C. H. Heist Corporation Business Information, Profile, and History

Company Perspectives:

At Heist, we like to create "partnering" relationships with our customers. Partnering is a long-term, mutually beneficial arrangement between two companies in which labor, equipment and other resources are often shared. And communication is closely maintained between management for maximum teamwork efforts.

Within a strong partnering context, we can adapt quickly to our customers' changing situations and provide them with the kind of personal attention we feel they deserve.

History of C. H. Heist Corporation

C. H. Heist Corporation offers U.S. businesses an array of industrial services using specialized, state-of-the-art equipment. Services include high-pressure water maintenance cleaning of industrial and chemical equipment and facilities; sandblasting; industrial painting; wet and dry vacuuming of industrial waste; exchanger extraction and insertion; shell side cleaning; tube cleaning; heat exchanger field service repairs; and insulation for commercial applications. Heist's customers consist of oil refineries; the petrochemical industry; chemical plants; ferrous and nonferrous metal facilities; mining installations; government authorities; nuclear, fossil fuel, and electrical generating plants; and pulp and paper mills. Its largest client--E. I. DuPont De Nemours and Company&mdashcounted for eight percent of Heist's total sales in 1996.

Heist's Canadian subsidiary extends similar industrial services to businesses in that country. Another wholly owned Heist subsidiary--Ablest Service Corporation&mdash′ovides professional and industrial temporary staff to companies in the eastern United States.

Partnering in 1949

One Charles H. Heist founded a painting and sandblasting company, which he named after himself, in 1949. He built the company around the principle of partnering with his clients, decades before the concept was in vogue. "Partnering is not a new concept for Heist," explained the founder's son, C. H. Heist, in a corporate brochure. "Today, through partnering," he continued, "Heist has become a permanent part of the day-to-day functions of many Fortune 500 companies.... Partnering allows us to provide our customers with better service through better employees. It helps us create stability in the work force with a stronger work ethic, better customer service attitudes, and a safer working environment."

Throughout the 1950s, Heist researched the specific needs of his target customers, then established long-term, mutually beneficial arrangements to serve those same clients. According to son C. H. Heist, "No job was too messy, too dirty, too hot, or too cold. That was the secret of Heist's market strategy then, as now."

The senior Heist relied on communications with customers and resource sharing, including labor and equipment, to perform his early painting and sandblasting contracts. He concentrated on selecting the proper materials, carefully adhering to all specifications, and taking every necessary safety precaution for each job.

Coatings and Abrasive Blastings

Heist specialized in protective coatings and abrasive blasting. Clients contracted with the company to protect equipment or facilities from corrosion. Since its inception, Heist used technologically advanced methods of abrasive blasting. For example, the company utilized self-contained mobile sandblasting units from the beginning of its operations. Not only did such devices lower costs for customers, the mobile sandblasting units also were fast and offered quick response times, so they were ready on short notice or for emergency situations.

The company also provided its customers with clean, healthy methods for abrasive blasting or for applying protective coatings. Heist offered businesses and industries environmentally friendly alternatives for painting or abrasive blasting operations. The company also maintained high standards for safety among its operatives. Heist workers received extensive safety training in the areas of respiratory protection, hazardous communication, confined-space entry, first aid, and hazardous response.

As the industrial services business evolved, Heist expanded into high-performance coatings such as flame spray metals and plastics. Then the company extended services further to vacuuming and hydrocleaning.

Vacuuming and Hydrocleaning

Heist developed expertise in both wet and dry vacuuming. The company maintained a mobile fleet of wet-vacuum trucks, with capacities between 3,000 and 4,000 gallons. The trucks' hydraulic dumping mechanisms allowed for the clean up of liquid wastes and contaminants. High-powered vacuum units collected dust, debris, and other dry wastes. Heist vacuuming operations serviced utility plants, steel plants, cement plants, roofing projects, construction sites, refineries, and chemical complexes.

Heist went on to develop a safe and effective industrial system devoid of chemicals. Heist's hydrocleaning services offered the high-pressure cleaning of chemical and petrochemical process equipment using water instead of chemicals. "We wash away the dirt, grime, and mess, not our customers' property," the company revealed in On Stream with Heist. "Hydrocleaning is even safe for intricate process equipment that could be damaged by other cleaning methods."

A variety of industries utilized Heist's hydrocleaning services, including steel, power, chemical, marine, petroleum refining, and pulp and paper enterprises. Despite the diversity, each client received customized service because Heist engineers designed equipment to handle each customer's job efficiently, inexpensively, and safely. "While several industrial service companies have some of the tools with which to do significant general mechanical turnaround and maintenance projects," noted a "Business Update" in BIC, "Heist owns the toolbox."

Passing the Torch

Heist changed leadership in 1983 when the company's founder died. Heist received a restated certificate of incorporation that year, and internal practices and policies continued to evolve throughout the decade. The son of the founder (also named C. H. Heist), a director of the company since 1978, assumed control as president and chief executive officer in 1988.

Throughout its history, Heist grew through acquisitions. For example, Pipe & Boiler Insulation, Inc. (PBI) of Charlotte, North Carolina, became a division of Heist. Serving the southeastern United States predominantly, PBI installed and distributed commercial and industrial insulation to nuclear and fossil fuel power plants; chemical, tobacco, textile, and food processing industries; airports and airlines; hospitals; schools; the military; and government installations. The division's crews and fleets of trucks operated 365 days a year and offered products from all major manufacturers--fiberglass, calcium silicate, mineral wool, fabricated materials, mastics, jacketing materials, air handling insulation, and accessories.

