PSCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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LADISH CO., 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 appropriate box):
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LADISH SENDS LETTER TO SHAREHOLDERS
Says Grace Brothers Has Shown Their True Colors
Urges Shareholders To Vote "FOR" Ladish's Director Nominees
Cudahy, WI, May 29, 2003 - Ladish Co., Inc. (www.ladishco.com) (Nasdaq: LDSH)
today sent the following letter urging Ladish shareholders to vote "FOR"
Ladish's director nominees on the WHITE proxy card and reject Grace Brothers'
attempt to take over Ladish without providing any value to shareholders:
May 29, 2003
Dear Shareholder:
Leading Voting Advisory Firm Recommends That Shareholders
Vote the White Proxy Card "FOR" the Ladish Nominees
With the Annual Meeting less than ten days away, we are pleased to
inform you that Institutional Shareholder Services ("ISS"), the
nation's leading independent voting advisor, recommends that its
clients vote "FOR" Ladish's director nominees on the WHITE proxy
card. ISS provides voting recommendations to hundreds of
institutional investors, mutual funds and other fiduciaries. Your
vote is important - please sign, date and return the enclosed WHITE
proxy card today.
We are extremely gratified that ISS has recognized that the best
interests of shareholders are served by reelecting your company's
nominees and rejecting Grace Brothers' attempt to take over Ladish
without providing any value to shareholders. ISS confirms what we
have been saying all along - as fiduciaries for all of our
shareholders, we simply cannot transfer control of the Board to a
single, large minority shareholder and get nothing for our
shareholders in return.
Grace Brothers Has Shown Their True Colors
You may recently have received a letter from Grace Brothers seeking
the election of their handpicked nominees purportedly to increase
the Board's independence. DON'T BE MISLED - Grace Brothers wants
control, not independent Board members.
We are committed to do what is right for our shareholders and we
have tried to work cooperatively with Grace Brothers to respond to
their concerns, resolve this proxy contest and avoid further
disruption to our business. On a number of occasions we asked Grace
Brothers to work with us to select additional mutually acceptable
independent directors for the Ladish Board. However, Grace Brothers
has refused to do so - insisting that the only resolution acceptable
to them is control of the Board by their own hand-picked directors.
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Your Board is committed to excellence in corporate governance and
has always been open to input from the company's shareholders. In
fact, Grace Brothers is already represented by two board members out
of seven, which is proportionate to their 29% equity stake in the
company.
Grace Brothers' claim that one of your current directors, Mr. Robert
Sullivan, has no relationship to them is simply false - it was Grace
Brothers that appointed Mr. Sullivan to Ladish's Board over ten
years ago. In addition, Ladish won a high overall corporate
governance rating from ISS; the advisory firm determined that Ladish
"outperformed 92.1% of the companies in the Russell 3000 and 87.9%
of the companies in the Capital Goods group." It is clear to us that
when Grace Brothers says they want a more "independent" Ladish
Board, they mean independent from everyone but themselves.
Grace Brothers' Interests May Be Different From Your Own
You should know that Grace Brothers acquired the vast majority (74%)
of their shares through the exercise of warrants at a price of $1.20
per share. Grace Brothers' relatively low basis in these shares may
lead them to view potential transactions very differently than other
shareholders.
In contrast, your current Board of Directors is fully aware of its
fiduciary duties and will continue to consider strategic
opportunities for the benefit of all shareholders, not just Grace
Brothers. Furthermore, we strongly believe that additional
independent directors must be acceptable to the full Board and
ultimately to all Ladish shareholders.
Ask yourself: If Grace Brothers believes that their interests are
aligned with yours, why have they objected to naming truly
independent directors to the Ladish Board?
Grace Brothers Has No Plan For Your Company -
They Simply Want Control Without Paying a Penny
Grace Brothers has asked you to elect their hand-picked nominees who
have no plan for your company and, according to their own proxy
materials, will implement one "only after they have had the chance
work closely with management and to carefully study the company's
business and prospects." (sic) Your Board believes it would be
irresponsible to turn over control of the company to a slate of
directors who, in the midst of these very challenging market
conditions, require time to get up to speed. Moreover, Grace
Brothers' proxy materials don't even indicate that they would or
could do anything differently than your current Board, even after
familiarizing themselves with your company.
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We believe that Grace Brothers' claims to want to work with our
management team to build shareholder value are simply talk. They
have expressed privately their desire to remove your experienced
management team and take control of your Board and your company.
Given Grace Brothers' actions, it seems clear that this is nothing
less than an attempt to take control of your company through a proxy
contest without offering you anything for your shares. If Grace
Brothers wants control of Ladish, then they should make a proposal
to pay you for it.
