Day & Zimmermann, Inc. Business Information, Profile, and History

Company Perspectives:

At Day and Zimmermann our success is built on our values. ... We will create a work environment that protects the health and SAFETY of our employees, our clients and the public. We conduct our business with absolute INTEGRITY and all of us are accountable for our own decisions and actions. We believe a total commitment to QUALITY is essential to client and employee satisfaction. We believe PROFIT is the healthy and constructive reward for individual and corporate effort. We value GROWTH that is strategic because it is critical to creating opportunities for our employees and ensuring the Company's long term success. Our employees belong to a FAMILY at home and a team at work, and are of most value at work if they are able to balance their personal and professional lives. We will be active members of a larger COMMUNITY, corporately and professionally, and will support deserving cultural, civic and charitable organizations, and professional societies that guard the standards of and advance our business practices.

History of Day & Zimmermann, Inc.

Day & Zimmermann, Inc., a private, family-run company headquartered in Philadelphia, provides technical, engineering, and management consulting services, as well as construction services, to a wide range of clients, both in the United States and in other countries. With some 20 operating units, Day & Zimmermann offers such services as project and program management, security, travel, technical staffing and temporary personnel, and property appraisal. The company has a long history of working with U.S. government agencies, including the Departments of Defense and Energy. Other clients have included public utility companies, health care facilities, financial institutions, and various private companies. The firm frequently establishes offices dedicated to serving individual clients, including an office in Charlotte, North Carolina, that serves Du Pont and an engineering office in Orlando, Florida, that serves Lucent Technologies. The company has completed projects in more than 75 countries worldwide.

Early History and Growth: 1901--20

Day & Zimmermann traced its ancestry to two companies: Dodge & Day, founded in 1901, and the H.L. Yoh Company, founded in 1940. In 1901 two young men just out of college joined forces to start their own company. Charles Day, an electrical engineer, and Kern Dodge, a mechanical engineer, formed Dodge & Day and were hired to modernize machine tool drives for LinkBelt Engineering Company of Philadelphia. The following year, Jeansville Iron Works hired the young firm to help update its facilities by converting belt-driven machine tools to motor-driven ones, designing power plant steam heating and electrical systems, and supervising the installation of machine foundations and equipment. In 1903 Dodge & Day won a contract from Westinghouse Electric and Manufacturing Company to evaluate new equipment. In 1905 Dodge & Day added an architectural department and construction force. By the following year the firm needed more work space and moved from its offices at the LinkBelt Engineering Company to facilities in downtown Philadelphia.

The company continued to grow, expanding its services to include electric railway engineering and construction and expanding its territory to include North Carolina as well as its home base of Pennsylvania. John Zimmermann, a former classmate of Day, joined the firm in 1907, bringing expertise in finance and operations, and in 1910 the firm's name was changed to Dodge, Day & Zimmermann. The company's history of contracting its services with the U.S. government began during this time when the government hired the firm to evaluate efficiency at naval yards. In 1912 Dodge resigned, and the company's name was changed to Day & Zimmermann, under which it was incorporated in 1916.

As U.S. involvement in World War I became inevitable, Day & Zimmermann's services were in demand to help companies prepare to convert their facilities to wartime production. Day also became a member of the Council of National Defense, which was formed to advise the government on the mobilization of U.S. resources in the event of war. The United States entered World War I in April 1917, and in the following year Day & Zimmermann took over the design, engineering, and construction supervision of the army's giant quartermaster terminal in Philadelphia.

The 1920s through World War II

Another project Day & Zimmermann took on in Philadelphia during this time had to be postponed until the end of the war. The city had hired the firm to build the 685-foot Bensalem Bridge, an important part of the proposed traffic network. The war interrupted construction, and by the time work was resumed, inflation had doubled the cost of labor and materials. Nevertheless, Day & Zimmermann fulfilled the terms of its original contract, completing the construction and absorbing immense losses that nearly bankrupted the company. The firm eventually recovered and continued to accept new work from the city, and the Day & Zimmermann name appeared on many bond issues proposed by the city for engineering and construction projects.

