It wasn't first quarter
earnings results that lead to Phil White's abrupt resignation from his post as president, CEO and chairman of Informix Software Inc. No, industry insiders sayoand subsequent reports indicateothe trouble began in quarters prior when senior management played a little numbers game that boosted revenue figures. "It was not in fact one bad quarter," says Andrew Brosseau, director of research for Boston-based Cowen & Co, "but in fact several bad quarters that were hidden. They recognized revenues for products that were put into the channel that had not sold through yet, and (they) did not disclose that."
While such questionable practices don't violate Generally Accepted Accounting Procedures (GAAP), when word of Informix's accounting deeds leaked out, Wall Street turned its back. "Senior management lost all credibility," says Brosseau. This could also suggest why one Informix CFO reportedly left the company after only three months.
Taking White's place is Bob Finocchio, former president of 3Com. Though analysts tracking 3Com were surprised by Finocchio's move, his sterling reputation on the Street and the company's stellar performance certainly explains why Informix wooed him for the top slot. Informix was unavailable for comment.
Climbing its way back from oper-ations losses few industry analysts thought the company could conquer, Broadway & Seymour has logged two profitable quartersowithout the help of cash generated by off-loading its superfluous business units.
Two years ago, Alan Stanford took over a company drowning in debt. Having lost its focus, Broadway & Seymour "was in markets that any one of which could have consumed the full energy of the company," says Stanford. That was then; now the only market Broadway remains in other than financial services is professional services, with a highly profitable legal support systems business. "It was too good to sell," says The Tower Group's Bob Landry.
Focusing on financial services, Broadway has invested significantly to regain the trust and support of customers it disappointed as well as those that wouldn't come near it. "We had a product that didn't even work very well that was in the marketplace. We committed to fix it. We lost a lot of money, but we said it will work and we will fix it. So (Crisp) works and is referenceable now."
And even though Broadway is on the road to recovery, it's not quite out of the woods yet, says Landry. "They have to continue to execute. Telling stories is easy; executing is hard."
Bankers need not be nostal- gic for the days when real estate deals were struck on the back of envelopes. These days, it's placemats, which is what Fair, Isaac & Co.'s Bob Heller used to pen the $46 million acquisition of Risk Management Technologies during an impromptu Thai dinner with Dave LaCross, the asset/liability systems provider's CEO.
Why make such a bold investment? The answer lies in future development. "First and foremost, the benefit is the possibility of putting credit risk and interest rate risk on the same analytical platform," says LaCross. "That's unprecedented."