Tag Archives: 8-K

CEO in charge of disastrous acquisition leaves with huge payout

Doug Ewert, the CEO of Tailored Brands (formerly The Mens Wearhouse) will step down from the role effective September 30, 2018.  He will also step down from the board. Tailored Brands has its head office in west Houston and has a market capitalization of $1.1 billion.



The SEC filing states that Mr Ewert is retiring but then goes on to state that the Separation agreement provides Mr Ewert with severance payments and benefits ‘as if his employment were terminated by the company for no reason’.

Mr Ewert has been the CEO since June 2011 and presided over one of the worst acquisitions of the 21st century.

Back in September 2013, another retailer, Jos A Bank made an unsolicited offer to buy The Men’s Wearhouse for $2.3 billion (in cash at a 42% premium!).

After a few months of haggling, the company ended up buying Jos A Bank for $1.8 billion (in cash at a 56% premium) in June 2014, which included $1.4 billion of goodwill and intangibles. Immediately after the acquisition closed, the company stopped the steep discounting at Jos A Bank (Buy one suit, get 7 free!). Sales plunged.

In 2015 the company took an impairment charge of $1.25 billion on the acquisition. In other words, they bought a business for $1.8 billion and less than 18 months later determined it was worth only $550 million!

Mr Ewert, who has a base salary of $1.25 million, is leaving with a cash payment of $5 million (2x base & 2x target bonus, to be paid over 2 years) and a pro-rata payment of his annual bonus to be paid in 2019. He also receives accelerated vesting of stock options and units worth, by my estimate, about $4 million.



Curiously, press release also announced that the COO of Tailored Brands, Bruce Thorn, had handed in his notice on August 22, effective August 31, to pursue another opportunity. Late this evening Big Lots, based in Columbus, Ohio, announced the hire of Mr Thorn as CEO.

As a result of Mr Thorn’s unexpected departure, the company is entering into a consultancy agreement with Mr Ewert until the end of the year which will pay him $104,167 a month for the 4th quarter.

Dinesh Lathi, currently the Non-Executive Chairman of the Board has been appointed as Executive Chairman with a base salary of $1 million. The company is seeking a new CEO.

SEC filing

https://www.prnewswire.com/news-releases/big-lots-announces-bruce-thorn-as-chief-executive-officer-300703673.html

 

 

 

 

Houston Oilfield Services company goes public via reverse takeover

 

MG Cleaners, a small oilfield services company based in the Galleria, has gone public via a reverse takeover of SMG Indium Resources (SMGI). The company specializes in the provision of products and services related to the washing and cleaning of drilling rigs.

SMGI agreed to purchase MG Cleaners for 4.6 million shares (shares traded at $0.30 on Friday) and $300,000 in cash. SMGI was originally formed to stockpile indium, a precious metal used in electronics manufacturing. After selling its stockpile in 2014, it became a cash shell.

The President of MG Cleaners is Stephen Christian who was a Rig Manager at Nabors Drilling until acquiring the company in 2010. The Chairman and CEO of MG Cleaners is Matthew Flemming.

Mr Flemming was the CEO of Houston-based HII Technologies when it was a cash shell public company. HII then made a few small acquisitions in the frac water management and safety & power segments of oilfield services during 2012-2013. The business peaked at $35 million in revenue in 2014  but filed for Chapter 11 in September 2015 after the downturn.

For the 6 months ended 30 June 2017, revenue for MG Cleaners was $1.2 million. The MG business had net income of $70,209. With the overhead costs of SMGI, the business lost $51,848 in the period. EBITDA was $259,478.

With the closing of the deal, Malone Bailey have been appointed as auditors to the company.

SEC filing

 

Parker Drilling appoints new Principal Accounting Officer

Parker Drilling, an oilfield services company (market capitalization $145 million) with its head office in the Greenway Plaza area of Houston, has announced that Principal Accounting Officer and Controller, Leslie Nagy, is leaving the company, effective 3 November, to assume the role of Chief Accounting Officer of another company. She had been with the company since August 2010.

Nathan Dockray has been appointed to replace Ms Nagy as Principal Accounting Officer. He has been at Parker Drilling for a few years, primarily in tax roles. Prior to joining the company, he was employed by PricewaterhouseCoopers.