Ladish's Board And Management Team Are Executing
On The Company's Strategy
Every company in our industry is facing the challenge of the severe
downturn in the aerospace and industrial markets. That's why Ladish
is working hard to control costs, while positioning the company to
capitalize on its opportunities when our industries rebound:
o Ladish has acted aggressively to control costs and align
production to current marketplace realities. Ladish has
successfully renegotiated healthcare contracts and, over the
past year, reduced headcount by approximately 10%. These actions
and operational cost improvement plans are expected to yield
annual savings in excess of $8 million. The company has also
significantly reduced capital expenditures, which were $1.1
million in the first quarter of 2003 compared to $5.1 million in
the same period last year. Notably, Ladish has achieved these
savings without compromising its reputation for superior
customer service and industry leading engineering capabilities.
o Ladish has continued to win new long-term contracts. In addition
to recently winning long-term contracts with General Electric,
Rolls-Royce and Pratt & Whitney, Ladish's subsidiary, PCT, was
recently awarded Preferred Supplier Certification at the Silver
Level by the Boeing Company. This award recognizes Ladish's
excellence in product performance, process control, and business
processes and is a benchmark used by Boeing to make decisions on
contract awards. It is clear that our customers have confidence
in Ladish, its Board and its management.
o Ladish has pursued strategic acquisitions and investments that
enhance operating margins, expand the company's product offering
and better position it to be a prime supplier to its customers.
In addition to providing a broader market presence, acquisitions
such as Stowe, Adco and PCT have driven a number of
cross-selling opportunities with customers such as United
Technologies, Pratt & Whitney, and Rolls-Royce.
o Ladish has consistently outperformed its industry peer group
based on total cumulative shareholder return. Grace Brothers'
assertion that they don't understand the composition of this
peer group makes no sense. This peer group has been included in
Ladish's publicly filed documents, which were reviewed and
signed by all our directors - including the two Grace Brothers
designees.
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With over 300 years of combined industry experience, Ladish's Board
and management team have successfully led the company through
several industry cycles and are doing so yet again. In stark
contrast, Grace Brothers' director nominees have limited experience,
no track record and no concrete strategy for enhancing the value of
your investment in Ladish.
THE STAKES ARE HIGH
PROTECT THE VALUE OF YOUR INVESTMENT AND THE FUTURE
OF YOUR COMPANY
Your vote is IMPORTANT. Whether or not you plan to attend the Annual
Meeting, please sign, date and return the enclosed WHITE proxy card
TODAY. We urge you not to sign any green proxy card you may receive
from Grace Brothers, even as a protest vote against them.
Thank you for your continued support.
On behalf of your Board of Directors,
/s/ Scott D. Roeper
Scott D. Roeper
Chairman, Independent Directors
The Ladish Board of Directors urges Ladish shareholders to vote "FOR" Ladish's
director nominees on Ladish's WHITE proxy card and to discard Grace Brothers'
green proxy card.
Ladish shareholders who have questions or need assistance voting their shares
can call the company's proxy solicitor, Innisfree M&A Incorporated, toll-free
at (888) 750-5834. Banks and brokers can call collect at (212) 750-5833.
The company and certain other persons may be deemed participants in the
solicitation of proxies from shareholders in connection with the company's
2003 Annual Meeting of Shareholders. Information concerning such participants
is available in the company's Proxy Statement filed with the Securities and
Exchange Commission on April 2, 2003. Shareholders are advised to read the
company's Proxy Statement and other relevant documents when they become
available, because they contain or will contain important information.
Shareholders may obtain, free of charge, copies of the company's Proxy
Statement and any other documents filed by the company with the SEC in
connection with the 2003 Annual Meeting of Shareholders at the SEC's website
at (http://www.sec.gov) or by contacting the company at the number listed
below.
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Certain statements made in this press release and other written or oral
statements made by or on behalf of the company may constitute "forward-looking
statements" within the meaning of the federal securities laws. Statements
regarding future events and developments and the company's future performance,
as well as management's expectations, beliefs, intentions, plans, estimates or
projections relating to the future, are forward-looking statements within the
meaning of these laws. Management believes that these forward-looking
statements are reasonable; however, you should not place undue reliance on
such statements. These statements are based on current expectations and speak
only as of the date of such statements. The company undertakes no obligation
to publicly update or revise any forward-looking statement, whether as a
result of future events, new information or otherwise. Among the factors that
might impact the company's performance are market conditions and demand for
the company's products; competition; interest rates and capital costs;
technologies; continued impact upon the commercial aerospace industry from the
September 11, 2001 terrorist attacks; raw material and energy prices; unstable
governments and business conditions in emerging economies; taxes; and legal,
regulatory and environmental issues. These and other important risk factors
regarding the company are included under the caption "Forward Looking
Statements" in the company's Annual Report on Form 10-K for the year ended
December 31, 2002 and may be discussed in subsequent filings with the SEC.
Ladish Co., Inc. is a leading producer of highly engineered, technically
advanced components for the jet engine, aerospace and general industrial
markets. Ladish is headquartered in Cudahy, Wisconsin with operations in
Wisconsin, Oregon and Connecticut. Ladish common stock trades on Nasdaq under
the symbol LDSH.
Contacts:
Ladish Co., Inc.
Wayne E. Larsen
(414) 747-2935
Joele Frank, Wilkinson Brimmer Katcher
Judy Wilkinson/Barrett Godsey
(212) 355-4449