One month after sitting next to The VAR Guy at a luncheon, Avnet Technology Solutions (ATS) Global President John Paget (pictured) is stepping down from the global distributor. Was it something The VAR Guy said? Kidding aside, our resident blogger was surprised by the change. Here’s why.
Paget spoke at an Avnet executive luncheon for Wall Street analysts in mid-December. At the time there was not discussion of Paget leaving ATS or stepping down from his day-to-day duties. Plus, The VAR Guy is always a bit suspicious when a publicly held company announces an executive change on or around a holiday weekend, when most of the press is out of the office.
Replacing Paget is Philip Gallagher (photo, right), a 26-year Avnet veteran who currently serves as president of Avnet Electronics marketing.
Smooth Transition?
Now here’s the interesting twist. According to the Avnet press release:
- Gallagher’s appointment to the AVT president position is effective March 2
- But Paget is stepping down from his current position, effective immediately, and will assist with the leadership transition
The press release goes on to say that Avnet wishes Paget well in his future endeavors.
Strange timing.
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Avnet has released quarterly financial results, and the information provides some clues about why Paget is moving on. According to Avnet’s press release, Avnet Technology Solutions (ATS) had sales of $2.00 billion in the second quarter fiscal 2009, down 12.0% year over year on a reported basis and down 7.3% when adjusted to exclude the impact of changes in foreign currency exchange rates.
In the earnings release, Avnet’s CEO stated: “Technology Solutions experienced a below normal calendar year-end surge as revenue finished at the low end of expectations due primarily to a weaker-than-expected final week in the Americas region. Similar to EM, the shortfall in the more profitable Americas region negatively impacted profit volume and margins. Therefore, we are taking more cost reduction actions in the TS business to continue aligning our cost structure to expected revenues. We are pleased with our progress this quarter in EMEA where previously announced restructuring and the addition of Horizon Technology are having the expected positive impact on performance.”
For the complete release, visit here.