Today’s CEO must operate his or her company in an unpredictable–and somewhat perilous–environment. It’s true that the U.S. economy grew 3.4% in 2006. And some economists believe gross domestic product growth might surpass 2.9% in 2007. However, leaders of American industry are wary of a number of economic wrecking balls, including spiraling energy costs, reduced capital spending, waning consumer confidence, and a weakening housing market that may come crashing down on their enterprises.
The chief executives of the BE INDUSTRIAL/SERVICE 100 have always had to manage volatility whether economic times were good, bad, or indifferent. The past year was no different. And, as expected, they more than held their own. Total sales grew 4.7%, from $17.2 billion to $18.1 billion, while total staff expanded by 8.5%, from 73,181 to 79,376–at a time when majority corporations have been aggressively chopping payroll.
In fact, the BE INDUSTRIAL/SERVICE 100 in sectors such as information technology, logistics and supply-chain management, food services, and, surprisingly, real estate development and construction posted the biggest gains. One lagging category did not come as a shocker to industry observers: automotive suppliers whose fortunes are tied to the viability of Detroit’s Big Three: General Motors, Ford, and Chrysler.
Albert C. Black was one of the BE CEOs who had reason to smile when he reflected on the progress his company made during 2006. Revenues of Dallas-based On-Target Supplies & Logistics Ltd. (No. 70 on the BE INDUSTRIAL/SERVICE 100 list with $58 million in sales) grew 56%.
Managing more than 800,000 square feet of warehouse space for Rubbermaid, On-Target made those gains, in part, due to a renegotiated contract that accounted for $4 million in revenues. The deal was originally signed in February 2005 after one of On-Target’s sales team members learned Rubbermaid was having trouble with its logistics provider. On-Target then made a presentation to Rubbermaid execs detailing its customized approach to logistics services. Two weeks later the company inked a deal to supply Rubbermaid with 440,000 square feet of warehouse space in two metro Dallas locations and to manage inventories for Rubbermaid’s entire retail line.
That contract was renewed and expanded in 2006. “We made sure we put in the performance matrix that these companies could agree with,” says Black. “We used good communication skills to establish a common strategy, a proper structure, and relative goals and objectives.” The CEO projects 2007 revenues to reach $75 million, with the Rubbermaid deal contributing some $7 million to the top line.
Information technology companies that provide services to government agencies continued to be wired for success as IT spending increased in 2006. While S&P’s fundamental outlook on the sector is neutral, the credit rating agency is positive on systems software and storage.
Russell T. Wright, chief executive of Alexandria, Virginia-based Dimensions International Inc. (No. 24 on the BE INDUSTRIAL/SERVICE 100 list with $186.2 million in sales) also looked favorably at the strides his company made last year. Revenues increased 51% as Dimensions International continued to benefit from synergies from its 2004 acquisition of SENTEL, a black-owned IT firm. Wright says one key contract signed was worth $325 million from the Army Field Support Command for its global property management support services. With six months remaining on the 2007 calendar, Wright anticipates Dimensions International’s revenues will increase an additional 20% to 30%.
Like Dimensions International, Fairfield, California-based MV Transportation Inc. (No. 10 on the BE INDUSTRIAL/SERVICE 100 list with $430.5 million in sales) achieved success by securing contracts with government agencies. As a result, its revenues increased by 15.5% last year, landing, among other business, an eight-year
contract valued at $55 million with the Washington Metropolitan Area Transit Authority to transport persons with disabilities. CEO Jon Monson says the company’s single-largest contract “propelled most of our growth in 2006.” The fixed-route mass transit and paratransit services provider, which also landed a $13 million annual contract with Montgomery County, Maryland, has contracts with about 185 cities and government districts in the United States.BE 100S companies tied closely to the U.S. automotive market had perhaps the most difficult year. Shifts in consumer demand away from the bread-and-butter sport utility vehicles sent U.S. automakers reeling along with their contractors. Among those injured in the car wreck: Detroit-based The Bing Group (No. 32 on the BE INDUSTRIAL/SERVICE 100 list with $135.3 million in sales), a manufacturer that provides parts to Tier I and II automotive suppliers. As a result of selling its seating and mirror division, whose main clients are Toyota, Ford, and GM, to Comer Holdings L.L.C. in December 2005, it realized a 74% drop in revenues. Although revenues had grown in 2005, the company wasn’t very profitable, according to Chairman Dave Bing. “If I couldn’t make money in that particular arena, there was no sense in staying in it. I had other divisions to run,” says Bing, who still operates metal processing, steel stamping, and assembly units.
