2017 Economic Impact Awards Lifetime Achievement in Business: Robert Low

Robert Low’s business story is not one of those that took the easy route, though it may look that way today. He leads a $1.6 billion trucking company with a fleet of 6,600 trucks, 12,300 trailers and 4,700 employees, as well as a casino resort on the Gulf of Mexico and a thoroughbred horse-breeding venture.

Along the way, Low’s learned from a bankruptcy – filed shortly after making his first million dollars – technological changes and head-to-head competition.

Springfield Business Journal Editorial Director Eric Olson talks with Low, 67, in his Prime Inc. office – located directly behind the reception desk for easy access to all employees. They sit in Prime purple chairs with an American Pharoah statue behind them, a replica Prime plane on Low’s desk and a crisp Wall Street Journal nearby. Excerpts follow.

Is it true this billion-dollar business started with a single dump truck?
It’s true. I’m a farm boy from Dallas County and needed a summertime job when I was going to college. I made a down payment on a dump truck.

How did you come across that dump truck and what was the idea behind it?
I probably shouldn’t have – it was pretty broken down. But you know, it was a summertime job and did all right. Went back to school in the fall and dump trucks don’t do so well in the wintertime – get shut down by weather. I had grown up around the dinner table with a lot of trucking talk. My dad was a market news reporter for the state. He reported livestock markets and had a little radio show. The folks that he was verifying the markets with were a lot of the buyers and subsequently a lot of the transporters of livestock. I heard a lot about trucking. You know, the over-the-road trucks operate year-round, pretty much, so I traded my equity in the dump truck for equity in an over-the-road truck and went from there.

Did you ever think it would amount to a billion-dollar business with thousands of employees and trucks? What were the key events to making this happen?
Lands no. I was kind of a dreamer, but I didn’t dream that big. I wake up every morning saying, “Is this bubble going to burst?” But it happened, and it’s been very rewarding.

I thought it was pretty easy at first because I was fortunate to have some success very early on. Back in the 1970s, leverage was the thing – high inflation and pay back with cheaper dollars. Interest rates spiked in 1980 and I found myself in bankruptcy. I [had] built this facility and moved to Springfield. I learned what really running a business in tough times was all about. Life lessons and business lessons, for sure – it got me grounded and the company formed some of the basic tenets that have enabled our success.

What did you learn?
We operated within the bankruptcy for four and a half years. The first three and half years was like every day waking up and not knowing for sure you’re going to make it through that day. It becomes very cash in, cash out – there’s no credit available, your vendors aren’t going to extend terms for you, so you’d better have enough money coming in to pay that day’s bills and payroll, etc. It was all about cash. You’re not really making money until you can generate real cash.

The most important lesson was about people. It’s all about having good, dedicated, smart people that are capable of that near-perfect performance – and how you get that, how you attract and retain those kinds of people.

When did you make your first million? Do you remember that moment?
I do remember it. In 1979, we made just over $1 million net profit. I was 29 years old and thought “man, this is easy.” Well, I learned very shortly that it’s not easy. That short-term profit can be erased very quickly with a change in business conditions. A lot of things did us in: We were poorly managed, poorly led, but having a lot of debt tied to the prime interest rate – 3 to 4 percent above the prime rate, floating – and growing very rapidly, so your debt was way up here and your equity base was growing nicely, but not proportionately. I learned a lot about accounting and finance.

How did the company get out of bankruptcy?
During dependency on the Chapter 11, we partnered up with some higher income individuals and had some nice investment tax credits and married them up with the driver and formed this partnership with Prime, the investor and the driver. Basically, it’s an independent contractor model, so the driver is really tied to the profitability of the truck. If you don’t make a profit, the driver is less profitable; if the truck makes a profit for the investor, the driver earns more. Eventually, Prime took the place of the outside investors, and at that time the drivers were still technically employees but on an incentive plan. Later, they became independent contractors, acquired their own trucks, [and] Prime was the investor in the trucks and leased the equipment back to the driver.

How would you describe the logistics market, right now?
It’s a cyclical market. Right now, it’s pretty good, although we’re just coming out of a freight recession. Late 2015 and ’16 were tough years for the industry.

Where does Prime sit on a national level, is it in the top 10 among over-the-road carriers?
Starting with FedEx and UPS, which are whole different categories, we’re like 16th or 17th, right in there. We have a flatbed and a tanker division, which are smaller, but in our core business, which is the transportation of products, foodstuffs and pharmaceuticals that need protective service, we’re the largest. And we’re gaining market share every day. Fortunately, we’re in a very fragmented market, so there’s a lot of market share out there.

How significant is Springfield and the location to the company’s growth?
Sounds crazy, but I think people like to do business with people from Springfield, Missouri. It’s the Heartland, with Midwestern values. It’s all good stuff.

Where do you see Prime in 10 years?
I think we’ll continue to grow. We have a great company culture that has taken on a life of its own by a depth of great talent. In our incentive-based program, they’re rewarded for their results. We really don’t do annual reviews; we review every week. Our incentive program is tied to weekly performance and very individualized. Our superstars’ performance isn’t dampened by those who aren’t as productive. It’s a very rewarding and self-perpetuating culture.

With the rise of the company the last several decades, have you received offers to buy Prime?
I’ve received offers but I haven’t considered selling it. Right now, M&A is pretty active. Once a month, once a week, someone is calling and inquiring. It’s hard to build up a network and capture the customer base, so we’re attractive. But I’m more inclined to try to buy something than to sell.

