This is how far technology has come since my journalism career officially began in 1980:
I was sent to cover the “Show Me Bowl,” the state high school football championships in Missouri, at the old Busch Stadium in St. Louis.
I remember lugging this Texas Instrument “portable” computer the size of a small suitcase. It had a teeny-weeny screen, and transmission required a dedicated line and a rotary dial telephone. To send a story to the newsroom, you put the receiver in a set of couplers, and hoped for the best.
During the baseball season, I sat in the press box at Chase Field and watched as a new generation of sportswriters posted news on Facebook pages; tweeted the latest trade rumor; and chatted with fellow sports scribes at stadiums across the country.
AZRE magazine is all about social media now, too. We have a Facebook page, a Twitter account, we send out a weekly “eblast,” and of course — we have azbigmedia.com, a site that lets us break stories affecting the local and national commercial real estate industry.
If I’m at a Valley Partnership breakfast, for instance, and the speaker says something noteworthy, I tweet about it. If I’m at BOMA’s TOBY Awards or AIA Arizona’s Design Awards, I post winners on the Facebook page.
Our goal is to inform — and entertain. Sometimes I post photos from the various events — tastefully done, of course.
Peter Madrid, Editor
Take it with you! On your mobile, go to m.issuu.com to get started.
The Valley of the Sun has created the perfect climate for tech startups.
Don’t believe me? What if I told you the Valley is almost as prolific as Silicon Valley for producing tech startup companies? Would you believe it? You should, because it’s a fact.
According to an analysis from SizeUp, a San Francisco–based provider of free business intelligence for small and mid-sized businesses, the Valley boasts two cities — Chandler and Mesa — among the nation’s Top 10 cities with the most tech startups per capita. Silicon Valley had three cities in the top 10.
And Chandler, home of Intel and Microchip Technologies, ranks ahead of tech darling Austin, Texas, which beat out Arizona to land Apple’s new facility along with about 3,600 jobs.
The rankings illustrate the Valley’s emergence as a hotbed for tech startups — computers, software, medical devices and electronics — and as an economic leader in technology- and research-driven industries.
And as technology drives Arizona’s economy, it also drives our coverage of Arizona business. Over the last several issues, we have been beefing up our coverage of all things tech-related. And in this issue, we take it one step further with the debut of a new section called HEAT, an acronym for healthcare, energy, aerospace and technology.
HEAT will take you inside all those issues that will drive Arizona’s economy during its second century. We’ve all known for a long time that Arizona is known for it’s heat. but soon, it will be the HEAT that defines Arizona.
The CFO of the Year Awards are given to professionals for outstanding performance in their roles as corporate financial stewards. This program provides many benefits to the business community by highlighting the important roles that financial executives play within the region. In addition to the awards, we’ll publish a special report that will accompany the November issue of Arizona Business Magazine.
Here are the CFO of the Year 2012 Finalists:
Chief financial officer and senior vice president HR, IT and supply chain Fender
The company: Fretted instruments, percussion, electronics and music accessories.
What he did: When broenen arrived at Fender, the company was in a potential default scenario on its debt. He not only got the company quickly into compliance with its debt agreements, but his ability to lead a refinancing of the company’s debt and the subsequent debt structure at the beginning of the economic crisis of late 2008 and early 2009 allowed Fender to have the resources available to continue to invest in its operations and longer-term strategic direction. The basis of these debt agreements has allowed Fender to continue to dominate its marketplace and invest in its innovation and strategic objectives over the past three years.
Pamela L. Chan
Executive vice president and chief financial officer Western Alliance Bank (dba Alliance Bank of Arizona and First Independent Bank)
The company: Serves small and mid-sized businesses, entrepreneurs, professionals, municipalities, nonprofit organizations, high net-worth individuals and other consumers.
What she’s done: to inspire organization to greater success, Chan communicates financial results and growth initiatives with management and across the organization in a simple and understandable format. This includes making key information available to all employees by placing important messages and financial charts in the break room or conference room. Chan facilitates a “bright Idea$” program, which is designed to encourage employees to submit innovative suggestions for cost savings, eliminating inefficiencies and streamlining procedures. In a 12-month period, employees have identified 15 “idea$” for a $200,000 annual savings.
