With 10 public companies topping $1-billion in revenue, the bay area is booming as a business center.
By HELEN HUNTLEY
Published May 16, 2005
The Tampa Bay area can claim a new title: It's a legitimate billion-dollar business center.
For the past decade, the St. Petersburg Times has taken an annual look at the area's top public companies. This year, for the first time, each of the 10 largest companies headquartered here has more than $1-billion in revenue. Together, they had $40-billion last year, although half of it belonged to Tech Data Corp., which sits at the top of the list.
While $1-billion isn't as much as it used to be, it's still an impressive number. And not only are these companies big, but most of the Times 10 are growing dynamically and performing admirably for their shareholders.
Eight of the 10 increased revenues by double digits last year. Their average return on equity was 20 percent. Their average two-year return to investors was 57 percent. In fact, only one lost money for shareholders: Danka Business Systems PLC, an office equipment distributor that has been on a downhill slide in spite of several turnaround attempts.
The success of the billion-dollar group "is a reflection of a growing economy and businesses growing and maturing in this marketplace," said Stuart Rogel, CEO of the Tampa Bay Partnership, a regional economic development group. "It's also reflective of a community that can support businesses that grow. They don't feel like they have to find another location to find employees and the resources they need to get the job done."
Rogel said he also is struck by the diversity of the group: The technology, health care, financial services, hospitality, home building, business services and utility industries are all represented in the top 10.
In prior years, Tampa Bay's billion-dollar public-company club has typically had six to eight members, but some of them didn't stick around. Companies that once qualified but gave up their independence to become part of other companies include Eckerd Corp., Florida Progress, Home Shopping Network and Kash n' Karry.
This year the billion-dollar list expanded from eight to 10 thanks to two newcomers with strong Tampa Bay roots: WellCare Health Plans Inc., which went public last summer, and Certegy Inc., which moved its headquarters to St. Petersburg from the Atlanta area last year.
A group of Tampa doctors started WellCare, which runs Medicare and Medicaid HMOs, and sold the company to a group of investors led by George Soros in 2002. Since then it has grown rapidly through acquisitions.
By the end of last year, WellCare had 747,000 members, primarily Medicaid enrollees in Florida. WellCare is the leading provider of Medicaid HMO services in Florida and Illinois and also does business in New York, Indiana, Connecticut and Louisiana.
Certegy is the modern-day successor to a Tampa Bay payment services business that started out as Florida Credit Service Center and later became Telecredit. It became part of Equifax Inc., then was spun off four years ago and renamed Certegy. Although its headquarters were in the Atlanta area, where Equifax is based, Certegy's operations center was in St. Petersburg. Company officials decided it made sense for the headquarters to be there too.
"It's an incredible location," CEO Lee Kennedy said. "An airport is critical to any large corporation and the airport in Tampa is as good as it gets. If you look at the support by various governments, the invitations and welcome we got when we came into the community, it was second to none. . . . The capabilities of suppliers are as strong here as I saw in Atlanta."
Kennedy said Certegy's St. Petersburg employment fluctuates between 2,500 and 2,700 and the company is considering opening a third facility to accommodate growth.
The additions of WellCare and Certegy meant the two smallest companies on last year's list dropped out of the top 10. Global Imaging Systems Inc., an office equipment distributor, came in just under the $1-billion mark at $927-million in revenue, a 23 percent gain from last year. Although it fell from 9th to 11th place, Global Imaging's fast growth puts it in a position to work its way back into the Top 10.
Anchor Glass Container Corp., a glass manufacturer, ranked 10th last year, but with $747-million in revenues, it's down to 13th this year. It has been surpassed by faster-growing MarineMax Inc., a boat retailer, which hit $762-million in revenues last year, putting it in 12th place. Rounding out the top 15 are two other rapidly growing companies, staffing services provider Kforce Inc. at $661.5-million in revenues and insurance agency Brown & Brown Inc. with revenues of $646.9-million.
The two companies at the top of the Times 10 list, Tech Data Corp. and Jabil Circuit Inc., are the only Tampa Bay companies to make the Fortune 500. Neither has been able to crash the exclusive top 100, but Tech Data, the largest public company in Florida, is getting close. It was honored by Fortune magazine recently for the most dramatic climb up the list in the past decade, from 464 in 1995 to 110 this year.
The magazine's opinion: "outsmarted rivals by keeping expenses and debt low. Boom or bust, smart management never goes out of style."
Both Tech Data and No. 2 Jabil hit rough spots when the tech boom went bust, but both have made strong recoveries. Now they are finding ways to reach new markets.
Among the many computer-related products Tech Data distributes, voice-over Internet protocol, wireless technology and digital convergence projects such as home security systems and cameras converted to digital are the most exciting, CEO Steve Raymund said.
Although Jabil is considerably smaller than Tech Data in revenues, it's more highly valued. Jabil's market capitalization is now more than $5-billion, more than twice Tech Data's, and well ahead of Lincare Holdings, the second most valuable company on the list.
For years, Jabil followed its customers around the world, building plants in locales from Eastern Europe to Asia, seeking both low-wage employees and areas where their multinational clients did business. Now with a presence established in mainland China and India, it's expanding its customer base to include Chinese and Indian manufacturers.
The prospect has set up an odd twist in the global outsourcing game.
In some cases, Asian companies were relying on the expertise of contract manufacturers as far away as Mexico to make their products. The cost of shipping, particularly heavy products like computer printers, began to outweigh the benefits of cheap, specialized labor in Mexico.
"Rather than have to go to Mexico . . . now they are able to utilize us" through Asian plants, Jabil spokeswoman Beth Walters said. It often makes sense, she added, for products to be manufactured as close to the end consumers as possible.
Jabil also is opening its first plant in Ukraine this year.
While the Tampa Bay area is growing up as a business center, it's still a long way from becoming a corporate headquarters area like New York, Chicago or Atlanta. Lots of giant public companies headquartered elsewhere have a substantial presence in the bay area, from Bank of America Corp. and HCA Inc. to Verizon Communications Inc. and Wal-Mart Stores Inc.
Most of the public companies based in the Tampa Bay area are small and only a few outside the Times 10 have much visibility. You've probably heard of Checkers Drive-In Restaurants Inc., but maybe not Flanders Corp. or Maritrans Inc.
Times staff writer Jeff Harrington contributed to this report. Helen Huntley can be reached at 727 893-8230 or firstname.lastname@example.org
[Last modified May 16, 2005, 04:46:15]
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