The track record of MTS Systems Corp.'s new CEO demonstrates the company's efforts to work past the disruptions it encountered last year when the federal government began investigating its export practices, company officials say.
Jeffrey Graves, who will take the top job at Eden Prairie-based MTS next month, has 25 years' experience in power systems and standby power storage, and electronic and aircraft components. For the past seven years, he has served as president and CEO of C&D Technologies, which makes energy storage systems for the global standby power market.
"We were pretty wowed by that résumé," said Mark Henneman of St. Paul investment firm Mairs and Power, a longtime MTS shareholder.
MTS makes sophisticated test systems and sensors for a variety of industrial production segments, including automotive. The company was banned last year from bidding on federal contracts, part of a federal probe of possible export violations. The Air Force lifted the suspension in September after MTS agreed to tighter contract conditions, including ethics standards, compliance, reporting and monitoring.
MTS remains under investigation for possible export violations by the U.S. attorney's office in Minnesota.
Company officials said Graves offers broad expertise that will help the company move forward.
"He brings a unique combination of scientific depth, a proven track record of success in senior management positions at global companies in our sector, and significant experience in government contracting and compliance," David Anderson, MTS chairman, said in a news release.
Before joining C&D, Graves served in various senior positions at Kemet Corp., an electrical component manufacturer. Earlier in his career, Graves served in various management positions at General Electric and Rockwell International.
"It looks like a beautiful fit with MTS' technology," Henneman said.
For the year, MTS earned $50.9 million, up 174 percent, on revenue of $467.4 million, up 25 percent. Earnings beat analysts' expectations by 9 percent, and revenue beat expectations by 3.9 percent.
Stock hit 12-month high
The export issues took time to resolve but don't appear to have a long-lasting major impact on the company, Henneman said. "The fact that they were able to get someone with [Graves'] capabilities is a pretty strong testament that this issue is largely behind them," he said.
Wall Street seems to agree. The stock hit a 12-month high of $54.15 a share last week and is up almost 20 percent so far in 2012, though it fell about 5 percent to $50.46 on Wednesday. Henneman said the decline might have been because of general weakness in industrial stocks.
Graves could not be reached for comment Wednesday at C&D. Sue Knight, chief financial officer at MTS, on Wednesday declined to discuss the company's decision to hire Graves beyond the company's news release.
Knight confirmed that the interim CEO, board member William Murray, had been a candidate to take the top job on a permanent basis. Murray moved into the job last August after Laura Hamilton left the company while the federal investigation was still underway.
Susan Feyder 612-673-1723