It was with some trepidation that ABiz embarked upon this year’s Top 50 Private Companies project, now in its eighth year. Researching and identifying companies that qualify for the list is always a huge task, even when the economy is on the upswing — which has, with only slight exception, steadily been the case since we launched this project in 2009. But 2015 was not a good year for Acadiana, which experienced a full year of the impact of an oil price slump that took hold in mid-2014 and has continued well into 2016. Sales tax revenues are down, housing has slowed, thousands have lost their jobs.
Fortunately, our fears about lack of participation (which leads to the dreaded effort to estimate the revenues of companies we know qualify) did not come to pass. In fact, participation this year was as robust as it has ever been, even outpacing what we experienced during some of the best economic years in the region. That voluntary involvement and the forthright answers we got from some of the top execs at these companies for the question-and-answer profiles on the following pages prove many top officials are just as willing to share information about their companies’ struggles and challenges as they are their successes.
And nowhere on the list is there a better example of this than the very top. For the first time in the history of the project, Acadian Cos. has moved into the No. 1 spot, displacing the top company for the past two years, Schumacher Group, which no longer qualifies for the list due to a 2015 investment in the local emergency medicine management firm (now called Schumacher Clinical Partners) by a Canadian company.
Acadian managed to pull off a modest 2 percent uptick in overall business last year, reporting $481 million in revenues, but that figure does not tell the story of the significant impact falling oil prices have had on the company, which (and this was not planned) will celebrate 45 years in business on Sept. 1, the day the Top 50 companies gather at the Cajundome Convention Center for a luncheon in their honor.
Primarily an ambulance service company, Acadian has more than 4,000 employees, with about 20 percent of its business concentrated in its Safety Management Systems division, which provides various training services and medic staffing in a number of fields, primarily the oil and gas industry. “The oil and gas industry really has hurt this area substantially,” CEO Richard Zuschlag tells ABiz. “We had several hundred safety medics all across the country doing this fracking in Ohio, Pennsylvania, Wyoming and North Dakota, Canada and California, and so the sad truth is that the decrease in oil prices has that division running at about 50 percent of what it was a year ago. We went from about $100 million in [annual] revenue in that division to $50 million in just six short months,” Zuschlag continues. The division has laid off 350 of its 780 employees.
The ground ambulance service, however, has been growing both through acquisitions and organically — the latter, Zuschlag’s research shows, being fueled largely by falling gasoline prices, which are putting more motorists on the road and sending more of them to hospital ERs.
“Our ground ambulance service in Texas has really taken off,” Zuschlag says, noting big Texas acquisitions in November and December and two more in June of this year. “We now are the largest private ambulance company in the state of Texas. In round figures we transport approximately 1,000 patients a day in Louisiana and 850 a day in Texas, so in another year Texas will pass up Louisiana,” he says. “If it weren’t for the extraordinary growth of our company in Texas, things could have come unraveled more drastically.”
Like Zuschlag, local executives are finding ways to grow and diversify in a down economy, evidenced by the fact that half of the list experienced revenue increases from 2014-2015. In fact five of the nine newcomers to the list — AMG, ABNAR, The Bernard Group, Targil Seasoning, M&M Sales Co., McLain Homes, The Southwest Group, Bulliard Construction and Miguez fuel — saw their revenues rise last year.
LEDA President and CEO Gregg Gothreaux echoes the majority of local business owners’ position that there is nothing to be gained from sugarcoating the current downturn and its far-reaching effects.
Many ABiz readers got a heavy dose of frank economic analysis at Gothreaux’s State of the Economy Luncheon on June 16, an annual event sponsored by this publication (read his recap on Page 16).
But Gothreaux did not let the audience leave on a sour note, emphasizing the recovery will come — possibly as early as the beginning in 2017. And because of the area’s tremendous diversification efforts, he predicts that it should take only a couple of years to recover.
“Think back to 1986, when the bottom fell out,” Gothreaux said. “The Lafayette economy didn’t even see the light of day until 1990, and didn’t really get going until 1994, four to eight years after the collapse. ... The reality is, it’s taken nearly two years for us to get where we are now. It will take at least that same amount of time for us to recoup the ground we’ve lost.”
No. of companies reporting increased revenue
No. of companies reporting decreased revenue
No. of companies reporting no change
LARGEST REVENUE INCREASES:
The Southwest Group - up 83%
McLain Homes - up 50%
Blue Victory Holdings - up 45%
Krispy Krunchy Foods - up 36%
LARGEST REVENUE DECREASES:
Truston Technologies - down 39%
JP Oil Holdings - down 30%
The Bernard Group - down 26%
View the full Acadiana Top 50 list, local public companies list and the top privately held companies in Baton Rouge, New Orleans and Lake Charles here.
GUS RANTZ IV, PRESIDENT
WHAT WE DO: We are a health care company with a specialty in post-acute care hospitals. Our hospitals see some of the sickest patients in the health care continuum, often coming directly from an ICU.
