In an unusually terse and forthright press release announcing the firing of a CFO, Scholastic, the publisher of the Harry Potter series and The Hunger Games, today reported the “termination of Maureen O’Connell’s employment as Chief Financial Officer and Chief Administrative Officer.”
Most often, public company press releases refer to the reasons for leaving the company as being “for personal reasons” or similarly mild wording.
Also unusual was Scholastic’s omission of any mention of O’Connell’s 11-year tenure or accomplishments. The company, however, was clear in its rejection of the notion that the termination had anything to do with the company’s recently negative financial results.
“This change did not arise from any issues involving the company’s financial results, which are meeting our expectations, business practices, internal controls or financial reporting procedures,” Richard Robinson, Scholastic’s chief executive officer, said in the press release.
Scholastic named Kenneth J. Cleary, Scholastic’s chief accounting officer, as its CFO, effective immediately. Before he became CAO in 2014, Cleary was vice president of external reporting and compliance. He joined Scholastic in 2008.
The termination of O’Connell, who was a Scholastic board member and chair of its audit committee, came on the heels of a steep sales decline at the company. On September 21, Scholastic reported its first quarter 2018 revenue of $189.2 million, compared with $282.7 million for the first quarter a year ago, amounting to a 33% decrease. (Scholastic typically records a loss in its fiscal first quarter, when most U.S. schools are not in session.)
During Scholastic’s Sept. 21 earnings call, O’Connell said the stronger comparative first quarter 2017 revenue numbers “benefited from the publication of Harry Potter and the Cursed Child Part One and Two, the best-selling book of 2016 across all genres.”
O’Connell joined Scholastic in January 2007 as executive vice president and chief administrative officer, including the roles of CFO and chief accounting officer. “She improved company-wide budgeting, forecasting, and capital allocation processes and led the development of pricing strategy across the business units,” according to a biographical note still on the company’s website as of noon on Wednesday.
“She also centralized all supply chain, purchasing, and manufacturing activities across the company, improved the Scholastic distribution centers’ turn times, and reduced inventory,” the bio note added. From 2000 to 2002, O’Connell served as CFO of Barnes & Noble before joining Gartner for a two-year stint, where she served first as CFO and CAO and later as president and chief operating officer.
Before joining Scholastic, Cleary, the new CFO, was senior assistant controller at Hertz, assistant controller at Engelhard, and manager of financial reporting at Sequa after beginning his career as an auditor for KPMG.