The Southeast’s Top Specialty Contractors

The depth of this year’s Top Specialty Contractors survey is on par with our record level of last year, with 200 ranked firms. However, the amount of 2008 revenue represented in this year’s ranking is significantly higher, compared to the previous year.

By Scott Judy and Tom Hale

Maybe 2008 wasn’t so bad, after all, for the Southeast’s specialty contracting firms. Then again, maybe 2009 is the year when the region’s ongoing downturn really starts to show up on companies’ bottom lines.

Those are some of the thoughts as Southeast Construction presents its ninth annual ranking of Top Specialty Contractors. Like last year, this year’s Top Specialty Contractors ranking lists 200 firms. At the same time, the collective revenue total for this year’s ranking represents yet another record, growing by more than 10% compared to last year to total approximately $8.5 billion in 2008 revenues—the most ever for this ranking.

Before we get to how specialty contractors are faring this year (see below), here is some explanation and brief analysis of the latest Top Specialty Contractors ranking.

As with other contractor lists that Southeast Construction publishes, this one is based on revenue generated during the preceding calendar year.

The format of our ranking is again based on regional revenue totals, meaning the volume of work collected in 2008 from projects located within the magazine’s four-state territory of Florida, Georgia, North Carolina and South Carolina.

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All figures listed in both the main ranking and the breakout listings are based upon online surveys submitted by the listed company. As with all of Southeast Construction’s rankings, specialty contractors must submit a survey in order to be listed.

Adapting to the Slide With the remainder of 2009 likely offering limited opportunities – and no certainty that the climate will improve in 2010 – specialty contractors throughout the Southeast are scrambling to adjust their operations in order to remain competitive and profitable.

To cope, firms such as Wayne Brothers, a concrete contractor based in Kannapolis, N.C., are “being persistent – trying to look for the right opportunities and trying to survive,” says Tim Waddell, the firm’s business development director.

The recession has forced Wayne Brothers to reduce staffing because of a reduced workload. “Our business is down drastically from last year, and the economic conditions are by far the worst we have ever seen,” Waddell says. “However, the economy seems to be picking up now, and we hope it continues throughout the rest of the year. Hopefully, we can get back to a more normal market next year.”

Barry Fiske, president of NAD Specialty Contractors of Boynton Beach, Fla., is also hoping for better times. “We’ve been in business since 1989 and this economy is the worst we’ve seen since 1974,” he says. “I went through 14 months of losing money. However, I see the economy improving slowly over the remainder of the year.”

To remain competitive, NAD has reduced its workforce from 94 to 14. “I’ve cut my overhead and I’ve cut everything else down to the absolute bottom line,” Fiske says. “We have survived through the hard part, and now I think it is just going to be a long, slow way back again.”

Baker & Sons Air Conditioning of Sarasota, Fla., is rebounding after feeling the effects of the economic downturn. “We were about a $6-million-a-year company and now we are about a $3-million to $3.5-million company,” says President Bill Baker.

With declining work in the residential and commercial construction markets, the company is refocusing attention on its 1,500-plus base of maintenance customers. “We are going to try to achieve 5,000 maintenance customers within two years,” Baker says.

Wobbly Credit Market The economy has had a minimal impact on Muns Welding & Mechanical in Beech Island, S.C., says Vice President Lorrie Gambrell. “We are a union pipe-welding company, and a lot of our work involves federal or government facilities,” she says. “So, there has been money flowing to those projects, and we’ve had steady work for the past two years.”

Still, many specialty contractors have to deal with the wobbly credit market, Gambrell adds.

“The biggest impact is the credit crunch,” she says. “The criteria are so much greater for getting bonding or lines of credit, and the banks are being careful about lending.”

Woody Watters, general manager of Pensacola Glass Co. in Pensacola, Fla., says the credit crunch is a concern for his company. “We have to pay more attention to our receivables and make sure that we are getting paid,” he says.

Watters says commercial and residential construction in his area “has totally evaporated except for individual or private improvements. “We are coping by trying to be more aggressive and trying to pursue every possible lead or bid. We’re just trying to maintain a workload to keep people busy. We have been fortunate in that aspect for the most part. Over the course of this long downturn, we have laid off only five to six people.

“Fortunately for us, the projects that we have going right now are fairly medium- to large-size projects, and they have some pretty aggressive time schedules tied to them. We are able to staff the jobs with adequate manpower.”

All-South Subcontractors, which is based in Birmingham, Ala., but works in the four-state Southeast Construction region as well, has taken steps to cope with the economy without the need to lay off any workers. “Fortunately a lot of our people are cross-trainable,” says Larry McCraw, All-South’s business development manager. “We have combined some of our crews; for example, combining roofing crews to do different things”

McCraw says construction starts have dropped steadily in his region. “The amount of work that is going to contract or being awarded is just not what it was over the last two to five years,” he adds.