BroadPeak Executive Forum

January 17, 2008 BroadPeak CFO Forum - A Huge Success

On Thursday January 17 BroadPeak was proud to host its second annual beginning of the year kick-off CFO Forum at the Federal Reserve Bank of Chicago. 35 attendees enjoyed comments on the 7th District economy from Federal Reserve Economist Bill Strauss.  Following Bill's dynamic speech attendees were given a tour of the Fed by Jerry Nelson, the Chicago Fed's popular docent.  The event was well received and was frankly a lot of fun.  Thank you to all who attended!

Deloitte Dumped for 43% Discount

A micro-cap company decides its Big Four auditor is too expensive.

Sarah Johnson
CFO.com | US

January 9, 2008

When Catapult Communications Corp. made the uncommon decision to drop a Big Four accounting firm in favor of a local, smaller auditor, it also took the unusual step of announcing its reason for the switch: Deloitte & Touche, Catapult's auditor of the past two years, was simply not offering the right price.

By hiring Los Angeles-based Stonefield Josephson, Catapult estimates it will save 43 to 49 percent in accounting expenses this year, off the $985,000 the Mountain View, California-based company would have paid Deloitte for fiscal 2008.

Catapult claims the change in audit firms will create "significant savings ... without negatively affecting the quality of the audit and related services." Considering its relatively small size — $102 million in market capitalization — saving nearly half a million dollars was significant, Catapult's investor relations representative, Leigh Salvo, told CFO.com.

Catapult, which supplies telecom test systems to service providers like Alcatel-Lucent and Motorola, also was attracted by Stonefield's team, service offerings, and background, Salvo said. Practical Accountant ranked Stonefield 67th among accounting firms in revenue last year, with $40 million. The firm has four California offices, one Hong Kong location, and more than 100 employees.

It's not a surprise Catapult was looking for ways to cut expenses. The $39.3 million company reported a 17 percent drop in its revenue for fiscal-year 2007, which it blamed on the consolidation of its customers and increased global competition.

To be sure, Jeff Garrison, Stonefield's president, says cost savings isn't his firm's main selling point. Like most auditors, Stonefield touts its high-quality work. However, he told CFO.com the firm was able to offer a lower rate than Deloitte in part because its partners don't have to deal with as much bureaucracy and can make decisions sooner without having to check in with headquarters.

At the same time, Garrison acknowledges that a regional firm like his does not fit every company's needs. In general, large-cap companies prefer using a Big Four firm, and Stonefield may not have the technical, industry-specific expertise to handle the review of some companies' financials without relying heavily on affiliated firms.

In announcing the change in auditors, Catapult said it has had no unresolved disagreements with Deloitte during its two-year partnership — a fact the accounting firm agreed with in a letter accompanying Catapult's latest 8-K filing. Deloitte did not respond to CFO.com's request for comment by press time.

However, the relationship ended soon after Catapult addressed a material weakness in its internal controls. In its financials for the quarter ended September 30, 2007, Catapult announced it had resolved the outstanding weakness, which resulted in properly classifying variable rate demand notes during the previous year.

 

Happy New Year

Happy New Year to all of our wonderful clients, friends, colleagues, and families.  We are honored to interact with all of you and without you, we wouldn't be the "BroadPeak" you know today.  We wish you a happy, healthy, and prosperous 2008 and we look forward to seeing you in the very near future!

Cheers!

Tony, Tom, Liz, and the entire BroadPeak Team

Adaptive Planning (a BroadPeak Partner) and Unitrin Featured in Chicago Sun Times Article

The Chicago Sun Times ebiz section Wednesday November 21, 2007

Focus, Dedication, and Discipline - Live Life Like Kit DesLauriers

One of my favorite quotes is "No life ever grows great until it is focused, dedicated, disciplined. " by Harry Emerson Fosdick. In fact when I was applying to graduate school and, later, when I was getting my MBA I kept that quote taped to my computer monitor to motivate me and to help me to focus on my goals. This quote came to mind once again when I recently read an article that truly moved me. When I was done reading the article I had one of those, "Why haven't I accomplished more with my life?" feelings that I get when I hear stories about some of the amazing achievers with whom I share the planet.

The subject of the article that got me so inspired is a woman named Kit DesLauriers, the first person in the world to ski from the summits of the highest peaks on each of the seven continents. She made history at 11 a.m. Oct. 18, just 37 days before her 37th birthday. That article made me think of all the things in my own life that I either accomplished or didn't depending on my level of focus.

