This is Bloomberg report of the meeting--Max90/not MadMax(eom)
AgriBioTech CEO Tells Shareholders His Role to Change (Update1)
AgriBioTech CEO Tells Shareholders His Role to Change (Update1) (Adds details from annual
meeting, closing share price)
Henderson, Nevada, Feb. 22 (Bloomberg) -- AgriBioTech Inc.'s chief executive, who last month
called off attempts to sell all or part of the unprofitable turf and forage seed company, told
shareholders his role will change to one with a lower profile. ''I will be working for this
company regardless of what the title is,'' Johnny Thomas told about 200 shareholders at the
company's annual meeting in Henderson, Nevada, near its Las Vegas headquarters. ''I don't care
if you call me janitor.''
Thomas led AgriBioTech through more than 30 acquisitions in four years in its aim to gain
critical mass in the fragmented, low-margin turf and forage seed industry and become attractive
to a partner or buyer.
In October, the company's shares soared 48 percent to 17 7/8 in two days after Thomas
predicted AgriBioTech would be bought for $30 to $70 a share by a chemical company within a
few months. On Jan. 22, he said the company suspended that effort to concentrate on
consolidating its acquisitions, cutting the shares' value by half. They closed at 5 13/16 today,
up 5/16. ''It was unfortunate, perhaps, that I gave an estimated time frame,'' the 57-year-old
executive told shareholders.
At the meeting, shareholders reelected six directors with a 94.8 percent vote of approval. They
also ratified a proposal to increase the authorized number of shares outstanding by 25 million,
to 100 million, for use in acquisitions, fundraising and employee compensation.
Charge Due
Randy Ingram, chief financial officer, said the company expects to take its previously
announced restructuring charge of up to $15 million or more by June 30, once a plan for the
restructuring is completed. ''We do not have a plan today,'' he explained.
He said the company is ''looking at ways to address'' the $23.3 million in convertible debt sold
in recent months to refinance bank loans that has a reset provision requiring the issuance of
more shares as the stock's price declines.
Thomas said the company may borrow against certain assets. ''We have fixed assets that are
underutilized from a long- term debt standpoint,'' he said.
Thomas Rice, director of research, said the company is staffing up its research and development
unit. ''We're not a biotechnology company yet,'' said Rice of AgriBioTech. ''We're well on our
way to becoming one, and a year from now I hope I'll be able to say that we are.''
The company has issued a string of bad news for shareholders in addition to the failure to find a
buyer, which prompted shareholder lawsuits. News included a second-quarter loss, share sales
by major stockholders and a cash shortage.
Paying With Stock
On Jan. 12, AgriBioTech said cash was so tight it was issuing stock to pay bills. It gave 22,000
shares to its securities law firm, Snow Becker Krauss P.C., to settle a $367,125 legal fee. It also
used 37,913 shares to pay $500,000 owed to Budd Group, a landscaping, security and janitorial
service company owned by one of its directors.
On Jan. 29, it was reported that Soros Fund Management LLC, run by billionaire investor
George Soros, sold 87 percent of its holdings, which had totaled 4.6 million shares, or 11.5
percent of the company.
On Feb. 1, two co-founders of the company, John Francis and Scott Loomis, resigned from the
board. While remaining employees, they gave up their status as vice presidents.
On Feb. 9, CEO Thomas said he was forced to sell 901,707 shares, about half his holding in the
company, at 5 1/4 to meet a margin call resulting from the stock's decline.
Last Tuesday, the company said its loss for the second fiscal quarter ended Dec. 31 was $10.3
million, or 26 cents a share, more than five times wider than the average estimate of three
analysts polled by First Call Corp.
On Friday, AgriBioTech disclosed it was out of compliance with an $83 million loan from its
principal lender, Bank America Business Credit. The bank waived the violation and the
company said talks are underway to renegotiate the loan.
Later that day, Fidelity Investments, the biggest U.S. fund management company, reported to
the SEC that its mutual funds, including the Magellan Fund, sold all their AgriBiotech shares for
a loss of $47.4 million.
NYSE/AMEX delayed 20 min. NASDAQ delayed 15 min.
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