The top two commercial contractors in Arkansas were still head and shoulders above the rest, but No. 2 VCC of Little Rock nearly caught up with No. 1 Nabholz Construction Corp. of Conway in 2012.
VCC reported revenue of $525 million last year, an increase of $75 million over 2011. Meanwhile, Nabholz’s revenue was down about $7 million to $537 million in its last fiscal year, which ended Sept. 30. Instead of a $94 million gap between the two, as was recorded in 2011, the $12 million difference represented about only 2 percent of sales.
CDI Contractors LLC of Little Rock, which had numbers in the half-billion range during the construction boom of the late 2000s, was nowhere near that level last year. But it did post a 27.3 percent increase in the fiscal year that ended for parent company Dillard’s Inc. on Feb. 2 of this year.
That pushed it into the No. 3 spot on Arkansas Business’ annual list of the largest commercial contractors based in Arkansas.
(Get the List: Click here to see the list of the state's largest commercial contractors in PDF or spreadsheet format. Also: Get the list of electrical subcontractors and the list of mechanical subcontractors.)
CDI’s total revenue of $136.2 million included more than $32 million worth of work done specifically for Dillard’s, but its outside work increased by almost 50 percent, from $69.7 million in fiscal 2011 to $103.8 million in fiscal 2012.
That bump in revenue went hand-in-hand with improved profitability for CDI, which, as a wholly owned subsidiary of a publicly traded company, is the only commercial contractor on the list whose profitability is available.
According to the Dillard’s annual report, CDI had profit of $5.3 million on the $103.8 million worth of non-Dillard’s work, a margin of 5.1 percent. That compares favorably with a construction margin of 1.6 percent in 2011. (But construction is far less profitable than Dillard’s retail operations, where the margin was 36.1 percent last year and above 35 percent for each of the previous two years.)
And business for CDI, led by President and CEO Lloyd Garrison, seems to be picking up.
“We believe we will continue to see some sales growth in the construction segment during fiscal 2013; however, there is no guarantee of improved sales performance,” Dillard’s revealed in its annual report. “The backlog of awarded construction contracts at February 2, 2013 totaled $159.3 million.”
And that was before April 29, when the Little Rock Advertising & Promotion Commission selected a partnership between CDI and Hunt Construction Group of Scottsdale, Ariz., as contractor for the renovation of the Robinson Center Music Hall.
While the scope of the renovation has not been finalized and construction will not begin until 2014, the price tag has been estimated at between $50 million and $65 million.
Ups and Downs
CDI Contractors was originally owned 50-50 by Dillard’s Inc. and Arkansas construction legend Bill Clark. But in August 2008, 15 months after Clark’s death, Dillard’s exercised its option to buy the Clark half of the business.
Bill Clark’s son, William, who became CEO after his father’s death, subsequently resigned from CDI and formed his own company, Clark Contractors LLC, in February 2009.
Clark Contractors more than doubled its revenue in 2012 to $104.3 million — a bit more than CDI’s non-Dillard’s work — and zoomed from No. 9 to No. 4 on the list.
Clark recently told Arkansas Business that 2013’s revenue would probably not match 2012’s, “but some projects we’re chasing could get us there.”
Meanwhile, Baldwin & Shell, the venerable Little Rock contractor that accepts work only in-state, dropped from No. 3 last year to No. 5 with a decline of almost 35 percent between 2011 and 2012. CEO Bob Shell recently said that 2013 should be busier and “2014 and 2015 are shaping up to be really good years.”
In a stark reminder that revenue and profitability are two entirely different things, last year’s No. 5 contractor, Latco Inc. of Lincoln, has dropped off the list entirely.
The builder of poultry houses and commercial trusses, which claimed revenue of $80 million in 2011, began selling off assets in 2012 and went out of business in February.