Make us your home page

Nearly all of Tampa Bay's top public companies saw revenues fall last year

The economic downturn has whipsawed Tampa Bay's top public companies in the past couple of years.

The St. Petersburg Times' roundup of the region's 10 largest public companies a year ago showcased a stock market disaster. The biggest local stocks in 2008 had lost a combined market value of $11 billion, or about 44 percent of their worth.

Stock prices have since rebounded strongly. But Part II of the Great Recession hit with a fury in 2009, cutting sharply into corporate revenues. Nine of the region's top 10 companies suffered a drop in revenue last year. The sole exception: WellCare Health Plans.

Members of the Times 10 may be leaner and a bit battle-scarred, but the group is stocked mostly with familiar names.

Nine are repeat members. The only newcomer arrived via the exit of Walter Energy, which is moving its corporate headquarters from Tampa to Birmingham, Ala. Taking Walter's spot, debuting at No. 9, is general insurer Brown & Brown Inc.

The rest of the lineup is unchanged with two exceptions. WellCare rose a notch to No. 3, knocking Gerdau Ameristeel down a peg, and HSN leapfrogged Raymond James into sixth.

The watch list for next year includes call center operator Sykes Enterprises, which missed the cut by a mere $64 million in revenue.

And Sykes is coming up fast. In its first fiscal quarter of 2010, the company posted $275 million in revenue, besting the current No. 10, Kforce, which had $227 million in revenue.

The turnaround artist: WellCare Health Plans

An economic slump apparently was just the medicine WellCare Health Plans needed. At least short-term.

Recovering from a management housecleaning and federal probe into accounting irregularities, the provider of managed health care plans returned to profitability last year as it boosted revenues 5 percent to $6.9 billion. Part of the boost was due to the economic downturn, which increased enrollment in many of the company's Medicaid plans.

Next year, the numbers may not be as encouraging.

Premium revenue is expected to fall to between $5.3 billion and $5.4 billion range because the company stopped offering Medicare Advantage private fee-for-service plans at the end of 2009. Those plans contributed about $1.1 billion in premium revenue last year.

Alec Cunningham, a WellCare manager who took over as CEO in December, said via e-mail that WellCare is "working to re-establish prudent, profitable growth" despite the projected revenue drop. On the plus side, the health care overhaul over time is expected to increase Medicaid eligibility in many states, potentially a "significant opportunity for WellCare," the company said.

A year ago, prosecutors said WellCare agreed to pay $80 million to avoid conviction on a charge of conspiracy to defraud the Florida Medicaid program and the Florida Healthy Kids Corp. It subsequently agreed to a $10 million civil penalty settling an informal inquiry by the Securities and Exchange Commission that regulatory filings reflected more than $40 million in profits that WellCare failed to return to the Florida agencies from 2003 to 2007.

A few legal issues remain. The company is still in discussions with the U.S. Department of Justice and the Office of Inspector General of the U.S. Department of Health and Human Services. WellCare said it couldn't predict when those issues would be resolved.

Cunningham noted that the legal payouts of 2009, however, didn't prevent WellCare from strengthening its balance sheet.

"We made significant financial progress over the last year," he said. "As of March 31, 2010, we have no borrowings, and we held about $120 million in cash and investments in our unregulated (non-health plan) companies."

The survivor: Gerdau Ameristeel

Not often does a well-established, $8 billion-plus company lose half its revenue in a single year and live to tell the tale.

Gerdau Ameristeel, the second-largest mini-mill steel producer in North America, paid a steep price for being in the construction industry during an epic downturn. Revenue last year fell to $4.2 billion, down a whopping 51 percent. Its net loss for the year: $162 million.

Gerdau chief financial officer Barbara Smith said the sharp dropoff in demand hit almost immediately in the fall of 2008.

"Construction requires credit, and when the financial markets collapsed, there was no money being lent for projects … so companies couldn't order the steel," she said.

Rooted in a cyclical industry, Gerdau was prepared. Every steel and fabricating mill had drafted a plan for how to get a 10 percent return on capital if it hypothetically lost 20 percent of its business and prices fell 20 percent.

No line item was spared. An undisclosed number of jobs were cut. Many full-time workers were cut to 30 hours a week. Salaries were frozen; training and most travel expenses were eliminated.

The company called suppliers in, seeking creative strategies through the downturn. Price relief was part of it, but so was improving the quality of some supplies to last longer. And reducing the use of certain materials to save money without hurting the finished product.

"We weren't reacting. We were basically executing from a well-defined plan," Smith said, comparing the situation to crafting a hurricane disaster plan.

