UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Preliminary Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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-11(c) or
Section 240.14a-12
Microwave Filter Company, 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)(1) 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:
<page>
Supplement
#2 to Definitive Proxy Statement
This supplemental information should be read in conjunction with the
Definitive Proxy Statement on Schedule 14A filed with the Securities
and Exchange Commission (the “SEC”) by the Company on February 9,
2012, which should be read in its entirety.
<page>
Please
vote
ONLY
the enclosed “White” proxy and …
DO
NOT
sign (& return)
ANY
“blue” proxy
you receive from Furlong!
Dear Shareholders:
By now, you may have received proxy material from a Mr. Daniel Rudewicz (or
Furlong Financial, LLC) in connection with our upcoming Annual Meeting.
The mailing of his material was not authorized by our Board of Directors and
is being done in direct opposition to our Board.
All Boards of publicly held companies have the fiduciary responsibility to act
(at
all
times) in the best interests of the company’s shareholders;
the Board of Directors of Microwave Filter Company, Inc. (hereinafter “MFCO”)
is
no
different.
Microwave Filter Company Board Nominees vs. Dissident
(Rudewicz Nominees)
The responsibility of the nominating committee of the Board
is to select
qualified
candidates to serve as Directors on the Company’s
Board; our nominating committee continues to provide
that
service to
our Board … as it has in the past.
Let’s look at the facts:
MFCO Board
nominees:
An experienced
business law attorney and retired partner of a prominent law firm in Central
New York (Robert Essig, Esq.) and a senior partner (and former GM Manufacturing
Executive) of an Upstate New York management consulting firm (John Kennedy,
MBA).
Rudewicz (Furlong
Financial, LLC) nominees:
Daniel Rudewicz (Furlong Financial
LLC) and Ryan Morris appear to be “professional dissident shareholders”
who utilize “proxy access” proposals and engage in proxy contests
to obtain board seats and eventually, gain control of a target company’s
board or gain other “remuneration.”
Currently (or in the recent
past) Rudewicz and/or Morris have made such hostile and aggressive attacks on
the following companies: (1) Paragon Technologies (PGNT.PK), Easton, PA; (2)
KSW, Inc., Long Island City, NY; (3) Pinnacle Airlines Corp (PNCL), Memphis,
TN and (4) Infusystem Holdings Inc. (NYSE-AMEX:1NFU), Madison Heights, MI.
Page
2
|
|
Shareholder
Letter 2
|
Rudewicz (and Morris) are
expected to wage a second proxy contest at next years (2013) shareholders’
meeting to install an additional group of three dissident directors and complete
their “take over” of your Board using their proposed proxy access
proposal (Proposal 2). They expect you to cede control of your Board to a group
of stockholders owning
as little as 15% of the company shares for as
little as 30 days without paying any customary control premiums.
Creating Shareholder
Value
Mr. Rudewicz (Furlong Financial
LLC) claims that his nominees are primarily concerned about shareholder value
whereas he contends the current Board is not. He suggests the repurchase of
shares and the payment of dividends, among other things.
Let’s
look at the facts:
Fact No. 1:
Return
on Shareholder’s Equity
has been consistently improving over
the last five years to the current level of 17% (annualized) for the 1st quarter
of FY12 as shown in Figure 1.
Fact No. 2:
Return
on Sales
(a measure of profitability per unit sales) has also been
improving to almost 8% for the 1st quarter of FY12 as shown in Figure 2.
Page
3
|
|
Shareholder
Letter 2
|
Fact No. 3:
The Board of Directors has authorized the payment of $678,850 in cash dividends
to our shareholders over the last six years ($0.10 in 2006 and $0.15 in 2011).
Fact No. 4:
The Board of Directors has authorized and
executed the repurchase of 323,073 shares which represent an 11.1% buy
back of the Company shares since FY2006.
Rudewicz (Furlong Financial, LLC) Proposal No.