Think about that for a minute. She climbed to the tops of the 7 tallest mountains (also known as the Seven Summits) in the world (Mount Everest, Mount McKinley, Kilamanjaro, and Visson Massif to name a few) and then skied down them. The first thought that came to my mind was: crazy. But as I read the article about DesLauriers it occurred to me that she didn't sound crazy at all.

She didn't initially set out to climb all 7 peaks and ski down them but once she got started the adventure sort of grew. She was fortunate, as a model and professional skier, to have the financial backing of some corporate sponsors. Once the sponsors found out about her quest they agreed to pay for her to journey to each of the 7 peaks.

Following is an excerpt from a USA Today article in which Kit describes skiing down Mount Everest which offers a vivid and powerful example of true focus.

What they faced the next morning was the Lhotse Face, 5,000 vertical feet of wind-scoured, shimmering white-and-blue ice at a 45- to 50-degree pitch, which is 15 to 20 degrees steeper than a standard stair step or a typical black diamond slope at a ski resort. An earlier avalanche had wiped away several feet of snow. At 9 a.m. Oct. 19, Kit, Rob and Jimmy stepped into their ski bindings and started down the Lhotse Face.

"As we went down the mountain, we would look down the fall line and try to read our line," Kit recalls. "Everybody was totally focused and our senses were so alert. There were times when you didn't see your other two partners. Each of us had to find our own best way down, and we were living our own experience. We would check in with each other along the way. It was so icy that at times the ice ax would barely penetrate an inch. Your skis weren't even leaving a mark."

They picked their way down by linking up patches of snow. Kit latched on to a mantra while skiing the Lhotse Face: "Like your life depended on it." And with each turn she uttered those words. Sometimes out loud.

"It was one of the few times in my ski career when it was, 'If you fall, you die,' " Rob says.

"One time Rob asked me how I was doing, and I said, 'I'm scared and I don't want to die,' " Kit recalls. "He said, 'Good, let's get a plan and get out of here.' It was said almost in a carefree manner at the seeming absurdity of our undertaking."

Kit makes a strong distinction between being scared and being grasped by fear.

"I have no room for fear in my life," she says. "Fear is paralyzing. It's one thing to be scared, but once you allow fear in your life, it is debilitating.

"I don't make any claims to not being scared. It's important and it's healthy. I've been scared enough that I'm comfortable with it. When you experience fear, the next thing out of people's minds is 'I can't.' We are in control of our minds. As much as our minds try to control us, it is important to not let your mind run too far."

This mind-set has allowed her to set goals and attain them. It isn't the spotlight that motivates her, she says, though she's has had more than 20 media interviews since her accomplishment, including a feature in the current issue of Outside magazine.

Are you focused on your goals? If you aren't ask yourself why not? If a woman can ski down a mountain that is 29,000 feet high by focusing on her goal what could you accomplish by focusing on your goals?

Original post can be found at http://ultimate-resumes.blogspot.com/

Subprime Losses Could Hit $400 Billion

A Deutsche Bank report predicts that eventually, 30-40 percent of subprime debt will default.

Stephen Taub
CFO.com | US

November 13, 2007

Don't expect fallout from the subprime credit crisis to ease anytime soon. Deutsche Bank told clients Monday that losses from the collapse in the value of subprime mortgage assets could range between $300 billion and $400 billion worldwide, Bloomberg reported.

Wall Street's largest financial institutions alone could wind up writing down as much as $130 billion, according to the wire service, citing a report by Deutsche analyst Mike Mayo. The rest of the losses will come from smaller banks and investors in mortgage-related securities.

Citigroup, Merrill Lynch, and Morgan Stanley are the most notable among organizations that have already written down assets due to record U.S. foreclosures. So far, a total of $40 billion has been written down.

Meanwhile, also on Monday, Fitch Ratings downgraded $37.2 billion of structured finance collateralized debt obligations (CDOs), further underscoring the trouble in the credit markets. Fitch cited continued credit deterioration of the underlying collateral, as well as changes to its default forecasting assumptions.

“The updated assumptions reflect increased probabilities of default with respect to recent vintage subprime residential mortgage-backed securities and SF CDOs,” the ratings company stated in its report.

In his note, Deutsche’s Mayo estimated that about $1.2 trillion of the $10 trillion in outstanding U.S. home loans are considered to be subprime. He predicted that eventually, 30 to 40 percent of subprime debt will default, according to Bloomberg.

