The freshman class of '94: three outstanding newcomers to the B.E. 100s point to emerging industries and savvy deal-making.

EVERY YEAR, OUR ANNUAL REport on black business reveals a new generation of the nation's leading black-owned companies. These neophytes have the tenacity, vision and ingenuity to hold a spot on the BLACK ENTERPRISE INDUSTRIAL/SERVICE 100 list.

Here are the stories of three freshly minted companies. The CEOs of these enterprises tell how they adroitly met the challenges associated with mergers and acquisitions, government contracts and the booming high-tech arena, making them models of business achievement.

THOMPSON HOSPITALITY INC.

When the opportunity finally came for Warren M. Thompson to fulfill a childhood dream, he grabbed it. In 1992, the president and founder of Thompson Hospitality L.P. (THLP) purchased 31 Bob's Big Boy restaurants, becoming one of the largest black-owned franchisees in the nation. The $13.1 million deal satisfied the 34-year-old Thompson's lifelong desire--to own a large restaurant chain.

As a youth in Tidewater, Va., he raised hogs for his family's businesses. But the experience that ignited his entrepreneurial fire came later. While a student at Hampden Sydeny College, he took a summer job at a hardware store. "One day, the owner of the store told me, "Don't think, just do what I say," he recalls. "I knew then I had to own my own business."

Thompson's entrepreneurial drive is paying off. Last year, Reston, Va.-based THLP had revenues of $34.3 million. Twenty Big Boy restaurants accounted for 60% of sales last year; each generates $ 1.1 million annually. Shoney's is another popular family restaurant chain, and each of the 11 Shoney's that Thompson owns rakes in $1.6 million annually.

It's roughly four years since the former Marriott Corp. executive decided to venture out on his own and form THLP, currently the fifth-largest Shoney's Inc. franchisee. Thompson, who has an M.B.A. from the University of Virginia, had served nine years with Marriott Corp., rising through the ranks to become a regional vice president of Host International, a food service subsidiary of the Bethesda, Md.-based company.

In 1990, Marriott decided to exit the family restaurant business, selling its Roy Rogers fast-food chain to Hardee's Food Systems Inc. of North Carolina. When Marriott decided to sell the Big Boy restaurants two years later, Thompson's track record convinced the hotel chain that he was capable of running the restaurants profitably.

A close friend and TLC Beatrice International alumnus, Darryl B. Thompson, 31 (no relation), helped to enlist 15 people to invest $2 million. Using his expertise in mergers and acquisitions, the former special assistant to the late TLC Chairman Reginald Lewis structured the deal with Shoney, THLP and Marriott. With Shoney's as a backer and equity partner and Marriott financing the deal, THLP was able to acquire the suffering Big Boys. Under the deal, THLP would convert 26 of the restaurants to Shoney's in two years.

THLP's acquisition windfall came on the heels of a 1989 class-action suit filed against Shoney's by its African-American employees. They accused the company of discriminatory policies in hiring and promotions, and they won. Shoney's was required to pay $105 million in back pay and damages and to meet certain goals in ending discriminatory practices.

Taylor Henry, chairman and CEO of Shoney's Inc., says that since the suit, Shoney's has worked closely with African-American organizations to improve employment policies and to increase minority franchise ownership. Henry insists, however, that the deal with Thompson just made good business sense.

Thompson agrees: "I presented a good business deal to Shoney's and they recognized it as such. It does have some social implications, some strategic advantages for Shoney's, but I think the deal was done for economic reasons." Indeed, the BE 100s company will pay 10% of its royalties to Shoney's over the next 20 years.

So far, THLP has been able to convert just 11 of the Bob's Big Boys, due to a sluggish economy and two bitter winters. Another kind of storm Thompson has had to weather is employee relations. After three years on the "for sale" market, morale ebbed for the 2,000 Big Boy employees who questioned the company's future. "I bought the company with a lot of excitement and I had to get them as excited as I was," Thompson says.

The savvy entrepreneur has been most recently elated about THLP's new catering service and its plans to open fast-food facilities. Thompson hopes such expansionary moves will bolster the company to the $45 million mark by 1995.

DYNAMIC CONCEPTS INC.

Many businesses still fancy the idea of having an automated, paperless office, though stacks of paperwork seem inevitable. But that hasn't kept high-tech, companies like Washington, D.C.-based Dynamic Concepts Inc.(DCI) from deep-sixing a few file cabinets. The 15-year-old company, founded by Pedro Alfonso, president and CEO, and Benjamin Peasant, secretary and treasurer, is one of the nation's largest independent systems integrators in optical imaging.

Using optical disks, DCI converts hardcopy documents into standard PC files. A single 5 1/4-inch disk stores hundreds of thousands of documents, which would normally take up the space of a two-drawer filing cabinet. The high-tech pioneer has revolutionized the records management of more than 40 government and commercial organizations, including the Internal Revenue Service, the U.S. Department of Commerce, Fannie Mae and Gannett Newspapers.

Digital imaging is only a fraction of DCI's operations. The BE 100s firm provides administrative and operational support, from word processing to building maintenance, along with telecommunications services. Earlier this year, DCI was one of four companies awarded a 10- to 15-year, $100 million contract (the company's stake is 10%) to install integrated voice and data communication systems in the new main terminal of the National Airport in Washington, D.C.

