David Turner is the new CFO at Thomson Corp’s financial division, a provider of financial information. Prior to joining Thomson Financial, Turner spent 10 years at Reuters. While at the newswire company, he held the CFO post in a number of business units, including Reuterspace. Prior to joining Reuters, Turner held various financial posts at PriceWaterhouseCoopers. He was educated at St. Andrews University in Scotland and is a member of the Institute of Chartered Accountants of England and Wales.
Thomson Financial was particularly hard hit by the 9/11 attacks, as demand from investment banking and brokerage clients plummeted. The group had about 2,000 employees in the vicinity of the World Trade Center and 200 employees in one of the towers. The company lost 11 employees in the disaster. Earlier this month Thomson Corp. management scaled back revenue growth targets for 2001. It now expects revenues to increase between 10 and 13 percent, down from the previously forecast target of 15 percent.
Thomson management blamed lowered expectations on the impacts of the attacks and weakened market conditions across all groups. The revised numbers exclude the recently acquired Harcourt higher education and corporate training businesses, which were acquired earlier this year from Anglo-Dutch publisher Reed Elsevier. Managers also said they expect earnings to rise to between 12 and 15 percent in 2001. That’s down considerably from the earlier 17 percent forecast.
Thomson Financial’s performance has been affected by the delayed sale of its financial publications unit, which includes The Bond Buyer and American Banker. Company officials have largely blamed the delay on the terrorist attacks. To make matters worse, Dominion Bond Rating Service recently downgraded the ratings on the company’s unsecured debentures and medium-term notes to A (low) from A. Dominion also downgraded Thomson’s preferred shares from Pfd-2 to Pfd-2 (low). The rating agency said it made the downgrades because the Harcourt acquisition significantly increased debt levels and weakened financial coverage ratios.
Second-quarter results, however, were relatively strong. Revenues from continuing operations, excluding disposals, increased 17 percent to $1.6 billion over the second quarter of 2000. Operating profit grew 27 percent to $259 million. Excluding one-time items, earnings from continuing operations were $84 million (13 cents per share) for the second quarter of 2001, compared with earnings of $56 million (9 cents per share) for the same period a year prior. In 2000 the company reported revenues of approximately $6 billion. The trading price of Thomson shares edged up 5 Canadian cents to C$46.85 (US$29.84) on the Toronto Stock Exchange in early morning trading on Monday.
Managers at Terayon Communication Systems Inc., a supplier of broadband access systems, announced the hiring of Carol Lustenader as the company’s CFO. Lustenader replaces Ray Fritz, who is leaving the company for family reasons.
Lustenader has been with the company for some time. She’s played an instrumental role in restructuring the company’s business into three core units. Prior to joining Terayon, Lustenader held numerous senior financial management positions at high-tech companies, including Clarify, Nellcor-Puritan Bennett, Pyramid Technologies, and Xerox Corp. She holds an M.B.A. in finance, marketing, and corporate accounting from the University of Rochester. She is also a member of the Financial Executives Institute and the Association for Corporate Growth.
Lustenader will have her hands full at Terayon. Last week, the company reported a whopping third-quarter pro forma net loss of $27.6 million (41 cents per share), compared with a profit of $8.4 million (12 cents per share) a year ago. The company was hit hard by a 36 percent drop in revenues during the quarter, which management attributed to the economic slowdown. Third-quarter revenues came in at $80 million, versus $125 million a year ago. Company managers are more optimistic about Q4, however. They expect to report a pro forma net loss of between 22 and 25 cents per share in the fourth quarter, and revenues between $80 million and $82 million.
Donald Schmeling has been appointed permanent CFO at Tampa-based health-care company PlanVista Corp. Schmeling had been serving as interim finance chief since July. Prior to that he served as CFO at Hydrogen Media Inc. in St. Petersburg, Florida, and as a partner at management consulting firm Grant Thornton in Tampa.
Schmeling will be taking over the financial reins of a company that is experiencing substantial revenue growth. In the three months ended June 30, turnover increased 33 percent to $8.9 million, up from $6.7 million in 2000. Management attributed the increase to steady demand from existing customers and a $1.5 million spike in revenues from new ones. But in late September, the company reported that $2 million to $3 million worth of revenue associated with a global health-care management agreement might not materialize in 2001. PlanVista management expressed concern that due to recent events, several Middle Eastern countries might delay — or pull out off — a planned health-care management program. “The company will continue to assess the impact on revenue during 2002,” company management said in a statement.
Ian Smith has been tapped as the first CFO at Vertex Pharmaceuticals Inc., a Cambridge, Massachusetts-based biotechnology company. Smith joins Vertex from the accounting firm Ernst & Young LLP, where he was a partner in the company’s Life Science and Technology Practice.
During most of his financial career, Smith has focused on mergers and acquisitions, spinoffs, and equity restructuring. He joined Ernst & Young’s U.K. business in 1987. In 1995 he joined the Boston office of the accountancy and was named partner in 1999. Smith received a B.A. with honors in accounting and finance from Manchester University. He is a member of the American Institute of Certified Public Accountants.
Smith comes to a company that has been struggling of late. Vertex’s losses in the third quarter more than doubled to $13.5 million, before accounting for merger related costs and extraordinary items. That’s considerably higher than last year’s third-quarter losses of $5.8 million. Revenues for the quarter did increase to $40.4 million, a 10 percent jump. The company’s total costs and expenses, not including the acquisition of Aurora Biosciences in Q3, was $53.8 million, up from $42.7 million in last year’s third quarter. Although Vertex’s share price dropped precipitously last month after the company suspended trials for an experimental arthritis drug, the company appears to be financially stable. Management reported about $730.3 million in cash and securities as of September 30.