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Thursday, Mar 28, 2024

Valleys’ Top CFOs – Honorees

Darren Hernandez, City of Santa Clarita By ANDREA ALEGRIA Staff Reporter In the City of Santa Clarita Darren Hernandez has been at the heart of fiscal management decisions that have led to accomplishments difficult to achieve in normal economic times, let alone a recession. As the City’s Director of Administrative Services, Deputy City Manager and Chief Financial Officer, he has helped the city remain solvent and fiscally sound enough to adopt a balanced budget on-time despite the economic downturn, and even to have the City’s credit rating upgraded. While many public agencies face deficits, layoffs and furloughs and have seen their credit worthiness evaporate, Santa Clarita earned the second highest Standard & Poor’s credit rating possible in June of this year, with a credit upgrade to AA+ from AA. “We are strong believers that the decisions you make in good times are more important than those made in bad times and that you always have to match ongoing expenditures with ongoing revenue,” he said. Anticipating an eventual economic slowdown, Hernandez supported efforts to act with caution and discipline during the period of expansion and prosperity. “Many people assumed the bubble would continue, but we treated some of that revenue not as recurring revenue and actually spent below our means during the economic expansion,” he said. Those fiscal policies gave the city a $5 million cushion in excess revenue over expenditures at the beginning of FY 2008. However, due to the size and scope of the recession which was more damaging than anyone anticipated, that cushion quickly evaporated and the city had to take steps to further protect its finances by implementing a hiring freeze and strategically reducing costs in contract services, among other things. Hernandez helped create and coordinate several fiscal strategies that have saved Santa Clarita millions of dollars and have helped it maintain economic stability. For example, he helped save the city $4-5 million by restructuring how the city handles debt, particularly general liability and workers compensation, he said. Always looking to find financial opportunities to restructure or diversify the city’s revenue base, Hernandez also helped create special financing districts that have further netted thousands of dollars for the city. As part of the City’s efforts to revitalize an older segment of the community, Hernandez orchestrated a bond financing issuance totaling $38.9 million. The proceeds were used to build a new library, streetscape and other improvements in Old Town Newhall. Hernandez, who says his greatest accomplishment in the last years has been getting married and having a baby, has worked for the city for more than six years. Previously he’s served as Director of Finance of the City of La Habra, Calif.; Village manager of the Village of Walden, New York; assistant to the City Manager of Kalamazoo, Mich.; and executive assistant to the Controller of the State of New York. Kermit Newman, Lakeside Community Healthcare By ANDREA ALEGRIA Staff Reporter For the last 14 years, Kermit Newman has helped pave the road to growth for Lakeside Community Healthcare. As Chief Financial Officer, he’s steered the organization through what at times have been turbulent financial waters, overseeing major mergers and acquisitions and modeling the financial feasibility of new business strategies for the company. “We’ve grown significantly over the past years and we’re now at a size that makes sense,” he said. “Right now our main focus is to improve profitability.” Lakeside Community Healthcare, a for-profit integrated healthcare organization that serves more than 250,000 members in Los Angeles and Ventura Counties, recently merged with Community Medical Group in 2007 and West Covina Medical in 2006. As a result of these mergers, 150 employed physicians now make part of the Lakeside Medical Group. Managing the medical group, and ensuring its sustainability and profitability, is among the main challenges ahead for the organization, said Newman. Other financial challenges include dealing with the increased costs of drugs, especially chemotherapy drugs, and successfully integrating the recent acquisitions into the company. Over the years, Newman has played a critical role in reducing expenditures, streamlining administrative expenses and negotiating higher revenues through key contracts.. It was his leadership which helped the organization survive an industry wide crisis a little more than a decade ago, when a third of competitors either failed or were acquired. In an industry that has seen it’s fair share of consolidation over the years, Lakeside survived and has gone on to become a strong growing company, he said. Last year, Newman was also instrumental in helping launch a new line of business, which yielded $40 million dollars in revenue in 2009. Newman modeled the financial feasibility of the strategy, negotiated key contracts and handled the day to day regulatory application process. Through this new line of business the organization now accepts financial risk for hospital services as well as for physician services. More than a knack for numbers, what defines his leadership is “the ability to utilize data and present data in a meaningful format, and use data to lead the company to a desirable outcome,” he said. Newman has served as the chief financial officer of Lakeside Healthcare since December, 1998. He joined the company in 1995 serving as executive director, finance and vice president, finance. He holds a bachelor’s of arts degree from Stanford University, and a master’s of business administration from the Anderson Graduate School of Management at UCLA. He is a certified public accountant and a member of the American Institute of CPAs. Hany Demian, eBridge By ERIC BILLINGSLEY Staff Reporter Growing up in Cairo, Egypt, Hany Demian always dreamed about coming to America. After graduating from college with a degree in