The service sector surprises no one by steaming ahead at full speed, while the construction industry raises eyebrows with its substantial growth.
Although the recovery is officially underway from the worst economic crisis since the Great Depression, a cloud of uncertainty still hovers
over the American business landscape.
Many unsettling questions still linger. Will there be a double-dip recession? How long will it take for credit to loosen up? When will the unemployment decline?
In the face of uncertainty, it is interesting to examine companies that are growing despite adversity. It is in this light that HispanicBusiness magazine releases its annual issue listing the 100 fastest-growing Hispanic-owned companies in America.
As a group, the 100 Fastest-Growing Companies brought in a heady $10.9 billion in revenue in 2009 — more than double the $4.7 billion they posted in 2005.
The ascent is particularly impressive when you consider that during the same year, the nation's 500 largest Hispanicowned companies suffered the steepest drop in combined revenues since we began compiling data 28 years ago. Granted, the 225 percent average five-year growth of this year's featured fi rms was surpassed by last year's average of 350 percent. On the other hand, last year's list had more growing to do: the $10.9 billion taken in by this year's crop far outstrips the $8.5 billion earned by last year's companies.
The Leadership of the 100
As the nation looks to regain its economic footing, these companies are leading the charge, chipping away at stubbornly high unemployment.
The 10 companies on the list boast the highest roster of workers: 20,251. T at surpasses the amount they employed five years ago by an impressive 7,900-plus. In comparison, last year the five-year increase stood at 5,900.
Topping the fastest-growing list for the second year running is MicroTech, a Virginia-based information technology firm that services more than 60 government agencies, including the Social Security Administration, the Federal Aviation Administration and the U.S. armed forces.
The six-year-old company's annual revenues have soared exponentially, from $3.4 million in 2005 to $39.1 million in 2008 to an eye-popping $65.5 million in 2009. Likewise, its employee base has snowballed from 20 in 2004 to 250 in 2008 to 348 last year.
"We look very hard for ways of improving ourselves daily," MicroTech CEO and President Tony Jimenez told HispanicBusiness magazine. "People want to do business with the best. Our secret is that everyone here wants to be the best. We're not satisfied with second or third."
MicroTech is among 51 companies on the list that are part of the service sector, which, like last year, dominates the directory, accounting for 56 percent of total revenues.
The distant runner up is construction, with 20.5 percent of total revenues, followed by wholesale, with 9.4 percent. T e remaining 15 percent comprise fi nance, manufacturing, energy, automotive, retail and transportation.
Though this year's top three industries also dominated last year's list in the same order, one of them — construction — has undergone signifi cant changes.
For starters, despite the real estate collapse, construction's 20.5 percent share of the list's overall revenues marks a significant increase over last year's 12 percent. On the other hand, the number of construction companies on the list fell from 22 to 18.
This suggests that while the recession hit hard, the hardy survivors garnered significantly more work than before.
This is the case for Allied Industries, a demolition and environmental cleanup fi rm in Sherman Oaks, Calif., which shot up to No. 9 on this year's list from last year's 16.
Like MicroTech, Allied Industries does a lot of business with the federal government. Its business plan consists of the demolition and reconstruction of buildings, and the environmental cleanup and remediation of toxic areas.
On the cleanup side, Ernie Gutierrez, Allied Industries' 42-year-old CEO and founder, said the company specializes in everything from asbestos and lead removal to cleanups of petroleum spills and contaminated soil.
"If it's bad for you, we get rid of it," he told HispanicBusiness. Allied was founded in 1997, but it has grown dramatically in recent years. Annual revenues jumped to $24.5 million in 2009, up from $4.5 million in 2005. The company's workforce swelled from 80 to 200 employees.
Mr. Gutierrez said the decision to work with the federal government turned out to be a good one. "The government is the largest consumer in the world," he said, adding that his company has landed many contracts funded by the stimulus package of 2009.
Among Allied's ongoing projects is the cleanup of jet fuel at the San Diego Miramar Naval Air Station, where the movie "Top Gun" was filmed.
