Category Archives: Distribution

CFO steps down at Houston distributor

Chris Micklas, the CFO of Houston Wire and Cable, has resigned, effective July 10, to join a start-up business in another industry.

Houston Wire is a distributor of electrical and mechanical wire and cable with revenues of $340 million. Approximately a third of its revenues come from the energy sector. It has a market capitalization of $46 million. The company has its head office near the 610/I-10 interchange on the east side.

Mr Micklas joined the company in April 2018 and was previously the CFO at Par Pacific Holdings, another Houston public company that is involved in refining. He also worked for the LNG business of BG Group (now part of Shell).

Eric Davis has been appointed the interim CFO. He joined the company in 1993 and spent 14 years as the Controller of the company. He is currently the President of the Heavy Lift division.

SEC filing – Micklas resignation




Oilfield Supply company appoints new CFO

DistributionNOW has appointed CFO Dave Cherechinsky as its new CEO, replacing board member, Dick Alario, who has been the interim CEO since November 2019.

In turn, the company has promoted Mark Johnson to be the new CFO. He is currently the Chief Accounting Officer.

The company is a worldwide supplier of energy and industrial products and engineered equipment solutions. It has 3,075 employees in 210 locations in 20 countries. It was spun off from National Oilwell Varco in 2014. It has its head office in NW Houston.

Former CEO Robert Workman left in November 2019 with a $3.0 million cash severance and accelerated vesting of common stock, valued at $4.4 million. He had been the CEO since the spin-off. The share price at spin-off was $32.  When he left it was $11.40. It is now $7.63.

Mr Cherechinsky has been the CFO since February 2018. He joined NOV in 1989 and was appointed the VP Finance for its distribution arm in 2003. In his new role, he will have a base salary of $650,000.

Mr Johnson joined NOV in 2008 and became the Chief Accounting Officer in February 2018. His new salary will be $385,000.

The company also announced the retirement of Daniel Molinaro. He worked at the company or its predecessors for 52 years. Mr Molinaro was the CFO for four years prior to Mr Cherechinsky. He started work with the Oilwell division of US Steel in 1968. That division was merged with the oilfield division of Armco, another steel company, in 1987 to form National Oilwell. The business went public in 1996 and merged with Varco in 2005.

SEC filing – DNOW CFO appointment

Sysco CEO leaves with $6 million cash severance

Sysco Corporation has replaced CEO of two years, Tom Bene with Kevin Hourican, who joins from CVS.

Sysco, a food distributor, is one of the largest companies headquartered in Houston. It has a market capitalization of $42 billion, revenues of $60 billion and 69,000 employees.

Tom Bene had been the CEO since January 2018 and Chair of the Board since November 2018. His promotion to the top job was announced in July 2017. Mr Bene had joined Sysco in 2013 as Chief Merchandising Officer before becoming COO in January 2016. Prior to that he spent 24 years at Pepsi-Cola.

Although the stock is near its all-time high, clearly matters are not going well inside the company. In announcing the switch, the board stated that the change will allow the company to ‘accelerate performance, fully capitalize on its scale advantages and drive meaningful operating improvements’.

Severance payment

Mr Bene had a base salary of $1.2 million and his target annual bonus was 150%. He will receive a severance of $6 million, in cash. This represents two times base and target bonus.  For the year ended 30 June 2019, Mr Bene received a cash bonus of just over $1.5 million, representing 85% of target.

Mr Bene will also get two years’ worth of health insurance premiums. Other than that, he didn’t get any additional payments. All his unvested stock has been forfeited. Like all officers of Sysco, Mr Bene didn’t have a severance or employment agreement that provided for guaranteed severance or other compensation upon termination.

New CEO compensation

Mr Hourican was the Executive VP of CVS Health and president of CVS Pharmacy. He will receive an annual base salary of $1.3 million. He will also receive a one-time sign-on bonus of $1.45 million to compensate him for the bonus foregone at CVS. Mr Hourican will also receive an annual equity award with a fair value equal to $8.5 million. 40% will vest over 3 years, the rest is performance-based.

New Chairman

Edward Shirley, currently Lead Independent Director of the Board, has been appointed Chair of the Board.

SEC filing – Sysco CEO change


CFO resigns from Retail Energy business

Rob Lane, the CFO of Spark Energy, has resigned to take another, as yet undisclosed, position in an unrelated industry. Current CEO Nathan Kroeker will also serve as the Interim CFO while the company searches for a permanent replacement.

[Update 5-23. A reader kindly pointed out that Mr Lane is the new CFO at Sunnova Energy. The company is a residential solar and battery storage service provider. It has its head office in the Greenway Plaza area of Houston. It has 65,000 customers in 22 states. It is PE-backed and has raised $2.5 billion from investors since 2012].

