30th annual report on black business: ready to rumble: during the last year, the B.E. 100s were fighting for survival. Successful firms won the battle for market share and profitability with stamina, intelligence and tenacity. (B.E. 100s Overview).Ready to Rumble During much of 2001, the B.E. 100s seemed like a welterweight facing a super-heavyweight of an opponent: the economy. Although the CEOs of these companies knew the go-go days of the late '90s were over, none of them could forecast the devastation of multiple forces--Sept. 11, war, recession, anemic anemic pertaining to anemia. business spending, and Enronitis--on Main Street and Wall Street. Against this backdrop, American business, from media and retailing to technology and manufacturing, was walloped, leaving a number of mainstay companies sprawled across the canvas and down for the count. The enterprises that endured and, quite frankly, thrived were those that exhibited the characteristics of the best prizefighters: stamina, agility, intelligence, and tenacity. In fact, these attributes marked the winners among the heavyweights of black business--companies that perform in any economic climate. Just take a look at our roster of 2002 companies of the year profiled in this issue for confirmation. This year there are a total of 300 companies that comprise the BE 100s, our listing of the largest black-owned industrial/service companies, auto dealerships, advertising agencies, banks, asset managers, and--our new contenders--private equity firms. The 2001 revenues for the top 100 industrial/service firms and the leading 100 auto dealerships alone were $20.3 billion, up from $19.7 billion in 2000--evidence that the BE 100s are a resilient lot. A significant number of black entrepreneurs managed to not get caught on the ropes. There were 57 industrial/service companies and auto dealerships that grossed $100 million. Twenty-two of this collective group produced more than $200 million in revenues. The biggest development was the crowning of a new champion: CAMAC (Computer Automated Measurement And Control) An IEEE standard (IEEE 583) for modular instrumentation systems. CAMAC "crates" are control stations that contain plug-in cards with ports to data acquisition devices. . The Houston-based energy producer and distributor, run by Nigerian-born Kase L. Lawal, emerged as the nation's largest black-owned company by pumping revenues of $979.51 million, just in spitting distance of the $1 billion threshold. (See "A New Leader Emerges".) CAMAC expects to exceed that milestone in 2002. The last time a billion dollar leviathan leviathan (lēvī`əthən), in the Bible, aquatic monster, presumably the crocodile, the whale, or a dragon. It was a symbol of evil to be ultimately defeated by the power of good. was included among the BE 100s was in 1998 when TLC TLC total lung capacity; thin-layer chromatography. TLC abbr. 1. thin-layer chromatography 2. Beatrice International Holdings Inc., the former New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of City-based operator of offshore grocery stores and food manufacturers created by the late, legendary financier Reginald Lewis For the English football (soccer) player, see . For the American basketball player, see . Reginald F. Lewis (December 7, 1942 - January 19, 1993), was an American businessman, who was one of the most successful business leaders during the 1980s. , posted sales of $1.4 billion. Another heavy hitter heavy hitter n. One that is predominant, as in influence or power: "Especially when a candidate is a challenger, appearances with heavy hitters from the party lend an air of credibility" has entered the BE 100s arena: Oprah. Harpo Inc., which produces the immensely popular The Oprah Winfrey “Oprah” redirects here. For the show, see The Oprah Winfrey Show. Oprah Gail Winfrey (born January 29, 1954) is the American multiple-Emmy Award winning host of The Oprah Winfrey Show, the highest-rated talk show in television history. Show, is the most recognized new arrival on the BE INDUSTRIAL/SERVICE 100, ranking No. 9 with gross sales Gross Sales A measure of overall sales that isn't adjusted for customer discounts or returns, calculated simply by adding all sales invoices, and not including operating expenses, cost of goods sold, payment of taxes, or any other charge. of $285 million. Stay tuned for more developments. Many of this year's dominant companies followed an age-old, but effective, boxing strategy: stick-and-move. They took care of existing markets and customers and, at the same time, found new lucrative beachheads. One example is World Wide Technology (WWT WWT Wastewater Treatment WWT What Was That? WWT Warioware Touched (Nintendo DS game) WWT Warioware Twisted! (Game Boy Advance game) WWT What a Waste of Time WWT World's Worst Tourist WWT Wall Wash Test ), dethroned this year as the nation's largest black-owned company--a distinction it held for the last two years. But the company, which grossed $802 million in 2000 and was expected to inherit the title of breaking the billion dollar mark from TLC, decided to restructure operations to prepare for what it views as an impending im·pend intr.v. im·pend·ed, im·pend·ing, im·pends 1. To be about to occur: Her retirement is impending. 