After poring over the numbers for months, one expression that could be used to describe the companies that comprise our CC100 list may be: Survival of the fittest.
Following up on the decrease in revenue last year, which reported on the applicants' 2008 revenue totals, the majority of this year's CC100 applicants reported even deeper losses for 2009. Only a handful of companies reflected positive revenue compared to their revenue recorded in last year's CC100. As such, CC100 companies had to dig deep to find new and improved ways to create and secure revenue. “We recognized the potential of joint-venture and teaming partnerships. We have forged strategic alliances with top-notch organizations, contributing to our success,” says Tim Penick, president of T.B. Penick & Sons Inc., San Diego.
Meanwhile, the variables that hold the industry in a stranglehold appeared stronger than ever. Economic confidence, increased competition for a shrinking number of jobs, and a lack of financing were the heart of the woes impacting the construction industry.
However, time does heal all wounds. One bit of evidence is that economists are starting to utter the word “recovery” in reference to both the economy and the residential construction market. Alas, last year was a bumpy ride, and one that we will not soon forget.
- Total revenue for the CC100 companies decreased a whopping 18% in 2009 due to losses nearly across the board from concrete subcontractors and general contractors.
- Concrete-related revenue for the entire CC100 list was -26%, compared to -6% for the 20 largest commercial contractors. On a positive note, Baker Concrete Construction (+18%), Monroe, Ohio; Gulf Shores C&A (+155.5%), Taylorsville, Utah; Blair Concrete Services (+219%), Wilmington, N.C.; and T.B. Penick & Sons Inc. (+24.5%) all experienced growth over the previous year in regards to commercial concrete revenue. “Innovation, diversification, and agility have been key elements in our business model,” says Penick. “We embraced innovative approaches to design, construction, safety, and management. We are constantly exploring new opportunities and new markets, and developing business models to serve them. Another key factor is geographical diversification. We recently expanded our national footprint to include New York, Utah, Hawaii, and Guam.”
- Growth in 2009 was extremely difficult for companies to achieve. Only 11 companies noted significant growth from 2008; eight stayed flat (±5%); and 81 reported revenue declines. Obviously, the latter provides the most telling evidence of an industry in turmoil; a figure that is double the number of companies reporting revenue declines from 2008 (see Growing or Declining?).
- Maintaining growth in 2009 was especially difficult. Again this year only three companies on last year's list showed positive growth from the revenue reported for 2008—Gulf Shores C&A, Taylorsville, Utah; D&F Construction Services, Taylorsville, Utah; and Baker Concrete Construction, Monroe, Ohio. This is Baker's fourth consecutive year of double-digit growth.
- The 20 largest commercial contractors recorded a -6% change in revenue from 2008 to 2009. Of the 20 companies, only five reported positive revenue in 2009.
- For the second year in a row, Gulf Shores C&A ranks among the top fastest-growing companies along with D&F Construction Services and Baker Concrete Construction. Relationships are at the center of the formula for continued success, according to Steve D. Stone, CEO of Gulf Shores C&A. “We focused our energy in 2009 on maintaining loyal customers, doing repeat business, and targeting bigger projects,” says Stone. “We built solid relationships with general contractors such as Zwick Construction, Salt Lake City. Both firms are growing at a similar rate. We go above and beyond to ensure that we take care of our clients regardless of the cost.” Stone expects this business philosophy to result in even more profits in 2010. “Gulf Shores has already signed more than $90 million in work for this year, and we are still aggressively pursuing more work. We anticipate blowing last year's revenue out of the water.”
Continuing the trend from previous years, commercial structural concrete and floor/slab construction dominate the majority of the work for CC100 companies, totaling 57%. This amount surpasses the previous high total of 53%, recorded in last year's CC100 survey. Other observations include:
The continued freefall of residential construction. After falling to 6% of total concrete revenue in 2008, the figure has dropped to 2% of total revenue in 2009. Miller & Long, Bethesda, Md., attributed 20% of its 2009 revenue, equaling $48 million, to residential. Marion Construction, Salem, Ore., recorded 44% of its revenue from residential construction, totaling $7.8 million. At the opposite end, Branco Enterprises Inc., Neosho, Mo., recorded $770,000 in residential construction, which was 1% of its total revenue. Meanwhile, 89 contractors recorded zero revenue related to residential construction.
- Following a 17% drop in 2008, revenue for tilt-up construction fell to $307.6 million in 2009, a 65% drop from the previous year. Contractors dedicated solely to tilt-up reported a 50% or more drop in revenue from 2008.
- The share of decorative work reported by our CC100 list increased to 3% of the total concrete revenue in 2009, up from 1% last year. Total decorative revenue totaled $200 million, up from the 2008 total of $123 million.
