It’s been a little over a year since Joseph Cormier joined GTEC as SVP of finance. Now, in his new role as CFO and vice president, Cormier sat down with GovCon Executive to reflect on the year’s successes and share insight into the defense firm’s future priorities.
GovCon Executive: You came onboard in January 2010. What opportunities did you see coming into your role?
Joe Cormier: GTEC is a great platform and as a new public company I wanted to help the company grow depth in the technology and intelligence services (TIS) segment of the business. I saw a great opportunity to help augment that, both organically and inorganically. Our advantage is our great presence in counter terrorism and our strong capabilities across C4ISR domains that we could leverage into future bids and acquisitions to strengthen and round out that skill set. We were successful in adding to that with two acquisitions – Zytel Corporation (Zytel) and Signature Government Solutions (SGS) – focused on the Intelligence community and providing cyber operations capabilities to the Ft. Meade market in particular.
GovCon Executive: What gains have your finance team helped realize in some of those areas since then?
Joe Cormier: Going back to the overarching public company atmosphere, we now have formal public filings, SEC filings and deadlines for quarterly earnings, conference calls and practices along those lines that change the closing process, the tempo, and obviously the performances measured each quarter not only internally but certainly externally by our investors and our shareholders. In addition to the public company requirements, we integrated two business in the second half of 2010. Those deals which I mentioned earlier layered on additional duties and complexity to the finance team’s duties. Our staff’s ability to step up the tempo amid new requirements has impressed me greatly. It’s a great testament to the people we have onboard.
GovCon Executive: Looking at the augmentation, you and colleagues completed your first two acquisitions, Zytel Corporation and Signature Government Solutions, in the fourth quarter. Tell us about that.
Joe Cormier: Zytel has helped us penetrate the Ft. Meade market with particular emphasis on cyber operations. That market for us was an important place to gather more critical mass and get a foothold. SGS added more depth across the intelligence community and also focuses on high-level IT and cyber operations. The finance team was obviously intimately involved in both acquisitions. We had to do a lot of due diligence around it and obviously finance the transactions. Going back to February  we were able to close a revolving credit facility, which gave us the financial flexibility to complete the Zytel acquisition. In December, we expanded the facility and brought in several additional banks to complete SGS. After SGS, we still have ample capacity to continue to invest organically and pursue additional acquisitions in 2011.
GovCon Executive: What lessons have you learned that are relevant to other government contracting CFOs, regardless if they are at private or public companies?
Joe Cormier: There are probably two things that I would highlight. One, there have been many things written, many people discussing the phenomenon of the fact that the acquisition workforce within the government is overly burdened and understaffed to meet the demands of all of the contracting that has to happen. What that, for planning purposes it makes it a lot harder to time your business coming onboard; i.e., everybody has a business development pipeline, everyone is bidding on new jobs and/or recompeting their own existing work. In those cases where you are going after new business and the government is telling you that they plan to award at date “X,” the lesson learned is you probably have to add date “X” plus a quarter or two in terms of timelines for the real revenue generation on those programs. Not only does that apply in normal funding environments but we are under a continuing resolution, which can further delay new program awards and starts.
GovCon Executive: What’s next on the heels of the Zytel and SGS’ acquisitions — any other acquisitions you can tell us about?
Joe Cormier: Doing Zytel and SGS were the first of what we would hope are going to be successful acquisitions in this space over time. As for future acquisitions we’re not going to force ourselves to buy sales and just try to meet a revenue number by forcing in a deal here and there. We are looking to really expand that intelligence sector footprint and in 2011 it will represent approximately 60 percent of our business base, add footholds and depths of capabilities in places where we see we can bolster those across our business space and we have the financial capacity to do more acquisitions. I think it will be a part of our strategy that you will see us do more.
GovCon Executive: With year one under your belt, what are some of the priorities going into the second year?
Joe Cormier: At GTEC, we are focused on growth and we’re going to be aggressive organically and inorganically with our M&A program. That’s going to require us to be active in acquiring more talent to the business and, in particular, in my domain as the CFO, it is going to force us to be flexible in terms of our capital structure and undertaking potential financings, while constantly focusing on improving internal cash flow to facilitate additional investment in growth. Then, also, we aim to add more depth of talent to be able to report and effectively manage the business once we continue to grow it.
GovCon Executive: What’s your sense of firms seeking to go public in this economy?
Joe Cormier: This [industry] is one area of growth in an economy that is trying hard to find growth. There are plenty of quality companies that certainly are probably public company- ready so I would not be shocked at all or surprised that others come to the market and try to take themselves public.
GovCon Executive: What’s your personal philosophy, moving forward, as GTEC CFO?
Joe Cormier: Back in college, I played football. My defense coaches would say, “If you are going to make a mistake do it aggressively, not standing around and waiting for something.” That is the mentality I aim to take; I’m not going to know everything but I’m going to try to be decisive about what I’m doing and keep moving forward.