The year 2002 was edgy and uncertain, as terrorism, accounting scandals, a sinking stock market and fears of war haunted national and regional companies.
"We all thought we saw recovery happening last year," says Kathy Baylis, vice president of the Sarasota County Committee for Economic Development. Now, she says, "The whole landscape has changed. I don? consider the forecast bleak, I just don? think it? going to get much better too soon. This could last well into 2003."
Even our many retired residents, who have insulated the region from economic downturns in the past, may not protect us forever. "Particularly where you have an area with lots of retirees, if they?e taking big hits in the stock market, at some point, it has to start trickling down to the rest of the local economy," says Nancy Engel of the Manatee County Economic Development Council.
"We?e won some, and some we?e lost," acknowledges Engel. Southern Foodservices, a locally owned, homegrown company, closed after 75 years in operation (although parts of it will live on through an acquisition by Sysco Foods). Andersen, the Sarasota tax software branch of accounting giant Arthur Andersen, became a casualty of the Enron accounting debacle. After enduring several rounds of layoffs, it is now negotiating with the city to sell its Sarasota location.
Bankruptcies also took their toll this past year. Uniroyal, one of Sarasota? largest employers, sought bankruptcy protection after laying off more than half its employees (the company says it hopes to reorganize). Telecommunications tower operator Pinnacle Holdings also declared bankruptcy; and Indigo Investment Systems, lauded last year for its meteoric growth, closed in June, then reopened its doors to a much smaller operation.
But 2002 did have some bright spots. Onyx North America, the country? largest environmental waste company, moved its headquarters to Sarasota. Beall? new distribution center was courted by a number of states, but chose Manatee County instead. Manatee was also able to secure Chris Craft? new product line by providing qualified targeted tax incentives. In fact, Baylis says, a record number of companies have relocated to Sarasota County or expanded over the past two years, adding nearly 1,000 jobs and more than $74 million in capital investment to the local economy.
But she? not sure that trend will continue. "Since Sept. 11, companies are re-thinking expansions and relocations," she notes. Economists estimate that nationally, relocations are off by 40-60 percent from last year. Because it can take years to negotiate such moves (Baylis says it took Sarasota three years to lure Boar? Head, which moved here in 2001), Baylis and Engel are redirecting their marketing efforts toward building closer relationships with site selection organizations.
Over the long term, however, both remain hopeful. "Our area seems to be riding the storm better than other communities," says Engel. "As long as Florida remains an affordable place to live and maintains its quality of life, we?e going to have a certain amount of growth, just not at the same pace as before."
Baylis agrees. "But it? certainly not going to be like it was from 1998 to 2000. It may never be that way again," she says.
Despite the impediments to growth, our 2002 list of top companies?ocally headquartered firms achieving $10 million or more in annual sales?s the biggest ever?37, compared to last year? 130. Eighteen companies are new to the list?nd that might indicate that we?e doing a better job of finding qualified companies as well as that some local companies are managing to grow and prosper even in difficult times. Combined revenues for the entire group reached $16.3 billion, up nearly 20 percent from last year.
Of the companies that appeared on our list last year, 60 posted increases, 27 lost money, and 31 maintained the same revenues as last year. While the majority of increases averaged 14 percent (down from last year? average of 17 percent), five of our companies posted increases of 47 percent or more.
Others suffered losses. Comdial, for example, plagued by a faltering telecommunications market and debt problems, posted one of the biggest losses?0 percent. The biggest loss was for Mike Carter Construction, which saw sales fall by 40 percent. Overall, however, decreases averaged around 13 percent.
By sector, manufacturers maintained the most even keel. Eleven of the 23 on our list reported the same revenues as last year. Increases and decreases for the rest averaged 13 percent, with two exceptions: pleasure boat manufacturer Wellcraft posted sales 61.4 percent higher than last year; Teltronic came in second highest at 48.4 percent.
Thanks to our predominantly senior population and their specialized medical needs, hospitals, retirement homes and those in the health care industry continued to gain, averaging14 percent increases. Doctor? Hospital, which closed its maternity ward in 2002 because of declining revenues, posted a 20 percent increase overall.
But the most profitable industries last year were construction and home development. Seventeen home builders made the list; and with a single exception, all reported increases averaging 23 percent. "We?e shielded here in Sarasota, because we still have a very good retirement population, boomer population and, believe it or not, expansion of the job market," says Lee Wetherington of Lee Wetherington Homes. Wetherington? sales soared 87.6 percent last year. "Some builders are slowing down because of poor land position," he says. "But if you?e got the land, you?l be able to continue building with no slowdown." Like the other successful builders in our group, Wetherington purchases most of the land he builds on, and most of that land lies east of I-75, where growth outpaces any other area.
Then there? the stock market. "Interest rates are the lowest they?e been in 40 years," says Wetherington. "You can put your money into the market and watch it on a computer screen, or you can put it into a home that you can live in and enjoy."
At one point last year, residents?insatiable appetite for new homes in Sarasota overwhelmed building inspectors, who fell months behind in issuing new building permits. It? not the worst problem for a builder to have, but given the uncertainty of other economic sectors, how much longer can this boom last? "Housing has been appreciating at 10-15 percent, even higher on the water," says Wetherington. "Maybe waterfront property over $2 million is becoming inflated, but in the $200,000-$600,000 range, Sarasota is still the best value in new home construction."
Speaking of construction, here? how we build our annual list of Sarasota? biggest moneymakers. To be selected, companies must report annual revenues of $10 million or more and either be headquartered here or be self-contained divisions of larger companies. They are ranked by annual sales, which is why we exclude some, such as auto dealerships or financial institutions, that report sales in a way that does not compare meaningfully to most other companies. In the few instances where companies on our list earned revenues through commissions, we report earnings after those commissions. We ask real estate firms for only their commissioned portion of sales.
We publish sales figures exactly as companies report them to us; last year? sales are noted in parenthesis after the current year? sales. If a company declines to report sales, we estimate, using a variety of sources. If a company prefers not to disclose annual revenues, but will confirm they make at least $10 million, we show those companies earning $10 million-plus. We also publish estimates given to us by companies that project earnings because their fiscal year did not end before our press time. All estimated figures are clearly marked as such.
To make the list as comprehensive as possible, we cross-check with numerous local, regional and national sources, including economic development councils and industry analysts. We are always prospecting for qualified companies to add to the list, and we hope you will bring any omissions to our attention so we can consider them for next year's story.
For a complete list of our top companies, pick up an issue of January's Sarasota Magazine at your local newsstand.