Chief financial officer The Logistics Group
The company: Asset-based transportation, trucking and warehousing services with focus on time-sensitive manufacturing companies.
What he’s done: Coates had been The Logistics Group’s primary accountant and CPA while he was working for the accounting firm of Kilpatrick, Luster & Co., but he had a dream of becoming a CFO. When The Logistics Group had grown to the point of needing internal financial expertise, the company recruited Coates to become its CFO. The company’s business has doubled year after year and the transition — including additional assets and costs — was well-managed and Coates led that process. He also directly manages the accounting process, along with billing, pricing and risk management.
Chief financial officer Total Transit
The company: Multi-faceted transportation, including private (taxi), public (bus, Dial-a-Ride) and transportation management.
What he did: Upon Eisel’s arrival at Total Transit, it took 26 working days to close the books for its 11 companies. Through Eisel’s leadership and vision, he assembled a group — starting with a new controller — that shared his vision as it relates to month-end closing. With persistent execution, continuous process improvement and effective leadership, Eisel has been able to reduce the Total Transit’s closing period to six working days, 16 days quicker than an average company, according to a 2011 study done by Financial Executives Research Foundation.
Thomas B. Fischer
Chief financial officer OnTrac
The company: A leader in regional overnight package delivery service within California, Arizona, Nevada, Oregon, Washington, Utah and Colorado.
What he’s done: Fischer has been a key driver of the company-wide strategy to automate the package flow of the 29 facilities in the overnight network. With a price tag in the millions per facility, Fischer’s level-headed leadership of the negotiations has saved the company hundreds of thousands of dollars of acquisition costs as well as cost savings from the new equipment and technology installed. During Fischer’s tenure, revenues have increased more than 200 percent; working capital has increased 300 percent; stock holder’s equity has increased more than 250 percent; and longterm debt, during this same time period, plummeted from extremes of 75 percent of the total assets to less than 7 percent.
Chief financial officer Unitedweb, Inc./Nextiva, Inc.
The company: Invests in and operates companies that serve small businesses and emerging markets across multiple industries that rely on the Internet and technology to run their business.
What she’s done: Fritz’s expertise in process design and development was critical as the company went through rapid growth, transitioning to a mature phase in the business life cycle in just a few years. Through her guidance, the company was able to take risks to grow its business and the company’s year-over-year growth has virtually doubled each year it has been in business. Fritz’s attention to the financial and operational details is the guiding force for many of the company’s initiatives and metrics that contribute to its successes. Fritz has helped the company grow to 190 employees and serve more than 60,000 companies.
Chief financial officer Scottsdale Healthcare
The company: Three acute care hospitals, clinical research, several ambulatory sites, and graduate medical education programs.
What he’s done: LaPorte’s role is to provide leadership that ensures a long-term and short-term financial position for the healthcare organization. His responsibilities also include information systems and he plays a key role in developing clinical integration initiatives to position the company for healthcare reform. LaPorte has displayed highly innovative skills in Scottsdale Healthcare’s debt restructuring ($350 million) and in helping to craft a successful clinical integration joint venture with hospital physicians. Both initiatives play a key role in the future success of Scottsdale Healthcare.
Video by Cory Bergquist
Chief financial officer Phoenix Children’s Academy, Inc.
The company: Owns and operates a network of 115 private schools, including preschools, elementary schools and middle schools in 16 states and serving about 16,000 students.
What he’s done: Malek believes the use of technology can greatly streamline operations and reduce the administrative burden faced by operational personnel. He worked with operations personnel to replace the company’s school level operating system with a company-wide Web-based system. The project was completed at no cost to PCA and has given the company the ability to manage functions for the centers and provide immediate real-time access to facility information and results. He also restructured the depository account process and implemented the use of electronic check scanners at all locations to reduce administrative burden and improve timeliness and accuracy of deposits. The move saved the company $60,000 in annual bank fees.
