CFO's strengths give Sewell family the full package

After stints with private-equity owned businesses and large cap organizations, Dan Fischer had demonstrated a keen ability to focus on not only where a company stands financially but where it can go.

That practical knowledge and good intuition then took him to CKS Packaging Inc., where after four years as chief financial officer he has managed to become a big asset for some of the most respected, experienced and private veterans in the plastics industry — Charles K. Sewell and his family.

Charles Sewell developed the first two-liter beverage container in 1977 for Coca-Cola Co. He also had helped popularize the plastic gallon jug for milk as owner of Sewell Plastics, which he sold in 1970. He founded CKS Packaging, his second, $300 million plus business, in 1985 with some of his former employees after his non-compete agreement expired.

“They thought OK, we'll start with a couple blow machines. We'll keep this small in one plant. And, 31 years later we're at about 300 blowing machines and we're 20 going to 22 locations,” Fischer said in a telephone interview about his role at the Atlanta-based business.

In addition to beverages, CKS makes containers for the food, consumer, chemical and automotive goods markets, using 225 million pounds of resin annually for customers like Coke, Dean Foods, Chick-Fil-A, Guardian Drug Co., Kroger and Borden. Sales now exceed $400 million a year and the Sewell family gives Fischer a lot of credit.

“Dan Fischer is the best CFO we have ever hired,” President/CEO John Sewell wrote on a nomination form seeking out the top financial managers in plastics.

Sewell also noted he was nominating Fischer at the urging of his father, 84, who has been in the plastics industry more than 50 years.

“Dan has helped us with several acquisitions, analyzed many more, is so strong on financial statements, ROI's, ratios, investments, working with banks, etc. Charles Sewell is giving this recommendation. For him to give anyone a recommendation is way out of his realm. We would put Dan up against any CFO in our industry.”

Preaching to the choir

Fischer said a lot of the important financial components were obviously in place when he arrived as is evidenced by the business longevity of the Sewell family and their impressive list of customers.

“We've been able to acquire new customers — some large ones — because of our size,” he said, pointing to Coca-Cola and its orders for orange juice bottles with handle ware.

“Then, we've been able to get with Talenti, which was bought by Unilever. That's the ice cream and the gelato in a plastic-type jar. We started off with them when they were small and we've been able to grow considerably with them.”

As involved family owners, the Sewell family has vast experience — 30-plus years each for John and his brothers Drew and Scott — and acumen to draw upon. Still, Fischer came along with much to offer in terms of reliable forecasting and “explaining key drivers and impact instead of just reporting numbers,” John Sewell said.

Fischer said as family owners, the Sewells “do a lot of things because they know in their gut it's right. As we're growing I try to explain what this decision or that decision drives for cash flow and income down the road. I help them understand those decisions more in dollar terms and give them options.”

Fischer's advice has been instrumental in everything from tracking resin and productivity to turning around under-performing plants to taking advantage of research and development credits to determining what businesses to acquire, according to John Sewell.

Getting started

Fischer had been vice president of finance for conveyor belt manufacturer Fenner Dunlop of America for three years and before that was CFO of Siegel-Robert Automotive and had held several director positions at Dana Holding Corp.

When he started at CKS Packaging, first on his to-do list was to begin working closely with plant managers and controllers by sharing weekly information about operating costs and taking emphasis off longer term costs like depreciation and rent.

“You're not going to change that in a couple months but you can change how you employ people and how you look at efficiencies so you don't waste power and resin, which is a large portion of our cost base,” Fischer said.

The emphasis was put on getting orders right the first time, using the right amount of dunnage and packaging, and expanding the view of plant operations.

“It doesn't end with blowing the bottle,” Fischer said. “You also have to stack the bottle and bag the bottle, which is a production step. I kind of extended their cost thinking to get the focus off of how much does it cost to make a bottle. It's really how much does it cost to get the bottle on the truck and shipped to the customer.”

Plant controllers put out weekly projections about operating costs and then will meet with plant managers about whether targets were hit or missed.

“They will sit down and explain, you did this and that drove this result on the financials,” Fischer said. “It has been eye opening I think for a lot of plant managers.”

For example, the kind of packaging used, be it a box or a bag, can shift the cost model greatly, as many CKS customers can likely attest.

“Or, when you do a stack, do you need to put slip sheets under each layer and corner posts?” Fischer asked. “It seems minor because these things cost a dollar or so, but when you're doing hundreds of thousands of these over the course of months and years it tends to add up.”

Acquiring companies

That adds up over the number of facilities, too, which is about to change.

Fischer said CKS Packaging is about to add two locations to the current 20 sites, which are concentrated in the six states of Georgia, Connecticut, Florida, Missouri, North Carolina and Texas. With a background in corporate development, buying and selling businesses is part of his forte and CKS has looked at quite a few other companies since he started.

Fischer spoke broadly about how CKS will grow again through acquisition.

“We tend to buy add-ons or geographic extensions,” he said. “We have a regular review process and we want to make sure we have our strategy right when we go after something. It has to fit certain criteria. There's geographic extension and for new technology, we might be looking for an acquisition that can help us get there faster than if we try to invest in doing it ourselves.”

John Sewell said the M&A process has a “robust” screening and due diligence process with an innovative system to determine how a company might fit.

Fischer described it as passing a series of screens. The first screen: Does it fit our strategy for what we are looking for?

“Then it's got to meet certain financial screens. Then, it has to meet certain culture screens,” Fischer said. “We are a family business so culture plays a big role into what we acquire. Are they going to be able to adapt to us or are we going to be able to move a little toward that way? So, there are various screens that the acquisitions we want have to go through.”

Fischer and his staff of just under 25 people also go through what it takes to get the maximum from research and development credits offered by states for job training and capital investment. He recommends working with an agency familiar with the government's requirements.

“We don't have the manpower to do that in house,” Fischer said. “You have to be careful because everyone out there is saying they can save you money but there are some very pointed savings if you do a lot of R&D like we do. We had a heavy program going in the state of Georgia.”

Corporate offices and three plants are in Atlanta. Another is in Mableton, Ga.

Other advice

Fischer also said it's a good idea to review 401(k) plans and consider improvements. CKS did and switched providers. The new system for the company's 2,200 employees is bilingual, automatically enrolls new hires, and automatically escalates but employees can opt out.

“If you start from the get-go it's painless,” Fischer said. “It shows employees where they are at for their retirement and gives them goals. It has helped a lot.”

Fischer also believes in education and training. He suggests checking out the webcasts offered by the major accounting firms, particularly those that qualify for continuing education credits or are free.

In addition, Fischer stays involved with the next generation of business finance employees by guest lecturing at Georgia State University as well as his colleagues through membership in groups like the CFO Roundtable.