business administration, and working for several companies in France, he moved to the U.S. in 1997 and secured a job shortly thereafter at eBridge. “I managed to secure a job at eBridge by convincing them that I would work hard on a student visa and prove to them that I could be a valuable asset to any corporation, while I studied along the way,” said Demian. He started with the company as a bookkeeper, while continuing to take accounting courses, pass the Uniform CPA Exam and earn a CPA certificate from the California Board of Accountancy. He also worked as controller and rose to the rank of CFO by 2002. “eBridge not only believed in my abilities, but they also believed in me as a person and believed that I had a long future with them,” said Demian. The company provides marketing services to business customers through the use of proprietary Internet properties and Internet marketing techniques. It currently provides websites and online marketing services for over 40,000 small businesses. eBridge, which has 75 employees, has grown from $200,000 in annual revenue in 2001 to an estimated $30 million in 2009, according to Demian, and the company hopes to grow to $300 million by 2012. Managing the finances of a growth company is fast paced business. Demian said one of the most difficult challenges he has faced, and overcome, is convincing banks to believe in the company’s growth and future. “As an emerging company we are constantly in need of additional capital to fuel our expansion,” said Demian. “In order for us to gain that capital it is my job to convince banks to look beyond just last year’s financials, and instead focus on this and next year’s forecasted results.” Accurately forecasting results to within a few percentage points, and offering complete transparency on the marketing data eBridge generates have gone a long way toward convincing financiers. One achievement Demian is especially proud of is getting the company out from under what he terms “very expensive” factoring of its receivables, by replacing factors with less expensive financing. He helped secure $4 million in financing from a local Los Angeles bank. The lowered cost of financing is expected to deliver an additional $1 million to the company’s bottom line in 2009. “As any CFO knows, we have one of the toughest jobs in our companies, and this is especially true in a growth company,” said Demian. “It’s especially challenging to find appropriate resources that allow the executive team the freedom to run with new ideas, and develop new markets without constraining the growth they can deliver,” he added. “As CFOs, we are the ones who have to say wait; how much is that going to cost; when will we see profit; and “sorry” you might have to wait a while before you can implement that strategy.” Ross Landsbaum, ReachLocal By ERIC BILLINGSLEY Staff Reporter A couple years ago, Ross Landsbaum was looking for his next big career move. And he had a very specific goal in mind: He wanted to help traditional media companies transition to the digital age. “I had been in traditional media most of my career,” said Landsbaum, who worked as CFO and COO of Panavision, EVP Finance and Operations and CFO of Miramax Films, and CFO of Spelling Entertainment. “A 30-minute interview with Zorik Gordon, CEO of ReachLocal, went on longer than I expected,” he said. “We were similarly aligned from a strategic point of view and the company was doing exactly what I wanted to do. I’m used to working in entrepreneurial environments.” Gordon hired Landsbaum as CFO of ReachLocal in 2008. The firm, which has more than 700 employees worldwide, helps small businesses and large national brands buy and place advertisements on the Internet. Its patent pending technology intelligently selects media, then tracks, optimizes and reports results for local advertising campaigns. The company grew at a rate of 3,217 percent from 2005 to 2008. It recently ranked #39 on the Inc. 500 list of the fastest growing private companies in the U.S. It ranked as the second fastest growing company in the Los Angeles-Long-Beach-Santa Ana region, and the fifth fastest growing advertising and marketing business in the U.S. But Landsbaum accepted the position right as the economy began to tank. Instead of pushing more growth, he worked with ReachLocal’s management team to slow expansion until the economy stabilizes. He and company execs simultaneously accelerated technology and product development to stay ahead of the competition. “The power of ReachLocal and its products have done well in the tough economy,” said Landsbaum, who started his financial career doing transaction work for the Arthur Andersen accounting firm. “And the company has a smart management team.” Another unique element to the job is that ReachLocal is venture capital backed. It has received $67.9 million in four rounds, the latest being $55 million in 2007. VantagePoint Venture Partners, Rho Ventures and Galleon Special Opportunities Partners Funds LP have all provided capital to the company. Working as a financial professional in the media and entertainment world poses plenty of challenges, said Landsbaum. Spelling Entertainment and many of the other companies he worked for were adept at thinking outside of the box. But it’s challenging to juggle a company’s artistic and creative views with hardcore financial realities. “As a CFO you end up being the balancing point,” he said. “Each of the companies I’ve worked for were paradigm changing businesses in their day. And the one thing I would say is that my prior experience has been layers building up to help me be successful at ReachLocal.” Daniel Zeddy, Anthony International By THOM SENZEE Staff Reporter Daniel Zeddy, CFO of Sylmar-based Anthony International, a leading maker of commercial refrigerator doors located in Sylmar, came to the firm after decades working at the top levels of finance in the furniture industry. He brought with him experience in helping a company in one of the industries hardest-hit by the recession. “Having come from a