A Tactical Edge.

The B.E. 100s are working every angle to gain the competitive upper hand and stave off the competition

THEY'VE BEEN REVAMPED, RESTRUCTURED AND REBORN. OVER the past decade, the chief executives of America's largest black-owned businesses have repositioned their companies for the 21st century through a deft combination of strategic planning, expansion and innovation. As a result, the concerns that comprise the BLACK ENTERPRISE INDUSTRIAL/SERVICE 100S have conquered new markets and targeted select niches.

Of course, these companies have been the beneficiaries of the eighth straight year of economic growth, but their success can be traced to more than macroeconomics. Learning from the past and anticipating the future, the CEOs focus on developing superior business models by identifying contemporary trends and applying capital, time and skills. The proof has been in the performance: in 1999, the total revenues for the BE INDUSTRIAL/SERVICE 100s were $8.77 billion, a 13.48% increase from $7.73 billion in 1998. But what was significant was the growth of the number of such enterprises that grossed $150 million or more. There are 16 such companies on the 2000 list, compared to 11 in 1999.

There was significant growth in the number of employees as well. Last year, 67,647 employees received paychecks from the BE INDUSTRIAL/SERVICE 100s, a 13.41% increase from 1998. Detroit-based Hawkins Food Group (No. 12 on the BE INDUSTRIAL/SERVICE 100 list with $176.2 million in gross sales) had the greatest number of personnel among the industrial/service employment leaders (see chart). The company employed 6,693 people last year (an employee-to-sales ratio of 1 to $26,000).

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Such growth will continue as the BE INDUSTRIAL/SERVICE 100s starts its next chapter. And a number of factors will impact its future: the ascent of tech firms; the application of digital solutions to old-line businesses; the use of capital markets to raise financing; and the identification of the next, big profitable thing. In fact, this year's growth leaders provide valuable dues to such future developments.

THE LEAP TO LEADERSHIP

Last year, several firms made huge leaps in revenues, providing solid platforms for advancement. But the ascension of World Wide Technology Inc. (WWT) was a watershed event. A pure product of the New Economy--an environment marked by surging consumer confidence, a bullish, yet volatile, stock market and dazzling technology--WWT, a St. Louis distributor of information technology products, made a list-rocking jump of 105.5%, from $201 million in 1998 to $413 million in 1999. As a result, the high-tech dynamo became the new leader of the BE INDUSTRIAL /SERVICE 100 list, beating out such Old Economy mainstays as Philadelphia Coca-Cola Bottling Co., (No. 2 on the BE INDUSTRIAL/SERVICE 100 list with $395 million in gross sales), and Johnson Publishing Co. (No. 3 on the BE INDUSTRIAL/SERVICE 100 list, with $386.8 million in gross sales). Not too shabby for the 1999 BE Company of the Year.

What factors accounted for such revenue growth? CEO David L. Steward pushed his company to astronomical heights using three different "e-marketplaces" launched in 1999: telcobuy.com to serve the telecommunications sector; fedbuy.com for federal government contract projects and ugsource.com to accommodate the commercial sector. These e-marketplaces generated 75% of WWT's revenues. "The utilization of the Web has allowed us to grow the business, bring value to customers and supplier relationships and drive down the cost of business," asserts Steward. "We can accommodate large customers without diminishing the level of service or driving up costs. [The e-marketplaces] have changed the way we do business with our partners and clients. The availability of information is much broader and deeper than ever before. Customers can go out and get what they need to do business with us."

Other prominent revenue generators could be found among those concerns involved in tech sectors, ranging from information technology to telecommunications. One such company wired for growth was Washington Cable Supply Inc. (WCS is No. 7 on the BE INDUSTRIAL/SERVICE 100 list), a Lanham, Maryland, electrical and telecommunications equipment distributor. Hailed as members of BE's New Power Generation, the husband-and-wife team of William and Beverly Parker increased sales 185.3%, from $74.3 million in 1998 to $212 million last year, by snaring lucrative contracts with AT&T totaling more than $100 million. The high-flying concern was tapped to handle material management for fiber optic network equipment. The linchpin of the deal was WCS becoming the first company to sign a joint marketing agreement with Lucent Technologies' Business Solution Provider Alliance. The AT&T spin-off chose WCS because it had the financing, technical and electronic commerce capabilities to become one of its value-added resellers. The deals, according to CEO William Parker, will position WCS to further upgrade technical skills and establish the funds to expand the business through mergers and acquisitions.

Other high-charging tech firms included Annapolis, Maryland-based Telecommunications Systems Inc. (No. 61 on the BE INDUSTRIAL/SERVICE 100 list), the wireless communications infrastructure developer that boosted sales 79.5%, from $25.4 million in 1998 to $45.6 million in 1999. Newcomer WireAmerica of Indiana's 97.2% gain pushed sales from $22.4 million to $44.1 million, earning the 64th slot on the list. And Mount Prospect, Illinois-based Sayers (No. 14 on the BE INDUSTRIAL/SERVICE 100 list), the computer sales and service firm run by former Chicago Bears' running back Gale Sayers scored big: total sales sprinted from $110 million in 1998 to $161 million in 1999, a 46.4% increase.

OLD ECONOMY FIRMS FIGHT BACK

A number of so-called Old Economy companies--firms in mature service and industrial sectors--saw significant dips in revenues. For example, restaurant and food contract services company Thompson Hospitality Corp. (No. 91 on the BE INDUSTRIAL/SERVICE 100 list) saw sales plummet from $43.5 million to $29 million. And automotive coatings and castings company, Wesley Industries Inc. (No. 39 on the BE INDUSTRIAL/SERVICE 100 list) realized a precipitous 26.3% drop, from $95 million in gross sales to $70 million.

Other old-line companies in the automotive sector have embraced the philosophy of strength in numbers. CEO William Pickard restructured Regal Plastics by folding the concern into a holding company with five other auto suppliers he owns. As a result, he turned a $63 million vendor into Global Automotive Alliance L.L.C. (No. 19 on the BE INDUSTRIAL/SERVICE 100 list) a $144 million juggernaut capable of pursuing multimillion-dollar auto parts contracts.

In Portland, Oregon, United Energy Inc. & Subsidiaries (No. 43 on the BE INDUSTRIAL/SERVICE 100 list), a petroleum distribution firm, saw its gross revenues climb 100% from $33 million in 1998 to $66 million in 1999. The reason for the spike: the rising price of oil. But CEO James Winters is not resting on his gusher. So customers can track usage, volume and orders, he is in the process of building a Web-based database. And with an eye toward diversification, he has begun to expand into food-services operations. "We acquired 11 Taco Bell restaurants in the Bay area last year," he says. "We're on track to do about $100 million [in business] this year."

THE CHANGE IN COMPOSITION

Typical of the BE INDUSTRIAL/SERVICE 100, the list had a number of companies coming and going. Fifteen companies left the list because of divestitures or bankruptcies, failure to meet eligibility, or they simply did not meet the revenue floor. The most noteworthy exclusion was TLC Beatrice International Holdings Inc., the global food manufacturer and distributor and the only BE 100s company to break the $2 …