The Passano family, which raised 100-year-old Waverly Inc. from a small printing business to the nation's premier medical publishing house, announced yesterday that it has hired the Baltimore-based company's first non-family chief executive officer -- Edward B. Hutton Jr.
Mr. Hutton has served as president and chief operating officer of Waverly since he was recruited from Simon & Schuster by Waverly Chairman William Passano Jr. three years ago.
In addition to naming the 45-year-old Mr. Hutton to the top job of the 1,000-worker company, Mr. Passano told investors gathered for the annual meeting at the Harbor Court Hotel yesterday that Waverly may issue up to 6 million more shares of common stock, potentially doubling the number of outstanding shares, if it needs to raise cash for another acquisition.
In the last two years, Waverly has bought three medical publishers, including the companies that publish the famous "Gray's Anatomy" -- giving Waverly a lucrative corner on anatomical reference books.
Mr. Hutton said that he wanted to delay any additional acquisition for at least a year in order to allow Waverly to digest the three new companies, as well as to continue developing its own medical journals.
Waverly, which had almost no debt a year ago, now owes nearly $17 million, Mr. Hutton noted.
Mr. Hutton said he believed the acquisitions, which include the nation's oldest publisher, Philadelphia-based Lea & Febiger L.P., will dilute Waverly's earnings for the next two years.
Although Waverly had record sales of $121.7 million and profits of nearly $4 million in 1990, profits slipped in the first quarter of 1991, he said.
Mr. Hutton predicted Waverly would end the year with earnings about 20 percent lower than last year's.
The 62-year-old Mr. Passano, who was Waverly's CEO for 20 years, said that his board of directors told him several years ago that he should look outside of the family for a successor. Although several family members were working for the company at the time, Mr. Passano said he realized that the board members "were right."
Mr. Passano said he would continue to work on the company's strategy and acquisitions.
Three months ended 3/31/91
... ... Revenue... ... ... Net... ... ... Share
'91... ... 33,041,000... ... 604,000.. ... 0.14
'90... ... 25,188,000... ... 1,162,000 ....0.32
% change.. ..... +31.2... ... ... - 48.0.....-56.3