distressed furniture market, Dan has shown us what happens when a company doesn’t implement proper business practices,” said Jeffrey R. Clark, president and CEO of Anthony International. Clark said Zeddy has instituted a new culture of accountability and new levels of cost control at the 900-employee manufacturing firm. “He’s also implemented a sense of pride throughout our organization,” Clark said. Zeddy relishes, and Clark appreciates, the fact that he has managed the financial matters and strategized aggressive capital investment endeavors, including no fewer than five acquisitions since his arrival at Anthony in 2005. “Because of great management and good employees, expanding in a bad economy has actually been more fun than a chore,” Zeddy told the Business Journal. “The people here work together; they get it.” Another idea of fun for Zeddy is keeping the firm stable in these uncertain economic times by continuing what he described as a long history of good management of the company’s working capital. That paradigm, Zeddy said, is what has allowed the firm to acquire domestic companies, as well as businesses in China and Europe. “As a member of the financial team responsible for due diligence on acquisitions, as well as integrating the acquisitions into the larger company, it’s my job to work closely with management and keep them informed of cost and revenue variances, so corrective action can be taken quickly.” Fortunately for Zeddy, the job of keeping the company’s top manager, CEO Clark, well informed is made easy by the access he enjoys. “We meet daily and multiple times per week,” he said. “The level of interaction we have is a big part of our growth even in a recession.” Likewise, Clark sees Zeddy’s ready accessibility as an important asset as he steers the firm into the unknown waters of the post-economic-meltdown era. “Dan is a great visionary and has a great sense of economic indicators,” Clark said. “He is an integral part of our leadership team and has played a major role in the growth and success of Anthony International.” Clark points to hard numbers as evidence of his CFO’s visionary abilities. “In the four years he has been with Anthony, the value of our company has grown by 61.29 percent, and Dan has played a major role in that phenomenal climb.” Gail Shaughnessy, The Signal Santa Clarita By MARK R. MADLER Staff Reporter There are two reasons why Gail Shaughnessy believes The Signal newspaper continues to persevere in this transition period for the newspaper industry. One is that the daily newspaper has always been “frugal” and kept a close eye on expenses. The other is that in serving only the Santa Clarita Valley it fills a niche that other newspapers in the area don’t necessarily rush into fill. “No one else can give the news that we give because it is all local,” Shaughnessy said. As The Signal’s chief financial officer and human resources director, Shaughnessy is involved with strategic planning, operational decision-making and generating statistical and financial data. In working alongside the department heads, Shaughnessy also makes them understand how all those departments fit in with the larger picture. The tough economy has brought the other managers together like never before, she said. Shaughnessy started as an accounting manager for the newspaper when first hired 10 years ago. She then moved to business manager and then to her current position. Prior to joining The Signal, Shaughnessy had worked primarily for CPA firms. A desire to eliminate a commute to Pasadena, be closer to her children who were in Santa Clarita schools and do financial work for just one company led Shaughnessy to The Signal. Internal changes in the executive ranks show the value of Shaughnessy’s tenure. In the past year, The Signal has gained a new publisher in Ian Lamont, and new directors in advertising and online revenue. Every new publisher brings in a different vision and focus for the newspaper, and Shaughnessy must intuitively figure out what that is and that can be a challenge. With Lamont, who started in September 2008, the focus has been on increasing circulation. “The last one liked editorial,” Shaughnessy said of Lamont’s predecessor. “It is interesting how they view it differently probably because of their backgrounds.” Shaughnessy epitomizes all the good traits of a CFO and is a leader among leaders at the Signal, Lamont said. Her knowledge of all aspects of the business puts her at the center of all decision making, he added. She’s at my right hand in all cases and everybody in the entire company goes to her,” Lamont said. With each new initiative at the newspaper comes a business plan that Shaughnessy monitors for revenue and expense expectations and its return on investment, comparing the forecast with the actual results. The process ensures that the company is spending its resources on projects that will have the best payback. Along with financial responsibilities, Shaughnessy also handles human resources duties at The Signal. It is in this role that Shaughnessy is, by Lamont’s description, the “conscience” of the company for the counsel and advice that she offers employees. Shaughnessy compared herself to a therapist when she lends an ear to what the employees’ have on their mind. “My office is open. I tell them even if you have to come and scream and leave that’s fine too,” Shaughnessy said. “It’s good to get things off your chest. If that helps them that’s great because it helps the company.” Jane Eagle, National Notary Association By THOM SENZEE Staff Reporter As chief financial officer of one of the largest membership organizations in the world Jane Eagle, 43, has been key to the National Notary Association’s strategy for surviving – even flourishing – during the toughest economic environment the organization has faced during its 51 years, according to NNA president and chairman, Milt Valera. “Logically, with the real estate, mortgage, banking and investment industries (industries that utilize the services of notaries the most) suffering the