#21. PLANNING RESEARCH CORP.
1500 Planning Research Blvd. McLean, Va. 22102 REVENUE: $372.4 million PROFITS: $6 million EARNINGS PER SHARE: 92 cents DIVIDEND: 20 cents ASSETS: $186.2 million STOCKHOLDERS' EQUITY: $68.2 million RETURN ON EQUITY: 8.8 percent EXCHANGE: NYSE EMPLOYES: 7,000 TOP EXECUTIVES: John M. Toups, chairman and chief executive officer; Wayne Shelton, president and chief operating officer. FOUNDED: 1954
DESCRIPTION: Planning Research is a typical "professional services" corporation similar to dozens that have been started in recent years in communities around the Washington Beltway. The company operates in several technical specialties and offers a variety of services, including computerized real estate listings, government systems design and integration and project management for government and commercial customers.
DEVELOPMENTS: Despite a 16 percent increase in revenue for the fiscal year ended June 30, PRC reported a 47 percent drop in net earnings. Management attributes the poor profit performance to a disappointing year for the company's engineering division, which continued to be hobbled throughout fiscal 1985 with increasing competition and erratic demand for services related to large-scale construction projects. Performance for the division has rebounded in recent months, reaching break-even through Dec. 31 in contrast to a net loss of $3.5 million in the first six months of fiscal 1985.
Overall corporate performance also has improved in the first half of the current fiscal year, with revenue of $219.6 million compared with $159.9 million in the similar period a year earlier. Net income for the first half was $3.9 million (59 cents) this year compared with $2.3 million (35 cents) in the first half of last year.
Last August, the company realigned top management, giving the title of president and chief operating officer to Wayne Shelton, who formerly had been president of PRC Government Information Systems, the company's largest division. #22. UNC RESOURCES INC.
175 Admiral Cochrane Dr. Annapolis, Md. 21401 REVENUE: $352.9 million PROFITS: $17.7 million EARNINGS PER SHARE: 81 cents DIVIDEND: None ASSETS: $390.3 million STOCKHOLDERS' EQUITY: $154.4 million RETURN ON EQUITY: 11.5 percent EXCHANGE: NYSE EMPLOYES: 6,000 TOP EXECUTIVES: Dan A. Colussy, president and chief executive officer; G. Vern Diedrick, senior vice president and chief financial officer. FOUNDED: 1954
DESCRIPTION: UNC Resources has dramatically restructured itself in the past two years, leaving the uranium mining business to concentrate on a variety of services and products for the aerospace, telecommunications and nuclear industries.
Its subsidiaries include the recently acquired Airwork Corp. and Pacific Airmotive Corp., which service turbine engines for business, military and commuter aircraft. UNC also operates TRT Communications, which provides a variety of telex and telegraph services.
In addition, UNC's Naval Products Division supplies nuclear materials for the U.S. Navy, while the company also operates nuclear facilities for the Department of Energy.
DEVELOPMENTS: After two years of transition, UNC Resources has a new management team, a new headquarters in Annapolis and a new corporate strategy. After taking a huge loss in 1984, largely from writing off discontinued operations, it turned a profit in 1985 and appears set for smooth sailing, according to analysts.
The catalyst for the turnaround in UNC's fortunes was $300 million it won in a 1984 legal settlement stemming from a dispute with Gulf Oil over uranium-delivery contracts. (Gulf subsequently was taken over by Chevron Corp.)
With new cash on hand, UNC has embarked on an aggressive acquisition program, which was shown this year with the purchases of Airwork Corp., Pacific Airmotive Corp. and TRT Communications. The company also has slashed overhead and eliminated losing operations -- such as its shipbuilding and machine-tool company -- under its new management team, led by Dan A. Colussy, former president of Pan American World Airways.
Finally, the company disposed of the two large shareholders whose presence had proved nettlesome to management. The first was Chevron Corp., which owned 36 percent of UNC's shares outstanding as a result of the 1984 legal settlement. UNC agreed in March to buy back these shares or arrange for their purchase by other investors during the next three years.
The other irritant was Charles E. Hurwitz, a Houston investor who has been involved in some nasty takeover fights and who had bought a roughly 20 percent stake in the company. The company made it clear that his presence was not welcome, and several days after the Chevron deal, UNC announced the repurchase of his more than 4 million shares. As part of the deal, Hurwitz obtained warrants to buy 3.5 million shares in the future, which could give him a tidy profit if UNC's stock gains.
UNC's Colussy says the combined undertakings "permit the company to pursue its strategic growth plan with greater certainty, free of questions stemming from the presence of large shareholders." #23. PRESTON CORP.
151 Easton Blvd. Preston, Md. 21655 REVENUE: $350 million PROFITS: $4.3 million EARNINGS PER SHARE: 75 cents DIVIDEND: 50 cents ASSETS: $206.9 million STOCKHOLDERS' EQUITY: $101.8 million RETURN ON EQUITY: 4.3 percent EXCHANGE: OTC EMPLOYES: 5,754 TOP EXECUTIVE: William B. Potter, president and chief executive officer. FOUNDED: 1983
DESCRIPTION: Preston Corp. is a holding company whose subsidiaries, Preston Trucking Co. Inc., Pioneer Transportation Systems Inc., Reeves Transportation Co. and Smalley Transportation Co., transport freight for manufacturers, retailers and wholesale distributors. It is the successor to Preston Trucking Co. Inc., founded in 1932.
