UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO SCHEDULE TO
Tender Offer Statement under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934
Marine Products Corporation
(Name of Subject Company (Issuer) and Filing Person (Offeror))
Common Stock, $0.10 par value
(Title of Class of Securities)
568427 10 8
(CUSIP Number of Class of Securities)
Ben M. Palmer
Vice President, Chief Financial Officer and Treasurer
Marine Products Corporation
2801 Buford Highway NE, Suite 520
Atlanta, Georgia 30329
(404) 321-7910
(Name, address
and telephone number of person authorized to receive notices and communications on behalf of
filing person)
Copy to:
Robert F. Dow, Esq.
Arnall Golden Gregory LLP
171 17th Street, Suite 2100
Atlanta, Georgia 30363
(404) 873-8706
Calculation of Filing Fee
Transaction Value(1) | Amount of filing fee(2) | |
$31,500,000 | $3,172.05 |
(1) | The transaction value is estimated only for purposes of calculating the filing fee. This amount is based on the offer to purchase up to $31.5 million in value of the issuer’s common shares, $0.10 par value, at a price of $9.00 per share. |
(2) | The amount of the filing fee, calculated in accordance with Rule 0-11 under the Securities Exchange Act of 1934, as amended, and Fee Rate Advisory No. 1 for Fiscal Year 2016 equals $100.70 per $1,000,000 of the value of the transaction. |
¨ | Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
Amount Previously Paid: N/A | Filing Party: N/A | |
Form or Registration No.: N/A | Date Filed: N/A |
x | Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
Amount Previously Paid: $3,172.05 | Filing Party: Marine Products Corporation | |
Form or Registration No.: Schedule TO | Date Filed: August 26, 2016 |
¨ | Check the box if filing relates solely to preliminary communications made before the commencement of a tender offer. |
Check the appropriate boxes below to designate any transactions to which the statement relates:
¨ | third-party tender offer subject to Rule 14d-1. |
x | issuer tender offer subject to Rule 13e-4. |
¨ | going-private transaction subject to Rule 13e-3. |
¨ | amendment to Schedule 13D under Rule 13d-2. |
Check the following box if the filing is a final amendment reporting the results of the tender offer: o
If applicable, check the appropriate box(es) below to designate the appropriate rule provision(s) relied upon:
¨ | Rule 13e-4(i) (Cross-Border Issuer Tender Offer) |
¨ | Rule 14d-1(d) (Cross-Border Third Party Tender Offer) |
This Amendment No. 1 (“Amendment No. 1”) amends and supplements that certain Tender Offer Statement on Schedule TO (the “Schedule TO”) filed with the Securities and Exchange Commission on August 26, 2016 relating to an offer by Marine Products Corporation, a Delaware corporation (“MPC” or the “Company”), to purchase for cash up to 3.2 million of its outstanding common shares, $0.10 par value, at a purchase price of $9.00 per share upon the terms and subject to the conditions described in the Offer to Purchase, dated August 26, 2016 (the “Offer to Purchase”), a copy of which is filed herewith as Exhibit (a)(1)(A), as supplemented by Addendum to Offer to Purchase (the “Addendum”) filed herewith as Exhibit (a)(1)(F), and in the related Letter of Transmittal (the “Letter of Transmittal,” and together with the Offer to Purchase and Addendum, as they may be amended or supplemented from time to time, the “Tender Offer”), a copy of which is filed herewith as Exhibit (a)(1)(B). The Company reserves the right, in its sole discretion, to increase the number of shares it purchases up to 3.5 million shares. The Tender Offer was approved by the Board of Directors on August 17, 2016. This Amendment No.1 is being filed in accordance with Rule 13e-4(c)(2) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Except as specifically provided in this Amendment No. 1, the information contained in the Schedule TO remains unchanged.
Item 3. Identity and Background of Filing Person.
(a) The filing person to which this Schedule TO relates is MPC. The address and telephone number of MPC is set forth under Item 2(a) above. The names of the directors and executive officers of MPC are as set forth in the Offer to Purchase under the heading “Section 11 — Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares,” and such information is incorporated herein by reference. The business address of each director and named executive officer of MPC is set forth in the Addendum under the heading “Section 11 — Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares” and such information is incorporated herein by reference.
Item 6. Purposes of the Transaction and Plans or Proposals.
