No. 20: Mum's the word for Jacobs

Tight-lipped company keeps winning and growing

Jacobs Engineering

Top 100 revenue: $1.3 billion

2007 revenue: $8.5 billion

2007 net earnings: $287.1 million

2006 revenue: $7.4 billion

2006 net earnings: $196.9 million

Employees: 52,000

Build it and the customers will come, then
return. But don't ask Jacobs Engineering
Group about its keys to success. The company
isn't talking. For Jacobs, silence is golden ?
or at least profitable.

Spokeswoman Mary Bloom declined to
comment for this profile or provide access to
Jacobs officials, saying it is company policy
not to comment publicly on any aspect of its
business, except for information disseminated
through press releases.

The company, based in Pasadena, Calif.,
ranked No. 20 on the Top 100 list, with $1.3
billion in prime-contracting

Founded in 1947, Jacobs focuses on
engineering, construction, operations and

In January, the company
won a three-year Air Force
deal with a potential maximum
value of $480 million.

Jacobs will provide
engineering and technology
acquisition support
services to Hanscom Air
Force Base in Bedford,
Mass., with other work to
be performed at locations

Jacobs' tasks at Hanscom include logistics
support, modeling and simulation, configuration,
and data management. The company
will also be responsible for test and evaluation,
security engineering and certification,
and assistance for the Air Force's Electronic
Systems Center. Jacobs has been providing
technical support to the Air Force for more
than 55 years, including systems engineering
at the service's acquisition and logistics centers.

On the civilian side, Jacobs has a threeyear
contract with NASA through the end
of the summer for test operation services at
the John C. Stennis Space Center in
Mississippi and Marshall Space Flight
Center in Alabama. If the award's two-year
optional extension is exercised, the
contract value could be as high as
$128 million.

Jacobs said it holds the bulk of the
U.S. government's major rocket-testing
contracts. In addition to the
NASA commitments at Stennis and
Marshall, other contracts include
work at the Arnold Engineering
Development Center at Arnold Air Force
Base, Tenn.; the Air Force
Research Laboratory at
Edwards Air Force Base,
Calif.; the Naval Air
Warfare Center Weapons
Division at China Lake,
Calif.; and NASA's White
Sands Test Facility near
Las Cruces, N.M.

Andrew Kaplowitz, a
vice president and senior
analyst at Lehman Brothers in New York,
said Jacobs is serious about repeat business,
and making it a priority has paid off for the

"Most of the industries I cover are transactional,"
Kaplowitz said. "Jacobs has a relationship-
based model. The work they get is
follow-on business with existing customers.
That allows the risk profile to be lower.
You're not bidding on price; you're bidding
on reputation."

Kaplowitz said Jacobs is the only company
he follows that has consistently shown earnings-
per-share growth of at least 15 percent
each year in the past 10. Organic growth
accounts for 10 percent, with the remaining
5 percent coming from acquisitions.

One of the notable 2007 Jacobs acquisitions
was Edwards and Kelcey Inc., an engineering,
design, planning and construction
management firm with expertise in transportation,
planning and environmental
impact; communications technology; buildings
and facilities; and land development.

Another acquisition was John F. Brown Co.,
an airport management consulting firm that
specializes in financial planning and business
advisory services. A third acquisition
was the engineering, design, planning and
construction management firm Carter and
Burgess Inc. The terms of the three deals
were not disclosed.

"Jacobs seems like it has acquisitions
down to a science," Kaplowitz said. "They
buy these businesses and fold them in. That
leads to increased earnings power over time."

At the end of the first quarter of 2008,
Jacobs said its contract backlog was
$16.2 billion, which includes a professional
services component of $7.6 billion. A year
ago, the comparable figures were $10.7 billion
and $5.8 billion, respectively.

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