UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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 Section 240.14a-12
Katy Industries, 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)(4) 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:
-------------------------------------------------------------------------
Notes:
KATY NEWS
---------
FOR IMMEDIATE RELEASE
---------------------
KATY INDUSTRIES, INC.
ANNOUNCES RESULTS FOR FIRST QUARTER
------------------------------------
ENGLEWOOD, CO - May 8, 2001 -- Katy Industries, Inc. (NYSE: KT) today reported a
net loss for the first quarter of 2001 of ($8,372,000) or ($1.00) per diluted
share, compared to net income of $645,000, or $.08 per diluted share, in the
first quarter of 2000. First quarter results of 2001 include unusual charges
totaling ($6,188,000) after-tax, or ($.74) per share. Unusual items are
detailed on a schedule accompanying this release.
Katy also announced that it completed the sale of its Thorsen Tools business on
May 3, 2001. Accordingly, Thorsen's results are reported as operations to be
disposed of in the accompanying summary of operations. Impairments of
$1,050,000 to the carrying values of certain Thorsen assets are reported in the
line "Equity in loss of operations to be disposed of" for the first quarter of
2001, in anticipation of the expected loss on the sale of this business to be
recorded in the second quarter of 2001.
On March 30, 2001, Katy announced that it had entered into a definitive
agreement with KKTY Holding Company, L.L.C. for a recapitalization of Katy.
Under that agreement, KKTY Holding commenced a tender off for up to 2,500,000
shares of Katy common stock at $8.00 per share, and agreed to purchase 400,000
shares of newly issued convertible preferred stock for $100 per share, or
$40,000,000.
Katy announced today that KKTY Holding Company, L.L.C. has advised Katy that it
is re-evaluating its tender offer and proposed purchase of preferred stock in
light of Katy's operating results for the first quarter and Katy's interim
operating results for April 2001 (which indicated a continued shortfall from
previously projected earnings before interest, taxes, depreciation and
amortization). KKTY Holding advised Katy that based on these developments it
believes one or more of the conditions to the tender offer may not be satisfied
at the expiration date of the offer. Consequently, KKTY Holding is considering
alternative courses of action to be negotiated with Katy, including among other
things, an increase of its proposed preferred stock investment in Katy, a
decrease in the preferred stock conversion price and a decrease in the number of
shares and price per share to be purchased pursuant to the tender offer.
Katy Industries, Inc. is a diversified corporation with interests primarily in
Electrical/Electronics and Maintenance Products.
Company contact:
Stephen Nicholson, Vice President of Finance, in Englewood at (303) 290-9300, or
at www.katyindustries.com
----------------------
Where You Can Find Additional Information:
Shareholder approval of the preferred stock purchase is the subject of a proxy
statement that was mailed to Katy shareholders in April for a shareholder
meeting to be held in June 2001. Katy strongly advises all shareholders to read
Katy's proxy statement, which has been filed with Securities and Exchange
Commission. Katy's proxy statement contains important information that you
should consider before making any decision about the proposals to be voted on at
Katy's shareholder meeting. Katy's proxy statement has been mailed to all Katy
shareholders and is
--------------------------------------------------------------------------------
KATY INDUSTRIES, INC.
HEADQUARTERS
6300 S. SYRACUSE WAY, SUITE 300, ENGLEWOOD, CO 80111-6723
TELEPHONE: (303) 290-9300 * FACSIMILE: (303) 290-9344
available, together with the annual report, quarterly reports, current reports
and other documents filed by Katy, at no charge at the SEC's web site at
http://www.sec.gov or from Katy by contacting Steve Nicholson at (303) 290-9300.
Neither this nor any previous announcement is an offer to purchase or a
solicitation of an offer to sell shares of Katy. The acquiring entity has filed
a tender offer statement and Katy has filed a solicitation/recommendation
statement with the SEC with respect to the tender offer. The tender offer
statement (including the offer to purchase, the related letter of transmittal
and the other offer documents attached as exhibits thereto) and the
solicitation/recommendation statement contain important information which should
be read carefully before any decision is made with respect to the tender offer.
The offer to purchase, the related letter of transmittal and certain other offer
documents, as well as the solicitation/recommendation statement, are available
to all Katy shareholders at no expense to them. The tender offer statement
(including the offer to purchase, the related letter of transmittal and all
other offer documents filed with the SEC) and the solicitation/recommendation
statement are also available at no charge at the SEC's web site at
http://www.sec.gov.
Some of the foregoing communications constitute "forward-looking statements."
