By Eric Peterson | May 01, 2018
Commerce City, Colorado
Commerce City, Colorado
Industry: Contract Manufacturing
Products: Honeycomb panels
Kerr boils down his company’s business model: "We take aerospace technology and find industrial uses for it.”
He sold honeycomb panels for Minnesota's Bellcomb Technologies and Denver's PanelTec before starting his namesake manufacturer. "I've been in this industry for 25 years," says Kerr. "PanelTec was closing its doors. I decided to buy all the equipment and materials and go out on my own. . . . I got a $40,000 loan to get started, paid it off the first year."
At that time, the business had six employees, "mostly family," says Kerr, and sold into four roughly equal markets: amusement park ride manufacturers; construction and development; aerospace; and transportation. In five years, the size of the staff has quadrupled as the ride business has skyrocketed to about half of the company's $3 million business.
Honeycomb aluminum is a perfect fit for dark rides that simulate motion by way of projection and special effects. "These dark rides are getting more popular because they're safe," says Kerr. "It's just wind blowing in your face and other illusions that you're going fast."
Clients include all of the major ride manufacturers that supply the household-name parks all over the world. Kerr started selling panels to Houston-based Oceaneering Entertainment Systems in the mid-1990s. "I've been working with Oceaneering for 23 of my 25 years in the industry," he says.
Kerr Panel's products are typically used for the walls and floors of the rides, and they're ideal because they don't crackle and pop and pierce the illusion as they move. "They call it 'oil canning,'" says Kerr of the noise. "Our panels don't do that, whether it's in an RV, a light rail train, or an amusement park ride."
But that's not the only benefit of honeycomb, says Kerr. "They're all fire-retardant, incredibly strong, incredibly light." Because of their core geometry that mimics a bee's handiwork, he adds, "The weight-to-strength ratio in incredible. You can park a car on it and it's not going to crush."
For centuries, people have used honeycomb structures to minimize the weight of materials without sacrificing strength. Honeycomb aluminum has been a staple of the aerospace industry for decades. Kerr Panel primarily uses aluminum, but the company also makes panels with composite and polypropylene structures, and steel and laminate skins.
The company also supplies similar infrastructure for elevators, commuter trains, and flight simulators. "We just built the wall panels for the world's largest passenger elevator in New York City," says Kerr. Each car can hold about 140 people. Because honeycomb aluminum is about one-seventh the weight of steel, that has a long-term impact on operational costs.
Kerr Panel has products in trains in Chicago, Denver, and Washington, D.C., and architects use the company's honeycomb aluminum for the underside of walls clad in decorative material.
In 2018, the company introduced peel-and-stick Ready Bond panels with adhesive backing. "The architects are loving those," says Kerr. "We're selling a ton of those. We're bonding everything from decorative materials to stone to it." For granite surfaces, it means installers can use an eighth of an inch instead of an inch.
While the company doesn't certify its panels in-house, Kerr Panel supplies such aerospace companies as Ball Aerospace, Lockheed Martin, and Boeing. The company has also supplied NASA with panels for wind tunnels and vacuum chambers.
When Airbus was looking to make molds for wings measuring eight by 26 feet, the French aircraft manufacturer "checked th Asian market, they checked the European market, they checked the Australian market, and nobody could build it," says Kerr. "We ended up making three for them."
With maximum measurements of 12 by 30 feet, the scale of the panels comes back to Kerr Panel's intellectual property -- and its equipment. "We've got one of the biggest CNC routers in the state," says Kerr. "Lockheed has the biggest one."
The panels are most often used for uses in ground support, but customers also certify them for uses in air and space. "We have a trash can lid on the International Space Station," laughs Kerr. "We have customers constantly coming up with new uses all the time."
About 75 percent of revenue comes from custom work, but the company also sells stock panels for the elevator and construction markets.
Kerr's supply chain is largely on the Front Range. "Everything is local except the honeycomb -- we get that from the East Coast," says Kerr.
After hitting about $3 million in sales in 2017, Kerr says the company is exceeding targets for 2018. "Right now, it looks like we're going to beat that this year," he says. "We've already done
$1.5 million in the first quarter."
Challenges: "Challenges are people," says Kerr. "We have such a niche industry we can't find people who have done this before. Anytime we hire a new person, we have to train them completely."
The approach is working. "We've got a great group of people," he says.
Marketing is another challenge. "We're getting our name out there and letting people know about honeycomb panels," says Kerr. "So many builders could be using these things that aren't."
Opportunities: New products. "We're looking to make some heated panels," says Kerr.
Aerospace is a potential sales driver. "It honestly appears we're being dragged that way, but I'm fighting it," says Kerr. He wants to avoid managing the requisite certifications, and may not need to get into that with the rise of commercial spaceflight. "They're learning they can certify their own panels."
Needs: While Kerr Panel doubled its square footage when it moved from Henderson to a 20,000-square-foot factory in Commerce City in May 2018, the company still needs more space. "We're trying to get another 5,000 square feet right now," says Kerr.
Power is another need that comes with the space: It's needed for another large CNC router, he says. "Right now, we want to get another router, but we don't have the power." Kerr has a strategy for the longer term. "We have a five-year lease here. After five years, we want to build our own facility."