Essex Rental — Proxy Contest (May 2015)
14 slides from Essex Rental's proxy contest presentation, May 21, 2015
Slide 1: Essex Rental Corp. Proxy Advisory Presentation
Essex Rental Corp. Proxy Advisory Presentation 1
Slide 2: Forward-looking statements disclaimer
This document does not constitute an offer to sell or a solicitation of an offer to buy any securities. It is an outline of matters for discussion only. Some of the statements in this presentation and other written and oral statements made from time to time by the Company and its representatives are
Slide 3: Background
3 Background Dissident shareholders Lee Keddie and Kevin Casey have distributed materials regarding a purported contested director election at the June 4, 2015 Annual Meeting of Essex Rental Corp. (“Essex” or the “Company”). The Company has repeatedly advised Messrs. Keddie and Casey that becaus
Slide 4: Essex Rental Communication
4 Essex Rental Communication Although the dissidents will not be entitled to nominate directors at the Annual Meeting, and notwithstanding that gold proxy cards will not be counted for the purposes of electing members of our Board of Directors, we feel it is important to provide a response to the
Slide 5: Underperformance?
5 Underperformance? “Underperformance” as suggested by the dissident shareholders is a function of the Company being acquired at a cyclical peak on October 31, 2008 and the crane industry subsequently experiencing an unprecedented downturn: Leading up to 2008, the Company benefitted from a const
Slide 6: Underperformance? (continued)
Underperformance? (continued) 6 Another market indicator is the Architectural Billings Index which provides metrics around the amount of architecture work being performed. Any reading above 50 indicates an increase in project design activity.
Slide 7: Underperformance? (continued)
Underperformance? (continued) 7 Pending these improved market indicators suggesting that we are finally starting to experience an increase in large construction project activity, the Board has been actively improving Company management, business practices and asset mix while also guiding the Compa
Slide 8: Underperformance? (continued)
Underperformance? (continued) 8 Improve quality; Hired continuous improvement and lean practice professionals to improve the quality of equipment provided to customers on rent Reshape our asset portfolio and reposition the fleet; Executed a trade transaction to sell 15 underutilized legacy a
Slide 9: Crawler Crane Utilization
Crawler Crane Utilization 9 Utilization has improved recently, particularly for hydraulic crawler cranes, but there is still significant upside potential for the utilization of our assets, which when utilized, will provide significantly increased free cash flow:
Slide 10: Financial Irregularities
Financial Irregularities 10 The Company recently restated historical financial statements related to two accounting issues: Essex’s auditors, Grant Thornton LLP, had signed-off on Management’s former presentation of the two accounting issues for 8 years and 3 years, respectively. For the first t
Slide 11: Corporate Governance and Director Compensation
Corporate Governance and Director Compensation 11 Laurence Levy and Edward Levy, the two primary members of Essex’s Strategic, Planning and Finance Committee, each receive $125,000 per annum in this role. Additionally, approximately $100,000 per annum of their office rent is reimbursed by Essex.
Slide 12: Corporate Governance and Director Compensation (continued)
Corporate Governance and Director Compensation (continued) 12 Members of the Strategic, Planning and Finance Committee of our Board of Directors are extremely engaged and provide tremendous value to the Company, including but not limited to the following: Regularly holding meetings with current
Slide 13: Dissident Change
Dissident Change 13 If successful, the dissident shareholders’ stated strategy is to elect new directors with “significant industry experience”, reduce compensation, renegotiate debt terms and explore strategic alternatives. Lee Keddie and John Climaco do not have anywhere near the experience in
Slide 14: Our Responsiveness
Our Responsiveness 14 The Company has been extremely responsive to the dissidents’ demands. We have: Invited the two nominees to join the Board of Directors; Agreed to cease the Hyde Park rent reimbursement effective as of the end of the current agreement which expires in February 2016; Al