2014 Hawaii Business Top 250: Gainers and Losers

Companies with the Biggest Shifts in the Rankings

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The lineup of Hawaii’s top companies is virtually unchanged this year. The leading six organizations on the Top 250 are the same as last year and in the same order: 1. Hawaiian Electric Industries, 2. HMSA, 3. Hawaiian Holdings (dba Hawaiian Airlines), 4. Matson, 5. UH and 6. Kaiser.

Last year, Hawaii Pacific Health was seventh and  Servco Pacific eighth; this year, they traded places. However, the companies holding Nos. 9 through 13 last year maintained the same rankings this year.

The first significant change was for ProService Hawaii, which has been one of the fastest climbing companies on the Top 250 for the past decade. It was No. 14 last year, but this year is ranked 70th after it changed accounting practices. Nonetheless, the number of ProService employees actually increased 9 percent.

Hawaiian Electric Industries has remained No. 1 on the list every year since 2009, except for one year, 2010, when HMSA displaced it. HEI’s gross annual sales slipped to $3.238 billion in 2013, down from $3.375 billion in 2012. Analysts suggest continuing big changes in electricity production might further cut into HEI’s gross sales down the road.

“Things are happening so quickly,” says Jeff Mikulina, executive director of Blue Planet Foundation, which supports clean, renewable energy in Hawaii. “For instance, we didn’t foresee this huge boom in rooftop solar PV that’s happened over the last five years. In 2004, it was roughly 400 homes with solar. By 2014, we had over 40,000. So some of HEI’s biggest competitors are the customers generating their own power.”

The challenge for HEI is to adapt, Mikulina says, and become more of an energy “concierge” rather than simply a provider.

“I don’t think disruptive change means it’s going to unravel the utility,” says Mikulina. “But the underlying paradigm is changing. They just have to take advantage of it and be nimble.”

Hawaiian Holdings, parent of Hawaiian Airlines, enjoyed gross sales of $2.155 billion in 2013, compared to $1.96 billion a year earlier. This reflects the strength of Hawaii tourism and the general local economy, and the airline’s expansion into new markets.

Sumner La Croix, incoming chair of the Economics Department at UH-Manoa and a research fellow with UHERO, the UH Economics Research Organization, says Hawaiian Air has become much more of an international company and is widely perceived as a good airline – which helps Hawaii’s reputation as a tourism destination.

In the past, he says, local airlines have made money when there have only been two, but when a third major airline enters the local market, there are stresses. “We’re at a point that it’s a little more stable, and that’s good for tourism here,” he says.

Hawaii’s two biggest banks, First Hawaiian Bank and Bank of Hawaii made it onto the Top 250, at 11th and 13th, respectively. They remain well regarded by mainland analysts and local experts.

“All the major bank scandals – you didn’t see that in Hawaii,” says Walter Dods, chairman of the Matson board and former CEO at FHB. “Even at the height of the debacle, almost all of the Hawaii properties foreclosed on were foreclosed by mainland banks. The banks here didn’t go out and loan 130 percent of a house. It’s pretty much a testimony that the banks stuck to their knitting and didn’t fall prey to the euphoria.”

Hawaiian Telcom slipped from 19th to 21th, even though its gross annual sales rose from $385.5 million in 2012 to $391.15 million in 2013.

Alexander & Baldwin, which is transforming its multibillion-dollar investments into an all-Hawaii portfolio, rose two places on the list to 22nd by increasing its gross sales from $261.5 million to $365.2 million.

Some of the biggest gainers among mid-size organizations on this year’s list:

  • S&M Sakamoto Inc., with gross sales up 203 percent.
  • Grove Farm, up 181 percent.
  • St. Francis Healthcare, up 79 percent.
  • Lend Lease, up 63 percent.
  • Queen Liliuokalani Trust and the UH Foundation, each up 53 percent.

Some significant declines on the Top 250 list were:

  • Royal Hawaiian Orchards L.P., with gross sales down 31 percent.
  • Swinerton Builders and Barnwell Industries, both down 27 percent.
  • Aqua Engineers, down 26 percent.



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Hawaii Business,August