Industry: Contract Manufacturing
Products: Precision sheet metal and machining services
Founder and CEO Mark Allen is guiding his sheet-metal fabrication shop into new industries with a focus on custom capabilities and value-added services.
"I've been doing sheet metal work since I got out of high school," says Allen.
After graduating from Lincoln High in Denver, he worked by day for Young Electric and studied business by night at Arapahoe Community College
He worked in the industry for 20 years before founding Precision Metal Manufacturing in the late 1990s. "The foundation was there," says Allen. "I'd worked my way up in the industry -- working on the floor to engineering, sales manager, and general manager."
Allen started the company with a corporate partner in Iowa-based Ag Leader Technology, a manufacturer of yield and moisture monitors. Ag Leader was also a customer, and, while Allen bought out the partnership in 1999, the company remains a Precision client. "We're still building their products for them today," says Allen.
Over the years, Precision has expanded into value-added services, including machining, welding, and assembly, and spun off Lakewood-based Pro-Tech Powder Coating in 2004. Allen remains the majority owner.
The company continues to manufacture precision sheet metal products for industrial machines as well as the aerospace, telecom, and medical industries. Colorado-based clients include Terumo BCT and Epilog Laser.
Growth has been "slow and steady over the years," Allen reports. "We like the slow and steady growth. Ten to 15 percent, I'm pretty happy with that. If we hit 30 percent, I get a little nervous."
He adds, "We've always self-capitalized. We're pretty good planners."
Case in point: Precision bought its 73,000-square-foot facility on six acres in Northglenn in 2009 and built out a quality lab the following year. "That wouldn't have been possible without the downturn," says Allen. "I could see us growing into this facility. It's paid off."
While the company suffered through a 30 percent dip in sales in the wake of the 2008 financial crisis, Allen's conservative strategy meant he had money to invest. "It always turns," he says. "I knew that. It's catching that cycle."
He says the ongoing economic uptick allowed Precision "to get entrenched in aerospace" after the company attained its ISO 9100 certification in 2010.
The company has diversified into new industries by taking a number of similar leaps of faith over the years. "We'll take on work that's out of our wheelhouse," says Allen, highlighting a mounting plate for a laser engraver that was made of Mic 6 aluminum. After the client suggested a move to honeycombed materials, Precision engineered a solution by vacuum-bagging the honeycomb between two stainless steel plates.
Another project involved a warp-resistant cabinet for a telecom client that exceeded expectations. After the drop test, "The cabinet worked just fine, but it broke the equipment inside," says Allen. "We were pretty pleased with that."
Challenges: "Labor," says Allen. "As we automate, that leads into that. These machines don't call in sick or take vacations." He says that the skill set doesn't transfer from HVAC to fabrication for aerospace and other specialized clients. "It's really not that similar at all," says Allen.
Precision currently runs two shifts on weekdays, so the company can expand "within its walls" without building out more space on its property, he adds.
Opportunities: Allen highlights "growth within our current customer base" as Precision's top potential driver of growth, and specifically cites aerospace, telecom, and architectural lighting.
"Our campaign has been for the last few years to build the aerospace side of our business," says Allen. "We're actively looking for new opportunities there." He says the focus is on "the Boeings of the world," not one-off satellites.
"We see a lot of opportunity in the DoD," he adds. "We were awarded the prototypes on a contract that was coming up that will last three to five years."
The recently passed federal tax bill "is huge for us," Allen notes. "It's a big help when we get a reduction in taxes so we can reinvest in the company. . . . The future looks bright."
Needs: "Keeping up to date on high-tech machines has been big for us," says Allen. Automation has been an emphasis, says Allen, but "not to eliminate jobs -- we're low-volume, high-mix." He points to automated loaders from AMADA and robotic welding systems from Miller as investments to date.
"We've put a lot of money into our machining division in the last two years," says Allen. Precision has a number of vertical mills as well as a Mazak horizontal mill. "Moving forward, we're going to focus on equipment for our precision sheet metal division." On the shopping list: automated tool changers and press brakes.