Companion Systems does quick turnaround
Firm now profitable after 3 years of hard work
But the company did have a few things going for it: a committed core of 120 employees, a marketable product, a new chief executive and a plan.
Founded by brothers Ralph and Dennis Merrill, Companion Systems makes enclosures, toppers and other accessories for automated teller machines. The business started with one prototype, built in Ralph Merrill's garage, and by the late 1990s served clients nationwide. The Merrills sold the business in 1996 to a venture capital (VC) firm, which had a five-year plan for the business.
"For a number of reasons, their strategic plans didn't work," said Companion CEO Al Tiley. "They ended up burying the business in $24 million in debt, where before we were debt-free."
In order to save the business, Tiley said the VC firm asked him to step in and buy the company. He did, buying all the outstanding stock of the business and all the debt.
That was late 2002. It seemed impossible, turning around a company that was up to its eyes in red ink, with no cash coming in and an entire sales staff that resigned. But that's not what Tiley talks most about. What he talks about are the employees, the product and the plan.
And through the whole turnaround process, Tiley said proudly, "We didn't lose a single person."
Companion worked with the bank to forgive a portion of its debt. Suppliers stepped in and extended credit to make sure products kept coming off the line. And with jaw-clenched determination, the company began its recovery
"Progressively, we built our way back out," Tiley said. "Our sales for the last two years are up about 38 percent between both years. The business is profitable again."
Seven months into fiscal 2005, the company has surpassed results for all of fiscal 2004, said Companion spokesman Trent Howell.
Last year, the Davis County Chamber of Commerce named Companion Systems its business of the year. The company won the same recognition from the Utah State Chamber of Commerce later in the year.
"More than anything else, Companion just encompasses the entrepreneurial spirit," said Chris Dallin, Davis Chamber president. "It's what America is all about — there comes a time when you jump over the edge, or you don't, and it takes so much intestinal fortitude to make that decision to jump. They did it, and they did it incredibly well."
You can be the first to comment on this story.