Gerbig, Snell/Weisheimer & Associates
Top officer then: Robert L. Gerbig
Top officers now: Robert L. Gerbig & R. Blane Walter
Estimated billings then: $84 million
Estimated billings now: $225 million
Employees then: 93
Employees now: 228
Forecast then: Expecting revenue increases in excess of 30 percent and billings high enough to make Gerbig among the three top-grossing ad agencies in the city.
Where it is now: Gerbig, Snell/Weisheimer far exceeded our expectations by more than doubling its employees and billings.
The agency rose to the top of the Columbus ad agency list in terms of local employees and gross billings and now runs neck-and-neck with HMS Partners in terms of gross income.
The firm netted three more accounts from Eli Lilly & Co. as well as that of Madison, Wisc.-based Bone Care International Inc., and Gerbig says that within the next 18 months, the firm will move from its current three locations to one larger.
Also in 1998, R. Blane Walter was named president and COO of the agency, and Vice President Karen Waldbillig Kasich’s role expanded to include a search for nonpharmaceutical business.
Gerbig says he also expects to open an office on the East Coast this year.
Doctors Hospital
Top officer then: Rick Vincent
Top officer now: John Bowers
Estimated billings then: $265 million
Estimated billings now: $265 million
Employees then: 1,900
Employees now: 1,900
Forecast then: Expecting renewed negotiations with competing hospital systems and possibly an affiliation or merger.
Where it is now: Doctors Hospital proved to be too good of a deal for its competitors to pass by. In August, OhioHealth won the race to purchase the three-hospital system over numerous local and out-of-state suitors which pursued Doctors.
The $142.5 million deal was expected to close late last year, giving Doctors Hospital more leverage to survive in the face of managed care, says Howard Sniderman, vice president of planning and marketing.
“Our goal was to sell the hospital when we were still in a very positive financial position, and because of the growth at Doctors West and all the building we did out there, we are in a positive financial position,” he says.
In addition, Doctors leased out during 1998 part of its North hospital to Select Specialty Hospitals of Mechanicsburg, Pa., for a long-term acute care facility.
OhioHealth has pledged to maintain the osteopathic medical education programs at Doctors. The Doctors Hospital Foundation, led by former Doctors President and CEO Rick Vincent, will be separate from the hospital and will focus on osteopathic medical education and community health.
Max & Erma’s Restaurants Inc.
Top officer then: Todd Barnum
Top officer now: Todd Barnum
Estimated revenues then: $91 million
Estimated revenues now: $100 million
Employees then: 3,800
Employees now: 4,500
Forecast then: Expecting five new locations, greater interest in franchising-including a possible push to franchise the company’s core concept-and revenues to top the $100 million mark
Where it is now: Max & Erma’s first two franchisees exceeded all company expectations financially and operationally in 1998. Due in part to those successes at Columbus and Cleveland airports, Max & Erma’s wasted no time in launching a strategic initiative to franchise its core concept. The company created a dedicated franchise development division and retained Lexington, Ky.-based KMH Partners LLC, a firm known for developing franchise programs that favor multi-unit operators.
In 1998, Max & Erma’s also opened its first Ironwood Cafe, a more intimate, upscale dining concept, and added three more company-owned Max & Erma’s locations to the 46 it had at the beginning of last year.
Max & Erma’s broke new ground financially, too, in 1998, topping the $100 million mark for the first time and setting records in net income and earnings per share.
Executive Jet
Top local officer then: Richard G. Smith III
Top local officer now: Richard G. Smith III
Estimated revenues then: $200 million to $600 million*
Estimated revenues now: $900 million
Employees then: 690
Employees now: 1,050
Forecast then: Expecting preparation for a public offering to raise capital, significant employment growth, expansion into a hangar at the former McDonnell Douglas plant and a new office building
Where it is now: Executive Jet’s search for capital didn’t land it on Wall Street after all. Instead, Warren Buffett stepped in and officially closed on a deal in July to purchase the company through his own investment business, Berkshire Hathaway Inc., for $725 million in cash and stock.
Company officials say an initial public offering would not have been a good fit, as they wanted to retain more control than would be permitted by stockholders. Buffett, on the other hand, will allow Executive Jet’s existing management to continue running the company, which-with his financial assistance-expects to expand around the globe, including into the Middle East, Asia and South America.
The company will move into new headquarters on Port Columbus’s north airfield late this summer. More than 300 aircraft are on order for delivery during the next 10 years and employment at Executive Jet has risen by 50 percent.
AEP
Top officer then: E. Linn Draper Jr.
Top officer now: E. Linn Draper Jr.
Estimated revenues then: $5.9 billion
Estimated revenues now: $12.7 billion**
Employees then: 18,000
Employees now: 18,000
Forecast then: Expecting further acquisitions, international expansion-especially in South America, India, Central America and New Zealand-and further diversification of services.
Where it is now: AEP announced in February plans to purchase a 20 percent stake in Australian utility Pacific Hydro, marking its first market entry Down Under. In addition, AEP Resources, a subsidiary of AEP, opened offices in London and Singapore last year-and announced plans to buy Louisiana Interstate Gas and Australia-based CitiPower.
AEP Communications, another subsidiary, introduced an energy-consumption monitoring service last year for business customers, further diversifying AEP’s portfolio of services.
