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Numbers Woman
Executive session by Jean Gruss | Editor/Lee-Collier
Julie Kline
Chief Financial Officer,
Stock Development
Julie Kline shies away from the limelight, but she's getting noticed as the new chief financial officer for Naples-based Stock Development. The company has about 550 employees who are currently developing and building in five communities from Punta Gorda to Naples.
In her new position, Kline oversees all aspects of accounting, finance and planning for Stock Development. Here's a snapshot of Kline's personal life and career:
PERSONAL
Hometown: Omaha, Nebraska.
Do you know Warren Buffett? "I've been to Warren Buffett's favorite spots and I actually grew up going to one of the Dairy Queens that he loves. So I used to get my little chocolate-covered ice cream cone and that's where he would have Berkshire Hathaway's annual meetings. I haven't met him but I've seen him in all the local haunts."
When did you move to Florida? 1993.
What are your outside interests? "Time really is spent catching up with everybody, family and friends. I am single. I do have a significant other and our basic hobby right now is looking for the perfect sailboat. I have some family who live in Fort Myers Beach, which is where I live."
Where did you go to college? "I went two years at the University of Nebraska at Lincoln. I was the Go Big Red, wear-the-red-polyester-on-Saturdays football fan, but I graduated from Arizona State with a finance degree. I've got an MBA from the University of South Florida in Tampa."
What's on your iPod? "I'm almost embarrassed to say. I'm into alternative music."
What are three things in your fridge? Ketchup, Diet Pepsi and red-pepper hummus.
What was your first paying job? "I was the cashier in a men's clothing store in Nebraska. That led into the credit office in college, which then led me into doing credit approvals for Discovery cards, which then led to this whole finance thing. I could really punch that register and to this day I use the keys on top of my computer instead of the keypad, because in those days they didn't have a keypad. It's really bad because I can't use a 10-key because of that. It's embarrassing, actually. I was trained since I was 15 to go to the top of that register. I leave a lot of the mechanical crunching to the folks around me now."
PROFESSIONAL
What is your previous experience? "From 1987 to 1993, I was with Texas Instruments. I was what they call a financial-planning supervisor and it was a great company. It was very conservative; we didn't spend a lot of money. That was my first job out of college and it's really what I got used to. They were very good, honest, integrity-filled folks. I watched corporate-services operating expenses, so I was responsible for the planning and accounting for a $300 million operating expense budget.
"From there I moved to Florida. I took a little stint with WCI Communities but ended up at Lennar for many years, from 1994 to 2006. I took the job-construction-cost background and transitioned into the homebuilding and land development business. When I started with Lennar, we were building about 10,000 homes a year. When I left we were at 50,000. I started with Lennar as a controller in Fort Myers and then I went to the corporate office in Miami for about five years where I learned corporate accounting and computer-system conversions for Y2K.
"Then I moved to West Palm Beach and I was there for about three years and became a regional controller. So my responsibility ended up being half the state of Florida and we delivered about 6,000 homes last year with $2 billion in revenues. It was about 10 different operating divisions for the state and my role was being responsible for the accounting, forecasting and financing. I spent the last couple of years working on company acquisitions for that area.
"I actually did a couple acquisitions. But to get to those two we looked through probably 20 or 30 companies over the two-year time frame. I have a lot of due diligence files. That really stretched me to a much higher level. Even though when you're going through it it's really difficult, I look back on it and I'm very thankful that I have that experience. I'm actually very thankful that they trusted me with that."
POSITION
When did you start with Stock Development? "I left Lennar in May and I started here in June."
Tell us about the chief financial officer's position. "It's the same concepts that I'm used to working on, which are the accounting responsibilities and making sure that we have a very clear, clean and concise balance sheet. Then, taking that balance sheet and knowing how that's going to turn out in the future into a forecast is really key. At Stock, we're spending a lot of time to get a very accurate and clear picture of our future.
"I really want to get into the nuts and bolts of bank loans, draws and repayments. So the key is to understand that and be able to cash-flow forecast from that. Also, I want to get financing in place for communities. The great thing about homebuilding and land development is it's one home at a time. It doesn't matter if you're closing 300 or 50,000 homes a year; it's one home at a time. If you know what that home is going to cost you and you know what you can sell it for and you know when it's going to close, the great thing about this industry is that you have a very clear picture of your future.
"So our goal now in the short term is to put that clear picture down on paper, see where we're going and really understand where the market's going so we can tailor our business to our market and to our core communities."
Longer term, where do you see this company going? "Stock has a wonderful land position with a great future and wonderful markets. The Lely community (in Naples) will be the community of the future. We also have our Paseo community in Fort Myers. So the two strengths will be Naples-Fort Myers for the long term."
What are your thoughts on the current homebuilding market? "Back 10 years ago in the Naples-Fort Myers area we were used to a consistent home-price appreciation with 3% to 5% a year. Today, the market is correcting itself. Instead of having more demand than supply, we're in the mode of having supply over demand. In my vision, that will wash out over the next 12 to 18 months and then we'll get back to that more normal course of business."
What advice do you have for homebuilders today? "If you really read what the national homebuilders are doing today, each of them has a different approach. There's a trend out there that says you should wait, hold and protect your margins. There's another trend out there that says you should really be focusing on liquidity and turning your homes.
"I think the basics really are that whatever your approach is or will be, you need to understand your costs for each and every home. Understand what the market will allow you to sell that home for and if that's not a wide enough spread, you need to focus on the cost side of the equation and make that product type work for the market that's going to buy it. And that's really the key. Before, you were able to build and you didn't have to be focused on efficiency and costs because you could just increase your prices. Now, in order to make money and build a quality product, you really have to focus on the cost side of the equation. It's that simple."
Does private ownership give you an edge over publicly held companies? "Yes. Decisions that are made in the public arena are focused on Wall Street. I don't want to negate that, because it is important. But the nice thing about being with a private builder is that you can sit down and make decisions that are strategically intelligent for the future and also intelligent for today without having these other forces out there."
Is it more difficult for a private entity to get financing on better terms than a publicly held company? "It's funny. We recently did some financing and those terms were very consistent with the national-builder arena. Maybe we do our financing a little bit differently because each community is financed [individually], whereas public builders have more of a revolver-type program. But in general I didn't find in our recent transactions that any of the parameters were inconsistent with what I would have seen at Lennar."
What is the first sign that the housing market is stabilizing? "Consistent sales every month, figuring out what the plateau of sales is and then focusing the business on that level of absorption."
Do you think we might see land prices drop to the level where buying makes sense? "Oh, absolutely. There's going to be plenty of land-buying opportunities. It's probably a little too early to tell when, but there will be in the future."
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