In the late 1920s Day & Zimmermann formed Penn Central Light & Power and the Municipal Service Company as umbrella organizations under which to operate electric utilities and rail transportation services in the eastern part of the United States. When Zimmermann became president of United Gas Improvement Company, the state's largest utility company, he brought Day & Zimmermann under its umbrella, and thus for a short time Day & Zimmermann became a subsidiary. This arrangement lasted only a year, however. In 1928 W. Findlay Downs and Nicholas Roosevelt bought Day & Zimmermann back from United Gas Improvement and reestablished it as an independent, privately held company that offered consulting, engineering, and management services.

Day & Zimmermann weathered the 1929 stock market crash and the following Great Depression largely because of its involvement in utility projects, including the construction of electric transmission lines to support rural electrification following the completion of Boulder Dam.

By the late 1930s the U.S. economy was recovering, and the threat of another world war was imminent. Day & Zimmermann designed and built a 1.5-million-square-foot aluminum reclamation area in Cressona, Pennsylvania, which it operated during World War II to produce artillery for the U.S. Navy. Other wartime contracts included the design and construction of the Iowa Ordinance Plant, which was built in a record 11 months and operated by Day & Zimmermann during the war years. During the peak production years of the war, the company employed 18,000 men and women.

Expansion and a Change in Ownership: 1950s-60s

In 1951 the company began its operation of the Lone Star Army Ammunition Plant in Texarkana, Texas. The plant encompassed 16,000 acres, contained more than 900 buildings, and was served by 160 miles of roads, 40 miles of railroad, 90 miles of electrical distribution service, 45 miles of water mains, and 25 miles of sewers. Day & Zimmermann continued to operate the plant for more than 40 years, and in 1965 the plant was awarded a presidential citation for making an outstanding contribution to improvements in economy and operations.

During the 1950s Day & Zimmermann undertook projects throughout the United States and in other countries, including a feasibility study of Lincoln Center in New York City and a survey of electrical power requirements in the Republic of Vietnam. By the end of the decade Day & Zimmermann was operating four major departments: reports, industrial engineering, management service, and engineering design and construction.

In 1961 Day & Zimmermann was acquired by the engineering firm H.L. Yoh Company for about $2.5 million, creating one of the largest technical firms of its kind in the United States, with 3,300 employees. The H.L. Yoh Company had been founded in 1940 by Harold L. Yoh for the purpose of war production and training. Yoh was the son of Ohio farmers whose ancestors had emigrated from Holland in the 1700s. Upon graduation from the Wharton School in 1929, he became a partner in a tool design firm. After 11 years he formed the company that bore his name, and largely because of his determination, the firm grew quickly. By 1953 the engineering division employed more than 500 engineers, draftspeople, architects, and industrial planners.

Upon acquiring Day & Zimmermann, Yoh decided to retain the name of the larger company, with H.L. Yoh Company becoming a subsidiary. In the four years following Yoh's acquisition, the company more than doubled in size, employing over 8,000 people involved in evaluation, planning, engineering, construction, ordnance development, and management. Day & Zimmermann continued to do substantial work for the U.S. military. In 1967, at the request of the navy, the company provided engineering, procurement, and construction services for two airfields in Thailand to support U.S. operations in Southeast Asia. The next year, the company completed modernization projects at the naval shipyards in Philadelphia and in Portsmouth, Virginia.

Vigorous Growth in the 1970s and 1980s

The 1970s brought further expansion. Day & Zimmermann opened the Kansas Division to operate the U.S. Army's munitions plant in that state. Moreover, the company acquired the Cole-Layer-Trumble Company, one of the largest mass appraisal companies, and MDC, which became part of Day & Zimmermann's infrastructure services division. Also during this time, Day & Zimmermann was hired as the construction inspector for the $50-million Veterans' Stadium complex in Philadelphia.

Further projects included conducting a property valuation of the railroad system of Penn Central Transportation Company when it declared bankruptcy; the project, which resulted in a $2.1 billion valuation, continued until the early 1980s. Under contract with the U.S. Railway Association, Day & Zimmermann developed a system plan for the government-sponsored ConRail. After serving as project manager for a new airport terminal in Charlotte, North Carolina, the company played a key role as master contractor in the three-year modernization program for the U.S. Postal Service and supervised more than 300 architectural and engineering firms throughout the eastern region of the postal system.

