Vitran announces top executive change
April 04, 2013
Toronto-based less-than-truckload (LTL) carrier Vitran Corporation Inc. said today that its Board of Directors has appointed board member Bill Deluce as interim president and CEO.
Deluce replaces Rick Gaetz, whom resigned as president and CEO and a Director of the Company.
“On behalf of the Board of Directors, I want to thank Rick Gaetz for his many contributions to Vitran over the years and to wish him well in his future endeavors,” said Richard McGraw, Chairman of the Board at Vitran, in a statement.
Vitran officials said that Deluce will work with the company’s current management team and Board of Directors to oversee its ongoing operations and efforts to improve the financial results
Vitran added that Deluce has been the CEO and a director of various corporations and that Vitran’s Board believes that this experience combined with his history as a successful entrepreneur, makes Deluce well suited to serve as interim President and Chief Executive Officer.
And the company said the Board will immediately launch a formal search to hire a permanent President and Chief Executive Officer.
In February, Vitran reported that full-year 2012 revenue rose 2.4 percent to $702.9 million, with fourth quarter 2012 revenue down 4.7 percent to $164.3 million. And it posted a loss from operations in its LTL division for the 2012 fourth quarter of $15.3 million compared to $4.2 million for the 2011 fourth quarter, adjusted for the real estate losses, with LTL shipments and tonnage up 1.8 percent and 0.5 percent respectively.
Earlier this year, Vitran signed an agreement to sell its Supply Chain Operation (SCO) 3PL business to Legacy Supply Chain for $97.0 million in cash proceeds, subject to working capital adjustments. Vitran said it intends to use a portion of the net proceeds from this transaction to fully reduce its outstanding debt under its senior revolving credit facility, and will have approximately $50.0 million of remaining cash on the balance sheet.
“This marks a new beginning for Vitran Corporation as a pure LTL company,” former CEO Gaetz said at the time of the transaction. “Vitran will continue to focus on building a premier North American LTL company.”
Gaetz told LM in a recent interview that Vitran is committed to being a market leader in the North American LTL market, with some industry analysts calling it a turnaround.
“It is a combination of a rebirth and a turnaround,” he said. “We really had to break it down to build it back up. We are on a bit of a journey, there is no question about it. Our team in the U.S. is very talented and is a great group of people. The technology we introduced to the business last year is bringing the company to a new level, and the culture of the company is changing to one that meets Vitran’s standards and expectations that we have at all our other businesses as well as one of service excellence.”
But hitting its stated goals may take some time, according to a research report issued by Stifel Nicolaus this week.
Stifel said that Vitran could miss the Wall Street consensus for first quarter earnings, which will be released on April 25, as density, pricing, cargo claims, and service levels, among other issues, still have a way to go, but it added that it believes the “company has made good progress with the substantial operation turnaround in its U.S. LTL division, but the implementation is still in the early stages, and results could be a bit slower to materialize.”
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