-----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, QtQ+FFvN8I5jsw3PjjzndHR74UdLMes/Dhdb18BXtAFNMdIfUMgoqkY7nyXJ0ltz 6omOTYbL0Ob+XQGo3Dim7g== 0000950109-01-000271.txt : 20010207 0000950109-01-000271.hdr.sgml : 20010207 ACCESSION NUMBER: 0000950109-01-000271 CONFORMED SUBMISSION TYPE: DEFA14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20010206 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SCOTT TECHNOLOGIES INC CENTRAL INDEX KEY: 0000720032 STANDARD INDUSTRIAL CLASSIFICATION: SEARCH, DETECTION, NAVIGATION, GUIDANCE, AERONAUTICAL SYS [3812] IRS NUMBER: 521297376 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEFA14A SEC ACT: SEC FILE NUMBER: 000-12558 FILM NUMBER: 1526462 BUSINESS ADDRESS: STREET 1: 5875 LANDERBROOK DR STREET 2: STE 250 CITY: MAYFIELD HEIGHTS STATE: OH ZIP: 44124 BUSINESS PHONE: 4404461333 MAIL ADDRESS: STREET 1: 5875 LANDERBROOK DR STREET 2: STE 250 CITY: MAYFIELD HEIGHTS STATE: OH ZIP: 44124 FORMER COMPANY: FORMER CONFORMED NAME: FIGGIE INTERNATIONAL INC /DE/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: FIGGIE INTERNATIONAL HOLDINGS INC DATE OF NAME CHANGE: 19870112 DEFA14A 1 0001.txt SCOTT TECHNOLOGIES, INC. PRESS RELEASE ON 2/6/2001 SCHEDULE 14A INFORMATION (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 [_] Definitive Additional Materials [X] Soliciting Material under Rule 14a-12 SCOTT 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: ------------------------------------------------------------------------- Robert Berick 216-896-1416 FOR IMMEDIATE RELEASE SCOTT TECHNOLOGIES REPORTS 2nd CONSECUTIVE YEAR OF RECORD RESULTS -- 4th Quarter Sales Climb 32% To $69.2 Million, EPS Up 31% To $0.38/Share Before Charge -- -- 2000 Sales Up 31% To $264 Million, EPS Up 40% To $1.47/Share Before Charge -- CLEVELAND, Ohio - February 6, 2001 - Scott Technologies, Inc. (Nasdaq: SCTT) today reported its second consecutive year of record results with both the top and bottom line growth at double-digit rates in 2000. "2000 was another year of strong financial results," said Mark A. Kirk, president and chief executive officer. "Our Health & Safety Products Group continued to be the primary driver of Scott Technologies in 2000 with sales increasing by 45 percent over its 1999 results. It achieved this strong growth through aggressive market share gain within the domestic fire service industry, increased demand for products and parts from its significantly larger installed customer base, and the contributions of the Scott/Bacharach Instruments joint venture and Scott Health & Safety Oy, its recently acquired Finnish business. "Despite challenging industry conditions, our Aviation & Government Products Group was able to improve its sales by 12 percent on a year-to-year comparison," Kirk continued. "This sales increase was primarily due to its aviation service business, AV-OX, Inc., which was acquired in December 1999." Fourth Quarter Results For the quarter ended December 31, 2000, Scott Technologies' sales increased 31.6 percent to $69.2 million, compared with $52.6 million during that period in 1999. Scott's 2000 fourth quarter sales were comprised of $44.1 million of sales from its Health & Safety Products Group and $25.1 million of sales from its Aviation & Government Products Group. Acquisitions contributed $12.6 million in sales during the fourth quarter of 2000, compared with $5.7 million in 1999's fourth quarter. The company reported net income of $5.3 million, or $0.31 per share on a diluted basis, for the fourth quarter of 2000, compared with 1999's fourth quarter net income of $2.1 million, or $0.12 per share on a diluted basis. Included in 2000's net income figure is an after-tax, fourth quarter charge of $1.2 million, or $0.07 per share on a diluted basis. This charge is comprised of $0.6 million in connection -more- -2- with the separation arrangement with Scott's former chief executive officer, Glen W. Lindemann, and $0.6 million relating to the review of strategic alternatives begun in May 2000 which led to the recently announced