CHARLOTTE, N.C. (Jan. 26, 2001) — In a surprise move, the nation´s largest independent marketer of tires and related products has replaced its man at the top.
Following a board meeting Jan. 22, Heafner Tire Group Inc. announced that Donald C. Roof was out as president and CEO of the Charlotte-based company. In his stead, Richard "Dick" Johnson was appointed president and chief executive officer.
Mr. Johnson most recently served as president of Heafner´s Southeast division, and previously had been president and CEO for ITCO Tires & Products, which was acquired by Heafner in 1998.
David Phillips, Heafner´s vice president of human resources, was asked whether Mr. Roof´s departure was hastened by a difference in opinion with Charlesbank Capital Partners L.L.C., Heafner´s majority owner, on how to run the company. Mr. Phillips told Tire Business he "can´t comment on any reasons why. Don´s decided to do other things."
The "good news," he added, "is that we got someone who´s a veteran in the distribution business. It´s a big change to have someone who has the knowledge of an operating group, and we´re pleased that it´s going to be a smooth transition."
Mr. Johnson even got a thumbs-up from his predecessor. Although Mr. Roof told Tire Business he would not comment at this time on why he and Heafner parted ways, in a statement issued Jan. 23 he said, in part: "I know that Dick will do an outstanding job for Heafner."
"I have enjoyed working with so many people in the tire industry over the last four years and will miss these relationships very much,"Mr. Roof continued. I do hope I will have the opportunity to work with some of you in the future."
Prior to joining ITCO, Mr. Johnson worked for a food distribution company, Albert Fisher Distribution—first as senior vice president from 1991 to ´94, and then as president and chief operating officer from 1994 to ´96.
Commenting on the change in the executive ranks, Kim Davis, a member of Heafner´s board, said he and the board "have complete confidence in Mr. Johnson´s abilities to lead this company and to continue the growth that we have enjoyed."
Mr. Phillips described the company´s new chief executive as an "excellent manager" who has "unique abilities to manage the large and diverse parts of the organization.
"Dick has been running the largest and most profitable of our operating divisions...and has done a super job with the Heafner-ITCO combination. He´s extremely people-oriented as well as a good financial manager."
In mid-1999, Charlesbank—a private equity firm with offices in Boston and New York—became the majority owner of Heafner and its nationwide retail and wholesale operations.
Mr. Roof joined Heafner as senior vice president and CFO in March 1997—two months prior to its acquisition of West Coast-based Winston Tire. For 12 years before that he had been an executive with Yale International Inc., a manufacturer of cranes, hoists and material handling equipment.
The Heafner Tire Group includes Heafner-ITCO in the Southeast and Competition Parts Warehouse, Winston Tire and California Tire in California and Arizona—all operations the company acquired over the past several years. In May 2000, it purchased Nebraska´s T.O. Haas Tire Co. in order to establish a Plains States distribution platform.
Then last July, in an effort to gain a long-sought foothold in the Northeast, Heafner acquired American Tire Distributors (ATD), the wholesale operations of Manassas, Va.-based Merchant´s Inc.
"Obviously, we made a lot of acquisitions," Mr. Phillips acknowledged, "and we´ve grown substantially in that period under Don´s leadership."
Late last year, Heafner began to merge its CPW and California Tire operations into a unit called Heafner Tire Group—Western Division. At the time, Mr. Roof said the consolidation would "allow us to improve our overall customer service capabilities and bring `one-stop-shopping´ to our West Coast customers."
But also last year the company´s financial results were affected by a struggling Winston Tire operation. Last August, the company saw a significant decline in its retail division´s operating results, cutting Heafner´s second-quarter operating earnings by more than one-third, despite an increase in sales.
Mr. Roof had attributed the entire fall in operating earnings to "significantly less than anticipated" results in the retail division caused by difficulties encountered during the rollout of a new point-of-sale computer system.
Those results came after the company posted solid increases in sales for the first quarter of 2000 but still had its operating earnings negatively impacted by start-up costs for a new distribution facility in California.
Questioned about the slip in revenue, Mr. Phillips said "no business that I know of is perfect. We could be doing better and would like to do better, and I believe we´re on the road to do that."
Still, he admitted that Heafner has yet to do more integration of some of its acquisitions "and we´re working on that. We´ve grown so rapidly...and you´re mixing cultures, companies and geographies—and that´s a challenge."
With the addition of T.O. Haas Tire, the company was expecting to see its annual revenues bolstered by more than $100 million. The company has projected its sales will hit $1.4 billion in 2001.
Heafner operates 240 retail outlets—primarily under the Winston Tire name—and has four distribution divisions serving 35 states.