With $50 million in fresh financing, Lily Transportation looks to expandNEWARK – Lily Transportation Corp., a major Northeast trucking firm, has ambitious expansion plans in New Jersey.
The Massachusetts-based company this month lined up $50 million in financing to increase its presence here and in New England. The financing came from Textron Financial Corp. of Alpharetta, Ga., in the form of a revolving credit facility.
ÂNew Jersey is the fastest-growing market for our services,Â says John Simourian, chairman and CEO of Lily, which has its state headquarters in Newark and offices in seven other locations in the Garden State. The privately held firm, which Simourian says had revenues of about $90 million last year, has a fleet of about 3,000 trucks. Nearly a quarter of them, or about 700, are in New Jersey.
Arthur Mavromatis, vice president of the firmÂs New Jersey operations, says trucking accounts for about 60 percent of LilyÂs business in the state and is growing at about 30 percent a year. The rest comes from truck leasing, rentals and maintenance services, and is expanding more slowly.
Big Lily clients include Wakefern Food Corp. of Elizabeth, the owner of ShopRite brand stores, and Whole Foods Market Inc., a chain of organic foods stores based in Austin, Texas. Although Wakefern owns and runs its own fleet of vehicles, it uses Lily to move goods to and from remote locations across the Northeast. ÂLily has a niche here that is difficult for us to provide,Â says Charles Amorosi, WakefernÂs director of transportation and traffic.
Lily could add new vehicles here or acquire another company. Mavromatis says a deal may be finalized in the next 60 to 90 days. Last July, Lily acquired APA Truck Leasing of North Bergen for an undisclosed price, adding a couple hundred trucks to its fleet.
ÂUnless we make a strategic acquisition, our growth will not be as good this yearÂ as last, Simourian says. Acquisitions both increase the firmÂs fleet size and bring in multiyear contracts; Simourian says most LilyÂs contracts are for five or more years.
Lily began its New Jersey operations in 1984 with the purchase of Champion Truck Leasing in Newark, a 300-vehicle operation. Lily now has about 200 employees in the state; Mavromatis expects that number to grow as his business expands.
He and Simourian are generally bullish about business prospects in the state. They point to its central location in the Boston-Washington corridor and an increasing trend among companies to outsource their distribution requirements.
LilyÂs track record helped it win the $50 million financing line from Textron, with whom it has had a relationship for nearly two years. Russ Brant, president of Textron FinancialÂs business-credit division praises Lily for its Âhigh-caliber management teamÂ and market reputation. That is why his company is Âexcited to support the companyÂs organic and acquisitive growth initiatives,Â Brant says.
However, Amorosi sees Âmore problems than anything elseÂ as he surveys the prospects for truckers in the state. He worries about Âthe impending possibility that our state may make our toll roads private.Â
In that case, Âthe prospect of increased tolls and decreased service will no longer be in the hands of the government, but in the hands of private companies,Â says Amorosi, who is president of the New Jersey Motor Truck Association in East Brunswick. ÂWhat leverage do we have any more in the trucking industry?Â The sale or lease of the toll roads would be the Âwrong thing to do to truckers and the motoring people,Â he adds.
Lily executives have worries of their own. Simourian says New JerseyÂs fiscal problems make it Âmore than likelyÂ that the state will raise taxes, and Mavromatis calls the condition of many Garden State roadways Âabsolutely deplorableÂ and says Âthey add to our cost.Â
Nonetheless, the folks at Lily are upbeat about their prospects here this year and next. Says Simourian: ÂNormally, in a presidential election year, the economy is strong.Â
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