The 1970s also brought a change of ownership. Yoh, who had run Day & Zimmermann after his company acquired it in 1961, retired and sold the firm to his son, Harold L. 'Spike' Yoh, Jr., who had worked with his father since 1958. The son and five other executives offered $16 million for the company, outbidding two other investor groups. Upon his retirement from the firm, the senior Yoh moved to Florida, where he bought a restaurant and where in 1976, a year after selling Day & Zimmermann, he died.

Growth through acquisition and internal expansion continued into the 1980s. In a joint venture with the Frank E. Basil Company, the Day & Zimmermann/Basil Corporation began operating the Hawthorne Plant, an army facility in Nevada. Located on 236 square miles and featuring more than 2,800 buildings, the plant represented the largest ammunition storage depot in the world, housing 400,000 tons of ammunition. In the early 1990s, with the end of the cold war, Day & Zimmermann personnel would also become responsible for demilitarizing much of the munitions stockpiled at the Hawthorne Plant.

In the 1980s Day & Zimmermann helped to staff a Du Pont office and provided further management through its Day Engineering division. The acquisition of SEACOR in 1982 gave the company the marine engineering skills to serve naval and commercial ship operators. Acquisitions later in the decade included the Wagner Group, Delta Associates, NPS Energy Services and NPS, Inc., Aquidneck Data Company, and Barry Services.

In 1983 the company's property appraisal services were retained by the state of West Virginia for a statewide property revaluation. A year later, Day & Zimmermann introduced Landisc, a new technique for mass real estate appraisal that utilized both computer and laser video technology to create a property image useful to tax assessors, police and fire departments, and real estate offices. Other services in this area included analysis of hardware and software needs of clients, training, disaster planning, off-site backup storage, and computer time-sharing, as well as public education programs to support assessors as they conducted revaluations.

Innovation and Sustained Growth in the Early 1990s

At the onset of the 1990s, Day & Zimmermann restructured itself, forming D & Z, Inc., to coordinate efforts in engineering, design, construction, operation, and maintenance, and SEACOR Services, Inc., to manage international and base support projects. During this time Day & Zimmermann provided a wide range of services to foreign and domestic military, industrial, and municipal clients. The younger Yoh continued to head the company, and as his fellow investors from the 1975 buyout retired and sold their interests to him, he became the principal owner. The company was eventually owned by Yoh and by one other executive, who held less than a ten percent interest.

Because Day & Zimmermann's roots were in pioneering engineering techniques, the company continued to modernize engineering processes in the 1990s. Engineers helped manufacturers incorporate statistical process controls, computer-integrated manufacturing techniques, and vision-capable robotics in order to streamline the production process. The company also designed air circulation and filtration systems to meet stringent requirements for contamination control in the manufacture of foods, beverages, and health care products. Despite cuts in defense spending, Day & Zimmermann continued to contract for work with the U.S. military and its allies. The company was involved in demilitarizing and destroying obsolete weaponry, making conventional ammunition items from primers and detonators to fully assembled bombs and missiles, and providing clients in a number of countries with consulting services in setting up manufacturing systems.

With governments at all levels taking a serious look at the condition of the U.S. infrastructure, Day & Zimmermann looked forward to continued growth by providing services for the expansion of roads, railroads, bridges, water and sewer works, and airports. For more than 50 years Day & Zimmermann had served as a consulting engineer on water and sewer projects, with its services including construction management support and direct contact operations. The company was also a leading consultant on airport construction, having worked for more than 90 airports or airline clients. Its services included noise abatement studies, economic analyses, and environmental impact statements.

In rail transportation the company provided systems integration services and assistance with improvements to control systems and equipment. The company also developed a program management oversight concept for the Urban Mass Transportation Administration to help its staff evaluate major transit projects and determine the efficiency of their use of federal grant money.

