1997 TIMES 50
TOP PUBLIC COMPANIES
Jabil Circuit | Tech Data Corp. | IMC Mortgage Co. | Coast Dental Services Inc. | Raymond James Financial Inc. | Kaydon Corp. | Sykes Enterprises Inc. | Reflectone Inc. | Information Management Resources Inc. | Shells Seafood Restaurants Inc.
Jabil Circuit Inc.
Networks tie Jabil into a profitable turnaround that Wall Street has recognized with a tenfold increase in the companys stock price.
Jabil Circuit Inc. keeps good company.
Its largest customers include technology stalwarts like Cisco Systems Inc. and 3Com Corp., which make equipment used to link computers in networks. The long-term growth rate for networking is 30 percent to 50 percent a year, according to some industry estimates.
The outlook brings a smile to the face of Jabil president Tom Sansone. Nearly half of the electronics contract manufacturers projected sales of $915-million this year will come from making networking equipment, such as routers and switches.
Wall Street cant hide its glee either. Shares in St. Petersburg-based Jabil have soared in recent weeks, reflecting Jabils recent financial performance and the overall strength of the technology sector.
The market is recognizing how well the company is doing, said Jeffrey W. Lin, an analyst with Montgomery Securities in San Francisco.
The stock market is wowed by how quickly Jabil has turned around its prospects. A year ago, the company was recovering from the loss of 25 percent of its business when one customer, Quantum Corp., canceled orders for disk-drive parts. Jabils stock price hovered near $5 a share in January.
Now the stock price is above $50, the customer mix is diversified and the company is moving further away from its lower-tech roots of making circuit boards.
It is capitalizing on a trend that finds more computer and Internet hardware manufacturers relying on companies like Jabil to build entire products and ship them to their customers. Full assembly work is more profitable for Jabil and will make up about one-third of its business this year. Jabils customers, such as Cisco, like the faster delivery times and lower costs.
Cisco enjoys the benefits of a state-of-the-art factory as if they owned it, Sansone said.
To keep up with the surge in business, Jabil plans to double its worldwide manufacturing capacity by the end of the year. In St. Petersburg, the company will go from 108,000 square feet to 324,000 square feet with the addition of two buildings.
Jabil also is moving into larger facilities in Scotland and Malaysia.
Finally, the company will start production this fall in Guadalajara,
Mexico, in a 134,000-square-foot factory. Total it all up, and
Jabil will have more than 850,000 square feet of factory space.
The companys European invasion could help boost international sales to about one-third of total revenue next year.
Tech Data Corp. CEO Steve Raymund is fluent in Portuguese and knows a little Spanish. Now, he might have to pick up some German as well.
As part of the Clearwater-based companys gradual push overseas, Tech Data announced last month that it will buy majority control of one of Germanys largest distributors of personal computer products.
The purchase of Macroton AG will pay immediate dividends: Tech Datas European sales will more than triple this year. It also represents a giant leap toward the companys goal of becoming a global player in the distribution of computer products.
We intend to build a Pan-European presence, Raymund said. Were just starting with the larger markets.
Tech Data first swam across the Atlantic in 1994 when it bought Frances largest distributor. Until then, it had ventured only north of the border by opening a distribution center in Canada.
Raymund made sure the Paris operation was successful before moving on to Germany. He is cautious because there are barriers of language, culture and currency that have to be overcome. And some of his competitors have tripped over those obstacles.
Currency has become a bigger issue recently because of the strengthening dollar, which makes foreign sales worth less when converted into dollars.
Despite the currency fluctuations, Tech Data expects international sales to make up about one-third of the companys total revenue next year, up from 13 percent last year. The company reported sales of $4.6-billion in fiscal 1997, which ended in January.
Despite a strong financial performance, Tech Datas stock price has lagged since the beginning of the year, disappointing executives who chalk it up to volatility among high-tech stocks. Its shares have been floating around $25 since hitting a 52-week high of $35.25 in December.
