For dck construction, diversity is key to survival in tough times
Construction company dck worldwide LLC has been weathering a downturn in the industry by holding onto government and military contracts while expanding overseas.
"We're growing in the Caribbean, Mideast and the Philippines," said Stephen D'Angelo, president, CEO and chairman of the global construction company in Jefferson Hills.
The company was ranked 168th among the Top 400 Contractors this year by Engineering News-Record, a trade publication that ranked companies on revenue. The company does design and build work, construction management and general construction, targeting state and local governments, the Department of Defense and commercial clients.
Like many others in the region, dck is looking for opportunities to join the boom in Marcellus shale natural gas exploration and production, said D'Angelo, who joined the company in 2003 as a turnaround specialist. The company also is looking at the health care market, he said.
The successor to family-owned Dick Corp. typically generates 60 percent of its business from government and military contracts and the rest from commercial business, said John T. O'Reilly, chief financial officer.
With the downturn, that balance has tilted more toward government and military -- now accounting for about 80 percent, O'Reilly said. Banks were not lending money and developers were not moving ahead with contracts for projects. The construction sector -- which lags downturns in the general economy by about a year -- was slammed so hard that it pushed construction unemployment "north of 25 percent" in March 2010, and down to just 21 percent this March, O'Reilly said.
Business diversity helped dck survive, but it wasn't easy, O'Reilly said.
Fewer project contracts being awarded increased competition for jobs that were available, O'Reilly said. Instead of competing against four or five companies, there might be 14 or 15 chasing the same contracts, he said.
"It was a knife fight," O'Reilly said.
The key to surviving is flexibility to do projects in government/military and commercial sectors alike, O'Reilly said. The company increased its business-development efforts. "We needed to make investments to broaden our scope," he said, taking a lead role on more projects and winning more open-ended contracts.
In July 2010, dck acquired Oakview Construction Inc. in Red Oak, Iowa, giving it a stronger presence in the Midwestern and Western construction markets, O'Reilly said.
The company sold its construction management business to Hill International Inc. of Marlton, N.J., to raise capital and focus on core businesses such as transportation, O'Reilly said.
He projects 2012 "is going to be a fairly decent year," as dck's backlog of projects is up 25 percent from a year ago.
The family-run Dick Corp. was involved in construction at several Pittsburgh landmarks, including PNC Park on the North Shore, Children's Hospital in Lawrenceville and Pittsburgh International Airport. But Dick Corp. ran into financial difficulties, in part because of a joint $400 million power plant construction project in Joliet, Ill., with an Enron Corp. subsidiary. Dick was an equal partner with Enron's subsidiary when the Houston-based energy giant collapsed in 2001.
Dick Corp. turned over leadership to Dennis Watts. In January 2003, he brought in D'Angelo, who became president after Watts left in July 2003 and has become the primary owner.
Brothers Douglas and David Dick, grandsons of the founder and co-chairmen of the company, sold their stake in Dick Corp. when it became dck worldwide in mid-2008.
The construction sector has been recovering from the recession this year and should continue to do better next year, said Jeff Burd, president of Tall Timber Group, a construction research company in Ross.
There are, however, lingering issues with building owners lacking confidence in the economy and borrowing conditions being "not terribly favorable" as lenders want more collateral and more restrictive terms, Burd said. Lenders are seeking advance leases of 60 percent to 65 percent of a commercial project before loaning money, he said.
The good news for dck worldwide is that some segments of the commercial market -- the hotel and hospitality industry in particular -- are showing signs of recovery, O'Reilly said.
Big hotel chains -- Hilton, Hyatt and Marriott -- can self-finance projects and move forward, O'Reilly said, and dck has been able to win some of that business.
"Hawaii and the Caribbean are the hot spots," he said, adding that the high-end resort business continues to do well.Additional Information:
About dck worldwide LLC
What: Global construction company dck worldwide specializes in developing, managing and building highly complex projects. The company offers design-build, pre-construction, construction management, general construction and public-private development services.
Where: Headquarters in Large, Jefferson Hills, with offices in Fort Lauderdale, Fla.; Red Oak, Iowa; Honolulu; Guam; and Abu Dhabi, United Arab Emirates.
Founded: Successor to Dick Corp., which was founded in 1922 by Noble J. Dick, a Homer City native, dck worldwide was created through the acquisition of the assets of Dick Corp. in 2008.
Ownership: Privately held
Revenue: $328 million in 2010
Executives: Stephen D'Angelo, president, chief executive officer and chairman of the board; John T. O'Reilly, chief financial officer; J. Gerry Majkut, executive vice president of operations; and John T. Sebastian, executive vice president.