As Utah’s CFOs confront a struggling national economy, turmoil in the financial markets and stringent compliance requirements, our 2010 CFO of the Year honorees agree the day of the back office bean counter is long gone. Today’s CFOs take on a strategic, communicative leadership role, acting as a partner with the CEO while providing firm fiscal guidance to secure a corporation’s financial future.
Private - Small
“Be ready to learn. A CFO in a small business will be asked to wear many hats and be involved in many things that are not directly related to the financing of the company.”
Like most companies in the construction industry, Altaview Concrete experienced hard times during 2009. But according to CEO Scott Reynolds, the company was able to stay out of the red thanks to the critical achievements of CFO Ben Covington. “Our banking relationship became severely strained,” says Reynolds. “Ben negotiated tirelessly with our bankers while simultaneously working with other significant creditors in very novel approaches.”
According to Reynolds, Covington’s determined efforts allowed the company to produce a modest profit, while the industry averaged a 50 percent drop. In addition, Covington made significant changes that led to a reduction of the company’s manufacturing costs by 13 percent.
Though Covington is a vital member of Altaview Concrete’s executive team, it’s not unusual to find him working hands-on in various roles. “I have spent time operating a loader in our sand and gravel operation in Tooele County, unloading trucks at the batch plant on 114th South, and sitting in the batch operator chair loading batching concrete.”
Covington says what he enjoys most about his position as CFO are the opportunities he has to interact with people from all across the organization. “I have the chance on a regular basis to visit with people who drive our trucks, operate our concrete pumps, manufacture our sand and gravel, and the mechanics who fix all the things that get broken,” he says. “The enthusiasm of our people is what makes me want to do my best.”
Career Step, LLC
Increased earnings by 25 percent, sales by 30 percent and product offerings by 50 percent during 2009.
Under John Hiatt’s financial leadership, Career Step increased its earnings by 25 percent, its sales by 30 percent and its product offerings by 50 percent during 2009. “John Hiatt has been crucial to all of these changes because of his ability to balance the needs of investors (new and old alike), maximize available resources, institute proven business practices, understand the company's strengths and weaknesses, and choose the best partners to take advantage of available opportunities,” says CEO Mike Wilstead.
Another major accomplishment for Career Step during 2009 was the closure of a transaction in which private equity investors purchased 55 percent of the business. Under Hiatt’s leadership, the equity partners made an additional investment that further reduced the founder’s stake in the business, which ultimately served the needs of both parties.
“I was the primary representative of the company in both of these transactions negotiating and structuring the deal with the legal team,” says Hiatt. “To me it is very gratifying to have the trust of the stakeholders. When a member of the board, a work associate or a third party to the business says I want to hear what the CFO says about a particular topic, their desire to have my stamp of approval is very satisfying. This trust others place in my honesty, integrity and opinion because of my title is important to me and I don’t take this responsibility lightly.”
Grew total bookings 45 percent during 2009.
AtTask CFO Michael Olson says sound financial management was integral to the software company’s growth during 2009. “During fiscal year 2009, our total bookings grew to $19 million, up from $13.1 million in 2008,” he says. “Through sound financial management, AtTask was able to grow in a difficult economic climate while not burning precious cash resources.”
Also during 2009, Olson led a company-wide mission to redefine and improve core operating metrics, which have provided a higher level of accountability in the company. Improvements in these core metrics included increasing renewal rates from below 50 percent to more than 80 percent; increasing license value accounts from approximately $7,000 to $12,400; and increasing monthly recurring revenue from $783,000 per month to $1.2 million per month.
“Mike played a significant role in achieving increased and improved operating results during fiscal year 2009 and has been instrumental in defining critical processes and policies that were lacking within AtTask,” says CEO Scott Johnson. “Mike has also quickly become a trusted advisor to me and a sounding board for not only financial and operational items, but strategic and forward thinking business plans. His contribution to the team has been very impressive and well beyond what I expected.”
Private - Medium
Douglas L. DeFries
Bank of Utah
Helped the bank achieve earnings of $9.3 million in 2009.
Bank of Utah CFO Doug DeFries considers himself the “traffic cop” of the organization. “[The CFO] needs to know a little knowledge and background about everything in the bank,” DeFries says. “To be effective as CFO, that knowledge must be leveraged with all constituents and a CFO must quickly be conversant in all aspects of the bank, not just the control or financial functions.”
DeFries took charge as CFO during 1992 and has since helped the bank accomplish steady growth averaging more than 7 percent per year for past 25 years. And though 2009 was anything but smooth sailing for the banking industry, Bank of Utah reported Tier 1 capital of 9.35 percent and Total Capital of 13.72 percent, which exceeded 2008 year-end figures and were higher than similarly sized community banks across the country. “Total 2009 capital was an all-time high of $75.6 million at year end,” says DeFries. “At a time when many banks are experiencing negative returns, the bank reported earnings of $9.3 million in 2009.”