WHAT KIND OF YEAR WAS 2015 FOR YOUR COMPANY AND EMPLOYEES? 2015 was part major expansion and part preparing for major changes in our industry. We invested heavily in markets that have the greatest need for pulmonary care, as the coming changes from the federal government will severely limit our ability to care for many patients who have traditionally benefited from post-acute specialty care, without the need for significant pulmonary treatment.
HOW HAS THE DOWNTURN IN THE OIL AND GAS INDUSTRY AFFECTED YOUR COMPANY? We have been affected more from a workforce standpoint. Many of our primary caregivers are RNs and LPNs whose spouses have been adversely affected by the oil and gas downturn, requiring their families to relocate for new jobs. Additionally, the impact on the state and the raising of taxes on all hospitals will negatively impact an already tumultuous industry.
WHAT FACTORS AND/OR MANAGEMENT DECISIONS IMPACTED YOUR FINANCIAL PERFORMANCE? We have invested heavily in our greatest resource, our employees. As many of our competitors were content with the status quo, we continued to seek out those who could improve our companies, and we have been fortunate to gather some of the top talent from around the country. They have been the major difference-makers in the success of AMG.
WHAT ARE THE MOST PRESSING ISSUES OR CHALLENGES FACING YOUR COMPANY (AND INDUSTRY) AS THEY RELATE TO PROFITABILITY AND GROWTH? The No. 1 factor affecting our industry is government over regulation and unfunded mandates that take time and resources away from patients and have no appreciable effect on outcomes or care. More time and money is spent on compliance and insurance related issues, rather than the primary goal of patient care.
WHAT’S THE BEST BUSINESS ADVICE YOU WERE EVER GIVEN? My father and former partner, Gus Rantz III, told me when I was 12 years old, “Don’t ever confuse effort with results.” Tim Howard, my business partner, told me when I was a teenager, “If you want to get ahead in life, that is easy, just work half days,” meaning put in 12 hours of work a day.
AJAY K. PATEL, OWNER
WHAT WE DO: We own and operate McDonald’s restaurants in Southwest Louisiana.
WHAT KIND OF YEAR WAS 2015 FOR YOUR COMPANY AND EMPLOYEES? We had a pretty good 2015 considering the downturn. We continue to rebuild and renovate our restaurants to offer our customers the best and most relevant experiences, constantly researching how we can deliver to customers more of what they want — a great example being the rollout and successful execution of all-day breakfast, which was a direct result of customer demand. And it has been a great contributor to our success since launching it last year. We will expand all-day breakfast later this year to include all muffin sandwiches, along with the biscuits and McGriddle lineup we currently offer. The challenge was to simplify our all-day menu first to be able to execute all-day breakfast at a high level, which answers the question we often get: “Why’d it take so long?”
HOW HAS THE DOWNTURN IN THE OIL AND GAS INDUSTRY AFFECTED YOUR COMPANY? As with most businesses in Acadiana, we have felt the impact of higher unemployment and layoffs. However, we believe we offer compelling value every day to keep existing customers and attract new customers.
WHAT ECONOMIC INDICATORS DO YOU WATCH MOST CLOSELY IN YOUR FINANCIAL PLANNING PROCESS AND WHY? We monitor the local unemployment and under employment rates as well as average household income of our local community. We also keep a close eye on the local real estate market to help us project our future growth.
WHAT’S THE BEST BUSINESS ADVICE YOU WERE EVER GIVEN? Stay focused on your customer and always continue to reinvest in your business.
THOMAS K. BULLIARD II, PRESIDENT
WHAT WE DO: We are a regional construction company. Our work includes light commercial, manufacturing, retail, medical, religious and industrial work. We also have a civil and masonry division.
WHAT KIND OF YEAR WAS 2015 FOR YOUR COMPANY AND EMPLOYEES? The year 2015 was an average year for the company. Both the volume of work and profit margins remained very close to prior years.
HOW HAS THE DOWNTURN IN THE OIL AND GAS INDUSTRY AFFECTED YOUR COMPANY? The downturn in the energy business has had a profound effect on just about every business in this region of the country. Specialty contractors who cater to the oil industry are in need of work so they turn to the markets that we cover. The end result of this has had a negative effect on the business.
WHAT FACTORS AND/OR MANAGEMENT DECISIONS IMPACTED YOUR FINANCIAL PERFORMANCE? We decided years ago that in order to sustain the business it must be profitable. After all, it does not take a Harvard Business graduate to figure that out. We, therefore, figure the cost of the work then add a margin to the bottom line and go in with it. We want the project to work out for our customer just as much as we want it to work for our company. If we can’t get what we need to perform the project in a comfortable manner, then we move on.
HOW HAS BUSINESS BEEN FOR THE FIRST HALF OF 2016. AND WHAT ARE YOUR EXPECTATIONS FOR HOW IT WILL END? Business for 2016 is slightly down, and we do not foresee any major changes in the market in the near future. But we continue to keep an eye on our design professionals, architects and engineers, to keep abreast as to what is coming up so that we don’t miss out on any opportunities.
