Though other companies still may be struggling out of the economic slump, the bay area's 10 largest are healthier financially than they were a year ago.
By HELEN HUNTLEY
Published May 17, 2004
The Tampa Bay area's biggest public companies are setting the pace for recovery in a strengthening economy.
Take it from the top. With more than $17-billion in revenue, Tech Data Corp. is larger than the next nine largest Tampa Bay area companies combined. Although it hasn't come all the way back to its heyday of three years ago, Tech Data's rebound has been impressive.
The company, which distributes computer products, last year reversed a sales decline brought on by the bursting of the technology bubble and turned a $200-million loss into a $104-million profit. Analysts project the positive trend will continue.
In addition to being the largest in the Tampa Bay area, Tech Data ranks as the 111th-largest public company in the country, according to Fortune magazine.
The second- and third-largest Tampa Bay companies are growing even faster than Tech Data. Jabil Circuit Inc. and Outback Steakhouse Inc. can boast of double-digit percentage increases in both sales and earnings.
Although some of the other companies are still struggling, overall the 10 largest companies in the Tampa Bay area are healthier financially than they were a year ago, when the St. Petersburg Times last did a review of the Tampa Bay area's top public companies. More important, they are all still around.
With one exception, the companies that made the top 10 list this year are the same ones featured last year. MarineMax Inc., a Clearwater boat dealer, was No. 10 on last year's list, but got bumped to No. 11 when Anchor Glass Container Corp. of Tampa went public in September. Making the Times 10 took just $540.7-million in revenue last year but required $709.9-million this year.
Getting bumped is no reflection on MarineMax, which is one of the best-performing public companies in the Tampa Bay area. In fact, fast-growing MarineMax might very well surpass Anchor Glass in revenue in the next few years.
Many Florida public companies did not weather the downturn in the economy nearly as well as those at the top of the Times 10 list. Florida had 471 public companies in May 2000 and only 369 three years later, a 22 percent decline, according to statistics compiled by PCE Investment Bankers in Winter Park. Many of those companies that disappeared went bankrupt, and very few new companies went public to replace them.
"The rate of mergers and acquisitions has been pretty consistent; what increased was the amount of bankruptcies and liquidations," said Michael Poole, a PCE principal. The market for new public offerings didn't start improving until the stock market began perking up last year.
The Times 10 rankings are based on total revenues for the most recently completed fiscal year. The one exception is Danka Business Systems, for which the Times used numbers from the past four reported quarters. The company has not yet released financial information for the fiscal year that ended March 31.
The strength at the top of the Times 10 is a combination of improving market conditions and companies playing well to their individual strengths. U.S. business spending finally began perking up last year after two bad years. Both Tech Data and Jabil, a contract electronics manufacturer, are benefitting from a rebound in the technology sector and from their global reach.
For Tech Data, Europe is the engine of growth, now accounting for a majority of the company's sales. Tech Data's European sales jumped 29 percent last year, enhanced by a stronger euro, which makes U.S. goods cheaper for Europeans to buy. It also makes Tech Data's sales in euros look even better when they are translated into U.S. dollars. The company also has sharpened its focus on specialized markets such as digital imaging and home networking.
"The broader trends in the industry got better, but the industry did not grow anywhere near as fast as Tech Data did," said Robert Anastasi, a research analyst who follows Tech Data for Raymond James & Associates and who owns the stock himself.
Although it is No. 2 in revenue, Jabil is the most valuable Tampa Bay area company, based on the $5.4-billion value of its outstanding shares. Jabil is adding customers worldwide at the same time it is strengthening its ability to bid for defense contracts at home. Chief executive Tim Main said the company is making sure its financial controls and management capabilities grow along with its sales.
"If you don't do these things well, the wheels will come off the vehicle," Main said.
The company is investing millions of dollars, he said, in its in-house information technology, the single biggest corporate investment it has. Another top priority is rotating international assignments among company leaders.
Outback has done remarkably well to keep growing even when economic times were tough. Now that times have improved, Outback is capitalizing on consumers' renewed interest in eating out and increased ability to pick up the check.
By far the most profitable company in the Times 10 is Clearwater's Lincare Holdings Inc. It had net income of more than $232-million last year, more than twice what Tech Data earned on less than a tenth of the revenues.
Lincare has prospered along with growing demand for respiratory services, particularly among the elderly. However, it faces a huge challenge in the form of changing rules for Medicare providers.
