The new CEO of Dex One says he's keeping an open mind about the strategy necessary to turn around the yellow pages publisher's fortunes, but he's already convinced of the company's intrinsic value.
"It has deep domain expertise with [small and midsized businesses], 500,000 of them in 28 states," Alfred T. Mockett said in an interview at the company's Cary headquarters Monday, his first day on the job. "It has personal relationships of many years standing with the principals of these businesses. And, also, this is probably the best, richest database of small and medium enterprises in the regions that we serve."
"The question," he added, "is how to liberate that store of value."
That's a question that bedeviled Mockett's predecessor, David Swanson, who departed in May. Swanson built the company into a major player that publishes yellow pages directories in 28 states, but in the process took on a mountain of debt that pushed the company into bankruptcy after the recession undercut its advertisers.
Dex emerged from bankruptcy with a lower debt burden, which will enable it to focus on boosting revenue. Revenue in the second quarter fell 20 percent to $451.8 million on an adjusted basis while ad sales, a leading indicator of future revenue, declined 13.4 percent.
"This is a company with a great heritage," Mockett said. "It has a recent troubled past, and everyone here knows that - its declining ad revenue, its declining customer base, its declining stock price. I'm here to arrest all that."
Mockett, 61, a native of Great Britain whose appointment was announced last week, has more than three decades of experience at telecommunications and technology companies. That included being a CEO of Motive, a provider of software for telecommunications companies, from 2006 to 2008, which is when the Austin, Texas, company was acquired by Alcatel-Lucent for $68 million. He also is the former CEO of American Management Services, a software and consulting firm in Fairfax, Va.
Although both Motive and American Management were sold during his watch, Mockett says that's not the game plan he has in mind for Dex.
"I did not come here to sell the company," Mockett said in his mild British accent. "I have signed a multi-year contract. I'm relocating to Cary. ... I'm undertaking a leadership role and a transformation that will be many years in the making."
"If the space is to consolidate," he added, "I would rather be a consolidator than a consolidatee."
Meeting employees
Mockett said his first day in the office would be his only day in the office for the next two weeks. He's traveling during that span with the goal of addressing two-thirds of the company's employees face-to-face, visiting the 10 largest shareholders, and meeting with business partners and "as many customers as we can." The company has 3,400 employees, including about 450 in the Triangle.
He'll be on a fact-gathering mission geared toward fashioning the company's strategy going forward, a task Mockett wants to complete within 100 days.
"We are a calendar-year-based company, and it would be nice to start next year knowing exactly where we're going and why," he said.
Expanding its reach
With advertisers shifting their spending away from print media, Dex has been expanding into digital media and repositioning itself in the market.
Dex is promoting itself as "the consultant to the small business operator in terms of helping them with their marketing needs," Jonathan Levine, vice president of Jefferies & Co., said last week when Mockett's appointment was announced. "To a certain extent, they are trying to migrate to something different."
Levine said he wouldn't be surprised if the company continues down that path under Mockett, but Mockett himself is noncommittal.
"I came here with no pre-conceived notions," he said. I want to keep all our strategic options open and preclude nothing."
Soccer competitor
Mockett is a competitor outside the business arena and recently played in the over-55 category at U.S. Adult Soccer Association's annual Veterans Cup national tournament in Massachusetts.
"Played four games in four days in 90-degree heat," he said.
Mockett said he's most proud of his ability to "deliver shareholder value" during his business career.
During his 21/2 years at American Management, he said, his turnaround of the business and the subsequent break-up and sale yielded shareholders twice what their shares were worth when he was brought in.
Dex shareholders are eager for a better return on their investment.
Dex shares, which rose 46 cents to close at $9.62 Monday, have fallen 72 percent since the company emerged from bankruptcy.