Mayo reportedly bases his predictions on “seat-of-the-pants” estimates using losses announced by the biggest securities firms. He figures banks and brokers may wind up writing off $60 billion to $70 billion this year, Bloomberg reported, adding that his estimate is based on known charges of $43 billion and expected additional losses of $25 billion.

To underscore the magnitude of the crisis, loss rates on about $200 billion of securities linked to subprime debt will run as high as 80 percent, according to Bloomberg's account of Mayo's report.

Congratulations to University of Chicago Professor Roger Myerson, Winner, Nobel Prize, Economics

University of Chicago Professor Roger Myerson awarded Nobel Prize in Economics

Oct. 15, 2007

Roger B. Myerson, the Glen A. Lloyd Distinguished Service Professor in Economics, was awarded the Nobel Prize in Economics Monday “for having laid the foundations of mechanism design theory.” Myerson earned one-third of the prize along with colleagues Leonid Hurwicz of the University of Minnesota and Eric S. Maskin of Princeton University.

Myerson is the author of Game Theory: Analysis of Conflict (1991) and Probability Models for Economic Decisions (2005). Myerson has published computer software programs related to his work and more than 70 papers on game theory and other topics concerning his research. He has been both a Guggenheim fellow and a Sloan Foundation research fellow.

Professor Myerson joins an all-star lineup of Nobel Laureates from U of C.  Other winners include:

An extraordinary number of Nobel Laureates have been faculty members,     students or researchers at the University of Chicago at some point in     their careers. Some of the laureates whose work is closely associated     with the University of Chicago are Milton Friedman (Economic     Sciences, 1986), Subramanyan Chandrasekhar (Physics, 1983), Saul     Bellow (Literature, 1976), Charles Huggins (Physiology or Medicine,     1966), and Willard Libby (Chemistry, 1960).       

In addition to these Laureates, Alexei Abrikosov of Argonne National     Laboratory (which has been operated by the University of Chicago for     the U.S. Department of Energy since the laboratory was established in     1946) shared the 2003 Nobel Prize in Physics "for pioneering     contributions to the theory of superconductors and superfluids."

 

The University of Chicago's first Nobel Laureate was Albert A.     Michelson. The first American to win the Nobel Prize in any of the     sciences, Michelson was recognized in 1907 for his measurements of     the speed of light. Robert A. Millikan (Physics, 1923), did both of     his prize-winning experiments on campus in the Ryerson Laboratory.

 

Of the 79 laureates who have Chicago ties, 27 have won in Physics, 23     in Economic Sciences, 15 in Chemistry, 11 in Physiology or Medicine,     and three in Literature.

 

Chicago Urban League ProjectNEXT - The Next Big Thing for Minority Entrepreneurs

Earlier this week, in my capacity as Vice President of Marketing for BroadPeak Collaborative, I attended the kick-off luncheon for the Chicago Urban League's forward- thinking new project called ProjectNEXT. The last time I felt that much energy and anticipation in a room was when I kicked off Money Smart Week at the Federal Reserve Bank of Chicago - and it felt great!

Under the high-energy and progressive leadership of CEO Cheryle Jackson, the Chicago Urban League is shifting from a social services provider model to an economic development model which, I think, is a stroke of genius on the part of Ms. Jackson. Project NEXT is a unique program in which minority entrepreneurs are mentored and given resources that will jump-start the growth of their companies. The program is highly competitive - 150 entrepreneurs applied for 16 spots in the program. And the program is only in its first year. I wonder how many business owners will apply next year or the year after? Seems to me that there is a huge demand for this program and I would guess that applications will increase exponentially over time.

A few professional service firms, including BroadPeak, have been selected by the Urban League to offer accounting, finance, analytics, management training/coaching, and other key services to the selected business owners. We are extremely honored and excited to have been chosen to participate in this program and we anticipate that the success in Chicago will lead to a nation-wide rollout.

Back to the luncheon.  I got to sit next to John Rogers, CEO of Ariel Mutual Funds and a member of the Board of the Chicago Urban League, a man I have admired for years. In addition to founding a hugely successful business John created the Ariel Community Academy in Chicago which is teaching kids about investing, thus developing hundreds of young minds who think that financial smarts are cool. (In contrast to popular singers, actors, and rappers whose conspicuous consumption can be enticing to youngsters.) Needless to say I was excited to get to talk to Mr. Rogers, in fact I was a little star struck. He didn't disappoint - he was modest, intelligent, and thoughtful in his remarks and he is clearly passionate about his work. It's always exciting to meet someone you idolize and, somehow, I managed not to spill food on myself or say anything stupid during lunch.

