The freshman class of '97.

EXCUSE THEIR SWAGGER. BUT BREAKING INTO AN exclusive club such as the largest listing of black-owned companies in the nation is indeed an occasion to celebrate and one deserving of a pat on the back. Each year, the BE INDUSTRIAL/SERVICE 100 is transformed by a fresh crop of newcomers who have brought their enterprises to the next level. These emerging concerns bring a new level of diversity to the list and, in many cases, show the prowess of African American entrepreneurs in cutting unprecedented deals and managing multimillion-dollar monoliths.

Included in this year's freshman class of three is an ax-football star determined to reinvent a former BE 100s company. The second entrepreneur is breaking new ground in health care through high technology, while the third is an investment banker whose remarkable takeover of a chain of convenience stores instantly made his company one of the top players on the BE 100s.

PLAYING ON A NEW FIELD

David Duerson knows about beating the competition. For years, he intercepted passes and gained yardage as a defensive back in the National Football League for such teams as the Chicago Bears, New York Giants and Phoenix Cardinals. And his prowess earned him two Super Bowl rings. Today, Duerson is playing on a totally different field. As president of Fair Oaks Farms Inc., he scrambles every day to score sales for his Kenosha, Wisconsin based meat processing operation. And thus far, the performance of Fair Oaks Farms has been worthy of an end-zone strut. The firm's 1996 revenues of $42.6 million place it at No. 48 on the BE INDUSTRIAL/SERVICE 100.

A graduate of Notre Dame, Duerson, 36, became involved in the food business by happenstance. At a sporting event, he met the president of McDonald's who encouraged him to consider owning and operating a franchise. Still unimpressed by the business, he was further nudged by his best friend, a multiple-franchise owner, and his wife. "I was extremely reluctant," says Duerson, who initially viewed practicing law as his next career move. "But I told my wife if she handled the due diligence and completed the application then I would pursue it. To my surprise, she had all the paperwork completed in 72 hours."

After working behind the counter for a day, Duerson became committed to developing a burgers-and-fries enterprise. During the NFL off-season, he went through an intense franchisee training program at Hamburger University. But as he started the process of taking over two McDonald's outlets in Louisville, Kentucky, a representative from Gerlen Corp., a majority-owned holding company based in Chicago, offered him the opportunity to become a food supplier for the Golden Arches. As an insider, the Muncie, Indiana, native would have an appreciation for the type of product that would best serve McDonald's operators. "When I first interviewed with McDonald's as a registered franchise applicant, I told them of my intent to eventually to the supplier side," says Duerson. "I planted the seed for this transition early on.

The deal was made all the sweeter by the fact that he would be returning a company back to the ranks of the BE 100s. Through a Gerlen subsidiary, OSI Industries Inc. offered Duerson the opportunity to purchase 51% of Fair Oaks Farms. OSI had just bought the majority interest of the company from Frank Brooks, the former consultant who ran the operation as Brooks Sausage, shifting the ownership into white hands. OSI sought a "diversity" joint venture, and Duerson fit the bill in experience and investment capital, paying between $1.5$3 million for his stake in the concern. (Fair Oaks supplies pre-cooked sausage patties to McDonald's, which currently makes up 94% of its business.)

After Duerson took over the company, he designed a rigorous six-month training program to learn everything he could about the meat processing business. He worked 10-hour days, gaining his education in tasks ranging from slaughtering hogs and shipping orders to overseeing quality control and keeping the books. "I wanted to make sure that I knew my business," he says. "It also gave me an opportunity to show my employees that I wouldn't make them do anything that I wasn't ready to do."

Now Duerson has his sights on increasing Fair Oaks' capacity. Besides supplying McDonald's and domestic institutions, the manufacturer has entered into off-shore agreements to distribute patties to Maxim's, a mammoth Hong Kong-based food services company, and Otsuka, a large Japanese pharmaceutical firm that owns a chain of convenience stores. The company also gained Halaal certification in order to capitalize on selling turkey sausage products to the Muslim populations of Singapore and Indonesia. And in June, Fair Oaks Farms is unveiling a line of retail food products, Duerson's Fair Oaks Farms Sausage and Double D Sausages. The multi-flavored sausages will first be distributed in Chicago and Indiana to cash in on Duerson's celebrity status in the region.

To handle this increased activity, Duerson has acquired $220,000 worth of new sausage linking equipment and additional production capabilities through a facility in Iowa. By doing so, he believes Fair Oaks will be a $100 million company by the turn of the century. "Our company mission statement is the same one I had when I played football, `Never be satisfied,'" says Duerson. "Whether it was practice or a real game, I always wanted to be a better player when I walked off the field than when I walked on. I want the same to hold true for Fair Oaks Farms." With roughly 36.2% growth in sales since he purchased the company 18 months ago, it appears Duerson is heading for the goal post for one more touchdown.

PLUGGED INTO HEALTH CARE

One of the most pressing issues to face the medical community is the prevention and treatment of worldwide plagues like AIDS. Social & Scientific Systems (SSS) may just be what the doctor ordered.

The 19-year-old Bethesda, Maryland-based concern provides technical and information support services to such government agencies as the National Institutes of Health's Office of AIDS Research, the Agency for Health Care Policy and Research (HCPR) and the National Institute of Diabetes and Digestive and Kidney Diseases. Helping these agencies achieve medical breakthroughs has proven healthy to SSS's bottom line. Ranked No. 81 on the BE INDUSTRIAL/SERVICE 100, the concern grossed $28 million in sales in 1996, an impressive revenue growth of 55% from the previous year. "SSS will continue to grow as the government and the private sector continue to push these efforts in health care research," says company Chairman Herbert J. Miller.