2
The second proposal that has been put forward by Mr. Rudewicz (Furlong Financial,
LLC) (Proposal No. 2) would amend the MFC bylaws to provide mandatory access
to your Company’s proxy material to a group of not more than 5 shareholders
who own 15% of your Company’s stock
for a period of as little
as one month.
This would effectively bypass the Board of Directors nominating committee and
provide leverage to a minority group of shareholders who have owned shares in
your Company for a very brief period. Your Company’s Directors have
a fiduciary duty to represent all the shareholders interest. This proposal would
empower a small minority who may use the
extremely brief holding period
for short term advantage by threatening the expense and disruption of a dissident
slate of directors running against Board nominees with your Company paying the
total cost of the proxy contest!
We feel
strongly
that this proposed amendment to our Company’s
Bylaws is simply unnecessary since shareholders already have the ability to
contact our Board and let us know of superior candidates to serve as outside
Directors. Should a vacancy come up and if the best candidate (for that
vacancy) happened to be the one recommended by a shareholder, our Board (like
any other) would naturally embrace that superior candidate.
Essentially, Mr. Rudewicz is trying to “fix”
a problem … that
doesn’t
exist.
Once again, we have enclosed our most recent quarterly earnings report. Read
for yourself once more how well our present Board & Management Team have
performed for you … our shareholders.
Our fundamental and all-consuming goal is
“still”
to
increase long term shareholder value for
all
shareholders,
particularly in these difficult and volatile economic times. We believe
we are on the right track and appreciate the loyalty and confidence of our shareholders.
Thank you for taking the time to read this letter. Enclosed you
will find another “WHITE” proxy. We again ask you to please
sign, date and return the “WHITE” proxy today, or cast your vote
via the internet or telephone. You are also urged to discard
any
blue proxy that you receive.
|
|
|
Robert R. Andrews
|
|
Carl F. Fahrenkrug, P.E.
|
Chairman
|
|
President and CEO
|
MICROWAVE FILTER COMPANY, INC.
2012
First Quarter Report
for 3 months ended
December 31, 2011
6743 KINNE STREET
EAST SYRACUSE, N.Y.
13057
315/438-4700 FAX:
315/463-1467
To: The Shareholders of Microwave
Filter Company, Inc.
I am pleased to report net income for the quarter ending December 31,
2011 increased to $102,817 (4 cents per share) as compared to net income of
$47,593 (2 cents per share) for the same period last year (quarter ending December
31, 2010).
While sales increased modestly (1.7%), higher profit margins were achieved
through manufacturing and engineering cost improvements (overhead and materials),
as well as, product sales mix.
Figure 1 is a bar graph of Return on Sales (including the unaudited first
quarter of FY 2012 results) indicating the progress Management has made in increasing
the profitability per unit of sales.
Figure 2 depicts the improvement in the Return on Equity over the
last five years (with the first quarter of FY 2012 annualized).
Management remains focused upon increasing shareholder value through
the current volatile business climate.
You are encouraged to review Microwave Filter Company’s Quarterly
Report on Form 10-Q for the quarter ended December 31, 2011 and other Securities
and Exchange Commission filings.