(a) Information regarding the purpose of the transaction set forth in the Offer to Purchase under the headings “Summary Term Sheet” and “Section 2 — Purpose of the Offer; Certain Effects of the Offer” is incorporated herein by reference.
(b) Information regarding the treatment of shares acquired pursuant to the Tender Offer set forth in the Offer to Purchase under the heading “Section 2 — Purpose of the Offer; Certain Effects of the Offer” is incorporated herein by reference.
(c) Information about any plans or proposals set forth in the Offer to Purchase under the headings “Section 2 — Purpose of the Offer; Certain Effects of the Offer” and “Section 11 — Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares,” and in the Addendum under the heading “Section 2 — Purpose of the Offer; Certain Effects of the Offer” is incorporated herein by reference.
Item 7. Source and Amount of Funds or Other Consideration.
(a) Information regarding the source of funds set forth in the Offer to Purchase under the heading “Section 9 — Source and Amount of Funds” in the Addendum is incorporated herein by reference.
(b) Not applicable. “Section 9 — Source and Amount of Funds” in the Addendum is incorporated herein by reference.
(d) Not applicable. No funds will be borrowed. “Section 9 — Source and Amount of Funds” in the Addendum is incorporated herein by reference.
Item 11. Additional Information.
Item 11 of the Schedule TO is amended by adding the following:
On September 13, 2016, officers of the Company presented at the B. Riley & Co. 2nd Annual Consumer Conference in New York. A copy of management’s presentation is filed herewith as Exhibit (a)(5)(C), and incorporated by reference.
Item 12. Exhibits.
Exhibit Number |
Description | |
(a)(1)(A) | Offer to Purchase, dated August 26, 2016* | |
(a)(1)(B) | Letter of Transmittal* | |
(a)(1)(C) | Notice of Guaranteed Delivery* | |
(a)(1)(D) | Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees, dated August 26, 2016* | |
(a)(1)(E) | Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees, dated August 26, 2016* | |
(a)(1)(F) | Addendum to Offer to Purchase, dated September 13, 2016 | |
(a)(2) | None | |
(a)(3) | Not applicable | |
(a)(4) | Not applicable | |
(a)(5)(A) | Press release announcing the Tender Offer, dated August 17, 2016* | |
(a)(5)(B) | Press release announcing commencement of the Tender Offer, dated August 26, 2016* | |
(a)(5)(C) |
Management’s Presentation at the B. Riley & Co. 2nd Annual Consumer Conference | |
(b) | None. | |
(d)(1) | Marine Products Corporation 2004 Stock Incentive Plan (incorporated herein by reference to Appendix B to the Definitive Proxy Statement filed on March 24, 2004) (File No. 001-16263) | |
(d)(2) | Form of stock option grant agreement under the 2004 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the Form 10-Q filed on November 1, 2004) (File No. 001-16263) | |
(d)(3) | Form of time lapse restricted stock grant agreement under the 2004 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.2 to the Form 10-Q filed on November 1, 2004) (File No. 001-16263) | |
(d)(4) | Form of performance restricted stock grant agreement under the 2004 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.3 to the Form 10-Q filed on November 1, 2004) (File No. 001-16263) | |
(d)(5) | Form of time lapse restricted stock agreement under the 2004 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the Form 10-Q filed on May 2, 2012) (File No. 001-16263) | |
(d)(6) | 2014 Stock Incentive Plan (incorporated herein by reference to Appendix A to the Registrant’s definitive Proxy Statement filed on March 17, 2014) (File No. 001-16263) | |
(g) | None | |
(h) | None |
* | Previously filed. |
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
MARINE PRODUCTS CORPORATION | ||
Date: September 13, 2016 | /s/ Ben M. Palmer | |
Ben M. Palmer Vice President, Chief Financial Officer and Treasurer |
INDEX TO EXHIBITS
Exhibit Number |
Description | |
(a)(1)(A) | Offer to Purchase, dated August 26, 2016* | |
(a)(1)(B) | Letter of Transmittal* | |
(a)(1)(C) | Notice of Guaranteed Delivery* | |
(a)(1)(D) | Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees, dated August 26, 2016* | |