Spark Energy (market cap $368 million) has its head office in west Houston. The company engages in the retail distribution of electricity and natural gas across 19 states.

Mr Lane became the CFO in June 2016. Prior to that he was the CFO of Emerge Energy Services,  a publicly-traded frac sand provider, based in Fort Worth.

The company completed its IPO in 2014 and has made 14 acquisitions after going public. In March 2018, the company announced that it had hired Morgan Stanley to explore strategic alternatives. Management believe the stock price didn’t reflect the financial performance and growth prospects of the company. Since that announcement, there has been no mention of the outcome of the advice received from Morgan Stanley.

The stock price is about 15% higher than before the announcement in March 2018 about the hiring of Morgan Stanley.

SEC filing

Houston distributor delisted after takeover

Nexeo Solutions, based in The Woodlands, has been delisted after its $1.75 billion takeover by Univar. The deal was originally announced in September 2018.

Nexeo is a chemicals and plastics distributor that provides value-added services such as blending, re-packaging and testing. Univar is primarily interested in the chemicals business. Earlier in February the two companies announced they would sell the plastics division for $640 million to a private equity firm.

Nexeo was originally formed as a private equity carve-out of the distribution business of Ashland in 2011. The deal price was $979 million. In March 2016, Nexeo went public via a reverse takeover by a blank check company, WL Ross Holdings (aka Wilbur Ross). The value of the deal was $1.67 billion.

Univar paid cash of $275 million and issued stock worth $605 million to the stockholders of Nexeo. It also repaid Nexeo’s debt of $745 million. The balance (estimated at $109 million) is primarily due to the former owners and officers of Nexeo as part of the reverse takeover.

Nexeo put itself up for sale at the beginning of 2018 due to the competitive landscape of the industry and the complex capital structure that resulted from the reverse takeover.

The top 5 officers of Nexeo will be receiving golden parachute payments totaling $35 million. In addition 4 of the 5 were part of the TPG deal and will be receiving a further $1.4 million of deferred consideration.

Univar expects to incur one time integration costs of $150 million. Approximately a third of this will be spent on IT integration costs of Univar’s e-commerce capabilities with Nexeo’s ERP system.  The rest will come from consolidating back office functions and overlapping facilities.

SEC filing


Centerpoint Energy CFO to retire

Bill Rogers, the CFO of Centerpoint Energy (market cap $14 billion) has announced he intends to retire for personal and family reasons. He will leave the company at the end of the first quarter of 2019 after a successor is named.

Mr Rogers joined the company in March 2015 from New Jersey-based American Water Works. He has a base salary of $555,000.  According to the proxy there are not any severance payments due as a result of his retirement. However by the time Mr Rogers leaves at the end of Q1, about $1.7 million in stock and performance shares will vest.

Back in April, Centerpoint agreed to acquire Vectren, another utility company, for $6 billion in cash. Centerpoint serves 5 million customers in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma and Texas. Vectren has 1 million customers in Indiana and Ohio.

Centerpoint expects the deal to close in the first quarter of 2019. The company will continue to have its head office in downtown Houston.

SEC filing

Houston CFO moves – week ending 18 May

Select Energy Services (market cap $1.8 billion) announced that CFO, Gary Gillette, will transition to Chief Administrative Officer, effectively immediately. The new CFO is Nick Swyka who joins from Nabors Industries, where he had been Director of Investor Relations since October 2015. Before that he spent four years as Director of Corporate Planning at Pacific Drilling. No compensation for Mr Swyka was disclosed.

Select provides water and chemical solutions for the oilfield sector. It used to have its head office in Dallas, where Mr Gillette is based but moved to the Galleria area of Houston after its takeover of Rockwater.

Waste Connections (market cap $19.8 billion), a waste management company that has its operational headquarters in The Woodlands though it officially has its head office in Toronto, announced an executive change.  CFO Worthing Jackman will succeed Steve Bouck as President and Mary Anne Whitney has been promoted from Senior VP of Finance to CFO.

Mr Bouck is retiring effective July 1 and was previously CFO at the company. Mr Jackman joined the company in 2003 and has been CFO since September 2004. Ms Whitney has been with the company since 2006 and has been in her current role since March 2012. Interesting the 8-K filed by the company states that compensation arrangements have not yet been finalized for either Mr Jackman or Ms Whitney.

Powell Industries (market cap $410 million), a supplier of custom engineered control solutions for electrical energy based in SE Houston, announced that CFO, Don Madison, will retire on October 1. He joined the company as CFO in 2001. A formal search is now underway for his successor.