2. rebound in the telecommunications sector. The management team spun off its Telcobuy.com (No. 2 on the BE INDUSTRIAL/SERVICE 100 list with $604 million in sales) division, which offers products over the Web to telecommunications firms, into a separate entity. (Both WWT and Telcobuy.com are both more than 51% black-owned.) With 2001 revenues of $320 million, WWT dropped to No. 7 on the BE INDUSTRIAL/SERVICE 100 list, but the company remains one to watch; combine total sales for WWT and Telcobuy.com and it would be a $924 million entity. WWT was not the only former champ to undergo a major overhaul. It is not yet known whether the retooling of Mel Farr Melvin Farr (born November 3, 1944 in Beaumont, Texas) is a former American football player. As a youth, Farr played football, baseball, track and basketball. He earned a chance to play football for UCLA, and was an All-American at the school from 1963 to 1967. Automotive, the nation's largest black-owned company in 1999, represents the beginning of a profitable master plan or an ineffective version of the rope-a-dope. In January Farr shocked the automotive business community when he sold back two Michigan franchises, including the flagship dealership in Oak Park, to Ford--bringing his number of sellbacks to six since 2000. In recent years Farr's operations have been beset by myriad external and internal problems. Slowing sales and a bet on inner-city customers with bad credit were largely responsible for a 31% dip in 2000 revenues, from $432 million in 1999 to $258 million. Moreover, two years ago Farr settled a class-action suit Noun 1. class-action suit - a lawsuit brought by a representative member of a large group of people on behalf of all members of the group class action from customers who bought cars equipped with the controversial On-Time Device, a gadget (1) Slang for any hardware device, typically small. Synonymous with "gizmo." (2) A mini application that resides on a computer desktop or personal home page, typically found in the Windows environment. that prevented those who were delinquent in their payments from starting their vehicles. The latest franchise sales enabled Mel Farr Automotive to offset those losses and produce revenues of $353.3 million, making it No. 2 on the BE AUTO DINER diner, restaurant resembling the railroad dining car that is its source. In the mid-19th cent., the first dining cars that appeared on trains were nothing more than an empty car with a fastened-down table. George M. 100 list. Now Farr is focusing his attention on creating used car superstores with the same clientele. Farr wasn't the only auto dealer hammered by a brutal economy and an industry in turmoil. Rising foreign competition, product recalls, financing deals, and expensive marketing campaigns whacked margins for scores of auto dealers. Some, however, found ways to deflect the blows. Winston Pittman Enterprises, the 2002 Auto Dealer of the Year, and Huntsville Dodge are examples of companies that saw prosperity during last year's tumult. Both focused on pushing upscale import models like Mercedes-Benz and Lexus. In 2001 many of our top 20 black-owned advertising agencies were pulverized pul·ver·ize v. pul·ver·ized, pul·ver·iz·ing, pul·ver·iz·es v.tr. 1. To pound, crush, or grind to a powder or dust. 2. To demolish. v.intr. by the recession. More than 40% of the list posted declining or flat billings as overall spending dropped 4.1% from the previous year. The biggest losses were suffered by Sykes Communications Inc. (No. 18 on the BE ADVERTISING AGENCIES list with $14.8 million in billings) and 1999 Advertising Agency of the Year Carol H. Williams Advertising (No. 6 on the BE ADVERTISING AGENCIES list with $72 million in billings), which plummeted 34.9% and 20.9% respectively. The partnership-minded Don Coleman Don Coleman (born May 4, 1928) was an American football player. He was elected to the College Football Hall of Fame in 1975. Advertising Inc. (No. 1 on the BE ADVERTISING AGENCIES list with $330 million in billings), however, expanded its territory through a strategic acquisition that gave the firm access to the burgeoning Latino market. The firm's billings grew by a robust 22.2%. Black-owned financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. companies, which include our ranking of insurance firms, banks, asset managers, investment banks The following is a list of investment banks Financial conglomerates Large financial-services conglomerates combine commercial banking and investment banking, and sometimes insurance. , and private equity firms, squared off against a series of collective challenges as well as those specific to individual sectors. All of them had to deal with the aftermath of Sept. 11 and the ensuing en·sue intr.v. en·sued, en·su·ing, en·sues 1. To follow as a consequence or result. See Synonyms at follow. 