-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UXtrpZCrF1Y989ujK7reDHGm9bJ20V3afe21lxLrFgKaeeyAe1OR33DCOJMeUPDe mKUjZsvpkcd0dWxV9qZkNg== 0000950103-98-000330.txt : 19980401 0000950103-98-000330.hdr.sgml : 19980401 ACCESSION NUMBER: 0000950103-98-000330 CONFORMED SUBMISSION TYPE: DEFA14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19980331 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ECHLIN INC CENTRAL INDEX KEY: 0000031348 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 060330448 STATE OF INCORPORATION: CT FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: DEFA14A SEC ACT: SEC FILE NUMBER: 001-04651 FILM NUMBER: 98581238 BUSINESS ADDRESS: STREET 1: 100 DOUBLE BEACH RD CITY: BRANFORD STATE: CT ZIP: 06405 BUSINESS PHONE: 2034815751 MAIL ADDRESS: STREET 1: 100 DOUBLE BEACH ROAD CITY: BRANFORD STATE: CT ZIP: 06405 FORMER COMPANY: FORMER CONFORMED NAME: ECHLIN MANUFACTURING CO DATE OF NAME CHANGE: 19820602 DEFA14A 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 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 Echlin 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: [ECHLIN LOGO] Paul Ryder Vice President Investor Relations ECHLIN UNVEILS AGGRESSIVE BUSINESS PLAN -- McCurdy Tells Investors That Success in Repositioning Programs Could Result in EPS of About $2.40-$2.50 in 1998, $3.65-$3.80 in 1999 and $4.40-$4.55 in 2000 -- NEW YORK, New York, March 31, 1998--At a presentation to financial analysts and investors held here today, Larry McCurdy, chairman, president and chief executive officer of Echlin Inc. (NYSE: ECH), discussed the bright outlook for the company. He explained how, under the present repositioning program being implemented at Echlin, the momentum the company experienced thus far in fiscal 1998 will continue. As a result, Echlin projects it will generate earnings that are considerably higher than analysts' current expectations. Earnings Projections Raised Mr. McCurdy pointed out that the First Call consensus earnings estimate for Echlin's fiscal year 1998, ending August 31, now stands at $2.28 per share, whereas Echlin expects to achieve approximately $2.40 to $2.50 per share. This represents a 28 to 33% gain over the $1.88 per share, before special charges, earned in fiscal 1997. Mr. McCurdy also projected that the company's upside improvement would continue beyond 1998, with earnings for fiscal 1999 in the range of $3.65 to $3.80 per share, and for fiscal 2000, $4.40 to $4.55 per share. Mr. McCurdy attributed Echlin's stepped-up earnings outlook to the rapid and successful implementation of Phase 1 of its repositioning program, and to new initiatives which he outlined for Phase 2. Phase 1 consists of a reorganized and simplified corporate structure; adoption of economic value added (EVA) principles; an extensive cost-reduction program; divestiture of underperforming and non-core assets; and acquisitions of complementary businesses. Phase 2 will include a worldwide sourcing initiative; massive realignment of the company's North American distribution operations; operational optimization through a shared services approach and new system software; and strategic acquisitions which are not included in the earnings projections. Together, these significant moves are expected to provide not only top-line growth, but just as importantly, a more efficient and streamlined organization. "One year ago, Echlin's board of directors installed a new management team to bring change to this company, and positive change-- together with value creation--is now being successfully realized in a rapid and effective fashion," Mr. McCurdy said. "The board believes that the current program is building both short-term and long-term value for shareholders." SPX Proposal Being Evaluated Mr. McCurdy stated that Echlin's board continues to evaluate the SPX Corporation proposal, even though SPX has not yet commenced a formal offer. Nevertheless, McCurdy pointed out that the board is extremely concerned about the lack of business logic of an Echlin-SPX combination, and about the effects of such combination on Echlin shareholders, customers, employees, suppliers and the communities in which it operates. "It appears that there are very few synergies between Echlin's operations and SPX's, and that the resultant cost savings of a combination would be considerably less than those SPX currently estimates. Moreover, SPX does not appear to understand Echlin's business, and a combination of our two companies, along the lines SPX spelled out in its new distribution concept, would be extremely destructive to our long-term relationships with customers. There is solid historical precedent that demonstrates a sizable loss of business occurs when an industry player naively attempts to reinvent the established channels of distribution. Already, we have had many of our major aftermarket customers voice overwhelmingly negative reactions, and warn us that a combination with SPX would severely risk ongoing business with them. This would result in a considerable loss of value for Echlin shareholders. "Since SPX's stock would be the primary consideration for Echlin shares, we are very concerned about the impact the potential loss of customers and lack of synergies would have on the stock price. We also have concerns about SPX's business. Based upon a market study commissioned by Echlin, SPX may have incurred some loss of market share, and appears to have cut product research and development activity, which could hurt its long-term position. Furthermore, technological advances may eliminate the need for certain diagnostic equipment as it exists today, thus significantly reducing overall demand for SPX's products," Mr. McCurdy continued. "Make no mistake--our independent board is committed to doing what is best for Echlin shareholders and its other constituents. Unlike the proposed SPX- controlled board, ours is not a self-interested board whose only job, we believe, is to rubber-stamp a pre-ordained agenda," Mr. McCurdy concluded. Caution Given on Forward-Looking Statements Certain statements included in this news release are "forward-looking" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"), and are made in good faith by Echlin pursuant to the Act's "safe harbor" provisions. Such forward-looking statements are not guarantees of future performance, and may involve known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied. Risks and uncertainties include, without limitation, global and regional economic conditions, business conditions in the overall automotive industry, and the cost and timing of the company's repositioning-plan implementation. They also include other factors discussed herein and those detailed from time to time in the company's filings with the Securities and Exchange Commission. ### -----END PRIVACY-ENHANCED MESSAGE-----