AEP decided to get out of the power trading business.
Bank One is poised to consume smaller institutions and launch its first national media campaign.
And Frontstep is being bought by Atlanta-based MAPICS.
Those moves make these businesses and others SBN's Companies to Watch in 2003.
1. American Electric Power. The deregulation era was good to AEP as it explored new business models like AEP Energy Services Inc., a subsidiary created in 1997 to trade electric and gas commodities.
While contributing millions to the company's revenue, Energy Services had its own concerns. Commodity pricing meant a roller coaster ride for sales, and in October, AEP announced it was bowing out of the trading business.
The day before this announcement, AEP fired five of Energy Services' traders for supplying inaccurate information to trade publications, and in November, disgruntled investors filed a class action law suit against the company.
With the leadership of chairman, president and CEO Dr. E. Linn Draper Jr., this Fortune 500 company needs to recover the lost revenue of Energy Services as well as regain its momentum and erase questions of unethical business practices.
2. Astute Solutions Inc. Life is good for this customer relationship management company. With a client list that includes McDonald's, Burger King, Georgia-Pacific, Scott's and Kroger, it's not hard to see why Astute Solutions was recently named to the 2002 Inc 500 List of America's Fastest-Growing Private Businesses, ranking No. 166.
The company's primary product, PowerCenter, has also garnered recognition, including a Gold Award at the Users Choice Awards, International Call Center Management Show in Chicago. And President and CEO Joe Sanda snagged the 2002 Ernst & Young's Central Ohio Entrepreneur Of The Year award in the Technology category and was named Ohio's Small Business Person of the Year by the Small Business Administration.
Astute Solutions has achieved a five-year growth rate of 1,247 percent. Can Sanda maintain this level of success? As others have discovered, growing too quickly can lead to problems. Finding the right balance will be essential for Astute Solutions in 2003 and beyond.
3. Bank One Corp. Since its merger with Chicago-based First Chicago, Bank One has retained its strong ties to Columbus. It is the nation's sixth largest bank holding company, with more than $270 billion in assets.
Bank One's credit card business reaps huge financial rewards but also poses risks as the economy continues its struggle toward recovery. Its credit card business is a key source of profit, proving about one-third of its $2.9 billion operating income last year.
Last month, Bank One agreed to lend $600 million to UAL Corp., the parent company of United Airlines which is under Chapter 11 bankruptcy. That's a risky move, which could lead to credit losses, say analysts. Bank One and UAL co-brand a credit card, with which users earn frequent flier miles.
Analysts predict Bank One, headed by president Melissa Ingwersen, will look to acquire smaller financial institutions in the coming year.
Meanwhile, the company launched its first national advertising campaign during the 2002 World Series, airing a series of 30-second commercials. The campaign is part of its effort to rebrand its First USA credit card to the Bank One name, and this branding effort will continue well into 2003.
4. Battelle. While the dot-com bubble may have burst, the technology bubble is still going strong, with high-tech companies realizing significant growth. Battelle's expertise in the commercialization of technology positions it for potentially unlimited success in the next several years.
Battelle's projects have led to the development of products including the fax machine, HDTV, the office copier machine, CDs and bar codes. The collaboration between Battelle and The Ohio State University Medical Center is a formula for R&D and business success, so it's no wonder that state government is turning to the organization to broaden its tech industry horizons.
Work by Battelle's 7,500 employees typically results in 50 to 100 patented inventions each year. It will be interesting to see what products, businesses and jobs stem from its projects in the coming year as President and CEO Carl F. Kohrt leads the company into the future.
5. Big Lots Inc. Just a year ago, only 15 percent of Americans recognized the Big Lots name, according to chairman and CEO Michael Potter; Wal-Mart had a 90 percent recognition rate. But thanks to a national television campaign launched last year and reborn this Christmas, that may be changing.
