Ruzika steps down at Devcon
BOCA RATON, Fla.--Richard Rochon has been named acting chief executive officer of Devcon International, following the Jan. 26 announcement that Stephen Ruzika would step down from the post.
A director of the company since 2004, Rochon has been chairman since Jan. 24, 2006.
Stan Smith, spokesman for Rochon, said Rochon, who is also currently chairman and chief executive officer of Royal Palm Capital Partners, a private investment and management firm, is not interested in becoming a permanent chief executive officer of Devcon, and "the board will begin a search for a permanent CEO."
Rochon, who was not immediately available for comment, said in a statement that Ruzika had "completed a significant part of what we asked him to do--transform Devcon into a security services provider." He further noted in the statement that "Devcon is in extremely competent hands with Ron Lakey now running our day-to-day operations." Lakey in December was named chief operating officer of Devcon International and president of Devcon Security Services.
Asked if Lakey would be a candidate for the chief executive post, Smith said he could not speak to that question. The board will form a committee at its next board meeting to undertake the search. Lakey has been with Devcon since February 2005. He has more than 13 years of experience in the security industry, having spent more than 10 years at ADT, where he had overall responsibility for ADT's Canadian and European operations.
Ruzika will remain with the company as an advisor for one year. According to an SEC filing, Ruzika will receive $10,416.67 per month for consulting services not to exceed 630 hours during the course of the year.
Jack Mallon, managing partner of Mallon Associates surmised that the management transition was a result of "losses being up and the stock price being down." The stock price has dropped by 50 percent in the past 52 weeks and operating and net losses are up, he said.
"In '05 the company showed an operating loss of $16.3 million and net loss of $14.3 million," Mallon said, "and for the first nine months of '06 we are looking at losses of $20.7 million."
Whoever becomes the next CEO will have to deal with Devcon's debt, Mallon said. The company in 2004 had long-term debt of less than $1 million, $55 million in 2005 and currently has $130 million in long-term debt. "The fact remains that this is a very precarious situation for the company," Mallon said. "[This kind of debt] has been the problem for many other alarm companies in the past, where they just got saddled with significant debt and were unable to spin out of it."