WHAT ARE THE MOST PRESSING ISSUES OR CHALLENGES FACING YOUR COMPANY (AND INDUSTRY) AS THEY RELATE TO PROFITABILITY AND GROWTH? I have to think that the biggest challenge facing the construction industry, at this point in history, is a lack of young Americans entering the field. There is a lack of qualified skilled trades such as carpenters and masons.
WHAT IS THE BEST BUSINESS ADVICE YOU WERE EVER GIVEN? Years ago a friend of mine, Mickey Pugh, asked me if I would prefer to slaughter the calf or shear the sheep. It was an easy answer, of course, because we pride ourselves on having repeat customers. It says a lot about who we are.
TED BELLARD, PRESIDENT
WHAT WE DO: Targil Seasoning is a spice co-packer for the retail market and a spice blender for the food industry.
WHAT KIND OF YEAR WAS 2015 FOR YOUR COMPANY AND EMPLOYEES? 2015 was a steady year for us with an average 8-10 percent increase in sales.
HOW HAS THE DOWNTURN IN THE OIL AND GAS INDUSTRY AFFECTED YOUR COMPANY? Targil is not usually affected by the oil and gas downturn in Acadiana, as we do business across the country.
WHAT FACTORS AND/OR MANAGEMENT DECISIONS IMPACTED YOUR FINANCIAL PERFORMANCE? We made a move last year to invest in equipment that increases production through automation so that we did not have to incur more labor costs. We added several automated canning lines to boost production on retail cans, resulting in an increase of 60 cans a minute to 260 cans a minute. We also added another bulk packing line to expand production on the institutional food side. This not only allowed us to immediately enhance our efficiency but also created a platform for our continued growth. Looking forward, I am evaluating how to best delegate some of my responsibilities on to others so that I don’t become overwhelmed and the company can maximize its potential.
HOW HAS BUSINESS BEEN FOR THE FIRST HALF OF 2016. AND WHAT ARE YOUR EXPECTATIONS FOR HOW IT WILL END? So far this year, we’re experiencing a 12 percent increase over 2015. We’d like to stay on that pace, and we see no reason we won’t meet that goal.
WHAT ARE THE MOST PRESSING ISSUES OR CHALLENGES FACING YOUR COMPANY (AND INDUSTRY) AS THEY RELATE TO PROFITABILITY AND GROWTH? The most challenging obstacle we face is regulations over everything manufactured in the food industry. Additionally, the value of the dollar affects us the most because most all spices are produced in other countries and as the dollar becomes weak, the cost of spices rises against other currencies.
WHAT IS THE BEST BUSINESS ADVICE YOU WERE EVER GIVEN? Work hard and never take on much debt. That was a learn by example from my father.
CHUCK MCMATH, PRESIDENT AND CEO
WHAT WE DO: We are a third-generation family owned business providing breakroom solutions for hospital, manufacturing, education and office clients throughout South Louisiana. We have distribution warehouses in Houma, Lafayette and Lake Charles.
WHAT KIND OF YEAR WAS 2015 FOR YOUR COMPANY AND EMPLOYEES? 2015 was our highest sales since the business began in 1974.
HOW HAS THE DOWNTURN IN THE OIL AND GAS INDUSTRY AFFECTED YOUR COMPANY? We have seen a significant reduction in sales in machines located in the areas where oil and gas service companies are located. If there are no employees in a facility, there are no sales in the vending machine. These sales can never be made up. Our Houma branch and trucks that service the Broussard and New Iberia areas have been affected significantly. The heart of Lafayette is holding on, and our branch in Lake Charles is thriving.
WHAT FACTORS AND/OR MANAGEMENT DECISIONS IMPACTED YOUR FINANCIAL PERFORMANCE? At the onset of the downturn, we made a decision to invest heavily in technology to create efficiencies within the company. We invested more than $500,000 to install credit card readers on 2,500 of our vending machines to encourage purchases from customers who may not be carrying cash, resulting in a 22 percent increase in existing machine sales in the second half of 2015. It also enabled us to use telemetry to get “real time” information from the vending machine to more effectively replenish the machine with exactly what was sold. This created accuracies and efficiencies to better serve the customer and enable the vending route person to service more machines each day with less effort. We also added a new concept in breakroom solutions called micro markets, which offers hundreds of snacks, beverages and fresh food selections in a totally customizable retail space for any office or facility using self-check out. Imagine a “mini convenience store” within your facility. Additionally, we strive every day to offer healthier options.
WHAT ARE THE MOST PRESSING ISSUES OR CHALLENGES FACING YOUR COMPANY (AND INDUSTRY) AS THEY RELATE TO PROFITABILITY AND GROWTH? We are challenged with new regulations, the rising cost of health care, and new regulations for providing healthy items through vending, along with the new labeling regulations outlined in the ACA requiring that the nutritional content be accessible by the customer prior to purchase.
WHAT IS THE BEST BUSINESS ADVICE YOU WERE EVER GIVEN? Forty-four years ago, before the business grew enough for me to even have employees, J. O. Reed, a vending service manager for Vendo brand machines, said: “Surround yourself with good people” and “Keep your employees happy; they will keep your customers happy.”