SAN FRANCISCO--(BUSINESS WIRE)--June 21, 1999--McKessonHBOC, Inc. (NYSE:MCK) announced today that its Board of Directors has appointed new executive management for the company. John H. Hammergren, previously Executive Vice President of the company, President and CEO of the Supply Management Business, and David L. Mahoney, previously Executive Vice President of the company, President and CEO of the Pharmaceutical Services Business, have been appointed Co-Chief Executive Officers of McKessonHBOC and elected directors of the Company.
Hammergren and Mahoney will share a newly created Office of Chief Executive Officer, with Hammergren focusing primarily on McKessonHBOC's core supply management and information technology businesses, and Mahoney focusing primarily on financial, strategic and other staff functions, along with the remaining businesses. In addition, Heidi E. Yodowitz, Senior Vice President and Controller, has also been appointed Acting Chief Financial Officer of the Company.
Mark A. Pulido, previously president and chief executive officer, and Richard H. Hawkins, previously executive vice president, chief financial officer, have resigned from their respective positions and, in Pulido's case, as a director, effective July 15, 1999. Each has agreed to assist in the transition to the new management team.
The Board also has established a committee of independent directors to work with the new management team. The committee, comprised of Alan Seelenfreund, Tully M. Friedman, Gerald E. Mayo and Carl E. Reichardt, will serve as Board liaison and source of counsel to Hammergren and Mahoney.
Seelenfreund, currently a director of McKessonHBOC, who from November 1989 until April 1997, served as Chief Executive Officer and until January 12, 1999, served as Chairman of the Board of McKesson Corporation, also has been appointed non-executive Chairman of the Board of McKessonHBOC. Effective immediately, Charles W. McCall has been removed as Chairman of the Board and dismissed as an employee.
"It is with deep regret that we accept the resignations of Mark Pulido and Rich Hawkins, who have served the company so capably and well," said Seelenfreund. "On behalf of the Board of Directors and employees, I thank them for their contributions."
"These changes reflect our need to move the company forward as quickly as possible," Seelenfreund added. "Under the circumstances, strong leadership is essential to this effort. We are extremely fortunate to have two very talented and experienced senior executives, John Hammergren and David Mahoney, who have the capability and are committed to rebuilding confidence in the strength, integrity and value of our company. John and David have worked closely and well together at the company, have complementary skills which will be very beneficial in leading McKessonHBOC, and have the unanimous and strong support of the outside directors. I look forward to serving as non-executive Chairman, with them at the helm.
"Heidi Yodowitz has 20 years experience in public and corporate accounting, including the past nine years in senior financial positions at McKesson. I am confident that she will serve the corporation well in her new role."
"We accept the responsibility of leadership that comes with our appointment and very much appreciate the Board's confidence in our ability to fill this role," Hammergren and Mahoney said jointly. "We have helped build McKessonHBOC's strategic position as the leader in healthcare supply management and information services and are dedicated to executing its strategy to improve healthcare performance for our customers. Our fellow employees throughout the company are a primary source of strength, and we will draw on that strength to move ahead. Our commitment to our Shared Principles will be unwavering. So too will be our commitment to add value for all of our key constituencies -- our employees, customers, shareholders, suppliers and creditors."
New President for ITB
The Company also announced today that it has appointed Graham O. King as President of its Information Technology Business (ITB) unit, reporting to Hammergren. King previously held the position of Group President, Outsourcing Services Group and Connect Technology Group at the ITB unit. "We remain strongly committed to our strategy for integrating information technology and supply chain management to reduce costs, improve quality and improve clinical outcomes," said Hammergren. "This business continues to be the leader in each of its categories in the healthcare industry. Graham has previously been president of one of the largest providers of software to the healthcare industry and we are confident that he will provide the leadership necessary to advance the success of our ITB business."
The following ITB officers have been dismissed immediately for cause: Albert Bergonzi, formerly President and CEO; David Held, formerly CFO and controller; Jay Lapine, formerly senior VP and general counsel, and Michael Smeraski, formerly senior VP and head of enterprise sales. The company is initiating an immediate effort to rebuild the ITB senior management team.
"The changes to the Board chairmanship and ITB senior management arose out of the Audit Committee review process and after thorough consideration by the outside directors of the company," Seelenfreund said. The Audit Committee review process was initiated following the discovery in late April of financial reporting issues at the company's recently acquired Information Technology Business unit, formerly HBO & Company. "Because of the nature of accounting improprieties that we have found at the old HBO & Company, which is now our ITB unit, and the participation of senior level employees of this business in such improprieties, we felt compelled to take prompt and decisive action. The failure of responsible leadership in the ITB business has harmed our entire employee population and shareholders, and cannot be tolerated. ITB employees deserve new and properly directed leadership, and we are providing that today. As John and David have said, we expect the strength, commitment and talent of our employee base and the broad offerings and industry leading customer base of this business to result in success."
"We are pushing forward with the Audit Committee review process and with our goal of completing it and the publication of restated financial information as soon as possible," said Seelenfreund. "While it is unlikely that we will be in a position to file our annual report on Form 10-K with the SEC by June 30th, we would hope to be able to do so shortly thereafter. Even though the Audit Committee's review process has not concluded and restated financial information is not yet available, the Company is already moving ahead to rebuild. The personnel changes announced today -- at the Board level, within senior management and in our Information Technology Business -- represent a critical first step. Because McKessonHBOC has outstanding people and a sound business strategy, we expect to succeed and increase shareholder value as the Company continues to move forward."
McKesson HBOC, Inc., a Fortune 100 corporation, is the world's largest pharmaceutical supply management and healthcare information technology company. McKessonHBOC provides pharmaceutical supply management and information technologies across the entire continuum of healthcare, including market-leading businesses in pharmaceutical and medical-surgical distribution, information technology for healthcare providers, services for payors and outsourcing.
Except for historical information contained herein, the matters discussed in this press release may constitute forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected. These statements may be identified by their use of forward-looking terminology such as "believes," "expects," "may," "should," "intends," "plans," "estimates," "anticipates" and similar words. Risks and uncertainties include the speed of integration of acquired businesses, the impact of continued competitive pressures, success of strategic initiatives, implementation of new technologies, continued industry consolidation, changes in customer mix, changes in pharmaceutical manufacturers' pricing and distribution policy, the changing U.S. healthcare environment, conclusion of the ongoing financial audit and other information referenced in the company's April 28 and May 25 press releases, and other factors discussed from time to time in reports filed by McKessonHBOC, Inc., with the Securities and Exchange Commission. The company assumes no obligation to update information contained in this press release.
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