Martin, Marcia, John, Colin, Anthony and All:
Sorry it took so long to post this message, but my life is very hectic these days with a rough travel schedule. Also, I apparently caught a flu of some sort while in Vancouver. Tonight is really the first night I feel almost back in fighting form. I'll skip the needless details and get right into the meat of my impressions:
THE FACILITY
AGTI occupies a nice suite of offices overlooking the city of Vancouver. The offices are tastefully, but not extravagantly, furnished and are certainly appropriate for a headquarters location.
THE STAFF
I met virtually everyone employed by AGTI in Vancouver (approximately 15-20) -- nice, professional people who seem to be working as if on an ant farm. The place is a real beehive of activity, trust me. (Sorry for all these insect analogies). I became aware that several of the people, including Bob Silzer himself, put in long hours almost every day. For instance, Chris Sargent typically begins his day at 6:30 a.m. and normally doesn't pack it up until 7:00 p.m. or later. I heard a constant theme from everyone -- they hunger for AGTI's success and are confident the company WILL succeed if they remain focused.
Bob Silzer (CEO) is a virtual dynamo of energy -- his love for the company is very apparent, as are his promotional attributes. Bob is probably the ideal guy to be leading the charge for AGTI -- devoted, inspirational in both his conviction as well as his rhetoric, and focused only upon success for us shareholders.
Firoz Lakhani (President) seems quite intellectual in many matters, including matters of finance. As with Bob Silzer, Mr. Lakhani is very personable and graciously shared his time with me. Mr. Lakhani has probably brought some stability to AGTI and is, I think, at least partially responsible for the company's effort to re-focus only on the core mission of selling electronic bingo. No more Branson, Missouri's.
Although I only chatted with him for a few minutes, Bob Hunziker (Investor Relations) is completely sincere and personable. Bob flew to the meeting from somewhere in southern California, the reason I didn't have much time with him. His dedication was quickly evident to me. I also picked up "through the grapevine" that Bob's entire family has invested heavily into AGTI. As with other key AGTI employees, insider ownership is a good sign of desire for the company's success.
Other employees were equally impressive, including everyone from the bookkeeping office to Bob McKay (CFO), to Darren Little (VP of Marketing), to Chris Sargent and others. Both Darren and Chris are definite assets, brimming with ideas and enthusiasm to help promote AGTI. I believe the web page was Darren's idea, as were the promotional displays at the Indian Gaming Conference. Speaking of the Gaming Conference, I saw numerous photos. Our AGTI booth was absolutely spectacular and appeared to draw large audiences. I think several orders have already resulted from the event, with the possibility of more to come.
THE PRODUCTS
I had a chance to see, touch and operate several of the products, and they performed flawlessly. Very high tech, very refined, and kinda fun! I hate to admit that I'm not personally a bingo player, but if I were, this would be the only way to go.
THE SHAREHOLDER MEETING
The meeting was well attended, considering that AGTI is a small corporation. I would estimate there were approximately 30 shareholders in attendance. I can tell you for a fact that there was at least one institutional buyer there (from Indianapolis), perhaps others that I didn't meet. I had always believed that no institution would even look at a bulletin board stock, but I was wrong. He seemed particularly astute regarding company financials and asked several related questions during the meeting. He seemed satisfied with the answers he received. On the day of the meeting, I think the stock jumped up a few cents due to the volume of "buys". Maybe he was one of the buyers? Don't know.
Not much could be said about the pending acquisition until everything is complete, but Bob Silzer claims the acquisition dramatically improves the outlook for AGTI. I think completion will be near-term, because it was hoped that the acquisition would be finished prior to the shareholder meeting. The company is privately held, explaining why the press release didn't mention the company's name. But as soon as the acquisition completes, AGTI will be immediately profitable and will be the largest provider of electronic bingo devices in the world. Even if some unforeseen roadblock should abort the acquisition, AGTI still expects to be profitable by the end of this year. Monthly revenues between June 1997 and October 1997 have nearly doubled.
Among other news, it seems as though another major manufacturer of electronic bingo devices has filed an IPO for release later this year. The good news for AGTI shareholders is that the IPO pricing is expected to be around $13/share. That company apparently has lower revenues than AGTI, so even with 68 million shares presently outstanding, AGTI should prove to be a much better buy. My business travel makes it difficult to do much research, so if anyone can get additional comparative details, I would be appreciative.
New TurboMax orders continue to arrive, with decent backorder levels in hand.
Bingo in the U.S. is a $5+ billion dollar pastime, only $50 million of which is presently electronic. A virtual fledgling industry. Electronics should also help catapult an increased spend rate at bingo halls, perhaps doubling the current $5B. There are approximately 50,000 bingo halls in the U.S., of which 170 seat 1,000 players or more. These larger halls are the obvious initial focus for AGTI.
In competitive replacements, AGTI has a 6:1 win/loss ratio.
Management grieves that the single biggest mistake so far has been the Reg S debacle. In a private discussion, Bob Silzer actually bristled when he addressed the issue, and implied that AGTI was somewhat naive in the Reg S agreements. But it was pointed out that the same forces of greed which drove AGTI's prices down to current levels will eventually have to drive the prices back up, so the Reg S buyers make a healthy return on their bargain investment. This is my layman's interpretation of the situation. I don't profess to have any in-depth knowledge of Reg S, but the argument sounds logical to me.
The relationship with Sega is still alive and well, but the development of Sonic Bingo is temporarily on a "back burner" until completion of the acquisition. A matter of maintaining focus and priorities.
Also, developments with the Thompson group in England are still moving forward as planned. Thompson is presently doing pre-marketing, with very favorable responses thus far. A joint promotion will be kicked off in London during Jan/1998.
As you know, the "reverse split" proposal has been shelved, for now at least.
The Branson, Missouri property is up for sale. This will eliminate a sizable monthly expense.
Well, I'm running out of time now and I tried to hit some of the highlights for you. There was a lot of other discussion about the number and size of orders placed, but I think press releases have covered that aspect pretty well. I walked out of the meeting feeling very confident about future success, and I think everyone else had the same perception. The "exit mood" was very upbeat!! |
