This Was Printed From Baltimore Business Journal
How Baltimore's largest private companies
weathered the recession’s punch
Premium content from Baltimore Business Journal - by Gary Haber
Date: Monday, August 30, 2010, 12:00am EDT - Last Modified: Sunday, August 29, 2010, 3:06am EDT
If you run a business, you know that 2009 was not a year you would want to put on a party hat and dance
the macarena.
Revenues tumbled, pink slips littered in-boxes at some firms and companies took a Ginsu knife to their
budgets as they slogged through the worst economic downturn since the Great Depression.
Greater Baltimore’s largest privately owned firms were not immune from the pain.
The Baltimore Business Journal’s latest annual ranking of the largest private companies in the region shows
the top 100 saw their combined 2009 revenue fall by nearly $1.7 billion. The largest 100 pulled in a combined
$21 billion in 2009, down from about $22.7 billion in 2008. That was a drop of more than 7 percent. The
companies on the list were ranked by 2009 revenue.
The shrunken revenue numbers are no surprise.
Daraius Irani, an economist at Towson University’s Regional Economic Studies Institute, describes 2009 in
terms more befitting a crime blotter than an economic analysis.
It was a year when “the recession firmly had its hands around everyone’s neck,” Irani said.
Revenue fell at seven out of the 10 largest private companies, including Allegis Group Inc., the largest
company on the list. The Hanover staff ing firm had $4.9 billion in revenue last year, down from $5.6 billion
in 2008. The drop reflected an economy still stuck in neutral, as skittish clients hired fewer temporary
workers.
“When things go south, we tend to see that first,” said Samantha Breger, an Allegis spokeswoman. “And
when things pick up, we tend to see that first.”
In an economy that has struggled to put people back to work, the good news is that the top 50 private
companies have actually added jobs locally. In 2010, those companies employed 664 more people than they
did the year before. Combined, these companies have a work force of about 20,500 people in Greater
Baltimore, not counting employees working outside the region.
The list is heavy on firms in construction, commercial real estate, and professional services and business
firms, such as law, information technology and engineering companies. That reflects the composition of
privately held companies to be found in many cities, said Richard Clinch, director of economic research at the
University of Baltimore’s Jacob France Institute.
“It’s what you would expect to see in the private sector,” Clinch said.
While revenues are down for the top 100 companies, things could have been a lot worse, said August “Augie”
Chiasera, president of M&T Bank’s Greater Baltimore region. The area has been cushioned by a diverse
economy, a highly educated work force, its proximity to Washington, D.C., and its steady source of federal
jobs and work for government contractors, Chiasera said.
Optivor Technologies in Annapolis Junction is one local company that has benefited from being a federal
contractor.
Optivor, No. 35 on the List, designs and installs telephone systems and data networks. Two years ago, only
about a quarter of its business came from government contracts. The remaining three-quarters came from
corporations.
But Stuart Chandler, Optivor’s CEO, was quick to recognize that in a slowing economy companies were
cutting back on buying things like new phone systems.
“We saw the economy start to stall out,” Chandler said. “We identified the government as a great
opportunity.”
Chandler switched the focus to government contracting. Optivor now has between 20 and 30 contracts,
including about $30 million worth of contracts for the Department of Defense. As a result, the company’s
revenue more than doubled to $52.9 million in 2009. About 75 percent of that came from contracts with the
federal government, Chandler said.
At Arinc, the Annapolis transportation communications and systems engineering firm that is No. 6 on the List,
revenue grew in part by expanding overseas, said Linda Hartwig, a company spokeswoman.
Among other moves, the company opened an office in New Delhi, India. It also won a contract to integrate
the systems at the airport in New Delhi, including the check-in systems and flight information displays.
Arinc’s 2009 revenue rose to $1.24 billion, from $1.16 billion in 2008.
Companies in the commercial real estate field had a tougher year, said Robb Merritt, president of Merritt
Properties, which had $141 million in revenue in 2009 and ranks 21st on the List. While that was up from
$139 million in 2008, Merritt said the story of the year was that commercial landlords could not get the same
kinds of rents last year as they could when the economy was healthier. There was also a shrinking demand
for space, as some companies closed and few expanded.
“For the whole industry, 2009 was not a good year,” Merritt said.
Carving out safe havens unaffected by the overall economic downturn was another strategy successful
companies used to make it through the recession, said Gregory Caruso, a principal at Harvest Associates LLC,
a business advisory firm in Canton.
“They looked at what niches in their industries were working and focused on them,” Caruso said.
One example is Oak Contracting LLC, a Towson construction management firm that specializes in school
building. The company’s revenue jumped 66 percent to $164.1 million in 2009. Oak, which is No. 20 on the
List, had nine schools under construction last year, including four high schools in Harford, Frederick and
Baltimore counties. That was far more than in a typical year, said Douglas Eder, Oak’s president.
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