Sometimes it takes dramatic moments to inspire change. For EF Precision Group, a manufacturer based out of the Philadelphia area, that moment arrived when 85% of its business was summarily shipped overseas.

It’s a familiar storyline: a mom and pop machine shop is nurtured into a full-fledged moneymaker, only to watch its largest customer fly the coupe, leaving its dwindling revenues in the wake.

But EF, which consists of two companies, EF Precision and EF Precision Assembly, defies this common manufacturing tale of woe because over the last 10 years, it has not only revitalized its business, but has forged a path into advanced new industries, producing parts used in fighter jets and racing bikes, while assembling machinery used in supermarkets and dentist offices.

Between 2005 and 2008, EF grew 57% and expects to see its revenue top $20 million in 2010, with customers ranging from Johnson & Johnson, to Lockheed Martin and Northrop Grumman. But that growth comes following several near-death experiences.

EF Precision’s vice president tandem of Bud Tyler and Bill Penecale helped oversee the company’s transition into a diverse advanced manufacturer. Today, EF Precision makes parts for the aerospace, defense and medical industries. Photo Courtesy EF Precision

Since 1977, the company had primarily been a machine shop and assembler. Over the years, it had taken on more and more business in the semiconductor industry. But in 1997 when its largest customer, Kulicke & Soffa Industries (K&S), gave notice that its production was headed overseas, EF saw its revenues drop from over $42 million to just $12 million within three years.

Part of the problem, says Bud Tyler, EF’s vice president for new business development, was how EF identified itself.

“Our company had become not a sales-driven company, but a manufacturing company,” says Tyler, who runs EF Precision Group with Bill Pennecale, vice president of operations. “We actually took [K&S’s] product as if it were our own and manufactured it. It left us vulnerable. And we needed to regroup and diversify into other industries.”

So began a six-year odyssey to steer the company into a more balanced, resilient structure. The first step, says Tyler, was using the group’s primary strengths – precision and quality manufacturing, along with advanced assembly – to lure more business from existing customers, while expanding its broader appeal.

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