After taking a dip last year, total revenues logged by the firms, as a group, making up the 2015 Rochester Top 100 fastest-growing private companies climbed more than 7 percent.
Jointly sponsored annually by the Rochester Business Alliance and KPMG LLP’s Upstate New York office, the Top 100 list is made up of independently owned, private companies based in the RBA’s coverage area. It takes in the counties of Monroe, Genesee, Livingston, Ontario, Orleans, Seneca, Wayne, Wyoming and Yates.
To be considered, nominees must have posted revenues of at least $1 million in each of the previous three years. To compute which companies rank as the region’s 100 fastest-growing firms, KPMG considers both the amount of year-over-year dollar growth and percentage of gain. Each factor is given equal weight.
Companies that made the final cut this year were winnowed from an initial list of 208 nominees.
The finalists are a diverse group ranging from the very large to the very small, and from long-established elder statesmen of the local business scene to recently founded newcomers. Fifteen rookie firms, of the 28 new companies that applied, joined the Top 100.
With more than 13,800 local workers, Wegmans Food Markets Inc. is the biggest company on the list. But more than half of the 2015 Top 100 companies are small businesses employing fewer than 100 here. Six firms employ fewer than 10.
The longest established firms on the 2015 list—Harris Beach PLLC, founded in 1856, and the Pike Cos., founded in 1873—are Top 100 perennials.
The youngest—Emerge and ProNexus LLC, both founded in 2012—have not been around long enough to have appeared on the Top 100 more than once.
Women own 10 of the 2015 Top 100 companies; eight are minority owned.
In all, the 2015 Rochester Top 100 list reported revenues totaling $12.61 billion. That is up 7.3 percent from the $11.75 billion the 2014 Top 100 companies reported.
Local employment also was up. The 2014 Rochester Top 100 firms employed 25,599 workers locally. This year’s contingent employs 28,288 in the Rochester area, a 10.5 percent rise.
By sector, retail accounted for $8.35 billion—or two-thirds—of the 2015 Top 100 group’s total revenues. With $1.91 billion in combined revenues, the service sector was next highest. The manufacturing sector’s $1.06 billion in combined revenues put it in third place.
As reported by the Top 100 cohort, most of the local economic sectors made year-over-year gains.
Manufacturing, financial services, retail, service, wholesale and distribution companies gained ground, taking in higher revenues than the previous year.
Manufacturing firms reported total revenues of $1.06 billion were up from $813.3 million last year, a 30 percent increase. Financial services sector revenues of $123 million were up 36 percent from a 2014 total of $90.6 million.
Top 100 retailers this year reported a nearly 7 percent gain from $7.8 billion last year. Service-sector firms’ collective revenues were up 34 percent over the $1.43 billion reported in 2014. Wholesale and distribution companies’ revenues rose to $269.1 million from the 2014 group’s total of $159.3 million, a 69 percent gain.
Despite the overall good news, two key sectors—technology and construction—reported lower revenues.
Technology-sector revenues fell to $303.3 million from $652.6 million in the previous year, a 54 percent drop. Construction-sector revenues of $587.2 million were down 25 percent from $783 million last year.
The construction and technology industries are pillars of the local economy, but one should not read too much into the sectors’ apparent slide, said Timothy White, managing partner of KPMG’s Upstate New York office.
“From a macro point of view, I am encouraged by the overall growth in revenues and particularly by the improvements in the retail and service sectors,” White said.
Nationally, as well as locally, healthy growth in the retail and service sectors is generally seen as signaling a stable economy, he said. Those sectors nationally have been on the upswing. And Rochester’s business climate to some extent mirrors the improving national economy.
The construction industry always has been volatile. The sector’s overall health cannot be divined from a single year’s decline or gain, White said.
The Top 100 numbers do not tell the whole story of the local technology sector’s performance, he added. Much of the decline can be traced to the exit of two companies from the list. Each chose for different reasons not to participate in the 2015 Top 100. But both still contribute to the local economy.
RBA president and CEO Robert Duffy said the 21 technology companies—along with the 28 service-sector companies and 20 manufacturing firms that together account for more than $3 billion of the 2015 Top 100 cohort’s revenues—“represent this area’s core strengths.”
Given a legacy bestowed by Eastman Kodak Co. and the power of institutions such as Rochester Institute of Technology and the University of Rochester, the strength of locally based manufacturing and technology concerns should be no surprise, Duffy said.
However, he added, “we’re probably not as well-known as we should be. The Rochester-Finger Lakes region is one of the best-kept secrets around.”
Even as it steadily downsized from a once-dominant role as the region’s top employer, Kodak spawned scores of technology and manufacturing startups that have continued to invigorate the local economy, Duffy said. UR and RIT, meanwhile, have turned out a steady stream of graduates who have helped make the area’s workforce one of the country’s most tech-savvy.
The recent selection of Rochester as the site of the Integrated Photonics Institute for Manufacturing Innovation will give a significant boost to the local technology and manufacturing sectors, he predicted.
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