A Founder Wants Back In

Steven S. Myers, the largest shareholder of SM&A as well as the company’s founder and retired chairman, will solicit proxies for the election of four candidates, including himself, to the SM&A board of directors at its upcoming annual meeting in May.

In a preliminary proxy statement filed this week with the Securities and Exchange Commission, Myers, who owns approximately 15.8 percent of the company’s stock, will lead a partial board slate that also includes Kenneth W. Colbaugh, Albert S. Nagy, and Redge E. Bendheim.

The decision of Myers, Colbaugh, Nagy, and Bendheim to seek seats on the SM&A board was based on a shared belief that the decline of more than 40 percent in the company’s stock price over the past year is “largely or entirely attributable to inappropriate financial guidance provided by the CEO on investment community conference calls in recent quarters; poorly controlled growth of the company’s selling, general and administrative (SG&A) expenses over the same period; inappropriate handling of various aspects of a recently completed strategic transaction; and management actions or failures to act resulting in the loss of several highly capable senior professionals, some of whom have since started businesses that now compete with the Company – some or all of which circumstances might not have occurred with better board oversight.

 “In my view, SM&A’s stock price is well below its intrinsic value,” said Myers  in a statement. “A better-qualified board is needed to provide the expertise and guidance necessary to help SM&A realize its full business potential.”

Myers, 61, founded SM&A, formerly Steven Myers & Associates,  in 1982 to provide competition management and program support services to industrial customers primarily in the aerospace and defense, information technology, and telecommunications industries. He served as chairman and CEO until his retirement last year.

Colbaugh, 55, served as a director and COO of SM&A from 1990 to 1999, during which the company achieved a compound annual growth rate of 44 percent.

Nagy, 62, was a director from June 2000 to April 2005. Bendheim, 54, was until his recent retirement a tax partner with KPMG LLP; in that capacity he provided financial and tax planning services to numerous publicly and privately held companies, including SM&A.

The four proposed directors on the Myers slate would replace current SM&A directors William C. Bowes, John P. Stenbit, Joseph B. Reagan and Robert J. Untracht. If the Myers slate is elected, and assuming the re-election of SM&A’s other directors, the company’s nine-member board would also include Dwight L. Hanger, J. Christopher Lewis, Cathy L. McCarthy, Gen. Peter Pace, and Robert Rodin.