2. To take place subsequently. war on terrorism Terrorist acts and the threat of Terrorism have occupied the various law enforcement agencies in the U.S. government for many years. The Anti-Terrorism and Effective Death Penalty Act of 1996, as amended by the usa patriot act , which caused increased volatility in the financial markets. Moreover, the Financial Modernization Act, which allows banks, brokerages, and insurance companies to merge and expand into each other's markets, has made for an industrywide in·dus·try·wide adv. & adj. Throughout an entire industry: sales that have decreased industrywide; industrywide cooperation. slugfest. Think of it as being analogous to placing boxers in a ring without regard to weight class. Developments in other sectors proved to be a mixed bag. Despite 11 rate cuts by the Federal Reserve in 2001--which brought them to their lowest level in 40 years--a number of banks such as Carver Federal Sayings Bank (No. 1 on the BE BANKS list with $449.5 million in assets) reaped benefits from nervous investors putting money in low-yielding but safe savings vehicles. Investment banks and asset managers saw their fortunes rise when the market rebounded significantly during the fourth quarter. For instance, the S&P 500 was up an impressive 16.8% four months after its Sept. 21 low, brought about by the terrorist attacks on the World Trade Center and the Pentagon. For much of 2001, private equity firms had to deal with a soft market sparked by the fallout of the dotcom implosion implosion /im·plo·sion/ (im-plo´zhun) see flooding. im·plo·sion n. 1. . For the first three quarters, the market remained limp because of the recession and war. But the industry realized a sharp turnaround by year's end as investor confidence snapped back. Venture capitalists Venture Capitalist An investor who provides capital to either start-up ventures or support small companies who wish to expand but do not have access to public funding. Notes: Venture capitalists usually expect higher returns for the additional risks taken. invested $7.1 billion in the fourth quarter, reversing an 18-month slump and pushing investment volume to $36.5 billion for the year, which was considered the third best in total dollars invested, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Newark, New Jersey-based Venture Economics. As for the BE private equity firms--some of which tended to their portfolio companies--assets under management were $2.5 billion. Now, the BE 100s have geared up for the recovery and a business environment marked by uncertainty. Many will fight the next rounds by emphasizing the same methods they employed in 2001: consolidating operations, developing alliances, finding top talent, and providing killer customer service. One could say they're bobbing and weaving, quickly staying out of their opponent's reach while positioning themselves to land a powerful blow. B.E. 100s Sales By Industry 43.7% Auto Dealers $8,869.9 10.0% Food & Beverage $2,023.3 7.7% Manufacturing $1,562.5 6.5% Technology $1,323.8 5.7% Media $1,158.7 5.3% Energy $1,082.0 5.1% Telecommunications $1,032.0 3.7% Construction $749.1 12.3% Other * $2,521.0 * OTHER INCLUDES: COMMODITIES, ENTERTAINMENT, TRANSPORTATION, HEALTH CARE, COMPUTER/OFFICE PRODUCTS, SECURITY OR JANITORIAL MAINTENANCE, AND HEALTH & BEAUTY AIDS ALL SALES ARE IN MILLIONS OF DOLLARS. AS OF DEC. 31, 2001. PREPARED BY B.E. RESEARCH. Note: Table made from pie chart. Auto & Industrial/Service Summary (2000-2001) 2002 TOP 100 I/S COMPANIES 2000 2001 % CHANGE Total Staff 65,898 63,627 -3.45 Total Sales * $10,979.272 $11,452.417 4.31 2002 TOP 100 AUTO DEALERS 2000 2001 % CHANGE Total Staff 12,257 12,305 0.39 Total Sales * $8,728.730 $8,869.872 1.62 2002 B.E. 100s 2000 2001 % CHANGE Total Staff 78,155 75,932 -2.84 Total Sales * $19,708.002 $20,322.289 3.12 * IN MILLIONS OF DOLLARS, TO THE NEAREST THOUSAND. AS OF DEC. 31, 2001. PREPARED BY B.E. RESEARCH. Eligibility for the B.E. 100s the BE 100s make up the largest black-owned businesses in the nation. For 12 months, the research department and editors of BLACK ENTERPRISE gathered surveys from hundreds of companies and information from scores of government agencies, professional organizations, industry associations, business information services See Information Systems. , entrepreneurs, corporations, and our readers in order to develop our definitive rankings. The following are the qualifications for each of our lists: B.E. Industrial/Service 100 A company must be at least 51% black-owned and have been fully operational for the previous calendar year (Jan. 1, 2001-Dec. 31, 2001). Companies listed must manufacture or own the products they sell, or provide industrial or consumer services Consumer Services refers to the formulation, deformulation, technical consulting and testing of most consumer products, such as food, herbs, beverages, vitamins, pharmaceuticals, cosmetics, hair products, household cleaners, [paints, plastics, metals, waxes, coatings, minerals, . (Brokerages, real estate firms, and firms that provide professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. such as accounting firms and law offices are not eligible.) B.E. Auto Dealer 100 An auto dealership must be at least 51% black-owned and have been fully operational for the previous calendar year. B.E. Advertising Agencies An advertising agency must be at least 51% black-owned and have been fully operational for the previous calendar year. To qualify as a full-service advertising agency, the company must provide creative services Creative Services are a subsector of the creative industries, a part of the economy that creates wealth by offering creativity for hire to other businesses. Examples include:
