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BearingPoint May Strive for Adaptability

Interim Leader Talks of Change After Blazer's Sudden Departure

By Ellen McCarthy
Washington Post Staff Writer
Friday, November 12, 2004; Page E05

Roderick C. McGeary, who took over at BearingPoint Inc. after the abrupt resignation Wednesday of chairman and chief executive Randolph C. Blazer, declined yesterday to talk about the circumstances of the management change but acknowledged the need for a new direction.

"I'm not coming into a broken situation that needs a lot of changes," said McGeary, 54. "But I do think I can grow the company and move it forward."

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McGeary, a board member who will move from California to take charge of the technology consulting firm, acknowledged criticism by investors and analysts that the company has been slow to adapt to changes in the market in recent years.

Although the McLean-based company's government work has grown with the boom in the contracting sector, McGeary said its commercial consulting needs immediate attention.

"We're going to focus on financial services . . .," he said. "I believe that business can grow at double-digit growth rates."

BearingPoint does everything from integrating technology systems to developing customized software for customers, but some analysts say the company has failed to zero in on the most lucrative consulting practices.

"In the commercial business, they haven't been targeting the areas that have had the biggest growth, like business process outsourcing," which involves taking over back-office functions such as accounting and human resources, said William R. Loomis, an analyst with Legg Mason Wood Walker Inc.

Although the company was profitable in its most recent quarter, revenue from commercial accounts has grown more slowly than sales to the government. While government contract revenue was up almost 22 percent from the same period a year ago, for example, sales to consumer, industrial and technology customers rose 11.2 percent.

BearingPoint also has run into some financial and accounting problems.

Last week the company restated its results for the third quarter. The company said it had to reduce two line items by $3 million each in its quarterly balance sheet. McGeary called the restatement "a very minor amount."

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