Craig L. McKnight
Executive vice president and chief financial officer Phoenix Children’s Hospital
The company: Arizona’s only licensed, free-standing children’s hospital, providing inpatient, outpatient, emergency, trauma and urgent care.
What he’s done: McKnight was at the forefront of a major acquisition that changed the face of pediatric care in the Southwest. In June 2011, Phoenix Children’s and Dignity Health Arizona completed a strategic alliance that transferred pediatric services at St. Joseph’s Hospital and Medical Center, Chandler Regional Medical Center and Mercy Gilbert Medical Center to Phoenix Children’s. Under the agreement, Phoenix Children’s also acquired the pediatric neuroscience programs, creating Barrow Neurological Institute at Phoenix Children’s Hospital. This agreement required complex financial analysis and modeling.
Video by Cory Bergquist
Chief financial officer Make-A-Wish America
The company: Grants the wishes of children with life-threatening medical conditions.
What he’s done: When Mehlhorn was hired, the finance department was experiencing operational challenges and had lost the confidence of the president and CEO, as well as the audit and finance committee of the national board and several key board leaders. Mehlhorn quickly turned the situation around, earning the respect and trust of virtually everyone with whom he has dealt. Last year, Mehlhorn established a centralized financial services unit from scratch. It currently provides accounting services for six chapters across the country and that number is expected to increase in the coming years.
Chief financial officer and executive vice president Arizona Zoological Society (dba Phoenix Zoo)
The company: Operates the Phoenix Zoo, which exhibits and cares for more than 1,100 animals, provides educational programs, and actively participates in animal conservation efforts.
What she’s done: Mendoza played a significant role in creating an incentive pay plan based on both individual and company performance. Payouts were successful in 2005, 2006, 2007, 2008 and 2012. The incentive plan has raised the bar for individual performance and created an environment of increased personal responsibility. Mendoza was also involved in the implementation of an endowment building initiative in 2006 and co-authored the policy where both an operating reserve fund and board designated reserve fund were established. The operating reserve fund has grown from $150,000 to $3.1 million and the board designated reserve fund has increased from $50,000 to $2.5 million.
Robert D. Osborne
Chief financial officer Russell Sigler, Inc.
The company: Primarily engaged in the wholesale distribution of heating, ventilation, and air conditioning parts, equipment and supplies that are predominantly manufactured by Carrier and Bryant.
What he’s done: Due to Osborne’s strength of planning and judgement, Russell Sigler, Inc. has a reliable, highly efficient corporate administration and finance team. With Osborne’s guidance and expertise, internal reports have been developed and are constantly fine-tuned. Osborne’s efforts have assisted in the company’s ability to respond to the changing dynamics of rapid growth and a volatile market. Osborne has been a key player and integral part in establishing relationships and negotiating agreements with the company’s banking partners, allowing for growth and sustainability of current and expanding business opportunities.
Senior vice president and chief financial officer Goodwill Industries of Central Arizona
The company: Operates 50 retail stores and eight stand-alone donation centers throughout metro Phoenix, Prescott and Yuma; offers job training, education and employment services to youth and adults with vocational barriers who are seeking self-sufficiency.
What she’s done: When Perry joined Goodwill in 2007, the organization had priority goals of ensuring fiscal responsibility and growing revenue and the number of people served. Since 2007, Goodwill has increased revenue from $59.6 million to an estimated $100 million in 2012; grown from 38 retail locations to 50 and from eight career centers to 13; decreased long-term debt by more than 57 percent; and will serve an estimated 40,000 by the end of 2012, nearly four times the number served in 2007.
Chief financial officer Esio Holding Company/Esio Beverage Company
The company: Focused on the development, manufacturing and marketing of multi-serve beverage dispensing systems and beverage products for the home and office.
What he’s done: Since Esio initiated business in 2005, Raber and the team have worked to refine strategy; design, develop and perfect the technology; secure mass retail distribution; and acquire national beverage brand licenses. In October, Esio launched its countertop unit in 2,800 Walmart stores. In connection with its retail launch, Esio was facing a significant capital need — thought to be $10 million — for inventory, advertising, and working capital. Raber worked on a creative financing strategy, which included payment terms from key suppliers, an asset-based line of credit, and a smaller equity raise. Esio was able to reduce its capital needs to less than $3 million and focus on execution of its retail launch.
