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Growing the top line

The 2016 Rochester Chamber Top 100 fastest-growing private companies represent a collective $14 billion in revenue for the region, a figure that has grown 10.8 percent compared with the 2015 list.

While these companies as a group show solid revenue growth, their pace of hiring is slower, with 2.4 percent job growth overall compared with the 11 percent increase in hiring among the Top 100 companies in 2015.

“Most companies are not adding a lot of people,” said Timothy White, managing partner of KPMG LLP’s Upstate New York Office, which crunches the numbers for the Top 100 list.

“Grow revenue and build behind it,” is the more recent trend, he said.

But putting one year of Top 100 companies against another is not an apples-to-apples comparison, he noted, because the companies change each year. This year’s list, for example, includes 19 first-timers.  Others are returning to the list after an absence and pushing out those with slower growth.

This churn is part of what keeps the Top 100 list dynamic and interesting.

“The program still has a life to it, and people want to be part of it,” White said.

This year marks the 30th consecutive year of the Rochester-area Top 100 fastest-growing private companies list.

To be considered, nominees must be independently owned, private companies in the Greater Rochester Chamber of Commerce coverage area, with posted revenue of at least $1 million in each of the previous three years. KPMG’s Upstate New York office partners with the Rochester Chamber to create the Top 100 list, looking at year-over-year dollar growth and percentage of gain. Companies that made the cut came from an initial list of 187 nominees from Monroe, Genesee, Livingston, Ontario, Orleans, Seneca, Wayne, Wyoming and Yates counties.

The list shows “a lot of people are working very hard to improve the economy,” said Robert Duffy, Rochester Chamber president and CEO. While pundits tend to focus on the negative when it comes to the economy, this list shows that Rochester is making real progress, he said.

“These companies are growing and producing jobs and increasing revenue,” he added.

Duffy noted the almost 11 percent jump in revenue among the Top 100 companies this year.

“It’s a huge infusion of capital for a region our size. It’s a real cause for celebration,” he said.

White noted that of the 15 construction companies on the list this year, 11 were not on it a year ago. This includes first-timers, New Energy Works Timberframers, at No. 71, and A.E.Y. Enterprises Inc., at No. 78. Meanwhile, Hamilton Stern Construction LLC, which tops the list this year, is making its third straight appearance since its founding in 2010.

That is one sector showing solid job growth over 2015, with companies on the list reflecting almost double the number of local employees from 2015—1,812 in 2016 compared with 941 in 2015—and revenue of $908 million compared with $587 million in 2015.

“Construction tends to be an industry where you can have some years where there’s more moderate growth and then some years where you get big jobs,” White said.

Also showing strength this year are companies in the wholesale-distribution sector. Last year there were four companies on the list compared with nine companies this year and $1.17 billion in revenue, up from $269 million in 2015, making this sector the third-largest behind retail and services in 2016.

Within the wholesale-distribution sector, Palmer Family of Cos., founded in 1850, is back on the list, at No. 31, after a five-year absence, while RCare, at No. 32, founded in 2006, is making its first appearance.

Meanwhile, manufacturing slid to fourth after having placed second or third for each of the past five years.

A total of 14 manufacturing firms made the list this year, down from 20 last year, though their collective revenue remained around $1 billion. That is still well below the $6.3 billion the sector represented in 2012, when it was the second-largest sector represented on the Top 100 list.

Retail and service continue to be the top two sectors, with retail representing a collective $8.6 billion in revenue in 2016 and 14,307 employees here. Service-sector businesses on the list represented $1.8 billion with about 7,150 employees locally.

Despite the variations year by year, many of the companies on the list are showing “stable, consistent, hold-your-own growth, which is probably not that different from nationally,” White said.

If there was a prize for longevity, that would go to the region’s largest employer on the list, Wegmans Food Markets Inc., which has appeared in the Top 100 since its first iteration in 1987, when the retailer took the top spot. That list identified companies with the largest revenue and not how quickly they were growing. By 1988, the Top 100 ranking methodology was changed, and Wegmans, while never at the top again, has made an appearance every year for 30 years.

“There are always up-and-comers who are growing and coming into their own. For Wegmans to have the staying power they have, that says a lot about their organization,” White said.

10/28/2016 (c) 2016 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.

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