UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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 §240.14a-12 | |||
|
ModusLink Global Solutions, Inc. | ||||
| (Name of Registrant as Specified In Its Charter) | ||||
| (Name of Person(s) Filing Proxy Statement, if other than the Registrant) | ||||
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On January 20, 2012, ModusLink Global Solutions, Inc. gave the following presentation at its 2011 Annual Meeting of Stockholders.
 2011
Annual Meeting of Stockholders |
 SEC Safe
Harbor Statement 2
Forward looking Statement
This
presentation
contains
forward-looking
statements,
which
address
a
variety
of
subjects
including,
for
example,
the
Company’s
plan
for
sustained
growth
in
revenue
and
profits;
the
Company’s
assessment
of
the
long-term
prospects
for
its
market
and
the
BPO
market;
the
trend
toward
outsourcing
key
processes;
the
opportunity
for
new
programs
and
integrated
solutions
in
our
client
base;
the
potential
benefits
of
the
investment
and
cost
reduction
plan
including
increased
revenue
from
new
programs,
improved
profitability,
sales
acceleration,
increased
market
penetration,
cost
alignment,
working
capital
improvements
and
improved
results
from
new
leadership;
the
expected
annualized
costs
savings
and
benefits
in
fiscal
2012
and
2013
as
a
result
of
the
investment
and
cost
reduction
plan;
the
level
of
reinvestment
in
sales
and
marketing
and
other
initiatives
in
fiscal
2012
and
2013;
and
the
impact
of
the
tax
benefit
preservation
plan.
All
statements
other
than
statements
of
historical
fact,
including
without
limitation,
those
with
respect
to
the
Company’s
goals,
plans,
expectations
and
strategies
set
forth
herein
are
forward-looking
statements.
The
following
important
factors
and
uncertainties,
among
others,
could
cause
actual
results
to
differ
materially
from
those
described
in
these
forward-looking
statements:
the
Company’s
success,
including
its
ability
to
meet
its
revenue,
operating
income
and
cost
savings
targets,
maintain
and
improve
its
cash
position,
expand
its
operations
and
revenue,
lower
its
costs,
improve
its
gross
margins,
reach
and
sustain
profitability,
reach
its
long-term
objectives
and
operate
optimally,
depends
on
its
ability
to
execute
on
its
business
strategy,
including
the
investment
and
costs
savings
plan
and
the
continued
and
increased
demand
for
and
market
acceptance
of
its
services;
global
economic
conditions,
especially
in
the
technology
sector
are
uncertain
and
subject
to
volatility;
demand
for
our
clients’
products
may
decline
or
may
not
achieve
the
levels
anticipated
by
our
clients;
the
Company's
management
may
face
strain
on
managerial
and
operational
resources
as
they
try
to
over
see
the
expanded
operations;
the
Company
may
not
realize
the
expected
benefits
of
its
restructuring
and
cost
cutting
actions;
the
Company
may
not
be
able
to
expand
its
operations
in
accordance
with
its
business
strategy;
the
Company’s
cash
balances
may
not
be
sufficient
to
allow
the
Company
to
meet
all
of
its
business
and
investment
goals;
the
Company
may
experience
difficulties
integrating
technologies,
operations
and
personnel
in
accordancewith
its
business
strategy;
the
Company
derives
a
significant
portion
of
its
revenue
from
a
small
number
of
customers
and
the
loss
of
any
of
those
customers
could
significantly
damage
the
Company’s
financial
condition and results of operations; the Company frequently sells to its supply
chain management clients on a purchase order basis rather than pursuant to contracts with
minimum
purchase
requirements,
and
therefore
its
sales
and
the
amount
of
projected
revenue
that
is
actually
realized
are
subject
to
demand
variability;
risks
inherent
with
conducting
international
operations;
tax
rate
expectations
are
based
on
current
tax
law
and
current
expected
income
and
may
be
affected
by
the
jurisdictions
in
which
profits
are
determined
to
be
earned
and
taxed,
changes
in
estimates
of
credits,
benefits
and
deductions,
the
resolution
of
issues
arising
from
tax
audits
with
various
tax
authorities,
including
payment
of
interest
and
penalties
and
the
ability
to
realize
deferred
tax
assets;
the
potential
tax
benefits
represented
by
the
net
operating
loss
carryforwards
may
not
be
realized
and
the
tax
benefit
preservation
plan
may
not
be
effective
in
preserving
those
benefits;
the
mergers
and
acquisitions
and
IPO
markets
are
inherently
unpredictable
and
liquidity
events
for
companies
in
the
Company’s
venture
capital
portfolio
may
not
occur;
increased
competition
and
technological
changes
in
the
markets
in
which
the
Company
competes;
and
the
Company’s
review
of
strategic
alternatives
may
not
ultimately
lead
to
a
transaction
that
results
in
increased
value
to
its
stockholders.
For
a
detailed
discussion
of
cautionary
statements
that
may
affect
the
Company’s
future
results
of
operations
and
financial
results,
please
refer
to
the
Company's
filings
with
the
Securities
and
Exchange
Commission,
including
the
Company's
most
recent
Annual
Report
on
Form
10-K
and
Quarterly
Reports
on
Form
10-Q.
Forward-looking
statements
represent
management's
current
expectations
and
are
inherently
uncertain.
We
do
not
undertake
any
obligation
to
update
forward-looking
statements
made
by
us.
Important Additional Information
On
December
2,
2011,
ModusLink
filed
with
the
Securities
and
Exchange
Commission
(the
“SEC”)
a
definitive
proxy
statement
in
connection
with
its
2011
annual
meeting
of
stockholders
(the
“2011
Annual
Meeting”)
and
has
mailed
the
definitive
proxy
statement
to
its
stockholders.
