A group of major stockholders has filed a letter with the Securities and Exchange Commission and with Bloomfield-based Griffin Land & Nurseries Inc. pressing the company to bolster the value of its stock by undertaking a major stock repurchasing effort.
In the letter to Griffin Chief Executive Officer Frederick M. Danziger, filed with the SEC, Mario J. Gabelli said he was writing on behalf of shareholders in New York, Connecticut, Nevada, and elsewhere, altogether holding a combined 5 percent or more of Griffin’s stock.
According to Gabelli, Griffin has experienced what he called “share creep” since 2001, in which more shares issued has in effect diluted the value of each share of stock. Gabelli goes on to say he understands that the dilution of stock is in large measure a factor of the number of stock options exercised by Griffin executives over the past six years. But he criticized Danziger for failing to compensate, adding, “At a minimum you should have bought enough shares back to offset the dilution.”
In addition, Gabelli said he believes Griffin’s stock in general “is materially above where your stock is selling so we remain somewhat miffed at the glacial speed of your share repurchase.”
Griffin Land managed to post a smaller loss for the first quarter, according to a financial report filed on April 12, with Griffin reporting a net loss of $1.28 million, a bit better than the same period a year ago when Griffin posted a net loss of $1.5 million.
The slight improvement “reflects higher operating results at Griffin’s Connecticut and Massachusetts based real estate division, Griffin Land, principally reflecting gains of approximately $500,000 on property sales completed in the 2007 first quarter and improved results from leasing operations,” according to a company statement.
Among those land sales was a deal announced in January involving the construction of a major distribution center near Bradley International Airport in Windsor Locks in which Griffin sold 130 acres in the New England Trade Port to the Illinois-based Walgreen Co.
Walgreen paid $13 million in cash for the Tradeport site, according to a statement from Griffin Chief Financial Officer Anthony Galici.
But Griffin has been encountering other headwinds this year, including the U.S. Labor Department’s April 9 announcement that it had sued Griffin Land and its Imperial Nurseries subsidiary, for violating federal migrant labor, wage, and hour laws.
The Labor Department also filed a similar lawsuit against Griffin’s subcontractor, Florida- and North Carolina-based Pro-Tree Forestry Services LLC, for whom the affected employees worked, according to a statement from John M. Chavez, public affairs officer for the Labor Department’s Boston office.
The lawsuits, filed in U.S. District Court in Hartford, accuse both companies of failing to pay workers at least the applicable minimum wage, Chavez said.