With operations growing in Europe, Tech Data plans to open a European headquarters in either Paris or Munich this summer. That will take some of the pressure off me, Raymund said.
He has been racking up frequent-flier miles of late, making deals and opening new distribution centers. He used his Portuguese last year when the company opened a facility in Brazil, its first in South America. The company serves other parts of Latin America through its center in Miami.
The company recently celebrated Brazil day at its Clearwater headquarters in appreciation of its operation near Sao Paolo. The day included cultural exhibits and a ticket giveaway to a Tampa Bay Mutiny soccer game. The cafeteria even served feijoada, a Brazilian dish made of black beans, rice and meat.
Oktoberfest isnt too far away.
Catering to higher-risk customers pays off in growth of loans, offices and profits.
IMC Mortgage Co. isnt likely to run out of customers.
The rapidly growing Tampa-based company lends money to people whose slightly tarnished credit records keep them from getting loans at traditional banks.
At a time when an unexpected job loss or an uninsured medical problem can derail a normally good credit record, those types of customers are legion. And IMC is betting there will be plenty of them around for a long time, IMC chief executive George Nicholas said.
The 3 1/2-year-old company has been expanding rapidly across the country and into the United Kingdom. It recently bought four other lending institutions that specialize in the same niche and boosted its number of retail offices from 17 to 66 in the first quarter. The company is in 41 states and is making plans for international markets as well, Nicholas said.
IMCs first-quarter net income set a record, climbing to $8.9-million compared with $1.6-million the year before, and those numbers dont reflect IMCs latest acquisitions.
The companys number of employees also is growing, from about 370 at the end of 1996 to 1,074 now. Roughly 200 work at the Tampa headquarters.
For IMC to keep growing, it needs capital, and much of IMCs cash is tied up in loans. The company recently made a successful secondary common stock offering of 6.3-million shares, raising more than $58-million.
At the rate the company is expanding, that should take care of the companys cash needs at least until the end of the year, officials said. After that, the company plans to borrow money to keep IMC growing.
IMCs stock has fallen in recent weeks, from a high of $25 in January to around $12. Stock prices have fallen for IMCs competitors in the non-traditional loan business as well. Analysts are worried the increase in interest rates would affect the business, although IMC officials contend that their industry is not interest-rate sensitive.
This year, the company is hoping to increase the number of loans it originates; thats the idea behind opening more retail offices. Also, by dealing directly with the customer, IMC has a better chance to sell other services, such as home equity credit lines and secured credit cards.
In July, the company is scheduled to move from its 28,000-square-foot building off Busch Boulevard to a new 88,000-square-foot building in Temple Terrace.
We are committed to the area, Nicholas said.
Managing a chain of dental practices has paid off big for Coast, though skeptics wonder how long the good times will last.
Coast Dental Services Inc. has breezed through its first three months as a public company like a kid with no cavities at checkup time.
Wall Street loves the Tampa-based companys strategy of acquiring, managing and marketing dental practices. Coast Dentals stock, which went public Feb. 11 at $8 per share, has since almost doubled, trading recently around $16. Coast, the nations first publicly traded dental practice management company, is converting skeptics who doubted that business efficiencies could be applied to the tradition-bound practice of dentistry. With 29 centers at the end of 1996, the company reported revenues of $8.1-million, up 144 percent.
Coast acquires struggling general dental practices, then uses its purchasing power to cut as much as 35 percent from supply expenses and 50 percent from lab costs. By taking management duties away from dentists and adding several dental assistants per office Coast ensures that its dentists see 40 percent more patients than traditional practitioners.
The result: Coasts dental offices generate an average of $500,000 in revenues per year, compared with $300,000 for traditional dental practices.
Some observers wonder if Coast can keep up the pace, though, and private-practice dentists question how the chain can offer dramatically reduced prices yet still guarantee quality. They predict the company will find a shortage of experienced dentists willing to sell out. The challenge facing Coast is to keep customers who first come to the companys offices because of their low prices.
