Neupert resigns position as CEO of drugstore.com - - - He will continue to guide company
2001-04-27
by Chris Winters
Journal Business Reporter
BELLEVUE -- Peter M. Neupert resigned his positions as chief executive and president of drugstore.com yesterday.
The Bellevue-based online pharmacy has named Chief Operating Officer Kal Raman as Neupert's successor.
Neupert said he will retain his role as chairman and will continue to take an active role in guiding drugstore.com's strategy and development of future partnerships with other companies.
``I have a lot of respect for Peter,'' said Steve Weinstein, an analyst with Pacific Crest Securities. ``I'm glad to see that he's going to be remaining active in the company.''
Neupert, an 11-year Microsoft veteran, was hailed as a ``dream CEO'' by drugstore.com's founder Jed Smith when Bay Area venture firm Kleiner Perkins Caufield and Byers tapped Neupert to lead the dot-com startup in 1998.
With a reputation for deal-making, Neupert is credited with cementing the Microsoft-NBC partnership that gave birth to MSNBC and also oversaw other Microsoft media properties such as Slate magazine.
Doing relatively well
The announcement of Neupert's decision to relinquish his CEO and president titles came while the company was conducting its quarterly earnings conference call with analysts and the media.
Drugstore.com reported its net loss shrunk while its revenues rose for its fiscal first quarter, which ended April 1, compared to the same period a year ago.
The company attributed its improved financial performance to reductions in marketing and sales expenses, as well as the addition of 171,000 new customers in its fiscal first quarter, which has swelled its total customer count to 1.84 million.
For the quarter, drugstore.com had a net loss of $41.7 million, down from $49.5 million for the first quarter a year ago.
The company generated $32.8 million in sales, a 44 percent increase over its $22.7 million in sales for the first quarter a year ago.
Excluding a $7.3 million restructuring charge, amortization of intangible assets and amortization of stock-based compensation, the company lost 33 cents per share outstanding and reported a pro forma loss of $21.8 million, beating analysts' estimates of a loss of 35 cents per share.
``Compared to other online retailers, drugstore.com has done very well,'' Weinstein said. One of them, San Francisco-based PlanetRX.com Inc., announced in March its intention to liquidate its assets and refer its customers to drugstore.com.
Weinstein gives drugstore.com stock a ``market perform'' rating.
`Give him an A'
Weinstein praised Neupert for doing a good job leading the company, and for being able to raise funding when the market dried up.
Drugstore.com raised $62 million in August from investors, including Hearst Communications, Amazon.com, Vulcan Ventures, Maveron LLC and Kleiner Perkins. The company reported yesterday it has $113.75 million in cash, cash equivalents and marketable securities.
``If you rank him next to his peers, you'd give him an `A,''' Weinstein said. ``He funded the company, and it probably will make it to profitability.''
Guiding drugstore.com this past year, at a time when dot-coms are folding their tents left and right, hasn't been easy.
Drugstore.com has laid off nearly 200 employees since October, and this week the company confirmed it has backed out of plans to lease eight floors of office space at Lincoln Square, the massive mixed-use project under construction across the street from Bellevue Square mall.
Weinstein does not know Kal Raman well, but the new drugstore.com CEO's experience speaks well of the company's prospects for the future, he said.
Raman joined drugstore.com in 1998 as chief technology officer and was promoted to chief operating officer the following year. From 1992 to 1997, he was director of the International Division of Wal-Mart Stores Inc. |
