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(Name of Registrant as Specified in Charter)
THE COMMITTEE TO REVITALIZE DOMINION BRIDGE CORPORATION
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INFORMATIONAL MEETING FOR
STOCKHOLDERS OF DOMINION BRIDGE CORPORATION
CALLED BY THE COMMITTEE TO
REVITALIZE DOMINION BRIDGE CORPORATION
4:00 p.m. June 4, 1997
Harvard Club
New York City
Good afternoon, and welcome to this informational meeting for
stockholders of Dominion Bridge Corporation. My name is Ilan Reich, and I am a
partner at Olshan Grundman Frome & Rosenzweig LLP, which is counsel to the
Committee to Revitalize Dominion Bridge Corporation. Present here today on
behalf of the Committee are John Kuhns, Ken Mariash and John Dutton.
The purpose of this meeting is to present the Committee's
viewpoint on how to revitalize Dominion Bridge and to answer any questions which
you may have.
First, however, let me set a few ground rules for this meeting.
o If you have a question, please identify yourself, give your
professional affiliation and state whether you are a stockholder.
o Please limit your questions to information which is publicly
available. We are unable to answer questions which involve speculation,
non-public information or rumors.
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o Similarly, please do not ask questions about the results of the
Committee's consent solicitation effort. Under the SEC's rules, we cannot make
any claims about the results of the solicitation effort prior to its completion.
In fact, a report recently appeared on this subject in the Canadian press which
was attributed to John Dutton. We believe that Mr. Dutton was misquoted on this
subject, and we hereby explicitly retract any statement which may have been
made.
o Please do not ask questions which involve predictions of future
market values for Dominion Bridge. Again, the SEC's rules preclude us from
making any such predictions.
We have available for your information copies of the Committee's
preliminary written consent materials which were filed with the SEC, as well as
the press releases issued by the Committee.
Now let me introduce John Kuhns, the chairman of the Committee.
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<PAGE>
Committee To Revitalize
Dominion Bridge Corporation
Information Meeting
Harvard Club
June 4, 1997
<PAGE>
I. Summary
A. THE PROBLEM
- Mismanagement
- Self Dealing
- Loss of Credibility
B. Alternatives
- Status Quo; or
- Committee's Agenda
C. Only One Real Solution - Committee's Agenda
- Competent, Experienced Management Team
- Shareholders Get Their Company Back
D. Decision Will Be Yours Shortly
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What Is This Vote About?
This is Not A Takeover - It is a "Take Back".
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II. The Problem
Our Problems as Shareholders Result From:
A. MISMANAGEMENT
SYMPTOMS:
- Revenue Growth As The Primary Objective
- Continual Changes To Business Plan Based On Failures
- No Permanent CFO
- No Financial and Cash Flow Planning
- "Loose" Accounting To Cover Problems
<PAGE>
DISEASE # 1: GROWING OPERATING LOSSES IN NORTH AMERICA
OPERATING INCOME (LOSSES)
($ 000,000)
Graphic material outling the operating losses for fiscal
years 1994-1996 and first six months of fiscal year 1997
(Sources: Annual Reports, 10K's, 10Q's)
<PAGE>
Disease # 2: A DRASTICALLY DECLINING STOCK PRICE
DOMINION BRIDGE CORPORATION COMMON SHARE PRICE ($ PER SHARE)
(SOURCE: NASDAQ)
Graphic material charting stock price of Dominion Bridge from
November 1994.
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B. SELF DEALING
- BONUSES
o $700,000 in February 1997
- REDUCTION OF STOCK OPTIONS' STRIKE PRICE
o Approximately 1,225,000 senior management's options had their
strike price adjusted downward, from a range between $3.25-$4.13 to
$2.00
MONETARY ADVANCES
o $1.82 million in 1993 to purchase the Company's common stock -
Subscription Receivable
o $1.73 million to affiliate of Marengere 1994
o $994,000 in 1995
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C. COMPLETE LOSS OF CORPORATE AND MANAGEMENT CREDIBILITY
o "A visionary or a teller of tales?"
o First Three Quarters of 1995 and 1996;
o 3 auditors in four years;
o NO Ability To Retain CFO
o Misstated Credentials
o Growing Numbers of Lawsuits Against Management
(Source: Various News Articles)
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II. Alternatives
A. Status Quo; or
B. Committee's Agenda
<PAGE>
A. Status Quo
WHERE CAN THE CASH COME FROM?
Organizational Chart of Dominion Bridge Corporation
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NO CORPORATE NORTH AMERICAN CASH?
In millions as of March 31,
1997 (Source: Annual Reports, 10Qs)
Cash and Equivalents $13.41
Less Restricted Cash:
MDC 5.00 Est. - $9.1 on 6/30/96
MIL Davie 5.85 Restricted
-----
Cash Available To 2.56 Est. Q2 End
North America
Less: BT Payment $5.00 By May 7
NET CASH AVAILABLE OR ON HAND?
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CONTINUING LOSSES MAY EXACERBATE CASH PROBLEM
(Source: Annual Reports, 10Q's)
1996-97 1996 1997
------- ---- ----
6 Mos
-----
Sales 620.1 362.6 257.5
Gross Pr. 57.7 34.7 23.0
S,G&A 66.0 38.7 27.3
----- ----- -----
Op. Pr. (8.3) (4.0) (4.3)
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SLOPPY ACCOUNTING ?