(a)(1)(E) | Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees, dated August 26, 2016* | |
(a)(1)(F) | Addendum to Offer to Purchase, dated September 13, 2016 | |
(a)(2) | None | |
(a)(3) | Not applicable | |
(a)(4) | Not applicable | |
(a)(5)(A) | Press release announcing the Tender Offer, dated August 26, 2016* | |
(a)(5)(B) | Press release announcing commencement of the Tender Offer, dated August 26, 2016* | |
(a)(5)(C) | Management’s Presentation at the B. Riley & Co. 2nd Annual Consumer Conference | |
(b) | None. | |
(d)(1) | Marine Products Corporation 2004 Stock Incentive Plan (incorporated herein by reference to Appendix B to the Definitive Proxy Statement filed on March 24, 2004) (File No. 001-16263) | |
(d)(2) | Form of stock option grant agreement under the 2004 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the Form 10-Q filed on November 1, 2004) (File No. 001-16263) | |
(d)(3) | Form of time lapse restricted stock grant agreement under the 2004 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.2 to the Form 10-Q filed on November 1, 2004) (File No. 001-16263) | |
(d)(4) | Form of performance restricted stock grant agreement under the 2004 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.3 to the Form 10-Q filed on November 1, 2004) (File No. 001-16263) | |
(d)(5) | Form of time lapse restricted stock agreement under the 2004 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the Form 10-Q filed on May 2, 2012) (File No. 001-16263) | |
(d)(6) | 2014 Stock Incentive Plan (incorporated herein by reference to Appendix A to the Registrant’s definitive Proxy Statement filed on March 17, 2014) (File No. 001-16263) |
(g) | None | |
(h) | None |
* | Previously filed. |
Exhibit (a)(1)(f)
Addendum to Offer to Purchase dated August 26, 2016
Updated as of September 13, 2016
The Offer to Purchase (“Offer to Purchase”) attached to the Schedule TO (“Schedule TO”) of Marine Products Corporation (the “Company”) filed on August 26, 2016, is amended as indicated below. Except as expressly set forth herein, this Amendment does not reflect events occurring after the date of the Schedule TO or modify or update any of the other disclosures contained therein in any way other than as required to reflect the amendments discussed below.
2. | Purpose of the Offer; Certain Effects of the Offer |
Section 2 is amended to add the following:
Based on our records and information provided to us by our affiliates, directors and executive officers, neither we nor, to the best of our knowledge, any of our affiliates, directors or executive officers, have any plans related to the events discussed on p. 14 of the Offer to Purchase.
9. | Source and Amount of Funds |
Section 9 is amended to read as follows:
We will use cash flow from operations and funds from selling our marketable securities to fund the purchase of the shares tendered in the Offer and to pay fees and expenses related to the Offer. Assuming that the Offer is fully subscribed for 3,200,000 shares, we expect the aggregate purchase price for the shares, together with all related fees and expenses, to be approximately $29.1 million ($31.8 million if the Offer is increased to 3,500,000 shares). For the second quarter of 2016, we had positive cash flow from operations of approximately $10.8 million. As of June 30, 2016 we held highly liquid short-term and long-term marketable securities with an aggregate market value of $47.4 million. We do not have an alternative plan for financing the tender offer due to the sufficiency of funds that will be available from the sale of such marketable securities. The Offer is not conditioned upon financing, although the Offer is subject to certain conditions. See Section 7.
11. | Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares |
Section 11 is amended to add the following:
Listed below are the names and addresses of the Officers, Directors and holders of more than 5% of the common stock of the Company:
R. Randall Rollins
Chairman of the Board
2170 Piedmont Road, NE
Atlanta, Georgia 30324
Gary W. Rollins
Vice Chairman and Chief Executive Officer, Rollins, Inc.
2170 Piedmont Road, NE
Atlanta, Georgia 30324
Gamco Investors, Inc.
