By Eric Peterson / CompanyWeek | Jun 06, 2016
The father-son team of Jerry and Toby Graham launched the company in 2008.
Jerry, a Wray-area farmer, and Toby, an electrical engineer who specialized in Indy cars, developed technology that brought a new level of precision to planting row crops like corn, sorghum, and soybeans.
Toby tragically passed away from a brain aneurysm in early 2015, and Marty took over as CEO after working in athletic apparel and management consulting. He telecommutes from Florida and travels to Colorado every month.
Tractors have long been the energy source for the planters they tow across cropland. "Most planters are run by chain drive," says Marty, likening it to a bicycle. "That same principle is how most planters work in the industry."
It's time-tested and effective but leaves something to be desired in the precision department. "That works fine but can't do any variable-rate planting," he says.
Graham Electric Planters allow farmers to save seed and avoid over-planting by precisely controlling each of the planter's rows -- typically numbering 16 -- individually, rather than as one single unit. "Each individual row becomes its own planter," says Marty. "The old method doesn't allow that."
As with all precision-agriculture technology, the end result "minimizes costs and maximizes revenue," he adds. "It allows better and more precise planting and maximizes the population of the plants."
Graham's patent-pending planters use brushless electric motors and GPS-enabled control systems operated wirelessly via an in-cab tablet. The company developed the software behind the system and designs and manufactures the circuit boards.
But Marty says farmers with old planters don't have to start from scratch: "We retrofit old planters with this technology." Considering a new planter is $200,000 and a Graham system is typically $15,000 to $20,000, he adds, "It's a very good value proposition."
And bringing a tech upgrade to a staid industry is just good business. "From a gross margin perspective, we're around 54 to 58 percent," he says. "Electronics always have a pretty high margin."
The company sells direct to farmers and through a dealer network in the U.S. as well as Mexico, Ukraine, Argentina, Canada, and other countries. More than 90 percent of sales were domestic in 2015, Marty says, but the 2016 forecast looks more like an even split.
Now big OEMs in ag are integrating Graham's technology into their products. "Just this year we started doing contract manufacturing with larger companies," says Marty. "Instead of putting our logo on it, we're putting their logo on it. It's good for us."
Challenges: Toby's death was a huge setback for the company. "That was a real kick in the stomach from a family and business perspective," says Marty. Sales dropped by more than 50 percent in 2015, but the company has rebounded. Marty projects to more than double 2014 revenue in 2018. "For the last year, I've been working on building new distribution channels," he says. "They're starting to blossom."
Opportunities: Marty sees potential for international sales growth and the company's burgeoning business supplying OEMs.
He also highlights a new downforce product that helps keep the planters level with the ground, which is especially tricky on rocky soil. The task is typically accomplished with hydraulics, but the Graham solution will use wireless solenoids. "That'll be a supplemental product that adds $1,000 to $1,200 of revenue per row," Marty says. "You get a big pop of incremental income on the same sale."
Needs: After launching the company with family money and SBA loans, Graham Electric Planter needs capital, most of all to support international growth. "The guys we're picking up internationally, we work with distributors who work with manufacturers," says Marty. "You start getting these bigger bulk orders." That's particularly difficult because the company is "still more or less a startup," he adds. "You don't want to go out on the equity market and give away a bunch of equity."