News Column

Warfel Construction posts double-digit growth in 2013

January 24, 2014

Scott, Jason

Lancaster COUNTY

Company president talks Chester County office expansion, annual goal

Milestones are not always easy to come by for established firms, especially those that have been in business for more than 100 years.

But for East Hempfield Townshipbased Warfel Construction Co. - founded in 1911 - 2013 will go down as a significant point in the company's history.

Not only did the Lancaster County firm open a second office because of high activity levels in the Philadelphia region, it also cracked $90 million in annual revenue for the first time.

Revenue for 2013 is expected to be in the range of $93 million to $95 million, said Matthew Hartzler, Warfel's president.

"It's still being finalized, but some good growth," he said.

The company posted $82 million in 2012 and $87.5 million in 2011, according to Business Journal records.

About one-third of Warfel's revenue last year was derived from general construction and constructionmanagement work in Central Pennsylvania. That percentage could trend up this year.

The rest stems from the eastern part of the state, as well as work in Delaware, Maryland, New Jersey and West Virginia, Hartzler said. Warfel also is licensed in Virginia.

Along with the double-digit growth in revenue, the company got back to prerecession employment levels, he said. The additional office will help bolster that figure, which is currently about 125 employees.

Hartzler sat down Monday with the Business Journal to discuss the company's office in Malvern and growth plans this year.

Q: Why was the end of 2013 the right time to add a second office? And can you describe the workload in that region and other markets you serve since the recession?

A: We've been doing more and more work in the Malvern/Philadelphia/eastern PA region and felt in order to be able to service our clients the way we want to service them, having an office down there just seemed to make sense.

It's very similar, actually, the makeup of the eastern PA region. We're focused in senior care. That's the majority of the work we do. (Continuing care retirement communities) are very prevalent there, and we're doing several projects there. We also have car dealerships and private education in that area, so similar makeup to what we're doing in Central PA.

I think with our growth, we're not planning to focus less on Central PA. We're just planning to focus more in other areas. Having another office helps us to focus in another area (and) make sure we're serving our clients.

What types of projects are producing the highest volumes? Why do you think that is, and are others making up a bigger piece of the pie?

Over 50 percent of our work is for CCRCs. If I had to say which area has been growing the most, it would be car dealerships. We've done three CarMaxes and we're doing an Audi dealership in Devon. And we're doing some work for Whitmoyer (Auto Group) in Mount Joy. Out of the area, we're seeing a lot more activity in that than we have done in the past.

I attribute it to getting involved with CarMax. We did our first CarMax (three or four years ago). They are a national firm and are building a lot in this area. They work with repeat contractors and we did a good job, so we got to do more.

Does the office opening in Chester County, that expanded physical presence, have crossover appeal for your Central Pennsylvania business?

Yeah, I think any of our clients that want to expand in the Mid-Atlantic region would see that as a positive. From a servicing-our-client standpoint, it allows them to single source that with us. That is one of the benefits of having an expanded presence.

How optimistic are you about industry growth this year and what are you doing to capitalize? How do you build offa record year?

The fundamental building blocks for our success, I feel, is our focus on our clients and making sure that we're meeting and exceeding their expectations. What that does is develops that client for life. So we get that repeat work and we also get new work.

Our new work I attribute to doing work for clients that we already have, and doing that very well. And also just a culture of servicing our clients, which really goes into our values and who we hire. We're trying to be different and trying to be a great service organization.

We have a lot of work in preconstruction right now. We're hoping if that work starts, as we're projecting, that we're going to grow similarly (over the) next year.

Your Second and State project in Harrisburg was recognized by ABC Keystone. That's up for a national award, right?

We submitted our Second and State project with WCI Partners for a national (ABC) award. We're hoping to hear positively on that in the beginning of February.

Is there a market for more projects like that, the high-end commercial buildings that incorporate more sustainable building practices?

We submitted another project for a national award. It's in Kennett Square. It's Kendal-Crosslands Communities. Those are all geothermal systems. All of the homes there are built either LEED Silver or LEED Gold homes. It takes the right combination. We have the know-how, but you need to have the clients who that's important to also.

We're finding more clients are interested in some level of sustainability and looking at life cycle costs.

More about Matthew Hartzler

Hartzler, 41, was hired out of college by Warfel Construction Co. in 1995. He began as a project engineer before becoming a project manager, assistant operations manager and then a vice president and partner in 2007.

He took over as president in May 2013.

A Penn State graduate, he earned his bachelor's degree in structural design and construction engineering technology.

Hartzler lives in Penn Township. He and his wife, Andrea, have three children, ages 13, 11 and 5.

He enjoys watching Philadelphia professional sports teams and running.

By Jason Scott

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Source: Central Penn Business Journal (PA)

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