UNITED STATES SECURITIES AND EXCHANGE
COMMISSION Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by a Party other than the Registrant [X]
[X] Revised Preliminary Proxy Statement
Name of Registrant as Specified in its Charter:
HI-LO AUTOMOTIVE, INC.
Name of Person Filing Proxy Statement:
HWANG FAMILY LTD PARTNERSHIP, BY KWANG-CHOU HWANG
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PROXY STATEMENT SUBMITTED BY
HWANG FAMILY LTD. PARTNERSHIP
2432 KEYHOLE, IRVING, TX 75062
This proxy statement and the accompanying proxy card, which
is pink, are furnished to the shareholders of Hi-Lo Automotive,
Inc., a Delaware corporation, in connection with the solicitation
by Hwang Family Ltd. Partnership, for use at the upcoming 1997
Annual Meeting of Stockholders of the company to be held on
Tuesday, May 20, 1997, at 9:a.m., Houston time, at the Sheraton
Astrodome Hotel, 8686 Kirby Drive, Houston, Texas, and at any
adjournment thereof. Definitive copies of this material are
intended to be released to stockholders around April 24, 1997.
On March 25, 1997, the record date set by the company for
stockholders entitled to vote in this election, there are
10,756,000 shares of common stock outstanding. Each share is
entitled to one vote, no cumulative voting being allowed.
Principal holders of these shares include the participants in
this solicitation, 13.4 % , Franklin Resources Mutual fund, 9.9
%, and Dimensional Fund, 6.5% of outstanding shares, based on
year-end filings of these funds. A more detailed information
regarding the principal holders of Hi-Lo securities is presented
in the proxy statement the company has provided you.
The execution and return of the enclosed proxy will not
affect a stockholder's right to attend the meeting and vote in
person. A stockholder may revoke his or her proxy by appearing
at the meeting in person, or send a letter of revocation to this
solicitor at any time before it is exercised. Also a later dated,
executed proxy card will revoke any prior dated proxy.
The solicitation is made by dissident shareholder, Hwang
Family Ltd. Partnership, that is contesting the nomination and
election of six new directors by the board of Hi-Lo Automotive.
The other participants are :
Kwang- chou Hwang, Ming-Ing H. Hwang, Larry D. Smith,
Fred J. Hwang, and Michael A. Ward.
Solicitation of proxies will be made by the participants
without compensation, using mails, telephone, faxes, letters, and
so forth. No other organization will be hired to assist in this
effort. Brokerage firms will be requested to forward proxy
materials to the beneficial owners thereof and will be reimbursed
by the partnership. Total cost is estimated at $15,000, which
will be borne by the partnership. Reimbursement from the company
will not be sought.
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Disclosure Regarding Participants
Hwang Family Ltd. Partnership, partners, Kwang-chou Hwang,
and Ming-Ing H. Hwang have not been convicted in a criminal
proceeding during the past ten years. The two partners are
both investors, and reside at 2432 Keyhole Dr., Irving, Texas
75062. The partnership, together with the partners, beneficially
own 1050,950 shares of Hi-Lo common stock (par value $0.01), and
directly own 1000 shares of the same. Time and shares purchased
in the past two years1 were: May 1995, 5000 shares; May 1996,
20,000 shares; July 1996, 178,600 shares; August 1996, 451,000
shares; September 1996, 50,000 shares; October 1996, 136,350
shares; November 1996, 50,000 shares; December 1996, 68,600
shares; and January 1997, 92,400 shares. These shares were bought
in the open market with cash. They are not, and were not within
the past year, a party to any contract, arrangements or
understandings with any person with respect to any securities of
Hi-Lo Automotive, except the agreement disclosed below regarding
this election.
Larry D. Smith, age 59, is an M.D. and resides at 8207 Mason
Rd., Manvel, Texas 77578. Dr. Smith is a beneficial owner of
331,600 shares of Hi-Lo Automotive Inc. common stock (par value
$0.01), and a direct owner of none of the same. He purchased
all these shares in December, 1996 without any outside financing.
During the past ten years, he has not been convicted in a
criminal proceeding. He has not, and was not within the past
year, a party to any contract, arrangements or understandings
with any person with respect to any securities of Hi-Lo
Automotive, except the agreement disclosed below regarding this
election.
