Macdonald-Miller Facility Solutions Revenue and Competitors

We are a private company owned by Fred Sigmund and Steve Lovely. Other senior executives are Jack Cheetham, EVP Technical Services; Tyler Kopet, CFO; Gary Kuhlman, EVP Quality Assurance, and Gus Simonds, EVP Market Development. I'm the Business Manager for the South Sound out of our Tacoma Office. We are a mechanical design-build and service contractor covering all of Western Washington. That means we design, install, and provide maintenance, repair and do technical services for buildings' heating and air conditioning, plumbing, and control systems - one-stop shopping for all that. Tell us a little about the company's history in the area. MacDonald-Miller formed in 1965, and in 1975, Fred Sigmund bought the company with partner, Virgil Timmerman. They dissolved the partnership in 1986 and Virgil went to Alaska to operate his own firm there. From 1987 through 1997, MacDonald-Miller enjoyed solid growth and an excellent reputation for installing a wide variety of mechanical systems and supporting the largest service fleet in the Northwest. We installed mechanical systems for the Regence Blue Shield building on Market Street, the former Shoenfeld Furniture building renovation, Intel Corporation in DuPont, and the Labor and Industries building off of Interstate-5 in Tumwater. What brought about the purchase of the company by Encompass? What made the owners decide to sell? In 1997, a trend seemed to be forming for larger property owners and managers looking to national companies for their mechanical services, rather than local or regional entities. A real opportunity was seen to "roll up" companies like MacDonald-Miller across the country into one public company and compete with the other national providers who were perceived to be less capable. Additionally, the sale of MM to a public company on the NY Stock Exchange provided a nice solution to the ownership equity transition from Fred and the employee-owned MacDonald-Miller. Part of the reason they agreed to sell was the understanding to continue to operate under our name MacDonald-Miller. Our new owners were, in fact, learning as much from us as we were from them. Many of the characteristics of our company were being modeled for other companies across the country to adopt. Ultimately, the merger with the new organization made us a better company without changing the core of what had already made MM successful. How did the company operate under the national owners? In 2000, our new owners merged with another large public company and the new entity became Encompass. After the merger that created Encompass, our hand was forced to change the branding of our company from MacDonald-Miller to Encompass. For the next 18 months under our new name, we began to feel the effects of the new "post 9-11 economy" and the rising specter of Encompass's impending fall. What prompted Fred and Steve to buy back the company? To make a long story short, the debt load of all the merger and acquisition processes, coupled with a lagging economy/stock market, caused Encompass to file Chapter 11 and sell off its assets. That's the happy ending - Fred and Steve reached into their pockets and bought back the company they helped build, and the MacDonald-Miller flag was raised once again. How did its bankruptcy come about and how did it affect the Tacoma operation? Our company overall weathered all of this very well thanks to the loyalty of our customers, and the Tacoma office was no exception. In fact we grew our service business through the toughest of times in 2002. Opening our office in Tacoma has really been a great asset to getting a better handle on all that is happening in the South Sound from a development aspect. What lessons were learned from the whole process? In retrospect, selling the company in 1997 had good merit, but how a public company operates offers little control over your ultimate destiny in comparison to private ownership. What are the plans for the company now? Currently, we are busy letting everyone know we are back and healthy and looking for exciting projects to work on. Because our company is more diversified than many in our industry, we are handling this very tough development market better than some others. All new construction businesses are smaller now than during the boom times of 1999-2001, but that segment of our business contributes about a third of our bottom line - compared to some who rely solely on that component. This is an important point; having a diversified service minded mechanical contractor means a quality approach to projects that goes beyond just the constructability of the system, but also how that system will perform for the life of the facility.