The new Medicare law, signed by President Bush in December but not yet fully implemented, reduces reimbursement rates and requires competitive bidding. The cut in reimbursements immediately trimmed 4.6 percent from Lincare's revenues in the first quarter. However, the company is continuing to grow through acquisitions and by increasing its market share.
Not all the companies in the Times 10 are doing well. Three are major turnaround works in progress, including the newest member of the group, Anchor Glass Container Corp. of Tampa, which emerged from Chapter 11 bankruptcy reorganization in 2002. Walter Industries Inc. in Tampa and Danka Business Systems PLC in St. Petersburg have efforts under way to stem losses and restore profitability.
In the first quarter of this year, Anchor benefitted from the uptick in the economy, trimming its losses on improving sales of its glass bottles, but Walter Industries struggled in its efforts to get its important home building division on track.
More restructuring charges are expected at Danka, an office equipment distributor, which has been cutting jobs to slash costs.
TECO Energy Inc. lost far more money - $909-million - than any other Tampa Bay company last year, largely as a result of writing off its investment in two ill-fated wholesale power plants. But the company managed to turn a profit in the first quarter.
Investing in the Times 10 is anything but a sure bet. Over a two-year period ending April 30, investors made money on stocks of five of the companies, lost money on four and broke even on one. Global Imaging Systems Inc. of Tampa was the big winner, with an 85 percent gain, while TECO Energy was the big loser with a 48 percent loss. On average, the Times 10 stocks were up a paltry 7.5 percent over two years, slightly underperforming the Dow Jones Industrial Average, which was up 7.9 percent.
If you really wanted to make money in Tampa Bay stocks over that period, small companies rather than big ones were the place to be. Investors more than tripled their money on stocks such as Technology Research Inc., a Clearwater company that makes electrical safety products; Flanders Corp., a St. Petersburg company that makes air filters; and Odyssey Marine Exploration, a Tampa company that explores shipwrecks.
Overall, small stocks have performed better than large ones over the past three years, not just in the Tampa Bay area, but nationally.
In addition to MarineMax, Tampa Bay companies that are approaching the size to crack the top 10 include Brown & Brown Inc., a Tampa insurance agency; Catalina Marketing Corp., a St. Petersburg marketing company; Kforce Inc., a Tampa staffing company; and Sykes Enterprises Inc., a Tampa computer services company.
- Jeff Harrington contributed to this report. Helen Huntley can be reached at huntley@sptimes.com or 727 893-8230.
THE TIMES 10
1. Tech Data Corp. 5350 Tech Data Drive
Clearwater, FL 33760
(727) 539-7429
www.techdata.com
Business: Distributor of computer products
Ticker symbol, market: TECD, Nasdaq-NM
Stock Price: $33.55, as of Friday
Top officers: Steven A. Raymund, chairman/chief executive; Nestor Cano, president worldwide operations; Jeffery P. Howells, executive vice president
Employees: 8,400
FINANCIALS
(Year ended 1/31/04)
Revenue: $17.4-billion, up 10.6%
Net income: $104.1-million, up 152%
Per share: $1.81, up 151%
Return on equity: 7%
2-year return to shareholders: -24.4%
Market capitalization: $2-billion
Biggest challenge: Drawing enough revenue from its “specialized business units” to offset any continued sluggishness in its core business of distributing computers and computer equipment. The specialized units focus on niche electronic markets, such as the units to link various electronic devices in people’s homes. Geographically, Tech Data’s operation in Germany presents its biggest challenge in terms of management and the economy.
2. Jabil Circuit Inc. 10560 Dr. Martin Luther King St. N
St. Petersburg, FL 33716
(727) 577-9749
www.jabil.com
Business: Contract electronics manufacturer
Ticker symbol, market: JBL, NYSE
Stock price: $25.58, as of Friday
Top officers: Timothy L. Main, president/chief executive; Chris A. Lewis, chief financial officer; Mark T. Mondello, chief operating officer
Employees: 35,000
FINANCIALS
(Year ended 8/31/03)
Revenue: $4.7-billion, up 33.4%
Net income: $43-million, up 23.9%
Per share: 21 cents, up 23.5%
Return on equity: 2.78%
2-year return to shareholders: 30.3%
Market capitalization: $5.4-billion
Biggest challenge: Managing a fast-growing global enterprise. Moving jobs offshore to save money coupled with a surge in new international customers has put Jabil on track to becoming a nearly $8-billion operation by fiscal 2005. With top-line growth of 25 to 30 percent annually, Jabil is pressed to invest heavily both in technology and development of its management ranks around the world.
