With the tough economic year of 2009 now safely in the rearview mirror, a clearer picture of the damage wrought by the recession is emerging.
In a typical year, at least half of the nine sectors in the HispanicBusiness 500 post higher revenues than the year before. This was even the case in 2008, which by all accounts was a difficult year. But 2009 took "difficult" to a new level.
Last year, seven of the nine sectors in the HispanicBusiness 500 saw declines in revenue, most of them steep. The two exceptions were finance, which boosted revenues by 7.7 percent, and service, which grew 5.9 percent.
In two years, the automotive sector on the HispanicBusiness 500 has become a shell of its former self. In 2009, revenues in this sector dropped an amazing 57 percent from the year before. Not only this, the sector suffered a 21 percent decline the year prior.
But automotive is hardly the only sector that struggled in 2009.
This year, the HispanicBusiness 500's construction sector took a major blow, with revenues plunging by $1 billion in one year, to $4.8 billion. That's a drop of nearly 17 percent.
Still, construction's share of the HispanicBusiness 500 directory's total revenues held steady at 16.1 percent, a reflection of how construction's woes last year were in proportion to that of other industries among Hispanic-owned companies.
In a bit of good news, the 10 biggest construction companies performed a little better this year than last, boosting their combined revenues by 8.6 percent, to $2.97 billion.
One new company breaking into the directory's overall Top10 list this year is Crossland Construction of Kansas.
At a time when much of the industry is experiencing an outright depression, Crossland held pretty steady, bringing in $527 million in 2009, an increase of just under 1 percent from the year before. It might not sound like much, but in last year's economy, anything other than down is a step up.
Christopher Crossland, the company's vice president of marketing and business development, attributed much of the success to Crossland's diversified base of customers.
The company is building two high schools and landed a community college project, but also maintains a steady base of Fortune 500 clients with offices in the area.
"You didn't take anything for granted in 2009," Mr. Crossland, whose mother is Hispanic, told HispanicBusiness magazine. "It really came back down to 'it's your customer.' We put a lot of focus on that."
Of all the sectors that experienced a decline in revenue, retail suffered the least.
In 2009, the industry posted a 3.6 percent drop in revenue from the year before. However, retail took the worst hit of all the sectors in 2008, shrinking that year by about a third.
Leading the retail sector for the second consecutive year was Navarro Discount Pharmacies, which posted a 2009 modest 4 percent decline in revenues year over year.
But the fastest-growing company in this industry sector was Holman's Inc., a business-to-business retailer that sells precision surveying and computer products.
Holman's was able to boost revenues nearly 13 percent in 2009 over the prior year, bringing its total annual revenue to $39.4 million.
CEO Tony Trujillo said the precision-surveying half of the business suffered last year, on account of the battered housing and construction industries. However, the computing side of Holman's -- thanks to hot products such as the Apple MacBook -- fueled a good deal of the company's growth.
Mr. Trujillo said the company took pains to fill the eight or so staffing positions lost in 2008, bringing it's workforce roster back to 55.
"We need to focus on building the economy and bringing jobs back into our workplace," he told HispanicBusiness magazine. "And let's not forget about our students, who will be coming out of school and looking for jobs."
When it comes to entire industries, finance was this year's winner on the HispanicBusiness 500.
This mirrors a trend on the Fortune 500, where finance -- along with health care and consumer cyclicals -- posted the biggest gains.
Posting a 7.7 percent gain year over year, finance was led by Texas-based International Bancshares Corp, a full-service financial institute. But while International Bancshares -- which ranks No. 4 on the overall list -- took in more money than any other firm in the finance sector, the company actually saw revenues dip by a modest 3.45 percent, to $728 million.
A newcomer to the overall Top10 is Pan-American Life Insurance Group, whose steady gains over the past few years have defied the volatility of the overall market.
The company -- which sells life, disability and health insurance to customers in the United States and Latin America -- boosted revenues by a solid 6.75 percent in 2009, bringing its total revenues to $427 million.
This feat bumped the company up to No. 10 on the overall list, up from a prior ranking of 16.
CEO Jose Suquet ascribes his company's success to a laser-guided focus on the mission: serving Hispanic insurance consumers in the Americas.
The company, he said, also managed to avoid the exotic investments that have bedeviled other competitors.
"We give interest rate guarantees," he told Hispanic Business magazine. "We're not in mutual funds, we're not stock market oriented."
Over the years, he added, Pan-American Life Insurance has been penetrating more and more into Latin America. Whereas five years ago 60 percent of its customer base lived in the United States, today the mix is about 50-50, he said.
The silver medal this year goes to the service industry, which was buoyed by the meteoric rise of Molina Healthcare Inc.
The company's growth has been simply explosive. In 2008, Molina's revenues were 24 percent above those of 2007. In 2009, revenues rose by an additional 19.4 percent, to $3.7 billion. What's more, CEO J. Mario Molina says 2010 revenues are on track to reach $3.9 billion.
But Molina Healthcare isn't the only business posting impressive results in that sector.
Interestingly, the service sector is the only of the nine in which a vast majority of the top-10 companies posted a gain over the year before.
The biggest revenue bump was achieved by Goodman Networks Inc., a Texas telecom services company, which increased sales by a whopping 65 percent, bringing total revenues to $365 million.
