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Previous: BANC ONE CREDIT CARD MASTER TRUST, 8-K, 2000-04-17 |
Next: WESTERN WIRELESS CORP, DEF 14A, 2000-04-17 |
<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2).
[ ] Definitive proxy statement.
[X] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
ITI Technologies, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
INTERLOGIX
INVESTOR PRESENTATION
- --------------------------------------------------------------------------------
LEGEND:
ITI has filed a proxy statement with the Securities and Exchange Commission
relating to the merger of ITI and SLC. The proxy statement contains important
information about ITI, SLC and the merger, and investors are urged to read it
carefully. The proxy statement is available free of charge on the SEC's web
site, http://www.sec.gov.
1
<PAGE> 3
Interlogix
Transaction Status
- --------------------------------------------------------------------------------
- - Merger of ITI and SLC Technologies to form Interlogix.
- - Current ITI shareholders may elect to exchange up to 50% of their existing
shares, in aggregate, for $36.50 in cash per share.
- - Assuming full subscription:
- SLC shareholders will own approximately 78%.
- Current ITI shareholders will own the remaining 22%.
2
<PAGE> 4
Interlogix
Transaction Status
- --------------------------------------------------------------------------------
- - Stock-for-stock merger of SLC with ITI (NASDAQ:ITII) to form Interlogix,
Inc. (NASDAQ:ILXI).
- - Transaction expected to close in early May 2000 - pending shareholder
approval.
- - Other closing conditions already met:
- Supplemental IRS Ruling
- Hart Scott Rodino
- SEC / Review of Proxy Statement
3
<PAGE> 5
Interlogix
Key Investment Highlights
- --------------------------------------------------------------------------------
- - Highly strategic merger:
- Complementary product lines and geographic distribution.
- Strong technological and market leadership in each segment.
- "Pure play" investment in supplying equipment to the global security,
life safety and corporate enterprise market.
- - Platform for continued growth:
- Conservatively leveraged capital structure.
- Public currency for acquisitions.
- - Potential for strong financial growth:
- Strong fundamental growth rates.
- Meaningful cost savings.
4
<PAGE> 6
Interlogix
Business Overview
- --------------------------------------------------------------------------------
- - Interlogix designs, develops, manufactures and distributes components,
software and systems.
- - Targets security, safety, convenience and lifestyle enhancements throughout
the world:
- Leverage leading brand positions.
- Leverage established international distribution.
- - Building upon the broad framework of SLC and ITI Technologies:
- Expand product applications beyond conventional industry boundaries.
- New product offerings in key growth areas of RFID asset tracking, web
enabled connectivity and digital communications.
5
<PAGE> 7
Interlogix
Leading Commitment to Product Development
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
[MAP OF U.S. indicating facilities and number of people dedicated to Technical Development]
Portland 32 CORE COMPETENCIES
Salem 24 Sensor Technologies Wireless
Corvallis 18 Electronic Access Control
Costa Mesa 14 Fiber Optics
Gladewater 7 Video & Audio Transmission
St. Paul 81 CCTV
Boca Raton 85 Digital Video & Digital Storage Media
Bohemia 18 Key Management
South Hackensack 2 Fire Control
Software Development
Integrated Systems
</TABLE>
Worldwide: 490 people dedicated to Technical Development
6
<PAGE> 8
<TABLE>
<S><C>
Interlogix
Customer Focus
- ----------------------------------------------------------------------------------------------
Corporate
Residential Commercial Enterprise
- Access Control - Access Control - Access Control
- Fire Protection - Communications - Communications
Product Lines Systems - Fire Protection - Fire Protection
- Intrusion Systems Systems
- Video - Video Surveillance
Surveillance Systems
Systems - Intrusion
- Intrusion
- Mass Marketers - Installing dealers - System Integrators
- Installing Dealers - National Companies - National Companies
Channels - Realtors - Independent
Distribution: Representatives
- Dealers
</TABLE>
7
<PAGE> 9
<TABLE>
<S><C>
Interlogix
Customer Requirements
Corporate
Residential Commercial Enterprise
- Zero False Alarms - Low Maintenance - Integratable
End User - Ease of Use/Simplicity Costs - Low Maintenance
Expectation - Life Style - Add-on Capability Costs
Enhancements - Service Support - Open Architecture
- Web Connectivity - Web Connectivity - Web Connectivity
Customer - Ease of Installation - Ease of Installation - Ease of Installation
Expectation - Retention Features - Feature Set - Training Support
- Minimal Central - Low Maintenance - Low Maintenance
Station Costs Costs
- Upgrades -
Expansions
</TABLE>
8
<PAGE> 10
INTERLOGIX
WORLD WIDE BRANDS
- --------------------------------------------------------------------------------
[LOGOS]
<TABLE>
<S> <C>
SUPRA ARITECH
ITI ESL
GBC A Product of Sentrol
ORIGIN Data Systems Fiber Options
SENTROL Caddx
KALATEL
CASI-RUSCO
</TABLE>
9
<PAGE> 11
INTERLOGIX
STRONG EUROPEAN PRESENCE
- --------------------------------------------------------------------------------
Headquarters: 2
[Map of Factories 5
Europe indicating Sales Offices 19
locations of Sales Branches 10
different Distributors 13
facilities]
10
<PAGE> 12
INTERLOGIX
ASSET MANAGEMENT
- --------------------------------------------------------------------------------
- Radio frequency identification tag installed on
moveable property identifies the asset as it passes
through a portal.
