Filed by Quantum Fuel Systems Technologies Worldwide, Inc.
Commission File No. 0-49629
pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Subject Company: Starcraft Corporation
Commission File No. 0-22048
The following is a power point presentation used beginning December 7, 2004 in connection with investor presentations by Quantum relating to Quantum’s proposed acquisition of Starcraft Corporation.
Unlocking the Hydrogen Economy
Quantum Fuel Systems Technologies Worldwide, Inc. .
INVESTOR PRESENTATION
December 2004
Forward Looking Statements
Statements in this document regarding the proposed transaction between Quantum and Starcraft, the expected timetable for completing the transaction, future financial and operating results, including the ability to achieve GAAP profitability within a certain timeframe, benefits and synergies of the transaction, future opportunities for Quantum, and any other statements about the future expectations, beliefs, goals, plans, or prospects expressed by the management of either Quantum or Starcraft constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words “will,” “believes,” “plans,” “anticipates,” “expects,” “estimates,” and similar expressions) should also be considered to be forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including: variations in pricing, material costs, other general costs and expenses; savings realized from consolidation of general and administrative expenses; an amortization expense from the recognition of an intangible asset arising from the valuation of current contracts and relationships; the failure to realize the synergies and other perceived advantages resulting from the merger; the ability of the parties to successfully integrate Quantum’s and Starcraft’s operations and employees; costs and potential litigation associated with the merger; the failure to obtain the approval of each company’s stockholders; the inability to obtain, or meet conditions imposed for, applicable regulatory and tax requirements relating to the merger; the failure of either party to meet the closing conditions set forth in the definitive merger agreement; the ability to retain key personnel both before and after the merger; each company’s ability to successfully execute its business strategies; growth of the alternative fuel, fuel cell and specialty vehicle markets; competitive conditions in the industry; business cycles affecting the markets in which the companies conduct business; and economic conditions generally. Additional factors may be found in Quantum’s Form 10-K for the year ended April 30, 2004, and in the other documents filed by the parties with the Securities and Exchange Commission, including the Registration Statement on Form S-4 that will be filed in connection with the proposed transaction.
Forward-looking statements are based on the beliefs, opinions, and expectations of the Company’s management at the time they are made, and the Company does not assume any obligation to update its forward-looking statements if those beliefs, opinions, expectations, or other circumstances should change.
Additional Information and Where to Find It
Quantum intends to file with the SEC a Registration Statement on Form S-4, which will include a joint proxy statement/prospectus of Quantum and Starcraft and other relevant materials in connection with the proposed transaction. The joint proxy statement/prospectus will be mailed to the stockholders of Quantum and Starcraft. Investors and security holders of Quantum and Starcraft are urged to read the joint proxy statement/prospectus and the other relevant materials when they become available because they will contain important information about Quantum, Starcraft and the proposed transaction. The joint proxy statement/prospectus and other relevant materials (when they become available), and any other documents filed by Quantum or Starcraft with the SEC, may be obtained free of charge at the SEC’s web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by Quantum by contacting Cathy Johnston at cjohnston@qtww.com or via telephone at (949) 399-4548. Investors and security holders are urged to read the joint proxy statement/prospectus and the other relevant materials when they become available before making any voting or investment decision with respect to the proposed transaction.
Quantum, Starcraft and their respective directors, executive officers and members of management and other employees may be deemed to be participants in the solicitation of proxies from the stockholders of Starcraft and Quantum in favor of the proposed transaction. Information about persons who may be considered participants in the solicitation of the stockholders of Quantum and Starcraft under the rules of the Commission and their respective interests in the proposed transaction will be available in the joint proxy statement/prospectus.
Quantum Overview
World Leader in Hydrogen Fuel Systems
Transportation
Power Generation
Hydrogen Refueling Infrastructure
Spun-off from IMPCO Technologies in 2002
Over 45 years of gaseous fuel experience
Revenues: $28.1 Million in FY04
19% Growth over previous year
Employees: 150
50% technical
In Production
18,000 systems produced
Commercialization Partnerships
GM: Worldwide
Sumitomo: Japan
IMPCO: Europe
Quantum’s Primary Markets
Fuel Cell Vehicles
Packaged Fuel Systems
Alternative Fuel Vehicles
Stationary Power Modules
Military / Aerospace
Refueling Units
Natural Gas and Propane Systems
Quantum is in production today… 18,000 Alternative Fuel Systems Delivered
Quantum’s Hydrogen Fuel Systems
Our Customers
Military / Defense
Quantum AMV / “Aggressor” Complete Fuel Cell Vehicle Design High Performance Off-Road Stealth Vehicle
Military / Defense
Promotional video showing Quantum’s Alternative Mobility Vehicle delivered to the U.S. Army. Video shows six different angles of the vehicle and a short clip of the vehicle being driven. Background music only, no commentary. (28 seconds running time)
Promotional video showing Quantum’s Alternative Mobility Vehicle delivered to the U.S. Army. Video shows vehicle driving. Vehicle background noise only, no commentary. (8 seconds running time)
STARCRAFT ACQUISITION
Starcraft Transaction Rationale – WHY?
Create full service company with complete capabilities from concept to production.
Starcraft Companies
Shareholder Value of Acquisition
Leverage each other’s design, product engineering and integration capabilities into Quantum’s customer base.
Shareholder Value of Acquisition
Utilize Starcraft’s Specialty Vehicle Assembly For Existing Starcraft Products AND Quantum’s Programs.
