PICO Holdings, Inc. (NASDAQ:PICO) announced, effective August 2,
the Company’s Board of Directors has appointed Dorothy Timian -
Palmer as Chief Executive Officer of the Company to succeed Max
Webb in that role. Mr. Webb will continue to serve the Company in
the newly created position of Executive Chairman. The Company also
announced that John Perri, the Company’s Chief Financial Officer,
will leave the Company once an orderly transition with new finance
staff in Carson City, Nevada has occurred and the La Jolla,
California office has been closed. This transition is expected to
be fully completed no later than the first quarter of 2019.
In connection with the foregoing, the Company’s
Compensation Committee approved, and the Company entered into, an
Employment Agreement with Ms. Timian - Palmer, an amended
Employment Agreement with Mr. Webb, an amended Executive Bonus Plan
for Ms. Timian - Palmer and Mr. Webb, and a Transition Agreement
with Mr. Perri. Concurrently with this press release, the
Company is filing a Current Report on Form 8-K with the Securities
and Exchange Commission, which summarizes each of these documents
and includes them as exhibits.
Eric Speron, the Company’s lead director,
commented:
“The Board is delighted to announce the
appointment of Dorothy as the new CEO of the Company. The Company
has achieved much in the last two years and its assets now consist
almost entirely of Vidler Water Company. As such, the Board
determined this was the right time to appoint Dorothy as CEO with
her extensive experience and expertise in all water development
matters and for her to continue on the path of maximizing the value
of Vidler’s unique and strategic portfolio of water assets.
Shareholders who have met Dorothy are keenly aware of her unrivaled
water development experience and her commitment to the Company.
“The board is also incredibly pleased Max was
willing to stay as our Executive Chairman. The board believes Max
has done a terrific job as CEO and we are extraordinarily pleased
he was willing to stay on this role as well as oversee our finance
and reporting functions once the transition to move those functions
to Carson City is complete. Max has accomplished everything the
board has asked of him and done it with exemplary stewardship,
precision and care so we were excited to retain his talents as the
company evolves by continuing to work with Dorothy and the Vidler
team.
“We believe this reorganization of the
management structure and the closure of the La Jolla office will
result in significant reductions in executive compensation and
overhead in future periods. Moreover, the Compensation Committee
believes the amendments to the Executive Bonus Plan - in
particular, the addition to the bonus formula of a time value of
money charge against invested capital, and the increase to 50% of
the portion of RSUs comprising any bonus payment - more closely
align the bonus incentive available to Dorothy and Max with the
best interests of shareholders. The scope of our executive bonus
plan has narrowed to just Dorothy and Max in order to finance this
modest capital charge yet retain competitive potential compensation
levels for our leadership.
“Once the transition is complete we will provide
further guidance to the normalized annual cash burn rate savings
before the one - off costs associated with the reorganization.”
Mr. Webb commented:
“I am very pleased to pass the CEO role over to
Dorothy. We have been colleagues for over 20 years and I believe
she is exactly the right person at this point in the Company’s
evolution to be leading the execution of the Company’s business
plan. Dorothy is very creative and clever in finding water
solutions to the water scarcities that exist in the markets we
serve - and she and the Vidler team have the deep and extensive
local knowledge in those markets that is essential for maximizing
the value of our water portfolio. I look forward to working with
Dorothy and the Board as we continue to monetize assets and reduce
our normalized annual cash burn rate.
“I wish to thank John Perri for the role he has
played for many years at PICO. He has been a dedicated steward of
the Company’s financial integrity over the years and has excelled
as a professional financial executive. John is committed to
ensuring the transition of the financial reporting and
administration of the Company to the new Company headquarters in
Carson City is executed in the most efficient and timely manner.
Once the transition is complete, it is the Board’s intention that I
will resume the role of Chief Financial Officer of the Company. On
behalf of the Board and management we thank John for his loyal
service to the Company and its shareholders and we all wish him
well in his future endeavors.”
Ms. Timian - Palmer commented:
“I am honored to become CEO of PICO and to
continue our efforts to maximize the value of our water assets for
shareholders. I remain committed to working tirelessly and as
efficiently as possible as we continue to endeavor to monetize the
remainder of our water asset portfolio. The transition of the
financial and administrative functions to our new headquarters in
Carson City is timely and should result in a more efficient
operation of the Company and produce significant normalized annual
cash savings.
“I wish to thank Max for the job he has done as
CEO these past couple of years and I am very pleased that in his
role of Executive Chairman he will continue to provide me with his
insights and financial expertise as I take on my new role. Max
has shown leadership and commitment to shareholder value and
I aim to emulate those actions.”
About PICO Holdings, Inc.
As of June 30, 2018, our major investment was
Vidler Water Company, Inc., a water resource and water storage
business with assets and operations primarily in the Southwestern
U.S.
Currently, we believe the highest potential
return to shareholders is from a return of capital to shareholders.
As we monetize assets, rather than reinvest the proceeds, we intend
to return the capital derived therefrom, less any working capital
requirements, back to shareholders through a stock repurchase
program or by other means such as special dividends taking into
effect liquidity requirements, debt covenants and any other
contractual and legal restrictions that may exist at the time.
OTHER INFORMATION
At June 30, 2018, PICO Holdings, Inc. had a
market capitalization of $256.5 million, and 22,020,168 shares
outstanding.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
Statements in this press release that are not
historical, including statements regarding the reorganization of
our management structure, the closure of our La Jolla office, our
ability to reduce our cash burn rate, and our ability to monetize
assets and return capital to shareholders through stock repurchases
or through other means, are forward-looking statements based on
current expectations and assumptions that are subject to risks and
uncertainties.
In addition, a number of other factors may cause
results to differ materially from our expectations, such as: any
slow down or downturn in the housing recovery or in the real estate
markets in which Vidler operates; fluctuations in the prices of
water and water rights; physical, governmental and legal
restrictions on water and water rights; a downturn in some sectors
of the stock market; general economic conditions; prolonged
weakness in the overall U.S. and global economies; and the
continued service and availability of key management personnel.
For further information regarding risks and
uncertainties associated with our business, please refer to the
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” and “Risk Factors” sections of our SEC
filings, including our Annual Report on Form 10-K and our Quarterly
Reports on Form 10-Q, copies of which may be obtained by contacting
us at (858) 456-6022 or at http://investors.picoholdings.com.
We undertake no obligation to (and we expressly
disclaim any obligation to) update our forward-looking statements,
whether as a result of new information, subsequent events, or
otherwise, in order to reflect any event or circumstance which may
arise after the date of this press release, except as may otherwise
be required by law. Readers are urged not to place undue
reliance on these forward-looking statements, which speak only as
of the date of this press release.
This news release was distributed by
GlobeNewswire, www.globenewswire.com.
CONTACT: |
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Max
WebbExecutive Chairman(858) 652-4114 |
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