A year and a half later, some less prepared competitors are still suffering. Gerdau, meanwhile, recently posted a first-quarter profit of $25 million and has been able to rehire some workers and increase hours.

The newbie: Brown & Brown

General insurer Brown & Brown has been a perennial bridesmaid on the Times 10 list.

With the departure of Walter Energy, which is relocating its headquarters from Tampa to Birmingham, Ala., Brown & Brown finally made the cut.

The honor came despite a small drop in revenue as the Brown network battled a dual dry up: the number of individuals and entities insured per policy is shrinking at the same time rates are trending down.

For Brown, a middle-market insurance broker, lower premiums translate into lower commissions and lower revenues.

The same trends are persisting into 2010.

"We think rates will continue to be soft," CEO J. Powell Brown said in an interview with the Times last week. "If the economy continues like it is, we could have internal negative growth."

Last year, Brown had negative internal growth. That was partly offset by doing $26.5 million worth of acquisitions, though even that was a rather mild acquisition year by Brown standards.

Made up of dozens and dozens of small insurers acquired through the years, Brown & Brown has long maintained dual headquarters in Tampa and Daytona Beach. That's because the company was formed by melding the South Florida insurance operations of Powell Brown's father, J. Hyatt Brown, with those of former Tampa Mayor William Poe.

While Powell Brown is stationed in Daytona Beach, his brother, P. Barrett Brown, runs the Tampa operation.

Barrett Brown said the company hasn't lost its passion for dealmaking. "We are very focused on acquisitions, but it's all about finding the right people, the right cultural match."

As well as the right price. Many agencies have skewed expectations, valuing their agency revenues at unjustified levels, he said.

One of the biggest challenges, Barrett Brown said, is to continue being very disciplined in chasing growth opportunities. "We're at a valley, so it's the hardest time to stay disciplined," he said.

Ten for '10:

Company 2009 Revenues (2008 Revenues)

1. Tech Data $22.1 billion ($24.1 billion)

2. Jabil Circuit $11.7 billion ($12.8 billion)

3. WellCare Health Plans $6.9 billion ($6.5 billion)

4. Gerdau Ameristeel $4.2 billion ($8.5 billion)

5. TECO Energy $3.3 billion ($3.4 billion)

6. HSN $2.7 billion ($2.8 billion)

7. Raymond James Financial $2.6 billion ($3.2 billion)

8. Lincare Holdings $1.6 billion ($1.7 billion)

NEW 9. Brown & Brown $968 million ($977 million)

10. Kforce $910 million ($997 million)

Companies that just missed the cut:

Sykes Enterprises $846 million

Quality Distribution $614 million

MarineMax: $589 million

Syniverse Holdings: $483 million

Nearly all of Tampa Bay's top public companies saw revenues fall last year 05/21/10 [Last modified: Friday, May 21, 2010 8:01pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Legalized medical marijuana signed into law by Rick Scott

    State Roundup

    TALLAHASSEE — Gov. Rick Scott on Friday signed into law a broader medical marijuana system for the state, following through on a promise he made earlier this month.

    Gov. Rick Scott signed legislation on Friday that legalizes medical marijuana in Florida.
  2. Line of moms welcome Once Upon A Child to Carrollwood


    CARROLLWOOD — Strollers of all shapes and sizes are lined up in front of the store, and inside, there are racks of children's clothing in every color of the rainbow.

    At Once Upon A Child, you often as many baby strollers outside as you find baby furniture and accessories. It recently opened this location in Carrollwood. Photo by Danielle Hauser
  3. Pastries N Chaat brings North India cuisine to North Tampa


    TAMPA — Pastries N Chaat, a new restaurant offering Indian street food, opened this week near the University of South Florida.

    The menu at Pastries N Chaat includes a large variety of Biriyani, an entree owners say is beloved by millions. Photo courtesy of Pastries N Chaat.
  4. 'Garbage juice' seen as threat to drinking water in Florida Panhandle county


    To Waste Management, the nation's largest handler of garbage, the liquid that winds up at the bottom of a landfill is called "leachate," and it can safely be disposed of in a well that's 4,200 feet deep.

    Three samples that were displayed by Jackson County NAACP President Ronstance Pittman at a public meeting on Waste Management's deep well injection proposal. The sample on the left is full of leachate from the Jackson County landfill, the stuff that would be injected into the well. The sample on the right shows leachate after it's been treated at a wastewater treatment plant. The one in the middle is tap water.
  5. Honda denies covering up dangers of Takata air bags


    With just a third of the defective Takata air bag inflators replaced nationwide, the corporate blame game of who will take responsibility — and pay — for the issue has shifted into another gear.

    Honda is denying covering up dangers of Takata air bags. | [Scott McIntyre, New York Times]