Sincerely,
|
|
|
Carl
F. Fahrenkrug, P.E.
|
|
Robert
R. Andrews
|
President
and CEO
|
|
Chairman
|
Microwave Filter
Company and Subsidiaries
Consolidated
Statements of Operations
(unaudited)
For the Three Months
Ended December 31, 2011 and 2010
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
1,317,207
|
|
$
|
1,294,567
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
813,995
|
|
|
827,308
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
503,212
|
|
|
467,259
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and
administrative
expenses
|
|
|
421,970
|
|
|
421,214
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
81,242
|
|
|
46,045
|
|
|
|
|
|
|
|
|
|
|
|
Other
income (net)
|
|
|
21,575
|
|
|
1,548
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
102,817
|
|
|
47,593
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit) for income taxes
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
|
$
|
102,817
|
|
$
|
47,593
|
|
|
|
|
|
|
|
|
|
|
|
Per share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings
per share
|
|
$
|
0.04
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing net
|
|
|
|
|
|
|
|
|
earnings
per share:
|
|
|
2,586,227
|
|
|
2,589,885
|
|
|
Microwave Filter Company and Subsidiaries
Consolidated
Statements of Cash Flows
(unaudited)
For the Three
Months Ended December 31, 2011 and 2010
|
|
|
Three months ended
|
|
|
|
|
December 31
|
|
|
|
|
2011
|
|
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
|
102,817
|
|
|
$
|
|
47,593
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net income
|
|
|
|
|
|
|
|
|
|
to net cash
provided by (used in)
|
|
|
|
|
|
|
|
|
|
operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
37,583
|
|
|
|
|
22,759
|
|
Gain on sale of fixed assets
|
|
(
|
20,000
|
)
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
Change in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
130,368
|
|
|
|
|
67,268
|
|
Federal and state income tax
recoverable
|
|
|
25,402
|
|
|
|
|
0
|
|
Inventories
|
|
|
49,870
|
|
|
|
(
|
17,252
|
)
|
Prepaid expenses and other assets
|
|
|
12,247
|
|
|
|
|
20,292
|
|
Accounts payable and customer deposits
|
|
(
|
37,811
|
)
|
|
|
|
91,436
|
|
Accrued payroll, compensated absences
|
|
|
|
|
|
|
|
|
|
and related
expenses
|
|
(
|
39,691
|
)
|
|
|
(
|
36,128
|
)
|
Other current liabilities
|
|
(
|
51,899
|
)
|
|
|
|
5,375
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in)
|
|
|
|
|
|
|
|
|
|
operating
activities
|
|
|
208,886
|
|
|
|
|
201,343
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
(
|
189,078
|
)
|
|
|
(
|
4,470
|
)
|
Proceeds
from sale of fixed assets
|
|
|
20,000
|
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by
|
|
|
|
|
|
|
|
|
|
investing
activities
|
|
(
|
169,078
|
)
|
|
|
(
|
4,470
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Purchase of treasury stock
|
|
|
0
|
|
|
|
(
|
1,912
|
)
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by
|
|
|
|
|
|
|
|
|
|
financing
activities
|
|
|
0
|
|
|
|
(
|
1,912
|
)
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
|
|
|
|
|
|
|
|
|
|
and cash
equivalents
|
|
|
39,808
|
|
|
|
|
194,961
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
at
beginning of period
|
|
|
1,258,885
|
|
|
|
|
1,466,719
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
at end of
period
|
$
|
|
1,298,693
|
|
|
$
|
|
1,661,680
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Schedule of Cash
Flow Information:
|
|
|
|
|
|
|
|
|
|
Income taxes paid
|
$
|
|
15,000
|
|
|
$
|
|
0
|
|
Microwave
Filter Company and Subsidiaries
Consolidated Balance
Sheets
December 31, 2011 (unaudited) and September 30,
2011
|
|
December 31, 2011
|
September 30, 2011
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
|
1,298,693
|
|
|
$
|
|
1,258,885
|
|
|
Accounts
receivable-trade, net of
|
|
|
|
|
|
|
|
|
|
|
|
allowance
for doubtful accounts
|
|
|
|
|
|
|
|
|
|
|
|
of $26,000 and $26,000
|
|
|
|
221,686
|
|
|
|
|
352,054
|
|
|
Federal and state income tax
recoverable
|
|
|
|
0
|
|
|
|
|
24,828
|
|
|
Inventories, net
|
|
|
|
517,391
|
|
|
|
|
567,261
|
|
|
Prepaid
expenses and other current assets
|
|
|
|
81,867
|
|
|
|
|
94,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
