St. Petersburg Times
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Fallen stars

By HELEN HUNTLEY, Times Staff Writer

© St. Petersburg Times
published June 2, 2002


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    Companies based in the Tampa Bay area
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    The technology boom of the late 1990s shaped the Times 50 rankings, the St. Petersburg Times' annual ranking of public companies in the Tampa Bay Area. Now the technology bust has done the same:

    St. Petersburg's Jabil Circuit Inc. topped the list three times and never ranked below fifth -- until this year. The company, which makes electronic components for the likes of Dell Computer Corp. and Cisco Systems Inc., grew from $560-million in revenues in 1995 to more than $4-billion last year. But with profits down sharply and the stock price cut in half over two years, Jabil fell to 20th in this year's rankings of companies with their headquarters in the Tampa Bay area.

    Tech Data Corp. was another perennially strong performer, climbing as high as the No. 2 spot and claiming the title of the Bay area's largest home-grown public company after Eckerd Corp. went private. But sales and profits are off, and in this year's rankings, the Clearwater computer products distributor fell from third place to 19th.

    Digital Lightwave Inc. set new standards for astonishing shareholder returns as its stock hit a high of $150 a share. The company jumped from 49th place to second in 2000, then took the No. 1 spot last year. Digital, which makes equipment used to test and monitor fiber-optic networks, was still trading for more than $40 a share a year ago, and those who had bought before the dot-com frenzy could boast of a two-year return of nearly 1,000 percent. Now the stock is selling for less than $4 a share and Digital has fallen to 25th place in the rankings.

    The drop is one of the more spectacular in the eight-year history of the Times 50. But the title for the all-time biggest drop from superstar to super-dud still belongs to IMC Mortgage Co., which plunged from fifth place in 1998 to 54th in 1999 as it went out of business.

    While stars of the technology sector experienced the most pain, a slower economy took its toll across this year's Times 50 rankings of corporate performance. On last year's Tampa Bay list, only one company reported a loss, and three others a decline in profits. On this year's list, four companies lost money and 11 others said profits were lower. A dozen reported lower revenues.

    But for every company that had an off year, another emerged a winner. In fact, a third of the local Times 50 companies reported that both revenues and profits rose by double-digit percentages or better.

    The leader of the pack: Brown & Brown Inc., a fast-growing insurance agency with dual headquarters in Tampa and Daytona Beach. An acquisition binge helped the company deliver a 64 percent increase in profits on a 38 percent increase in revenues during 2001. Investors took note; the stock price has more than tripled over the past two years.

    This is Brown & Brown's third consecutive top-10 ranking in the Times 50, a distinction no other company can currently match. And analysts say the ingredients are in place to continue that string of successes.

    "The environment we're in is near optimal for Brown & Brown and one in which they'll be able to substantially grow the business," said David Lewis, an analyst who tracks the company for SunTrust Robinson Humphrey in Atlanta.

    The insurance agency's goal is to increase pretax profits 15 percent a year, with half of that coming from internal growth and half from acquisitions. Lewis said there are literally thousands of privately held insurance agencies that offer potential fuel for Brown & Brown's future growth.

    Three other Tampa Bay companies are top 10 repeaters this year: Lincare Holdings Inc., a respiratory services provider in Clearwater; TECO Energy Inc., the parent company for Tampa Electric; and Checkers Drive-In Restaurants Inc., a Tampa fast-food chain.

    One notable addition to the rankings is Walter Industries Inc. of Tampa, a home builder and industrial products company that suffered through bankruptcy and a parade of chief executives before finding the path to profitability.

    On the national level, the hospital chain HCA Inc. earned the top spot on the list of companies that have their headquarters elsewhere but employ 1,000 or more people in the Tampa Bay area. Profits quadrupled last fiscal year, and the company's investors earned a 68 percent return over the past two years.

    Analyst John Ransom at Raymond James & Associates Inc. in St. Petersburg said HCA is benefiting from a more focused strategy than it had in the past and from an improved environment for health care providers.

    "In the hospital industry, local market share is everything," he said. "HCA has worked hard at winnowing down their company to the 180 hospitals that they think have really strong franchises."

    He praised HCA's policy of reinvesting excess cash flow in capital improvements and the progress the company has made settling federal complaints regarding its billing practices. And he said the environment is better for health care companies.

    "Hospitals and managed care companies have consolidated down to fewer players and now they are ganging up on the employers, with medical bills going up 10 to 15 percent a year," Ransom said. "At some point that will stop, but now we're right in the middle of a big pricing cycle.

    "With Jane Fonda hitting 60, we've also gotten to the point where the demographic bulge is starting to have an impact, and HCA is right on the cusp of that," Ransom said. "We're headed back to health care growing faster than the economy for a while."

    One notable loss since the publication of last year's Times 50 list is IMRglobal Corp. The Clearwater software company was acquired by CGI Group Inc. of Canada. One company on this year's list is on the way out: Gulf West Banks Inc., parent of Mercantile Bank, is being acquired by the South Financial Group of Greenville, S.C.

    Helen Huntley can be reached at huntley@sptimes.com or (727) 893-8230.

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