(Source: 10K, 10Q's)
1996 Nine Months -
Reported "Claims" Real
-------- -------- ----
Sales 237.1 (6.80) 230.3
Pre Tax 8.85 (6.8) 2.1
Taxes(e) 3.2 (1.4) 1.8
Net Inc. 5.7 .3
EPS $.24 $.01
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Summary of Status Quo Problems
o Continued Poor Operating Performance; No Cash
o No End To Accounting and Control Problems
o No Coherent Business Strategy to Turn Around and Build North America
o No Coherent Business Strategy to Convert MDC Acquisition Into Cash Flow To
Service Acquisition's Cost
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III. COMMITTEE'S AGENDA - TIME FOR A CHANGE
o Stop Losses, Eroding Margins, Increasing Overhead and Hemorrhaging Cash
Flow
o Focus On Resurrecting and Operating the Business, Eliminate Self Dealing,
Law Suits and Questionable Transactions
<PAGE>
III. Only One Real Solution - The Committee's Agenda
A. How Was The Committee Formed?
- Impetus Was Discussion With Shareholders Who Wanted An Alternative to
Status Quo
B. Who Is The Committee ?
- Competent, Experienced Businessmen
o Kenneth Mariash, President & CEO
o John D. Kuhns, Chairman
o John M. Dutton, Secretary
o Will Add Experienced and Knowledgeable CFO, and other Financial
and Operating Managers As Needed
<PAGE>
Kenneth W. Mariash
o General Credentials Include 4 undergraduate and graduate degrees
o Business Experience
o Every Level of the Construction, Oil & Gas, and Real Estate
- Business Worked Way Through College as Construction
Superintendent
- Started Own Construction Business in late 60's
- Grew Quickly Into Fully Diversified Construction
Organization Though the 70's
- Branched Out Into Real Estate Development and Contract Oil
Drilling
- Annual Revenues of Approximately $100 million in late 70's
and early 80's
o Invested His Own Money In Every Aspect of Business
o Has a comprehensive background in mergers, acquisitions and
workouts, especially on behalf of banks regarding troubled real
estate
<PAGE>
John D. Kuhns
o General Credentials Include 3 undergraduate and graduate degrees
o Business Experience
- Salomon Brothers
- Kuhns Brothers & Company
- Catalyst Energy Corporation
- New World Power Corporation
<PAGE>
John M. Dutton
o General Credentials include 2 undergraduate and graduate degrees
o Business Experience
- Moseley Halgarten Estabrook & Weedon
- American Mediacal International, Inc.
- Corsair Asset Management, Inc.
- LH Friend, Weinress, Frankson & Presson, Inc.
<PAGE>
C. What Is the Committee's Business Plan?
o Initiate Drastic Cuts In Corporate Overhead
o Focus On Operations
- Improve North American Margins - Gross Profit and Operating
- Develop EPC Marketing plan for Central and Western Canada, where
Canada's Expenditures for Oil & Gas, Construction & Infrastructure
Are Expected To Occur
- Re-evaluate Strategy for MIL Davie
o Marketing of Shipyard - Construction and Repair
o Off Shore Platforms - Project Finance
o Financial Plan
- Obtain Working Capital for North America
- Refinance Bankers Trust
<PAGE>
Business Plan Continued
o Rationalize Business Financially
- Develop Strategy To Match Cash Flows and Obligations with Respect to
MDC Asset
- Restructure Accounting Policies - Taxes and Cash Flow
o Evaluate Existing Personnel
- Elevate, Re-deploy or Retain as Necessary
o Recover Missing or Wasted Corporate Assets
- Expenditures - fees, commissions, questionable payments
- Inappropriate Assets - resort development in the Caribbean
- Settle Law Suits
o Timing
- NOW OR NEVER
- THE ABOVE STEPS MUST ALL BE IMPLEMENTED IN FISCAL 1997
<PAGE>
D. HOW WILL MANAGEMENT BE PAID?
o Smallest Component: Salaries
o Majority of Compensation Will Be Equity-Based Incentives
o We Will Only Make Money If Shareholders Do
- Earnings
- Cost Cuts
- Stock Price Increases
<PAGE>
How Do We Get Paid ?
o Under New By-Laws, Chairman Will Set Officers' Compensation, and
Stockholders Would Approve Chairman's Compensation
o Under New By-Laws, Stockholders Would Have Power To Remove The Senior
Officers At Any Time
<PAGE>
IV. Decision Will Be Yours Shortly
o NOT TAKEOVER, TAKE BACK
o SHAREHOLDERS GET THEIR COMPANY BACK
o SHAREHOLDERS RETAIN POWER FOR FUTURE CHANGES
<PAGE>
Epilogue
"You've got to remember that when you are an officer of a company, you have
to provide guidance to your conduct [sic], and quite often when that doesn't
take place, the Company must move."
MICHEL MARENGERE
Chairman of the Board and
Chief Executive Officer
Dominion Bridge Corporation
Conference Call
May 15, 1997