Ablest Service Corporation

Heist's subsidiary Ablest Service Corporation conducted the company's second line of business: temporary staffing. Under the direction of W. David Foster since 1986, Ablest broke sales records and performed well financially throughout the decades. Ablest specialized in providing clerical, light industrial, and information technology (IT) staff to a variety of employers. Ablest maintained company-owned offices throughout the midwestern and southeastern United States, expanding to more than 30 offices by the 1990s.

Like its industrial services counterpart, Ablest relied on dedication to customer service to retain its position in the marketplace. As Foster explained in the 1996 annual report, "We look for clients who want value-added services and a supplier they can partner with. Our major competitive strength is our ability to empower local management to react as owners of the company and have the motivation to satisfy their customers' expectations. These local offices have the backing of a larger company, providing human resources support and IT systems, but they have the autonomy to operate as a local company which can meet the needs of their customers."

Growth Through Acquisitions

In 1993, Heist acquired the assets of Ohmstede Mechanical Services, Inc., of Baytown, Texas. Ohmstede Mechanical expanded the industrial services offered by Heist to refineries and the petrochemical industry. The Texas company provided onsite exchanger repair and maintenance; exchanger cleaning; and bundle extraction.

Three years later, Heist revised its operating structure. Looking to reduce costs, the company outsourced some support functions and closed an industrial maintenance and repair facility in Buffalo, New York. Heist also initiated its Economic Value Added (EVA) process in 1996. The company launched this long-term strategy to monitor and measure its systems for financial reporting and incentive compensation. Though long-term in nature, the EVA program elicited some short-term gains. As Charles H. Heist explained in the company's 1996 annual report, "We fully anticipate definitive long-term benefits from our EVA program. While our intentions and strategies with regard to EVA have indeed been long term, we've also enjoyed some immediate improvements. By improving inventory turnover and reducing inventory size--through implementation of just-in-time deliveries or having vendors stock inventory--we have reduced investment in inventory by $400,000."

Spinning Off Ablest

In 1996, Heist announced the planned spinoff and initial public offering of its wholly owned subsidiary Ablest Service Corporation. In part, the move was a response to the trend toward consolidation in the commercial staffing sector. "We want to complete the spinoff and IPO to make Ablest a 'pure-play' company," explained Foster in the 1996 annual report, "so it is easier for us to participate in the consolidation movement by making acquisitions. The spinoff and IPO will enable us to assemble more creative purchase plans and buyout offers. Our intention is to become one of the consolidators." Acquisition activity would bring the goal of $200 million in annual sales by the year 2000 within the subsidiary's reach. Shortly thereafter, in September 1996, Ablest purchased Tech Resources, Inc., an Atlanta-based company active in the area of information technology staffing. Ablest established a new division--Tech Resource Group--dedicated to information technology staffing after the acquisition.

Despite the company's plans, conditions in the stock market were unfavorable for an initial public offering at the beginning of 1997, so Heist postponed the spinoff of Ablest. President C. H. Heist remarked in a January press release that "Ablest will continue to aggressively pursue acquisitions and open new offices in strategic markets where the company currently does not have a presence.... This should provide the critical mass necessary to complete an initial public offering on the terms originally contemplated."

During the second quarter of 1997, Ablest acquired Solution Source, Inc. This growth--with Ablest's strong financial performance--reinforced Heist's board of directors commitment to the subsidiary's spinoff and IPO later in the year. By June, Ablest purchased yet another company to expand its services in information technology staffing. Ablest's Tech Resource Group absorbed the Kelton Group of Raleigh, North Carolina, which provided information technology staffing and documentation services. "Raleigh was a market area we had planned to open leveraging our existing traditional staffing operation. This gives us immediate revenues and profitability compared to an organic set-up," Foster explained in a June 1997 press release.

By August 1997, Ablest operated 37 offices, but conditions never became suitable for the planned spinoff of the subsidiary. "By keeping the companies together," president and chief executive officer C. H. Heist revealed, "we can better utilize the financial strength and leverage of the combined entities to aggressively pursue acquisitions and open new offices in strategic markets."

Future Plans in 1997

Ablest's plans at the end of 1997 included new offices and acquisitions. "Our acquisition strategy remains aggressive and strong," reported President and CEO C. H. Heist in an August 1997 press release. "Staffing firms, especially those that specialize in information technology staffing, that are accretive to earnings, are compatible with our corporate culture and fit into our geographic expansion plans will be strong candidates and carefully considered." Heist's plans for its industrial cleaning and maintenance services involved refocusing on chemical cleaning and introducing new services such as dewatering, which utilized mobile filter presses to remove liquids from industrial wastes. "This year," remarked C. H. Heist, "we've brought new capabilities on line that allow our industrial maintenance segment to provide additional services to existing customers, as well as provide new services to new markets."

Principal Subsidiaries: C. H. Heist Ltd. (Canada); PLP Corporation; Inpro Industries Inc.; Ablest Service Corporation; Ablest Personnel Services Ltd.