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Metromail Continues With Business as Usual, Faber Sees No Additional Burden as He Takes Over For He

Metromail chairman Barton Faber foresees no problems in assuming the roles of president and CEO in the wake of Susan Henricks’ surprise resignation from those positions Dec. 30.

“It’s just more work for me,” Faber said, stressing that he is more than capable of holding down the top three executive positions. “No, I don’t think it will be [a burden], at least for the near term. We’ll review it in six months to a year. We have a really strong team and that’s what is important.”

Henricks was in charge of overseeing U.S. operations and planning and executing business strategies for Metromail, Lombard, IL, a leading provider of database marketing, direct marketing and reference products. The company is expected to generate sales of $330 million for fiscal 1997.

In a statement released by the company, Henricks said she resigned to pursue a senior executive position elsewhere — and despite speculation that she left to work for a competitor, Faber expects that she will abide by the 18-month noncompete agreement all Metromail executives must sign.

“We have the ability to control and enforce [the agreement],” Faber said. “Susan was honorable and had high integrity, so I’m confident she’ll [honor] that.”

Faber said that Metromail’s fundamental strategy will remain unchanged and that he will shift his focus from the United Kingdom to U.S. operations. This shouldn’t be a stretch because international business makes up only 10 percent of the company.

Faber expects Henricks’ loss to be felt most in Metromail’s relationship with direct marketing organizations. She was very active in the Direct Marketing Educational Foundation and had a “significant presence” with DMA. Faber said he will become more involved with both groups over time.

Everyone below Henricks is still in place, which should allow operations to continue as normal. Henricks had been with Metromail for 12 years and became president in July 1995. She was honored in May as Direct Marketer of the Year by Direct Marketing Days in New York.

Faber has been chairman since January 1996. He was instrumental in orchestrating the takeover of Metromail by R.R. Donnelley & Sons, Chicago, the world’s largest commercial printer, in 1987 and led the initial public offering in June 1996, which allowed Metromail to spin off from the parent company. Donnelley retains a 38 percent stake in Metromail.

Henricks’ resignation has been met with little reaction from investors.

“The timing of the announcement was fortuitous coming at the end of the year,” said Janet Del Giudice, an analyst for Salomon Smith Barney. “The day after, [Metromail] was only down a quarter point. The stock has really held up, and they’re continuing their business plan. Any effect [on the stock price] we would have seen around the announcement time.”

Alexia Quadrani, vice president of equity research for Bear Stearns, agreed that the timing of the resignation will dampen any market effect and that Bear Stearns will continue its buy recommendation.

“While we view this move as a negative for the stock,” Quadrani said, “Metromail has just completed its busiest season and is moving into its least important quarter.”

While the stock has remained steady since the announcement — it closed at 18 1/8 Jan. 8 — the true effect of Henricks’ departure won’t be felt for some time.

“How will their customers react? So far they’ve given positive feedback,” Del Giudice said. “It will take a couple of quarters to see how the big customers react.”

Metromail’s stock was offered at $20 1/2 and has swung between a 52-week high of $24 and a low of $15 1/2. Del Giudice cites earnings disappointments and investor’s lack of education on the company for the stock trading down from its original offering.

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