An agency's financial status is measured in terms of billings--monies allocated by an advertiser to its agency to buy time on television and/or radio, or space in publications and other print media. These media outlets then pay a commission back to the agency in the form of a discount, typically between 15%-20%, which the agency counts as revenue. Other sources of revenue include production fees that the agency charges to its clients and fees for adjunct services such as public relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most , consulting, and promotional work. Our ranking of the 20 top agencies is based on a combined total of actualized ac·tu·al·ize v. ac·tu·al·ized, ac·tu·al·iz·ing, ac·tu·al·iz·es v.tr. 1. To realize in action or make real: "More flexible life patterns could . . . billings, plus capitalized billings (commissions that haven't been paid but the media buys were completed), and other agency fees reported as revenues, an accepted industry practice for reporting earnings. B.E. Banks A commercial bank or savings and loans savings and loan n. a banking and lending institution, chartered either by a state or the Federal government. Savings and loans only make loans secured by real property from deposits, upon which they pay interest slightly higher than that paid by most banks. that are classified by the Federal Reserve as black institutions and have been fully operational for the previous calendar year. An institution's financial status is measured in terms of total assets, capital, deposits and loans, including mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. for the calendar year. In compiling our list of the leading 25 institutions, we received surveys from black-owned institutions as well as consulted the Federal Reserve, state banking commissions, and industry associations. B.E. Insurance Companies A life insurance company must be at least 51% black-owned and have been fully operational for the previous calendar year. An institution's financial status is measured in terms of total assets, life insurance in force, premium income, annuity income, net investment income, statutory reserves, and surplus. The top 10 insurance companies on our list sell individual and/or group life insurance policies. (No institution that is strictly in the business of selling property and casualty insurance has been included.) In compiling the list, we received surveys from these institutions, consulted the rating services, state regulatory agencies state regulatory agency A state body responsible for establishing professional standards, and for certifying professionals or organizations through appropriate documentation , and industry associations. B.E. Investment Banks An investment bank must be at least 51% black-owned and have been fully operational for the previous calendar year. The top 15 investment banks compiled on our list engage in such activities as underwriting, initial public offerings (IPOs), mergers and acquisitions (M&A), retail brokerage, institutional research and sales, and financial advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal . A firm's financial status is measured in terms of total dollar amount of managed issues (including total senior, cosenior, and comanaged issues) derived from the underwriting of municipal, corporate and agency bonds, mortgage- and asset-backed securities Asset-backed security A security that is collateralized by loans, leases, receivables, or installment contracts on personal property, not real estate. asset-backed security A debt security collateralized by specific assets. , equity underwriting and private placements for the calendar year. In addition to receiving surveys from these companies, we consulted the federal and state regulatory agencies, and industry associations. B.E. Asset Managers An asset management firm must be at least 51% black-owned and have been fully operational for the previous calendar year. The top 20 firms on our list include those that invest financial assets Financial assets Claims on real assets. for individuals and institutions such as the pension funds of government agencies and corporations, and endowments of colleges and universities. (Asset managers who specialize in real estate and other types of investment vehicles are not eligible for inclusion on this year's list.) A firm's financial status is measured in terms of total dollar amount of managed assets derived from equities, fixed-income and tax-exempt investments, and cash for the calendar year. In addition to receiving surveys from these companies, we