The phrase "cautiously optimistic" has been bandied about quite a bit lately. For some, it masks turmoil, but for many, it is a modest way of saying "we're doing really well in a terrible time". It was with a measured precision and a hesitance to employ a cliché that Mark Valenti, president and CEO of The Sextant Group used the phrase when we spoke in mid-May. But truth be told, the phrase makes sense for a company with growth on the horizon in a tough economic climate.
Actually, the company is feeling confident enough to open a new office in Washington, DC, fronted by senior consultant Michael Kerr, who has returned to The Sextant Group to pick up where he left off after his time spent with the company from 2001 to 2003.
In the independent consultant firm's more than ten years in business, expansion into new regions and hiring of new personnel has been a carefully considered and, at the risk of sounding cliché again, organic. The firm has a national footprint, but they only open an office once the work load positively demands it and the search for the right regional leader has produced the perfect match.
"The Washington, DC announcement was the culmination of a couple of years of hard work," Valenti said. "That finally got us to this magic point where we had enough work in that region and the right guy came along and raised his hand."
Modesty aside, The Sextant Group has made major inroads in DC. Current or recently completed academic, research and government projects in the District and the two adjoining states are valued at nearly one half billion dollars. These include George Mason University Academic VI/Research II facility, James Madison University College of Integrated Science and Technology, Logistics University for the Department of the Defense, plus multiple projects for University of Mary Washington and a series of facilities for the University of Virginia, including the new medical Education Building and the Information Technology Engineering Building and Life Science Building.
More specifically, "It's a unique opportunity right now. If you're fortunate enough to still be doing good business, there is some talent available," Valenti noted. When speaking to his own personnel, Valenti explained, "I say that we're going to be cautiously aggressive. Because we're feeling pretty good about where our business is right now, and where our future business lies, and we think there's an opportunity to build market share, capture some quality people, and grow our business a little bit. We're lucky enough to be in a position to do that. We're not hiding our head and we're not waiting for the noise to go past us, we're going to be part of the noise."
Business is holding steady for The Sextant Group, billings are holding up, and "we haven't even blinked since last September when so many companies started struggling," Valenti elaborated. "I will say contract closing is softer than it has been historically, so the inference that we could draw is that next year could be a little bit tighter than it is right now. But by the same token, looking at our staffing requirements, and a few other things that are germane to running our business day to day, we've said, 'Let's not sweat this too much. It's a little bit of a lull in the action, but we don't see any indicators that this is a long-term trend at all."
Valenti, who will conclude his term as InfoComm president at the show this month, also provided a positive outlook from the InfoComm 100 event which was held in April. There, 100 representatives from manufacturers, consultants, and integrators revealed that business is actually quite strong. "The truth is there were only some select market segments like residential and certain sectors of the banking market that were really grossly out of whack. The rest of us were doing good, solid business, and I don't mean just the AV business, but other market sectors as well, small manufacturing and so forth, so it's not nearly as bad as the headlines."
In terms of vertical markets, The Sextant Group is pretty well entrenched in higher education, and "that's what's held us in such good stead. It has clearly slowed, but it has not gone away. They're still spending and there are still projects. The difference is there is a lot more competition for those projects. But the good news is we're kind of recognized as specialists in that field, and so a lot of architects have called us looking for us to be the differentiator on their team."
The feeding frenzy of 20-some-odd architecture firms pursuing projects that would formerly have only drawn five or so as prospects hasn't presented much of a problem for The Sextant Group, whose experience in the field of higher-ed truly sets the design proposals apart. "Our opportunities have held up really nicely," Valenti noted. "In fact March for us was a record of all time in terms of new opportunities that we identified." April was a good month for the company as well.
Valenti anticipates that the institution market in general has held its own and within the next 9-12 months it will pick back up to where it was. There is some uncertainly among projects supported by tax revenues, which of course are in jeopardy as businesses report smaller profits. But while state institutions may be dragging their feet a bit, and private schools are watching their endowments decline as much as 30 percent, community colleges are booming. "Typically when the economy goes down, the community college market gets really busy," Valenti observed. "People are getting laid off and they're going back for second degrees and train for a new career."
Federal government projects and healthcare are other areas where work has not only remained steady, but will likely increase due to the addition of stimulus money to these areas.
With summer hours and the ensuing productivity burst from an enlivened staff ahead of him, Valenti concluded, "At least from where I sit, it's still a pretty optimistic view. I don't see any lurking monsters in the shadows. The Sextant Group is not really nervous."