Black Box CEO to Step Down Following Rough Year

Black Box Network Services CEO Michael McAndrew plans to resign after a rocky sales force restructuring and 62 percent drop in the company’s stock price during 2015.

The Lawrence, Penn.-based company, No. 34 on the CRN Solution Provider 500, said it has engaged a national executive search firm to conduct an external search for candidates to replace McAndrew, who held the top job for just 33 months. McAndrew’s resignation will take effect once his successor is appointed.

’Despite recent challenges, both Mike and I are optimistic about the future of the company and agreed that now is the right time to transition to new leadership to take the company to its next phase of growth,’ Thomas Greig, chairman of Black Box’s board, said in a statement.

[RELATED: Black Box CEO Takes Sales Force To Task]

Wall Street has hammered Black Box in 2015, sending its stock price plummeting from $24.18 on Jan. 1 to just $9.18 as of Wednesday morning. The stock fell an additional 8.3 percent Wednesday after Black Box announced McAndrew’s resignation.

McAndrew took his sales force to task in October’s earnings call, calling their performance ’unacceptable’ as a major restructuring over the past year had failed to produce any gains in revenue or bookings. He told investors to expect continued slow sales from Black Box’s federal and commercial customers until at least March 2016.

Specifically, McAndrew said the sales organization failed to increase revenue across technology areas from middle enterprise customers despite that being the first area of focus from its sales reorganization. The company also neglected to build a sufficient backlog in its commercial services business, resulting in lower-than-anticipated bookings for the most recent quarter.

McAndrew said the company expects to turn over 30 percent of its sales organization between the beginning of 2015 and the coming quarters.

’I believe that with our transformational efforts well underway, now is the right time for a transition,’ McAndrew said in a statement. Neither Black Box nor McAndrew responded to requests for additional comment.

Black Box recorded a $129.8 million net loss in its most recent fiscal quarter, which ended Sept. 30, as well as a 5 percent drop in sales to $237 million. For its most recent fiscal year, which ended March 31, 2015, sales sunk 3 percent to $971.7 million.

Black Box’s stock price is at its lowest point in more than 21 years, approaching the company’s all-time low of $8.63 per share recorded in June 1994. The company’s stock price peaked at $79.17 in May 2000, and was trading at more than $20 per share in all but two months between 1997 and 2014.

McAndrew was employed by Black Box for more than 26 years, serving as the company’s vice president and chief financial officer from 2002 to September 2012, and its president and chief operating officer from October 2012 to April 2013 before stepping into the CEO role in April of that year.

Over the past two years, Black Box has invested in its Cisco and wireless solutions businesses and grown North American and international product sales in areas such as education and media.