Management Turnover as Change Agent

Friday, February 5, 2010

What's Behind the Sudden Departure of PSS World Medical's CEO?

Wednesday of this week, PSS World Medical Inc. PSSI (NASDAQ), a medical distributor company, unexpectedly annoDavid Smithunced the immediate departure of its CEO and Chairman, David A. Smith. Smith who had been with the firm since 1987 and was appointed CEO in 2002 and later his Chairman in 2007 has left the firm with virtually no comment. The company selected Gary Corless, another long term employee and the current COO, to replace Smith as CEO. The company also appointed Delores Kesler, a director since 1993, as the new chairman.Smith’s sudden and unexpected departure had an immediate negative One year Stock Performance of PSS World Medicalimpact on the company’s stock. Smith’s departure comes according to Kimberly Morrison, a reporter for the Jacksonville Business Journal,

The management change comes on the heels of several strong quarters of financial performance for thGary A. Corlesse company. Despite a difficult environment, the company’s fiscal 2010 earnings growth is expected to be more than 30 percent.

PSS World Medical, a Jacksonville-based distributor of medical products, reported net income for the nine months ended Jan. 1 was $52.9 million, a 40.3 percent increase from the same period the year before. Although the third quarter results were slightly below analyst expectations, Kreger said the confirmed guidance suggested accounting and financial performance was not behind the change.

Investors will continue to wonder what exactly was behind the sudden change at the firm. Corless, the new CEO, worked quite closely with Smith and is likely to continue the policies Smith put in place. Anyone interested in this sector or specific company needs to stay on top of ongoing events. The reasons for Smith’s departure will more than likely come out.

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