But the 62-year-old Camden, South Carolina, native has always been plugged into numbers. He holds an undergraduate degree in mathematics from Clark College (now Clark Atlanta University) and a master's degree in mathematics from Howard University. In 1963, he was hired as a programmer for the Lambda Corp., a high-tech information services firm, where he developed database management systems and simulation software models used for war games and nuclear attack damage estimates. In 1969, he cofounded the Hendrickson Co., a statistical analysis firm that he says "shifted computerized applications from the military to the civilian side of government." Hendrickson analyzed federal, civilian and income-transfer programs.

After a dispute with some of the principals at Hendrickson, Miller and two other employees, Denis Ables and Mary leMat, left to form SSS in 1978. (Miller owns 51% of the company, while Ables, the company's senior vice president and treasurer, and leMat, the concern's senior vice president and corporate secretary, each own 24.5%.)

Of the firm's 18 clients, roughly 93% represent government agencies in the health care field. SSS's biomedical research support division, which employs 90 of the company's 215-member workforce, handles the technical support and administrative management for three of the federal government's clinical trials programs for AIDS treatment. The effort, which includes 90 current clinical studies and 60 that are being developed, involves the treatment of the virus in adults and children, prevention of transmission of the disease from infected mothers to infants and outbreaks within communities. SSS also distributes funds for various research laboratories and management of Internet sites for communication with researchers and clinics.

"In the immediate future, we will see if these applications are transferable to the local and state arena," maintains the soft spoken Miller. "The next frontier will be with pharmaceutical companies in the commercial area."

For now, SSS will deal with government initiatives. And the next time the executive branch debates health care reform, SSS will likely figure prominently in reams of computer printouts.

SHOPPING FOR DEALS

Leslie M. Corley is the master of the deal. He demonstrated his skills when he structured the transaction that created Convenience Corp. of America Inc. (CCA), the nation's second largest licensee of 7-Eleven convenience. stores. With gross sales of $137.1 million, the West Palm Beach, Florida-based business is ranked No. 8 on the BE INDUSTRIAL/SERVICE 100 in its first showing. "This transaction is indicative of the type of deals that we look at," says the 50-year-old financier. "We seek companies with potential for long-term growth and a strong fundamental outlook."

Corley has always been one toe try to reach for the cosmos. His first career move was to become an astronaut. He wasn't able to make the grade, thanks in part to an Air Force requirement for 20/20 vision. So he decided to pursue aeronautical engineering at the University of Illinois. Deciding not to limit his options, Corley set his sights on another universe--high finance.

After graduating from Harvard Business School in 1971, the enterprising Corley went to work for Fidelity Investments, the gargantuan investment company, as a securities analyst making stock recommendations to fund managers. The experience taught him the art and science of fundamental analysis. He researched industrial trends and evaluated financial documents to assess the intrinsic value of a company. His picks usually met three criteria: strong underlying earnings and cash flows; solid management; and a well-performing or improving industry. It also didn't hurt that he was trained by Peter Lynch, the legendary investment guru who made Fidelity Magellan the best-performing fund of the 1980s.

Upon leaving Fidelity in 1977, Corley emerged from his behind-the-scenes position to center stage. He was first a mergers-and-acquisitions strategist for Norton Simon, the New York City-based conglomerate with holdings that included Hunt-Wesson and Canada Dry, and then a principal for the then-fledgling firm of Kelso & Co. At Kelso during the go-go '80s, Corley helped structure 11 acquisitions and leveraged buyouts, including the $640 million takeover of Blue Bell, the parent company of Wrangler Jeans. Total value of the transactions: $1.5 billion.

Eventually, Corley was ready to strike out on his own. In 1988, he formed LM Capital Corp., an investment bank in which he is the sole shareholder, to acquire positions in companies that measure up to his discriminating investment standards. Among the firm's holdings: Roberts Brothers Inc., a 100-year-old company that produces canned tomato products, and Perfect Fit, a bedding and mattress concern. But LM Capital's most substantial holding to date is its controlling interest in CCA.

Actually, CCA came about when Corley was searching for another target. "We were initially looking to acquire a chain of Burger King franchises because we found there was a real value in branded fast food outlets," says Corley. "But as that deal fell through, we discovered another opportunity."

In December 1995, LM Capital acquired Contemporary Industries Corp. (CIC), which operated 146 7-Eleven convenience stores throughout the Midwest for $40 million. LM Capital financed the deal with debt and equity capital from Bank One Indianapolis, Allied Capital, MES-BIC Ventures, Connecticut Greene Ventures and Opportunity Capital Partners. Operating under the CCA banner, the concern bought six additional outlets last August.

The key to the operation's success, Corley believes, is brand recognition. When the stores were managed by CIC, the outfit purchased unbranded gasoline, sold it at the lowest retail price in the market and, as a result, produced thin profit margins. Last year, CCA struck licensing agreements with such major companies as Citgo and Texaco. And seeing the potential to increase market share and profits, the company has opened licensing relationships to develop Taco Bell Express outlets within two of its convenience stores. "Depending on the performance of the first two outlets, we anticipate adding as many as 10 such outlets each year," says Corley, who still has an appetite for Burger King franchises--and deals.