Shareholder Group Seeks Ouster of Beazer CEO
McCarthy did not address the issue during a presentation at an investor conference in
CTW Investment Group said Monday's disclosure by Beazer about job cuts, expected fourth-quarter impairment charges and the suspension of the company's dividend "further undermined management's credibility at a precarious moment in the housing cycle."
The Washington-based group, which works with union-sponsored pension funds that own roughly 300,000 Beazer shares, wants the board to immediately replace McCarthy, name an independent board chairman and establish a legal and regulatory compliance committee.
The comments were made in a letter from the executive director of CTW Investment Group, William Patterson, to Laurent Alpert, chair of the nominating and corporate governance committee of Beazer's board of directors.
McCarthy spoke during the investor conference Tuesday afternoon about Beazer's financial situation and the investigations involving the company. But he did not talk about the shareholder advisory group's request of the board to oust him.
"Certainly, the company has some specific issues that it has to address," McCarthy said.
He said he believes the downturn in the housing market could be "somewhat sustained."
Beazer has been beset by turmoil in the housing industry that has caused its number of home closings to plunge. Chief Financial Officer Allan Merrill said Tuesday that some of the cancellations Beazer suffered in its fourth quarter were due to false rumors about the company in the media, specifically reports the company was readying to go out of business.
Even so, internal problems at the company have exacerbated the situation.
On Monday, Beazer said it expects to record pretax charges of $230 million in its fiscal fourth quarter.
It also said it cut 650 jobs, or 25% of its work force, in October, and is suspending its quarterly dividend to reduce costs.
The homebuilder said it is unable to provide a full, audited report of its results for the quarter ended Sept. 30, but wanted to provide some preliminary data to investors.
The company is currently in the midst of restating financial results for several prior-year periods.