Stockholders of Flow General Inc. yesterday gave the company's directors a vote of confidence in a ceremony of silence.
The McLean-based biomedics and high technology company has had its problems in recent months. Profits are down. Legal problems, including Securities and Exchange Commission investigations, are up.
So it was with some dread yesterday that Joseph E. Hall, president and chief executive officer of Flow General, opened the floor for questions at the annual stockholders meeting. And it was with great relief to him that the only response, for almost a minute after microphones were opened, was silence from the 200 people present.
"I can't believe this," Hall said, half smiling, thoroughly stunned. "No questions?"
One stockholder, Jeanette Leventhal, owner of 450 shares, rose from her seat and went to a mike. Very politely, she said she owned shares in 45 other companies, but that her Flow stock was the only stock that bothered her.
"Flow is the only one of the stocks I own that has had charges brought against it by the SEC," Leventhal said. Flow also was the only one of her holdings on which she was losing money, Leventhal said. In that context, she wanted to know what Hall had done to earn his $304,815 salary last year.
Hall said his salary included $186,672 in bonuses, and was based on the company's "good performance" in 1981, when Flow General earned $7.2 million. Flow General lost money in the last two quarters, including a first-quarter loss of $247,000 (3 cents a share). Hall said neither he nor other Flow General officials are receiving bonuses this year. About the company officials' straight salaries, he said: "I don't think we're overpaid."
Flow General last May, without admitting or denying allegations, settled a SEC civil suit alleging that the company did not completely disclose to stockholders how it intended to use funds raised in a 1980 stock offering.
Hall yesterday declined public comment on that matter, during and after the meeting. He also declined comment on a second SEC investigation, still pending, into the alleged sale of company stock by company officials.
"We have been advised by counsel not to comment on that," Hall said, adding that he thought the company would be vindicated and that the second SEC matter would not adversely affect the company's future performance.
There was only one more question after Hall's answer. An unidentified man wanted to know what Flow General "hung its hat on" in terms of a primary product or service. "Technology," Hall said, and then there was silence.
A reporter asked Hall after the meeting if the stockholders had let him and the other directors off the hook. "Damned right they did," Hall said.
But he said he believes the stockholders feel "the company has a very bright future." To support that faith, Hall announced yesterday that Flow has entered a joint-venture agreement with Meadox Medicals Inc. of Oakland, N.J., to produce synthetic veins and arteries.
The joint venture, which Hall says will be lucrative, will do business under the name "Flow-Meadox Joint Venture."
Flow General's current financial problems are no more than the workings of a recessionary economy, and the stockholders knew that, Hall said. One stockholder, who asked to remain anonymous, agreed with him.
"It's a substantial company, and it'll come around," the stockholder said.
After the meeting, Flow General Executive Vice President Richard D. Holbrook went to Leventhal and spent about 15 minutes listening to her concerns and offering his views. Leventhal, a woman of propriety, would not comment on her private conversation with Holbrook. But she gave her reason for speaking out at the meeting:
"I was scared and nervous. But I had to say something. I just couldn't believe the silence," she said.