It was good to be African American and a business owner in 2004. With more attention given to diversity in America, minority-owned companies found themselves in high demand. From the private sector to the government, America recognized black businesses as quality suppliers or good acquisition targets.
“There are more corporations who see the business case for doing business with minority suppliers,” says Harriet Michel, president of the New York-based National Minority Supplier Development Council. However, she adds, “The reason you may see a jump in revenues in the top 100 black-owned companies is because corporations have cut the number of suppliers they are working with and doing longer contracts with a few of the larger minority companies.”
“It absolutely helps to be a minority-owned business,” says Ronald Hall, CEO of Bridgewater Interiors L.L.C. (No. 3 on the BE INDUSTRIAL/SERVICE 100 list with $645.3 millions in sales), which saw a 285% increase in revenues over 2003. In 2004, Bridgewater made history twice, receiving the largest contract ever awarded to a minority company from Ford Motor Co. and the Chrysler Group. The car seat systems manufacturer received a contract for $400 million from Chrysler and a $500 million contract from Ford. Both contracts are for work to be completed over the next three to five years.
But the primary reason for Bridgewater’s triple-digit growth was the opening of two new plants to service existing contracts. It opened a plant in Oxford, Alabama, in March to build seats for the Honda Pilot SUV. “We project that with the one morning shift and not a full year of production, we probably did about $95 million to $100 million,” says Hall, who plans to add an afternoon shift and 125 more employees to the Alabama plant.
Bridgewater also opened a third plant in Warren, Michigan, to meet seat demands for the Ford F150, the Lincoln Navigator, and the Ford Expedition, which created nearly 500 jobs for minorities. “About 98% of our employees are Detroiters,
and 90% are people of color,” boasts Hall of the Michigan location. Hall was tapped six years ago by Milwaukee-based Johnson Controls Inc. to serve as a 51% owner of Bridgewater Interiors. The deal made it possible for JCI to gain a piece of the contracts slated for minority-owned businesses. In turn, JCI gave big dollar backing to a black-owned company that may otherwise not have been able to meet the overhead necessary to service large automotive contracts. With the muscle of JCI, Bridgewater Interiors is looking to hit the billion-dollar mark within five years. “I believe there is strength in numbers,” says Hall of his joint venture with JCI.Such strategies enabled our industrial/service companies to post an impressive performance in 2004: Gross sales grew 11%, from $12.92 billion in 2003 to $14.29 billion in 2004. And these firms increased productivity by reducing headcount by about 5%, from 64,402 to 70,569. As in previous years, there have been a number of casualties in a somewhat unforgiving environment.
Community Pride Inc., for example, left the list after its supermarket retail operation suffered major financial setbacks. And bidding farewell to black ownership completely and exiting the BE 100S this year are Gilreath Manufacturing Inc. and Total Premier Services Inc. Injectronics, a Tier 1 auto supplier, acquired Gilreath Manufacturing, which joined the BE INDUSTRIAL/SERVICE 100 list in 1997. Gilreath specialized in custom injection molding for the auto industry and was headed by CEO Leon Tupper since 1991. Total Premier Services, the Houston-based oil and drill business that debuted on the BE INDUSTRIAL/SERVICE 100 list in 2002 with $242 million in revenues, was sold to a majority firm.
WAR AND PROFITS
Companies like Dimensions International (No. 35 on the list with $98.6 million in sales), however, expanded by acquiring SENTEL Corp. in 2004. “We kind of broke new ground as two 8(a) graduates coming together,” says CEO Russell Wright. “It’s different when smaller companies get acquired by larger companies. At that point
Up 42% is Huntsville, Alabama-based LESCO (No. 49 on the list with $73.9 million in gross sales), which also provides technology and facility support to the government. “Ninety-nine percent of our business is from the government,” says CEO Anita Williams. Williams says 2004 was a particularly good year because LESCO stepped into a different arena and didn’t rely solely on its 8(a) connections. “We started bidding on A-76 contracts,” says Williams, referring to the program that allows commercial businesses to bid on work usually performed by government employees. “Not many businesses wanted to try to bid against the government, but we tried it and we started winning.” LESCO has employees in Korea, Afghanistan, and Kuwait providing IT support as well as building and managing supply warehouses, which would ordinarily be managed by government personnel.
Because of this procurement trend by corporations and government agencies, BE 100S companies such as Bridgewater Interiors, LESCO, and Dimensions International have seen double-digit growth since last year. But that isn’t necessarily the case for all black businesses.
“I wouldn’t let the success of the BE 100S be the bellwether of how they are all doing,” says Michel, whose organization consists mostly of companies that generate less than $15 million a year. She reasons, “Since the theory behind procurement is to work with fewer suppliers, if anyone is seeing growth it should be the BE 100S.”
SELLING PIECES FOR PROFIT
Peebles Atlantic Development Corp. (PADC), BE’s 2004 Company of the Year (No. 18 on the list with $202.9 million in gross sales), cashed out on his landmark investment. With a $10 million incentive from the city of Miami to black
Prior to the opening of the Royal Palm, the local black community had been on a 12-year boycott against Miami Beach after residents and business owners felt Nelson Mandela was snubbed during his visit to Florida in 1990. Mandela had previously visited Cuban President Fidel Castro, angering Miami’s Cuban residents.
