Book of Giants List Continues to be Fluid

I don't know how many of you keep copies of CONTRACTOR from year to year, but those who do might have noticed that the annual Book of Giants is a fluid list. Some of the nation's largest mechanical contractors fall off the list and some are added.

I don't know how many of you keep copies of CONTRACTOR from year to year, but those who do might have noticed that the annual Book of Giants is a fluid list. Some of the nation's largest mechanical contractors fall off the list and some are added.

The utility company Giants that had been on the list, such as Keyspan, are gone now that utilities have determined that mechanical contracting is not a get rich quick scheme. And good riddance. They never responded to our questionnaires or phone calls, and trying to figure out their contracting revenues from their Security & Exchange Commission filings was aggravating. I think utilities' annual reports are intentionally obtuse so that nobody can figure out what they're really doing.

We've added Johnson Controls, which has purchased large mechanicals such as Cal-Air and Berg Inc., to the list. We may not be dead-on, but I believe the number that we're reporting for Johnson Controls' contracting revenue is in the ballpark. I wish I could get a good number for Tyco, which is undoubtedly the country's biggest fire protection contractor. Tyco's Fire Protection Services division enjoys about $3.5 billion in revenues, but that includes more than sprinkler contracting and it includes revenues from Europe and Asia. Our Giants list encompasses North American contracting only.

It's not easy to track down all of the firms that would qualify for the Top 100, since most firms in this industry are privately held and some want to remain anonymous. We're constantly adding new firms to the list. Some contact us and ask to be sent the Giants questionnaire. We run across others through the course of the year from, for example, a profile in a local business journal that mentions that the company has revenues in excess of $40 million.

Some companies have been on our list all along. Alakai Mechanical, Honolulu, and Berger Engineering, Dallas, have revenues this year that qualify them for the Top 100. Others have fallen off the list. There were a number of companies that did not respond to the questionnaire who I found on financial reporting Web sites, such as Dun & Bradstreet's Hoovers.com. I was a bit surprised at how far some once-prominent companies had fallen.

Of course, being big has never equaled being financially secure as so many large mechanicals have gone belly up, such as Encompass Services and American Plumbing & Mechanical. Does anyone remember Natkin Group? Sam P. Wallace? They were both number 3 on the list in years back. I was beginning to think that being the country's third largest mechanical was jinxed. When Pool & Kent became number 3, I was afraid the hex was going to get it too, but EMCOR bought it and all is well in Baltimore.

It was for precisely those reasons that we at CONTRACTOR took some heat years ago about emphasizing gross revenues over profits. As an alternative, we began asking the Giants for their net profit percentage. Most of them are shy, to say the least. Quite a few, however, are willing to report their net profit, and a few are both proud and willing. Take note that the people on this list may come and go as well, but Steve Irwin of Farmer & Irwin is always on this list. It may be the result of Steve being a stalwart in Plumbing-Heating-Cooling Contractors — National Association, it may come from being a smart guy, or it may be both.

The upshot of all this is that it is inevitable that we left somebody off the list. If you work at a contractor that should be on the list or know of a firm that should be on the list, please let me know.

Other than the volatility of the Giants list, the news is mostly good. The nation's largest mechanicals are saying that they might decide not to participate in the coming recession. A number of important markets are not overbuilt and backlogs are still healthy. It's probably a good idea to stay out of the condo or loft conversion market and the hotel market is about a year and a half away from being overbuilt. The office building market is also iffy.

Healthcare, schools, industrial (especially power and refining), and the water and wastewater treatment markets are expected to remain healthy. See our coverage of the Giants in our feature story, Guardedly Optimistic.