Fred J. Hwang is an anesthesiologist and is a partner of
North Hills Anesthesiology Associates, 8017 Glenview, Hurst,
Texas. During the past ten years, he has not been convicted in a
criminal proceeding. He owns 48,800 shares of Hi-Lo Automotive
common stock (par value $0.01) beneficially and none directly.
He bought 1000 shares on June 7, 1995, 18,800 shares in August
1996, 12,000 shares in September 1996, 8000 shares in November
1996, 3000 shares on December 11, 1996, and 6000 shares on March
17, 1997. No borrowed funds were used in these purchases. He is
not, and was not within the past year, a party to any contract,
arrangements or understandings with any person with respect to
any securities of Hi-Lo Automotive, other than the agreement as
disclosed below regarding this election.
Michael A. Ward is a partner of Coastal Securities, 1160
Dairy Ashford, Fifth Floor, Houston, Texas 77079. During the
past ten years, Mr. Ward has not been convicted in a criminal
proceeding. He is a beneficial owner of 4000 shares of Hi-Lo
common stock (par value $0.01) , and direct owner of 1000 share
of the same. He purchased 1000 shares on February 4, and 4000
shares on February 6, 1996. No indebtedness was involved in
purchasing of these shares. He is not, and was not within the
past year, a party to any contract, arrangements or
understandings with any person with respect to any securities of
Hi-Lo Automotive, except the agreement disclosed below regarding
this election.
Participants as a group hold 1,436,350 shares of Hi-Lo
common stock, representing 13.4 % of total number of shares
qualified to vote in this election. The participants have agreed
to vote all their shares for election of the three nominees
supported by the solicitor, and reject all nominees recommended
by the present board.
No participant has any arrangement or understanding with
respect to future employment with the company, except as director
of the company.
Performance of Company and Management
As you all know, Hi/Lo is in a precarious financial
situation, with dwindling market share and mounting losses
threatening to put it out of business. Table 1, which is prepared
from the company's 1996 quarterly reports, summarizes the
financial performance of the company from 1991 to 1996. The most
disturbing aspect is the way per store sales has decreased over
the years, especially in the last two years. This in spite of
consumer price increases each year. The huge loss shown for
1996 does include a huge write-off taken in the third quarter,
but even without that, the third and the fourth quarter figures
include sizable operating losses. In the opinion of this
solicitor, this trend can not continue much longer before the
company could be faced with liquidity problems. For more detailed
financial data of the company, please study its annual report you
have just received from the company.
Table 1. Financial Performance of Hi/Lo
1996 1995 1994 1993 1992 1991
Sales/Store 1.293 1.380 1.499 1.520 1.547 1.429
(million)
Operating (59.3) 8.43 17.51 13.38 17.58 16.48
Income(MM)
Net Income (4.99) 0.16 0.85 0.64 0.89 0.80
Per Shr($)
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Purpose and Intention
The partnership attempts, with your approval, to elect the
two candidates for directors nominated by us and reject two of
the candidates recommended by the board, whom we consider to be
unfriendly to investors. Unless otherwise marked, your proxies,
if properly executed and returned, will be voted for the election
of the two candidates we nominated, namely, Michael A. Ward, and
Kwang-chou Hwang, and for the rejection of Richard C. Adkerson
and T. Michael Young. Please refer to page 2 of the company proxy
statement for a list of board nominated directors and their
background and qualifications. If you have any questions, please
call us at (972) 570-7718
If proxies from a majority of shareholders are received,
we will have a well balanced board of directors that will work
for enhancing shareholder values. The board will hold a meeting
to elect a new chairman of the board, and we will push for the
implementation of the following plan: (a) A committee will be
formed to search for a buyer of the company. (b). Concurrently,
various measures will be taken to improve Hi/Lo's operations.
These include, but not limited to, improving our computer system
with more competent computer personnel, improving our warehouse
and inventory control operations, matching competitors' prices
across the board, decentralizing the current management
structure, eliminating commercial sales managers in many of
company stores, and trying to sell unprofitable stores to store
managers or any other interested parties. These measures will be
influenced and modified by surveys of opinions and suggestions
that we will seek from all key employees of the company down to
store managers. We hope that these actions would improve our
bottom line so that even if we do not succeed in finding a
reasonable buyer, the company would become more competitive and
profitable.
