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Globe 100

Staying afloat

Deteriorating conditions made it difficult for companies to thrive, but the most successful adapted and delivered

By Steven Syre
Globe Staff / May 19, 2009
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Managing a business through the terrible economy of 2008 was a lot like running a lemonade stand in a rainstorm. Success was possible, but it surely wasn't easy.

The steep downturn in the economy didn't affect everyone at the same time. Massachusetts, like some other states, was in relatively good shape at the start of the year. So were some selected industries.

But everyone was under the gun by the end of the year, as the economic storm swept over every corner of the country and nearly every industry. A financial system in crisis, plunging consumer confidence, and waves of job cuts prompted unprecedented government intervention. Economists spoke seriously about the possibility of a new depression.

Companies that make up this year's Globe 100 prevailed through those economic headwinds with new products, a hard eye on cost controls, and an ability to adapt on the fly. But there was no mistaking the kind of financial stress they endured.

Start with stock prices. The Globe 100 companies lost 32.6 percent of their stock market value, on average, last year. That was a serious setback, but still about 5 percentage points better than the performance of the Standard & Poor's 500 index in 2008.

Business operations at many of those companies struggled, too. Fully half of the companies on the Globe 100 list saw their profit margins squeezed in 2008. About one of every four posted some kind of revenue decline last year.

Look through this year's Globe 100 and several themes emerge, illustrating just what it took to be successful in 2008 despite the pressure.

One of those themes: the ability of technology companies to create products so compelling they sell no matter what happens in the broader economy.

The Globe 100 includes many companies from all kinds of industries. But the top of this year's list is dominated by technology companies of different stripes. That means telecommunications businesses, life science companies, and Internet-oriented ventures, among others.

Cubist Pharmaceuticals of Lexington, this year's top company, rode the booming sales of its antibiotic Cubicin. Profits exploded at the number four company on this year's list, Starent Networks Corp. of Tewksbury, whose equipment is helping to drive the cellular phone industry's multimedia revolution. Akamai Technologies of Cambridge, the well-established company that ranks 13th this year, continues to grow by directing an ever-increasing flow of electronic traffic on the Internet.

Other companies adjusted to the times to find new customers and deliver products with an emphasis on value.

Staples, the office superstore company based in Framingham and ranked 14th on the Globe 100, began offering $3 credits to customers who brought their ink cartridges into stores to be recycled. It expects to collect 50 million of them this year.

Unifirst Corp., a Wilmington company that supplies workplace uniforms, redirected its sales force to specifically target clients in industries with a history of weathering tough economic times. It's the number 20 company on the Globe 100.

VistaPrint Ltd. of Lexington, which ranks fifth on this year's list, continues to ramp up online sales of printed products to small businesses and consumers for less.

One surprise from this year's Globe 100: Many smaller companies in the financial services industry, especially banks, didn't fair poorly at all.

Many of those small banks, like Hingham Institution for Savings, actually moved up on the list this year. The Hingham company, ranked 43d this year, didn't crack the previous year's Globe 100. Legacy Bancorp and Berkshire Hills Bancorp, both of Pittsfield, as well as Benjamin Franklin Bancorp in Franklin all climbed higher in this year's rankings.

The economy of 2009 will pose another challenge. Conditions during the first three months of the year continued to deteriorate. The same skills and innovation that set Globe 100 companies apart in 2008 will help create success in the difficult months to come.

Steven Syre can be reached at syre@globe.com.