How we pick the Fastest-Growing
To qualify, a company must be incorporated in the U.S.; have a minimum market capitalization of $250 million on June 30, 2008; have a stock price of at least $5; have been trading continuously since June 30, 2005; have revenue and net income for the four quarters ended on or before June 30, 2008, of at least $50 million and $10 million, respectively; and have posted a compound annual growth in revenue and earnings per share of at least 25% annually over the three years ended on or before June 30, 2008.

All companies that meet those criteria are ranked by their revenue growth rate, their EPS growth rate, and their three-year annualized total return to investors for the period ended June 30, 2008. The overall rank is based on the sum of the three ranks. Once the 100 companies are identified, they are reranked within the 100, using the three equally weighted variables. If there is a scoring tie, the company with the larger four-quarter revenue receives the higher rank.

To compute the revenue and EPS growth rates, Fortune uses a trailing four quarters log linear least square regression fit. Excluded from the list are foreign companies, real estate investment trusts, and limited partnerships. Also excluded are companies that lost money in the quarter or four quarters ended on or before June 30. In addition, Fortune excludes companies that have announced intentions to restate previous reported financial data, if the errors appear to have a significant impact.

From the Sept. 29th, 2008 issue

Allis-Chalmers Energy 124%
Arena Resources 117%
Nutrisystem 110%
Sigma Designs 294%
Sepracor 228%
Hornbeck Offshore Services 214%
Arena Resources 107%
T-3 Energy Services 101%
Steel Dynamics 84%