While Peebles ended a short-lived victory for African Americans, his real estate development firm did not exit the BE 100S. Rather, PADC showed an increase in revenues of 147% over 2003. Peebles will remain on the BE 100S list with his other ventures that include The Residences at the Bath Club, a $250 million project in Miami, and a hotel in the Bay Area in California. According to a prepared statement by Falor Co., “Peebles’ efforts increased the value of the property, [which led] to the highest priced hotel sale in Miami Beach’s history.”
Sid Taylor, CEO of SET Enterprises Inc. (No. 17 on the list with $212 million in gross sales), also sold a portion of his business and saw growth of more than 31%. While he doesn’t sell anything as glamorous as luxury hotel rooms, Taylor’s products are just as much in demand. SET Enterprises processes the exposed and unexposed metal on cars. Part of SET’s strategy in the past has been to acquire facilities as a measure of growth, but last year the Detroit-based auto supplier saw selling as a strategy.
SET sold its forming
business unit, which consists of stamping, welding, and assembly operations, to asset management firm Triune L.L.C. for an undisclosed amount. Taylor says this sale will allow the company to focus on its core strengths and take better advantage of its unique position. SET is the only minority supplier to work with both kinds of metal–exposed steel and unexposed steel.
Also bitten by the “sell” bug was McDonald’s supplier Anderson-DuBose Co. (No. 22 on the list with $166.6 million in sales). “We sold the South African unit to the management team there,” explains CEO Warren Anderson, who says maintaining the facility overseas was expensive and physically taxing. The Solon, Ohio-based company supplies a variety of items to McDonald’s restaurants, including Happy Meal toys, paper and dairy products, and frozen meats.
The sale of the South African business unit caused an 11.64% decrease in sales for 2004, but Anderson says overall it was a prosperous year. “Sales for our two existing businesses were up. McDonald’s had a tremendous year. And my beer brands, Coors and Miller, had a good year,” he says. By making such smart moves, BE 100S CEOs like Anderson are proving they are developing the right formula for success.
Industrial/Service [Eligibility] A company must be at least 51% black-owned and have been fully operational for the previous calendar year (Jan. 1, 2003 through Dec. 31, 2003). Companies listed must manufacture or own the products they sell or provide industrial or consumer services. (Brokerages, real estate firms, and firms that provide professional services such as accounting firms and law offices are not eligible.)
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Top 10 Growth Leaders |
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| Company | Location | 2004 Sales* | 2003 Sales* | % Increase |
| Bridgewater Interiors L.L.C. | Detroit, MI | $645.309 | $167.407 | 285.47 |
| Peebles Atlantic Development Corp. | Coral Gables, FL | 202.925 | 82.000 | 147.47 |
| TAG Holdings L.L.C. | Troy, MI | 103.000 | 57.000 | 80.70 |
| CAMAC International Inc. | Houston, TX | 987.000 | 573.347 | 72.15 |
| Southeast Fuels Inc. | Greensboro, NC | 55.884 | 34.238 | 63.22 |
| Industrial Inventory Solutions (IIS) | Cleveland, OH | 37.800 | 24.000 | 57.50 |
| Telecommunication Systems Inc. | Annapolis, MD | 142.685 | 92.100 | 54.92 |
| Workplace Integrators | Bingham Farms, MI | 81.000 | 55.000 | 47.27 |
| Q3 Industries | Columbus, OH | 47.000 | 32.000 | 46.88 |
| Logistics & Environmental Support Services Corp. (LESCO) | Huntsville, AL | 73.900 | 52.000 | 42.12 |
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Top Employment Leaders |
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| Company | Location | Employees | Sales* | Employee To Sales Ratio |
| MV Transportation Inc. | Fairfield, CA | 7981 | $271.863 | 1:34 |
| Manna Inc. | Louisville, KY | 6250 | 185.000 | 1:30 |
| Barden Cos. Inc. | Detroit, MI | 4055 | 372.000 | 1:92 |
| The Bartech Group Inc. | Livonia, MI | 3400 | 195.000 | 1:57 |
| V and J Holding Cos. Inc. | Milwaukee, WI | 3200 | 90.000 | 1:28 |
| Thompson Hospitality | Herndon, VA | 2650 | 165.600 | 1:62 |
| H. J. Russell & Co. | Atlanta, GA | 1907 | 304.241 | 1:160 |
| RS Information Systems Inc. | McLean, VA | 1800 | 321.000 | 1:178 |
| Radio One Inc.** | Lanham, MD | 1750 | 363.982 | 1:208 |
| The Gourmet Cos. | Atlanta, GA | 1700 | 167.000 | 1:98 |
*IN MILLIONS OF DOLLARS. AS OF DEC. 31, 2004. PREPARED BY B.E. RESEARCH. REVIEWED BY THE CERTIFIED
PUBLIC ACCOUNTING FIRM EDWARDS & CO.
**RADIO ONE INC. IS PUBLICLY TRADED. THE MAJORITY OWNERSHIP OF VOTING CLASS STOCK IS HELD BY AFRICAN AMERICANS.
Industrial/Service Summary
| Â | 2004 | 2003 | % Change |
| Total Staff | 70,569 | 74,402 | -5.15 |
| Total Sales* | $14,292.871 | $12,916.875 | 10.65 |
*IN MILLIONS OF DOLLARS, AS OF DEC. 31, 2004. PREPARED BY B.E. RESEARCH. REVIEWED BY THE CERTIFIED
PUBLIC ACCOUNTING FIRM EDWARDS & CO.Â
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