2009 goes down in the books as one of the most difficult years in construction history. Scores of contractors felt the deep impact of the recession to their bottom lines, and some were forced to close permanently. However, despite the turbulent times, many remain optimistic. “We expect to remain flat or slightly increase our gross sales in 2010 as compared to 2009,” says Ben Behnke, project executive, SAK Construction, Puyallup, Wash.
Others expect a neutral 2010 with an eye toward growth in 2011. “Obviously 2010 is going to be a down year for us,” says Doug Byles, division manager of Nibbi Concrete, part of Nibbi Brothers Construction, San Francisco. “I expect 2011 to be markedly better because so many of our projects have had delayed starts.”
If you compare the 2009 total revenue of $20.3 billion and concrete revenue of $6.9 billion, the figures resemble the numbers recorded in 2006, which measured $17.2 billion for total revenue and $8.2 billion for concrete revenue.
Ultimately, this recession reset the industry back three years in terms of revenue. Perhaps, we should look at this metaphorically—like a drink from the fountain of youth, we will come back leaner and stronger.
Click to learn more about the defining issues of today's concrete industry as defined by the respondents of the CC100 applicants.
Interesting Data Tidbits Baker Concrete Construction returns to the No. 1 position after losing out on the top spot to CECO (No. 2) last year. Baker concentrates 45% of its business in the industrial sector, followed by commercial cast-in-place (25%); slabs and foundations (10%); highway (5%); sitework (5%); specialty (5%); and tilt-up (5%).
- The CC100 companies employed 42,010 people as of April 2010. Last year, that figure was 52,300 employees—a 20% decrease, on par with the current unemployment figures for the U.S. construction industry as a whole, according to the Associated General Contractors of America, Arlington, Va.
- Of the top 100 companies, 48 are members of the American Society of Concrete Contractors—a number that dropped by four from last year.
- New to CC100: Adjustable Forms Inc. (No. 18, first appearance in CC100); Okland Construction Co. (No. 22, first appearance in CC100); S.B. Ballard Construction (No. 29, first appearance since 2005 when it was ranked No. 22); Urata & Sons Cement Inc. (No. 42 returns to CC100 after ranking No. 33 in 2007); Shaw & Sons (No. 52, first appearance in CC100); KBS Construction Inc. (No. 61, first appearance in CC100); L&G Concrete Construction (No. 69 returns to CC100 after ranking No. 68 in 2007); RCC Concrete Corp. (No. 88, first appearance in CC100); North Coast Concrete (No. 94 returns to CC100 after ranking No. 93 in 2006); TDU Concrete Inc. (No. 99, first appearance in CC100); and Jones Concrete Construction (No. 100 returns to CC100 after ranking No. 95 in 2006).
- Each year, a host of companies fall just short of making the CC100. On the outside looking in: Albanelli Cement Contractors; Berry Concrete Construction; Groninger Construction; Faser-Con; and Greystone Masonry Inc., to name a select few.
- For the second year in a row, turmoil reigned over the CC100 rankings with 16 companies moving up or down by 10 or more places from their rank in the 2009 CC100. Risers include: F.A. Wilhem Construction (+35 to No. 9); Morley Construction (+35 to No. 10); Gulf Shores C&A (+43 to No. 13); T.B. Penick & Sons Inc. (+14 to No. 19); Concrete Strategies (+22 to No. 24); Blair Concrete Services (+56 to No. 26); Barton Marlow Co. (+12 to No. 30); Dollar Concrete Construction (+42 to No. 35); Donley's Inc. (+13 to No. 40); Nibbi Brothers Construction (+21 to No. 62); Stark Excavating (+15 to No. 63); Linblad Construction of Joliet (+10 to No. 66); D&F Construction Services LLC (+25 to No. 70); Healy, Long & Jevin (+11 to No. 79); Zera Construction Co. (+14 to No. 84); and Trademark Concrete Systems Inc. (+13 to No. 87). Fallers include: Webcor Concrete (-15 to No. 23); Largo Concrete Inc. (-14 to No. 32); Scurto Cement Construction (-13 to No. 38); the Layton Companies (-15 to No. 47); Tilt-Con Corp. (-23 to No. 50); Riggs Contracting Inc. (-25 to No. 51); Miller Builders (-15 to No. 53); SAK Construction (-38 to No. 68); Gresser Cos. (-14 to No. 72); Carter Concrete Structures (-11 to No. 75); Empire Tilt-Up Systems (-21 to No. 80); Builders Plus (-21 to No. 81); Woodland Construction (-21 to No. 83); All-Phase Concrete Construction (-16 to No. 97); and Danko Concrete Construction (-35 to No. 98). Three companies remained in the same position as last year: McCarthy Building Cos. (No. 7), Cantera Concrete Co. (No. 49), and Christman Constructors (No. 55).