consulted the federal and state regulatory agencies and industry associations. Private Equity Firms A private equity firm must be at least 51% black-owned and have been fully operational for the previous calendar year. The leading 10 firms on our list include those that manage funds making equity investments in, and/or providing financing for, established and start-up companies start-up company A new business. . These investments are made on behalf of the firm and their individual and institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. . A firm's financial status is measured in terms of total capital under management for the calendar year. Additional information provided to BE included a firm's total number of funds as well as its portfolio companies. In addition to receiving surveys from these companies, we consulted regulatory agencies regulatory agency Independent government commission charged by the legislature with setting and enforcing standards for specific industries in the private sector. The concept was invented by the U.S. and industry associations. As indicated, BLACK ENTERPRISE consulted industry analysts and other sources to verify the information contained in the lists. Companies that may have previously appeared on the BE 100s but have been excluded this year are either no longer black-owned or their financial status has dropped below the minimum threshold to make any of the lists. The BE 100s are available on disk in both Windows and Mac formats. TopList Software provides mailing addresses and phone numbers of the companies as well as information on black organizations. For more information on TopList, contact B.E. Unlimited at 212-886-9576. A New Leader Emerges the BE 100s has gained a new leader--and it's a freshman. CAMAC Holdings Inc., a Houston-based company that engages in oil and gas exploration, consulting, and engineering, is making its debut on the BE INDUSTRIAL/SERVICE 100 list with gross revenues of $979.5 million, becoming the nation's largest black-owned company. CAMAC (which stands for Cameroon-American) is a hair away from being inducted into the billion dollar club, a feat that has not been accomplished by a black-owned company since TLC Beatrice International Holdings Inc., the New York City-based operator of offshore grocery stores and food manufacturers, achieved that milestone on the 1998 BE 100s (see "Ready To Rumble," this issue). Kase L. Lawal, the Nigerian-born CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. and president of CAMAC, started the company 16 years ago as an international trade operation. Over the years, Lawal retooled the enterprise to focus on the lucrative oil and gas industry. Today, through its two principal subsidiaries, Allied Energy and Oceanic Consultants, CAMAC owns stakes in inland and offshore oil and gas producing properties as well as interests in businesses that conduct drilling operations, oil transportation, technical advisory services, and construction for the oil industry in Africa, Asia, Europe, and North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . CAMAC also owns an energy trading company whose business was unaffected by the recent Enron scandal The Enron scandal was a financial scandal that was revealed in late 2001. After a series of revelations involving irregular accounting procedures bordering on fraud, perpetrated throughout the 1990s, involving Enron and its accounting firm Arthur Andersen, it stood at the verge of , says Lawal. "We used to produce oil and rely on someone to sell it," says Lawal, who owns 80% of CAMAC. "We decided that we could get contracts, and assemble a risk management team that could deal with the volatility of selling oil and gas." As a result, revenue growth has been impressive. With more than 1,000 employees, the company posted revenues of $114.26 million in 1999, $571.54 in 2000, and almost a billion dollars for 2001. Lawal projects revenues easily exceeding the billion dollar mark in 2002. "Our business is an integrated business in terms of providing upstream and downstream services," says Lawal. Upstream services include the exploration and production of oil and gas while downstream includes the trading and refining of the products. The CEO points out that the company had been focused on the upstream until about five years ago when it decided to branch out. "The natural growth is always to get to downstream to complement the upstream, that's the logical step. That's where our growth has come from the past four years." The next big project: the $1.3 billion development of a refinery complex in South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. , involving the acquisition and relocation of equipment from the Blue Island Refinery in Illinois. After the equipment is reassembled in South Africa, the new facility will employ more than 2,000 workers. "I want to encourage more blacks to get involved in the oil industry as entrepreneurs," he says. "Through CAMAC, I want to be one of the architects of black empowerment globally." --Alan Hughes |
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