The growing concern for the environment in the United States also fueled growth at Day & Zimmermann in the early 1990s. The company worked on technology for plastics recycling, often in conjunction with state, county, and municipal governments, in order to reduce the amount of solid waste taken to landfills. Furthermore, the company worked with Rutgers University to turn waste products into carpet, containers, construction materials, and automotive parts. In 1993 Day & Zimmermann sold its subsidiary Day Products Inc., which operated a plastic bottle recycling facility in New Jersey, to Wellman Inc., the largest plastics recycler in the nation at the time.

Acquisitions and Partnerships in the Mid-1990s

As Day & Zimmermann headed into the latter half of the 1990s, it moved to meet new challenges and to grow, a key component to the firm's success, according to Yoh. The company's interest in growth through acquisitions and mutually beneficial partnerships was not unique, however. An October 1995 article in Engineering News-Record reported that many U.S. companies involved in engineering, architecture, and construction sought to expand through acquisitions rather than internal growth. As the article noted, 'Acquisition mania is being driven by the globalization of markets as firms seek geographic diversity, new market segments and large-sized public projects.' The article also indicated that a survey of some 500 executives in construction and design firms revealed that approximately 95 percent planned to seek partnerships.

In late 1994 Day & Zimmermann acquired Spartan Constructors, Inc., an Atlanta-based industrial contracting firm. Day & Zimmermann announced that Spartan's construction resources and hands-on abilities would complement its own strengths in engineering and construction management. As part of Day & Zimmermann, Spartan, which had previously worked on small and medium-sized projects, would possess the financial resources to take on larger projects. A year later Day & Zimmermann formed a partnership between its Day & Zimmermann Information Solutions (DZIS) subsidiary, which handled information technology systems and services, and Documentum, Inc., a document management vendor. The partnership was formed to provide business solutions for clients in the power and utility industries. Another partnership was announced in January 1996, pairing DZIS with Fulcrum Technologies Inc., a provider of information-retrieval software. The alliance allowed DZIS to integrate Fulcrum products with other technologies, including Documentum's, to provide clients with customized business solutions.

Day & Zimmermann formed yet another alliance in February 1996 when it announced a three-year agreement with AlliedSignal Inc., a manufacturer of chemicals and industrial fibers. Day & Zimmermann agreed to assist in the design of production lines at four AlliedSignal facilities, which made polyester fiber, carpet fiber, bullet-proof vests, and chemicals. Day & Zimmermann's expertise in the fiber industry--the firm's clients included AlliedSignal rivals Du Pont and Monsanto Co.--convinced AlliedSignal to form a partnership with the firm. In June, Day & Zimmermann formed a partnership with Environmental Science & Engineering Inc. to form an environmental cleanup company providing construction and consulting services.

In the mid-1990s some of Day & Zimmermann's attention was diverted from acquisitions and joint ventures as it worked to resolve issues surrounding the Alamodome, a sports arena in San Antonio, Texas, for which it had provided project management services in the early 1990s. The Alamodome, financed through a voter-approved tax increase and completed in May 1993, was built on the grounds of a former industrial site. The soil was later discovered to be contaminated, giving rise to allegations that appropriate environmental assessment procedures had been ignored in order to speed construction and keep costs down. Although the Metropolitan Transit Authority (VIA) had been responsible for the preparation of the site, Day & Zimmermann found itself in the middle of numerous lawsuits, including a civil lawsuit filed by the city of San Antonio in 1994. The lawsuit against Day & Zimmermann, Alamo Iron Works, which had sold VIA the site, and two environmental consulting firms sought to recoup about $16 million, the amount the city expected to spend cleaning up the soil. The case was settled out of court in 1996.

Significant Changes and Continued Expansion for the New Millennium

Day & Zimmermann experienced a significant transition in the late 1990s as ownership shifted from the younger Yoh to his children. Spike Yoh, who had seen the firm's sales grow from $100 million to nearly $1.1 billion from 1976 to 1998, stepped down as president, handing over the role to his son Hal Yoh, who also took over as CEO and chairman in early 1999. After bidding against two public companies, Hal was given the opportunity to buy the company from his father. Spike Yoh and a minority shareholder sold their shares of Day & Zimmermann to the children and company in the late 1990s.