way they are, we should be under water,” Valera told the Business Journal. “Instead, we will be in the black again this year, thanks in large measure to the efforts of Jane Eagle, who is a dynamic leader, and has made an extreme difference.” Eagle attributes her success in keeping the organization on solid financial footing to eliminating waste, redundancy and inefficiency, among other measures. Her ability to pivot when the economy plunged into recession shortly after arriving was key to the organization’s survival during this crucial period. “I don’t think I realized at the time that we were entering into a crisis,” she said. “No one really appreciated the recession we were in; it hadn’t yet become evident things would not be as they had been historically in other recessions.” But, Eagle said, it quickly became clear that she had to react. “In trying to make some fundamental changes in terms of how we made decisions, I found there was a disconnect between how we looked at revenues and expenses,” she said. At the core of the turn-around was a change in the way expenses were considered. “We were looking at in a vacuum,” she said. “Instead of ‘can we afford this,’ we now ask ‘should we afford this?’” Eagle has worked closely with President Milt Valera since she took the top finance job at the National Notary Association in 2007. “She took charge right away,” Valera said. “Candidly, she saved the organization from financial disaster.” Membership had dropped by a third, while overall revenues had declined by 40 percent when Eagle came to NNA. But changes were implemented quickly as Eagle recognized opportunities to trim fat. “There was redundancy, and we did cut our payroll expenses,” she said. “Of course, the biggest asset of an organization is staff, and it’s really important how we manage them and utilize that resource.” That, Eagle said, is why she folded human resource operations into finance. One of the first things she did as head of the association’s H.R. Department was to settle or challenge several pending legal matters. Now with close to 175 employees, down from approximately 230 when she first arrived, the organization’s overall productivity and services provided remain at the same levels as before, according to Eagle. In addition, Eagle oversees all of the association’s bread-and-butter issues, which all CFOs handle, including financial data management, risk assessment and strategic planning. She is appreciative of the recognition presented by the Business Journal’s Top CFOs Award. “Obviously it’s a huge honor,” Eagle said. “It’s nice to know the things I’ve done have made a difference and have been recognized by others.” Andrew Mandell, ValleyCrest Companies By MARK R. MADLER Staff Reporter The role of a chief financial officer, explained Andrew Mandell, gets defined differently by those working in that position. At public companies, where Mandell had spend much of his career before landing at ValleyCrest Companies, a CFO was evolving into becoming as he described like “a policeman” because of the regulations put in place by Sarbanes-Oxley. Not so at a privately held company like ValleyCrest, one of the nation’s largest landscaping firms with roots deep in the San Fernando Valley and headquartered in Calabasas. At his employer, the finance chief is a key business manager linked in with the other executives in the decision making propelling the company forward. “I think the role continues to evolve as being ensuring you are compliant with all the regulations and at the same time helping people make strategic decisions by providing information and being a partner with the operational people,” Mandell said. ValleyCrest founder and Chairman Burton Sperber said he and son Richard, the company’s president and chief executive, were fortunate to find Mandell and that Mandell found them. “He is a great leader in the company,” Sperber said. “Everyone looks to him for leadership.” With nearly three decades experience in the financial field, Mandell brings great experience and resources to ValleyCrest. His background includes financial positions at Fox Cable Networks, ITT Corp., The Walt Disney Co. and Universal Studios when it was still owned by the Seagrams Corp. The biggest difference in going to ValleyCrest in 2001 was that Mandell now worked for a privately-held company where there is less of a bureaucracy and the actual owners are accessible. “There are no big committees,” Mandell said. “We don’t do a lot of formal presentations.” ValleyCrest encompasses six divisions with 10,500 employees in 21 states and generates annual revenues in the hundreds of millions. The company has been named as the No. 1 family-owned business and the largest local construction firm by the San Fernando Valley Business Journal and among the Top 100 companies ranked by Lawn & Landscape magazine. ValleyCrest has done the landscaping at Dodger Stadium, the new Dallas Cowboys stadium, Hyatt and Four Season Hotel locations, the Valencia Town Center and the Americana at Brand in Glendale. In 2006, the company took the step of selling a majority share to MSD Capital, L.P., the investment firm of Michael Dell, founder of Dell Computers. The investment firm, however, takes a hands-off approach, allowing the decision making on strategy and grown to remain in Calabasas. ValleyCrest does acquiring of its own to extend its national reach. Mandell is assisted by a single staffer for mergers and acquisitions, of which there have been six in the past year. Between the two of them they handle all aspects from the negotiations to structuring the deal to closing the deal. Even though ValleyCrest is one of the major players in landscaping, their market share remains small. When moving into new markets, the company prefers to do it by acquisition rather than organically, which takes too long, Mandell said. ValleyCrest tend to focus on existing markets where it can increase density or contiguous market to optimize its delivery system, Mandell added.

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