By placing its offshore holdings in a separate non-U.S. entity, sales for the Houston-based oil and gas exploration and trading company dropped from $1 billion to $573.3 million. Now, Act-1 Group, the Torrance, California-based staffing firm ranked No. 3 on the BE INDUSTRIAL/SERVICE 100 list with sales of $520 million, is nipping at CAMAC’s heels for the coveted spot. BE INDUSTRIAL/SERVICE 100S perennials Johnson Publishing Co. Inc., which had sales of $488.5 million, and Philadelphia Coca-Cola Bottling Co., which had sales of $447 million, round out the top five.
A HOST OF CASUALTIES
The most notable development on this year’s list is the large number of business casualties. In addition to Exemplar, approximately 12 dropped off the list because of divestitures, bankruptcies, and failure to meet our eligibility standards or inability to meet this year’s revenue threshold. (See box on BE 100S standards in the BE 100S overview.) For example, Culver City, California-based Alert Staffing was removed from the ranks of the BE 100S. Says CEO Victoria Lowe: “We were forced to shut down operations and relaunch the business as a new entity.” That’s the second major overhaul for a firm that made its debut on the 2001 BE INDUSTRIAL/SERVICE 100 list in the No. 13 position with gross sales of $204.2 million.
Another BE 100s mainstay, uniform maker Terry Manufacturing, which ranked No. 74 with $44.5 million in sales last year, filed for bankruptcy amid a federal investigation over missing assets from its books. Brothers Rudolph and Roy Terry, who headed the 41-year-old Roanoke, Alabama-based manufacturing company, maintained that cash flow problems were responsible for the business shutdown. Reportedly, their accounts receivables and inventory dropped from more than $37 million to only $2 million in the second quarter of last year. While the brothers blame the dramatic drop in assets on unsecured company debt, some contend that they used company funds to pay personal bank loans. Once hailed as a top performer, Terry Manufacturing included the U.S. Armed Forces, the 1996 Olympic Committee, and McDonald’s among its major clients. (See “Historic Black-owned Firm Suspected of Fraud” on blackenterprise.com.)
Also falling from this year’s BE INDUSTRIAL/SERVICE 100, but not necessarily falling from grace, is ITS Services Inc. The Springfield, Virginia-based technology support firm, which ranked No. 53 with $67 million in sales last year, is no longer in black hands. Majority-owned Arlington Capital Partners recapitalized the 13-year-old company last year and brought in new management, replacing its African American founder and CEO, Angela M. Mason.
GROWTH THROUGH DIVESTITURE
Some notables on the BE INDUSTRIAL/SERVICE 100 found new energy by joining forces with majority-owned firms. Russell Simmons, CEO of Rush Communications (No. 9 with sales of $320 million) sold his flagship Phat Farm apparel unit for $140 million to Seventh Avenue giant Kellwood. In a shrewd move, Simmons still retains the posts of president and CEO and will earn half of the clothing line’s gross sales.
Simmons has become a master at gaining strength through partnerships. In 1999, he crafted a similar transaction with Universal Records when