Mechanical know-howHarrisburg HVAC company H.B. McClure Co. growing through acquisitions, emphasis on partnerships
Persistence and being opportunistic often breed consistency and help grow a brand.
For well-established businesses such as Harrisburg-based H.B. McClure Co., efforts to foster and expand relationships with general contractors during the recession meant very little to the bottom line.
But with construction activity trending up, the design-build mechanical contractor is starting to see the fruits of its labor.
Add in the acquisition of a competitor and growth in its fuel-service base through other deals, and H.B. McClure is poised to end its fiscal year with record revenue.
"It's come back, and we're actually ahead of 2008 levels," President Robert Whalen said.
The nearly 100-year-old company posted $29.2 million in revenue four years ago, according to Business Journal records.
With across-the-board growth in both commercial and residential service, Whalen said, he expects to see about $31 million when the firm closes its year Sept. 30.
"Certainly the acquisitions have played a role in that," he said.
In April 2011, H.B. McClure announced that it had purchased Lemoyne-based C.W. Fritz Co., a competitor that had fallen on some tough times during the recession.
During the next 16 months, the company would acquire the propane sales and delivery business from Cumberland County-based Freedom Propane Inc. and purchase a pair of oil businesses in Dauphin and Lancaster counties.
H.B. McClure has grown to about 200 employees.
"Strategically, we're looking for ways to add additional residential customers," Whalen said. "Each one of these deals helped us to do that in what we think of as an efficient way."
Despite market perceptions, only 40 percent of the company's business is residential. The bulk of its revenue — about $20 million per year — is in commercial construction and services.
The late-2011 acquisition of Lower Paxton Township-based Derry Oil Co. and recent deal involving Elizabethtown-based Shelly Oil Co. were part of a broader effort to flatten out the ebbs and flows in the company's service business, Whalen said.
"The number of new oil households is close to zero, but it's still an important part of our residential service customer base," he said.
The propane side of the business, which is a small sliver right now, is expected to take on more importance as time goes on, Whalen said.
"Propane is a natural byproduct of the process we're going through in the (Marcellus) Shale," he said. "So the availability of product is going to be prevalent as output grows."
In the highly fragmented heating, ventilation and air conditioning industry, acquisitions should play a bigger role in the company's growth efforts moving forward, Whalen said.
For H.B. McClure, the focus is on expanding geographically and potentially enhancing residential fuel options to include natural gas and electricity.
The commercial side of the business operates within about 45 miles of Harrisburg.
"Over time, you will see us expand our residential service to overlap," Whalen said.
Currently, that business operates within about 30 miles of the capital city. Whalen said he would like to go further down Route 283 to Lancaster and south on Interstate 83 to York, as well as east into the Allentown area.
Five years ago, H.B. McClure, like many of its peers, was more of an oil advocate.
Today, with huge growth in Marcellus Shale natural-gas exploration and many businesses and households switching fuel sources to take advantage of low gas prices, the company has focused on trying to be more of a trusted adviser to customers, Whalen said.
"We don't have our head in the sand as it relates to the change in the natural-gas market," he said. "We are trying to position ourselves to help customers make the right decisions. It's not always in their best interests to switch, but sometimes it is."
The reality is that oil customers — especially in rural locations where gas access is limited or nonexistent — will continue to be a sizable piece of the business, he said.
Like many blue-collar companies, the biggest challenge for H.B. McClure will be finding qualified technicians as fewer people go into the trade fields.
A major part of the company's strategic plan focuses on training, Whalen said. The plan is to recruit candidates out of high school or recently out of school and train them the McClure way.
"We look at the glass as half full," he said.
The company continues to build its relationships with area vocational-technical schools and schools of higher education.
"We remain pretty bullish from what we're seeing from the economy," Whalen said. "Certainly things are not back to the go-go days of the mid-2000s, but we have not seen any indication that things are heading south, either."
H.B. McClure will continue to be flexible while finding ways to further expand its service offerings, he said.
"We believe that positions us even better than we were before," he said, citing the importance of locally established service companies that people can trust.
About Robert Whalen
Robert Whalen is president of Harrisburg-based mechanical contractor H.B. McClure Co.
The 42-year-old Lower Allen Township resident has been with the company since 2008. Prior to that, he worked in the human resources industry as the Northeast sales leader in health and benefits consulting for New York City-based Mercer.
Whalen is a 1992 graduate of Cornell University, where he earned a bachelor's degree in agricultural economics. He also earned an MBA in business management from Cornell in 2004.
He is married with four children. He enjoys hunting, fishing and golfing.
Recent H.B. McClure acquisitions
April 2011: Acquires Lemoyne-based HVAC contractor C.W. Fritz Co. after firm closes
Aug. 2, 2011: Acquires propane sales and delivery business from Freedom Propane Inc., based in Monroe Township, Cumberland County
Dec. 30, 2011: Acquires Lower Paxton Township-based Derry Oil Co.
Aug. 31, 2012: Acquires Shelly Oil Co., based in Elizabethtown