Managers at UAL Corp. named Frederic Brace chief financial officer of both the parent company and its United Airlines subsidiary. The board of directors has also indefinitely suspended the quarterly cash dividend on its common stock, which is expected to save the struggling company about $2.5 million. In another sign of distress at the carrier, James Goodwin, UAL chairman and chief executive officer, asked that his pay be suspended through year-end. Top executives at American, Continental and Delta have already agreed to shave their annual salaries by 25 percent.
Board members at UAL also announced they would forego board member compensation through year-end, company managers said in a statement. They expect the salary cuts to save the carrier roughly $1 million, which represents one-tenth of 1 percent of the $1 billion in losses analysts expected at United this year, Reuters reported.
These bleak announcements at the Chicago-based company are a direct response to the September 11 terrorist attacks, as the entire U.S. airline industry grapples with reduced travel demand, widespread flight cancellations, and more than 100,000 layoffs. United, the nation’s second-largest air carrier, has cut its worldwide flight schedule by 20 percent — a move also taken by other major U.S. carriers over the past three weeks. Officials at the company said last week that they planned to lay off about 20,000 workers in the wake of the attacks, which has added to the pressure on Washington to put up a $15 billion package to rescue the industry.
Prior to the attacks, United was already starting to feel the pain of an economic slowdown. For the six months ended June 30, revenues fell 6 percent to $9.08 billion. Net losses totaled $675 million, compared with an income of $405 million in the year-ago period. The weak economy has substantially reduced bookings on flights to the West coast and Asia.
Brace replaces Douglas Hacker, who will take over as president of United NewVentures, a UAL Corp. subsidiary. Brace joined United in May 1988 as manager of operating budgets and held a number of senior positions before becoming senior vice president of finance in July 1999.
- Managers at video game publisher Midway Games Inc. tapped Thomas Powell as the company’s new chief financial officer. Powell replaces Harold Bach, who is retiring. The incoming finance chief joined Midway as executive vice president, finance, in April. Prior to that, he was vice president of corporate business development and strategic planning at Dade Behring Inc., a supplier of clinical diagnostics. Bach, who has been CFO since 1990, will remain on the board of directors. Earlier last month Byron Cook, vice chairman of the board, left the Chicago-based company to pursue other interests.
That’s not surprising. It hasn’t been all fun and games at Midway Games of late. For the fiscal year ended June 30, revenues decreased 50 percent to $168.2 million. Net losses totaled $69.3 million, up from $12 million the year prior, due in part to $6.8 million in restructuring expenses. Revenues reflected decreased unit sales as the company transitioned from making 32-bit and 64-bit to 128-bit game consoles. The company’s shares closed on Friday at $12.11 on the New York Stock Exchange. Over the past year, Midway’s share price has ranged from $6.13 to $18.50.
Rick Bryson, CFO at Pac-West Telecomm Inc., announced his decision to leave to company to ”pursue other interests.” The announcement comes shortly after Pac-West officials announced a management shakeup, as well as a cost restructuring, in response to tough market conditions. Wally Griffin, Pac-West’s chairman and CEO, will assume the additional role of CFO. He will be assisted by vice president of finance and treasurer Ravi Brar and senior financial advisor Dennis Meyer.
Revenues at the Stockton, California-based provider of integrated communications services decreased nearly 15 percent in the second quarter of 2001 compared with the same period a year ago. Net losses for the second quarter were $3.6 million, a 10 cent loss per diluted share, compared with a 4 cent loss per share in the second quarter of 2000. As of June 30 the company had $90.7 million in cash and short-term investments, $30.0 million available under a senior credit line, and approximately $17.0 million in available vendor financing.
Officials at Wilmington, Massachusetts-based Telephotonics Inc., a supplier of integrated optical components for DWDM systems, named Mike Rubino vice president of finance and chief financial officer. Rubino joins the company with over two decades of experience in high- growth networking and telecommunications companies. Prior to joining Telephotonics, he was vice president of finance and CFO of Ellacoya Networks, a venture financed technology company. Telephotonics was founded in March 2000 and has secured $18 million to date in venture funding from Bessemer Venture Partners, Atlas Venture, and Blue Chip Ventures. Rubino also helped manage an initial public offering at Maker Communications Inc. in May 1999, as well as its subsequent acquisition by Conexant Systems. Prior to that, Rubino was CFO at Agile Networks, where he helped managed its acquisition by Lucent Technologies. Rubino is a certified public accountant and holds a B.S. from the University of South Carolina.