Telecom Co. CEO Resigns Amid Restructuring
Communications Systems, Inc. (CSI), announced Wednesday that William Schultz resigned from CEO and was replaced by Chairman Curtis Sampson, who will now serve as interim CEO.
The Minnetonka-based telecommunications firm also named Edwin Freeman chief financial officer and Roger Lacey vice chair of the board.
Interim CEO Sampson is best known locally for his purchase and revitalization of the Canterbury Park racetrack in 1994. But his long and illustrious career has also consisted of building several multimillion-dollar telecommunications companies, including the founding of CSI in 1970—which at the time had a staff of three.
Twin Cities Business highlighted Sampson’s widespread success last year when he was inducted into the Minnesota Business Hall of Fame.
CSI’s latest leadership changes coincide with the realignment of the company’s structure to operate primarily as a holding company that monitors and supports its three business units—JDL Technologies, Suttle, and Transition Networks (TN).
JDL handles IT services such as wireless network design and infrastructure configuration, Suttle markets solutions for fiber and copper networks for major communication companies, and TN helps companies integrate fiber optics into their data networks.
CSI said that under the new structure, the three units will each operate more independently in their respective businesses and that certain positions at CSI will be eliminated as the roles are taken on by positions at the respective subsidiaries.
CSI said the approach will emphasize “greater accountability of business unit leaders and more directly recognize business unit performance, [and] energize each business unit to improve levels of financial performance.”
“We believe the changes we have taken to restructure our parent company as a holding company and to focus on individual business unit performance is in the best interest of our shareholders and will increase shareholder value,” Sampson said in a statement. “In particular, it is difficult to announce Bill Schultz’s resignation. Since joining us in May 2000, he has made many important contributions both at [TN] and as an officer of CSI.”
The company added that its changes aim to improve its TN business. “TN was a strong contributor to the company’s revenues and profitability prior to 2012, but since then its performance has been and continues to be adversely affected by a number of external challenges,” CSI said. “TN may be able to capitalize on a number of significant market opportunities and achieve increasing levels of revenue and profitability if it reorganizes and refocuses its internal staff, and makes strategic investments in additional marketing, sales, and product development staff.”
CSI said it plans to fund improvements made at TN with the savings that will come from the business structure changes.
Last year was disappointing financially for CSI; it reported net earnings of $2.2 million, or $0.26 per share, down 77.1 percent from $9.8 million, or $1.15 per share, in 2011. Revenue, meanwhile, totaled $104.3 million for the fiscal year, down 27.5 percent from the previous year.
However, for its most recent quarter, ended June 30, CSI reported net earnings of $1.6 million, or $0.19 per share, up 64.6 percent from the same period in 2012. Second-quarter revenue, meanwhile, totaled $31.9 million, up 25 percent from the same period in 2012.