-----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, S5GbyuzTjNoKxeywNPPDK235NREMnd1QXSjPZnkNdG9IiqsVrdVxdJLj7NW5X3bj greDsKOF0cLhIRB+IBuzoA== 0000950103-97-000303.txt : 19970512 0000950103-97-000303.hdr.sgml : 19970512 ACCESSION NUMBER: 0000950103-97-000303 CONFORMED SUBMISSION TYPE: DEFA14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19970509 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADT LIMITED CENTRAL INDEX KEY: 0000833444 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS BUSINESS SERVICES [7380] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEFA14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-13836 FILM NUMBER: 97599052 BUSINESS ADDRESS: STREET 1: CEDAR HOUSE 41 CEDAR AVE CITY: HAMILTON HM 12 BERMU STATE: D0 BUSINESS PHONE: 8092952244 MAIL ADDRESS: STREET 1: 2255 GLADES RD STE 421A CITY: BOCA RATON STATE: FL ZIP: 334310835 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 ADT Limited (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: (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: The following press release was issued by ADT on May 9, 1997: FOR IMMEDIATE RELEASE ADT Limited ("ADT") ADT ANNOUNCES FIRST QUARTER 1997 EARNINGS PER SHARE UP 40 PER CENT TO $0.28 - ------------------------------------------------------------------------------ Hamilton, Bermuda, May 9, 1997 -- ADT Limited (NYSE - ADT), through its subsidiaries, a leading provider of electronic security and vehicle auction services, announced today that net income, before non-recurring items, for the three months ended March 31, 1997 was 54 per cent higher at $44.6m (1996 - $28.9m) on net sales increased by 12 per cent to $460.7m (1996 - $411.3m). Fully diluted earnings per common share, before non-recurring items, were 40 per cent higher at $0.28 (1996 - $0.20). The weighted average number of common shares outstanding during the first quarter of 1997 was 173.7m (1996 - 163.6m). Commenting, Mr. Michael A. Ashcroft, Chairman and Chief Executive Officer of ADT, said: "First quarter results were very encouraging, demonstrating the strength of the ADT brand." "ADT Security Services' commercial business in the United States had a very good first quarter, benefiting from marketing initiatives taken in the previous quarter, as well as from a stronger market." "ADT's residential business also continued to grow strongly with unit sales of approximately 88,000 in the first quarter, compared with 75,000 in the fourth quarter of 1996. Growth in the residential business has been fueled by ADT's strategy of establishing multiple channels of distribution and, in the first quarter, ADT added to its strategic alliances with the announcement of a joint marketing agreement with AT&T Corporation." "ADT Automotive also had another record quarter with the conversion ratio up 2.6 per cent on vehicle sales 14 per cent higher than in the first quarter of 1996." "ADT's agreed transaction with Tyco International Ltd., which was announced in the first quarter, will create a major force in fire and safety services, enhancing ADT's ability to grow, not only in North America and the United Kingdom, but in all parts of the world utilizing Tyco's established infrastructures in more than 50 countries worldwide." Electronic Security Services Net sales and operating income from the Electronic Security Services division for the three months ended March 31, 1997 amounted to $373.7m and $65.7m, respectively, representing increases of 11 per cent and 25 per cent, respectively, over the first quarter of 1996. ADT's total annualized service revenues as of March 31, 1997, were approximately $955m representing an annualized growth rate of approximately 15 per cent. National Accounts/Core Commercial All segments of ADT's commercial business experienced good growth in the first quarter, particularly CCTV and Access Control. Sales to the public sector, including the US Marshals Service and the General Services Administration, led the growth in National Accounts. Small business and traditional product lines drove growth in the core commercial business where buyer preferences trended towards ADT-owned systems. Successes during the quarter included three CCTV contracts from Crown Books; becoming the exclusive provider of security and fire alarm services to Mercantile Stores, a specialty retailer with 186 locations; pioneering a new standard of pharmacy protection for Revco; and significant new CCTV and intruder alarm installations for Home Shopping Network, an ADT customer since 1994. Strong proposal activity reflects an upturn in market demand