On a recent plant tour at Clearwater airplane instruments maker Aerosonic Corp., I stopped by the calibration workstation of employee Brenda Stonom. I asked her how things were looking.
"Things are looking better," she said with a grin and a hand hug. She started at the company 54 years ago. Now that's perspective.
It's the same sentiment, minus the hug, echoed by the top managers at Aerosonic. It's a firm, to be frank, that's been swimming against an economic tide, bad luck and woes of its own making for decades.
Can this small manufacturer with 208 employees and a slim market value of less than $12 million compete with the big boys of the aerospace and defense industries?
Can a business whose history is peppered with a series of executives accused of fraud and funny accounting prove it's now back on track?
And can a company that suffered a devastating fire and loss of critical equipment just two years ago rise from its own ashes and finally begin to grow?
The odds suggest no way. By late 2008, amid Wall Street's implosion, Aerosonic's stock cliff-dived to 49 cents a share. It traded Friday around $3 a share, much improved but a far cry from its $27.50 price in May 2002.
But now there's a newly assembled management team and a renewed sense of confidence at 57-year-old Aerosonic, led by CEO Doug Hillman. The softspoken engineer, 54, was recruited in early 2008 to try his hand at raising the performance bar.
For starters, the company announced record earnings in its 2010 fiscal year, after losses in both 2009 and 2008.
"When I looked at Aerosonic a few years ago" — wait for it, it's Hillman's signature line — "I saw a jewel in the rough."
Why do we care about some tiny business tucked inside a nondescript building, a warren of windowless manufacturing and testing rooms, north of Drew Street near the Clearwater Airpark? Three reasons:
• Because Aerosonic is a regional rarity. It's a homegrown manufacturer based on high-tech engineering and a core of experienced employees, who must do a lot of manual tinkering to make sensitive flight data instruments meet stringent military and commercial aviation standards.
• Because the Tampa Bay metro area is full of companies like Aerosonic, small businesses that quietly scrap for market share away from the limelight of downtown corporate hubs and professional public relations machines.
• Most of all, because Aerosonic has been given a fresh chance with new leaders and attitude.
There just might be a comeback tale in the making here.
Tampa's Don Russell, 58, senses the positive vibes. The investor owns 3 percent of Aerosonic and serves on its board. He was optimistic last week after the company's annual meeting, even as he acknowledged the hard work ahead.
Anybody who spends time with engineers and visiting manufacturing businesses hears the same talk about striving for "world class" operational status, "zero defects" and improving "on-time delivery." It's a common language of performance at places like St. Petersburg electronics maker Jabil Circuit or the Tampa operations of Sypris Solutions. It was a favorite topic at the Largo plant of Paradyne, since acquired but once a global leader in designing modems for high-speed Internet access.
Aerosonic, for example, in the past year improved its on-time delivery (delivering orders to customers on time and with no defects) from 40 percent to 70 percent. That's a dramatic improvement, but still a far cry from the tough standards of the best-disciplined manufacturers.
Hillman knows this. But it's a start.
"Our goal is to be north of 90 percent this year," he says, then shoot for 99 percent. Anything over 98 percent is "world class" in the manufacturing world.
There's a lot of bad karma Aerosonic must cast away. Some of its past top executives — including founder Herb Frank, David Goldman and Mervyn Nabors — over the years have faced various allegations of fraud, misappropriation, tax evasion, stock misrepresentation or dubious accounting practices.
In August 2008, a suspicious fire gutted one of Aerosonic's buildings on N Hercules Avenue, destroying some critical equipment. Remember the date. It was also the start of the Wall Street meltdown that, along with the fire damage to Aerosonic, pushed the small company's stock well under $1 a share.
Hillman says big customers like Lockheed and Boeing last year called him often, pulling for Aerosonic to come back after the fire. The Clearwater company makes certain products no one else does, so even the big aerospace companies were concerned, partly for selfish reasons, about Aerosonic's welfare.
This year, the big companies no longer call. That's a good thing.
The rebound, though slow, came with a $200,000 boost in earnings from an insurance payout from the 2008 fire. Another plus, says company chief financial officer Kevin Purcell, was ending an inflexible banking relationship with Wachovia in favor of much more borrowing power provided by M&I Bank.
It's a reminder of how good ties to a bank can be so critical, especially in such lean credit times as these.
Hillman received $357,163 in compensation in the past fiscal year and owns about 80,000 shares in Aerosonic. Naturally, he's as eager as anyone to see the company strengthen and grow. It will simply take some time.
Given Aerosonic's modest resources, any strategy to expand — like polishing a jewel in the rough — requires care.
Contact Robert Trigaux at firstname.lastname@example.org.