Arctic Cat Inc. has decided to replace its current chairman and CEO and temporarily reinstate its former long-time leader, Chris Twomey, to run things while a search ensues.
Claude Jordan had served as Arctic Cat's CEO for three years. He joined the company as president and COO in 2008 after having sperved as a vice president at Home Depot.
When the company announced Jordan's departure on Monday, it didn't disclose the reason for his exit, saying he "stepped down." But a company spokesperson told Twin Cities Business that the exit was "involuntary, without cause."
The news of Jordan's exit comes somewhat unexpectedly. Arctic Cat recently reported a quarterly loss and lowered its full-year outlook, but just a few days ago, it issued its annual proxy statement, which notifies shareholders of the company’s annual meeting in August and made no indication that Jordan would be leaving That filing showed that Jordan’s compensation totaled more than $1.9 million last year, and it estimated that he would've been entitled to roughly $597,634, as of March 31, in severance if involuntarily terminated without cause. He'd get about $3.8 million if let go following a change of control of the company, according to the filing.
Arctic Cat, a maker of snowmobiles and ATVs, is headquartered in Plymouth, but it only employs about 25 people there. Nearly 1,300 of its 1,500 employees are located in Thief River Falls, and another 50 are in St. Cloud. The company also has about 135 employees at an Ohio distribution center.
Monday morning, shortly after the announcement of Jordan's departure, shares of Arctic Cat's stock had plummeted more than 12 percent, but they recovered a bit and closed down about 8.8 percent at $34.02 per share.
Arctic Cat reported a $1.5 million loss for its latest quarter, and the company lowered its full-year outlook. (Read more about Arctic Cat’s latest quarterly performance in the Star Tribune here.) And its prior quarter was also disappointing. But Arctic Cat also grew revenue from $465 million to over $730 million during Jordan's tenure, and the company also entered the growing off-highway recreational vehicle market under Jordan’s leadership. Too, while its stock price has slumped this year, it climbed significantly between 2010 and the end of 2013, and it's still about twice as high as it was three years ago.
Twomey said in a Monday statement that Jordan and the board “have mutually decided this is the right time, however, for new executive leadership at the company.”
“It makes sense to set up the leadership team that will take the company forward to a successful future, as we enter a new fiscal year,” Twomey said in his Wednesday statement, adding that Chief Financial Officer (CFO) Tim Delmore, who previously announced plans to retire, will postpone his retirement during the transition period. Arctic Cat plans to appoint a new CEO and CFO “in the coming months,” Twomey said.
During Twomey’s 24-year tenure as CEO, Arctic Cat enjoyed 22 years of profitability. He helped take the company public in 1990, and six years later he led the firm into the ATV business. In 2011, he was inducted into Twin Cities Business' Minnesota Business Hall of Fame for his success leading the company.
Arctic Cat is among Minnesota's 40 largest public companies based on its revenue, which totaled $730.5 million in its latest fiscal year.