The keynote speaker for the event was Jim Reynolds, founder and CEO of Loop Capital, a Chicago-based investment bank. Mr. Reynolds was a dynamic, funny, and interesting speaker who managed to share some valuable advice about how to start a successful company. The difference, he said, between entrepreneurs who want to be successful (who doesn't?) and those who really "get it" is twofold: vision and focus. Vision and focus are the essential ingredients to success when starting your own business.

Mr. Reynolds discussed the fact that successful entrepreneurs, no matter what they are doing, are always promoting their businesses. His point was that as a successful entrepreneur you should always be thinking about your business and selling yourself. If you meet someone new, join a club, or speak at an event, you should always be ready to talk about your business, sell a product, or promote yourself, if only by behaving with class and dignity.

I learned a lot from Mr. Reynolds comments at lunch but it also occurred to me that as he described what it takes to succeed in business he was also describing Cheryle Jackson. Ms. Jackson has been at the helm of the Chicago Urban League for only a year but in that short time she has completely reshaped the vision of the organization, energized a talented staff, and has maintained an intense focus on the new mission that she set. She is a successful entrepreneur within an established organization. Like I said at the start of this post, it has been a long time since I have felt that much energy in a room and since I have been that impressed with a program.

I am thrilled that BroadPeak is part of ProjectNEXT but I am also excited that a project like NEXT has been born. It's rare that a not-for-profit can attract a leader who really understands how to create lasting and meaningful changes in the community. Too often organizations take the easy and non-controversial path of offering bland and impactless programs that don't offend, don't take risks, and don't have an impact.

Ms. Jackson and her team have put their reputations on the line with Project NEXT - if it were to fail then the naysayers in the world would be happy to armchair quarterback her mistakes and to say things like, "We never should have strayed from our original mission". ProjectNEXT won't fail, of that I am sure, but my point is that it takes a lot of guts to change the direction of an organization and to create programs with metrics and deliverables and the possibility of truly creating positive change in the world.

If you haven't heard of ProjectNEXT, the Chicago Urban League, or Cheryle Jackson click here to check out the Urban League website.

Attention Employers: Employees Are Losing 5 Work Days Per Year In Commuter Traffic

AP - Associated Press Updated: 10:29 a.m. CT Sept 18, 2007

WASHINGTON - Drivers waste nearly an entire work week each year sitting in traffic on the way to and from their jobs, according to a national study released Tuesday.

The nation’s drivers languished in traffic delays for a total of 4.2 billion hours in 2005, up from 4 billion the year before, according to the Texas Traffic Institute’s urban mobility report. That’s about 38 hours per driver.

“Things are bad and they’re getting worse,” said Alan Pisarsky, a transportation expert and the author of “Commuting in America.”

“We’ve used up the capacity that had been bequeathed to us by a previous generation, and we haven’t replaced it,” Pisarsky said.

The study summed it up this way: “Too many people, too many trips over too short of a time period on a system that is too small.”

$78 billion tab cited
The study estimates that drivers wasted 2.9 billion gallons of fuel while sitting in traffic. That's about 26 gallons a year per driver.

Together with the lost time, traffic delays cost the nation $78.2 billion, the study estimates.

High gasoline prices appear to have cut into optional driving but not commuting to work, said David Schrank, an associate research scientist at the Texas Transportation Institute, which is part of Texas A&M University.

“We’re really not seeing drops in the peak travel times,” said Schrank, a co-author of the study.

About three-quarters of all commuters drive alone to work, according to census data.

The study provided detailed information on traffic congestion in the nation’s 85 largest metropolitan areas.

The Los Angeles metro area had the worst congestion, delaying drivers an average of 72 hours a year. It was followed by Atlanta, San Francisco, Washington and Dallas.

The least congested metro areas were Spokane, Wash., and Brownsville, Texas, where drivers were delayed an average of eight hours a year.

No silver bullet seen
The study offers a menu of options for addressing congestion, including adding roads or lanes where needed, improving public transportation and changing driving patterns through flexible work schedules, telecommuting and carpooling.

