Sodini did not immediately respond to [image-nocss] a call for comment, but in a press release said, "I have now spent over 10 years with The Pantry and am proud of what we have accomplished. Ultimately, however, the board and I discussed the company's succession plan and we decided now was the right time to implement it. I look forward to working with the board to assure a seamless transition, and I continue to remain enthusiastic about the company's opportunities and prospects in the years to come."
Tom Murnane, lead director at The Pantry, told CSP Daily News that Sodini's decision to retire was the result of ongoing succession planning and discussions between him and the board. "Pete's been there 12-plus years at this point," said Murnane, citing Sodini's readiness to retire. "His contract expires at the end of September, and at this point.... Pete and the board working together have decided that in order to have an orderly transition to a new CEO, that this was the right time to implement our succession plan so that we would have adequate time to have a very orderly transition."
Murnane added, "Pete's been an outstanding CEO, and he's done a great job."
In the press release, he said, "Pete's commitment to this company and its people is unmatched. All of us who have worked with Peter throughout the years have benefited from his leadership, his selfless commitment to the company and his foresight. He leaves The Pantry with many core strengths, and we are grateful for his dedicated service."
Murnane noted that Sodini will serve as chairman and CEO up until the completion of his contract at the end of September. After that point, "he's not planning any further involvement," said Murnane.
The board and a search committee are currently defining their requirements for a replacement, with a goal of having a new CEO in place when Sodini's contract expires. "As long as we do that, I think we'll accomplish what we've set out to accomplish," said Murnane.
Ben Brownlow, associate vice president of equity research with Morgan Keegan & Co. Inc., echoed the sentiments on Sodini's departure. "He's been with the company for 12 years, he's 68 years old, I think he's just ready to retire," Brownlow told CSP Daily News.
In terms of leading candidates, Brownlow cited Frank Paci, whom The Pantry announced yesterday was promoted to executive vice president of business operations, and who will continue to serve as senior vice president, finance, CFO and secretary. Paci will add acquisitions and legal affairs to his set of responsibilities. The executive joined The Pantry in June 2007 from Blockbuster Inc., where he was executive vice president of strategic planning and business development. "I do feel Frank [Paci] has had an increasing role in the operations over the past year," said Brownlow. "I feel like he has been heading up pretty much everything from a strategic and financial point. So I hope he's a candidate, because I think he's qualified and I think he's done a great job."
Brownlow cited Paci's experience at Blockbuster in finance, strategic planning and business development. "I just think he has a pretty good track record, at least being with The Pantry, with trying to slowly improve the balance sheet where he can, buying back debt and making strategic acquisitions," he said. "From what I've seen, the pricing strategy they've implemented at retail, to the acquisitions to the bond buybacks, I think he's had a pretty heavy hand in."
In February, The Pantry announced a record first-quarter 2009 in terms of earnings per share, EBITDA and operating cash flow. This came after a year of restructuring, cost-cutting and a freeze on acquisitions, renewing speculation that it would soon be back on the acquisition warpath in a big way. The buzz intensified in April, when the chain signed a definitive agreement to acquire 40 c-stores from Alabama-based Herndon Oil Corp.
For his part, Brownlow does not expect a big ramp-up in acquisitions. "I think it will be a slow process," he said. "There are a lot of concerns, not just with The Pantry, but in general, about investors wanting to see a healthy balance sheet and maintain dry powder in case there is a very good acquisition [to be had]. But I don't think investors just want growth at any cost in this environment."
The Pantry's recent acquisition of Herndon was a case in point, which happened along with a bond buyback. "The point being to emphasize that they are focusing on improving the balance sheet while balancing that with growth," said the analyst.
Based in Sanford, N.C., The Pantry is a leading independently operated convenience-store chain in the southeastern United States and one of the largest independently operated c-store chains in the country, with revenues for fiscal 2008 of approximately $9 billion. As of April 23, 2009, the company operated 1,648 stores in 11 states under select banners, including Kangaroo Express, its primary operating banner.
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