Faring somewhat better than the automotive market are companies in the quick-service restaurant industry. While S&P’s fundamental outlook remained neutral as of the end of March, the firm expects consumers to continue dining out as a result of a higher percentage of Americans working, particularly women. This increased demand is good news for Warren Anderson, CEO of Solon, Ohio-based Anderson-DuBose Co. (No. 21 on the BE INDUSTRIAL/SERVICE 100 list with $207.9 million in sales), which distributes food, paper, and
beverage products. He says healthier menu choices offered by McDonald’s, its primary client, led to a 6.9% spike in revenues. However, continued economic uncertainty is expected to stifle growth, according to Anderson, who expects revenues to remain flat next year. Also benefiting from the increase in consumers who opt to dine out is Louisville, Kentucky-based Manna Inc. (No. 19 on the BE INDUSTRIAL/SERVICE 100 list with $276 million in sales), a multiple fast-food restaurant franchisee. CEO Ulysses Bridgeman Jr. credits the company’s 36% revenue jump to the acquisition of additional eateries. In March 2006, the company purchased 10 Chili’s restaurants throughout Wisconsin and five more in St. Louis. It now has a total of 161 Wendy’s outlets, in Illinois, Missouri, Kentucky, Wisconsin, Tennessee, and Florida, and 25 Chili’s restaurants.Talk of a real estate bubble was abundant over the past year, but R. Donahue Peebles, CEO and chairman of The Peebles Corp. (No. 13 on the BE INDUSTRIAL/SERVICE 100 list with $403.4 million in sales), says it’s due to overreaction. The company has expanded to new projects in Florida and Nevada and increased its real estate investments with commitments to new projects in excess of $2.5 billion. He says there’s a lot of money to be made provided you know where, what, and when to develop: “Now is a great time to buy your home because prices are down. The small investor should be buying when fewer people are buying and selling when fewer people are selling, not the opposite.” Looking ahead, Peebles has his eye on properties in major markets such as Chicago and New York City.
In addition to developing new properties, Peebles decided to diversify his portfolio by acquiring 50% of the licensing rights of the Negro Baseball League Players Association’s authentic athletic apparel. “It
was an opportunity brought to me by someone who actually read about me in BLACK ENTERPRISE and read about our company there,” he recalls. “It was an interesting idea. And I like the idea of diversifying and trying something different.”Thor Construction also benefited fr
om commercial construction activity in booming markets. Among its projects: a $20 million monorail on the Las Vegas Strip connecting the Monte Carlo Resort and Casino to the Bellagio Hotel and Casino. The company recently finished building its first Target store for the retail giant and has another underway. Thor was also awarded a 20% stake in a $200 million project on a football stadium for the University of Minnesota. “Our numbers for this year are nothing compared to what we’re going to see next year,” boasts CEO Richard Copeland.
B.E. 100s Flashback
In June 1973, BE revealed the first-ever ranking of black businesses–the Top 100. The original list, which included industrial, service, and professional businesses largely targeted at African American consumers, had collective sales of $473.4 million and employed a total of 9,267 workers. The No. 1 company: Berry Gordy’s Motown Industries, which produced sales of $40 million. By 1988, the expansion of black auto dealerships as well as professionally trained deal makers heralded the BE 100S–the BE INDUSTRIAL/SERVICE 100 and the BE AUTO DEALER 100. Today, the nation’s largest black industrial/service firms boast total revenues of $18.1 billion, and two companies–St. Louis-based World Wide Technology and Houston-based CAMAC International–have surpassed the billion-dollar sales mark.
Top [10] Growth Leaders
| Company | Location | 2006 Sales* | 2005 Sales* | % Increase |
| RLJ Development L.L.C. | Bethesda, MD | 460.020 | 168.100 | 173.66% |
| Thor Construction | Minneapolis, MN | 84.000 | 33.790 | 148.59% |
| On-Target Supplies & Logistics | Dallas, TX | 58.000 | 37.000 | 56.76% |
| Facility Interiors Inc. | Dallas, TX | 57.000 | valign=”middle”>37.100 | 53.64% |
| Dimensions International Inc. | Alexandria, VA | 186.248 | 122.884 | 51.56% |
| C. D. Moody Construction Co. Inc. | Lithonia, GA | 51.000 | 37.000 | 37.84% |
| Manna Inc. | Louisville, KY | 276.000 | 203.200 | 35.83% |
| Universal Systems & Technology  (UNITECH) | Centreville, VA | 78.250 | 59.300 | 31.96% |
| Marc Wear | Los Angeles, CA | 40.656 | 30.876 | 31.68% |
| Sun State International Trucks L.L.C. | Tampa, FL | 100.000 | 80.000 | 25.00% |
Top [10] Employment Leaders
| Company | Location | Employees | Sales* | Employee To Sales†Ratio |
| MV Transportation Inc. | Fairfield, CA | 10,273 | 430.522 | 1:42 |
| Manna Inc. | Louisville, KY | 7,000 | 276.000 | 1:39 |
| ZeroChaos | Orlando, FL | 4,800 | 366.800 | 1:76 |
| Barden Cos. Inc. | Detroit, MI | 3,900 | 501.000 | 1:128 |
| V and J Holding L.L.C. | Milwaukee, WI | 3,600 | 97.000 | 1:27 |
| OMNIPLEX World Services Corp. | Chantilly, VAÂ | 3,500 | 85.000 | 1:24 |
| The Bartech Group Inc. | Livonia, MI | 3,125 | 203.000 | 1:65 |
| Thompson Hospitality | Herndon, VA | 2,900 | 203.600 | 1:70 |
| The Gourmet Cos. | Atlanta, GA | 2,050 | 171.000 | 1:83 |
| H. J. Russell & Co. | Atlanta, GA | 1,829 | 364.420 | 1:199 |
Industrial/Service Summary
| Â | 2006 | Â 2005 | Â % Change |
| Employees | 79,376 | 73,181 | 8.47 |
| Sales* | $18,061.790 | $17,245.398 | 4.73 |
*In millions of dollars, to the nearest thousand. As of Dec. 31. Prepared by B.E. Research. Reviewed by the Certified Public Accounting firm Edwards & Co. †in thous
ands of dollars