DeFries’ next role: Bank of Utah president. He will take the leadership reigns in early 2011. “I’m excited to take on new challenges and successfully direct all the lines of business for the bank during these challenging economic times.”
“Learn how to manage people, not just the numbers.”
Datamark CFO Kristine Rasmussen says the day of the bean-counting CFO is long gone. She advises younger CFOs to gain experience beyond the numbers. “Learn how to manage people, not just the numbers,” she says. “Listen to your audience and manage the information communicated based on their needs and level of understanding. Communicate both the good and not so good information.”
Under Rasmussen’s leadership, the company’s EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) grew close to 20 percent despite revenue decreasing 10 percent year over year. And, the company’s accounts receivable decreased from 36 percent over 30 days at the end of 2008 to 17 percent at the end of 2009. These accomplishments, according to Rasmussen, were a direct result from improving communication with clients. “We improved communication among the various groups within Datamark to eliminate unnecessary steps as well as reduce the number of invoicing errors,” she says.
“Kristine has helped us move from one-dimensional thinking on pricing strategy to a multi-dimensional, and eminently more applicable approach,” says CEO Tom Dearden. “In doing so, she has taken an intrinsic company process and turned it from a potentially fatal flaw into a significant competitive advantage. Thanks to her, we landed two large, profitable, clients in 2008 and 2009 that we would not have won had we stuck to our practice of static pricing.”
Eric F. Sailsbery
Futura Industries Corporation
Increased operating income by 63 percent.
While many companies struggled to stay out of the red during 2009, Clearfield-based Futura Industries experienced a record-breaking year. “Although our income was down 19 percent from the year before—a decrease of more than $9 million—our operating income was up 63 percent from the prior year and our net income was up 36 percent,” says CFO Eric F. Sailsbery.
The company also experienced record cash generation. “Our free cash flow return on total assets moved from 6 percent in 2008 to 15 percent in 2009,” Sailsbery says. “This was an increase of more than $2 million … We also upgraded one of our extrusion presses in 2009, giving us productivity increases and additional extrusion capacity of about 30 percent.”
According to CEO Susan Johnson, Sailsbery was vital to these accomplishments. “Eric Sailsbery is and has been an outstanding CFO for Futura Industries Corp.,” says Johnson. “This company has transformed from respectable to extraordinary since the current leadership, including Eric as our CFO.”
Sailsbery says his guiding philosophy is to have an impact on the company’s long-term success every day. “The management of our routine data processes and the financial reporting that we do is very important. However, if we do not make use of that information to drive change, it doesn’t mean as much,” he says. “We work to have excellent financial information as quickly as we can and then we use our time and that information to make a difference.”
Private - Large
Cafe Rio Mexican Grill
Helped grow the restaurant from 6 to 31 locations.
As financial leader of one of Utah’s fastest-growing companies, Cafe Rio CFO Bob Baker says he views his role as a strategic partner who works to develop growth and organizational strategies, in addition to leading all core finance functions.
His method is working: under Baker’s leadership, Cafe Rio has grown from six Utah-located restaurants to 31 locations covering six states, with more restaurants slated to open during 2010.
“In 2009, Cafe Rio grew 14 percent in revenues and added 6 new locations, including our first location in California. Profitable growth is our lifeblood at Cafe Rio,” says Baker. “Generating sales without delivering an appropriate return on investment is not sustainable for growth. The investments, systems and training we provide our people always support our customers, sales and profits.”
“Bob’s understanding of restaurant operations has contributed to his achievement of exceptional margins when compared to industry averages,” says Cyrus DeVere, Cafe Rio’s vice president of human resources. “His holistic approach to managing key risk exposures that could potentially hamper the company’s ability to achieve its goals has been crucial as Cafe Rio has grown nearly five times the size it was when Bob joined the executive team.”
Baker says Cafe Rio’s growth is in large part due to its employee base. “The quality of the people running a new restaurant is just as important as the quality of the location itself,” he says. “With great locations and great leaders, you have a high chance of success.”
Grew the company’s top line nearly 20 percent.
Control4 CFO Dan Strong says today’s financial leaders should work side-by-side the CEO. “The CFO needs to be the one sitting on the shoulder of the CEO and the executive team, saying, “Have you thought about this? Have you considered that? … The overriding role of the CFO is to try and be the conscious of the company,” he says.
Under Strong’s leadership, Control4’s top line grew nearly 20 percent in 2009, which is especially impressive growth when you consider that Control4 is closely tied to the struggling housing market. “We expect our growth rate this year to exceed last year and so far we are on track to achieve that.”