Coast got its start in 1992 when Dr. Adam Diasti opened his first dental office in Holiday. Working with his brothers, Terek and Tim, Diasti began building a chain of dental practices throughout Tampa Bay. Terek Diasti, a veterinarian, is now the companys chairman and CEO; Tim Diasti is vice president-operations; and Adam Diasti heads the Coast affiliate that owns the dental practices.
Coast intends to keep growing, adding at least 25 offices this year throughout Central Florida and into Georgia. Though a handful of competitors are preparing to enter the same markets, Coast believes it has a strong head start.
Theres certainly going to be competition. Its just a question
of when, said Joseph Smith, Coasts chief financial officer.
But were out there right now, blazing the trail.
Companywide expansion, changing regulations and a booming stock market are fueling momentum at the brokerage firm.
Regional brokerage firms are in the spotlight as big banks look to buy their way into the brokerage business. But dont bet on Raymond James Financial Inc. succumbing to the lure of a buyout offer any time soon.
The St. Petersburg-based firm has expansion plans of its own.
Some of them are now on view at the Carillon office park in St. Petersburg, where construction has begun on a third office tower that will nearly double the size of Raymond James headquarters.
The nine-story building will connect to existing offices by an enclosed walkway spanning Carillon Parkway. A small headquarters building for Raymond James Bank and a 1,000-car parking garage also are part of the $35-million project.
Even this building will not give us the expansion room we need, company spokesman Lawrence Silver said. He said Raymond James asset management subsidiaries will have to stay in nearby leased space.
Raymond James growth has been phenomenal in the 1990s. Fueled by the strong stock market, revenues have more than doubled since 1990, while profits more than tripled. On tap for this year:
n Expansion of the sales force by 10 to 15 percent. About 2,700 stockbrokers now work with one of the three Raymond James brokerage firms Raymond James & Associates, Investment Management & Research and Robert Thomas Securities.
n Expansion of efforts to sell brokerage clients on Raymond James Bank products. The offerings now include first mortgages and home equity loans.
n Expansion of international sales and research efforts. Raymond James currently has offices in Europe, South Africa and India. It also imports research on South African stocks for U.S. clients and hopes to do the same with research on Indian stocks through a joint venture in that country.
Changing regulations have made it easier for banks to be in the brokerage business and vice versa. Some big banks are deciding they would rather buy a retail brokerage business than build one from scratch.
Bankers Trust, a commercial bank, touched off a frenzy in brokerage stocks last month by announcing it was acquiring Alex. Brown & Sons, a Baltimore-based brokerage firm. Some analysts think even big European banks will be interested in buying U.S. brokerage firms.
Raymond James stock has benefited from the renewed interest in brokerage firms, as well as the companys own financial performance.
However, Raymond James chairman Thomas A. James has said repeatedly
that he wants the company to remain independent, and he controls
about 25 percent of the stock.
The parts manufacturer is on a feeding frenzy. Just dont look for that growth in the bay area.
You wont see Kaydon Corp.s products unless you take apart airplane engines, bulldozers or giant cranes.
As a matter of fact, chances are you wont see much of Kaydon in the Tampa Bay area at all. Its one of those giant companies that has its headquarters in Tampa Bay but all its operations in other parts of the world.
In all, Kaydon has about 2,300 employees at sprawling factories in eight states, England, Germany and Mexico.
But in Tampa Bay, it has 12 employees, all in its headquarters off U.S. 19 in Clearwater.
Know this about Kaydon, though: The company, which makes unglamorous products like hydraulic cylinders, rings and seals and ball bearings as big as 15 feet in diameter, is on a roll.
Last year, Kaydons sales grew by 26 percent double the rate they grew in 1995. Its profits are growing by more than 30 percent annually. Its stock price is up about $8 a share from a year ago, trading recently around $49 a share. And the company is still growing like crazy.