Nominees Supported by Solicitor
The two nominees for directorship who are supported by the
partnership have a common commitment and understanding that, if
elected, they will work vigorously toward enhancing shareholder
value. They are all firm believers in the doctrine that the
board should be controlled by shareholders. These nominees are:
MICHAEL A. WARD---Age 44, B.S., Business Administration, Univ. of
Kansas, 1979. Has worked in the financial fields for 18 years,
of which 12 years has been in bankruptcy/turnaround markets. Has
been a partner at Coastal Securities, Houston, Texas for 6
years. Currently holds 5000 shares of Hi/Lo common stock. If
elected, will work with other board members to improve stock
value by implementing various strategies.
KWANG-CHOU HWANG----Age 64, Ph.D Chem Eng., California Institute
of Technology, 1965. Senior Engineering Specialist, Space and
Aircraft systems, Garrett Corp., Los Angeles, 1966 to 1979.
Managed real estate and securities investments, 1979 to 1997.
Stockholder of Hi/Lo, 1995 to 1997, currently a beneficial owner
of 9.8 % of outstanding shares. He is managing partner of Hwang
Family Ltd. Partnership, Irving, TX. Committed to fight to
improve shareholder value if elected.
None of the nominees listed above has ever had any business,
financial or contractual relationship with the company in the
past.
The compensation and benefits these nominees will receive,
if elected, will be the same as those received by the present
board members. Please look in the proxy statement sent to you by
the company for details.
Voting Procedures
The company by-laws requires that the presence at the meeting
in person or by proxy of the holders of a majority of the
outstanding shares entitled to vote is necessary to constitute a
quorum. To be elected, a nominee must win a majority of the votes
cast, with abstention votes treated equally with rejection votes.
The two nominees we nominated will not appear on the proxy
card mailed to you by the company, but do not let that bother
you. The company has assured this solicitor, in writing, that
these candidates can be presented and voted on at the meeting,
or any adjourned meeting thereof, and the partnership will vote
your proxies, unless otherwise marked, for these candidates. All
you have to do, if you agree with what this solicitor intends to
do, is discard the proxy card mailed out to you by the company,
execute and return the proxy card enclosed in this solicitation.
Stockholder Proposal and Director Nomination
Rules and deadlines regarding submittal of stockholder
proposal and nomination of directors for the 1998 stockholders'
meeting are presented in the proxy statement furnished to you by
the company, and will not be repeated here.
Kwang-chou Hwang
2432 Keyhole Dr.
Irving, TX 75062
Tel:(972) 570-7718
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PROXY
HI-LO AUTOMOTIVE, INC.
Annual Stockholders' Meeting to be held on May 20, 1997
THIS PROXY IS SOLICITED ON BEHALF OF HWANG FAMILY LTD
PARTNERSHIP
ELECTION OF DIRECTORS:
1. Hwang Family Ltd Partnership Group Nominees: Michael A.
Ward, Kwang-chou Hwang
For all nominees[ ]1 Withhold Authority for all nominees[ ]2
Instruction: To withhold authority to vote for election of one or
more persons nominated by the Hwang Family Partnership Group,
mark For above and cross out name(s) of persons with respect to
whom authority is withheld.
2. Company Nominees
The Hwang Family Ltd partnership Group intends to use this proxy
to vote for persons who have been nominated by Hi-Lo Automotive
to serve as directors, other than the company nominees listed
below. You may withhold authority to vote for one or more
additional company nominees, by writing the name of the
nominee(s) below. You should refer to the proxy statement and
form of proxy distributed by the company for the names,
background, qualifications and other information concerning the
company's nominees.
There is no assurance that any of company's nominees will serve
as directors if any of the Partnership Group's nominees are
elected to the board.
Company nominees with respect to whom the Partnership Group is
NOT seeking any authority to vote for and WILL NOT exercise any
such authority:
Richard C. Adkerson, T. Michael Young
Write in below the names of any additional company nominees for
whom authority to vote is withheld:
__________________________________________________________
Dated:________________
Signature______________________________
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(reverse page of proxy)
The undersigned hereby appoints Kwang-chou Hwang of Irving,
TX, attorney and proxy, with full power of substitution, to vote
as proxy all the shares of Hi-Lo common stock held in the name of
the undersigned at the annual meeting of Hi-Lo Automotive to be
held on May 20, 1997, at the Sheraton Astrodome Hotel, 8686 Kirby
Dr., Houston, TX, and at any adjournment thereof, in accordance
with the instructions given above.
Dated:_____________, 1997
Signature(s):____________________________________________