3. Outback Steakhouse Inc. 2202 N West Shore Blvd., 5th Foor
Tampa, FL 33607
(877) 733-6774
www.outback.com
Business: Restaurant chains
Ticker symbol, market: OSI, NYSE
Stock price: $42.01, as of Friday
Annual dividend: 52 cents
Top officers: Chris Sullivan, chairman/chief executive; Robert Basham, chief operating officer; Paul Avery, president
Employees: 81,225
FINANCIALS
(Year ended 12/31/03)
Revenue: $2.7-billion, up 16.2%
Net income: $170.2-million, up 13.4%
Per share: $2.17, up 14.8%
Return on equity: 17.02%
2-year return to shareholders: 26.5%
Market capitalization: $3.3-billion
Biggest challenge: Staving off an influx of competitors while making planned price increases stick. Outback plans capital expenditures of $200-million to $240-million to open between 121 and 139 new restaurants this year, including 32 to 35 Outback Steakhouses, 30 to 35 Bonefish Grills, 24 to 25 Carrabba’s Italian Grills and two Paul Lee’s Chinese Kitchens, the company’s newest concept.
4. TECO Energy Inc. 702 N. Franklin St.
Tampa, FL 33602
(813) 228-4111
www.tecoenergy.com
Business: Electric and gas utility holding company
Ticker symbol, market: TE, NYSE
Stock price: $11.80, as of Friday
Annual dividend: 76 cents
Top officers: Robert D. Fagan, chairman/chief executive; John B. Ramil, executive vice president/chief operating officer; Gordon L. Gillette, senior vice president-finance/chief financial officer
Employees: 5,753
FINANCIALS
(Year ended 12/31/03)
Revenue: $2.7-billion, up 2.8%
Net loss: $909.4-million
Per share: -$5.05
Return on equity: -42.4%
2-year return to shareholders: -47.7%
Market capitalization: $2.4-billion
Biggest challenge: Steering the company back toward a focus on its regulated electric and gas utilities while staunching losses in unregulated wholesale power operations. Further write-downs of troubled wholesale plants are possible, which could require painful steps to strengthen the company’s balance sheet.
5. Raymond James Financial Inc. 880 Carillon Parkway
St. Petersburg, FL 33716
(727) 567-1000
www.raymondjames.com
Business: Stock brokerage and money management
Ticker symbol, market: RJF, NYSE
Stock price: $24.89, as of Friday
Annual dividend: 28 cents
Top officers: Thomas A. James, chairman/chief executive; Chester B. Helck, president/chief operating officer; Jeffrey P. Julien, senior vice president/chief financial officer
Employees: 5,100 plus 3,800 independent contractors
FINANCIALS
(Year ended 9/26/03)
Revenue: $1.5-billion, up 0.8%
Net income: $86.3-million, up 8.8%
Per share: $1.76, up 10%
Return on equity: 9.78%
2-year return to shareholders: 17.6%
Market capitalization: $1.9-billion
Biggest challenge: Continuing to grow in the face of volatile markets. The company is trying more compensation options to lure high-achieving financial advisers from other brokerages. A new addition to headquarters means room to grow and added costs. Raymond James also is revamping software systems to prevent commission overcharges on mutual funds, an outgrowth of a settlement with regulators earlier this year.
6. Danka Business Systems PLC 11101 Roosevelt Blvd.
St. Petersburg, FL 33716
(727) 622-2100
www.danka.com
Business: Office equipment distributor
Ticker symbol, market: DANKY, Nasdaq-NM
Stock price: $3.90, as of Friday
Top officers: Todd Mavis, chief executive; Peter Williams, president European/Australian Group; Michael Popielec, chief operating officer Americas
Employees: 8,400
FINANCIALS
(four quarters ended 12/31/03; results not yet available for fiscal year ended 3/31/04)
Revenue: $1.34-billion, down 5.1%
Net loss: $36.1-million
Per share: -88 cents
Return on equity: -73.5%
2-year return to shareholders: -17.3%
Market capitalization: $255.6-million
Biggest challenge: Stemming losses and turning the company around with a new CEO and a new structure. Recent cost-cutting efforts include outsourcing the information technology department, relocating the company headquarters and cutting employees. Danka took a $20-million restructuring charge at the end of last year and has said it will take another of at least the same size.
