PCM Sales President Joe Hayek, a six-year veteran of the $1.42 billion national solution provider that is facing a possible hostile takeover, has left the company and is not going to be replaced in the "immediate return," according to a U.S. Securities and Exchange Commission regulatory filing.
Hayek has taken a position as vice president of M&A and corporate development for Worthington Industries, a diversified $2.5 billion metals processing company based in Columbus, Ohio.
Hayek's departure comes with the potential for an acquisition or a hostile takeover by rival Zones.
Hayek took the helm of PCM's PCM/Sarcom enterprise services division nearly two years ago. The PCM/Sarcom services business represents one of the most critical pieces of PCM's business with $500 million in annual sales and more than 1,000 employees.
PCM could not be reached for comment on the Hayek departure or its response to the Zones matter. PCM shares closed down 2 cents per share, or 0.20 percent, to $9.80. The 52-week high is $11.96, while the 52-week low is $6.02.
A source close to the company, who did not want to be identified, said Hayek was a well-respected executive who will be missed.
"It's a big loss," said the executive. "He was a valuable asset. You can't lose your key people and be a better company. PCM is either going to have to do something offensively to help shareholders, like leveraging their balance sheet to sell real estate or buy back shares."
In an SEC filing last month, Zones Chairman Firoz Lalji revealed that he and his wife, Najma, have acquired 5.02 percent of the shares of El Segundo, Calif.-based PCM, formerly known as PC Mall.
In the SEC filing, Lalji said he believes PCM's shares are "grossly undervalued and represented an attractive investment opportunity." He also said he thinks PCM has been "poorly managed" and is "one of the poorest-performing companies in its industry channel."
"Over the past three years (PCM) has seen no revenue growth, stagnating at approximately $1.4 billion annually, and has cumulatively generated net income of approximately $16.4 million on revenues of approximately $4.26 billion, which the [Laljis] believe represents a wholly-unacceptable level of 0.4% of revenue," Firoz Lalji said in the filing.
In the filing, Firoz Lalji also targeted PCM CEO and founder Frank Khulusi, who he claimed is "compensated at unreasonably higher levels than those of his peers at similarly-sized companies." Lalji noted that he and his wife plan to discuss their concerns directly with the PCM board of directors.
PCM's EBITDA (earnings before interest, taxes, depreciation, and amortization) was 1.9 percent during its last fiscal quarter, compared with 3.3 percent for Insight and 7.4 percent for CDW during the same period. Zones is a private company and does not report EBITDA.
In the SEC filing, PCM said: "We appreciate Joe's contributions to PCM, early on as our Executive Vice President of Corporate Development and Investor Relations, and more recently as the head of our Enterprise division, and we wish him success as he pursues this new opportunity."
PUBLISHED APRIL 15, 2014