Control4 CEO Will West says Strong’s ability to manage the company’s present needs while always looking toward the future is one of his key strengths. “Dan balances the conservative financial mindset with the ability to evaluate any given opportunity on its own merit in addition to how it impacts the overall resource needs. In addition to the block and tackle work of managing a technology business on a daily basis, Dan has the ability to look ahead and put a realistic perspective on what can be achieved in the coming quarters and years. This is an invaluable quality in a company that might consider various forms of public financing,” West says. “The results Control4 achieved in 2009 were directly related to his hard work to drive the top line business results while constantly pushing for bottom line improvement.”
Keith C. Wallace Jr.
C.R. England, Inc.
Helped the company reach more than $1 billion in revenue during 2009.
Despite rising gas prices and a struggling economy, transportation carrier C.R. England continued to grow and outperform its industry competitors during 2009. According to CEO Dean England, the company’s sustained success is due in large part to CFO Keith Wallace, who has been the company’s financial leader since 1997.
“[Keith] has keen insight into the technical aspects of what it has taken to grow C.R. England into a $1 billion business encompassing more than 35 different operating units,” England says. “Keith has been able to successfully merge his technical expertise and his business background with a strong, amiable and abundant personality that has helped him develop long-lasting personal relationships with key constituencies in the financial industry … His resume of experience and his continued leadership is an important reason for the financial success of one of the nation’s largest global transportation providers.”
During his tenure as CFO, Wallace has instigated changes including implementing tractor leasing for owner operators, creating a logistics division, and building transportation services into Mexico and Canada. Today the company is looking to expand into China.
Wallace says at the end of the day, a successful CFO is one who is honest and offers full disclosure at all times. “It solidifies personal and business relationships beyond any other measure.”
“A penny saved is a missed opportunity.”
From day one as inContact’s CFO, Greg Ayers has been central to building the Salt Lake-based company. “Greg joined inContact just over a year ago, and in that time he has turned around our financial performance and set the company on a clear path for prudent growth,” says CEO Paul Jarmon. “Based on the changes made, the company has additional cash flow to drive innovation and product development, and has also become much more attractive to investors.”
Under Ayers’ leadership, the company raised $8 million in equity and refinanced $8.5 in debt, realigning resources to achieve profitability. The company also grew its revenue 46 percent during 2009. “Greg has a very balanced approach to company finances,” says Jarmon. “He addressed company needs with the funding and refinancing, and has supported R&D growth and company marketing efforts aimed at continuing to drive interest and adoption of the product line. He keeps a careful eye on the balance sheet, while working hard to fund the company opportunities. Add to that the fact that he’s a pleasure to work with, and we have an amazing CFO.”
To younger financial leaders, Ayers advises: “Get your department in order ASAP, and then spend time with other C-level executives understanding the business and the market dynamics in which your company operates.”
Shanna K. Speredon
Helped the bank maintain its five-star rating.
It’s no secret that banks have been hit particularly hard during today’s economy. But Brighton Bank remains among the top performing banks in the nation; according to BauerFinancial, the nation’s leading bank rating system, Brighton Bank has maintained its five-star rating for safety and soundness for 21 consecutive years.
According to Brighton Bank CFO Shanna Speredon, the bank’s return on average assets during 2009 was 1.79 percent and return on average equity was 13.14 percent. “These statistics were the highest of the 29 Utah banks reported and published by BankMeasure,” she says.
And despite the recession, under Speredon’s financial leadership the bank was able to make several major improvements, including renovating its City Center Branch and updating its technology. The bank was also able to continue offering employee benefits such as its 100 percent 401(k) matching program.
Though Speredon says she is excited about the bank’s continued strength, what she enjoys most about working as CFO for Brighton Bank is the company’s commitment to the community. “Brighton Bank believes in giving back to the community and encourages participation from employees,” she says. “Each year, Brighton Bank helps support local schools, sports activities, United Way, Community Shares, the Heart Association, and Christmas for several families.”
Ritch N. Wood
Nu Skin Enterprises
Increased the company’s profit 26 percent while earnings-per-share increased nearly 50 percent.
During 2009, Nu Skin Enterprises reached record-breaking levels. Under the leadership of CFO Ritch Wood, the Provo-based company added more than $80 million in top-line revenue over 2008. The company’s profit also increased 26 percent while earnings-per-share increased nearly 50 percent. “The profitability of the company, as measured by operating margin, increased 18 percent and we generated revenue and earnings growth in every region in which we operate around the world,” Wood says. “We paid a record level of more than $550 million of commissions to our sales leaders.”
Frank Maughan, shareholder at Mayer Hoffman McCann, says Wood’s fiscal expertise and leadership has led to Nu Skin’s enormous success. “As the CFO, Ritch is focused on improving operating margin and shareholder value. The increase to earnings per share is a reflection of his leadership in controlling costs as the company grows,” Maughan says.
