Roy Anderson Corporation Business Information, Profile, and History

Company Perspectives:

Since 1955, performance has been the guiding principle at Roy Anderso n Corp. We know it means more than making deadlines. It means dedicat ion. It means professionalism. It means leaving the job site on the l ast day knowing that the finished project tells all the world the kin d of work you do. At Roy Anderson, we're proud to let our work speak for us.

History of Roy Anderson Corporation

Family owned and operated, Roy Anderson Corporation (RAC) is one of t he United States' largest construction companies. Based in Gulfport, Mississippi, RAC is involved in a wide variety of hospitality, commer cial, government, education, healthcare, industrial, entertainment, a nd sports construction projects. A major factor in the growth of the company since 1990 has been the building of casinos in the Gulf of Me xico region, which elevated RAC from regional status to a firm with n ational prominence. In addition to its home office, the company maint ains regional offices in Jackson, Mississippi, and Destin, Florida. R AC's founder, Roy Anderson, Jr., serves as chairman, while his son, R oy Anderson III, is president and chief executive officer, responsibl e for the day-to-day running of the business.

Roots of Company Dating to the 1920s

Roy Anderson Corporation grew out of the real estate business founded by Roy Anderson, Sr., who moved from Purvis, Mississippi, to Gulfpor t in 1925, launching Roy Anderson Real Estate. He became involved in construction on a small scale, building one or two small houses each year. As a child, his son, Roy Anderson, Jr., often helped out on the construction sites, fetching water and materials for the workmen and eventually learning to do a little carpentry himself. That early exp erience led him to become interested in engineering, which he studied at the Georgia Institute of Technology, better known as Georgia Tech , graduating in 1951. Because he was involved in the Reserve Officer Training Corps (ROTC), Anderson then served a four-year stint in the Air Force, in Korea, before returning home to Gulfport with his wife in September 1955 to go into the contracting business.

He set up shop in his father's real estate office and with just a sin gle employee and a pickup truck began drumming up small repair jobs. Later in 1955 his father died, and the real estate business was taken over by his sister, Jane Sawyer, and brother-in-law, Len Sawyer, bec oming Sawyer Real Estate and Insurance. Anderson soon graduated from repair and remodeling projects and followed in his father's footsteps by building a few homes. His goal, however, was to become involved i n constructing commercial buildings. Two of his earliest large projec ts were the construction of the Mount Bethel Baptist Church in Gulfpo rt and the Gulfport Chamber of Commerce.

A major step in the history of the company came in 1958 when Anderson bid on the construction of a branch for Hancock Bank. His bid of 6;106,000 was matched by another area contractor. According to Anders on's recollections in a 2002 interview with the Mississippi Busine ss Journal, "It was quite a dilemma for [Hancock] to decide what to do. I was only a young contractor and the other contractor was an established firm, W.M. Craig & Co. Leo Seal (then president of Ha ncock Bank) decided the only thing he knew to do was to flip a coin. Since I was the youngest of the group, I suggested that Mr. Craig cal l the coin. He called heads and it came up tails. You could say we wo n our first gambling project back then." The credibility Anderson gai ned with the Hancock Bank project led to ever larger jobs. Later in 1 958 RAC built the Long Beach High School, a $386,000 contract. An other significant project was the building of a five-story officers' residence at Biloxi's Keesler Air Force Base in 1961. Yet another mil estone job in the early years was the $3.8 million contract to bu ild the substructure foundation at Gulfport's Mississippi Power Compa ny power plant in 1969.

Government Contracts Dominating the 1980s

Over the years, RAC proved adept at changing with the times, shifting its focus to different types of projects as they became available. I n the 1980s, for example, when there was little private construction money in Mississippi and the Reagan and Bush administrations were dra matically increasing defense spending, RAC chased state and federal b usiness, landing a large number of contracts at both Keesler Air Forc e Base and Stennis Space Center in Hancock County. As the Cold War ca me to an end at the close of the 1980s, defense spending slowed down and RAC was on the lookout for new opportunities in the area. It foun d them after Mississippi legalized gambling in 1990.

