Viztec Inc.
Last year, liquid crystal display maker Viztec Inc. took a major step forward. The firm, which uses a unique manufacturing method for building flexible plastic displays for watches, PDAs, cell phones and credit cards, moved its headquarters to Twinsburg in April from its former home in McLean, Va.
In May, founding brothers Gary and David Freeman hired former 3M executive Gary Fischer to lead the firm as its CEO. Fischer grew his former company, W.L. Gore & Associates Inc., from eight employees to more than 300, and to $40 million in annual sales before selling it to 3M for $140 million. Fischer worked at 3M for a short time after the acquisition.
The same month it hired Fischer, Viztec landed a $1 million grant from the state of Ohio’s Technology Action Fund board. At the time, the company reported the funding would be used to help get its Plastic Pixel technology on the market and into high-volume production.
Traditional displays on small electronic devices required glass, which is heavier and more expensive. Viztec’s manufacturing process creates low-cost plastic displays with the display quality of glass. With Fischer at the helm, and several reported interested investors, 2003 looks to be the breakout year for Viztec.
Roadway Express
We don’t see anything but a bright future for the trucking firm named “Carrier of the Year” by the world’s largest company. Wal-Mart, which hauls some of its 50,000 daily shipments with Roadway Corp.’s Roadway Express subsidiary, honored the trucker with the distinction in June.
Awards aside, as of press time, Roadway was on pace to top 2001 revenue, closing the third quarter with a 14 percent increase from the previous year and recording more than $2 billion in sales by early September.
Two events last year bode well for the trucker in 2003. One is the shutdown of competitor Consolidated Freightways, which Roadway CEO Michael Wickham called “unprecedented in its magnitude.” Wickham indicated that Roadway is well-poised to pick up plenty of the former competitor’s business.
The second factor that should boost Roadway is its agreement with the U.S. Customs Service and the Canada Customs and Revenue Agency to speed the customs process. In the wake Sept. 11, the trucking industry was stymied by tightened border security.
In June, Canadian Deputy Prime Minister John Manley and U.S. Director of Homeland Security Tom Ridge announced the Free and Secure Trade (FAST) program, in which trucking firms can apply for a faster border clearance process for commercial shipments. Roadway Express and its Canadian subsidiary, Reimer Express Lines Ltd., earned the FAST certification in November.
Ben Venue Labs
While the economy may have taken a backseat in the last mid-term elections, health care issues are on the forefront. Much of the health care debate is focused on prescription drug costs, with President Bush even speaking out in favor of new patent legislation to make it easier to bring nonbrand name drugs to market.
The Bedford Laboratory division of Ben Venue labs is preparing to be a contender in the generic market by expanding its local labs to facilitate the expected growth of generic pharmaceuticals.
Ben Venue contracts with large pharmaceutical companies to manufacture their products, then takes advantage of that knowledge to produce generics that can be marketed after the life of the original patent.
Generics represent approximately 51 percent of the prescriptions bought through Medicaid, and 40 states permit pharmacist to substitute generic drugs at their discretion.
It hasn’t been an easy road for generics, with patent disputes spending years in court, but with the aggressive marketinginsurance providers are undertaking to direct consumers to less expensive drugs, the generics market is poised for growth.
Ben Venue also benefits from a strong local medical community as well as the global marketing of its new parent company, Boehringer-Ingelheim, headquartered in Germany. That allows it access to potential growth in profitable foreign markets, including the generic-friendly Canadian market, making it a company to watch.
J.M. Smucker’s
J.M. Smucker’s has been in business for more than 100 years, but this year’s events seem to prove that the Smucker family, which stills has key roles within the company, is not resting on its berries, so to speak.
In June of last year, the company completed an all-stock transaction with Procter & Gamble, merging Jif peanut butter and Crisco shortening and oil brands with J.M. Smucker’s. As a result of the merger, company sales were a record $367 million for the second quarter of fiscal 2003, more than doubling the sales of the previous second quarter.
Even without the contribution of Smucker’s new brands, sales would have increased $20.8 million — 12 percent — but the Jif and Crisco brands added more than $173 million in one quarter.
In addition, Smucker’s increased sales in the foodservice area in part due to record level sales of its Uncrustables to schools nationwide.
As a result of bringing on Jif and Crisco, the company announced plans to take an aggressive marketing approach with its new products, including increasing retail coverage.
As the company moves into 2003, expectations for increased sales in the Jif and Crisco brands, as well as Smucker’s Uncrustables, have raised the earnings guidance. The word on the street is that Smucker’s stock will increase as much as $2 by mid-year, bringing it to more than $40 a share.