Wood attributes the company’s success to sound financial decisions made prior to and during the economic hardships. “Our success in 2009 was largely a result of decisions made over the last few years, and today we are making decisions to ensure our success in 2011 and beyond,” Wood says. “We must invest every month in the future of our business, and we do this through focused and directed research and development, training, growth and retention of our employees, and key investments in our infrastructure which include buildings and technology.”
Dennis R. Klaus
Salt Lake Community College
“Be an open-minded listener, a creative critical thinker and don’t allow yourself to be professionally stereotyped.”
As CFO of Salt Lake Community College, Dennis Klaus is going through one of the largest challenges of his career: juggling a shrinking budget with increasing student enrollments. During 2009, the college experienced unprecedented growth with enrollment numbers rising by more than 3,700 students, while on the other hand experiencing budget reductions of 17 percent.
“Enrollment for this summer term is currently at almost 14,000 students, which represents an approximate increase of 25 percent over last year,” says Klaus. “Through conservative but creative budgeting, we have been able to weather the significant budget cuts and deal with the unprecedented enrollment growth that declining economies frequently bring with them to higher education.”
According to Roland Brimley, CPA at Terry, Price & Wunderli, Klaus’ strategic financial leadership helped SLCC refinance $8 million of the college’s bonds to obtain a lower interest rate, saving the college more than $160,000 per year in interest charges during the next six years. “Under Dennis’ direction, SLCC has become a stronger institution financially and the future looks bright,” says Brimley. Under Klaus’ guidance, the college is also currently engaged in the construction of two capital construction projects of approximately $30 million each.
Klaus says what he enjoys most about his financial leadership position is helping to ensure a healthy future for the college and its students. “I enjoy having the opportunity to work in an arena where we get to see our students grow and succeed.”
Department of Administrative Services, State of Utah
“Trust your instincts. Most of the time when I’ve regretted a decision it’s because I didn’t follow my instincts in the first place.”
John Reidhead leads two of the state’s largest financial departments: He serves as CFO of the Department of Administrative Services (DAS), and as director of the Division of Finance. In these roles, Reidhead has been tasked to manage contractions and budget reductions without greatly impacting public services. “The divisions within DAS that receive general fund appropriations have seen cuts of 15 to 25 percent, which is common among [State of Utah] departments,” he says. “We are all adjusting to the ‘new normal’ in the budget. There has been restructuring and merging going on.”
According to Salvador Petilos, deputy executive director of DAS, Reidhead has been vital to the two organization’s fiscal soundness. “A key member of the DAS executive team, John helps to oversee a department with seven divisions, and an annual operating budget in excess of $150 million,” says Petilos. “He provides critical input in determining the strategic and operational directions of both DAS and the Division of Finance, as well as valuable advice on the financial implications of business activities.”
Reidhead says what he enjoys most about his dual financial leadership roles is being able to efficiently and effectively provide services to the pubic. And despite the cuts, Reidhead says there have also been additional initiatives and innovations brought forward. One of the major public-serving accomplishments during 2009 that Reidhead is most proud of is the Division of Finance’s development of a fiscal transparency website, www.transparent.utah.gov
University of Utah Hospitals and Clinics
Accomplished bond issues of $50 million to expand UNI and $90 million expand HCH.
Gordon Crabtree has long influenced Utah’s financial landscape. Prior to being appointed CFO of the University of Utah Hospitals and Clinics (UUHC), Crabtree served as the finance director for the State of Utah for more than 10 years and finance director for the 2002 Salt Lake Olympic Committee for seven years.
As CFO of UUHC, a position he has held for nearly 10 years, Crabtree manages the financial operations of multiple health care facilities from hospitals to clinics. Under his fiscal leadership, and despite economic hurdles, UUHC achieved much during 2009. Accomplishments included the establishment of bond issues for new facilities, such as a $50 million expansion of the University Neuropsychiatric Institute and $90 million expansion of the Huntsman Cancer Hospital.
David Entwistle, UUHC CEO, says Crabtree’s financial wisdom has been vital to the organization’s sustained success. Entwistle offers an example: “Complex changes in federal reimbursement for health care services and support of medical education threatened to undermine the financial stability of our organization,” he says. “Because of Gordon’s prudent planning, decisive leadership and collaborative personal style, he was able to work with leaders at the state and federal level to avert a financial crisis and lead the organization to one of its best financial years in recent memory.”
Crabtree says what he enjoys most about his leadership role is finding opportunities to triumph over challenges. “Everything has opportunities for improvement and every change can be a win-win outcome,” he says. “The hardest things will create the biggest opportunity for new and creative thinking. No situation is without at least one opportunity for improvement.”