The reinvention of NAV

BRICK, N.J.--North American Video is known for its surveillance installations in the gaming industry. By one estimate, it owns 80 percent of that market. And for 14 years the company has been profitable in growing to $80 million in annual revenues.

Despite that success, however, the company, led by president Cynthia Freschi, last year brought in investors to help spur growth. The Halifax Group contributed not only capital, but experienced executives as well, including new NAV board chairman David Dupree, a former managing director and partner at the Carlyle Group, and new CEO Jason Oakley, who has a background with Ingersoll Rand and in the financial sector.

Now, a year in, Oakley said the company has made great progress toward its goals of diversifying its verticals and product lines, just as the future looks bleak for the gaming industry. In Globalysis' 2009 Casino Executive Outlook Survey, 52 percent of polled executives foresaw a “very poor” or “poor” performance for gaming in 2009.

“What people don't know about us is that we've got a significant footprint in education, in transportation, in commercial,” said Oakley, “and we made a significant investment in our Business Process Solutions team in August, bringing in five great guys from Ingersoll Rand.” Because of that team, he said, the company's pipeline has gone from 97 percent gaming 12 months ago to more than 30 percent from other vertical markets.

Further, while 12 months ago as much as 93 percent of that pipeline was for video installation, now as much as 20 percent of the pipeline is in access control installation and other non-video technologies.

Finally, Oakley said an increased emphasis on service will help the company grow in the near and long term. “We're finding this economy is really helping us,” Oakley claimed, as CFOs are demanding every piece of a company be reexamined, including service contracts. “As a large independent we feel we can outperform the local players and be extremely competitive against the large nationals,” he said. “We're going to build our business around customer service ... We may not win every job, but we won't lose any customers.”

That win on customer service, however, is dependent on having the right people in place, and NAV is on an ambitious hunt to attract the top talent, Oakley said. “Attracting talent is my number one job,” he said. “It's how I'll get measured as a CEO; it's how we'll measure our business.” The company has also installed a compensation plan for the sales staff that rewards service contracts, giving a finder's fee for the contract and an ongoing piece of the  contract for the sales person, in perpetuity.

As for acquisitions, Oakley said he had already looked at 30 potential deals, and turned them all down. “The trick is to find businesses that are valuable because the enterprise has value, rather than the founder having value,” he said. However, he was in active negotiations with two integrators in early March. Acquisitions will come: “They'll be selective, and they'll be in places where I can get a geographical headstart or a vertical headstart.” And he said they'll be integrators with service revenue in the “high teens ... But you have to be a little careful with recurring revenue. You need to insert the word 'profitable.'”

With in-house engineering expertise, an in-house commissioning and design program that cuts down on installation costs, and a dedicated investor team looking at a seven-to-10-year plan, Oakley likes his positioning.

“We grew the business 10 percent last year,” he said, “and we're forecasting that we'll grow in some shape or form this year ... We have $80 million in business, but, really, we have no market share. You can look a sales person in the eye and say, 'Go get me some.'”