Since September 1995, Kaydon has been on a buying binge. In less than a year, it has spent more than $35-million on five manufacturers of hydraulic cylinders in places like Laurens, Iowa, and Great Bend, Kan. The additions are expected to add $75-million a year to its sales.
After recently securing a $100-million credit line, Kaydon doesnt plan to slow down, says company chairman Lawrence Cawley.
If we can find it, and its the right kind of property priced right, were going to buy it, he says.
Kaydons recent purchases of the hydraulic cylinder manufacturers pushed it into a new business line. It also shows Cawley isnt afraid to look into any business in which Kaydon can make money supplying heavy products for industry.
Started in Muskegon, Mich., in 1941, Kaydon moved its headquarters to Clearwater six years ago because Tampa International Airport is convenient and the area has a good quality of life, Cawley said.
Translated: Cawley, who last had lived in the Tampa Bay area in
the 1950s, thinks its a great place to live, even if all his
companys operations are elsewhere.
Though its name may be unfamiliar, the Tampa company has pleased investors with its recent performance.
Youve probably dealt with Tampa-based Sykes Enterprises Inc. and didnt even know it.
Ever call your computermakers trouble line? It could have been a Sykes employee in Minot, N.D., who handled your call.
Ever get help with your childrens interactive video game by dialing that toll-free number on the side of the box? Could have been a Sykes employee in Klamath Falls, Ore., who walked you through the installation.
Since 1977, Sykes has become one of the nations biggest providers of troubleshooting services, technical support and product information for computer manufacturers, software publishers and others. Its 3,800 employees work at seven call centers in the United States, along with branch offices and call centers in Sweden, Belgium and the Netherlands.
The past year has been a particularly good and busy one for Sykes.
In April 1996, the company raised $39.7-million in one of the most successful initial public offerings of the year, at a split-adjusted $12 a share. After trading above $50 a share last fall, the stock price has settled above $30 a share. The IPO and a secondary offering that raised $71.5-million in November allowed Sykes to shrink its debt and expand its operations.
As a result, earnings have soared. Sykes net income quadrupled last year to $9.7-million. It has consistently met analysts expectations, and it doesnt look as if the company will miss any time soon, said Robin Smith, vice president for investor relations.
The biggest difference (about being a public company) is that weve had to learn how to continue to invest strategically for the future, but do so on 90-day cycles ... to make sure we meet our quarterly numbers and analysts expectations, Smith said.
Sykes is getting some help meeting its earnings expectations from some new lines of business it bought its way into.
In March, it bought Info Systems of N.C. Inc. in a $23-million stock swap. The same month, it bought Traffic N.V., a Belgium company, for $1.8-million in cash.
The Info Systems purchase pushed Sykes into the retail service business, adding customers like Food Lion Inc., Petco Pet Stores Inc. and Eagle Food Centers Inc. The purchase of Traffic pushed Sykes into the business of producing manuals and documents for other companies and gave it a foothold in Belgium.
Look for Sykes to move into other new business lines, including offering services to banking and telecommunications companies, in the near future.
We see both of those as high-growth areas, Smith said.
And as investors know, Sykes likes growth.
Competitive pressures are forcing the company to consider an alliance that would make British Aerospace sole owner.
Though Reflectone Inc.s revenues have grown more than 50 percent in the past two years, the company still finds itself dwarfed by its competitors.
So this week, shareholders of the Tampa-based maker of flight simulators are expected to approve an alliance with giant British Aerospace Holdings Inc. The deal would make British Aerospace the sole owner of Reflectones stock, taking Reflectone off the list of Tampa Bay-based public companies.
Little besides the stock ownership is expected to change at Reflectone, company officials say. But they hope British Aerospaces name recognition and deep pockets will help Reflectone compete in a marketplace filled with bigger and bigger players.
