Identifying BE 100s Companies
For the past three years, BE has made public those companies that have failed to prove that they belong among the ranks of the nation’s largest black-owned companies. As we compiled this year’s listings, a number of firms refused to return our surveys, provide financial information, and/or confirm percentage of black ownership. Those that did not abide by our compliance process have not been included on our 2006 rankings. Below, we have included a list of businesses that have proven to not be financially viable or failed to meet our 51% black ownership requirement.
In producing the various rankings, B.E. Research, the fact-gathering unit that collects data on the BE 100S, and our editorial team have beefed up the data-verification process. We require all BE INDUSTRIAL/SERVICE 100, BE AUTO DEALER 100, financial services companies, and BE ADVERTISING AGENCIES to complete a survey. Each has to include the following information: a detailed description of business activities; historical data on when the company came under majority black ownership; confirmation that the entity is at least 51% black-owned or that African Americans own at least 51% of the controlling shares of a publicly traded company; and total revenues (for industrial/service companies and auto dealers), billings (for advertising agencies), assets (for banks), assets under management (for asset managers), total managed issues (for investment banks), and capital under management (for private equity firms) for the calendar year 2005.
< BR> We require that the CEO, CFO, or current corporate officer sign and date the survey as verification of all information. We continue our due diligence by making calls to each company and, in many cases, requiring audited financials and other corroborating financial material as well as contacting the Securities and Exchange Commission, Thomson Financial Securities Data, and Dun & Bradstreet. The lists are reviewed by CPA firm Edwards & Co. and verification of asset managers and investment banks is conducted by Barge Consulting.
The following companies failed to meet our standards for inclusion on this year’s list: Rush Communications of NYC Inc., run by hip-hop guru Russell Simmons, who sold his urban apparel empire, Phat Fashions L.L.C., to Kellwood Co. for $140 million in 2004; Magic Johnson Enterprises, a holding company with operations that include movie theaters and food and coffee franchises; Midwest Stamping Inc., formerly one of the nation’s largest automotive suppliers; United Energy Inc., a Portland, Oregon-based energy company; The Romar Group Inc., a Los Angeles-based clothing design and product development firm; McNeil Technologies Inc., a defense contractor that specializes in information technology; Trio Trucking, a transportation services firm; Vanguard Holdings, a Savannah, Georgia-based safety equipment distributor; Terry Manufacturing, the clothing manufacturer that failed after the owners, Roy and Rudolph Terry, were convicted of corporate malfeasance; and Lundy Enterprises L.L.C., a New Orleans-based Pizza Hut franchisee hit hard by Hurricane Katrina.
The sector that took the greatest beating is the insurance industry. The four black firms left standing are seeking new strategies so they can stay off the canvas. Here’s their performance