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Stamps.com's Chairman and CEO Steps Down

October 13, 2000|KAREN KAPLAN | TIMES STAFF WRITER

Internet postage company Stamps.com said Thursday that John Payne resigned as chairman and chief executive, four days after three other top executives resigned their posts with the 4-year-old Santa Monica firm.

Board member Marvin Runyon, who served as U.S. postmaster general for six years in the 1990s, has stepped in as Stamps.com's chairman and has begun searching for Payne's replacement.

"We'd like to have had that person here today," Runyon said from Nashville, where he leads a business consulting firm. Runyon said a chairman and chief executive will be hired "as soon as possible," though he couldn't estimate whether the search would take weeks or months.

The executive shuffle was motivated by a feeling among Stamps.com's board members that they "were not seeing the performance we had hoped for," according to one board member. He added that the board is unified in its desire to find new management for the company.

Layoffs also are under consideration at the company, which has nearly 500 employees, according to people familiar with the situation. Runyon said the board will "make sure we've got the right organization and the right size going forward."

Stamps.com is one of four companies that lets customers buy postage via the Internet and print it directly on envelopes. Stamps.com took in $5.7 million in revenue in the first half of the year, but lost more than $89 million. In 1999, the company lost $56.5 million on a mere $36,000 in sales. Analysts expect the company to turn a profit in 2002.

Shares of Stamps.com closed at an all-time low Thursday of $2.72, down 22 cents in Nasdaq trading. Earlier in the day they traded as low as $2.31. In November, the stock traded as high as $98.50.

On Monday, the company said Chief Financial Officer John LaValle and Comptroller Candelario Andalon had left to "pursue other endeavors," and that President and Chief Operating Officer Loren Smith planned to return to his role as board member.

Payne, who joined Stamps.com in May 1998, will remain on the company's board and serve as a special advisor to focus on Encryptix, an El Segundo firm that was spun off from Stamps.com in November. It uses Stamps.com's technology to let companies use the Internet to distribute tickets, gift certificates and vouchers to customers who can print them out themselves.

Runyon said Payne's skills are better suited to a company in the start-up phase, while Stamps.com needs someone with more operating experience. Payne was not available for comment.

With $330 million in cash as of June 30, and a burn rate of $40 million to $45 million per quarter, Stamps.com has some time to rework its strategy, said Geoff Beard, an analyst with Thomas Weisel Partners in San Francisco. "It's definitely too early to throw in the towel on the business," he said.

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