General Physics Corp., on the heels of a merger with a former subsidiary, announced the resignation yesterday of its president and chief executive.
Roger E. Klose's departure from the Columbia-based engineering and nuclear power services company comes less than a month after the completion of a merger with GPS Technologies Corp., a former subsidiary that splintered from General Physics in September 1991.
Mr. Klose, who resigned his position of four years for "personal reasons," according to a company statement, will remain a senior consultant to the company through 1997.
Jerome Feldman, chairman of the newly merged company's executive committee and former chief executive of GPS Technologies, will replace Mr. Klose as CEO. Mr. Feldman also heads National Patent Corp., a New York-based firm which increased its stake in General Physics to 54 percent as part of the January merger agreement.
"The key to General Physics' future is the GPS Technologies acquisition, and its ability to expand beyond the nuclear industry and into fossil, industrial and more aggressively into government work," Mr. Feldman said yesterday. "One of the strengths of GPS is its engineering and technical services base, of which you'll see more."
Additionally, the company elevated Chief Financial Officer John C. McAuliffe to the post of chief operating officer.
"It's been a tough period for the company since going public," said John Curti, a Securities Corp. of Iowa analyst who tracks General Physics. "Mergers are a very physical effort, and maybe Klose is tired, or perhaps there's politics involved. The decision certainly caught me by surprise."
The announcement also surprised longtime General Physics employees, who as of late yesterday had not been informed of Mr. Klose's exit.
"We just had a company meeting with him less than two weeks ago to discuss aspects of the merger," said one General Physics staffer. "It never came up."
Mr. Klose could not be reached for comment.
Under terms of the merger agreement, General Physics paid $25 million in cash and subordinated debentures, along with 5 million common shares and stock warrants, to reacquire GPS Technologies.
General Physics moved to acquire GPS Technologies, which provides engineering, training and support to fossil fuel plants and clients such as the Department of Defense and the Department of Energy, as a result of cutbacks in the defense industry and the Soviet Union's collapse.
Those cutbacks resulted in weakened earnings for General Physics, which in the first six months of this year generated a net loss of $620,000, or 10 cents a share, on revenues of $27.9 million. The recent figure, which included a reserve of $932,000, compared with 1993's first-half net gain of $1.3 million, or 21 cents a share, on revenues of $33.5 million.
By comparison, GPS Technologies in the first nine months of 1993 posted revenue gains of $43 million while still independent, vs. General Physics' revenue slide to $49 million.
The combined firm, with 40 U.S. locations and 1,300 employees, will generate sales of roughly $120 million this year, Mr. Feldman said.