The recent conference call from Beacon Enterprise Solutions summarized substantial increases in sales, reduced operating expenses, an improved cash position, and income from operations that was positive for the first time in the company’s history. Most impressively, the results can be traced directly back to operational and strategic decisions that were carefully conceived and implemented over the past 1-2 years.
The call, hosted by Chairman and CEO Bruce Widener, along with President and COO Jerry Bowman, and VP Corporate Controller and Treasurer Scott Fitzpatrick, provided an overview of Beacon’s fiscal year and fourth quarter, ending September 30, 2011. Net sales for the year were up 35%. Operating expenses were down 18%, with gross margins well within the target range of 39%. Most importantly, 4th quarter income from operations from the company’s core business was positive, a first for the company.
In addition, Beacon’s cash position was significantly improved for both the year and the quarter. Much of this is due to improved collections processing, with DSO (Day Sales Outstanding) continuing to decrease, and AR (Accounts Receivable) turnover continuing to increase. This primarily comes from a tightening of controls related to invoice processing, important for the company’s ability to scale. Beacon has also restructured its financing, replacing the previous short-term debt, outstanding at the end of Q3, with a superior debt placement, plus has raised a small amount of preferred equity from existing and new investors, further improving the company’s cash position. Total liabilities are down as well, helping shareholder equity.
Another important step taken by Beacon is the implementation of a cloud-based solution to facilitate the real-time flow of information between all business functions inside the boundaries of the organization, and to manage the connections with employees, vendors, contractors, customers, and shareholders. Beacon’s migration to an integrated financial CRM/PSA system enabled the company to nearly double the size of its customer base in fiscal 2011 to a total of 212 locations in 51 countries. Moving to an internationally oriented cloud-based system is increasingly important to potential clients, making it possible to effectively deal with the many currency, language, and other challenges of doing business on a global scale. Among other things, it gives Beacon 24/7 access to project and client data anywhere in the world, and allows critical course corrections to be made immediately, versus waiting for end-of-the-month financials.
Beacon has also transitioned its legacy customer service and fulfillment operations to a new partner company, allowing the company to better focus on its core global professional service business. Beacon is now 100% focused on the business of providing national, multi-national, and global clients consistent, predictable, standardized ITS services across their entire client enterprise.
Beacon has realized substantial success mining its rich and varied customer base for new business, and plans to continue this fruitful strategy. They also intend to continue developing key partnerships, an approach that minimizes the cost of sales and associated risk, while introducing the company to new clients. Beacon’s overall market approach is now based upon the following structure:
o 2 Channels – Direct Sales, Strategic Partnerships
o 4 Technical Business Units – Engineering, ITS Contract Services, ITS Construction Management, Service Delivery Management
o 4 Vertical Markets – Pharmaceutical, Retail, Global Integrators, Government
Though pleased with the success brought about by all of the above adjustments, the executive team is clearly looking forward, and anticipates a very strong 2012, with new contracts and partnerships already in the works.
For additional information, visit the company’s website at www.AskBeacon.com
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