McDermott CFO Resigns After $1.9 Billion Loss

The company said Stuart Spence left to “pursue other opportunities” and was replaced by Chris Krummel, formerly chief accounting officer.
Matthew HellerNovember 6, 2019

A day after reporting a $1.9 billion quarterly loss, oilfield services company McDermott International announced Tuesday that CFO Stuart Spence had resigned from his post.

Spence, an energy industry veteran, left McDermott to “pursue other opportunities,” the company said in a news release. He was replaced by Chris Krummel, global finance vice president and chief accounting officer.

“We wish Stuart success in his future endeavors and appreciate his significant contributions to McDermott over the past five years,” CEO David Dickson said in a news release.

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On Monday, McDermott had reported a third-quarter net loss of nearly $1.89 billion on revenue of $2.12 billion, compared to net income of $2 million on revenue of nearly $2.29 billion in the year-ago period.

The company attributed the loss primarily to $1.5 billion in noncash charges “related to impairments of goodwill and intangible assets and $256 million of changes in project gross profit on specified projects identified in a covenant” of its new, $1.7 billion credit agreement.

It has also been struggling with heavy debt from its 2018 acquisition of CB&I and lower spending from oil and gas industry customers.

Market rumors that McDermott had retained a Chapter 11 advisory firm sent its shares falling from $5.88 per share to $1.58 per share over two days in mid-September. The stock dropped 6.3% to $1.62 in trading Tuesday.

Spence succeeded Perry Elders as CFO in August 2014 after working in the energy business for about 19 years at such firms as Halliburton, Global Oilfield Services, Green Rock Energy, Aibel, and Vetco International. He earned a base salary of $599,621 and total compensation of nearly $3.58 million in 2018.

Krummel joined McDermott in October 2016 from private equity firm American Industrial Partners.

“Chris has worked closely and collaboratively with our leadership team for the past three years and has clearly demonstrated the business and financial acumen that McDermott needs,” Dickson said. “I’m confident in his ability to lead our finance organization as we work to rebuild our capital structure to match and support the strength of our operating business.”

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