and suggests that growth in commercial sales will continue in the second quarter. In Canada, ADT has entered into an agreement for joint marketing to small businesses with the seven Canadian Bell operating companies which is expected to result in substantial lead generation for the commercial sales force. In addition, a telemarketing program has been launched with Telus, the Bell operating company in Alberta, to generate new residential business and the program is now being expanded to include Ontario. In the United Kingdom, where ADT provides security services for major companies ranging from Barclays to Texaco, sales of CCTV and Access Control systems were strong and high levels of CCTV and Access Control growth are expected to continue in 1997. Significant new contracts during the first quarter included an order for a CCTV system for High Down high security prison and ADT is currently launching a major new marketing initiative in the field of school security where it is already an acknowledged expert with over 6,000 schools currently employing the expertise of ADT companies. Residential During the first quarter, ADT contracted to install and monitor 88,000 new residential security systems, compared with 75,000 in the fourth quarter of 1996. ADT's residential customer base is now in excess of 1.2 million, more than 85 per cent of which is located in the United States. Competition in the residential marketplace continues to put pressure on installation revenues for basic security systems. However, new lifestyle enhancing services introduced by ADT during the first quarter, such as remote "keyfob" access to installed security systems, and pagers equipped to send a signal when a code is entered into the home system, are helping to counteract some of the pricing pressure. One application of the paging feature is directed towards latchkey children and is another example of ADT's commitment to meeting customers' needs. The ADT authorized dealer program continues to be an important source of new customers and ADT now has 128 dealers throughout the United States. Along with ADT's affinity relationships with RadioShack, USAA Insurance and CENTURY 21/ERA/Coldwell Banker (franchisees of HFS Incorporated), the dealer program has resulted in a more balanced distribution strategy and, together, these channels of distribution contributed approximately 30 per cent of residential unit sales in the first quarter. The newest joint marketing agreement, with AT&T, which was announced in early March, will further support residential sales when AT&T and ADT begin marketing joint product and service offerings in the third quarter of 1997. Vehicle Security and Tracking The marketing of CarCop to ADT residential customers in a combined home and vehicle security service has begun in a first of a kind program. In addition, commercial fleet opportunities are being pursued both directly and through ADT's commercial sales force. Vehicle Auction Services Net sales and operating income from the United States Vehicle Auction division for the three months to March 31, 1997 amounted to $87.0m and $15.4m, respectively, representing increases of 17 per cent and 43 per cent, respectively, over the first quarter of 1996. The total number of vehicles sold at ADT Automotive auctions in the first quarter reached an all-time record of 310,000, an increase of approximately 14 per cent over the first quarter of 1996. The fleet/lease sector accounted for the majority of this with a 26 per cent increase in the number of vehicles sold. Sales of manufacturers' vehicles however also increased by 18 per cent in the quarter. The first ADT LION electronic sale for Toyota was held during the quarter and was a significant success with 83 per cent of the entry being sold. ADT Automotive has recently published its 1997 Used Car Market Report which is now regarded as an important source of industry data. Background ADT, through its subsidiaries, is the largest single provider of electronic security services in both North America and the United Kingdom, providing continuous monitoring of commercial and residential security systems to over 1,800,000 customers in North America and Europe. ADT is also the second largest provider of vehicle auction services in the United States, operating a network of 27 vehicle auction centers providing a comprehensive range of vehicle remarketing services to vehicle dealers and owners and operators of vehicle fleets. Forward Looking Information Certain statements in this press release constitute "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, statements