No limits: Nuprecon LP expands the meaning of demolition services with multiple operations in the Pacific Northwest.

There are a number of factors that can limit the growth potential of a demolition contracting firm.

Dave Whitley, executive vice president of Nuprecon LP, Snoqualmie, Wash., remarks that a demolition company "can only grow as fast as its human and financial capital allow."

Carefully building u p these vital assets have been critical tasks that Nuprecon President John Hennessy and Whitley have been focusing on this decade as the company grows by revenue and by operating regions.

JUST OFF THE BOAT

Of the routes taken into the demolition industry, John Hennessy's is probably one of the few that involves working on a crab fishing boat. But after working in that harsh and dangerous occupation in Alaska, Hennessy decided in the late 1970s that a chance to work in the demolition industry in Seattle was worth taking.

Hennessy spent eight years learning the industry and working his way up the ranks of the former Precon Enterprises before that company was dissolved in the mid-1980s.

Shortly thereafter, in 1986, Hennessy started his own demolition company with a core team including one of the owners of Precon and named the new entity Nuprecon.

Calling Nuprecon a demolition company is only partially correct, as from the start Hennessy has followed up on his vision to provide a number of services that can fully prepare a building site for a general contractor or owner/developer.

In its 20-year history, Nuprecon has added three operating divisions that can work either separately or in tandem with its flagship demolition company.

The company has also outgrown both its original office location and another office building it moved into in 1992. Earlier this decade, the company moved into its 45,000-square-foot-headquarters building in Snoqualmie, Wash., in eastern King County about 25 miles east of Seattle.

The company has also expanded geographically, with an Oregon Division created in 1990 and a Pacific Division based in Hawaii established in 2005.

Key personnel have also been added along the way, with current Executive Vice President Whitley coming onboard in 2001. Many other key business unit and division managers have been added or are now part of a corporate family of some 500 people working at Nuprecon LP.

As it has made progress along its two-decade journey, the company has been involved in scores of high-profile projects, including a significant part of a $375 million abatement, demolition and reconstruction project at the Sea-Tac Airport near Seattle, an interior demolition job for Nordstrom's flagship store in downtown Seattle, several major military base demolition projects, Pasadena City Hall in California, and a key role in preparing the Waikiki Beach Walk in Hawaii.

The company's track record and operating methods have allowed it to attract the attention of outside investors, specifically in the form of Evergreen Pacific Partners, a private equity fund that has recently acquired a majority stake in Nuprecon and injected it with capital that will allow Nuprecon to continue growing at a faster clip.

As the company plans and prepares for 2007, Hennessy can look back upon a career that has taken him in less than three decades from a new hire plucked from a crab fishing boat to the president of a company with some 25 to 50 projects taking place at any one time that will probably record some $70 million in revenue in 2006.

FULL AND FAIR SERVICE

Both Hennessy and Whitley can cite several reasons why Nuprecon has enjoyed two decades worth of company growth, but most of these factors tie into service and integrity.

Demolition companies learn about the critical role of subcontractors from both sides. In most cases, the demo firm is itself a subcontractor and at the same time it may occasionally need to work with other subcontractors on the jobsite.

In the subcontractor role, Nuprecon stakes its reputation on performing in such a way that the general contactor for which it is working will want to make Nuprecon its preferred demolition contractor in the future. "General contractors manage risk, and they want to go with a known entity that has an outstanding track record," says Whitley. "They also like doing business with a single-point provider; then they have just one contract to write, the potential for schedule compression and value-added savings."

Nuprecon is able to provide that "single-point" service in part thanks to the three operating divisions it has created:

* Nutech Concrete Sawing and Drilling, started in 1990, deploys the heavy equipment and expertise needed to perform a wide spectrum of saw cutting tasks, including through deep concrete walls, slabs and even dams and bridges.

* EWR Abatement Services, created in 1999, can handle the removal and safe disposal of a wide range of hazardous materials at the jobsite, including asbestos, lead, mold, PCB light ballasts and mercury.

* The ReNu Recycling Services division of Nuprecon, started in 2001, places C&D containers at jobsites and hauls commingled or sorted recyclables to the appropriate processing facility.

Each of these divisions has been beneficial not only because of the "single-point" service it offers to Nuprecon's clients, but also because it helps eliminate the possibility of Nuprecon being saddled with a marginal subcontractor in any of these segments on the job. "We started the Concrete Sawing division in particular because of unsatisfactory experiences with some of the subcontractors in that field," says Hennessy.

Additionally, though, the expansion of services fits in with Hennessy's vision of what Nuprecon should be. "Our mission statement reads, 'Preparing the way through integrated demolition, remediation and recovery solutions,'" notes Whitley. "That covers the spectrum of what we're trying to achieve. We want to prepare the way for someone to build something--whatever that takes."

Establishing the range of services is only part of the equation, however. Beyond that, Nuprecon and each of its operating divisions has had to demonstrate that it offers the best option in a competitive landscape.

