This article was printed in the Sacramento Bee today. Certainly hope it's an indication of a turn around
Valley Media shake-up at top: Firm
has floundered a bit since IPO
By Dale Kasler
Bee Staff Writer
(Published Dec. 4, 1999)
Valley Media Inc. beefed up its top management Friday, attempting
to reverse a slide in profitability that has punished its stock price.
The Woodland-based wholesale distributor of videos, CDs and
DVDs said Senior Vice President Melanie Cullen was promoted to
the new post of chief operating officer. Two other top officers were
given new assignments as well.
In making the moves, said President and Chief Executive Rob Cain,
Valley Media is recognizing that last spring's initial public stock
offering has stretched management thin -- and may have contributed
to a costly back-office gaffe.
The error was this: At about the time last spring the company was
planning a move to a new Woodland warehouse, Cain was
frequently on the road talking to Wall Street analysts about Valley
Media's public offering.
Cain said he was "preoccupied with the IPO."
The public offering went well -- but the warehouse move cost
significantly more money than anticipated. When the problems were
revealed in June, investors drove the stock down 31 percent in one
day, to under $15 a share.
Valley Media lost $799,000 during the quarter marked by the
warehouse move. In the latest quarter, it earned a $335,000 profit,
down from $415,000 a year earlier, and the stock has continued to
struggle.
The stock closed at $8.121/2, down 61/4 cents, in Friday's trading
on the Nasdaq Stock Market.
By appointing a chief operating officer, Valley Media now has
"somebody who can be more internal to my external," Cain said.
Because the company is now public, Cain spends a lot more of his
time these days dealing with analysts and investors.
Cain said the management overhaul also positions the company to
better deal with Internet commerce. Valley Media already
distributes product for e-retailers; now it wants to get into ventures
like providing online audio clips so computer users can sample a
CD before they buy.
To that end, Chief Financial Officer Randy Cerf will take the new
post of senior vice president of new media and business
development. Ken Alterwitz, who has been senior vice president of
sales and marketing, will take on new chores in digital and global
distribution. |