The
definitive
proxy
statement
contains
important
information
concerning
the
identity
and
interests
of
ModusLink’s
directors,
director
nominees
and
certain
of
its
officers
and
employees
that
may
be
deemed,
along
with
ModusLink,
to
be
participants
in
the
solicitation
of
ModusLink’s
stockholders
in
connection
with
the
2011
Annual
Meeting.
Copies
of
ModusLink’s
definitive
proxy
statement,
any
other
relevant
documents
and
other
materials
filed
with
the
SEC
concerning
ModusLink,
when
filed,
may
be
obtained
free
of
charge
at
www.sec.gov
and
www.ir.moduslink.com.
The
definitive
proxy
statement
and
any
other
relevant
documents
filed
with
the
SEC
contain
(or
will
contain)
important
information,
and
stockholders
should
carefully
read
the
definitive
proxy
statement,
the
accompanying
WHITE
proxy
card
and
other
materials
filed
with
the
SEC
when
they
become
available
before
making
any
voting
decision. |
 Investor
Highlights Market leader in Supply Chain Business Process Outsourcing
$25 billion addressable market
More than $875 million in FY2011 revenue
Returned nearly $97 million of cash since beginning of fiscal 2008
–
$57 million of stock repurchases –
12% reduction of outstanding shares
–
$40 million ($0.91 per share) special dividend to stockholders in March 2011
More than 70% of revenues from Fortune 1000 companies
Strong balance sheet*:
–
No debt; approximately $110 million of cash
–
Strong liquidity: current ratio of 1.8x
Legacy CMGI NOL’s of $2 billion
*At October 31, 2011
3 |
 Company
Snapshot ModusLink is a leader in global supply chain business process
management, providing clients with a broad and integrated portfolio of
solutions
4 |
 Improving
Outlook for BPO Market Worldwide BPO Spending 2008 –
2015:
Source: Gartner -
Q2 2011
5 |
 Problems
We Solve for Clients * 2012
16
th
Annual
Third
Party
Logistics
Study
59%
54%
41%
37%
36%
Price Pressure to Reduce Operating Costs
Global Supply Chain Complexity
Lack of Supply Chain Visibility
Volatile/Unpredictable Demand
Supply Chain Disruptions
ModusLink’s solutions help clients solve their most significant supply
chain challenges
Top logistics challenges for electronics companies*
6 |
 ModusLink
Serves Highly Dynamic Core Markets Computing
Software
Communications
Storage
Consumer
Electronics
* Images are representative of product type and not specific products handled or
clients served. 7 |
 Our Long
Term Strategy 8
* Gartner -
Q2 2011 |
 9
Fiscal 2011 Financial Results
Recession created adverse
conditions for our clients, which
in turn impacted ModusLink
–
Use of fewer materials in
packaged products
–
Pricing
–
Unit volumes (and its effect on
revenue mix)
Lower SG&A due to strong cost
management initiatives
Impairment charges reflect
economic and competitive
effects on acquired businesses;
significant changes made to
improve results
* Twelve months ended July 31, 2011
** Twelve months ended July 31, 2010
9 |
 10
Most Recent Quarter
First quarter fiscal 2012
Revenue reflects lower
volumes from certain client
programs, especially in
Europe and the Americas
Favorable revenue mix and
benefits from cost reduction
actions had a positive effect
on profitability
–
Achieved highest gross profit
margin in nearly two years
–
Reported first operating income
in six quarters
* Three months ended Oct. 31, 2011
** Three months ended Oct. 31, 2010
10 |
 Capitalization and Liquidity
Maintained strong balance sheet and liquidity
* $40 million cash special dividend was paid to stockholders on March 31,
2011 11
(US Millions)
Total Debt
-
$
0%
Cash & Cash Equivalents
111.5
$
Total Common Equity
242.1
$
100%
Marketable Securities
0.1
$
Total Capitalization
242.1
$
100%
Total Cash & Marketable Sec.
111.7
$
FY2005
FY2006
FY2007
FY2008
FY2009
FY2010
FY2011
Q1FY2012
Current Assets
$449.1
$ 495.6
$ 540.6
$ 473.9
$ 426.1
$ 409.7
$ *345.7
$ 404.6
Current Liabilities
$224.4
$ 213.4
$ 220.4
$ 235.2
$ 189.1
$ 187.1
$ 161.5
$ 219.3
Current Ratio
2.0x
2.3x
2.5x
2.0x
2.3x
2.2x
2.1x
1.8x
Capital Structure
As of October 31, 2011
Cash & Marketable Securities
As of October 31, 2011
Liquidity |
 Implementing Our Investment
and Cost Reduction Plan in Fiscal 2012
Executing an investment and
cost reduction plan to:
–
Increase revenue from new
programs
–
Improve profitability
–
Put new leadership in place to
drive improved results
12
Cost Alignment &
Working Capital
Improvements
Strengthening
Leadership
Sales Acceleration
& Increased
Market Penetration |
 13
* Estimated impact relative to base year, fiscal 2011
Investment and Cost Reduction Plan:
Summary
13 |
 Actions
to Enhance Stockholder Value Since Last Year’s Annual Meeting
Continued focus on improving financial performance through
implementation of investment and cost reduction plan
Returned $40 million to stockholders through special dividend
Enhanced corporate governance
–
Separated Chairman and CEO roles
Adopted a tax benefit preservation plan
Commenced review of strategic alternatives
–
Board has formed a committee comprised of independent directors that
are currently conducting the review and will make associated
recommendations to the full board
14 |
 15
Thank You
15 |