Kreisler Manufacturing Sets The Record Straight For Shareholders

ELMWOOD PARK, N.J., Dec. 16, 2014 /PRNewswire/ --

Dear Fellow Kreisler Stockholder:

Since January 1, 2014, the Kreisler stock price has increased from $10.50 to $15.25, a 45% increase, which is reflective of our substantially increased earnings for fiscal 2014 as well as the increasing support of shareholders who are confident current leadership is creating value in the Company.  We urge your continued support of the management slate. 

The nominees proposed by AB Value Management LLC ("AB Value") have no experience in managing a business such as Kreisler's.  The most recent letter from AB Value refers to "peer companies" to Kreisler which purportedly have a much greater relative valuation than Kreisler.  What AB Value failed to tell you was that these companies had revenues ranging from $86.49 million to $395.39 million, and therefore could not be considered "peer companies" by any reasonable standard.  Kreisler's revenues for fiscal 2014 were only $30.6 million.  This means that the so-called "peer companies" were at a minimum more than twice as large to as much as 13 times larger in annual revenue than Kreisler!  There are other errors in their "peer company" analysis which reflect the lack of experience of AB Value in Kreisler's industry.

AB Value's disregard of the facts has infected all of their communications with Kreisler shareholders.  Several stockholders have asked me to specifically respond to the misrepresentations and misleading statements made by this activist hedge fund, which is solely interested in advancing its own agenda and not in the interests of all shareholders. The following is intended as a response to each of their statements:

• John Poling – Among the many misstatements made by AB Value, are the statements that maliciously and knowingly blacken and impugn Mr. Poling's character. The truth is that Mr. Poling was never charged with any wrongdoing by the SEC, the IRS, or any other government agency in connection with The TUBE Media matter.  Additionally, AB Value voted FOR Mr. Poling at the 2013 Annual Meeting of Stockholders, well after The Tube Media issues were made public.  In addition, Mr. Levy, the former CEO of The Tube Media, was sentenced in 2014 for wrongdoings that had nothing to do with The Tube Media.
• Compensation – The truth is that the compensation package for management was approved unanimously by both independent directors (including Mr. Daly).  Although Mr. Daly was concerned about some of the compensation issues, that concern was alleviated by the final compensation package which he approved and made repeated statements of unequivocal support.  It's good to see that AB Value recognizes the benefit of using "peer companies,"  however flawed their selection process might be, since one component of developing the final compensation package was the use of comparable peer companies.
• Poland – The truth is that Kreisler made a substantial investment in its operations in Poland as a result of requirements of our 60% customer.  As part of its purchase of our Polish subsidiary in July 2012, the major customer assumed millions of dollars of liabilities and released Kreisler from burdensome obligations under the then outstanding long-term agreement.  Our exit from Poland is one part of the changes we have made that has allowed us to achieve the performance that now makes us so attractive to AB Value.  It should be noted that AB Value (1) voted FOR the entire slate of directors at the 2013 Annual Meeting of Stockholders; and (2) publicly complimented Kreisler Board and management on the Poland subsidiary sale.
• Corporate Governance – AB Value is well aware of the reasons Kreisler moved to the OTC Pink Sheets.  As a result of these moves, the company has saved hundreds of thousands of dollars.  Now AB Value wants to turn back the clock and drive up our costs by becoming an SEC-reporting, Nasdaq-listed company and creating new board committees to provide board fees to the AB Values-controlled directors.  How is any of that good for shareholder value?

Kreisler directors and management have appreciated your support in the past and need your support now to fend off AB Value, an activist hedge fund.  By now, you should have received the Kreisler proxy statement for our December 18, 2014 Annual Meeting, along with a WHITE proxy card or voting instruction form.  In addition, you may already have been contacted by or on behalf of Andrew Berger or have received proxy materials and a GOLD proxy card from AB Value hedge fund.  AB Value has launched this proxy contest in violation of Kreisler's bylaw provisions that were designed to ensure the process is fair to all stockholders.  This issue will be decided by the court. 

We urge you to discard any GOLD proxy card that you may receive from AB Value and to sign and return only the WHITE proxy card that you receive from Kreisler.  If you previously signed a GOLD proxy card sent to you by AB Value, you can still vote for your Board's nominees following the instructions on the WHITE proxy card. 

WE BELIEVE THAT THE ELECTION OF THE DISSIDENT GROUP'S NOMINEES WILL LEAD TO A SHORT-TERM FOCUS THAT WOULD JEOPARDIZE KREISLER'S OPERATIONS AND FINANCIAL POSITION AND HARM THE VALUE OF YOUR INVESTMENT.

If you have any questions or need assistance in voting your WHITE proxy card, we encourage you to call our proxy solicitor, Innisfree M&A Incorporated toll-free at (888) 750-5834. Banks and brokers can call (212) 750-5833.

Thank you for your continued support of Kreisler. We look forward to communicating with you in the coming weeks.

About Kreisler Manufacturing Corporation

Kreisler is a manufacturer of precision metal components and assemblies for use in military and commercial aircraft engines and industrial gas turbines. These products primarily include tube and manifold assemblies. The Company and its wholly-owned subsidiary, Kreisler Industrial Corporation, are located in Elmwood Park, New Jersey.

Forward-Looking Statements

This information and other statements by Kreisler Manufacturing Corporation in this letter contain "forward-looking statements". Words such as "believe," "demonstrate," "expect," "estimate," "anticipate," "should," "project," and "likely" and similar expressions identify forward-looking statements. In addition, statements that are not historical should also be considered forward-looking statements. Readers are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date the statement was made. Such forward-looking statements are based on current expectations that involve a number of known and unknown risks, uncertainties and other factors which may cause actual events to be materially different from those expressed or implied by such forward-looking statements.  Kreisler is under no obligation to (and expressly disclaims any such obligation to) update or revise any forward-looking statement whether as a result of new information, future events or otherwise. If Kreisler does update any forward-looking statement, no inference should be drawn that Kreisler will make additional updates with respect to that statement or any other forward-looking statements.

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SOURCE Kreisler Manufacturing Corporation