Smucker’s symbiotic merger seems to have great potential, at least in the short run, and the company is definitely one to watch in 2003, proving what we all knew as kids: You really can’t argue with PB&J.
RPM Inc.
Northeast Ohio has seen some of its most successful and admired business leaders — including Jack Kahl and Joe Gorman — step down in the last few years, and it lost Al Lerner.
It’s hard enough for someone new to step into these positions, but it is even harder if you have the same last name. When Frank Sullivan became CEO of RPM, succeeding his father, Thomas, he came out swinging. The younger Sullivan immediately mapped out a five-year plan to double the company’s income to more than $3 billion.
Sullivan is looking to acquire smaller players in the coatings industry, increase sales and take advantage of an expanding do-it-yourself market. And with the manufacturing industry hurting, Sullivan is banking on getting some deals.
Considering that some of RPM’s clients are big box, and the Home Depot and Lowe’s seem to be recessionproof, the plan may succeed. However, most analysts are expecting manufacturing to get worse before it gets better, and rapid growth in a down economy is risky.
Although consumer spending hasn’t taken the hit initially expected, an increase in unemployment and sinking consumer confidence may bring unpleasant change in 2003. Hopefully, Sullivan can make his mark and keep RPM profitable as his father did for 31 years.
Also of note, in October, RPM reincorporated in Delaware, making that entity the parent holding company of the Ohio-based company. It’s not a TRW-esque move as far RPM’s relationship with Cleveland goes, but it not-so-tacitly throws light on that fact that Ohio seems to be getting less and less business friendly.
Jo-Ann Stores Inc.
At the beginning of 2002, Jo-Ann Stores Inc. didn’t appear to be a company worth watching.
Its stock was trading at $7 per share, a fraction of its price four years ago. In 2001, the fabric and craft retailer announced an 8 percent work force reduction, store closings and a series of quarterly losses. It looked like the company was struggling, but CEO Alan Rosskamm was steadfast, and told his employees and investors to persevere.
By the end of 2002, Rosskamm was vindicated. The company’s stock was once again trading in the high- $20 to low-$30 range, and month after month, the retailer reported store sales increases, with a 19.6 percent jump in April.
There was a minor economic turnaround last year, but what was more directly responsible for Jo-Ann’s rebound were steps Rosskamm took several years ago to help the ailing company start growing again.
In 1998, the company, then known as Fabri-Centers of America, acquired House of Fabrics, then changed its corporate name to Jo-Ann Stores Inc. and re-grand-opened all of its stores under the Jo-Ann name.
The following year, Rosskamm implemented SAP retail information software, which allowed the company to better control inventory. And with its greater presence on the West Coast, Jo-Ann Stores built a 63,000-square-foot distribution center in California, which opened in 2001.
All of these steps required big investments, but it appeared to pay off by the end of 2002. The company reported in November that its operating profit for the first three quarters of of 2002 was $51.7 million, compared to a $9.4 million loss in the previous year.
Corrpro
Misappropriation of funds, overstatement of revenue, ERISA violations, misconduct by executives and class action lawsuits: Why let Houston have all the fun with Enron when we have Corrpro Co. Inc.
Luckily for Corrpro, most of the issues the company faced in 2002 are somewhat old news by now, but it was a tough year for the corrosion protection equipment manufacturer headquartered in Medina.
In 2002, Corrpro had a little de ja Enron when it was discovered that its Australian subsidiary had, “accounting irregularities involving the overstatement of revenues and understatement of expenses.”
These irregularities are predicted to cost the company more than $5 million in pretax charges dating back to 2000, and to date, the investigation itself has cost the company $1.4 million.
As a result of the initial accounting problems, Corrpro is scrambling to re-establish loan agreements with its creditors, and is now the subject of a class action shareholder lawsuit.
“Once we reach consensus with our lenders, we will be in a better position to communicate the components of the plan relating to the ongoing financing of our business,” says chairman, president and CEO Joseph W. Rog.
In addition, Corrpro has had to reassess the goodwill on its books in response to new accounting standards, which last year amounted to more than $18 million in noncash charges.
But we’re not hearing Corrpro’s death rattle yet. The Australian assets have been sold, and all things considered, the company improved its margins in the second quarter of fiscal 2003 (October-December 2002). For the most part, its North American operations are still making a profit, even though the aforementioned charges are taking a chunk out net profit.
Depending on what effect the lawsuits have on profits this year, the company could make it out of these scandals with the business intact and a lesson learned.
Brouse McDowell
When Brouse McDowell sought to establish an aggressive and attractive IP practice to strengthen its competitiveness, it lacked the necessary resources.