What was supposed to be AEP’s biggest news of the year-finalization of its planned merger with Central and South West Corp.-fizzled a bit when the Public Utilities Commission of Ohio filed a protest with the Federal Energy Regulatory Commission. The merger, approved by shareholders in mid-1998, would make AEP the country’s largest utility, with 4.6 million customers in 11 states. Hearings on the merger are expected to begin this month.
Glimcher Realty Trust
Top officer then: Herb Glimcher
Top officer now: Herb Glimcher
Estimated revenues then: $130 million
Estimated revenues now: $168 million
Employees then: 714
Employees now: 526
Forecast then: Expecting more growth through mall acquisitions, the announcement of a new headquarters building downtown and funds from operations increases in the 8 to 10 percent range.
Where it is now: Glimcher made its largest acquisition ever in 1998 with the $375 million purchase of five shopping malls with a combined 5 million square feet of space. This purchase increased Glimcher’s total holdings by 20 percent to 30 million square feet and gave the company its first properties in Oregon, California and Minnesota. In addition, the company announced plans in mid-October to build a 1 million-square-foot mall on 203 acres just outside Chicago. Closer to home, Glimcher completed the $5.1 million purchase of 90 acres at Polaris to build a super-regional mall with anchors including Sak’s Fifth Avenue, Kaufmann’s and Lord & Taylor.
On the financial side, funds from operations-the best measure of a real estate investment trust’s performance-increased nearly 14 percent through the end of September.
With all this growth, the company’s search for a larger headquarters building has taken a backseat, but company officials say it is still in the plans.
Buckeye Egg Farm L.P.
Top officer then: Andy Hansen
Top officer now: Andy Hansen
Estimated revenues then: $125 million
Estimated revenues now: $125 million
Employees then: 426
Employees now: 480
Forecast then: Expecting expansion into Wyandot and Hardin counties, and a new, more responsive approach to dealing with neighbors and government entities
Where it is now: Buckeye Egg Farm has begun facility expansions in Northwest Ohio as well as at its Licking County location, despite continued objections from neighbors.
In Marseilles and Mount Victory, expansions are under way or under review by the Ohio Environmental Protection Agency. A feed mill in Northwest Ohio is under construction as well.
In Licking County, plans are moving forward-despite a pending appeal of EPA permits-to add laying houses as well as remodel older buildings to reduce odor and insect problems.
Despite harsh media reports, President Andy Hansen says he was successful in his efforts to improve attitude at the company and emphasize response to neighbors and government entities. For example, a settlement was reached in a class action lawsuit filed against the company by Marion County residents, although claims for monetary damages remain. The company also reached a settlement with the U.S. Occupational Safety and Health Administration to pay $425,000 in fines and increase health and safety training and auditing at all of its facilities.
Metatec Corp.
Top officer then: Jeff Wilkins
Top officer now: Jeff Wilkins
Estimated revenues then: $48 million
Estimated revenues now: $63.7 million**
Employees then: 375
Employees now: 650
Forecast then: Expecting the company’s ongoing push toward Digital Versatile Disc technology to either break-through or bust
Where it is now: Metatec began mastering and manufacturing DVDs nationwide in February. In July, the company announced a definitive agreement to buy the CD-ROM business of Imation Corp., which included plants in California, Wisconsin and The Netherlands. This gave Metatec its first European presence and nearly doubled its manufacturing and fulfillment capacity.
In addition, Metatec began manufacturing last year a new generation of DVD with two data layers that can be read without turning over the disc. The company also broke ground on a 151,000-square-foot fulfillment center.
As for Metatec’s financial situation, earnings per share averaged 20 cents during the first nine months of 1998-a far cry from the 3 cents per share reported in the same period of 1997-but not quite as high as the 25 cents we predicted if this DVD technology took hold.
Excel Management Systems Inc.
Top officer then: Curtis Jewell
Top officer now: Curtis Jewell
Estimated revenues then:$11.5 million
Estimated revenues now:$10.7 million
Employees then: 90
Employees now: 90
Forecast then: Expecting a narrower focus which will jump-start sales growth and send revenues past $20 million
Where it is now: Despite effort and investment, 1998 did not yield the benefits Curtis Jewell expected for Excel Management.
A success came from putting in place financing vehicles and contracts to allow government agencies to buy his services without having to bid on them, allowing him to take on more government contracts.
However, Jewell spent much of the year working toward what turned out to be an unsuccessful merger with a company he declined to name. The merger would have provided Excel with commercial business to supplement its government contract focus, but miscommunications scratched the deal. He does not rule out future acquisitions or mergers.
In addition, a national sales effort faltered when the newly-hired director and some staff did not work out. Now, Jewell’s taking on the responsibility of marketing while he searches for replacements.
“We did all that planning and made great investments in ’98, and it did not come through,” Jewell says. “It’s a difficult thing for a small company to do-get over the $10 million to $12 million mark to $25 million. It requires great investment and strategy.”
Despite the disappointments, Jewell still expected a profitable 1998 and he’ll renew his efforts this year.
*As listed in Arthur Andersen’s 1997 survey of the top 100 privately held companies in Central Ohio
**Figure based on average revenue growth through first three quarters of 1998 projected at same rate through fourth quarter.