On the eve of a Wall Street holiday and after the market's close, Standard Pacific announced on Thursday the immediate replacement of longtime CEO Stephen Scarborough with Jeffrey V. Peterson, the lead independent director of the company's board of directors.
Peterson, who has served on the board for seven years, will be chairman, CEO, and president of the Irvine, Calif.-based public builder, which has been battered by the sagging housing market.
Peterson acknowledged as much in Thursday's conference call with analysts. "The current operating environment calls for a sense of urgency," he said. Besides making the leadership transition "as seamless as possible" for everyone from employees to shareholders, Peterson said a priority would be to "to ensure the continuity of the business and its operations."
Those operations have struggled. According to SEC filings, Standard Pacific reported a net loss of $440.9 million in 2007, which was more than quadruple its 2006 loss of $98.4 million. Share prices have reflected such troubles and closed at $4.68 cents on Thursday. (Markets had closed by the time the company revealed the leadership change.)
During Thursday's call, analysts asked whether the departure of Scarborough, who had been with Standard Pacific since 1981, was voluntary, performance-related, or personal. Management declined to answer since it was a personnel matter.
Scarborough served as CEO for eight years.
According to the call, no terms have been set for the length of Peterson's employment at Standard Pacific. "It is totally open-ended ...," said Peterson. "This is not something we've gone into with a calendar but with a mandate and a sense of responsibility and urgency."
Peterson is a former managing director with the Trust Co. of the West.
The CEO changeover raises some questions about Standard Pacific's future. "Several investors speculated that this move was made by SPF to facilitate a sale of the company, or some other corporate restructuring," home building analyst Ivy Zelman wrote in her post-announcement assessment. "However, after talking to our industry contacts, we believe that this move was made to re-invigorate the company's employees in this challenging market environment and to build long-term shareholder value."
One analyst asked during the call whether the move might affect any plans to declare bankruptcy. "I don't think it's appropriate to comment on that at this call. The purpose of this call was to me to be introduced to you," Peterson answered. "There is a whole host of things we are going to be addressing, and I think we should leave it at that."