Robert Rieger, who took over as the top executive at Exolon-ESK Co. last September, is resigning in three weeks to take a top position at Ferro Corp., the City of Tonawanda abrasives manufacturer said.
Rieger is stepping down to become Ferro's worldwide business director for electronic products in Cleveland. Rieger said today he also will be involved in other parts of Ferro's business.
Exolon has not named a successor for Rieger, although the company said in a filing with the Securities and Exchange Commission that it hopes to have a new candidate ready to take over Oct. 1. Rieger plans to work with Exolon's remaining management and its board of directors to help make the transition orderly.
Rieger said the Ferro opportunity was too good to pass up. "I was not expecting to leave, but Ferro had been in contact with me for some time," said Rieger, whose last day is Sept. 17. "I felt it was in the best interest of my career" to take the Ferro job.
Rieger joined Exolon last September after spending the previous three years as managing director of Zircon Worldwide for Cookson Matthey Ceramics, the British ceramics firm that owns TAM Ceramics Inc. in Niagara Falls and the Vesuvius-Buffalo plant in Lackawanna. He previously was president of TAM Ceramics in Niagara Falls.
Under the leadership of Rieger and Chairman Theodore E. Dann Jr., Exolon has been trying to focus in recent months on expanding the company's international presence and pushing into more high-technology abrasives products, which tend to be more profitable.
A key part of that strategy centered around the deal that Exolon announced in March to buy the European silicon carbide manufacturing business owned by its ESK partner. The deal would roughly double the company's sales to almost $150 million and divide its revenues almost equally between North America and Europe.
A second part of that deal seeks to resolve Exolon's divided ownership structure -- a source of major friction in recent years -- by having several of Exolon's major shareholders buy the 50 percent stake that ESK's German parent company, Wacker Chemical Corp., owns in the firm. Final negotiations are continuing on those deals.
Even so, Exolon's business has sagged during the first half of this year, with the company's profits tumbling by 44 percent as stiffer foreign competition and declining market demand cut into its sales.
The company's profits, which have fallen for three straight quarters, slid to $831,000, or 78 cents per share, during the second quarter, compared with $1.49 million, or $1.43 per share, the year before.
"There is no link between the performance at Exolon and my leaving," Rieger said.
Exolon blamed most of that decline on a 12 percent drop in the company's sales, which fell to $17.7 million from $20 million a year ago because of the weakened demand for its products and more intense competition from low-cost Chinese imports.
Exolon's profits also were hurt because its product mix shifted toward more of its less lucrative products, as well as higher electricity costs at its Illinois plant, which also was forced to curtail production due to power shortages, Rieger said.
Those factors were partially offset by improving earnings from Exolon's share in its Norwegian joint venture, which contributed $151,000 in pre-tax profits, up from $67,000 a year ago.