contained herein regarding expectations with respect to future sales, operating efficiencies and product expansion are subject to known and unknown risks, uncertainties and contingencies, many of which are beyond the control of ADT, which may cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements. Factors that might affect such forward looking statements include, among others, overall economic and business conditions, the demand for ADT's services, competitive factors in the industry, regulatory approvals and uncertainty about the consummation of future acquisitions. Contact: ADT Johnnie D. Johnson & Co., Inc 561-988-3600 212-425-4848 Note: This and other ADT press releases are available through Company News On-Call by fax; call 800-758-5804, extension 112511, or at http://www.prnewswire.com. ADT LIMITED Summarized Consolidated Statements of Income (unaudited) Three months ended March 31 1997 1996 $m $m Net sales 460.7 411.3 Cost of sales (239.3) (221.5) Selling, general and administrative expenses (145.9) (131.3) Non-recurring items - transaction costs* (9.6) (0.6) Charge for the impairment of long-lived assets - (744.7) ------- ------- Operating income (loss) 65.9 (686.8) Interest expense - net (16.7) (20.9) Other expenses less income - (0.3) ------- ------- Income (loss) before income taxes 49.2 (708.0) Income taxes (14.2) 2.4 ------- ------- Net income (loss) 35.0 (705.6) ======= ======= Fully diluted earnings (loss) per common share $ $ Before non-recurring items 0.28 0.20 Non-recurring items (0.06) (5.40) ------- ------- Net income (loss) per common share 0.22 (5.20) ======= ======= * Represents first quarter 1997 costs related to the ADT-Tyco transaction and the unsolicited proposals by Western Resources. ADT LIMITED Summarized Consolidated Balance Sheets (unaudited) March December 31, 1997 31, 1996 $m $m Assets Current assets: Cash and cash equivalents 492.0 215.9 Accounts receivable - net 318.7 210.7 Inventories 41.3 39.2 Prepaid expenses and other current assets 66.8 117.0 ------- ------- Total current assets 918.8 582.8 Property, plant and equipment - net 1,527.6 1,513.6 Goodwill and other intangibles - net 476.6 458.0 Long-term investments 100.6 100.6 Other long-term assets 70.8 75.4 ------- ------- Total assets 3,094.4 2,730.4 ======= ======= Liabilities and shareholders' equity Current liabilities: Short-term debt 74.3 209.2 Accounts payable 173.8 138.0 Other current liabilities 267.8 293.6 ------- ------- Total current liabilities 515.9 640.8 Long-term debt 1,057.1 910.1 Deferred revenue 163.2 146.1 Deferred income taxes 102.1 91.5 Other long-term liabilities 169.3 182.1 ------- ------- Total liabilities 2,007.6 1,970.6 ------- ------- Shareholders' equity 1,086.8 759.8 ------- ------- Total liabilities and shareholders' equity 3,094.4 2,730.4 ======= ======= ADT LIMITED Summarized Consolidated Statements of Cash Flows (unaudited) Three months ended March 31 1997 1996 $m $m Cash flows from operating activities Net income (loss) 35.0 (705.6) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Charge for the impairment of long-lived assets - 744.7 Depreciation and amortization 57.8 52.9 Interest on ITS Vendor Note (2.5) (2.1) Liquid Yield Option Notes discount amortization 5.3 5.0 Deferred income taxes 11.5 (4.9) Gain on disposal of investment in associate - (1.2) Loss on currency transactions 2.4 1.7 Other (0.5) 0.8 Changes in assets and liabilities (59.1) (39.0) ------- ------- Net cash provided by operating activities 49.9 52.3 ------- ------- Cash flows from investing activities Purchase of property, plant and equipment - net (100.5) (75.5) Acquisition of businesses (6.1) (20.6) Purchase of customer contracts (17.7) (3.9) Proceeds from litigation settlement 77.5 - Disposal of investment in and loans to associate - 15.4 Other (1.9) 1.5 ------- ------- Net cash utilized by investing activities (48.7) (83.1) ------- ------- Cash flows from financing activities Net (repayments) receipts of short-term debt (168.3) 8.9 Repayments of long-term debt - (15.0) Proceeds from long-term debt 141.8 6.0 Proceeds from issue of common shares 303.1 4.6 Other (1.9) - ------- ------- Net cash provided by financing activities 274.7 4.5 ------- ------- Effect of currency translation on cash and cash equivalents 0.2 (0.6) ------- ------- Net increase (decrease) in cash and cash equivalents 276.1 (26.9) Cash and cash equivalents at beginning of period 215.9 350.9 ------- ------- Cash and cash equivalents at end of period 492.0 324.0 ======= ======= - Ends - -----END PRIVACY-ENHANCED MESSAGE-----