Henry Bros. completes turnaround in 2008
FAIR LAWN, N.J.--Despite an economic situation some are starting to call a depression, Henry Bros. Electronics reported rosy numbers for 2008 in early March, and predicted continued growth for 2009. After a 2007 in which the company lost just over $300,000 on $57.9 million in revenue, Henry Bros. turned things around in 2008, posting $1.5 million in net income and increasing revenue by nearly eight percent to $62.4 million.
CEO Jim Henry attributed the success to a change in strategy after a poor 2006, whereby the company focused on “strategic placement of key personnel and systems in high-growth regions across the country.” For example, the company recently opened new offices in Grand Junction, Colo., and Houston, in order to capitalize on a growing petrochemical business. In fact, the company has “doubled our sales force in every region we operate in,” Henry said.
Further, he said, Henry Bros. will continue to invest for growth. “Our management team made a conscious decision not to just sit by and wait for the fallout” of the poor economy, Henry said. “We’re looking to aggressively increase our market share.” While this economy is “unlike anything we’ve ever experienced,” he continued, “we know that events such as these tend to reduce the size of the marketplace and we’re confident we’ll emerge a stronger company.”
For 2009, John Hopkins, the company’s CFO, predicted growth of six percent, to roughly $80 million. That, of course, assumes Henry Bros. won’t acquire in 2009, which Henry said was a possibility. Noting that the company had recently amended a credit facility with TD BankNorth, increasing capacity from $4 million to $8 million, he said Henry Bros. might seek additional funding in 2009 “to fund acquisitions,” which may be targeted in Philadelphia and Northern California.
Some of the company’s success can also be attributed to the recent wins of large jobs, such as the Tactical Video Capture System, which Henry Bros. is working on with L3 Communications. The company has taken in $2.6 million from the job already, and it’s possible they’ve only completed three percent of the total job, depending on how future bids turn out. This allows Henry Bros. to be more selective in the jobs they bid on, which is important for keeping operating margins high, said Hopkins. “We’ve seen increased margin pressure in New York,” Hopkins said by way of example, but “we don’t feel it’s a good long-term strategy to bid jobs at cost.”
Henry said an emphasis on service as a product has also helped margins, things like consulting jobs that take advantage of the convergence with IT systems. And management has simply made the company more efficient, putting “systems in place that can catch things before they go south,” he said.