One Corporate Center
Rye, NY 10580
Richard A. Hubbell
President and Chief Executive Officer
2801 Buford Highway NE, Suite 520
Atlanta, Georgia 30329
Ben M. Palmer
Vice President, Chief Financial Officer and Treasurer
2801 Buford Highway NE, Suite 520
Atlanta, Georgia 30329
Linda H. Graham
Vice President and Secretary
2170 Piedmont Road, NE
Atlanta, Georgia 30324
Bill J. Dismuke
Director
2170 Piedmont Road, NE
Atlanta, Georgia 30324
Larry Prince
Director
2170 Piedmont Road, NE
Atlanta, Georgia 30324
Henry Tippie
Director
2170 Piedmont Road, NE
Atlanta, Georgia 30324
James B. Williams
Director
2170 Piedmont Road, NE
Atlanta, Georgia 30324
Exhibit (a)(5)(c)
Second Annual Consumer Conference September 13, 2016 New York, NY Jim Landers Vice President, Corp. Finance Marine Products Corporation
2 Certain statements and information included in this presentation constitute "forward - looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward - looking statements include statements that look forward in time or express management’s beliefs, expectations or hopes. In particular, such statements include, without limitation, our belief that our order backlog and dealer inventory levels warrant increasing production during the third quarter and our belief that we are prepared to capitalize on opportunities to increase market share and to generate superior financial performance to build long - term shareholder value. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Marine Products Corporation to be materially different from any future results, performance or achievements expressed or implied in such forward - looking statements. These risks include possible decreases in the level of consumer confidence and available funds impacting discretionary spending, increased interest rates and fuel prices, weather conditions, changes in consumer preferences, deterioration in the quality of Marine Products’ network of independent boat dealers or availability of financing of their inventory, and competition from other boat manufacturers and dealers. Additional discussion of factors that could cause the actual results to differ materially from management's projections, forecasts, estimates and expectations is contained in Marine Products' Form 10 - K, filed with the Securities and Exchange Commission for the year ended December 31, 2015. Forward Looking Statements
3 • Headquartered in Atlanta • Manufacturing in Nashville, Georgia • NYSE: MPX • Recent Stock Price (September 9, 2016): $ 8.88 • Market Capitalization (in millions): $ 341 • Current Dividend Yield: 2.7% • Average Daily Volume (YTD 2016): 14,700 • Long - term focus on Financial and Shareholder Returns: • No Debt • Cash and marketable securities at 06/30/16: $ 47.7 million • Partial Tender Offer launched for up to 3.2 million shares Corporate Profile
4 • Marine Products Corporation is one of the largest manufacturer of sterndrive powerboats in the United States and holds a 14.4% market share. According to most recent data, Chaparral brand held the highest market share in its category. • The Company’s Robalo brand also holds a significant and growing market share in the coastal offshore fishing boat market segment. • Marine Products Corporation’s Vortex jet boat is a relatively new product line but has quickly garnered second place in a segment dominated by one major manufacturer. About Marine Products Corporation Marine Products Corporation has been manufacturing high - quality powerboats for over 50 years.
5 • A mature market with $35.4 billion in annual retail sales • Top 5 manufacturers hold over 55% of total sterndrive market share • The majority of recreational boat manufacturers are small companies with limited geographic markets • Retail sales are improving following the 2008 – 2009 downturn The Recreational Boating Market 30,000 35,000 40,000 45,000 50,000 55,000 60,000 65,000 70,000 2011 2012 2013 2014 2015 Annual Fiberglass Powerboat Sales (Source: Info - Link Technologies, Inc.) • Improved consumer confidence, real estate and fuel prices are macro catalysts. • Sterndrive unit sales are beginning to improve.
