The Inc. 100

Overview of the Inc. 100 with a focus on general trends, profitability and stock performance.

The 12th annual ranking of America's fastest-growing small public companies

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What a system! At the beginning of the past decade the average company tabulated in these pages didn't even exist. Which means the jobs each of those companies now bestow -- an average of 667 -- didn't exist, either. Neither did hundreds of new products, scores of happy stockholders, a dozen novel ideas and trends, nor a handful of new millionaires. Nor, to be sure, a couple of instances of fiduciary excess, a scattering of chief executive resignations, a number of lawsuits, and the rest of the typical detritus that competitive commerce throws off -- a small enough fee to enjoy the air-your-laundry-in-public wonder of free enterprise.

If there is a lesson in these pages for Russians and Czechs and other Johnnies-come-lately to a market economy, it's that for all the years they've wasted on systems that fizzled, the table of free and private enterprise remains bountiful. And that it's available to anyone with money to risk, energy to burn, hours to spend, a belief in him- or herself, and chutzpah enough to coax capital from people he has never met and never will.

That's the hard part. The rest is easier still, suggests this 1990 gathering, Inc.'s 12th annual roundup. For example, the presence on the list of fast-food chain Rally's (#5) shows that you can beard giants in their kitchens and still gain a share of hamburger spoils. And you don't have to be seasoned in the ways of business to pull it off. IBM-PC clonemaker Dell Computer (#32) was founded in 1984 by a teenager who naïvely -- but successfully -- took on a huge corporation founded more than 70 years earlier.

And what's proffered for sale needn't be glamorous or pricey. Specialty retailer Silk Greenhouse (#31) has been on the Inc. 100 for two consecutive years, simply through selling artificial flowers and genuine party favors. Jean Philippe Fragrances (#42) distributes and markets alternative perfumes; its Shangrila, a self-admitted rip-off of Shalimar, retails at K mart at a fraction of Shalimar's price. And what humbler endeavor is there than cashing checks and selling lottery tickets out of a storefront, as does Supermail International (#58)?

In the end, though, the most persuasive testimony to exactly how free free enterprise can get is the way products put out by one fast grower can be recirculated by another, allowing the latter to flourish just as fast. On the list for two straight years -- following 30 straight centuries during which no other aspirant from its particular industry sector qualified -- six-year-old Cash America Investments (#79) has twice occupied Inc. 100 slots by dint of becoming what the company claims is the largest pawn-shop operation in the country. Now there's food for Eastern Bloc thought.

Other notes and observations from the 1990 Inc. 100:

But What Do They Do?
In a brief description, the list attempts to capture the essentials of what business each company is really in. Sometimes, though, far more than a scant line of type is required to do it justice. Metro Mobile CTS (#37), for example, is described herein as both a cellular phone service and seller of propane. How one endeavor ties in with the other might escape the uninitiated observer; to CEO George Lindemann, they're "entirely compatible. . . . Both are consistent with our long-standing preference to operate utilitylike businesses." Ironically, he may consider his setup utilitylike, but if Inc. did, the company wouldn't have made the list: Inc.'s criteria specifically exclude utilities.

When the market-driven company couldn't leave well enough alone with a line of nonaerosol spray containers, two-time listee Selvac (#47) moved into the personal-care market with a proprietary hair-removal device. Recently, it plunged into beauty parlors. Not only does that sequence follow the logic of complementary businesses, explains CEO Allan Borkowski, but the salons provide built-in consumer testing labs for untold lines of businesses to come.

Amerihost Properties (#67), on the other hand, had the good sense to change its corporate name at the same time it changed -- quite markedly -- its line of business. In 1987, as America Pop Inc., the company sold off a string of refreshment stands and began building motels.

Loss Leaders

With 72 entries profitable and 3 breaking even in 1989, the list is little better or worse than usual. But 7 of the remaining 25 showed no profit in fiscal '89 -- nor did they post one in any of the four previous years. Of these perennial money losers, 3 are cellular phone services, an industry distinguished by odd arrangements that don't seem intended to yield profits in our lifetime.

The other 4:

* Infrasonics (#59). After eight years this medical-equipment manufacturer has yet to post an annual profit, but president Jim Hitchin is starting to breathe easier. The company's line of respirators was developed in-house and is fully paid for. As a result, "all future revenues and profits will belong to the company and benefit our shareholders without having to share the profits with outside partners," he says. The company posted its first-ever profitable quarter in '89.