Archives for September 2014

Solid Revenue Growth, Hard-Fought Income Growth, And Declining Profit Margins Dominate The Landscape

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First, the good news: Organic revenue growth is up, on average, in every revenue band and across every region. While only in the single digits, growth reflects the sustainability of some of the gains made in previous years, with an average 5.7% growth rate across all non-Big 4 firms.

When you include the effects of the 125 mergers reported by participating firms, growth rates rise to 7.4% (which equates to an extra $1.25 billion in revenue this year if distributed equally across all participating firms).

The second piece of good news is the growth in net income ­- participating firms report an average organic net income growth rate of 7.1%, up from 5.1% the previous IPA reporting year. Growth was strong across the Southeast, the Great Lakes and the Western part of the country, and across most revenue bands. Firms in the Northeast, Great Plains and the $50 million to $75 million revenue band grew organically at a lesser rate than in the 2013 report.

Mergers and acquisitions played a role in sustainable income growth, pushing all non-Big 4 growth rates to 8.7%, with a noticeable bump of 14.0% for the $50 million to $75 million firms.

Now the challenge: Profit margins have generally been in a downward trend across most revenue bands since their pre-recession peaks. Net income as a percentage of net revenue stands at 30.0% for all participating firms this reporting year, with the above-$15 million firms continuing a three-year downward drift.

Honkamp Krueger Acquires Crippen Reid & Bowen

Dubuque, Iowa-based Honkamp Krueger & Co. (FY13 net revenue of $43.7 million) acquired Moline, Ill.-based Crippen, Reid & Bowen LLC on Sept. 22.

Gregory Burbach, MP for Honkamp Krueger says, “Since the opening of our Davenport branch in October of 2013, HK has been dedicated to growing our footprint in the robust Quad Cities market. The addition of CRB to the HK Family is an exciting step in our growth, and we look forward to serving our clients world-class service and high-quality services together.”

Kenneth Bowen, former MP of CRB and now partner with HK, adds, “With HK’s menu of over 40 services, in addition to compliance and consulting services, we are now able to offer workforce management and wealth management services under one roof. We have a nice cultural fit with HK and look forward to our future together.”

David Katri Named Innovative Firm Leader

David Katri

David Katri

David Katri, president and CEO of Clark Nuber (FY13 net revenue of $31 million) of Bellevue, Wash., was named the 2014 Innovative Firm Leader by the Leading Edge Alliance.

Katri is known throughout the accounting profession for his ability to motivate and empower others, his deftness at implementing an inspiring vision for his firm, and his track record of results. In his 14 years as Clark Nuber’s leader, Katri has helped triple its growth, created a nationally recognized workplace culture of excellence that stays on the forefront of technology, and has nurtured a small, independent firm into one that is broadly recognized as one of the most respected and profitable in the business.

Grant Thornton Appoints Bishop as Audit Partner

Bill Bishop

Bill Bishop

Chicago-based Grant Thornton LLP (FY13 net revenue of $1.3 billion) admitted Bill Bishop as audit partner in the firm’s Atlanta office effective Aug. 1. Across the firm, Grant Thornton admitted 32 new partners and principals and promoted 21 professionals to managing director.

“Bill has demonstrated extraordinary leadership skills, a track record of success as measured against the firm’s strategic drivers and a genuine dedication to living Grant Thornton’s global values,” says Mike Stokke, OMP of Grant Thornton’s Atlanta practice.

Bishop joined Grant Thornton in 2002 and has spent his entire career with the firm. Serving both public and private companies, his experience includes providing assurance services to diverse industry groups such as franchising, retail and technology clients; assisting clients with implementation of complex accounting issues, specializing in purchase accounting; identifying internal control weaknesses and recommending suggestions for corrective action; and assisting companies with meeting the registration and filing requirements of the SEC.

Elliott Davis Admits Six New Shareholders

Greenville, S.C.-based Elliott Davis (FY14 net revenue of $70.2 million) announced the admission of six new shareholders into the firm.

“Our new shareholders are forward-thinking individuals who lead by example,” says Rick Davis, managing shareholder for Elliott Davis. “They have demonstrated a deep commitment to the development and growth of their respective practices and to the firm as a whole.”

Claudia Gibbons is located in the firm’s Greenville office and serves as the firm’s quality control director for tax services. With more than 25 years of public accounting experience, Gibbons oversees the design and maintenance of quality control policies and procedures to ensure compliance with applicable professional standards, regulatory requirements and the firm’s quality control standards.

Leah Maybry has more than 15 years of public accounting experience. She focuses on individual income tax compliance and planning for high-net-worth individuals and their related entities and is located in the Charlotte, N.C., office.

Chris Purvis provides audit and consulting services for financial institutions and leads compliance consulting service efforts firmwide. He is located in the firm’s Charlotte office.

Brandon Renaud has more than 15 years of public accounting and private industry experience. He has served clients of all sizes, with a particular focus on large-scale restaurant groups, common interest realty associations, nonprofits and contractors. Renaud is located in the firm’s Charleston, S.C., office.

Drew Rogers provides income tax planning and compliance services to closely held businesses and high-net-worth individuals. He has extensive experience in providing tax services to partnerships, corporations, trusts, estates and individuals. Rogers is located in the firm’s Greenville office.