Such forward-looking statements are subject to various risks and uncertainties
and Katy claims the protection afforded by the safe harbor for forward-looking
statements in the Private Securities Litigation Reform Act of 1995. These
statements include all statements regarding the timing, completion and effect of
the proposed recapitalization of Katy. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors, including the ability
to obtain the needed shareholder approvals on a timely basis, that, together
with the other risks and uncertainties detailed from time to time in Katy's
filings with the SEC, may cause the actual results, performance or achievements
of Katy to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements. The safe
harbor is not applicable to the foregoing communications to the extent that they
constitute tender offer materials and has not been judicially determined to be
applicable to such communications to the extent that they constitute soliciting
materials in connection with the tender offer.
--------------------------------------------------------------------------------
KATY INDUSTRIES, INC.
HEADQUARTERS
6300 S. SYRACUSE WAY, SUITE 300, ENGLEWOOD, CO 80111-6723
TELEPHONE: (303) 290-9300 * FACSIMILE: (303) 290-9344
KATY INDUSTRIES, INC. SUMMARY OF OPERATIONS - UNAUDITED
(In thousands, except per share data)
Three Months Ended
-----------------------
$
March 31, March 31, Change
2001 2000 Inc/(Dec)
--------- --------- ---------
Sales $115,635 $134,008 ($18,373)
Cost of goods sold 88,042 92,237 (4,195)
--------- --------- --------
Gross profit 27,593 41,771 (14,178)
Selling, general & administrative expenses 34,791 36,234 (1,443)
--------- --------- --------
Operating (loss) income (7,198) 5,537 (12,735)
Equity in loss of operations to be disposed of (1) (1,620) (644) (976)
Interest and other, net (3,402) (3,246) (156)
--------- --------- --------
(Loss) income before provision for income taxes (12,220) 1,647 (13,867)
Benefit from (provision for) income taxes 4,276 (577) 4,853
--------- --------- --------
(Loss) income before distributions on (7,944) 1,070 (9,014)
preferred securities
Distributions on preferred interest of subsidiary, (428) (425) (3)
net of tax
Net (loss) income ($8,372) $645 ($9,017)
========= ======== ========
(Loss) earnings per share of common stock - Basic
Continuing segments - businesses to be retained ($0.22) $0.13 ($0.35)
Unusual items (1) (2) (0.74) 0.00 (0.74)
Operations to be disposed of (1) (0.04) (0.05) 0.01
--------- -------- --------
Net (loss) income ($1.00) $0.08 ($1.08)
========= ======== ========
(Loss) earnings per share of common stock - Diluted
Continuing segments - businesses to be retained ($0.22) $0.13 ($0.35)
Unusual items (1) (2) (0.74) 0.00 (0.74)
Operations to be disposed of (1) (0.04) (0.05) 0.01
--------- -------- --------
Net (loss) income ($1.00) $0.08 ($1.08)
========= ======== ========
Average shares outstanding - Basic 8,394 8,416
========= ========
Average shares outstanding - Diluted 8,394 8,426
========= ========
Dividends paid per share $0.000 $0.075
========= ========
Other Information
-----------------
Working capital, excluding current maturities of
indebtedness of $147,000 $108,893 $125,642 ($16,749)
======== ======== ========
Long-term debt $147,754 $155,817 ($8,063)
======== ======== =========
Preferred interest in subsidiary $32,900 $32,900 $0
======== ======== =========
Stockholders' equity $140,464 $159,939 ($19,475)
======== ======== =========
Capital expenditures $3,359 $4,560 ($1,201)
======== ======== =========
Operating income by segment:
Electrical/Electronics ($2,641) $1,394 ($4,035)
Maintenance Products 503 6,278 (5,775)
Corporate (5,060) (2,135) (2,925)
--------- -------- --------
Total ($7,198) $5,537 ($12,735)
========= ======== ========
(1) Includes results of Thorsen Tools for 2001, in addition to results for
SESCO and Sahlman Holdings, Inc., which are included in both 2001 and 2000.
The Thorsen Tools business was sold in May 2001. These results include
asset impairments of $1.1mm in anticipation of the loss expected to be
realized upon recording of the sale transaction in the second quarter.
However, these impairments are included in the Unusual Items line for
earnings per share purposes.
(2) See attached schedule of unusual items.
KATY INDUSTRIES, INC. SUMMARY OF UNUSUAL ITEMS - UNAUDITED
(In thousands, except per share data)
(All items after tax)
Three Months Ended
---------------------------------------
DRAFT March 31, March 31,
2001 2000
------------------ ------------------
Diluted Diluted
Amount Per Share Amount Per Share
------ --------- ------ ---------
Severance and other restructuring $ 856 $0.10 $ 0 $0.00
Loss associated with exit from 2,134 0.25 0 0.00
electrical branded product lines
LIFO inventory adjustment 874 0.11 0 0.00
Costs associated with recapitalization 1,641 0.20 0 0.00
Asset impairments associated 683 0.08 0 0.00
with second quarter sale of
Thorsen Tools business
------------------ ------------------
$ 6,188 $0.74 0 $0.00
================== ==================