6 The “Power of Choice” • Offer a wide variety of boat types, powered by three major engine types, utilizing our competitive advantages: – Design expertise • Frequent additions of attractive options and features. – Profitable manufacturing operations • Vendor relationships • High volumes – Distribution network – Brand name recognition – Nationally advertised pricing structure
7 Product Lines 15 Models R222 Robalo Chaparral 210 SunCoast 35 Models
8 The Vortex - Chaparral’s Jet Boat • New product introduced in 2014 model year. • Built around a reliable, high - quality Rotax engine manufactured by Bombardier Recreational Products. • Entered a new market with a differentiated product. 243 Vortex
9 SunCoast – A Chaparral Outboard! The SunCoast features the first outboard offered by Chaparral in three decades and is now available in three different sizes. 230 SunCoast
10 Highlighting the Robalo R160 Our 16 - foot Robalo is a new product offering for the first - time boater as well as more experienced anglers. The Robalo R160 offers the same features and quality found in our larger Robalo models, but at a nationally advertised price of under $20,000. R160
11 H2O – Chaparral’s Newest Outboard! The 21’ H2O is now available with an outboard motor and sleek new colors. 21’ H2O Ski & Fish and 21’ H2O Sport
12 Chaparral is the largest manufacturer of sterndrive boats in the 18’ to 33’ range. Chaparral Market Share June 30, 2016 18’ – 33’ Range 44.3% 7.9% 12.4% 14.5% 8.1% 12.8% Sea Ray Bayliner Chaparral Cobalt Regal All Others Market Share
13 5.91 6.02 5.91 5.72 5.49 5.91 6.79 7.41 7.71 8.30 8.25 8.30 7.18 7.38 7.71 7.30 8.37 11.72 13.86 13.7 13.4 14.52 8.10 199419951996199719981999200020012002200320042005200620072008200920102011201220132014 2015* 2016 Chaparral Sterndrive Market Share ( 18 - 33 Ft) Percentage Consistent and Increasing Market Share * In 2015 Chaparral’s sterndrive offerings were 18 - 33 ft. 2015 market share is calculated based on those values. All previous years’ market share is based on 18 - 35 ft.
14 • Approximately 147 independent domestic dealers • Approximately 85 International dealers on six continents • MPX has a nationwide dealership presence, including dealers in the top boating states • New dealers interested in our stability, R&D investment, innovation and financial strength • Dealer support through sales and service training, boat show support, incentive programs Key to maintaining our market share Distribution Network
15 Financial Overview
16 Second Quarter 2016 Financial Results MARINE PRODUCTS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per share data) Periods ended June 30, (Unaudited) 2016 2015 % BETTER (WORSE) 2016 2015 % BETTER (WORSE) Net Sales $ 65,066 $ 59,498 9.4 % $ 128,731 $ 110,142 16.9 % Cost of Goods Sold 51,258 46,894 (9.3) 102,235 87,333 (17.1) Gross Profit 13,808 12,604 9.6 26,496 22,809 16.2 Selling, General and Administrative Expenses 7,096 6,181 (14.8) 14,139 12,132 (16.5) Operating Profit 6,712 6,423 4.5 12,357 10,677 15.7 Interest Income 151 105 43.8 243 222 9.5 Income Before Income Taxes 6,863 6,528 5.1 12,600 10,899 15.6 Income Tax Provision 2,045 2,099 2.6 3,861 3,541 (9.0) Net Income $ 4,818 $ 4,429 8.8 % $ 8,739 $ 7,358 18.8 % EARNINGS PER SHARE Basic $ 0.13 $ 0.12 8.3 % $ 0.23 $ 0.20 15.0 % Diluted $ 0.13 $ 0.12 8.3 % $ 0.23 $ 0.20 15.0 % AVERAGE SHARES OUTSTANDING Basic 38,363 37,026 38,330 37,025 Diluted 38,363 37,120 38,330 37,224 Second Quarter Six Months
17 Second Quarter 2016 Financial Results Compared to Q2 2015 • 9.4% increase in net sales due to higher unit sales • Gross Margin of 21.2% was comparable to Q2 2015 • Operating Profit increased by 4.5% • Diluted EPS was $0.13 compared to $0.12 in the previous year. $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 Net Sales Gross Profit Second Quarter (thousands) 2015 2016
18 $149 $168 $171 $207 $101 $106 $252 $194 $163 $135 $148 $123 $272 $244 $39 $176 $261 19992000200120022003200420052006200720082009201020112012201320142015 (In Millions) Historical Net Sales
19 Return on Invested Capital * (15%) (10%) (5%) 0% 5% 10% 15% 20% 25% 30% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 * Calculated using cash flow from operations and average invested capital. Return calculation includes cash and marketable securities.
20 • During the 10 - year period ending in 2015, Marine Products has generated more than $100 million in operating cash flow, and returned almost all of it to our shareholders in the form of dividends and stock repurchases. • Marine Products has recently offered to make up to $31.5 million in additional share repurchases. Strong Stewardship of Cash and Focus on Shareholder Returns $0 $20 $40 $60 $80 $100 $120 Dividends Share Repurchases Operating Cash Flow
21 Marine Products Corporation 2801 Buford Highway NE Suite 520 Atlanta, GA 30329 404 - 321 - 7910 www.marineproductscorp.com Corporate Headquarters
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