Gevity HR, Inc., continues to polish its image with the recent addition of James F. Orr III to the company's board of directors.
From September 1987 until his retirement in 1999, Orr was chairman, CEO, and president of UNUM Provident Corporation's predecessor, UNUM Corporation. Orr then served as president and CEO of Boston-based United Asset Management Corporation, one of the largest publicly owned investment management companies in the world, from May 2000 to December 2001. Since 2006, he has served as a director of American International Group, Inc., where he is also a member of the Compensation & Management Resources and the Nominating & Corporate Governance committees.
The company recently announced a quarterly dividend of $0.05 per share of common stock, which will be payable July 31 to shareholders of record as of July 15.
It may be only a nickel, but almost any positive news is welcome at the industry giant's 97,000-square-foot office in Lakewood Ranch. The company reported a net income of $9.9 million in 2007, a 72 percent decrease from the $35 million it booked in 2006, according to its Securities and Exchange Commission filings.
Gevity's core business is serving as the full-service human resources department for small and mid-sized companies. In July 2007, it was forced to lay off 50 of its approximately 1,000 workers. At the time, a company spokeswoman said the cutback was the "result of bringing costs in line with our income. We obviously need to manage our spending."
That same month, Gevity's Senior Vice President of National Sales and Field Service Operations Peter Grabowski resigned after spending more than a decade with the company. The company did not disclose the reason for his departure.
Those personnel changes, coupled with lower-than-expected second-quarter results in June 2007 and an almost 50 percent drop in share value, culminated in the resignation of CEO and Chairman Eric Vonk in late October. Vonk, who had been Gevity's leader since April 2002, was succeeded by COO Michael Lavington.
Analysts seem to like the change. "Client retention continues to be a problem; however, new management has improved the delicate situation created by an ill-advised strategy change by prior executives," Morningstar Analyst Joel Bloomer wrote in February. "As the company refocuses on its core competency of providing professional employment services to small businesses, we expect performance to steadily improve."
Morningstar gives Gevity its highest rating -- five-stars -- and a fair value estimate of $14 per share, about double its current share price.
Potential suitors may be knocking. In late May, the global private equity firm General Atlantic LLC announced in a filing with the Securities and Exchange Commission that it owns about 2.2 million shares of Gevity, or 9.5 percent of the company's outstanding stock, making General Atlantic Gevity's second largest shareholder. General Atlantic already owns a majority of TriNet Group Inc., a San Francisco-based human resources company.
