John Riggs IV, president and CEO of J.A. Riggs Tractor Co.: “Our biggest asset is our rental fleet.”
J.A. Riggs Tractor Co. has ridden out the ups and downs of 85 years of business, built on its foundation as a Caterpillar distributor.
The Little Rock enterprise ranks No. 43 among the largest private companies in the state with 2012 revenue of $197 million. That figure reflects a one-year decline of 10 percent.
The decrease is associated mostly with a slowdown in shale play activity in the Ozarks. The downturn is a blip on the financial radar compared to the real estate meltdown in northwest Arkansas that preceded it.
“Out of our top 10 customers up there in 2008, only one is still in business,” said John Riggs IV, president and chief executive officer.
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Revenue at the company reached a pinnacle of $233.7 million in 2006 and nosedived to $166 million in 2009. A staff that numbered 509 in 2006 was cut to 410 by 2009 through targeted layoffs, early retirements and attrition.
Diversification has positioned the company to financially endure turbulent market conditions that have seen more clients opt to rent equipment instead of buying.
“As they’ve de-leveraged, we’ve had to leverage,” Riggs said. “It’s another way to help our customers be more efficient.”
Back in 1984, the company carried rental inventory of maybe 20 pieces of heavy equipment worth less than $1 million. Today, that number has grown to 597 pieces valued at nearly $79.2 million. Ninety percent is Caterpillar equipment, ranging from attachments to $750,000 dozers.
“Our biggest asset is our rental fleet,” Riggs said. “It’s bigger than our facility here.”
Customers can mitigate their financial risk by renting instead of owning, and for Riggs, there are tax advantages to renting afforded through double declining depreciation.
Repair work in the shop and in the field also adds to the corporate cash flow.
On this sunny Monday, the service bays are filled with a mix of equipment that includes drilling rigs, bulldozers, fracking trucks and more. Sales, rental and service encompasses heavy construction, mining, agriculture, logging and power unit equipment.
The J.A. Riggs machine shop is geared up to fabricate components, restore a variety of construction and industrial equipment and produce customized hydraulic cylinders.
The company’s headquarters campus at 9125 Interstate 30 is the mother ship for parts inventory for its seven other locations around the state.
The old parts warehouse is undergoing transformation to become a training facility.
Early foundation work is in motion for the new executive office building next door.
The corporate staff has taken up temporary residence on the third floor of the Two Financial Centre Building in west Little Rock.
The new building should be completed next year.
J.A. Riggs is in its fourth generation of family leadership and ownership. Family ownership was consolidated in 2002 into a triumvirate of John Riggs IV; his brother, Keith, vice president of corporate development; and cousin, Rob Cress, chief operating officer.
Robert Cress, representing the fifth generation and the son of Rob, started work in the sales department in January.
Other family members could join him.
“I’m hopeful that one of my sons will come into the business,” said John Riggs IV.
Corporate Highlights
1927: J.A. Riggs Sr. founds the Arkansas Road Equipment Co. at 214 W. Second St. in Little Rock, the first of three different downtown locations that would house the venture.
1928: Name changes to Arkansas Tractor & Equipment Co., and the firm is appointed the Caterpillar dealer for 45 counties in Arkansas effective Nov. 24. At the time, the company has about 17 employees.
1931: Six more Arkansas counties are added to its Caterpillar territory.
1938: Name changed to J.A. Riggs Tractor Co., and the Caterpillar franchise is expanded to 66 Arkansas counties.
1959: The Little Rock home office is moved to a new facility at its present location at 9125 Interstate 30.
1965: J.A. Riggs Tractor Co. has 260 employees. By 1979, the number has grown to 290.
1989: July 1, CEPCO Inc. (Custom Engineered Products Co.), a wholly owned subsidiary of J.A. Riggs Tractor Co., is started. Closed in 2002.
1993: Employment reaches 377.
1994: Employment reaches 444. Annual revenue tops $100 million for the first time, reaching $106.5 million.
1995: Employment reaches 502.
1997: Riggs Rental Services Inc. begins operations with the purchase of A-1 Rents Tools & Equipment Inc. of Russellville.
1998: Employment reaches 571.
2002: Statewide distribution rights for Caterpillar equipment are completed. The nine-county northwest Arkansas territory was controlled by E.A. Martin Machinery Co. of Springfield, Mo.
2006: Employment reduced to 509.
2009: Employment reduced to 410 by targeted layoffs, early retirements and attrition.
2013: Construction of new Little Rock headquarters office building started.
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