Former Sarcom VP Speaks Out On Firing

Sarcom

Sarcom abruptly announced this week Mills and Berding are "no longer with the company."

Randy Wilcox, company founder and board member, took on responsibilities as acting CEO. He declined to comment about the circumstances of Mills' and Berding's departure.

Berding, speaking this week from his Ohio residence, said he was fired during an off-site meeting in which top executives now in charge of the company told him that his longtime friend and colleague Mills had been fired.

"They told me not to go back to my office, that they would pack up my stuff and send it to me," Berding said. "It was a three-minute conversation."

Over the past 18 months, Mills and Berding led the company's efforts to restructure $114 million in debt from what Berding said were a series of bad acquisition deals made by senior management.

"We were burdened with $114 million in debt from the knucklehead management team that went out and paid way too much for the acquisitions they bought and got nothing for them," Berding said.

Wilcox said Berding's comments about acquisitions made from 1996 to 1999 should be taken in perspective. "Did they all work out? No, of course not," he said. "But some of our best locations and largest customers were part of those acquisitions."

Berding said during the last year, he dismissed three district managers who cashed in on bonus incentive payments of $25,000 per quarter even though they didn't make the sales number required to earn the bonuses the year prior to Berding's arrival.

Under the bonus guidelines, the district managers should have paid the company back at the end of the year because sales didn't meet the company's goal, Berding said. But because they were paid before he and Mills were brought on board 18 months ago, Sarcom never recovered the money,he said.

"Half of the people put in the field by Sarcom were just totally incompetent," Berding said. "They just didn't run their business right, and I went out and replaced every one of them with people I know who have been in the industry for 18 years."

Wilcox said could not comment about the district managers' bonus incentives because he was not aware of the situation.

Berding said while neither he nor Mills are certain, he believes many of the fired managers, complained so loudly that he and Mills paid the price with their jobs. "I think Randy had a lot of people who were upset and complaining to him," Berding said. "There was enough noise that they finally decided they were going to make a change."

Wilcox declined to comment on Berding's conjecture about complaints from former managers.

"Rick and Scott did a good job," Wilcox said. "This has nothing to do with company performance or anything like that. The fact they are no longer with the company is all we can really say."

Berding said there are plenty of signs of the success of his and Mills' efforts, including $1 million in revenue for the month of June 2002. When Mills joined the company 18 months ago, he said, Sarcom was losing $3 million a month.

Still, in spite of being terminated, he said he believes the work he and Mills accomplished in refocusing the company from a products and low-end services company to a full-services company with seven services practices is on track.

"Sarcom is positioned to be very successful, and I wish them nothing but the best of luck," Berding said. "I just have a hard time believe the company is better off without Rick and me."