It may still be one of Orange County’s fastest growers, but Micro General isn’t king of the hill anymore.
Once a company that made postage meters, the technology consulting and outsourcing firm has gone from $11.21 million in annual sales three years ago to $130.3 million this year,a 1,063% gain. While it scored the top spot on last year’s Business Journal list of fastest-growing companies, the technology service provider came in at No. 2 this year as its sales have slowed somewhat amid the general economic slowdown.
Even so, the company continued a tried-and-true method of growth: acquisition. Micro General acquired software maker SoftPro Corp., giving it a boost in providing technology services for the real estate and title insurance markets.
“This acquisition puts us well ahead of schedule in penetrating that market and SoftPro will have a positive effect on Micro General’s revenue and earnings growth over the coming year,” said Dale Christensen, Micro General’s chief financial officer.
Micro General’s growth dates from the involvement of Chairman Bill Foley, widely known for also being chairman of both Irvine-based Fidelity National Financial Inc. and Anaheim-based CKE Restaurants Inc. Foley acquired Micro General through a reverse merger with Fidelity’s technology unit, ACS, which now owns more than two-thirds of Micro General. Fidelity then began outsourcing much of its technology work to Micro General.
The benefits have shown up in quarterly results. Sales for the June quarter rose 10.2% year-to-year, to $32.5 million. Executives say they’re benefiting from more business going to Micro General’s higher-margin service and consulting business. In the June quarter, those activities contributed 70% of total revenue, while a year earlier service and consulting revenue was 42% of total revenue.
Investors have noted the company’s performance. By July, Micro General shares were up some 90% from October 2000 levels, and they were still up 21% at a recent check. The company landed a spot on the Russell 3000 index and announced a repurchase and a dividend program to continue to add value to the stock.
“Initiation of the buyback program affirms our confidence in the company’s future,” said John Snedegar, Micro General’s president and chief executive officer. n
