Itron CEO seeks to retake centerstage
LOS ANGELES (Reuters) - After two years of doing little but fly-fishing, golfing and playing with his grandchildren, Itron Inc Chief Executive LeRoy Nosbaum is suddenly back at the helm of the smart grid company he is credited with building into a billion-dollar business.
Under Nosbaum's 9-year tenure as CEO from 2000 to 2009, Itron enjoyed explosive growth as energy efficiency and the so-called smart grid became one of the market's hottest sectors. Helped by nine acquisitions, sales at the smart meter maker grew to nearly $2 billion and its share price soared more than five-fold.
But since Nosbaum, 65, gave up the CEO post in March of 2009, Itron's stock has lost a quarter of its value, dogged by concerns about the company's long-term strategy in the face of increasing global competition and the drying-up of federal U.S. stimulus dollars -- money that had spurred adoption of smart meters by U.S. utilities in recent years.
Then on August 31, Itron's board of directors brought Nosbaum back. At the same time, the company announced the abrupt retirement of CEO Malcolm Unsworth.
Itron's advanced electric meters allow households to monitor their usage more closely while also sending data back to their local power providers -- ideally saving energy and cutting costs.
Earlier this year, Unsworth aimed to allay Wall Street jitters about long-term growth by unveiling an ambitious goal of doubling revenue by 2015. Analysts criticized the plan as thin on details, and Itron stock fell 5 percent the next day.
"We announced it too soon, before we had the paint dry," Nosbaum said in an interview on Monday. "We didn't give sufficient details to convince anybody that we actually had a plan. There has to be a strategy beyond 'We're all going to work hard.'"
Nevertheless, Nosbaum said Itron will indeed reach that goal of $5 billion in sales by 2015, and possibly exceed it.
"If it changes, it only will be in the upward direction."
The same lack of clarity characterized a restructuring plan that will include an undetermined number of layoffs and the closure of factories and offices, Nosbaum added.
"I wish we hadn't announced it before we had the details, but I'm stuck with that one," he said.
It remains to be seen how much better Nosbaum can fare, given the uncertain market environment and a downbeat outlook for funding-strapped clean technology plays on Wall Street. But the CEO himself reckons the board did right going to him, in part because of his expertise in communication.
Nosbaum said the company has fallen short in engaging both investors and customers -- hurting not just its stock price, but also its status in the marketplace.
"I don't believe that we have taken and kept centerstage in the debate in the marketplace," he said. "We have been allowing other lesser competitors to take that centerstage."
Specifically, Itron must work on dominating fast-growing markets such as China, India and South America, Nosbaum said.
"In South America, I'm completely unimpressed with what we've done the last several years. But we'll fix that."
Nosbaum said Wall Street is too focused on the smart meter business in North America, and the company has not done a good enough job of highlighting its other businesses.
"Shame on us," he said.
To be sure, Nosbaum is not one to mince words, saying plainly that economic malaise and turmoil in the markets had taken a toll on morale at Itron.
"One of the big impacts is the mood is so crappy," he said. "The mood of my people is not great, the mood of our customers is not great, the mood of my board is not great."
Onward and upward, however, Nosbaum said.
"I have to do some things because of it -- a little cheerleading, a little reality-setting. Yes, we are watching things a little closer in some countries. That's life. That's why we get paid the big bucks."
Itron shares closed at $35.89 Monday on Nasdaq. The stock is down 47 percent from its 52-week high of $67.58 reached last October.
(Reporting by Nichola Groom; Editing by Richard Chang)
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