So the law firm did what any sharp-minded legal team would do — it went to the negotiating table and executed an acquisition deal that resolved the situation and made everybody involved happy.
Brouse’s merger late last year with intellectual property law firm Emerson & Skeriotis brought seven experienced IP attorneys and 14 staff members across town, including the highly respected team of Roger Emerson and John Skeriotis.
The move, engineered by Brouse Managing Partner Jerry F. Whitmer, was savvy on several fronts and put Brouse in a position of strength heading into 2003. First, it makes Brouse a more complete player in its regional legal space. Because of the increased reliance on technology as a key component of day-to-day operations, businesses in any industry can find themselves in need of good, solid IP representation.
The merger also added Emerson & Skeriotis’ client base to Brouse’s roster and increased its number of attorneys to 75 and total staff to 130.
InfoCision Management Corp.
InfoCision Management has done a good job of keeping a low profile without comprising its ability to support the Akron community. But business has been very good for the Bath Township-based call center operator, and you can only fly beneath the radar for so long.
Business is so good that InfoCision, which employs 2,700 people at 21 call centers in Ohio, Pennsylvania and West Virginia, expected sales growth of 30 percent last year over 2001, and it has run out of space for its burgeoning IT staff.
Over the next five years, President & CEO Gary Taylor says he expects to add at least 25 more IT employees. To accommodate this growth, the company spent $2.4 million to buy and equip a 34,000-square-foot building and shifted into it 50 IT workers from previously leased space.
M&G Polymers USA LLC
Last year, M&G Polymers USA LLC completed a move from its longtime home in downtown Akron to a new, $4.6 million research and development headquarters in Medina County’s Sharon Center.
M&G Polymers, a unit of M&G Polimeri Italia S.p.A., employs 31 people and plans to conduct research into new and improved polyethylene terephthalate, a hard plastic known as PET that is used to make bottles.
Delane Richardson, director of research and development — Americas, says the new research center will support M&G’s Italian parent company’s manufacturing plant in Point Pleasant, W.Va., which makes two-liter plastic bottles.
Although M&G is a unit of the Italian company, it has Northeast Ohio roots. It was a longtime division of Goodyear Tire & Rubber Co. before being sold in 1992 to Shell Chemical Co. The Italian polyester company bought M&G from Shell in 2001.
The move was spurred by increased demand in the PET market, and M&G expects it to allow for the creation of 16 new jobs over the next few years. It also allowed M&G to remain in Northeast Ohio. The company was recruited by states including West Virginia and North Carolina.
Quatech Inc.
Last year, Quatech Inc., an Akron company that develops and manufactures computer ports that enable businesses to replace computers without replacing printers, scanners and other peripherals, outgrew the three-story former union hall it called home.
The 50-employee company is expected to complete its move to Hudson early this year, and Quatech president and CEO Steve Runkel says the expanded space should help boost productivity by nearly 25 percent.
Runkel assumed control of the company two years ago, when venture capitalists DCC Growth Fund of Alexandria, Va., and Hill Street Capital of Cincinnati bought it for an undisclosed sum from its founders, C.F. Chen and C.S. Chen, unrelated professors at the University of Akron.
Quatech, founded 20 years ago, had sales of about $6.5 million in 2000 and grew by 20 percent in 2001. Last year, it expected year-end numbers to close in on $10 million.
The growth is due in a large part to changes in technology. Many computers today have more than one port to connect peripherals. Quatech’s products allow customers to maintain their older printers, monitors and other peripherals with existing port connections, as well as add extra ports so even more devices can be hooked up to their systems.
SummaCare Inc.
When you’re the third-fastest growing business in Northeast Ohio among companies with revenue exceeding $100 million, preparing yourself for growth is simply part of doing business.
SummaCare Inc. President Marty Hauser says he expects SummaCare to cover 50,000 to 60,000 new people by the end of March, bringing total enrollment to about 200,000.
The health care company is expanding so fast that it’s outgrown its new downtown Akron headquarters just a year after moving into the building at Main and Market streets. By early next year, some employees will work out of rented offices across the street.
To handle the increases, SummaCare has upgraded it technology and plans to hire as many as 50 more people in the next few months, bringing total employment to about 320.
It’s been a major turnaround for the organization, which lost $2.6 million in 1998. Through the first three quarters of 2002, SummaCare posted a profit of $2.3 million on sales of $202 million.
Much of the growth is due to the addition of a new client, the Cleveland Health Network, which manages employee health insurance for Cleveland Clinic Foundation and other affiliated Northeast Ohio hospitals. The other reason is that the health care company has finally been able to manage its costs and focus on providing quality services while turning a profit.