proposed transaction with a subsidiary of Tyco International. This thorough process, which was conducted with the assistance of financial advisors, intensified in the fourth quarter. (NOTE: for more information on this proposed transaction, please see the discussion under the "Business Outlook" section found later in this release.) Excluding this charge - and 1999's fourth quarter charge of $3.2 million, or $0.17 per share on a diluted basis, for an adjustment to the carrying value of the company's deferred divestiture proceeds - net income in the fourth quarter of 2000 would have been $6.5 million, or $0.38 per share on a diluted basis, versus $5.3 million, or $0.29 per share on a diluted basis, in 1999's fourth quarter. Cash earnings per share ("cash EPS") from continuing operations for the fourth quarter of 2000 were $0.33 per share on a diluted basis, compared to 1999's fourth quarter cash EPS from continuing operations of $0.30 per share on a diluted basis. Excluding 2000's fourth quarter charge, cash EPS during this period would have been $0.40 per share on a diluted basis, an increase of 33.3 percent over 1999's results. The company believes that cash EPS - earnings before the amortization of goodwill - is more indicative of its cash flows. Scott achieved operating income of $9.7 million for the fourth quarter of 2000, compared to last year's fourth quarter operating income of $9.3 million. Excluding 2000's fourth quarter charge, operating income would have been $11.7 million, an increase of 25.8 percent over 1999's fourth quarter operating income. Operating margin for 2000's fourth quarter was 14.0 percent of sales, compared with 17.7 percent a year earlier. "Our operating margin in 2000 also was artificially low as a result of the above-mentioned fourth quarter charge," explained Kirk. "If you factor out the impact of this charge, our operating margin for the fourth quarter of 2000 would have been approximately 17 percent." Full Year Results For the year ended December 31, 2000, Scott Technologies' consolidated sales increased 31 percent to $264.0 million, compared with $201.5 million in 1999. Scott's 2000 sales were comprised of $166.6 million of sales from its Health & Safety Products Group and $97.4 million of sales from its Aviation & Government Products Group. Acquisitions contributed $43.1 in sales during 2000, compared with $7.3 million in 1999. Net income for 2000 was $24.3 million, or $1.40 per share on a diluted basis, compared to 1999's net income of $50.3 million, or $2.74 per share on a diluted basis. Excluding the items mentioned above in the fourth quarter discussion - as well as 1999's non-recurring net gain of $31.1 million, or $1.69 per share on a diluted basis - 2000's net income was $25.5 million, or $1.47 on a diluted basis, compared to 1999's net income of $19.2 million, or $1.05 per share on a diluted basis. -more- -3- Cash EPS from continuing operations for 2000 were $1.49 per share on a diluted basis, compared with the $1.06 per share on a diluted basis reported in 1999. Excluding 2000's fourth quarter charge, cash EPS for 2000 was $1.56 per share on a diluted basis, an increase of 47.1 percent over 1999's results. Scott achieved operating income of $43.7 million in 2000, compared with the $37.6 million last year. Excluding 2000's fourth quarter charge, operating income for the year would have been $45.7 million, an increase of 21.5 percent over last year's results. Operating margin for 2000 was 16.6 percent of sales, compared with 18.6 percent of sales in 1999. Excluding the impact of the 2000's fourth quarter charge, operating margin for the year would have been 17.3 percent. Business Outlook In a joint statement issued yesterday, Scott and Tyco International announced that they have entered into a definitive merger agreement pursuant to which a subsidiary of Tyco will acquire Scott. Scott stockholders will receive Tyco shares valued at approximately $400 million, or $23.00 for each share of Scott Technologies. The transaction, which is contingent upon