Six months of executive infighting at Metrocall Inc. has led to a top-level management shake-up at the paging carrier, an eventuality the company discounted just three weeks ago.
Among the changes, Richard M. Johnston will replace Harry L. Brock Jr. as chairman of the company’s board of directors. Brock is a major stockholder in the company and will remain a member of the board.
Christopher Kidd resigned as chief executive officer and vice president, a position he held since 1987. William L. Collins III, the vice chairman of the board, has been elected to replace him and also will assume the position of president.
Alexandria, Va.-based Metrocall has been aggressively expanding its paging network during the past two years with what Kidd described as a “grow, build and acquire” strategy.
Part of that strategy included merging with FirstPage USA Inc. in August 1994. Metrocall issued about three million shares of its common stock for the company and three FirstPage representatives joined Metrocall’s board, including FirstPage’s President William Collins.
Those three board members and four others voted last August to oust Brock from his position as company president while retaining him as chairman. Brock quickly filed a lawsuit seeking reinstatement but dropped it a few weeks later. CEO Kidd began fulfilling the duties of company president.
The following month, Metrocall commenced a secondary public offering of four million shares of common stock at a price of $28.25 per share to repay debt and finance acquisitions. But by Jan. 2, the stock had dropped to close at $18.69. The company convened a teleconference for stockholders and analysts the next day. At that time, Metrocall officers denied a management shakeup was possible, and said such a rumor was the primary factor depressing the company’s stock price.
Analysts are reportedly concerned about the company’s strategic and financial future in an increasingly competitive arena. While Metrocall bills itself as a national carrier, it may have difficulty fending off encroachments by industry Goliaths such as Paging Network Inc.
And Metrocall’s rapid subscriber growth has been matched by growth in operating costs that impact the company’s ability to generate cash flow.
Chairman Johnston projects optimism. “These board actions reaffirm Metrocall’s continuing commitment to carry out the strategic plan to grow, build and acquire in a consolidating industry. Bill Collins and I both discern Metrocall’s outstanding opportunities to enhance shareholder value and to remain a leading company in our industry.”
Metrocall said it offers paging and wireless messaging services to more than 940,000 subscribers in the top 100 standard metropolitan statistical areas in the United States, including 846 cities.
