Insight CEO Out, Former Tech Data President Takes Interim Reins

Insight said Tuesday morning that Fennessy is leaving to pursue other opportunities. He was not quoted in a release announcing his departure.

Tony Ibarguen, a former president and COO of Tech Data and an Insight board member, has been named interim CEO, according to Insight.

Fennessy was named an Everything Channel VAR500 Executive of the Year in 2008, but Insight has struggled as the economy slid. Through the first six months of 2009, Insight's sales fell 20.5 percent compared with the same period last year. During the first two quarters this year, Insight earned $8.9 million, compared with a $166.9 million loss for the first two quarters last year.

Brian Alexander, managing director of equity research at Raymond James & Associates, said the timing of Fennessy's departure was surprising.

"It was clearly involuntary. The ultimate decision was driven by a five-year period of relative underperformance from then [when Fennessy joined Insight]. Revenue is more today than it was then. They've made some acquisitions that have diluted profitability. You could take other side and say he was saddled with a lot of legacy issues but ultimately he wasn't able to navigate through those as successfully as the board wanted."

Fennessy joined Insight as CEO and president in November 2004 after serving as vice president of worldwide marketing for IBM's Personal Computer Division and general manager of the vendor's worldwide PC Direct organization.

Among the issues that predated Fennessy's arrival were stock option accounting, "trade credit" accounting and complex IT systems conversion challenges, Alexander said.

"It appeared that the company was finally free of said distractions and that the company was entering the first period in Fennessy's tenure where he could be evaluated on core business execution. He took an aggressive stance on operating expenses in the past few quarters and 2Q results were reasonable, albeit mixed, in a difficult environment," Alexander wrote in a note Tuesday morning.

Two weeks ago, Fennessy sold 37,500 company shares that he owned through a trust for $462,267, according to a filing with the Securities and Exchange Commission. At the time, he still owned 178,241 shares, according to the SEC.

Tim Crown, Insight's chairman and a co-founder of the company, said in a statement that he wants Insight to "evolve and realize its full potential" under a new president and CEO who is "focused on driving ongoing improvements in our operational execution and on maximizing shareholder value."

Ibarguen helped Tech Data grow from $3 billion to $17 billion in revenue. He also is a former executive vice president of sales and marketing at VAR Entex Information Services and was president and CEO of Alliance Consulting Group.

"Tony has been a great addition to our board over the last year and we are pleased he has also agreed to lead the company on an interim basis. He is a proven business leader with tremendous industry experience," Crown said in a statement.

Insight also said it's on track to meet its previously forecast earnings of 80 cents to 87 cents for fiscal 2009, which doesn't include any severance or restructuring charges.

"We are confident that Insight is well positioned for success. Insight's next president and chief executive officer will lead a company with a sound business strategy, talented teammates and deep partner and client relationships," Crown said in a statement.

Crown said Insight would consider both internal and external candidates to be Fennessy's successor.