Quantum Programs
Starcraft’s Specialty Vehicle Assembly
Shareholder Value of Acquisition
…Increased Geographic Footprint.
Corporate Headquarters
Quantum Advanced Technology Center
Irvine, CA
Quantum Advanced Vehicles Center
Lake Forest, CA
Tecstar
Haslet, TX
Tecstar
Shreveport, LA
Tarxien
Vaughn, ONT
Tecstar
Oshawa, ONT
Troy Tooling
Rochester Hills, MI
Quantum Detroit Office
Troy, MI
Tecstar Corporate
Troy, MI
Classic Design Concepts
Walled Lake, MI
Tecstar Corporate
Madison Heights, MI
Tecstar
Livonia, MI
Starcraft
Goshen, IN
Amstar
Fort Wayne, IN
Quantum – Starcraft Transaction Rationale
Strategic
Expands Quantum’s capabilities – design through production
Customer benefits
Cross-selling opportunities leading to increased market share
Management
Experienced management team
Financial Performance
Solid revenue base
Expected GAAP profitability within 1 year after closing
Shareholder Value
Increased profile – financial community
Significant hydrogen and fuel cell potential with sustainability
Financial Overview
QUANTUM TECHNOLOGIES
Quantum’s Growing Revenue Base
Achieved 19% revenue growth in FY04 reaching $28.1 Million
Reported a 64% increase in Fuel Cell Systems revenues
OEM Fuel Cell development activity is increasing
Revenues by Operating Segment
($ Millions) $30 $20 $10 $0
FY02 FY03 FY04
Alternative Fuel Segment
Fuel Cell Systems Segment
Growing Contract Base Active Development Programs
($ Millions) $20 $10 $0
At 10/31/03 At 10/31/04
Quantum’s Increased Operating Leverage
Improved gross margins
Anticipate gross margins to remain in the 30-35% range
Customer funded R&D
Over 60% of our R&D is funded by OEM customers, government agencies and military programs
40% 30% 20% 10% 0% -10% -20% -30% -40% -50%
Improved Gross Margins
FY02 FY03 FY04
Customer Funded R&D
70% 60% 50% 40% 30% 20% 10% 0%
FY02 FY03 FY04
Quantum’s Improving Financial Performance
Net loss improved 51% during FY04
Ebitda in FY04 was ($3.7) Million
Cash used in operations improved 63% during FY04
Quantum has a fully funded business plan with in excess of $60 Million in cash on the balance sheet
Net Loss
($ Millions) $0
-$10
-$20
-$30
-$40
-$50
FY02 FY03 FY04
Cash Used in Operations
($ Millions) $0
-$10
-$20
-$30
-$40
FY02 FY03 FY04
Quantum – Starcraft Transaction
Transaction Structure Shareholder Value Pro Forma Financials Timing
Transaction Structure
Transaction Structure:
Stock for stock transaction using Quantum shares for Starcraft shares
Tax-free exchange
Fixed share structure; no share/ratio adjustments
Consideration:
21 million shares at 2.34 shares of QTWW stock for every share of Starcraft common stock
Assume $15 million convertible note and other long-term debt obligations, and cash-out of stock options
Surviving Entity:
Quantum
Post transaction ownership: Quantum 60%; Starcraft 40%
Entity Structure:
Starcraft will remain a wholly-owned subsidiary for commercial, operational and legal purposes
Stock Exchange:
Nasdaq: QTWW
Established revenue streams in growing markets
$210M forecasted* in FY05
$250M forecasted* in FY06 (first full year)
Forecasting* GAAP profitability in Year 1 and utilization of Quantum’s NOLs
Strong balance sheet and cash position
Diversified, established business model with complementary products and services
Shareholder Value of Acquisition
Combined Financial Results*
Year 1 (FY06) revenues driven by:
New OEM programs
JV revenues
Aftermarket distribution
GAAP profitability and Ebitda forecasted in Year 1 (FY06)
Forecasted Financial Results
($Millions)
Forecasted Revenues
($Millions)
$250
$200
$150
$100
$50
$0
FY04A FY05F FY06F
$20 $10 $0
FY04A FY05F FY06F
Net Income Ebitda
* Note: Forecasts are forward looking information and are based on certain assumptions related to the growth of the Company’s industry and other risk factors. Actual results may differ materially from forecasts based on a number of important factors that are discussed in more detail in the “Forward Looking Statements” section at the beginning of this presentation as well as the Company’s filings with the SEC. Some factors that could cause results to differ are as follows:
Revenues could vary based on the growth of the alternative fuel, fuel cell and specialty vehicle markets.
Ebitda and profitability could vary based on program pricing, material costs, other general costs and expenses, and actual savings realized from consolidation of general and administrative expenses.
Forecasted net income will be impacted by amortization expense from the recognition of an intangible asset arising from the valuation of current contracts and customer relationships. This expense is preliminary and could change based on a final valuation.
Pro Forma Balance Sheet (in Millions, except ratios)
Pro Forma
Cash & Marketable Securities $ 55
Working Capital 75
Total Assets 285
Debt 20
Stockholders’ Equity 250
Debt to Equity .10:1
Note: Pro Forma Balance Sheet could vary based on changes in working capital, capital expenses, the structure of the convertible note, changes in borrowing and results of operations between now and closing.
Anticipated Transaction Timing
Date
Activity
Dec 04 / Jan 05
Jan / Feb 05
Feb / Mar 05
Mar 05
File Proxy
SEC Review
Mail Proxies
Close Transaction
Nasdaq: QTWW www.qtww.com
Unlocking the Hydrogen Economy