Posted 5/20/2013 12:00 am
Updated 11 months ago
Leading a 106-year-old family company carries heavy responsibilities that have only begun to lift six years after the start of the Great Recession.
Steve Anthony, president of Anthony Timberlands Co. since 2004, says business is better (the glass is half full), but the housing market is still nowhere near what he considers “sustainable” levels for his wood products company (the glass is half empty).
Open and intense, Anthony talked like a man who sees the economy improving but has been burned so badly he’s not quite ready to believe it.
“We tend to be a leading economic indicator, and if that’s the case, maybe we can look for good news going forward. I’m not sure. A lot of things that we used to be able to hang our hats on are not true anymore,” Anthony said during a visit to ATI’s flagship lumber mill in Bearden, the company’s base.
He held to his careful predictions despite revenue growth of 12.7 percent in 2012 compared with 2011 and steady improvements in the housing and construction markets, upon which his business depends.
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In April, the U.S. Commerce Department reported that housing starts for March had risen to an annual rate of 1.04 million units, the best showing since June 2008.
But Anthony seeks to keep the indicators in perspective. “For many years, 1.2 million, 1.4 million was sustainable,” he said. “That’s what we always saw. When it peaked at 2 million, of course the industry geared up to that level. When it crashed, it crashed down to 400,000 or 500,000.”
On Thursday, seeming to justify Anthony’s cautious course, the Commerce Department reported that construction of new homes fell in April to an annual rate of 853,000 units, though building permits rose to their highest level since June 2008. And single-family home construction dropped to an annual rate of 610,000 units.
“So we’re still far below the previously sustainable level that was needed to replace the units that were going out. We’re 50 percent higher than we were but we’re still half of what we used to be,” he said. “So it’s hard … to really project much of what’s going to happen. If you went back to 1.2 million, I don’t know who would be manufacturing the lumber. There’s been so many mills go out of business. You’d have to build new mills.”
Anthony Timberlands, however, has stuck it out. And because it has, the 49th largest private company in Arkansas has pulled its annual revenue up from $141 million in 2010, the low point during the late unpleasantness, to $162.5 million in 2012. That’s still far below its $185.5 million showing in 2008, before the worst of the housing crash had reached companies like Anthony.
The wood products and timber management company retrenched, of course, cutting shifts at its mills, instituting wage and salary freezes, pulling back on advertising, “anything that we could cut,” Anthony said.
He also credited ATI’s bankers, “our financing partners, who really, in the face of some pretty bad numbers, hung in there.” Anthony cited in particular Robert Head, who was CEO of Pulaski Bank & Trust (acquired by IberiaBank Corp. of Lafayette, La., in 2007) and Ross Whipple, CEO of Summit Bank of Arkadelphia.
Anthony said longtime relationships with local and regional bankers had helped ATI emerge from the economic downturn. So would it be accurate to say that local or regional bankers were more responsive?
“Oh, hands down,” he said, laughing. “Bank consolidation has just been a nightmare for us and especially our CFO, Rick Green.”
“We had relationships with a number of local and quasi-regional and regional banks that gradually started merging and becoming targets for national banks. Bank of America, Regions, Chase — they just started gobbling up our financing partners.
“And you look up and you’re dealing with a guy in Charlotte or Birmingham and they don’t care. They don’t care about the back story. They don’t care about the relationship. They just want to see the numbers, and if you post bad numbers for two quarters in a row, they walk in and say, ‘We want to be paid.’”
The support and faith of local and regional banks “were very important to us during this period,” Anthony said.
They may not have realized it, but that support and faith were also important to about 600 workers in south Arkansas, where Anthony Timberlands operates. In January, the company announced that it was adding second shifts to three departments at the Bearden plant, requiring the hiring of about 65 new employees.
Anthony makes it clear that his company is in south Arkansas for the long haul: “We plan to be here as long as we can.”
Anthony Timberlands Timeline
1840s: Addison Anthony moves from Virginia to settle in south Arkansas.
1884: Garland Anthony, Addison’s grandson, is born.
1907: Garland Anthony starts sawmill in Hopeville, near Bearden in Ouachita County.
1910-1940s: Garland and his brothers Frank, Will and Oliver form Anthony Brothers Lumber Co. Frank subsequently moves south and forms Anthony Forest Products Co. Will moves to Murfreesboro, operating sawmills in the area before selling out to Weyerhaeuser Co. The third, Oliver, remains in the area and partners with Garland Anthony in various timberland acquisitions.
1930s-1940s: During the 1930s, Garland Anthony’s business grows into what is at the time believed to be the largest private lumber manufacturer in the world. By the end of the 1940s, many of the small sawmills owned by various family members have closed, but members of the Garland and Oliver Anthony families maintain timberland-owning partnerships that survive today. Also during this time, Garland’s son Ted begins working for the business.
1939: John Ed Anthony, son of Ted and grandson of Garland, is born.
1946-1950s: Ted builds several mills in east Texas, which his father goes on to partner in. Ted Anthony returns to Arkansas in the mid-50s, where for a time he manages Bearden Lumber Co., along with other mills in the area.
1961: Ted Anthony dies unexpectedly at the age of 48. John Ed, the first of the family to attend college, graduates from the University of Arkansas and joins his grandfather Garland back in Bearden to lead the family enterprise.
1966: John Ed Anthony replaces wooden sawmill in Bearden with modern concrete and steel plant.
1974: John Ed Anthony, seeking to expand the company, forms Anthony Timberlands Inc. with the purchase of Hot Spring County Lumber Co., which is now ATI’s Malvern mill, and Saline County Lumber Co. in Benton, which will be destroyed by fire in the late 1970s.
1980s: ATI buys an International Paper hardwood plant at Beirne in Clark County and more land, along with Frizzell Lumber Co. in Gurdon.
1982: Garland Anthony, company founder, dies at the age of 97.
2001: John Ed Anthony inducted into the Arkansas Sports Hall of Fame in recognition of his success in horse racing under the name Loblolly Stable.
2004: John Ed’s son, Steven, becomes ATI president.
2006: ATI acquires all of Bearden Lumber Co., which had remained in family ownership throughout the period.
2012: John Ed Anthony, now chairman of ATI, is inducted into the Arkansas Business Hall of Fame, established by Sam M. Walton College of Business at the University of Arkansas.
2013: Anthony Timberlands Inc., with $162.5 million in revenue in 2012, employs 600, has five wood products manufacturing plants in Arkansas and owns and manages 150,000 acres of timberland across south-central Arkansas. Steve’s son, Addison, has added yet another generation to the business’ history.