- Key benefits:
- Reduce theft of real and intellectual property.
- Track location and movement of portable equipment.
[GRAPHIC] - Detect exit and entry of assets with employee
identification.
- Financial management system for high-value assets
and inventory.
- Expands the access control opportunity from "people
only" to "people and assets".
Up to 20 ft.
from doors or
other portals.
[GRAPHIC]
11
<PAGE> 13
INTERLOGIX
SUPRA EKEY
- --------------------------------------------------------------------------------
- Supra's eKey combines:
- Sleek design and functionality of
the Supra brand Palm Vx
[GRAPHIC] - Interface to Supra's electronic
keybox.
- Nightly synchronization of data
through the internet:
- Agents to receive MLS updates,
showing feedback, roster changes
and a host of business communications.
- Approximately 600,000 agents using
Supra's electronic lockbox system.
12
<PAGE> 14
INTERLOGIX
ORGANIZED BY GEOGRAPHIC BUSINESS UNITS
- --------------------------------------------------------------------------------
REGIONAL PRESENCE
AMERICAS EUROPE & ASIA PACIFIC
AFRICA
RESIDENTIAL COMMERCIAL CORPORATE ENTERPRISE
CORE ITI CORE SLC START 1996
SLC BUSINESS DEVELOPMENT
END USER CUSTOMER FOCUS
13
<PAGE> 15
INTERLOGIX
SECURITY MARKET SIZE / GROWTH
- --------------------------------------------------------------------------------
- Within the residential market, our primary focus is the wireless
segment:
- Per Stat Resources - growing at 18% per annum.
<TABLE>
<CAPTION>
MARKET SIZE - MANUFACTURER LEVEL GROWTH RATES
SIZE ($ IN MILLIONS)
<S> <C> <C> <C> <C> <C>
16%
Residential 14% 14%
12%
Corporate $1,500 10% 10%
Enterprise 8% [GRAPH] 8%
[PIE GRAPH] 6%
4%
$5,000 2%
0%
Commercial
$3,500
Market Size - $10 Billion Residential Commercial Corporate
Enterprise
</TABLE>
Source: Management estimates based on Frost and Sullivan and Stat
Resources data.
14
<PAGE> 16
INTERLOGIX
CORPORATE ENTERPRISE OFFERINGS
- --------------------------------------------------------------------------------
Wireless communication
Fiberoptic cable
CCTV camera
Dome camera
Card Reader
Motion sensor
Control Unit [GRAPHIC]
Central Control Unit
Smoke detector
Glassbreak sensor
15
<PAGE> 17
INTERLOGIX
MARKET SEGMENTATION
- --------------------------------------------------------------------------------
----------------------------------------------------
ITI
----------------------------------------------------
5.0% Commercial
[PIE GRAPH]
95.0%
Residential
Security
1999 REVENUE: $121 MILLION
----------------------------------------------------
SLC
----------------------------------------------------
26.7% 9.1%
Corporate Real
Enterprise Estate
[PIE GRAPH]
8.0%
Residential
Security
56.2%
Commercial
1999 REVENUE: $428 MILLION
----------------------------------------------------
INTERLOGIX
----------------------------------------------------
20.8% 7.1%
Corporate Real
Enterprise Estate
[PIE GRAPH]
27.3%
Residential
Security
44.8%
Commercial
1999 REVENUE: $549 MILLION
16
<PAGE> 18
INTERLOGIX
GEOGRAPHIC SEGMENTATION
- --------------------------------------------------------------------------------
----------------------------------------------------
ITI
----------------------------------------------------
84.7% 11.0%
Americas Europe
[PIE GRAPH]
4.3%
Asia
1999 REVENUE: $121 MILLION
----------------------------------------------------
SLC
----------------------------------------------------
63.2% 33.3%
Americas Europe
[PIE GRAPH]
3.5%
Asia
1999 REVENUE: $428 MILLION
----------------------------------------------------
INTERLOGIX
----------------------------------------------------
67.9% 28.4%
Americas Europe
[PIE GRAPH]
2.7%
Asia
1999 REVENUE: $549 MILLION
17
<PAGE> 19
Interlogix
Additional Growth Opportunities
- - Digital Video Recording / Retrieval:
-High capacity fixed and mobile video recording and archiving systems.