The Auto Industry
The recession has been particularly brutal for the auto industry. Nonetheless, some creative companies have found ways to thrive.
One of these is Miami-based AZF Automotive, which ranked 27th this year. T e dealership has carved out a unique niche: selling cars to customers and re-sellers in Latin America. AZF also provides federal government employees with vehicles.
Founded in 1993, AZF has seen its revenues jump from $9.1 million in 2005 to $28.7 million in 2009. "The reason is mainly because 'going green' is catching on overseas," Carlos Rafael Domenech, the company's CFO, told HispanicBusiness magazine. "We grew sales because there is a huge demand for hybrid vehicles."
In particular, the biggest spike in sales occurred in Ecuador, where the government eliminated duty taxes on hybrid vehicles in 2009. T is year, the duty tax on hybrids returned, but the fee is relatively low. "We are hoping other countries will follow," he said.
Some Remodel the Business Model
Extreme highs and lows have been the watchwords for Link America, a warehouse management and wireless communications firm based in Rowlett, Tex.
Despite the tough economic times, Link America jumped from No. 26 on the fastest-growing list to No. 6. "I had to change the whole business model three years ago," CEO Andres Ruzo told HispanicBusiness. "We were 100 percent equipment. Now it's 100 percent services."
When the economy tanked in 2001, Mr. Ruzo was forced to reduce head count from 100 to fi ve. Since then, he's been able to boost the employee base back up to about 25.In five years, the company's revenue has zoomed from $4.2 million to $40.7 million.
These days, about 75 percent of the company's income comes from warehouse services for telecom giants like Verizon and T-Mobile. But it is the other portion of the business that is unique: wireless communication services for police departments, fire stations, ambulance drivers and other first responders.
For this, Link America off ers an array of services, from erecting towers to building networks. It is currently creating a new network for the Dallas Area Rapid Transit.
Mirroring a nationwide trend, a handful of companies based on health care experienced sizable growth last year. Most notable has been the meteoric rise of Molina Healthcare, which became the No. 1 company on this year's HispanicBusiness 500.
A healthcare system providing care to low income people in 15 states, Molina boosted revenues from an already stratospheric $1.6 billion in 2005 to $3.7 billion in 2009. T is year, it ranked 52nd on the fastest growing list, up from 63rd.
Expanding at an even faster rate is a handful of smaller companies in the healthcare arena. Link Construction, which specializes in healthcare facilities, more than quintupled its output since 2005, with revenues skyrocketing from $7 million to $37 million. It moved up this year from 12th to 10th.
Millennium Communications, a New Jersey company launched by former pharmacist Mike Fernandez, works to improve the communication flow between pharmaceutical sales reps, doctors and patients. The company has seen revenues mushroom over five years, from $1.6 million to $8.1 million. It came in at No. 11 this year, up from No. 14.
The Florida-based J&K Mechanical, which provides air conditioning, plumbing and medical gas for the healthcare industry, saw revenues grow in half a decade from $3.4 million to $11.5 million. Its workforce grew in kind, from 15 to 50. T is year, the company ranked 23rd. Last year, it wasn't on the list.
Some of the entrepreneurs in this group came from humble beginnings. The 42-year-old Mr. Gutierrez of Allied Industries was an employee in the painting and lead abatement industry with scant resources when he decided to pursue his dream of starting an environmental cleanup company.
A school in the Los Angeles area provided good training, but Mr. Gutierrez couldn't aff ord the classes. He didn't let that them stop him. He worked out a deal with the instructor in which he painted the classrooms and refinished the floors in exchange for his education.
"The next thing I know I'm teaching the courses," he said. Not long af er, Mr. Gutierrez had his own business. He said he racked up $80,000 in credit card debt getting the company off the ground. During that time, he lived in a humble rented room, where he stayed for nine years, until his business was established.
"There were times I literally could not pay my phone bill, and I had my phone shut off ," he remembers. But that was then. Now, Mr. Gutierrez owns his dream home in the San Fernando Valley and has season tickets for the L.A. Lakers. "My advice is one to have a goal, and persevere," he said. "To be tenacious about having that goal, and never give up."
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