Mike, I'm not as troubled by the CFO leaving. In my previous life, I was in executive management. It is very common for the 2nd in command (CFO) to leave when the CEO leaves. A new CEO will frequently pick a CFO that agrees with his vision and direction of a company. When he leaves, any CFO worth his/her salt, would also look for a more progressive situation. It's not good for a professional career to stay around in a company that is battening down the hatches, or work with a new CEO having a different vision. I don't think there is anything untoward in the accounting arena. Remember, when Bergeron came in, he and the CFO had already written off all the "sins" of past management in the amount of over $200 million. It is very unlikely that there are any accounting irregularities within a year of a new CEO after a house cleaning of the books.
I'm also not troubled by large contracts leaving. Most companies using outside data services from a firm like Geac (or SAP etc) have "cruising" management. They would be governmental agencies, non-profit organizations etc. Their management are not usually motivated to make huge decision like a data supplier change.
The main problem with GAC was (1) the acquisition of JBA... clearly a sloven and unprofitable organisation and (2) the Y2K aftermath when companies lower their data processing budgets.
I have a feeling from the conference call and news releases that the new CEO knows the remedy. It's quite straight forward that any experienced manager would know what to do... cut fat, remove debt, and improve earnings. Imagine GAC a year now, earning $1.00/share, and with no debt. At a minimum, stock price would be worth $8.00 (8 times earnings). Then, its time to add the sizzle... acquiring new line of credit... make strategic acquisitions... revamp the old enterprise system into today's technology and database system. |