A diversified approach to providing technical services has given rise to steady revenue growth--around 15% to 20% annually. Last year, the company reported $20 million in sales revenues, of which the computer systems integration division accounted for 30%. This year, DCI is hoping to do $27 million in sales.

Forming strategic alliances with other companies while going after large contracts has been key to the company's financial success, notes Alfonso. DCI has won subcontracts from such computer giants as IBM Corp. and Sunguard Inc.

It comes as no surprise that Alfonso, 45, gained much of his business and technical expertise from his six years of work for IBM's Federal Systems Division and General Electric Co.'s Systems Business Division. In 1979, the former account manager decided to leave the big corporate institution of GE and try his hand as an entrepreneur.

Initially, in the late 1970s, Alfonso and Peasant sought to carve out a niche in the energy consulting business, what with skyrocketing fuel prices and long gas lines gripping the nation. But in 1980, the newcomer quickly recast the company's focus to technology.

While information systems was a burgeoning market, high-tech companies were still considered risky businesses. DCI had a hard time securing working capital. "When we only needed $150,000 to $250,000 from the banks, it was fine," says Alfonso. "But once we needed a line of credit for millions, the banks were more concerned that we might be a risk." DCI currently has a $5.5 million line of credit with Signet bank in Richmond, Va. But Alfonso concedes that if the company ever needed $50 to $100 million, he would definitely consider taking DCI public and raising the money from outside investors.

DCI survived much of its first decade of operation thanks to government contracts acquired through the Small Business Administration's 8(a) set asides for minority contractors. The company graduated from that program over two years ago. By balancing a number of government and commercial contracts, DCI doubled in size since 1990 and boasts a staff of 460.

What's DCI's next move? The company has cast its sights overseas. In March, Alfonso and 25 other U.S. business representatives visited Japan during a two-week program sponsored by the Japan-United States Business Council. The cooperative will assist DCI and other small firms in securing Japanese contracts. Alfonso is also eyeing trade opportunities in Mexico with respect to NAFTA: "I want to take advantage of opportunity when it comes and not just stay ahead."

MYRIAD INDUSTRIES INC.

In 1992, CEO Jerome O. Crawford merged three wholly-owned subsidiaries into Myriad Industries Inc. The BE 100s firm, based in National City, Calif. (near San Diego), is the parent company of A&E Industries Inc., a ship repair and steel manufacturing concern; Advanced Test Systems (ATS) Inc., an electrical and electronic systems installation firm; and Remedquip International Manufacturing (RIM) Inc., an environmental waste cleanup mobile equipment maker.

The idea was for the subsidiaries to piggyback off one another instead of relying on outside subcontractors. "Every time RIM secures a contract, a division of A&E gets a refurbishing or manufacturing contract," explains Crawford. "And whenever A&E wins a ship repair contract, ATS gets a marine electrical subcontract."

This successful synergy translated into sales revenues of $17 million in 1993, which could easily double for this year. Myriad averages over a dozen government and commercial clients, including Hughes Aircraft Co., Westinghouse, the U.S. Air Force and U.S. Navy.

Though not a military man, Crawford, 47, spent four years in the trenches working as a general manager for Sphere Management Inc., a Tacoma, wash., firm that provided facilities management and food services for the U.S. Department of Defense. He had further military dealings as CEO of U.S. Support Services in Kent, Wash., which he founded in 1985. But when black-owned Liberty Bank of Seattle folded, wiping out his $400,000 line of credit, Crawford was forced to file bankruptcy in 1990.

A never-say-die attitude helped Crawford bounce back in 1991 when he signed on as a consultant with Myriad, a Delaware corporation. At the time, the firm was Pharmaco-Medico Systems Corp., based in Englewood, Colo. A&E was its only enterprise. It changed the name when it reincorporated, reorganized and went public in 1992. Within a year, Myriad acquired ATS and RIM.

Conversion Industries Inc., a merchant bank in Pasadena, Calif., provided the $1.5 million equity capital Myriad needed to fund the offering. In exchange, Myriad had to give up preferred stock and warrants. The over-the-counter stock (NASDAQ: MRAD), listed on pink sheets, sells for about $3 a share.

Despite its newest concerns, the company's biggest revenue generator is A&E, which accounted for 60% of revenues last year. The only minority-owned firm to hold a Master Ship Repair certification, A&E is hoping to benefit further over the next three years from the U.S. Navy's pledge to spend $25.7 billion on ship maintenance and modernization.

But with fierce competition mounting, the threat of disappearing naval contracts puts Myriad in a precarious position. Crawford, also A&E president, is now looking to manufacture small vessels and ferryboats for commercial industry.

That means AST will have to pick up any slack from its sister company. AST, which received 60% of its contracts from A&E, is now positioning itself in the burgeoning personal computing arena. Next year, the company will distribute disk storage devices for Apple Macintoshes.

Of course, Myriad has its other dependent to rely on, too. RIM, which accounted for 35% of sales in 1993, is poised to capitalize on a major growth industry of the coming century. The Environmental Protection Agency predicts the remediation of hazardous and non-hazardous waste sites will create a $12.1 billion and $11.8 billion market, respectively.

Crawford says that Myriad, which employs approximately 500 people, will seek out opportunities abroad, especially in Romania and Australia. "We're pushing a major thrust in the international market, because that's where the future lies for these kinds of industry."