-Intelligent data base management.
- - Advent Fire System:
-Analog, conventional and UL wireless systems enable control and monitoring
of sprinkler systems.
-Downloadable system upgrades.
- - Mobile View:
-Municipal bus systems, school transport, police and emergency.
- - Impac DVMR:
-ADT / Time Lapse.
18
<PAGE> 20
Interlogix
Pro Forma Historical Financial Results
[bottom number represents SLC revenues or EBITDA,
top number represents combined revenues or EBITDA]
<TABLE>
<CAPTION>
Pro Forma Historical Revenues Pro Forma Historical EBITDA
[BAR GRAPH] [BAR GRAPH]
<S> <C>
$550.0
549.4 $110.0
$500.0
484.6 $100.0
$450.0
427.0 427.8 $90.0 90.7
$400.0 81.9
369.0 375.6 $80.0
$350.0 ($ 73.7
($ 326.0 in $70.0
in $300.0 304.2 mm) 68.5 65.5
mm) 275.7 $60.0 60.2
$250.0 54.6 58.7 52.7
225.2 $50.0
43.3 42.6
$200.0
$40.0
$150.0 35.0
$30.0
$100.0
$20.0
$50.0
$10.0
$0.0
$0.0
1995 1996 1997 1998 1999
1995 1996 1997 1998 1998 1999
SLC ITI
SLC ITI Nine Months
Average Combined Growth: 16.0% Average Combined Growth: 18.6%
1999 excludes - 1999 litigation re patent / merger expenses
- SLC management fees 19
</TABLE>
<PAGE> 21
Interlogix
Proven Track Record - Growth Through Acquisitions
- Since 1990 SLC has successfully integrated 21 companies and begun two
start-up corporate enterprise developments in key segments.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$500 428
Cosmotron
Impac
$450 Tecom
$400 375
Fox
$350 Origin Data
SLC Comm.
Sectro N.V.
$300 326
GBC
276 Kalatel
$250 Fiber Options
225 Casi-Rusco
Atlas Scantronic
$200 Onecard
175 Centralized
Supra
$150 135
Aritech
$100 62 U.S.
Aritech Europe
$50 51 Barrier Bar
33 ESL NiceDuc
Base Becuwe
$0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
</TABLE>
20
(Revenues, $ in millions)
<PAGE> 22
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SLC's Balanced Growth through the 1990s
Dollars in Thousands
500,000
450,000 428
400,000 375
350,000 326
300,000 276 SALES
250,000 225
200,000 175
150,000 135
63
100,000 61
55
50,000 51
33 49
38
24 PBT
22
20
8
6
0 2
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
PBT #'s
</TABLE>
Acquisitions Organic Total
Sales: $192 million + $236 million = $428 million
PBT is defined as operating income excluding management fees, amortization
expense and certain other expenses.
21
<PAGE> 23
Interlogix
ProForma Net Income / EPS 1999 Total Year
<TABLE>
<CAPTION>
($Millions) Net Income EPS
<S> <C> <C>
ITI Reported Results $13.4 $0.68
SLC Reported Results 25.7 1.31
Transaction Adjustments (18.9) (0.96)
------ ------
ProForma/Sub-Total 20.2 1.03
Other Adjustments:
- Non Recurring - ITI 3.2 0.16
- Management Fee - SLC 1.7 0.09
- Synergies of $10M 6.1 0.31
- Interest Income / $40M Cash/Notes 1.9 0.09
------ ------
Adjusted Net Income $33.1 $1.68
------ ------
Outstanding Shares 19.6 M
</TABLE>
22
<PAGE> 24
Interlogix
Synergy Opportunities
- - Cost reductions within 12 months ($10M).
- Duplicate engineering resources / intrusion panel development.
- Make / buy opportunities.
- Global purchasing - volume leverage on material prices.
- G & A savings.
- - Working capital reductions.
- Inventory turns from 4.2x to 7.0x
- Common information technology platform.
- - Manufacturing Consolidations.
