Slow Rebound: EC&M 2012 Top 50 Electrical Contractors

For the firms on EC&M’s 2012 Top 50 Electrical Contractors list, being able to take advantage of last year’s turnaround in the construction industry, albeit slow and spotty, largely depended on the market sectors and geographic areas in which they worked. In 2011, private industrial and manufacturing sectors led the limited recovery for the industry. Telecommunications, driven by the need for new data centers, also grew at a steady clip. However, uncertainty about the general U.S. economy and the upcoming presidential election stunted the return of public-sector projects. Markets that rely on government funding, such as transportation, government buildings, and public works (including wastewater and sewer), remained stalled. Yet, incentives and grants for the power segment, including renewable energy sources and storage and the upgrade of the country’s electrical infrastructure to the smart grid, were still made available.

As a whole, the firms on the 2012 Top 50 Electrical Contractors list earned $12.8 billion in total revenue for electrical and datacom services last year (see The Top 50 Electrical Contractors). This marks a 7.6% increase from the $11.9 billion generated in 2010 by the firms on last year’s list and a step toward the pre-recession peak of $13.3 billion earned in 2008 by the Top 50 firms (Fig. 1). Only 12 firms on this year’s list experienced a decline in revenue for electrical and datacom services from 2010 to 2011, and, of those firms, only one claimed a decrease of more than 20%. On average, this year’s Top 50 firms logged a 13.6% increase in revenue for electrical and datacom services in 2011. Two firms didn’t provide revenue information in 2010.

(Photo at right courtesy of Power Design, Inc.)

Driving the average revenue gain, several companies reported significant hikes in their year-over-year numbers and upped their rankings. Minneapolis-based Egan Co. returned to the Top 50 list with a 64.6% jump in revenue. Norwalk, Conn.-based EMCOR Group, Inc. remained in the No. 1 position with growth of 45.6%. Forty-percent growth allowed Minneapolis-based Parsons Electric LLC to jump from No. 22 to No. 16. A 30.7% increase moved Rolling Meadows, Ill.-based MYR Group, Inc. from No. 4 to No. 3.

San Jose, Calif.-based Cupertino Electric, Inc. (CEI) charged from the No. 10 spot to No. 5 by garnering a 69.8% spike in revenue for electrical and datacom services. The firm attributes its astounding increase in revenue and meteoric rise to foresight dating back two years. “In 2011, we executed on the work that we started in 2009,” says John Boncher, president and CEO. “We saw there was a lot of opportunity back then. The bulk of the hard work was done in 2009 and 2010, and in 2011 it was purely just finishing up the plan.”

The long ramp-up time allowed the company to avoid the growing pains of taking on large projects. “We were fortunate because we had a two-year period where we could build up staff and resources to prepare for this,” continues Boncher, who confesses that, as a service provider, the firm may not be able to continue with growth on this scale. “For a service provider, growth numbers like this should make somebody very nervous. It’s not sustainable for anyone in a service industry. This is more a testament to the quality of work we do for our customers and their commitment and loyalty to us because of the quality and the way that we treat them. So we’ll grow as long as we can continue to find customers that appreciate and are willing to pay for what we bring to the table.”

With a 51.3% annual gain, Torrington, Conn.-based Ducci Electrical Contractors, Inc. skyrocketed to the No. 32 position from No. 45. “2011 was naturally a continued difficult economic climate for just about everyone — and it was no different for us,” says Richard J. Ducci, president and CFO. Ducci attributes his firm’s growth last year to continued efforts in performing successfully for its core customers and earning repeat business, as well as expansion of the firm’s geographic and market reach. “We expanded our horizons slightly both in terms of geography as well as the type of work we do — while not straying too far from our basic operating principles,” he concludes.

Fort Lauderdale, Fla.-based Hypower, Inc. moved from the No. 47 position to No. 34 with a 44.6% increase. The firm credits the strength of the power market for its growth in revenue. “Hypower, Inc. benefited in 2011 from government incentives that induced government funded or subsidized projects, such as work on military bases and major solar roll-outs,” says President Bernard Paul-Hus. “This enabled a robust growth rate primarily for Hypower’s Energy Infrastructure Group with moderate to sustained growth for our Power Group, Electrical Group, and Airfield Group.”

The company installed 38 million watts of solar energy in 2010 and around 100 million watts in 2011. Ironically, the bulk of Hypower, Inc.’s solar business is performed outside of Florida — the sunshine state. The firm completed major projects in North Carolina, Kentucky, and New Jersey. However, Hypower plans to open new headquarters in South Florida, which will require hiring additional employees and working with Florida legislators to make solar power a priority, through incentives and legislation, to create more space for solar.

(Photo at right courtesy of Guarantee Electrical Co.)