Ms Nagy’s departure follows the appointment of Mike Sumruld as CFO at the beginning of October. Mr Sumruld joined from LyondellBasel though much of his career was spent at Baker Hughes. The previous CFO of Parker, Chris Weber, left earlier in the year to become the CFO at Halliburton.

Houston E&P CFO resigns

Erin Energy has announced that CFO Daniel Ogbonna has resigned, effective immediately. No reason was given for his departure and the company will seek potential candidates to replace him.

Erin Energy is an Exploration & Production company with its head office in the Galleria area of Houston. It has producing properties in offshore Nigeria and conducts exploratory activities in Kenya, The Gambia and Ghana. It has a market capitalization of $265 million.

Mr Ogbonna was appointed CFO in September 2015. No details were given of any severance package though he was paid $295,000 and, according to the proxy, is entitled to a severance of one year’s salary and bonus if terminated without cause.

The company, formerly known as Camac International, has undergone recent changes at the senior executive level. In February, the CEO resigned after less than a year in the role. In May, John Hofmeister (former President of Shell), resigned as the chairman of the Board after one year in the role (though he had been on the board since 2010).

Erin also issued a bizarre filing last week in which they said that in April 2017 and July 2017 there were two changes in control of the company. Basically 55% of the voting shares that were beneficially owned by Dr Kase Lukman Lawal, the company’s former Chairman and CEO transferred to two entities in April 2017 following a loan default. In July, Dr Lawal regained effective control as the voting rights were assigned to him by the two entities.

 

Halliburton hires new CFO from Parker Drilling

 

Halliburton (market cap $40 billion) has hired Chris Weber to be its next CFO, replacing Mark McCollum who left in April to become the CEO at Weatherford. Mr Weber joins from Parker Drilling (market cap $200 million) where he had been CFO for 4 years. Prior to that, he was the Treasurer at Ensco plc for two years.

Mr Weber will receive

  • base salary of $650,000
  • restricted stock award of $483,000 (vests over 5 years)
  • non-qualified stock options worth $207,000 (vest over 3 years)
  • ‘restoration grant’ of restricted stock worth $1.5 million (vests after 3 years)

I presume the restoration grant is to compensate Mr Weber for the unvested stock options he is giving up at Parker Drilling (though according to the proxy the company recently filed they were worth only about $700,000 at the year end).

Halliburton’s interim CFO has been Robb Voyles. He will continue to work for the company as its Executive VP, Secretary and General Counsel. Parker Drilling has appointed Jon-Al Duplantier as its interim CFO. He is currently the Chief Administrative Officer and General Counsel.

 

Houston CFO moves – week ending 9 June

 

Craig Owen, CFO at Southwestern Energy has joined Rosehill Resources as its CFO. Southwestern appointed Jennifer Stewart (Senior VP for Tax and Treasury) as its interim CFO. See my blog post for more details. Southwestern Energy CFO jumps ship to Rosehill Resources

 

Frank’s International (Drilling tools – market cap $1.7b – Head office in West Houston) has named Kyle McClure as its new CFO (base salary $350,000). He was in charge of Treasury and Investor Relations and ha been performing the CFO role in an interim capacity since March 2017 when previous CFO, Jeff Bird, left to become the CFO at Dril-Quip.

 

Helix Energy Solutions (Offshore oilfield services – market cap $800m – head office in West Houston) has promoted Erik Staffeld, currently the VP – Finance and Accounting, to be its CFO. Mr Staffeld joined Helix in 2009. He replaces Tony Tripodo who becomes an Executive VP and Senior Advisor to the CEO. Mr Staffeld will receive a base salary of $350,000.

 

Camber Energy (E&P company formerly known as Lucas Energy – market cap $5m) has had a recent shake-up in C-suite. The company is in the process of moving its head office to San Antonio and outsourcing the back office accounting to Enerjex. Last week Paul Pinkston, the Chief Accounting Officer announced his resignation, effective 8 June 2017. This week, CEO (and former CFO) Anthony Schnur resigned. He joined the company in November 2012 as CFO and became the CEO one month later. Since late 2013, the company hasn’t had anybody formally holding the title of CFO with the duties effectively split between Schnur and Pinkston. Camber has appointed Robert Schleizer as interm CFO.