7. Walter Industries Inc. 4211 W. Boy Scout Blvd.
Tampa, FL 33607
(813) 871-4811
www.walterind.com
Business: Home building, financing, industrial products, coal and natural gas
Ticker symbol, market: WLT, NYSE
Stock price: $12.04, as of Friday
Annual dividend: 12 cents
Top officers: Don DeFosset, chairman/president/chief executive; William Ohrt, executive vice president/chief financial officer
Employees: 5,276
FINANCIALS
(Year ended 12/31/03)
Revenue: $1.3-billion, down 1%
Net loss: $29-million
Per share: -67 cents
Return on equity: -9.4%
2-year return to shareholders: -6.6%
Market capitalization: $533.9-million
Biggest challenge: Improving profitability of home building operations, which have been through a reorganization and strategy changes. Rising interest rates could put a crimp in the company’s plans. Walter recently sold off an industrial materials company and an aluminum company but is still trying to find a buyer for its coal mining and coke production operations. Higher coal prices should help attract potential buyers and improve net income.
8. Lincare Holdings Inc. 19387 U.S. 19 N
Clearwater, FL 33764
(727) 530-7700
www.lincare.com
Business: Oxygen and respiratory therapy services
Ticker symbol, market: LNCR, Nasdaq-NM
Stock price: $35.09, as of Friday
Top officers: John P. Byrnes, chief executive; Shawn Schabel, president and chief operating officer; Paul G. Gabos, chief financial officer
Employees: 7,487
FINANCIALS
(Year ended 12/31/03)
Revenue: $1.1-billion, up 19.4%
Net income: $232.1-million, up 21.9%
Per share: $2.22, up 28.3%
Return on Equity: 27.23%
2-year return to shareholders: 11.3%
Market capitalization: $3.4-billion
Biggest challenge: Grappling with changing Medicare rules, including recent cuts in reimbursement rates and a plan to establish a competitive bidding system for oxygen equipment. The new rules trimmed $12.3-million from Lincare’s first-quarter 2004 revenues. However, the company continues on a growth binge, adding 85 operating centers last year and 18 more during the first quarter. Demand for respiratory therapy is growing as the U.S. population ages, a trend that bodes well for Lincare.#
9. Global Imaging Systems Inc. 3820 Northdale Blvd., Suite 200A
Tampa, FL 33624
(813) 960-5508
www.global-imaging.com
Business: Office equipment distributor
Ticker symbol, market: GISX, Nasdaq-NM
Stock price: $32.60, as of Friday
Top officers: Thomas S. Johnson, chairman/chief executive; Ray Schilling, senior vice president/chief financial officer
Employees: 3,800
FINANCIALS
(Year ended 3/31/04)
Revenue: $750.7-million, up 10.5%
Net income: $39.8-million, up 16.1%
Per share: $1.70, up 7.6%
Return on equity: 15.4%
2-year return to shareholders: 85.1%
Market capitalization: $751-million
Biggest challenge: Smoothly integrating acquisitions, particularly the company’s biggest ever, newly acquired Imagine Technology Group, which will add about $117-million to annual revenues. Global Imaging also aims for internal growth of 6 to 8 percent a year. Technology solutions, such as computers and network services, account for a small but fast-growing part of the company’s business.
10. Anchor Glass Container Corp. 4343 Anchor Plaza Parkway
Tampa, FL 33634
(813) 884-0000
Business: Manufacturer of glass food and beverage containers
Ticker Symbol, market: AGCC, Nasdaq-NM
Stock price: $15.20, as of Friday
Annual dividend: 16 cents
Top officers: Richard M. Deneau, president/chief executive; Darrin J. Campbell, executive vice president; Roger L. Erb, executive vice president
Employees: 3,040
FINANCIALS
(Year ended 12/31/03)
Revenue: $709.9-million
Net loss: $71.5-million
Per share: -$4.37
Return on equity: -74.8%
2-Year return to shareholders: 0
Market capitalization: $384.4-million
Biggest challenge: Finding ways to grow in a mature industry while facing heavy competition from other glassmakers and alternative packaging. A heavy debt burden left from its bankruptcy reorganization limits flexibility. The company went public last year.
