DSG, UniTek among nine area companies on Inc. 500
August 13, 2009
By Mike Armstrong
This time of year, I await the Inc. 500 list as impatiently as those who count the hours before the midnight release of the latest Madden NFL video game.
The Fortune 500 may have the biggest U.S. corporations. The Forbes 400 may dish on America’s richest. But to me, the Inc. 500 ranking of the fastest-growing U.S. privately held companies beats them for entrepreneurial drama.
I think it’s because the annual list is far more Main Street than Wall Street. Most are companies you’ve never heard of, but some you have. Zipcar, the for-profit car-sharing service, is there. So is Vizio, which makes flat-panel TVs and home-theater systems.
And from the swirl of statistics, you can see where the hotbeds of growth companies are. Unfortunately, the Philadelphia region is still not one of them.
But we do have our fast-growers here. DSG, of Malvern, is the highest-ranked local company on the Inc. 500 list, which was released on Wednesday.
That places it at No. 82, far from No. 1 Northern Capital Insurance, a Miami property and casualty insurer with a three-year revenue growth rate of more than 19,800 percent. (The insurer zoomed from revenues of $476,898 in 2005 to $95 million in 2008.)
Still DSG is a quintessential life-sciences/technology company that the Philadelphia region spawns regularly. DSG is a software developer that provides electronic data capture and other tools used for data collection in the clinical trial phases of new drug or medical device development.
DSG saw its revenues grow about 1,800 percent from $1.7 million in 2005 to $32.1 million last year.
Given that it was started in 1992, DSG is not an overnight success. But I was pleasantly surprised to see that founder Anthony J. Varano Jr. began his career as a software programmer at Unisys Corp. So we can chalk up at least one growing spinoff to Unisys, which has been the incredible shrinking corporation in recent years.
DSG is one of nine local companies that landed on the Inc. 500. That’s down from 13 last year.
Four of the nine companies appeared on the 2008 Inc. 500 list. The best-known is the Neat Co., of West Philadelphia, at No. 169. Formerly known as NeatReceipts, the company produces a line of electronic scanners to digitize and organize business receipts, business cards and other documents.
Neat Co. employs 160 people and had revenue of $29.1 million in 2008, up from $11.7 million in 2007.
The other repeat performers are:
* PriceSpective, of Blue Bell, at No. 174. Another life-sciences-oriented firm, PriceSpective is a management consulting firm that develops pricing and reimbursement strategies for the pharmaceutical industry. It employed 42 people and had revenues of $9.5 million in 2008.
* ACI Estate, of Doylestown, (No. 211), sells insurance to senior citizens and offers estate planning.
* Alpha Card Services, of Huntingdon Valley, (No. 416), processes debit and credit-card transactions for merchants. It’s an example of another Philadelphia-area strength: technology firms with a back-office, financial-services bent.
The largest local company to make the list is UniTek USA, which had 2008 revenues of $265.6 million. Based in Blue Bell, UniTek provides engineering and construction management services to companies in the cable and telecommunications industries. It also was the biggest employer of the local bunch with 2,491 people.
In 2005, UniTek’s revenues were $38.9 million. That’s a three-year growth rate of 583.3 percent. Impressive, but good enough to rank only as No. 441 in the nation.
Sure, growth rates of more than 1,000 percent aren’t sustainable in the long run. Fast-growing companies consume lots of capital - financial and human - and they flame out more often than they grow into Google.
But this is a fun list to scan each year. These are all privately held U.S. companies that must be able to show four full calendar years of sales. The first year of sales must have been at least $200,000 and the most recent year must be at least $2 million. Then, the magazine ranks the companies by their three-year increase in revenue.
Here’s a rundown of the other local companies:
* Clear Align, of Eagleville, at No. 135. This company designs and makes custom imaging, sensing and fiber-optic systems for the military and aerospace sector.
* Cities2Night.com, of Philadelphia, at No. 221. This company operates online social networking sites for 17 cities.
* PeopleShare, of Philadelphia, at No. 425. Like it sounds, this company provides temporary, contract and permanent staffing to other businesses.
Of course, in the last couple of years, Inc. magazine has expanded to 5,000 the number of companies it ranks. So there are a whole bunch of other companies based in the area that fall into that range. You can see a list of 100 of the fastest-growing Philadelphia-area companies at http://go.philly.com/Inc5000.