customary regulatory review and approval by Scott stockholders, is expected to be tax-free for the stockholders of Scott. The number of Tyco shares that Scott stockholders will receive in the merger will be based on the volume weighted average prices of Tyco shares on the New York Stock Exchange as reported by Bloomberg Financial Markets for the five consecutive trading days ending on the fourth trading day immediately preceding the date of the Scott stockholder vote. Conference Call On The Web A live Internet broadcast of the company's conference call regarding 2000's year-end/fourth-quarter results can be accessed, and will be archived, at www.streetevents.com beginning at 11:00 a.m. Eastern Time today. - -------------------- About Scott Technologies, Inc. Scott Technologies, Inc. is a leading designer and manufacturer of sophisticated, high-performance respiratory protection systems, gas detection instruments and other life saving products for fire-fighting, industrial, aviation and government markets. # # # The statements contained in this news release about the possible sale of the company to Tyco are forward-looking and speak only as of the date of this press release. The statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. The consummation of this transaction is subject to various risks and uncertainties, including the inability of the company to obtain the approval of the sale by the company's stockholders or satisfy the other conditions to the sale to Tyco. * * * * * * -more- -4- Investors and stockholders are advised to read the proxy statement/prospectus regarding the business combination with Tyco when it becomes available, because it will contain important information. The proxy statement/prospectus will be filed with the Securities and Exchange Commission by Tyco International Ltd. and Scott Technologies, Inc. and stockholders may obtain a free copy of the proxy statement/prospectus (when it is available) and other documents filed by Tyco and Scott by directing such request to Tyco International Ltd., The Zurich Centre, Second Floor, 90 Pitts Bay Road, Pembroke HM 08, Bermuda, tel: (441) 291-8674; or to Scott Technologies, Inc., Attention:Corporate Secretary, One Chagrin Highlands, 2000 Auburn Drive, Suite 400, Beachwood, Ohio 44122, tel. (216) 464-6153. Information about Scott's participants in the solicitation, and a description of their direct and indirect interests, by security holdings or otherwise, are contained in the joint filing by Tyco and Scott under SEC Rule 425 and Rule 14a-12 on February 5, 2001. (tables attached) Scott Technologies, Inc. Consolidated Financial Results (in thousands, except per share data)
Three Months Ended December 31, Year Ended December 31, 2000 1999 2000 1999 --------- --------- --------- --------- Net Sales $69,175 $52,597 $263,981 $201,541 Cost of Sales 45,868 34,312 172,452 133,206 --------- --------- --------- --------- Gross Profit on Sales 23,307 18,285 91,529 68,335 --------- --------- --------- --------- % of Sales 33.7% 34.8% 34.7% 33.9% Operating Expenses: Selling, General and Administrative 12,138 7,891 42,544 27,199 Research and Development 1,460 1,097 5,263 3,571 --------- --------- --------- --------- Total Operating Expenses 13,598 8,988 47,807 30,770 --------- --------- --------- --------- Operating Income 9,709 9,297 43,722 37,565 --------- --------- --------- --------- % of Sales 14.0% 17.7% 16.6% 18.6% Other Expense (Income): Refinancing Costs 94 94 375 375 Interest Expense 1,664 1,575 6,612 8,727 Interest Income (717) (1,064) (2,844) (3,597) Other, Net 299 430 1,455 1,662 --------- --------- --------- --------- Income Before Income Taxes 8,369 8,262 38,124 30,398 Income Tax 3,038 2,933 13,847 11,160 --------- --------- --------- --------- Income from Continuing Operations 5,331 5,329 24,277 19,238 Discontinued Operations, net of tax: Income from Operations -- -- -- 1,761 Gain on Disposal -- (3,185) -- 29,440 Extraordinary (Loss) on Extinguishment of Debt -- -- -- (156) --------- --------- --------- --------- Net Income $5,331 $2,144 $24,277 $50,283 ========= ========= ========= ========= Weighted Average Shares - Basic 16,949 17,851 17,038 18,075 Weighted Average Shares - Diluted 17,350 18,199 17,338 18,357 Per Share Data - Basic EPS: - -------------------------- Income from Continuing Operations $0.31 $0.30 $1.42 $1.06 Income from Discontinued Operations -- (0.18) -- 1.73 Extraordinary (Loss) on Extinguishment of Debt -- -- -- (0.01) --------- --------- --------- --------- Net Income $0.31 $0.12 $1.42 $2.78 ========= ========= ========= ========= Per Share Data - Assuming Dilution: - ---------------------------------- Income from Continuing Operations $0.31 $0.29 $1.40 $1.05 Income from Discontinued Operations -- (0.17) -- 1.70 Extraordinary (Loss) on Extinguishment of Debt -- -- -- (0.01) --------- --------- --------- --------- Net Income $0.31 $0.12 $1.40 $2.74 ========= ========= ========= ========= EBITDA from Continuing Operations $12,042 $10,988 $52,232 $42,981 ========= ========= ========= ========= EBITDA Margin, Continuing Operations 17.4% 20.9% 19.8% 21.3% ========= ========= ========= ========= Cash Earnings Per Share - Basic Cash EPS: - ---------------------------------------- Income from Continuing Operations $0.34 $0.31 $1.52 $1.08 Income from Discontinued Operations -- (0.18) -- 1.73 Extraordinary (Loss) on Extinguishment of Debt -- -- -- (0.01) --------- --------- --------- --------- Net Income $0.34 $0.13 $1.52 $2.80 ========= ========= ========= ========= Cash Earnings Per Share - Assuming Dilution: - ------------------------------------------- Income from Continuing Operations $0.33 $0.30 $1.49 $1.06 Income from Discontinued Operations -- (0.17) -- 1.70 Extraordinary (Loss) on Extinguishment of Debt -- -- -- (0.01) --------- --------- --------- --------- Net Income $0.33 $0.13 $1.49 $2.75 ========= ========= ========= =========
* Cash Earnings per share includes the after tax effected amortization of goodwill related to acquisitions. Scott Technologies, Inc. Consolidated Balance Sheet (in thousands) December 31, ASSETS 2000 1999 --------- --------- CURRENT ASSETS Cash and Cash Equivalents $53,177 $67,924 Trade Accounts Receivable, net 31,961 18,938 Inventories 36,832 33,193 Prepaid Expenses 834 2,311 Current Deferred Tax Asset 15,000 14,060 --------- --------- Total Current Assets 137,804 136,426 --------- --------- PROPERTY, PLANT AND EQUIPMENT Land and Land Improvements 23,616 29,783 Buildings and Leasehold Improvements 11,799 12,718 Machinery and Equipment 34,130 26,492 --------- --------- 69,545 68,993 Accumulated Depreciation (20,776) (18,828) --------- --------- Net Property, Plant and Equipment 48,769 50,165 --------- --------- OTHER ASSETS Deferred Divestiture Proceeds and Other, net 4,383 7,463 Prepaid Pension Costs 21,463 18,948 Intangible Assets 51,121 40,268 Cash Surrender Value of Insurance Policies 7,042 6,204 Prepaid Finance Costs 1,500 1,875 Deferred Tax Asset 1,785 13,215 Other 5,087 4,525 --------- --------- Total Other Assets 92,381 92,498 --------- --------- Total Assets $278,954 $279,089 ========= ========= December 31, LIABILITIES 2000 1999 --------- --------- CURRENT LIABILITIES Accounts Payable $14,619 $12,910 Accrued Insurance Reserves 8,359 9,380 Accrued Compensation 5,444 4,315 Accrued Interest 553 1,133 Accrued Liabilities and Expenses 31,345 30,590 Current Maturities of Long-Term Debt 9,990 5,010 --------- --------- Total Current Liabilities 70,310 63,338 --------- --------- Long-Term Debt 60,000 69,990 Non-Current Insurance Reserves 14,373 17,300 Other Non-Current Liabilities 27,262 31,390 --------- --------- Total Liabilities 171,945 182,018 --------- --------- STOCKHOLDERS' EQUITY Common Stock 1,909 1,905 Capital Surplus 115,118 114,502 Retained Earnings 27,985 3,708 Accumulated Other Comprehensive (Loss) (1,410) (1,563) Treasury Stock (36,593) (21,481) --------- --------- Total Stockholders' Equity 107,009 97,071 --------- --------- Total Liabilities and Stockholders' Equity $278,954 $279,089 ========= ========= -----END PRIVACY-ENHANCED MESSAGE-----