By this time Anderson was receiving help in the business from his son , Roy Anderson III. The younger Anderson, born in 1957, took a route to the construction industry different from that of his father, altho ugh like his father he spent time at construction sites delivering wa ter to the workmen. After earning an undergraduate degree at the Univ ersity of Alabama, he earned a law degree from the University of Miss issippi Law School in 1982. He never practiced law, instead joining h is father shortly after graduation. His study of law, however, would prove an asset when dealing with contracts. Although the son of the o wner, Anderson III worked his way up in the company, starting out by assisting project managers on a number of jobs. By the time RAC enter ed the 1990s the company was very much a father and son operation, an d in 1993, the younger Anderson took over day-to-day responsibilities as president.

Despite never having built a casino, the Andersons were able to land the contract to build Casino Magic in Biloxi in July 1992, unusual in that it was the first casino built on a barge rather than a riverboa t. RAC was able to complete the project in just 83 days, a feat that caught the attention of Park Place Entertainment, owner of Grand Casi nos, which was set to build a casino in Gulfport and was intrigued by the barge concept and brought in the Andersons for a meeting at thei r Minnesota headquarters. Park Place's mid-south region President Tom Brosig, whose own family was involved in the construction business, told Mississippi's Sun Herald, "I saw a father and son working together. That was all I needed." The newspaper also reported, "Bros ig recalled that the Andersons convinced reluctant Grand Casino execu tives to build a parking garage next to their casino in Gulfport, som ething they didn't think was necessary. 'None of us anticipated Gulfp ort would open as well as it did,' Brosig said. 'Without the garage, we would have been dead.'" By working 24 hours a day, seven days a we ek, RAC was able to complete the $42 million Grand Casino project in only 156 days. Speed was of great importance to the owners, as ca sino operators were all vying to open before the competition to estab lish themselves in the new market.

With two highly successful casino projects under its belt, RAC positi oned itself to take full advantage of the region's casino boom in the early 1990s. Casino construction dominated RAC's business until 1996 as employment peaked around 1,000. Other projects included the Grand Casino-Biloxi, Lady Luck-Biloxi, the Palace Casino in Biloxi, and Ca sino Magic in Bay St. Louis. During this period the company also tack led its largest project, the $260 million contract to build the G rand Casino and Hotel in Tunica, the largest dockside casino in the w orld. But even as casino building was just beginning to explode, the Andersons knew that the contracts would not last forever. They began taking steps, as early as 1993, to diversify and not place too much e mphasis on the hospitality industry. In 1993 RAC opened regional offi ces in Jackson, Mississippi, and in Memphis, primarily to accommodate the new casino business but also with the idea of scouting for nonca sino work after the boom ended. The company was also wise to recogniz e that the casinos would bring other construction work. Roy Anderson III told the Mississippi Journal in a 1997 article, "Gaming is the magnet that brings the people--which results in the ancillary co nstruction. Even in areas that do not have gaming, you're seeing tax revenues go back into the communities through more state building pro jects."

After casino work petered out in the mid-1990s, RAC shifted its focus to other industries. In 1995 it built the Marshall County Correction al Facility, Mississippi's first privately run prison, for Wackenhut Corrections Corp. Wackenhut was so pleased with the work that it awar ded RAC a second contract to build a Virginia facility. Prison projec ts dominated the company's slate over the next couple of years as it completed eight more prison-related projects in Mississippi and Arkan sas. During this period RAC also became involved in the hospital/heal th facility sector. It built the University Medical Center's perinata l center in Jackson as well as a major project at Rush Medical Center in Meridian, Mississippi.

