Tough 2008 Shows on List of State's Largest Private Companies

by Gwen Moritz  on Monday, May. 25, 2009 12:00 am  

Collecting revenue data for the annual list of the state's largest private companies was harder this year. Fewer companies responded to the initial survey; more had to be begged and prodded; more forced Arkansas Business to use estimates.

(The list of the top private companies in Arkansas, available here, has been revised since its original publication to reflect a new, higher estimate of revenue by Stephen LaFrance Pharmacy Inc. Click here to see the list as it originally appeared. A spreadsheet version is also available.)

Fewer companies reported increased revenue between 2007 and 2008 - except companies in the energy and health care sectors, of course. And some of those warned that 2009 revenue would be off significantly from 2008. (See, for instance, this week's article on Bruce Oakley Inc. of North Little Rock and its 120 percent increase in revenue.)

Mainstays of the list are missing this year, and others are on the way out. In the end, the price of entry to the list dropped for the second straight year - and this time, by more than 10 percent.

The top of the list remains firmly in the hands of petroleum wholesaler Truman Arnold Cos. of Texarkana, Texas. (Arkansas Business has traditionally included businesses from either side of Texarkana on this particular list.) Its $2.5 billion revenue for the fiscal year that ended on Oct. 31 was a 28 percent increase over its previous year record of $1.95 billion and a testament to the stratospheric price of fuel throughout most of 2008.

No. 2 on the list is Warren Stephens' Stephens Inc., but the revenue figure of $1.84 billion (as estimated by Thomson Gale Competitive Intelligence) is one of the least reliable numbers on the list. In fact, none of the numbers associated with the three Stephens family's businesses are particularly reliable; financial secrecy is part of the Stephens corporate culture.

Stephens Group LLC, the investment company owned by Witt Stephens Jr. and his sister, Elizabeth Stephens Campbell, is No. 37 on the list with 2008 revenue estimated at $250.2 million by Hoover's Inc.

SF Holding Corp., the holding company for various interests still jointly held by Warren Stephens and his cousins, has undoubtedly been underestimated at No. 53. Its $154 million revenue figure is entirely the 2008 revenue for Stephens Media, the Las Vegas-based chain of newspapers, as estimated by Thomson Gale.

Even that may be underestimated. Advertising Age magazine estimated Stephens Media's revenue at $274 million in 2005. Newspaper revenue in general has gone off a cliff since then, and Stephens Media has acknowledged its struggles through widespread layoffs and other cost-cutting measures. But whether revenue is actually down by more than 40 percent in just three years is uncertain.

Stephens Media's gross revenue was apparently in excess of $150 million last year. In its annual proxy statement filed with the Securities & Exchange Commission in April, Dillard's Inc. of Little Rock disclosed that it had spent more than $3 million on advertising with Stephens Media during 2008. "Such fees did not exceed 2% of the consolidated gross revenue of Stephens Media Group during 2008," according to the Dillard's proxy. ("Group" has been dropped from the Stephens Media name.)

The ad spending was revealed because Warren Stephens is a member of Dillard's board of directors. Dillard's previous proxy statements have not been as specific about advertising spending with Stephens Media.

Unfortunately, Walter E. Hussman is not a director of any public company that buys advertising from his Wehco Media Inc., which we place at No. 36 with estimated revenue of $270 million.

Wehco dropped off Advertising Age's list of the 100 largest media companies in 2007, when the cutoff was $301 million. Since then, the parent company of the Arkansas Democrat-Gazette has acquired more newspaper properties, but it began tightening its belt with a hiring and wage freeze in August 2008 followed by layoffs and other cuts in 2009.



A few companies actually reported significant revenue improvement in 2008.

Riceland Foods Inc., the giant rice cooperative at Stuttgart, enjoyed revenue that was up almost 30 percent in the fiscal year that ended July 31, allowing it to move from No. 5 to No. 3 on this year's list. That tracked almost perfectly with the increase in the average price for rice, which was $12.80 per hundredweight in the fall 2007 harvest compared with $9.96 in the 2006 season.

Producers Rice Mills Inc., also of Stuttgart, did even better. Its revenue was up 58 percent, to $533.4 million in its fiscal year, which also ended July 31, 2008. And rice prices were up another 30 percent for the 2008 harvest, which bodes well for both rice cooperatives when we rank them next year.

Allens Inc. of Siloam Springs benefited from a recessionary retreat from restaurant dining. It sold $735 million worth of canned and frozen vegetables in the fiscal year that ended Feb. 28, 2009, up more than 20 percent from the previous year.

Perfect 10 Distributing Co., which sold more than $422 million worth of satellite television equipment in 2005 before dropping to less than half that in 2007, is back on the rise with the advent of high-definition satellite receivers. It climbed three spots to No. 39 on this week's list with $237.8 million in revenue last year.



Two companies that were longtime residents of the largest private companies list have disappeared this year because they no longer meet the definition of "Arkansas-based, Arkansas-owned."

The largest was CDI Contractors LLC of Little Rock, which was No. 15 on last year's list with 2007 revenue of $575 million. Half-owned by publicly traded Dillard's Inc. since its founding in 1987, CDI became a wholly owned subsidiary when Dillard's bought the remaining half from the heirs of co-founder Bill Clark in August 2008.

CDI would not rank nearly so highly this year, even if it were on the list. Dillard's annual report, issued on April 1, revealed that CDI had net sales of almost $88 million to external customers in the five months it was owned by Dillard's in fiscal 2008. It also had revenue of $19.1 million for work done on Dillard's retail properties during that period.

Dillard's slashed capital expenditures in 2008 by almost $200 million, "mainly as a result of the construction of fewer stores," the report says. That decrease in capital expenditures presumably had a dramatic impact on CDI's 2008 revenue and on any comparison between 2007 and 2008.

Also sold off the list was American Management Corp. of Conway, a $100 million-plus insurance agency that was sold to First Mercury Financial Corp. of Southfield, Mich., in February 2008.

Peterson Farms Inc. of Decatur, which was No. 62 on last year's list with estimated 2007 revenue of $128 million, is also missing from the list. Its integrated broiler operations were sold last June to Simmons Foods Inc. of Siloam Springs, which subsequently moved from No. 12 to No. 10 on the list with an increase of almost 20 percent in its 2008 revenue.

Two companies are making their final appearances on the list: Affiliated Foods Southwest Inc., which is ranked No. 12 based on $730 million in revenue during the fiscal year that ended June 30, 2008. On May 5, Affiliated filed for Chapter 11 bankruptcy and began liquidating assets.

Continental Express remains on the list - at No. 74, with estimated revenue of $90 million last year - by virtue of being Arkansas-owned until December 2008, when its assets were sold to Celadon Group Inc. of Indianapolis

ERC Properties Inc. of Barling and its Fort Smith neighbor, Riverside Furniture Corp., dropped off the list as revenue lagged. Rod Coleman, CEO of ERC, did not reveal 2008 revenue but said the property developer and manager had "cut our revenue and staff down to a minimum."

Riverside, which was No. 73 last year with $99.5 million in 2007 revenue, did not respond to this year's survey but has announced the layoff of more than 300 workers since January.



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