“The problem has grown too rapidly and is too complex for only one technology or service to be ’the solution’ in most regions,” the report said.

"The good news," study co-author Tim Lomax said, "is that there are multiple strategies involving traffic operations and public transit available right now that if applied together, can lessen this problem."

Atlanta has the second worst congestion in the country, though there has been some improvement, according to the study. In 2005, Atlanta drivers wasted an average of 60 hours a year in traffic delays — down from 70 hours a decade earlier.

A 2005 task force appointed by Georgia Gov. Sonny Perdue called for directing more resources toward mitigating traffic congestion in the Atlanta area.

But the region’s population is growing so fast that planners are having a tough time dealing with the increase in automobiles, said Jane Hayse, chief of transportation planning for the Atlanta Regional Commission.

“With the pace of growth that we have here, it’s pretty difficult to reduce congestion,” Hayse said. “Trying to keep it at today’s level is really our goal.”

The Atlanta metropolitan area added 890,000 people from 2000 to 2006, more than any other metro area in the country, according to census estimates. There were 5.1 million people in the Atlanta area in 2006.

Most and Least Congested Areas The 10 most and least congested metro areas in the nation, according to the Texas Transportation Institute. Listed are the average number of hours drivers waste in traffic delays per year. Nationally, drivers wasted an average of 38 hours in 2005, up from 31 hours in 1995. Most Congested                                                2005   1995 Los Angeles                                72    71 Atlanta, Ga.                               60    70 San Francisco-Oakland                60    56 Washington, D.C.                       60    53 Dallas-Fort Worth                       58    34 San Diego                                  57    35 Houston                                    56    32 Detroit                                      54    51 Orlando, Fla.                             54    54 San Jose,  CA                          54    51                   Least Congested                                         2005  1995 Brownsville, Texas               8     4 Spokane, Wash.                    8    10 Akron, Ohio                         10     9 Anchorage, Alaska             10     9 Corpus Christi, Texas         10     7 Rochester, N.Y.                  10     7 Beaumont, Texas                11     6 Buffalo, N.Y.                       11     6 Springfield, Mass.               11    10 Laredo, Texas                    12     7 Source: Texas Transportation Institute

Kraft Selects Ingersoll Rand CFO to Replace Current CFO

Food-products giant names Timothy McLevish, effective Oct. 1
Stephen Taub, CFO.com
August 30, 2007

Kraft Foods Inc. announced that CFO James Dollive will retire after 29 years with the company, and named Ingersoll-Rand Co. senior vice president and CFO Timothy McLevish to succeed him effective October 1.

McLevish has held his post at Ingersoll-Rand, with headquarters in Hamilton, Bermuda, since 2002. That diversified industrial firm, which provides products and services to industries from transport to building security, said it expected to announce a successor prior to his departure.

At Northfield, Illinois-based food-products giant Kraft, McLevish will be responsible for financial operations including accounting and reporting, financial planning and analysis, treasury, tax, audit, and investor relations. Irene Rosenfeld, Kraft chairman and CEO, said McLevish combines a finance and accounting background with experience in public-company governance and line management, strategic planning, and mergers and acquisitions.

Prior to joining Ingersoll-Rand, McLevish rose through a number of jobs at Mead Corp. to become CFO in 1999. While at Mead, he also filled several general management positions, including president and general manager of Mead's Specialty Paper Division.

Said Rosenfeld of James Dollive: "Jim's financial expertise and exceptional standards of ethics and integrity have earned him the respect of both his Kraft colleagues and the financial community. Over the course of Jim's career, he has helped Kraft achieve many significant milestones, including our initial public offering in 2001 and our recent transition to a fully independent company."

Indeed, this has been a busy year for Dollive and Kraft, which in April completed its spinoff from former parent Altria Group. It subsequently announced that it will buy some biscuit and cereal-products businesses of Groupe Danone SA for $7.2 billion, amid an industry-wide M&A boom.

In a conference call with investors earlier this year, Rosenfeld said divestitures are in the future. "We continue to evaluate our existing brands in the context of our new framework," she said, according ro Reuters, "and we'll divest those businesses that don't fit our long-term growth plan."

Earlier this month, during a conference call to discuss second-quarter earnings, the Wall Street Journal reported, Kraft said it may sell its Post cereal unit, which the paper estimated could fetch about $3 billion. Also earlier this month, Kraft sold $3.5 billion of debt in a five-part offering.