Ha-Lo Industries Is Heralding Its Performance

NILES, Ill. — When Ha-Lo Industries Inc. President and Chief Executive Lou Weisbach hands out a business card, it comes enclosed in a larger card imprinted with a graph of his company’s nearly fivefold 1995 stock price increase.

Open the card, and a hidden computer chip triggers the sound of a heralding trumpet.

“If I give something like that, people are going to remember me, and the same thing is true for our customers,” Weisbach said.

Taking advantage of computer chip technology is one small way the Niles, Illinois-based company is making an impression in the highly fragmented, $8-billion specialty advertising industry. Ha-Lo creates the logo-emblazoned hats, T-shirts, calendars, pens, mugs and other gizmos that its clients give away to promote themselves to customers and employees.

Ha-Lo, with 1995 sales of $172.9 million, already is the industry’s largest and only publicly traded company. Several analysts forecast long-term growth rates in the 30% to 35% range, estimates that coincide with Weisbach’s predictions.

“There’s a world of opportunity for these guys,” said Greg Cappeli, an equity analyst with the Chicago Corp. “They’re very well run, they make good acquisitions, they have good relations with the companies they work with, and they’ve produced quarter after quarter.”

Ha-Lo’s third-quarter profit from operations was $2.68 million, or 19 cents a share, a 58% increase from net income of $1.69 million, or 16 cents a share, a year ago. After a 7 cent a share charge related to a September acquisition, net income was $1.68 million. Third-quarter sales of $65.1 million were up 12% from a year earlier.

Ha-Lo has made 10 acquisitions since 1993 that have added more than $100 million in revenue, and Weisbach said they will come faster in the future.

“In our particular industry and in our position, there’s a certain momentum that builds, and the momentum creates more and more opportunities at a faster clip,” Weisbach said.

The company has 2,300 employees in more than a dozen U.S. cities, plus a contracted sales force of 700. It will open its first New York office in January.

Weisbach said Ha-Lo plans a full-force international expansion by acquiring advertising specialty companies in Europe, particularly in Italy, France, Germany and Belgium.

In the U.S., Ha-Lo is focusing on acquiring other specialty advertising companies but also wants to buy a large sales-promotion agency, which helps consumer products companies boost sales.