The company's growth rates--which lately have been in the 20 to 40 percent range annually--seem to indicate that Nuprecon's clients are believers. "Most general contractors have a comparison they can make--they have worked with other demo contractors," says Hennessy. "What they see, and what they fill out in the evaluation forms we provide them, is our high emphasis on safety, site cleanliness, a high priority on strict schedule adherence," he adds.

Scrutinizing and tracking the customer evaluations allows Hennessy and managers to make sure customers are satisfied with Nuprecon's performance. On the other hand, visiting jobsites can be a good way to gauge where the company stands with its front-line personnel.

"At a recent large job in Hawaii, I had several local workers on that crew walk up to me and say, 'No one has cared for us the way you have,' and they were referring to things like worker training, company-provided safety equipment and the morning safety meetings that we provide that, unfortunately, are not always standard," says Hennessy.

Attention to safety (and employees overall) and attention to customers come first and second, while making money "is third on our list," states Hennessy. As it has with successful companies in other industries, this philosophy has led to strong revenue growth and profitability, thus allowing Nuprecon to continue to focus on its two biggest priorities while the third takes care of itself.

FORWARD PROGRESS

The past two decades have been gratifying ones for Hennessy, and during the past five with Whitley on board Nuprecon has enjoyed continued growth even when each year that compound growth must be added to a larger existing base.

But as Whitley noted regarding limits to financial and human capital, additional resources in the form of the Evergreen Pacific Partners (EPP) equity stake should prove crucial to Nuprecon's ability to grow within and beyond its core geographic markets.

To some extent, the company already has a national presence. It is active in some 13 states and has even performed work in the Eastern United States. This includes the formation of key strategic alliances that have led to projects from demolishing an incinerator plant over the Delaware River in Philadelphia to doing major structural work at the Pentagon.

However, when a contracting firm such as Nuprecon is involved in more than 40 projects at any one time, it can strain the ability of top managers to fully grasp the company's day-to-day operations.

According to Whitley and Hennessy, the investment by EPP will allow the company to ease some of this strain by hiring additional executive and management talent and by allowing them to make more significant strategic investments. "John wanted to maintain the growth trajectory of the company, and that can only happen with additional capital, not just by cash flow generated from operations," says Whitley.

Hennessy and Whitley say Nuprecon has had the good fortune of hiring many good people, and that the company is always mindful of promoting from within. "We have a reputation as a great company to work for," says Whitley. "As a growth company, we have opportunities for advancement, which is attractive to good people," he adds.

Whitley says that many of the company's new recruits come from outside the demolition industry, although knowing the construction side of the equation can be beneficial. "It's a fun, dynamic business. No two days are the same," he remarks. "But construction field experience is a plus," he admits. "Long-term field people have experience that you can't go to school to learn."

In terms of intangibles, Hennessy remarks, "Number one, we value honesty and integrity." Additionally, new hires should have a "good strong work ethic and an ability to work within a system. We like people who are thinkers but who also understand that we have a platform here and that we've been successful in how we approach our growth."

With its reputation as a growth company that is an attractive place to work, Hennessy acknowledges that the company is contacted "on a regular basis" by people interested in Nuprecon.

Now, with its funding in place, Hennessy and Whitley can work on helping Nuprecon overcome some of those traditional barriers to company growth. "With a private equity firm as our financial partner, we now have the flexibility to go find people and we are implementing a recruiting plan over the next several months," says Hennessy. "We do a lot of strategic planning in our company, and we always come to the conclusion that we need the right people to take advantage of the opportunities out there."

And once they do, yet more smart growth for Nuprecon is the likely result, says Whitley. "We think the market is buoyant and will support our vision for the future in this region," he remarks. "We can continue to grow, and it's going to be in a strategic, selective and sustainable way."

The author is editor of Construction & Demolition Recycling and can be contacted at [e-mail].

RELATED ARTICLE: Nimble but ready.

As a company with four operating divisions, Nuprecon LP, Snoqualmie, Wash., has to make significant capital investments in equipment and machinery to take on major projects.

But Nuprecon President John Hennessy says that the company does not carry heavy machinery in excess of what it needs to serve its customers. "We run lean, both in terms of people and equipment," he acknowledges. "Our people are working 100 mph at all times--we always seem to be short. And we don't spend a lot of money on heavy equipment, but rather have strong relationships with suppliers like Hertz Rental. So in downtimes we don't have as much iron on the property sitting idle."

Nonetheless, the company probably owns about $15 million worth of equipment, Executive Vice President Dave Whitley estimates. In addition to Komatsu and Hitachi excavators and Bobcat brand skid steers, the company counts among its inventory Atlas-Copco hydraulic breakers and hammers and a fleet of Brokk multi-attachment machines that can be used on interior jobs.

The combination of machinery it owns and its relationship with rental agencies has allowed Nuprecon to equip its SWAT (Special Works Action Team) personnel with the necessary tools to perform smaller, quick-turnaround jobs that are still an important part of the demolition market.

The SWAT unit was formed in 2005 to ensure that Nuprecon could stay involved in the multi-family residential and smaller commercial segments of the market that are often left behind when companies focus on big ticket jobs only. "We have gained a reputation by performing bigger, difficult jobs, but the SWAT unit has helped us stay competitive in the other markets as well," says Whitley.