Cardtronics plc (market cap $1.3 billion), a provider of ATM services based in West Houston, has appointed Paul Gullo as its Chief Accounting Officer. He was previously at TechnipFMC plc for 9 years in various roles. Mr Gullo will receive a base salary of $310,000 and replaces Brad Conrad who becomes Treasurer.

DXP Enterprises (market cap $653 million), an industrial wholesaler based in NW Houston, has appointed Gene Padgett as its new Chief Accounting Officer. Mr Padgett previously spent 10 years at Spectra Energy and replaces Mac McConnell who retired in March.

EP Energy (market cap $754 million), an indebted E&P company with its head office in downtown Houston announced that they let go Francis Olmsted, its Chief Accounting Officer, as part of a 10% reduction in force. He joined the company in May 2012. Jeff Stanberrry, the Director of General Accounting and Financial Reporting will assume the role of Financial Controller.

Key Energy Services (market cap $339 million) announced that CEO Robert Drummond resigned to pursue another opportunity (which later turned out to be the CEO at Keane Group, another Houston oilfield services company) and named current CFO, Marshall Dodson, as the interim CEO. Key is a well servicing contractor that came out of bankruptcy in late 2016 with a new controlling shareholder, Platinum Equity. Mr Dodson joined Key in 2005 and became CFO in 2013.

Houston CFO moves – week ending 30 March

Josh Anders, CFO of Adams Resources & Energy (market cap $183 million) resigned, effective mid-April 2018 to take a position at an unnamed upstream E&P company. He had been at the company only 15 months. His predecessor retired after 31 years at the company! The company appointed Sharon Davis as the interim CFO. She is currently the Chief Accounting Officer.

Nic Graham, CFO of Houston Wire & Cable (market cap $254 million) announced his intention to retire in 2018. The company is conducting a search for his replacement. Mr Graham is 65 and has been the CFO since 1997.

LyondellBasell (market cap $42 billion) has appointed Jacinth Smiley as Chief Accounting Officer. Most recently she was the CFO for the North American Region and Integration leader at GE Oil & Gas. She replaces Mike Sumruld who left at the beginning of October to become the CFO at Parker Drilling.

Padam Pandit has rejoined Mahindra North America as its CFO. Having spent 7 years at Mahindra USA (primarily a tractor distributor), most recently he was the Controller for the US Rigs aftermarket business unit of National Oilwell Varco. Mahindra is part of an publicly traded Indian group of companies.


Struggling Houston public company agrees to takeover

Willbros, an energy infrastructure services company that has been struggling for a number of years, has agreed to be taken over by Primoris Services, a construction services company based in Dallas (market cap $1.1 billion).

Primoris will be paying 60 cents a share. That represents a substantial premium on the current share price! In all Primoris will be paying $100 million in cash and adding $10 million to $25 million for additional liabilities such as to bring workers’ compensation accruals in line with their more conservative accounting. They are also providing $20 million in bridge financing prior to the deal closing (expected in Q2 2018).

Willbros has backlog of approximately $400 million and has revenues of around $660 million. It has under-performed the past few years and has been selling off non-core assets. The final blow was terrible results in Q3 2017 when the company reported an operating loss of $32 million, primarily driven by $13 million of contract losses on three lump-sum pipeline construction projects. That caused the company to fall out of compliance with its borrowing covenants.

Primoris is buying Willbros for the utility transmission and distribution businesses and will take steps to reduce the riskiness of projects undertaken by the oil and gas segment. The pipeline construction business was sold in January 2018.


Sysco hires Partner from its Auditors to be its new Chief Accounting Officer

Sysco (market capitalization $28.5 billion) , the food distribution company that has its head office in West Houston, announced that it has hired Anita Zielinski as its Senior Vice President and Chief Accounting Officer.

Ms Zielinski will receive a base salary of $450,000 and be eligible to participate in the 2017 bonus scheme (target 100% of base) and the long-term incentive plans (grants to be made in August 2017 with a dollar value of 200% of base).

Ms Zielinski joins from Ernst & Young, where she was an audit partner. She will oversee all accounting functions and will act as key liaison to external auditing firms. The primary audit firm for Sysco is … Ernst & Young. In fact the press release states that she has ‘extensive experience working with Sysco as a client’.

The SEC rules on auditor independence allow for hiring of audit partners by clients provided they didn’t work on the audit of the client in the year prior to his or her appointment. I presume Ernst & Young’s audit independence is not compromised in this case. Note that other regulators around the world have stricter rules on independence than the SEC (for example the ‘cooling off’ period is two years, not one).

The position of Chief Accounting Officer has been open since Joel Grade was promoted to the CFO position in September 2015.