TVI posts 2Q loss, elevates Hughes

Interim CEO named permanent chief

August 09, 2007|By M. William Salganik | M. William Salganik,Sun reporter

Glenn Dale-based TVI Corp., which makes products and decontamination shelters for emergency workers, named its interim head as its president and chief executive officer yesterday, and reported a loss of $14.8 million in the second quarter.

Shares dropped 22 cents to close at 38 cents - a 37 percent fall, continuing a slide that has followed financial and management problems. TVI shares traded at just under $3 as recently as October.

TVI named Harley A. Hughes president and chief executive. Hughes, a retired Air Force general, had been interim CEO since April. He served on TVI's board of directors beginning in 2003, and previously was chairman of F&H 2 Inc., a consulting firm that advises on future weapons requirements.

Hughes' interim appointment came as the company's board ousted two top officers after the discovery of what the company characterized as "questionable" overpayments to a supplier. Resigning at the board's behest were CEO Richard V. Priddy and Executive Vice President Charles L. Sample.

"While we still have many challenges ahead to return TVI to profitability, we believe that we have made substantial progress to date toward turning the company around," Hughes said in a statement, noting an effort to reduce expenses and carry out a turnaround plan.

The loss of $14.8 million, or 44 cents a share, in the quarter that ended June 30 compares with a $228,000 gain in the corresponding period last year.

The company blamed most of the loss on a "noncash goodwill impairment charge" it took related to its 2005 acquisition of SafetyTech International Inc.

"Our former management's financial expectations used to value goodwill associated with STI were no longer valid," Hughes said in his statement.

Decreased sales of the company's shelter and personal protection products also put pressure on the profit margin, the Prince George's County company said.

Overall, however, revenue was up substantially.

The company reported $12.5 million in revenue in the second quarter, up about 70 percent from $7.3 million in the corresponding period last year.

In what it termed "a planned Board member rotation of assignments," TVI announced that Todd Parchman had become chairman of the board and of its compensation committee.

The previous chairman, Mark Hammond, remains on the board and will chair the audit and governance committees.

bill.salganik@baltsun.com

Sun reporter Jamie Smith Hopkins contributed to this article.

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