value. Company access to shareholder voting records may
have a chilling effect on the exercise of ownership rights by exposing
shareholders to possible retaliation.
As an owner of Oregon Steel, you can help restore the value of your shares by
supporting these three proposals. We strongly urge you to sign, date and return
the GOLD consent card today. As holders of over 1.2 million Oregon Steel shares
- -- or 4.9% of the total outstanding -- the members of the Committee to Restore
Shareholder Value at Oregon Steel Mills are committed to holding management
accountable. We believe that the passage of these three proposals will help
ensure that management acts in the interest of Oregon Steel's owners -- the
shareholders.
Thank you very much for your support.
VOTE FOR PROPOSALS 1, 2 AND 3 ON THE ENCLOSED GOLD CONSENT CARD
YOUR GOLD CARD MUST BE RECEIVED BY FEBRUARY 22
CALL 1-888-235-2465 FOR MORE INFORMATION
The members of the Committee to Restore Shareholder Value at Oregon Steel Mills,
Inc. (the "Committee") are The Crabbe Huson Group, Inc, (beneficially owns
1,281,700 shares of common stock of Oregon Steel Mills, Inc. ("Shares") or
4.97%), the Amalgamated Bank of New York LongView MidCap 400 Index Fund (730
Shares or .003%), and the American Federation of Labor and Congress of
Industrial Organizations (0 Shares). Each Committee member is a participant in
the consent solicitation (the "Solicitation"). Additional participants in the
solicitation (whose ownership, if any, is in parentheses) are: William Patterson
(265 Shares), Damon Silvers, Chris Bohner, Beth Young, Susan Dundon, Chris
Wallace, Brandon Rees, Dianne Wood, Dieter Waizenegger, Marc Bayard, Shawn
Wooden, Ed Keyser, and Joshua Mason, all of whom are employees of the American
Federation of Labor and Congress of Industrial Organizations.
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COMMITTEE TO RESTORE SHAREHOLDER VALUE AT OREGON STEEL MILLS, INC.
UNLOCK SHAREHOLDER VALUE AT OREGON STEEL MILLS, INC.
RESTORE MANAGEMENT ACCOUNTABILITY TO SHAREHOLDERS
VOTE FOR PROPOSALS 1, 2 AND 3
ON THE ENCLOSED GOLD CONSENT CARD
Your GOLD Consent Card Must Be Received No Later Than
FEBRUARY 22, 1999
Please Allow Sufficient Mailing Time To Meet This Deadline.
Committee to Restore Shareholder Value at Oregon Steel Mills, Inc.
1429 G Street, Suite 245
Washington, DC 20005
1-888-235-2465
