CFO OF THE YEAR 2010
CFO OF THE YEAR 2010
Friday, October 22, 2010
David Forell, vice president and CFO of Centro Inc., won in the $10 million to $50 million category. Forell and partner Mike Gallagher purchased Centro, a distributor of flow control products, in 2001.
In addition to his employees, Forell thanked his wife “who asked me nine years ago why not buy a company in Memphis instead of moving from Memphis.”
Other finalists in the category were Paulo Aur, CFO and COO for American Paper Optics LLC; Jeff Bailey, CFO and senior associate, Hnedak Bobo Group Inc.; and Annelle Hochhauser, CFO, Interactive Solutions Inc.
What company does: Centro is a distributor of flow control products.
Your role: I own 50 percent of the company. My role is to handle non-sales functions such as accounting, warehouse, purchasing, health and business insurance, data processing, bank relations and operations.
Background: B.S. in Business Administration and MEA from Northwestern University. I began my career with Arthur Andersen & Co. in Chicago. I worked for Marshall Field & Co. and the U.S. division of the British American Tobacco Co. before becoming CFO of Hutzler Brothers Department Stores in Baltimore at age 36. I came to Memphis as CFO of Catherine''s Stores Corp. and was there for 13 years. My partner, Mike Gallagher, and I purchased Centro Inc. in 200l.
How's business?: Very good. We have recovered nicely from problems we faced in early 2009 when three of our large customers went into Chapter 11. This caused my partner and me to take a 10 percent salary reduction and to reduce our employees'' salaries by 5 percent. We recovered in the latter half of 2009 and were able to repay the salary reductions in December. We recently restored the pay cut as well as most of the benefit reductions.
Biggest challenge at the moment: To continue the momentum built over the past few months
What will change in the next year?: We continue to expand our product offering and we have added two outside sales people. Overall we are bullish on the amount of manufacturing activity we are seeing in our served geography.
How do you measure success?: As with most businesses, we measure success by our profitability. However, profits allow us to provide our employees with benefits, profit sharing and pay increases so a portion of our success measurement is improving our employees'' lives and their personal financial growth.
Biggest business strength: Experience and enthusiasm of our employees
Biggest business weakness: Our enterprise data processing system is outdated. It is difficult for us to justify the cost of a new system when we have over 600 man-years of experience with the current system.
Biggest risk: First is that our software provider will stop supporting our current enterprise data processing system. Second is that larger competitors may move into our territory.
Biggest mistake: Our biggest mistakes have been hiring related. We have had to terminate two people who took advantage of us by taking money they were not entitled to. In addition, we have had to terminate some poor performing sales people that we hired.
Most strategic move: Adding pumps and seals to our product mix.
Turning point: When my partner and I first acquired this business, the first three months'' results were terrible. To turn the business around, we revamped the pay structure to make a larger portion of everyone''s pay commission or performance based.
Biggest worry: Who will run this business long term. We have a large number of employees who are over 50years old and I am concerned about replacing their experience and expertise.
Most challenging task: Managing the various personalities within the company
Favorite task: Evaluating prospective acquisitions
Least favorite task: Doing semi-monthly payroll
Source of support in a business crisis: I first look to my partner, Mike Gallagher.
Key goal to achieve: When my partner and I bought this business 10 years ago, our plan was to grow the company to $20million in five year and $40 million in 10years. We achieved the former goal. With the recession it looks like we will not make the latter goal, but we have another year to go.
What''s in the short-term future?: We hope to assimilate another company or two into Centro.
Five-year plan: To exit Centro by selling my share to my partner and moving into retirement.
First choice for a new career: It would involve sports. Once I determined I did not have talent to play, I was interested in being a sports writer or announcer.
Congratulations Mr. Forell! CFO of the Year
David Forell, vice president and CFO ofCentro Inc., won in the $10 million to $50 million category. Forell and partner Mike Gallagher purchased Centro, a distributor of flow control products, in 2001. In addition to his employees, Forell thanked his wife “who asked me nine years ago why not buy a company in Memphis instead of moving from Memphis.”
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