DEVELOPMENTS: Increased competition in the deregulated trucking industry held Preston to a 7 percent increase in revenue for the fiscal year ended Dec. 31. Net income for the year was down sharply, by more than 52 percent. Although truckers were permitted to boost rates by 5 percent in 1985, Preston was forced by competitive pressures to pass up the increase and actually cut by 1 percent its average charge for each 100 pounds delivered.
Two major competitors, McLean of Humble, Tex., and Halls of Mechanicsburg, Pa., were forced to curtail operations as a result of the increased competition. Management estimates that about 10 percent of Preston's revenue increase in 1985 can be traced to business formerly handled by Halls.
Although the company was helped by declining fuel prices in the latter half of 1985, the operational savings was more than offset by increased insurance costs. Management estimates that fuel costs declined about 30 percent over the year, but insurance costs were up 300 percent.
Last August, Preston acquired Smalley Transportation Co. of Tampa, Fla., a freight-forwarding company with routes in Florida, Georgia, Alabama and Tennessee. The company continues to seek out possible merger and acquisition candidates in an effort to expand its operating system beyond the Northeast and upper Midwest. Preston Trucking Co., the major operating company, currently produces about 70 percent of the firm's revenue and operates from Maine to Virginia and west to Missouri and Wisconsin. #24. DANAHER CORP.
3524 Water St. NW Washington, D.C. 20007 REVENUE: $304.9 million PROFITS: $13.5 million EARNINGS PER SHARE: $1.29 DIVIDEND: None ASSETS: $268.9 million STOCKHOLDERS' EQUITY: $49.9 RETURN ON EQUITY: 37 percent EXCHANGE: NYSE EMPLOYES: 2,400 TOP EXECUTIVE: Steven M. Rales, chairman and chief executive officer. FOUNDED: 1984
DESCRIPTION: Through subsidiaries, Danaher manufactures and sells tires, other industrial and rubber products and vinyl building products. It also owns and manages real estate loans and properties. Its Mohawk Rubber Co. subsidiary in Salem, Va., makes and sells car and truck replacement tires under Mohawk brand names to independent tire dealers. Its two major customers are Chrysler Corp. and K mart Corp. Its Master Shield Inc. subsidiary, with facilities in Weatherford, Tex., and Lynchburg, Va., manufactures vinyl building products for home repair and new residential construction. Diversified Mortgage Investors Inc., the third subsidiary, manages a real estate loan portfolio and also manages the company's properties.
DEVELOPMENTS: 1985 was the first full year of operation of the Danaher Corp. It previously had existed as DMG Inc., a company involved only in real estate operations. In 1984, the real estate company combined with Mohawk Rubber Co. and Master Shield Inc. under the name Danaher. Last year, the company purchased the outstanding 15 percent equity of Mohawk Rubber owned by General Electric Credit Corp., making it a wholly owned subsidiary.
In 1985, Danaher and Equity Group Holdings, a private Washington real estate partnership, also raised their stake in Scott & Fetzer Co. to 6.5 percent of outstanding common shares. However, the companies later sold their stock to Berkshire-Hathaway, which acquired Scott & Fetzer, a manufacturer of floor cleaning systems and other products.
Danaher's total revenue for 1985 was $304.9 million, more than triple the revenue of 1984. That increase was partly due to the operations of Mohawk Rubber, which was acquired in October 1984. Rubber and related products accounted for about 87 percent of Danaher's revenue in 1985. Net earnings for the company rose from $2.9 million in 1984 to $13.5 million in 1985. #25. BDM INTERNATIONAL INC.
7915 Jones Branch Dr. McLean, Va. 22102 REVENUE: $250.3 million PROFITS: $10.6 million EARNINGS PER SHARE: $1.04 DIVIDEND: 12 cents (class A); 10.4 cents (class B) ASSETS: $118.4 million STOCKHOLDERS' EQUITY: $49.2 million RETURN ON EQUITY: 23.9 percent EXCHANGE: Amex EMPLOYES: 3,730 TOP EXECUTIVE: Earle C. Williams, president, chief executive officer and director. FOUNDED: 1959
DESCRIPTION: BDM is a diversified professional and technical-services company whose subsidiaries provide advanced technology to the public and private sectors in the areas of defense, communications, energy, space, logistics, transportation, manufacturing, banking and the environment. More than 85 percent of the company's revenue and earnings comes from tests, experiments, designs, analysis, research and systems services geared toward defense.
DEVELOPMENTS: 1985 began strongly for BDM: Contracts awarded in January 1985 were the highest of any single month in the company's history. It won a contract valued at more than $100 million over 10 years, which was expected to generate about $20 million in revenue last year. That contract was awarded by the U.S. Air Force to develop and implement a requirements data bank to lead to a more efficient worldwide materiel support for Air Force weapons systems.
By the end of the year, BDM had received three contracts totaling $13.4 million to provide support to the Royal Saudi Air Force. The largest of these contracts was for $5.9 million, which will be used to aid Saudi Arabia's logistics planning section. A $4.9 million contract will provide automated logistics data tracking through BDM's Reporting Analysis Management Information System, located in Dayton, Ohio. An additional $2.6 million contract will be used by BDM to assist Saudi Arabia with aeronautical engineering.