VELOCITY - DEE JACOB [93]
“Happy New Year,” Elaine said, the tiniest smirk crossing her face.
“Happy? Really? Are there good surprises in there?” asked Amy.
“No. I was being sarcastic.”
“All right, are there bad surprises?”
Elaine shrugged her shoulders. “I would have to say that there are no surprises, at least as far as I’m concerned. Since the second quarter, I’ve been waving so many flags my arms got tired.”
“Yes, you like to wave your flags,” muttered Amy, and instantly regretted saying it.
“No, excuse me, but I do not like to wave flags. As vice president of finance for this company, I feel it is a key part of my responsibilities to provide the proper alerts to management.”
“Yes,” said Amy, “absolutely, I agree. By all means, keep waving those flags whenever you think there is something I should be aware of.”
“I only crunch the numbers; the rest of you are the ones who create them,” said Elaine.
And as if she had scored some sort of moral triumph, Elaine pivoted and left.
Amy turned to her computer, unfolded the slip of paper, and keyed in the password to bring up the report. She paged through it all quickly so as to get an overall impression. At first glance, to her own surprise, the numbers did not look horrible. Hi-T had recorded a profit for the quarter and for the year. Sales had increased from third quarter to fourth, though only by 3 percent. Somehow, with all of Elaine’s hand-wringing in recent weeks and months – her flag-waving – Amy had been bracing herself for something really ugly. But it wasn’t a disaster.
Then Amy drew in a breath, as she thought, yes, that’s the point. It was not horrible, but it also was not great. The quarter and the year were so lackluster. She had been expecting … more. She had been expecting, she realized, something impressive. Or at least the beginnings of what might become outstanding performance.
She began to drill down into the details. And to her disappointment, this was where she began to notice some disturbing trends. Indeed, sales were up, but the backlog of orders was up as well – and it had risen in greater proportion than the sales increase. Shipments were down; they had fallen by 4 percent from the third quarter. Inventories – no surprise – were up; greater backlog, lower shipments would equal higher inventory. Even given marginally higher sales, the finished products were not being delivered fast enough to reduce the backlog. Then she noticed something that she found very upsetting: sales were up, but so were order cancellations. Yet the backlog was high. Which customers were canceling their orders? The report did not provide that information.
But the real jaw-dropper came when she got to the breakout of numbers for Formulation & Design. During the fourth quarter, the Rockville operation had received a gigantic payment for completion of a multiyear project, and this along with some other one-time accounting credits had masked the weaknesses in the core business. Here, the backlog was large, and yet relatively stagnant. It was for the most part being shifted from quarter to quarter, and not being converted into income. At the same time, over the course of the entire past year, there had been a decline in the bookings of new projects. F&D seemed to be working and working on the existing projects, and not much was getting finished.
“This is not good,” Amy whispered to herself. “Not good … not at all good.”
She closed her eyes, refusing to look at the report anymore. She leaned back in her chair. She felt slightly sick. Clearly, she was going to have to have a talk with Viktor Kyzanski about what was going on. And she knew that charming Viktor would try to oil his way past all of her concerns. He would sidestep her every attempt to corner him or pin him down. He would juggle his words. He would instantaneously come up with irrefutable technical reasons why things could not be done any differently than they were being done at present. He would make her feel unsophisticated,