- Underway within current SLC operations.
- Combined company opportunities.
- - Incremental revenue opportunity.
23
<PAGE> 25
Interlogix
Amortization - 1999 ProForma EPS
<TABLE>
<CAPTION>
Pre-Tax After tax
Avg. Annual Impact on Impact
($Millions, except per share) Life Amortization Net Income on EPS
---- ------------ ---------- ------
<S> <C> <C> <C> <C>
1999 - ProForma EPS $1.03
- Other Adjustments 0.65
-----
1999 ProForma EPS (with adjustments) $1.68
SLC Existing Amortization (1) 19 $9.2 $8.8 0.45
Transaction Goodwill (per proxy) 20 5.7 5.7 0.29
Intangible Assets (2) 16 9.0 5.8 0.30
-- ----- ----- -----
Total Amortization $23.9 $20.3 1.04
----- ----- -----
1999 ProForma EPS $2.72
excluding goodwill -----
</TABLE>
(1) SLC goodwill amortization - 10% tax deductible
(2) Amortization - 100% tax deductible
24
<PAGE> 26
Interlogix
Goodwill Evaluation
- Goodwill calculation per the proxy assumes:
- A $36.50/share for stock exchanged for cash and the stock's trading price
on date of proxy ($28.56) on all remaining shares.
- Final purchase price based upon:
- $36.50 for stock exchanged for cash and the fair value of all remaining
shares.
- The impact to goodwill at a range of trading prices for Interlogix common
stock after close of the transaction:
<TABLE>
<S> <C> <C> <C> <C>
Stock Trading Price $28.56 $27.00 $25.00 $23.00
Goodwill Savings Impact (20 Yrs) -- $7.8 M $17.8 M $27.7 M
EPS (19.6 Million Shares) -- $.02 $.05 $.07
</TABLE>
25
<PAGE> 27
Interlogix
ProForma Income Statement Full Year 1999
<TABLE>
<S> <C> <C> <C>
($Millions, except per share) $ % Adjustment Presentation
------ ----- -----------------------
Sales 549.4 100.0
----- -----
Gross Margin 244.1 44.4
Operating Income 55.0 10.0 { 7.7 Non Recurring Charges
{10.0 Synergies
Interest, Net 17.6 3.2 (3.0) Interest Income
Other Income 1.7 0.3
---- ---
Income Taxes 18.9 0.3 7.8
---- --- ----
Net Income 20.2 3.7 12.9
---- --- ----
Earnings Per Share $1.03 $0.65
</TABLE>
26
<PAGE> 28
Interlogix
Corporate Profitability Goals
Gross Margin Operating Margin
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50
16 15.0
48 14.4
46.0 14 13.8
% 46 45.6 % 13.2
OF 45.3 OF 12
SALES 44 45.0 SALES
10
42
550 600 650 700 550 600 650 700
Annual Revenues Annual Revenues
</TABLE>
Gross Margin: Operating Margin:
- Economies of scale Goal > 15%
- Global purchasing 1999 11%
- Plant consolidations
27
<PAGE> 29
Interlogix
PF Capitalization and Coverage Ratios
Pro forma Capitalization - Dec. 31, 1999
<TABLE>
<CAPTION>
($Millions, except per share) Percent of Multiple of
Total Capitalization EBITDA (a)
-------------------- -----------
<S> <C> <C> <C>
Cash $31.3 NA NA
Revolver 150.9 29.2% 1.4
Term Loan 100.0 19.4% 1.0
----- ----- ---
Total Debt 250.9 48.6% 2.4
Stockholder's Equity 265.5 51.4% 2.5
----- ----- ---
Total Capitalization 516.4 100.0% 4.9
----- ----- ---
</TABLE>
Coverage Ratios
Total Debt / PF LTM 9/99 EBITDA 2.4 x
PF LTM 9/99 EBITDA / Total Interest 5.9 x
Note:
(a) Assumes pro forma EBITDA for L-T-M September 1999.
28
<PAGE> 30
Interlogix
Summary
- - Merger is highly strategic:
- Complementary on a geographic and product line basis.
- ITI wireless technology, SLC distribution and enterprise solution
focus.
- - Revenue growth synergies:
- Opportunity for increased sales through leveraging complementary
distribution channels and product lines.
- Wireless product through European distribution channels.
- - Provides customers with broad product lines in all key markets.
- Portfolio of products with technology and cost leadership.
- - Management incentive aligned with shareholders via stock option
opportunities:
- 1.6 Million approximately 0.8 current ITI option holders.
- - Capital structure provides capacity to continue to consolidate industry.
29
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