Richard G. Snyder, Reflectones chief executive, said the company needs to be bigger to keep up with defense mega-companies formed by other mergers, such as Lockheed Martin Corp. and Loral Corp., Raytheon Co. and Hughes Electronics Corp., and Boeing Co. and McDonnell Douglas.
We were facing much larger competition ... that made it difficult for us to compete, Snyder said.
British Aerospace, the United Kingdoms largest aerospace and defense contractor, had revenues of close to $9-billion last year. It owns almost half of Reflectones stock; buying the rest requires approval of the majority of the remaining company stockholders. Reflectone executives favor the merger.
British Aerospace has agreed to pay $24 a share, roughly $39-million, for the stock.
There are no plans to change much about the way Reflectone has been doing business, primarily because the company has been doing well, with revenue rising from $65-million in 1994 to $100-million in 1996, Snyder said.
Also, the companys name will stay the same. We are a 58-year-old company, and our name has value in the marketplace, Snyder said.
Reflectone has 785 employees; about half are based in Tampa. The rest are scattered around various military bases across the country and in the United Kingdom.
The company started in 1939 making simulators that helped pilots learn to recognize the silhouettes of various planes. The system was used in World War II.
Now it makes flight simulators for both military and commercial
aircraft. It also has diversified into the entertainment industry,
creating the Questor attraction at Tampas Busch Gardens as well
as the Wild Arctic ride at Orlandos Sea World.
The software consultants hard-driving CEO is banking the short-term future of his company on the Year 2000 computer glitch.
Information Management Resources Inc. has never faced a deadline like this before.
The Clearwater-based software consulting company is helping large businesses deal with the plague of the computer industry, the Year 2000 glitch. The problem boils down to the inability of many older computer programs to recognize 2000 as a valid date.
That means by Jan. 1, 2000, IMR will have to complete more than 40 projects it is already working on, plus any others it adds in coming months. If the problem isnt fixed, computers could come crashing down and wreak havoc on a companys operations. Now thats pressure.
But Satish Sanan looks calm and collected. The chief executive of IMR says his company can do the work faster and cheaper than his competitors, which include heavy hitters like IBM and Keane Inc.
His edge: IMR owns a software facility in Bangalore, India, which is responsible for writing computer code. The company takes advantage of lower labor costs and the time difference in India, allowing nearly around-the-clock work.
Sanan is so confident of his business model he is banking the short-term future of his company on the Year 2000 problem. He expects fixing the glitch will generate half of the companys revenue for the next three years. In 1996, Year 2000 work accounted for only 27 percent of IMRs $28-million in sales.
But dont expect IMR to fade away in the new millennium. The company
plans to leverage existing business relationships into continuing
software maintenance work.
The payoff has begun after four years spent reviving the Tampa-based seafood restaurant chain.
Shells Seafood Restaurants Inc. got its sea legs back in 1996 after careening around the decks for three years.
Credit Bill Hattaway, the former Red Lobster executive, who orchestrated a turnaround that culminated with the Tampa-based seafood restaurant chain raising $7-million in a public stock offering.
As president and chief executive officer, Hattaway spent four years reviving a chain that had shrunk from 28 restaurants to 10. The company retreated completely to within Florida, closing locations in such far-flung markets as New York, Atlanta and Nashville, Tenn.
He expanded the menu and installed new efficiencies, computerized cash registers and a stronger management infrastructure that positioned the company to grow again.
Founded in Madeira Beach in 1985, Shells once pretty much lived off its food. The original formula capitalized on signing deals for abandoned restaurants and making minimal renovations. But the restaurants appearance clashed with an average meal price that came in at a pricier $10 to $12.
Hattaway refined the formula to make the decor better fit the prices. Costing $400,000 per store, renovations are more extensive.
Its working. Shells now has 33 locations, all company-owned. The average store pulled in $2.2-million in revenues in 1996, up from $1.9-million the previous year.
This year Shells ventured outside Florida again for the first
time in years. It opened in suburban Cincinnati and has plans
for three or four more stores this year, probably in southwest