The transition in ownership did not stop Day & Zimmermann from its aggressive growth plan, and the company continued to grow and to take on new partnerships and major projects. In late 1998, for instance, the firm progressed with its international expansion by forming a joint venture with M+W Sander, a subsidiary of Jenoptik AG, to build the world's largest insulin plant in Frankfurt, Germany. In the United States the company signed a five-year contract with the Hanford nuclear plant in Washington State to provide security and other services, bringing its total U.S. Department of Energy security projects to three. In April 1999 Day & Zimmermann acquired The Mason Company, a private firm that provided manufacturing, engineering, base operations, and security services to the federal government, primarily under the name Mason & Hanger. Mason was merged with Day & Zimmermann's Government Systems Group, which provided services, including manufacturing, storing, and demilitarizing ammunition and weapons, to the U.S. Department of Defense and to other governments. It was believed that the acquisition would boost Day & Zimmermann's sales to $1.5 billion a year and increase its number of employees to about 22,000.

Word that Day & Zimmermann planned to sell subsidiary D & Z Infrastructure Inc., which handled infrastructure and airport construction, began to spread in early 1999. This would be a departure from its acquisition strategy, but it was rumored that the company planned to sell the business to Daniel, Mann, Johnson & Mendenhall, a design and construction company serving the airport market, in order to help fund the purchase of Spike Yoh's shares. Although Day & Zimmermann declined to confirm the reports in February, in June it was announced that the division had been sold to AECOM Technology Corporation, which also owned Daniel, Mann, Johnson & Mendenhall.

In May 1999 Day & Zimmermann announced plans to grow further by investing in its core businesses, particularly in its engineering and construction division, Day & Zimmermann International, Inc. (DZII). The firm intended to position DZII as an innovative, technologically advanced firm offering speed and flexibility to customers. The company also reported that, while it would continue to seek new alliances, it would focus on building stronger relationships with existing clients as well. In June the firm reported that NPS Energy Services was being raised to full business group status, indicating an interest in expanding its operations, which involved working with fossil and nuclear power facilities. The company then set the stage for increased international growth by establishing an office in Manchester, England, in August 1999. The office was established to service Du Pont facilities but also served as a base for Day & Zimmermann's European expansion.

By late 1999 Day & Zimmermann had five operating groups offering a wide range of services--Day & Zimmermann International, Inc.; Day & Zimmermann LLC; H.L. Yoh Group; NPS Energy Services, Inc.; and Day & Zimmermann Mason & Hanger--and serving to meet client needs in a rapidly changing culture. With the third generation of the Yoh family firmly in control of the business, the firm intended to continue growing and expanding its services, fortifying its operations, and increasing its competitive edge as it entered the 21st century.

Principal Subsidiaries: D & Z Construction Services; Transportation Construction Services, Inc.; Day & Zimmermann Construction, Inc.; Life Sciences International; Process & Industrial Division; D & Z Microelectronics; Barclay Travel Agency; Cole-Layer-Trumble Company; Protection Technology; Day & Zimmermann Services; Day & Zimmermann Hawthorne Corporation; Kansas Division; Lone Star Division; Munitions Technologies Division; DZIC-Contract Labor Administration Services; Day & Zimmermann Information Solutions; H.L. Yoh Company LLC; NPS Energy Services, Inc.

Principal Operating Units: Day & Zimmermann International, Inc.; Day & Zimmermann LLC; Day & Zimmermann Mason & Hanger; H.L. Yoh Group; NPS Energy Services, Inc.

Principal Competitors: Bechtel Group, Inc.; Fluor Corporation; Foster Wheeler Corporation.

Chronology

• Key Dates:

• 1901: Charles Day and Kern Dodge form Dodge & Day.
• 1907: John Zimmermann joins Dodge & Day.
• 1912: Dodge leaves firm, and company name is changed to Day & Zimmermann.
• 1916: Day & Zimmermann is incorporated.
• 1927: The company diversifies into electric utility services.
• 1951: Day & Zimmermann begins operation of the Lone Star Army Ammunition Plant.
• 1961: H. L. Yoh Company acquires Day & Zimmermann.
• 1975: Harold L. Yoh retires and sells Day & Zimmermann to his son, Harold L. 'Spike' Yoh, Jr.
• 1998: Ownership of Day & Zimmermann shifts to Spike Yoh's children.