Chief financial officer Cancer Treatment Centers of America
The company: A regional destination hospital specializing in complex and advanced-stage cancer care.
What he’s done: Under Ribbe’s guidance, CTCA Western has surpassed budget expectations, including doubling net operating income before shared services and corporate allocation in 2012 compared with the previous year. Ribbe’s leadership in maximizing efficiencies is evident in the hospital’s Lean Six Sigma program, which eliminated more than 9,800 hours of patient wait time in 2011. An additional 12,000 hours of non-value added employee time were also eliminated. Ribbe’s vision of utilizing technology to improve patient care has helped create the nation’s first and only all-digital cancer hospital.
Chief financial officer Avnet
The company: One of the largest distributors of electronic components, including connectors and semiconductors; technology solutions, computer products and embedded technology.
What he’s done: Sadowski has been instrumental in the acquisitions of more than 65 companies, all of which have contributed to Avnet’s attaining a global leadership role in the electronic components and computer products industries. Sadowski and former Avnet CEO Roy Vallee introduced a value-based management initiative in 2001 that focused on a minimum 12.5 percent return on capital employed. The initiative put Avnet into a position of being the most profitable company in its industry and highest market cap. And in an effort to use the company’s cash most effectively, Sadowski initiated a stock buy-back program, which was recently increased another $250 million by Avnet’s board of directors.
Video by Cory Bergquist
Lyle R. Scritsmier
Chief financial officer MedApps (an Alere, Inc. Connected Health Company)
The company: Provides technology solutions for the collection, transmission and remote management of patient health data.
What he’s done: During a challenging economic environment, Scritsmier assisted the start-up company in raising $9 million of investment through three rounds of financing. He used his experience in the healthcare industry to secure sales and increase margins with MedApps initial customers when it was most critical. This ability is best illustrated with a 2010 deal, where Scritsmier closed a $3 million contract. As part of the negotiation, he convinced the client to prepay an amount equal to four months of operating capital at a time MedApps was operating at a loss and the deal gave the company financial breathing room when it was greatly needed.
Chief financial officer CyraCom International, Inc.
The company: Provides innovative interpretation and translation services to clients in healthcare, business and government.
What she’s done: Through Sweeney’s direction, the company more than doubled revenues to $43.7 million, while turning a negative EBITDA (earnings before interest, taxes, depreciation and amortization) to a positive $4.8 million, and increased the earnings per share by 180 percent. The company has dramatically increased from 198 employees at the end of 2007 to more than 692 at the end of 2011. During Sweeney’s tenure, CyraCom has also been listed on the Inc. 5000 list of fastest growing private companies in 2007, 2009, 2010, 2011 and 2012.
The company: Full-service fitness center with 10 locations throughout Arizona. Mountainside is the largest locally owned fitness center chain in Arizona, serving more than 44,000 active members.
What she’s done: With Taylor spearheading the effort, Mountainside has upgraded both its accounting system (Intact) and its fitness software (CSI). These two platforms not only speak directly to each other, but Intact is also recognized as one of the premier financial softwares in any industry. Most recently, Mountainside led the movement of the company’s credit card process out from underneath the banking industry and into more flexible, third-party processing. This move has helped Mountainside receive its funds sooner. Currently, Mountainside bills more than $22 million annually, so this was no small feat to accomplish.
Chief financial officer The Lavidge Company
The company: A Phoenix-based, full-service advertising, public relations, communications, consulting and interactive marketing agency.
What she’s done: Torre established hard performance measurements such as goals, ratios, KPI’s and benchmarks to be implemented company-wide, a challenge in an environment where creativity is the product for sale. She has streamlined the company’s monthly financial reporting to encompass accountability on all levels and developed a performance-based compensation plan for the management team. These financial strategies have improved company performance and changed the attitudes and perceptions of the agency’s creatively minded personnel to embrace finance as something that can still allow for “fun.”