Also posting impressive results were G&A Partners, a professional employment services company out of Texas, which increased revenues by 10.7 percent; MVM Inc., a security and law-enforcement support company from Virginia, which increased revenues by 17.85 percent; and MEI Technologies, a cyber-security Texas company, which bumped up total revenues by nearly 19 percent.
Whether companies were taking oil and gas out of the ground, distributing gas and petroleum products, producing petrochemicals or supplying energy efficient air conditioning, it was a tough year to be in the energy business.
All told, the energy sector year-over-year revenues in 2009 plummeted 51.5 percent.
Yet the depth of energy's fall is a little misleading.
This is because energy's performance in 2008 was unusually strong, due to a gravity-defying spike in oil prices during the first half of that year.
In last year's 500 edition, energy was the only industry in which all of the sector's top 10 companies posted higher revenues than the year before.
In 2009, the opposite occurred: energy was the only industry in which each of the top 10 firms posted negative growth.
Reflective of the trend in 2009 was Venoco, a Denver, Colorado-based oil and gas exploration company operating primarily in California. Venoco saw revenue plunge by more than 50 percent to just over $272 million. But the year before, its revenues had surged 47 percent. So Veneco is essentially back to where it was in 2007.
Still, this year's plunge for Veneco was enough to dislodge the company from first place in the energy sector and drop it down below new leader Urbieta Oil. Based in Medley, Florida, the distribution company also had a poor year though its revenue decline was "only" 38 percent, enough to leave it just ahead of the field.
For the second time in a row, manufacturing had a tough year, and 2009 was even worse than 2008.
The industry's year-over-year revenues tumbled 16.7 percent in 2009; in 2008, they fell 10.8 percent.
Hit hard were companies like The Ideal Group, based in Detroit, Mich. The Ideal group for years has been a major supplier to GM, and many times has won that company's Supplier of the Year award.
But as GM has struggled, so too has The Ideal Group, which has experienced a far from ideal revenue decline of 45 percent, dropping the company from the 500's fifth largest manufacturing company to the 10th.
HUSCO International, a Wisconsin-based manufacturer of hydraulic and electrohydraulic controls for the off-highway and automotive markets, , took an even bigger hit with revenue from hydraulics slumping almost 48 percent.
It wasn't all bad news for the sector, however.
The best percentage gain in revenue came from Gusto Packing Co., in Montgomery, Ill., where sales of meat products jumped almost 43 percent to $194 million. That was enough to bump Gusto up from seventh place last year into fourth.
There were equally wild swings among the top three companies. Steep losses from Lopez Foods (meat products, down almost 43 percent) and The Diez Group (steel, down 39 percent) enabled Mexican food manufacturer Ruiz Foods, with an 11 percent increase, to slip through into first place.
With revenue of around $2.7 billion, Brightstar Corp. is in a league of its own in the wholesale sector. Even so, 2009 was not a great year for the Miami-based company's sales and distribution services to the wireless and IT industries.
The telecommunications giant saw revenue slide almost 23 percent from last year's $3.5 billion – the largest percentage drop among the leading 10 companies in this sector.
Meanwhile, the entire sector saw revenues plunge by 16.7 percent in 2009. That comes after an 11 percent drop in 2008.
The contraction is intricately linked to the fortunes of Brightstar, whose annual revenues make up nearly half of the entire sector's total revenues, which in 2009 amounted to $5.9 billion. The combined revenues of 61 companies make up the other half.
Frozen food distribution company Quirch Foods had a better year, losing just 4 percent of revenue to settle at an even half billion dollars and maintain second place.
The best result among wholesalers came from one of the six Florida-based companies in the sector's top 10, Precision Trading Corp., of Miami Gardens, whose electronic distribution business boosted earnings by 11 percent.
The Zaid Group, wholesalers of Hispanic food products out of Atlanta, GA., also performed well (up almost 6 percent) as did newcomers Tire Group International, of Miami, whose 3 percent rise to $70.5 million carried them into 10th place.
Transportation, the smallest sector on the HispanicBusiness 500, had a difficult year in 2009.
The industry, which includes mostly trucking and shipping companies, saw revenues slide by a third from 2008, from $432 million to $288 million.
However, the sector -- whose revenues comprise just 1 percent of the entire HispanicBusiness 500 -- experienced an 18 percent boost in 2008, so the extent of this year's drop is a little misleading.
With just 18 companies on the directory, transportation's top 10 firms actually make up a slim majority of the sector. That top 10 has a new look with four companies missing from last year. Most prominent of the four replacements is Mile Square Transportation, a school bus company from Yonkers, New York, which vaulted into third place with revenue of $30 million, a tidy 7 percent increase over 2008.
That was only $1 million shy of second-placed La Rosa Del Monte Express, from the Bronx, and $9 million behind the sector's top performer, Public Special Commodities, based in Mira Loma, . California.
Pan American Express, headquartered in Laredo, Texas, held onto fourth place despite a gnarly year, which saw the interstate carrier's revenue slump 29 percent, to just below $21 million.
On the plus side, Leticia Inc., based in Hillside, New Jersey, made more than $15 million hauling excavated material, a nice increase of 14 percent, while J. L. Patterson & Associates, of Orange, CA., also finished 2009 with a slight earnings uptick.
Hispanic #1 Breaking News for Entrepreneurs, Professionals and Small Business Owners - HispanicBusiness.com
OCTOBER 31, 2014
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