LOOKING UP
Engineering Companies Post Higher Billings, Though Fluor Dampened Total
By CHRIS CZIBORR
Engineering companies,apart from Fluor Corp.,saw sales rise last year on the strength of projects dating to better economic times.
More good news: backlog,a leading indicator of better times,is on the rise at most of them.
Collectively, the 30 companies on this year’s Business Journal list of biggest engineering companies operating in Orange County reported a 3% decline in billings from their local offices to $4 billion for the 12 months ended June 30. The Business Journal made estimates for seven companies.
But the results, as always, are skewed by No. 1 Aliso Viejo-based Fluor.
Factoring out Fluor, which had a 6% decline in OC billings to $3.2 billion, the remaining 29 companies on the list posted a 9% increase in billings to $779.1 million, versus a year ago.
Fluor, which wouldn’t break out its OC numbers, was a Business Journal estimate. It was based on Fluor’s company-wide billings decline of 6% to $9.2 billion, which it did report.
The engineering company’s billings were more than four times that of the other 29 firms combined.
The 30 companies on this year’s list saw their company-wide revenue rise 3% to $22.7 billion. With Fluor taken out of the mix, the other 29 firms grew billings 12% to $13.4 billion.
The engineering sector’s billings are seen as a lagging indicator because projects typically are negotiated far in advance of their completion. But the sector’s backlog is a leading economic indicator, showing what the firms will be working on in the future.
Fluor’s company-wide backlog is down 16% to $9.7 billion versus a year ago. But the 20 other companies that reported backlog numbers show an 11% increase to $220.5 million, reflecting signs of a recovery.
For Fluor, the results show a continued slowing from gains in 2001. Back then, a surge in power plant construction benefited the company, which now is scaling back its power plant business.
In July, the company said it would dissolve its Duke/Fluor Daniel venture with Charlotte-based Duke Energy Corp. following “the continued dramatic decline in demand for construction of new power generation,” according to a release.
And the company doesn’t expect last month’s blackouts in the Northeast will spur more demand for power plants (see related story, page 20).
The Santa Ana office of No. 2 Denver-based CH2M Hill Cos. maintained its spot, growing OC billings 11% to $174.3 million.
CH2M continues to benefit from big OC infrastructure projects, including wastewater treatment and transport projects. CH2M did not disclose backlog figures.
No. 4 Irvine-based Keith Cos. didn’t break out its OC billings, but did post a 13% increase in company-wide billings to $91.3 million. Keith officials said they expect to grow revenue if Congress pushes electricity grid infrastructure work in light of the blackouts.
The Irvine office of No. 8 Pasadena-based Tetra Tech Inc. saw its billings rise 33% to $28 million. That was good enough to move it up two spots from last year.
“Most of the increased growth is being driven by the continuing strength of housing, which pumps money into all sorts of areas including public works,” said Tetra Tech executive vice president Douglas Reinhart. “We’re expecting about 10% billings growth this year.”
Moving up three spots to No. 11, the Irvine office of Boise, Idaho-based Washington Group International grew billings 45% to $23.2 million.
“We’re benefiting from some large design-build projects like the San Fernando Valley Bus Rapid Transit system, and we’ve started working on the (State Route) 125 Toll Road in the San Diego area,” said vice president Robert Close.
Close said the company has large projects in its sights, including extension work on the metro in Los Angeles County and work on the Garden Grove (22) Freeway.
The Costa Mesa office of Oakland-based Geomatrix Consultants Inc. moved up five spots to No. 13, with 44% billings growth to $18.7 million. The company didn’t disclose projects or clients, and attributed the revenue growth to “more word of mouth than usual,” a spokesperson said.
Down two spots to No. 24, the Irvine office of Alpharetta, Ga.-based MACTEC En-gineering and Consulting Inc. saw revenue shrink 33% to $7.8 million.
“We had a major industrial client for about three years and that contract ended,” said vice president Steve Howell. “Some of our people associated with that ended contract moved to our L.A. office to work on another contract.”
MACTEC’s OC workforce fell 62% to 28.
The top debut on this year’s list was Anaheim Hills-based Development Resource Consultants Inc. The company grew revenue 31%,good enough to debut at No. 27.
“We do a lot of retail work,beside industrial and subdivision work,and a lot of the areas where we had built a lot of homes now have retailers coming in,” said company principal Lawrence Gates. “We expect 15% to 20% revenue growth this year. We’ve been recording 35% a year growth for the past five years and that’s going to slow down a little bit. We can’t sustain that level of growth anymore.”
The Orange office of Omaha, Neb.-based HDR Engineering Inc. charted at No. 29, growing OC engineering billings 30% to $5.7 million.
“We were finishing off large projects that we had been previously awarded, including work for Amtrak,” said James Owens, HDR vice president. “Our revenue growth outlook for this year is pretty flat.”
The firm’s OC unit also supports work in Los Angeles County and the Inland Empire.
Newcomers to this year’s list include No. 30 Irvine-based PENCO Engineering Inc., which grew revenue 25% to $5.5 million. The company’s work includes engineering infrastructure projects at the Irvine Spectrum for The Irvine Company, and the Palo Verde housing expansion for the University of California, Irvine.
“Educational work on six UCI projects as well as K-12 projects have been driving growth,” said PENCO marketing director Tiffany Sikora. “This year we’re anticipating another 25% in billings growth.”
Dropping off the list was last year’s No. 28, the Irvine office of Cleveland, Ohio-based The Austin Co., which had $4.1 million in billings; last year’s No. 30 Irvine-based Hall & Foreman Inc., which had $5.4 million in billings; and last year’s No. 30 Newport Beach-based FBA Engineering, which had $5.2 million in billings.
The trio’s billings weren’t high enough to make the $5.5 million cutoff.