Jeff Walker specializes in audit engagements and financial reporting of closely held businesses. He is located in the firm’s Greenville office.

Urban Joins CohnReznick Advisory Group as a Managing Director

Paul Urban

Paul Urban

Paul Urban has joined New York-based CohnReznick LLP (FY14 net revenue of $508.2 million) as a managing director with CohnReznick Advisory Group, specializing in enterprise information management and business intelligence.

Based in the firm’s Roseland, N.J., office, Urban brings more than 20 years of experience in implementing enterprise business intelligence and analytical solutions to improve financial management, create better customer experiences and product offerings, optimize logistics, increase sales and reduce operational costs. He helps companies uncover the business value that is locked up in the vast amounts of data held in their organizations, and then works with them to leverage it as a strategic asset to support and improve operations and better serve customers.

“Paul understands the business intelligence needs of middle market businesses across a wide range of industries,” says David Rubin, principal and national director – risk and business advisory.

Throughout Urban’s career, he has focused on creating business intelligence solutions that address critical business needs, such as financial analytics, regulatory compliance, customer intelligence, operational intelligence, supply and distribution chain analytics, and self-service reporting.

BKD Expands Dallas Presence with Kacinski & Associates

Springfield, Mo.-based BKD LLP (FY14 net revenue of $445.3 million) is expanding its presence in the Dallas market with the acquisition of loan review services firm Kacinski & Associates, Inc., effective Sept. 2.

“Kacinski and BKD are a good fit in many ways, beginning with our common approach to client service,” says BKD CEO Ted Dickman. “BKD and Kacinski each have developed a loyal client base through their focus on providing exceptional service with integrity, professionalism and responsiveness.”

Founded in 1988, Kacinski’s team of dedicated professionals providing loan review services to Texas financial institutions, primarily in the Dallas area. Those employees have joined BKD’s loan review services division, which operates out of Houston, Indianapolis and Kansas City, Mo. With the addition of Kacinski, BKD’s loan review practice will advise more than 200 banks on credit risk management issues.

“We’ve worked hard to become a trusted and respected name in our industry, and we’re thrilled that BKD recognizes our industry expertise,” says Kacinski & Associates founder Suzanne Kacinski, who joins BKD as a managing director.

Friedman LLP and Executive Sounding Board Associates Join Forces

New York-based Friedman LLP (FY13 net revenue of $72.6 million) and Executive Sounding Board Associates LLC (ESBA) announced that Friedman will integrate the business consulting, turnaround management, restructuring and crisis management practice of ESBA into Friedman effective Jan. 1, 2015. Friedman and ESBA will continue to operate as independent brands.

The integration expands Friedman’s footprint in Pennsylvania and Maryland and provides clients of both firms with full-service accounting, tax, advisory and restructuring services. Conversely, ESBA plans to increase its presence in New York and leverage its expertise and contact base with the support of Friedman personnel.

“The Friedman/ESBA integration arose out of a mutual trust and desire to provide our clients with an increasing depth of high-quality professional services,” says Bruce Madnick, MP of Friedman.

“Our offerings complement each other nicely,” says Robert Katz, president of ESBA, “especially Friedman’s forensic accounting, litigation support and valuation services with ESBA’s restructuring and crisis management expertise.”

Wolf & Company to Join BKD

Ted Dickman, CEO of Springfield, Mo.-based BKD LLP (FY14 net revenue of $445.3 million) announced that BKD and Oakbrook Terrace, Ill.-based Wolf & Company (FY13 net revenue of $23.3 million) are joining forces. Wolf will officially become part of BKD on Nov. 1.

“BKD and Wolf are an excellent fit for each other,” says Dickman. “In addition to our cultural similarities, both firms focus on offering high-quality service to clients and rewarding career opportunities for our associates. This combination gives us a strong physical presence in the nation’s third-largest market, where we have been looking to get on the ground for several years.”

Wolf is one of the Chicago metropolitan area’s leading CPA and advisory firms, providing a range of services, including wealth management and personal financial planning, to more than 2,000 clients from locations in Oakbrook Terrace and downtown Chicago. The addition brings about 140 personnel into the BKD team, including 18 partners.  Wolf MP Russell Romanelli will join BKD as MP of BKD Chicago, which will primarily serve clients from its Oakbrook Terrace office.

“This is going to have huge benefits for Wolf, BKD and our clients,” says Romanelli. “Together, our vast knowledge and resources will help us provide better service to an increasingly complex mix of clients.”

UHY To Open Third Michigan Office In Detroit’s Financial District

Chicago-based UHY LLP (FY13 net revenue of $192.1 million) is opening its third Michigan office in the heart of downtown Detroit’s financial district. The new office will be open for business on the sixth floor of the Chrysler House (previously known as the Dime Building) sometime in November.

Founding partner Gordon Follmer started his accounting career in this same building while attending night school at University of Detroit in 1960. “We’re excited to expand operations in Detroit as the revitalization of business growth in the city is gaining momentum,” says Follmer. He also feels the downtown addition will be excellent for recruiting and retention, “A lot of our new team members, the younger ones, the next generation of leaders, have expressed interest in working downtown.”

“We are really excited about this new beginning in the downtown area,” says Tony Frabotta, CEO of UHY Advisors and MP of UHY LLP. “This is a great opportunity for UHY to be part of Detroit’s comeback story.”