Meanwhile, Big Lots' stock rose from $10 per share to just under $20 at its peak this summer. While its stock price is back in the $12 range, many analysts feel the company's $60 million television campaign and store renovations make it a strong stock pick. With consumers looking for more bang for their buck, Big Lots is well-positioned to take advantage of the trend.
6. Damon's Grill
Damon's is taking advantage of consumers' demand for more flavorful, quality foods. When President and CEO Shannon Foust came on board three years ago, he engineered a major shakeup that resulted in a new unit design, menu and ad campaign that coincided with a revamped logo and name change to Damon's Grill. The name change was designed to emphasize the restaurant served a lot more than just ribs.
This year, the chain of more than 140 stores in 28 states, the United Kingdom, Puerto Rico and Panama created an aggressive franchise campaign, with the ambitious goal of more than doubling its number of stores to 300 in the next three years.
Will it be successful in reaching its lofty goals in a slowly recovering economy in 2003?
7. Frontstep Frontstep, formerly Symix, earned more than $92 million in revenue in fiscal year 2002 and employs more than 600 people.
Frontstep's customers, primarily manufacturers, were hit hard by the recession, and as a result, the company suffered as well. Revenue took a sharp downward turn beginning in 2000 as its customers, primarily manufacturers, were hit hard by the recession. Frontstep has worked hard to return to profitability by selling off or abandoning products which weren't selling and focusing on its e-commerce products.
The acquisition of Frontstep by MAPICS, an Alpharetta, Ga.-based competitor, was announced in November. Stephen Sasser, Frontstep president and CEO, will lead the two companies through the transition period, scheduled to conclude by the end of first quarter 2003. After that time, his role is undetermined, as is that of a number of jobs in Columbus. This will be a year of transition and reconstruction.
8. The Longaberger Co. Basket-making may not seem like a high-tech industry, but Longaberger is transforming an art into a successful science. Taking the input of hundreds of its long-term craftspeople, Longaberger has invested a great deal of money and time into transforming its manufacturing system, hoping to make it more efficient, flexible and ergonomically friendly.
With 7,300 employees and 70,000 independent sales consultants, the company is also rethinking its sales strategy, re-emphasizing the importance of the in-home show, vs. brochure and Internet marketing and sales strategies. According to President Tami Longaberger, there's just no substitute for seeing and touching the baskets in person. This strategy also relies on its sales associates more heavily.
Time will tell whether these investments will pay off in added revenues and profits.
9. Value City Department Stores Inc. Changes at the top characterize 2002 for this chain of discount department stores.
Early last year, the company announced the resignation of George Kolber and the promotion of John Rossler to the position of president and CEO. Later in the year the company hired ex-Wendy's executive Charles Rath as its executive vice president and chief marketing officer.
Value City, led by Chairman Jay Schottenstein, also owns DSW Shoe Warehouse and Filene's Basement stores. A $525 million refinancing project last year gave the company improved liquidity and added financial flexibility to support its operating initiatives and growth objectives, says Jim McGrady, Value City's chief financial officer.
With its stock price hovering in the $2 range, Value City is looking to re-energize and reinvent itself in 2003. It will be interesting to see the company's new strategy materialize with Rath leading the marketing efforts, and whether it will succeed.
10. Wendy's International Inc. In the competitive world of fast food, Wendy's, the third largest quick hamburger restaurant in the world, continues to thrive despite its huge personal and professional loss of founder Dave Thomas.
In additions to Wendy's restaurants, the company owns the Tim Hortons chain, and in 2002, jumped into the fast-growing quick casual market segment, acquiring Baja Fresh Mexican Grill. There are currently 173 Baja Fresh restaurants, the majority in California, and the company's goal is expand to the East Coast and have 600 to 700 restaurants by 2007, according to Chairman and CEO Jack Schuessler.
The company has also introduced a menu of fresh salads to its Wendy's restaurants in an effort to better serve consumers seeking tastier and healthier choices.
Since 1990, Wendy's compounded average annual growth rate is about 3.6 percent, and Schuessler is confident that trend will continue in the coming year.