When prison work dried up in the late 1990s, RAC focused on hotel wor k through its offices in Jackson and Memphis, as well as an office th e company also opened in Dallas. At the end of the decade RAC became involved in the building of sports and entertainment facilities. In 1 999 it won the $49 million contract for a 14,000-seat multipurpos e arena in Bossier City, Louisiana, suitable for sporting events, con certs, conventions, and other programs. The project was another examp le of ancillary construction, resulting from the increase of conventi on business in the Bossier City and Shreveport markets due to casino gambling in the area. But much of RAC's sports business during this p eriod was related to the popularity of college football in the South, as members of the Southeastern Conference (SEC) found themselves fun ding stadium expansions in order to remain competitive. Major schools including the University of Alabama, Auburn University, and the Univ ersity of Tennessee led the way, and smaller SEC members such as the University of Mississippi and Mississippi State University felt compe lled to follow suit. In 2000 RAC won the $19.7 million expansion of DavisWade Stadium on the Campus of Mississippi State and the $ 24 million expansion of Caught-Hemingway Stadium on the Mississippi c ampus in Oxford. The company was not actually looking for stadium wor k, but because it possessed a great deal of expertise with concrete w ork, RAC proved to be an ideal candidate for the projects.

As the economy stalled in the early 2000s, RAC's diverse capabilities allowed the company to be opportunistic. While large hospitality pro jects were on the wane, RAC was able to offset that loss of business by taking on healthcare projects such as the $9 million Biloxi Re gional Hospital and parking garage, the $24 million ambulatory ca re facility in Sherman, Texas, and the $12 million medical office building parking garage for Gulfport's Memorial Hospital. RAC also w on a pair of judicial projects: the $44 million U.S. Courthouse i n Gulfport and the $18 million Justice Court facility in Jackson. A stalwart of the 1980s, military projects became another important source of new work. RAC received contracts to construct a Special Ope rations Forces facility for the U.S. Navy and a Lockheed Martin Metro logy Center, both located in the Stennis Space Center. In September 2 002, RAC was awarded the $22.4 million contract for several proje cts on the Keesler Air Force Base.

Acquiring Harrell Construction in 2003

RAC looked to diversify further in 2003 by way of acquisition, purcha sing Jackson-based Harrell Construction Group, LLC (HCG). With sales of $75 million in 2002, HCG employed about 200 people, compared w ith RAC's $210 million in sales and 500 employees. In addition to its Jackson headquarters HCG maintained a division office in Birming ham, Alabama. Although HCG was formed in 1997, it was the result of a management buyout of a 120-year-old construction firm, giving HCG de ep roots in the region: About 60 percent of its work came from repeat customers. Although HCG mostly operated in Mississippi and Alabama, it was capable of handling projects throughout the Southeast. HCG was especially strong in hospitality and retail and brought to RAC a num ber of experienced construction professionals.

With the incorporation of HCG's operation, RAC continued to win a wid e variety of building contracts. In 2003, for example, it was awarded the $5.9 million repair contract at the Pensacola Naval Air Stat ion. In 2005 it returned to the casino market in a major way, teaming up with a partner of Donald Trump to make the winning bid to build t he $500 million, 240-acre President Casino Broadwater Resort on t he Biloxi Peninsula, with the project to include the first all-suite 638-room hotel on the Mississippi Gulf Coast, and The Villas at Bacar an Bay, featuring 387 one- and two-bedroom luxury condominiums. A wid e variety of construction projects also would open up in the reconstr uction efforts after Hurricanes Katrina and Rita struck the Gulf Coas t in August and September, respectively, of 2005.

Principal Subsidiaries: Harrell Construction Group, LLC.

Principal Competitors: Hunt Construction Group, Inc.; Perini C orporation; Skanska USA Building Inc.

Chronology

• Key Dates:
• 1955: The company is founded by Roy Anderson, Jr.
• 1958: A bank branch is the first major contract.
• 1969: A Mississippi Power Company power plant contract is won.
• 1982: Roy Anderson III joins the company.
• 1992: The firm wins its first casino contract.
• 1993: Roy Anderson III is named president and CEO.
• 2003: Harrell Construction Group, LLC is acquired.