Recco in The News

Unfrozen asset

Refrigeration Engineering and Contracting Co. Inc.

Refrigeration services firm realizes potential with better biz practices

By Sean McFadden
JOURNAL STAFF

WOBURN – For Peter Comeau, the key to unfreezing his company's growth potential has come from opening the door to expert assistance, as well as shaking up his business model.
It’s been 11 years since Comeau and his wife, Lori, purchased Refrigeration Engineering and Contracting Co. Inc., also known as Recco, which was founded by Bill Hoover and Fred Antoon in 1969, for an undisclosed amount.
Becoming chief of the Woburn-based, full-service refrigeration systems design/installation/maintenance outfit, says Comeau, who had actually begun his tenure with Recco back in 1977, required a fundamental shift in thinking.
"Before we purchased the business, I had no idea how much more of my time would be spent on education and managing change," says Comeau, who had previous engineering and sales experience but limited management expertise.
A major concern, says the 56-year-old president, was that the appropriate systems weren't in place to grow the company: "As a contractor, we didn't operate day-to-day; we took more of a long view of it. (In terms of) knowing what we had for assets and liabilities at any given point in time, we had to take somewhat of a guess."
Beginning in 2001, the Comeaus engaged a series of business consulting firms to assess operations and offer advice on IT and software systems training, management practices and staff training. Over the past two years, says Comeau, the company's annual fees for these services have exceeded six figures.
Ed Johnson, a partner at Feeley & Driscoll PC, a Boston-based CPA/consulting firm that Recco has engaged on an ongoing basis, observes, "Their strength was that they had a lot of repeat customers. So they were obviously doing something operationally well. Accountability and reporting were the big areas that we needed to work on."
By implementing those efficiencies, the Comeaus have tripled the 45-person company's revenue to $15 million and now have 250 active accounts in the food and beverage, ice rink, pharmaceutical and chemical industries. Thirty-five percent of those clients, which include Coca-Cola and General Mills on the food and beverage side and Boston College and Harvard University in the ice rink arena, have remained with the company since the Comeaus acquired Recco.
Recco's revenue is derived from three key areas of business: refrigeration system construction, which is the design/build component; service, which includes maintenance and repairs; and the sale of refrigeration parts. Those areas currently represent about 60 percent, 35 percent and 5 percent, respectively, of Recco's total revenue.
On the construction side, Recco handles jobs ranging in price from $20,000 to $3 million. According to Comeau, approximately 25 percent to 30 percent of the value of a construction project typically goes to the manufacturer of the major system components.
This year, Comeau expects revenue to remain flat, as he's begun to put more emphasis on the service side of the operation -- a reflection of the fact that there's been a bit of retraction in the economy on the construction side, along with increased competition for that work. In fact, Comeau is looking to potentially double the size of his service business, which stands at 20 field personnel.
"Service is an annuity type business that allows us to have long-term clients," Comeau explains. "But it's also a great engine to drive construction sales."
Leo Reed, executive vice president of the Hingham-based New England Mechanical Contractors Association, says, "Future market trends indicate that the service side of the industry will be as important as the construction side."
For smaller, specialty contractors like Recco, Reed adds, it's vital to be knowledgeable in all facets of the operation, from sales to project management. "Peter and Lori are both very competent people," he says. "They're always trying to broaden their vision."
Comeau says that broadening the firm's skill set has ultimately helped Recco operate on a more level playing field.