What was the last acquisition for Prime?
A company called TRL in the Scranton, Pennsylvania, area, which is now a large terminal. It’s not quite the size of Springfield’s. But it has many of the amenities. That’s part of our culture. A lot of companies say, ‘Oh, we love our employees.’ It begs the question: How are they investing to improve the quality of the work experience for their associates? Hopefully, from our facility with the gym, physician’s office, child care, physical trainers, spa and salon, we try to show that we indeed do love our associates and care very much about their happiness while they’re here.

Have you considered taking Prime public?
Oh, for about 3 or 4 minutes. But we are able to get things done quickly here. We have a great management team. With the controls and quality leadership, we have what I think are the positive attributes of a public company without some of the problems. The investor public and the analysts are pretty fickle and brutal. I would rather have our folks just be tied to our performance and not the vagaries of the stock market and fluctuations in the economy. I like the independence, and I like to be able to make a call. I’d say it’s not in the cards for us to go public.

Is employee ownership an option?
To a certain extent, it’s embedded into every associate’s compensation. It accomplishes some of the same things without the debt and legal issues we get into with an (employee stock ownership plan). In many cases, an ESOP rewards the owner with a bank loan, which is a funding mechanism for it, so you create another layer of debt. And I’m not crazy about debt at this point.

Is Prime operating debt-free?
No, we have some. We could be, but in this environment with low-interest rates, we feel it’s good business for us to have some debt. If interest rates go up, we’ll liquidate some things. As long as we can risk-adjust it and get great yield on those borrowed funds, we’ll continue that strategy.

Prime is not the only business you operate. When did you begin to diversify and what prompted that?
Getting into the casino business was a happenstance situation with a local attorney who was also a good friend. He happened across a tribe as he was involved in some other unrelated work and they wanted to build a casino and get a gaming license. So I got into the Indian game thing in South Dakota with Rosebud Sioux Tribe. That was very successful. But the contract term was fixed by law and after a few years of success, they really didn’t need me. They were making money. After I exited that venture, I thought, ‘This casino business was pretty good.’ It was just starting to become popular in some states. I looked at a property in Mississippi that was in bankruptcy and I had some experience in bankruptcy. I made a very good deal on the casino. I got quite an education in the casino business at first, too. One of the things that makes casinos work is geography and the radius you have without competition.

You build a casino across the street from another casino, you cut the first casino in half. I learned that, among other things. It’s been a lot of fun in Biloxi. [At Palace Casino Resort], we have a golf course, hotel, a true resort. It’s nonsmoking, to keep our folks healthy down there.

What other business investments have you made?
We recently did a joint venture with O’Reilly (Hospitality) and Tim O’Reilly. We’re building some hotels and hope to build some more. I’m in the construction business in partnership with Killian Construction, and have several other passive investments.

Of course, the real love of my wife’s life for sure, and mine to a large extent, are the racehorses. Right now, we have racehorses in New York, Florida and Kentucky, and we have our farm out here, with broodmares and their babies. We love seeing them grow up. It’s a very entertaining passion in our lives.

Some years back, you had one horse run in the Kentucky Derby.
Yea, Steppenwolfer.

Are there any others you can pinpoint that are on that track?
Eric, we always have hope. There’s probably one, maybe, but I don’t know which one yet. We have several 2-year-olds that are promising. We’ll see if we can get lightning to strike again.

How many horses do you have in the stables?
We have about 16 broodmares, so we have about 16 babies and 16 yearlings, a few we bought, and probably that many more at the racetracks. We’ve had a great year. We went to the sales and sold the offspring of a filly we paid a lot of money for a few years ago. Her name was Arienza. We sold the offspring for $1.1 million, which is pretty nice.

You’re building America’s fourth-largest residence on your 200-acre Primatara estate.
I’ve heard that, too. I don’t think that’s true. But it’s a big house. I’d like to say it’s a modest house, but I can’t say that without choking on it. We’re looking forward to the completion. It’s been in construction for six years, I think, and we’re not all that close. We’re kind of halfway getting a roof on it.

The wine cellar is the most important part, and it’s fantastic. The problem is I’ve got to keep it stocked.

Is there a particular element you’re most anxious for?
It has a lot of nice features, kind of like Worlds of Fun. It has a two-lane bowling alley, a shooting range, an Irish pub and a large meeting room so we can entertain folks as well as have Prime meetings there. We have large customer and driver advisory groups, so we plan to use it for business purposes too.

The number I’ve seen is 70,000 square feet.
That’s way over.

Do you want to settle it here?
I’m going to say in the 55,000 [square-foot range]. We’re talking about livable square footage; we’ve got some porches and things that perhaps people have computed and thrown in there.

Did the Pensmore property influence you at all?
Yeah, I’ve visited on a couple of occasions. They were kind enough to give us a tour. I wasn’t trying to duplicate it. It’s much different architecture. But it’s impressive.

The architecture you went with is the Federalist?
Yeah, more of a classical type.

Completion date?
Let’s say three more years.

You’re not joking.
I’m not joking. I wish I was, but nope. I’m just being realistic. Maybe that’s good, because if it was done tomorrow, I’d have to pay for it all tomorrow. This way I can stretch it out.