By Eric Peterson | Jul 13, 2020
Laser cutting, welding, and bending
"The company started as one of the very first laser shops in the state," says Petersen.
His father, Mark, became an employee of the company as a laser operator soon thereafter, in late 1992. "I grew up working in the shop," says Petersen, who was 11 when Critical Laser opened its doors. "It's kind of the only gig I ever had."
After his father bought it from the original owners with two other employees in 2006, Petersen detoured from a degree in criminal justice, came back to the family business, and bought out the other owners in 2009.
At the time, gross revenue was $860,000 and Critical Laser was in need of a big sales boost. Because industrial lasers can cost in excess of $1 million, the math simply didn't pencil out. "Equipment's expensive," he adds. "You're looking at bringing on a debt bigger than what your topline revenue is just to compete in the market."
By cutting costs and paying down debt, the Petersens were able to catalyze Critical Laser's comeback. "The big push was just understanding our numbers: knowing what we really needed to make as a dollar-per-hour shop rate," says Petersen. "Job shops like us can't work an eight-hour day or a 10-hour day and be done. We always are running two shifts. Right now, we're running almost three full shifts."
It means the math does pencil out. Critical Laser's annual revenue hit about $2 million in 2019, and Petersen forecasts the company will be able to double again in the near future.
In 2018, the company invested in a 10-kilowatt Bystronic ByStar fiber laser, its first move from the legacy CO2 technology. "The new fiber lasers have really changed the landscape," says Petersen.
The new laser can complete some typical jobs in about a quarter of the time. "It's a race car," touts Petersen. "It is the most powerful laser in the state of Utah. It really took off for us."
The company then doubled down on its strategy, he adds. "We kept the same attitude: We're going to keep running a night shift, stay as lean as we can, and try hard to stay ahead of the technology curve when it comes to manufacturing and laser cutting parts."
But the 10,000-watt system will soon be eclipsed: A 12-kilowatt fiber laser is coming online in July 2020, replacing a 3,500-watt legacy laser. The 6.5-foot-by-13.5-foot cutting table will allow the shop to take on more architectural, mining, and metal fabrication projects and thicker metals. "It's going to double our capacity," says Petersen. "It's the largest laser cutting table in the Intermountain region."
With the increased capacity, the company focused on outreach to manufacturers not only in Utah, but in neighboring states as well. Critical Laser now serves customers in industries "all over the board," says Petersen, including oil and gas, construction, aftermarket automotive, and consumer products.
While the minimum job is typically $500, Critical Laser is equipped for high-volume work and orders of up to 200,000 units a year. "We're looking for big production runs, because that's where our equipment shines," he adds.
Laser cutting often competes with cheaper stamping, and fiber lasers make for a faster, less expensive process. "We can cut it about as fast as you can stamp it," says Petersen. "Where we really take off, it's pretty hard to stamp quarter-inch or half-inch steel. . . . Your other option would be to have it waterjet-cut, but waterjets are super slow."
Critical Laser also offers bending by way of a 175-ton press brake, hardware insertion, and welding, as well as powder coating through a partner, but the company's laser focus won't change anytime soon. "As far as branching out into other services, we really believe in letting professionals be professionals," says Petersen. "Guys who already running other companies that are doing CNC milling or CNC lathes, we've got to let those guys do that. They already do a good job, they do it at a good rate for us, so we'll refer you to somebody we know, like, and trust."
Challenges: With increased inquiries from manufacturers looking for domestic vendors, managing growth is a big one. "It really is going to be a shift in our business model doing either single orders of large quantities or more likely bigger purchase orders with release dates on them for either quarterly or monthly delivery," says Petersen. "Setting up manufacturing for those guys is going to be a challenge for us."
"An over-looming challenge for us all the time is staying ahead of the technology, not getting bogged down in the old equipment and making sure we stay on the front end of what's new," he adds.
Opportunities: While oil and gas has been slow, construction work is consistent, and other sectors are growing. Direct-to-consumer brands "are booming," says Petersen. "If you're selling online, everybody's quarantined."
Reshoring. "We're seeing a significant amount of that work that we were losing overseas in '08-09 and 2010, a lot of that's coming home to the U.S.," says Petersen. "We're fielding a lot of phone calls from U.S.-based manufacturers throughout the Intermountain states saying, 'We need more reliable sources for our components. We can't buy them overseas. What's your capacity?'"
Critical Laser's lead times have increased from a week to five during the pandemic, but that's still a lot quicker than manufacturing overseas. "The big push is the reliability," he says. "Part for part, we're probably a little bit more expensive, but if you look at the opportunity to order in smaller numbers with more reliable lead times, I think we're actually a better value."
Needs: "The biggest need really is people," says Petersen, forecasting three to four hires in the short term. "We need people who want to become metal fabricators."
Along with that need, an increased focus on metal shop programs at vocational and high schools would be a big help, he adds. "We are 100 percent training everybody we hire right now."
In concert with people, the company has a need for more automation of manufacturing processing, he adds.
Critical Laser is also running out of room at its 10,000-square-foot facility in Lindon. "We need 20,000 square feet," says Petersen. "That's another need for us."