 

Hyperdynamics, a small E&P company that is traded over the counter (head office – West Houston) has announced that CFO, Sergey Alekseev, will become President of a subsidiary company and that Jason Davis will rejoin the company as interim CFO. Hyderdynamics has no revenue but recently negotiated an agreement with a privately-held Nigerian company to establish a 50/50 joint venture to drill in the offshore waters of the Republic of Guinea. The company also completed a $6m equity raise to help pay for its share of the drilling costs.

Mr Alekseev, who was only appointed to the CFO position in April, will effectively manage the joint venture from Hyperdynamics’ perspective. Mr Davis was the CFO of Hyperdynamics from 2009-2011 and was VP-Finance and Treasury fom 2012-2014. Most recently he was the interim CFO at Casa Exploration, a private E&P company focused on Latin America.

 

 

 

Southwestern Energy CFO jumps ship to Rosehill Resources

Craig Owen has resigned as CFO of Southwestern Energy (E&P operator – market cap $3b – head office in Spring) to take the same role at Rosehill Resources (E&P – market cap $16m – head office in West Houston).

Mr Owen has been the CFO at Southwestern Energy since October 2012. Rosehill Resources is a newly created public company that recently acquired Tema Oil and Gas. Mr Owen’s new salary will be $480,000 base, a $20,000 increase on his base at Southwestern Energy. Mr Owen will also receive long-term equity incentives, though according to the SEC filing, the specifics have not yet been determined.

Interestingly, Southwestern Energy issued a press release announcing Mr Owen’s departure. They didn’t name Rosehill but stated that he was leaving to “accept a new career opportunity with an energy company that does not compete with Southwestern Energy”. A guess that is technically true in that Southwestern’s operations are primarily in the Marcellus basin while Rosehill currently only operates in the Permian basin, but, in my opinion, it is a little misleading.

Southwestern has appointed Jennifer Stewart (Senior VP for Tax and Treasury) as interim CFO while it searches for a permanent replacement. At Rosehill, Mr Owen replaces Tiffany (“TJ”) Thom who has been acting as interim CFO. She will continue to assist Rosehill as a consultant through a transition period.

Oxy hires new CFO

Occidental Petroleum, a large E&P company (market cap $45 billion) with its head office in the Greenway Plaza area of Houston has announced the appointment of Cedric Burgher as CFO, effective 31 May. Mr Burgher joins from EOG Resources, another Houston E&P company, where he was VP, Investor and Public Relations

Mr Burgher will receive a base salary of $600,000 and a sign-on bonus of $250,000. He will also receive restricted stock units with a value of $2.5 million.

Mr Burgher replaces Chris Stavros, who according to the 8-K filed ‘announced his retirement’ effective 30 May 2017. For the record, Mr Stavros is 53 and has been CFO for just under 3 years (though he joined Oxy in the investor relations department in 2006).  I thought the retirement wording was a little strange until I looked at the proxy of the company which allows for payouts on ‘retirement with Occidental consent’.  At yesterday’s closing share price, Mr Stavros will receive a share-based payment worth almost $2 million.

Exterran Chief Accounting Officer joins KBR

Raymond Carney, the VP and Chief Accounting Officer at Exterran, has resigned to take the same role at KBR. Exterran is an oilfield services company with its head office on the west side and has revenues of around $1 billion while KBR is an Engineering and Construction company based in downtown Houston with revenues of $4 billion.

Mr Carney had been at Exterran for just over a year. Prior to that, he spent 7 years at Dresser Rand as the CAO. At KBR, he will receive a base salary of $310,000 and replaces Nelson Rowe, who has been promoted to Senior VP/Officer of Financial Planning and Investor Relations.

Exterran has made no announcement of Mr Carney’s replacement.

New Houston public company hires CFO

PLx Pharma Inc, a Houston company with its head office near the Texas Medical Center has appointed Rita O’Connor as its new CFO, effective July 2017.

The company is focused on developing safer and more effective aspirin products and recently started trading on Nasdaq having completed its reverse merger with Dipexium Pharmaceuticals. PLx originally tried to perform an IPO back in February 2016. Dipexium had a listing but announced in late 2016 that the product it was developing had no viable path to commercialization.

Ms O’Conner will receive a base salary of $300,000 plus stock options. She joins from Kent Place School, an all-girls college preparatory school in New Jersey where she was the CFO. Prior to that, she was the CFO at two pharmaceutical companies and began her career at Deloitte and Touche.

Ms O’Connor replaces David Jorden who had been acting CFO since June 2015