Itronix Forging Ahead With Revenue Growth, New Product

THE SPOKANE-based maker of laptop computers has had a banner year after rebounding from layoffs and sluggish business.

SPOKANE - Itronix, the Spokane maker of rugged laptop computers, is closing in on a banner year.

CEO David Dayton, who was hired seven months ago, said Itronix will break the $100 million revenue mark when its fiscal year ends in March. The previous high for Itronix was fiscal year '97, when revenue totaled about $80 million.

Yesterday, Itronix released a new product - a small Windows CE-based computer the company hopes will take it into new markets.

During its seven-year history in Spokane, Itronix has often been confused by name and similarity with Itron - the manufacturer of meter-reading equipment. In fact, Itronix was spun out of Itron in 1992. Prior to that, both companies were Washington Water Power subsidiaries.

While keeping the company name, Dayton said one of his goals is to build a local image for Itronix.

Dayton also wants to take Itronix public in the next few years and raise total revenue to the $200 million level within four years.

Those plans are a marked change from what Itronix faced a year ago.

In April, the company had to lay off 40 of 390 employees after revenues fell, said Dayton. Now, Itronix's work force has grown to 450, including 120 temporary workers.

Dayton says of the rebound, "Our business is very big-deal driven," and a few deals were finalized as he joined the company.

Steve Gevurtz, the former Itronix CEO who left in June, adds, "It's a combination of the right efforts coming together at the right time."

Gevurtz now does consulting, including some work for Itronix.

One of Itronix's recent large deals is with Bell South. Itronix said last week that Atlanta-based Bell South will buy 15,000 of its laptop computers for its field technicians.

Gloria Perkins, director of installation and maintenance for Bell South, said the Itronix laptop was picked for its leading technologies, rugged design and wireless capabilities.

Perkins said numerous other vendors were considered, but Itronix distinguished itself during tests.

Both Itronix and Bell South said the purchase is one of the largest deployments of mobile computing technology.

The Itronix laptop, which comes with a wireless modem and a 200 megahertz Pentium processor, is mainly used by companies with large field-technician forces, such as Sears, in addition to telephone and utility companies. Other clients include Boeing and Caterpillar.

Itronix markets the product as a tough and efficient device - protected by a magnesium case - capable of being dropped and rained on, and it still works.

The laptop product costs about $5,000 and is assembled at a 41,500-square-foot facility at Liberty Lake. Administrative offices are in Spokane.

Yesterday's product release was the company's first since the rugged laptop PC four years ago.

Dubbed the T5200, the hand-held computer is a miniature version of the laptop. It, too, is targeted at field-service workers who transmit data to and from a home office.

The T5200 runs on the Microsoft Windows CE operating system (a pared-down version of Windows 98) and comes with a wireless modem and a 73.7 megahertz processor.

Dayton said the device is being tested by five customers and will be assembled in Taiwan.

Farming out assembly work to Taiwan is new for Itronix. Dayton said the company will save money as well as capacity at Liberty Lake.

"This is a product that allows us to access another base of customers," said Dayton.

For instance, cost-conscious laptop customers might find the new hand-held device more appealing because it costs about $2,000, said Dayton.

What's more, the product is something of a breakthrough for the hand-held-computing industry. Dayton noted that no other small device running Windows CE is designed to work like the T5200.

Itronix, a subsidiary of Burlington, Mass.-based Dynatech since 1997, competes against Panasonic, said Dayton.

A handful of smaller companies also occupy the specialized market.

Dayton said that Itronix is now No. 2 in the rugged laptop computer market, behind Panasonic, which sells its well-known "Toughbook" for less than Itronix sells its laptop.

Dayton, 54, spent 22 years in several management positions at Hewlett-Packard.

He said one reason he was recruited by Dynatech for the Itronix job is for his experience taking smaller companies public - something he hopes to do with Itronix.

"We'd like to be a public company for two reasons," said Dayton. "One, it gives us access to capital. And second, having the stamp of approval from the marketplace by being a public company is significant."

In addition to the goal of becoming a public company, Dayton is also considering acquisitions, although no deals are near.

"I'm looking for other methods of providing growth to the company," he said.