|
2,119,637
|
|
|
|
|
2,297,142
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
|
769,313
|
|
|
|
|
617,818
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
|
2,888,950
|
|
|
$
|
|
2,914,960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
|
151,701
|
|
|
$
|
|
195,535
|
|
|
Customer
deposits
|
|
|
|
57,909
|
|
|
|
|
51,886
|
|
|
Accrued federal and state income taxes
|
|
|
|
574
|
|
|
|
|
0
|
|
|
Accrued
payroll and related expenses
|
|
|
|
39,421
|
|
|
|
|
57,514
|
|
|
Accrued compensated absences
|
|
|
|
228,845
|
|
|
|
|
250,443
|
|
|
Other
current liabilities
|
|
|
|
31,755
|
|
|
|
|
83,654
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
510,205
|
|
|
|
|
639,032
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
|
510,205
|
|
|
|
|
639,032
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock, $.10 par value
|
|
|
|
|
|
|
|
|
|
|
|
Authorized 5,000,000 shares,
Issued
|
|
|
|
|
|
|
|
|
|
|
|
4,324,140 shares in 2012 and
2011,
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding 2,586,227 shares
in 2012
|
|
|
|
|
|
|
|
|
|
|
|
and 2011
|
|
|
|
432,414
|
|
|
|
|
432,414
|
|
|
Additional
paid-in
capital
|
|
|
|
3,248,706
|
|
|
|
|
3,248,706
|
|
|
Retained earnings
|
|
|
|
388,302
|
|
|
|
|
285,485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock in treasury, at cost
|
|
|
|
|
|
|
|
|
|
|
|
1,737,913 shares in 2012 and
2011
|
|
|
(
|
1,690,677
|
)
|
|
|
(
|
1,690,677
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity
|
|
|
|
2,378,745
|
|
|
|
|
2,275,928
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders'
equity
|
|
$
|
|
2,888,950
|
|
|
$
|
|
2,914,960
|
|
|
|
|
|
|
|
|
|
|
|
|
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PROXY
This proxy is Solicited by
The Board of Directors of Microwave Filter Company, Inc.
Proxy
for 2012 Annual Meeting of Shareholders
The undersigned hereby appoints Robert R. Andrews and Carl F.
Fahrenkrug proxies of the undersigned, with full power of
substitution, to vote shares of common stock of the Company which
the undersigned is entitled to vote at the 2012 Annual Meeting of
the Shareholders to be held on Wednesday, March 28, 2012 at 10:00
a.m. and any adjournments thereof as follows:
(1) ELECTION OF DIRECTORS
Instructions:
To vote for all nominees, place an X in box number 1. To
withhold authority to vote for any individual nominee, place an X in
box number 2, and draw a line through his/her name in the list
below.
1. [ ] For All Nominees
2. [ ] For All Nominees Except Those With A
Line Through Their Name
Robert D. Essig
John J. Kennedy Anne
Tindall
The
Board of Directors recommends a vote FOR all nominees.
(2) Proposal to ratify the appointment of EFP Rotenberg, LLP
as the Company’s independent auditors for the fiscal year ending
September 30, 2012.
The
Board of Directors recommends a vote FOR this proposal.
FOR [ ]
AGAINST [ ] ABSTAIN [ ]
(3) In their discretion, the proxies are authorized to vote
upon other matters properly coming before the meeting or any
adjournments thereof.
The
Board of Directors recommends a vote FOR this proposal.
FOR [ ]
AGAINST [ ] ABSTAIN [ ]
This proxy will be voted as
directed by the undersigned. IF NO DIRECTION IS GIVEN, THIS
PROXY WILL BE VOTED FOR PROPOSAL (1), (2) and (3).
NOTE: Please date and sign exactly as your name or names appear
below and return in the enclosed postage paid envelope.
When signing as an Attorney, Executor, Trustee, Guardian or Officer
of a Corporation, please give title as such.
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Signature
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Date
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_______________________
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_________
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Signature if held jointly
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Date
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IMPORTANT:
To assist
the Company in planning the Annual Meeting please check the
following:
I plan to attend the Annual Meeting _____ I
do not plan to attend the Annual Meeting _____
Microwave Filter (PK) (USOTC:MFCO)
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