Lyndon Faulkner is an engineer by training, but the exuberance he brought to the rugby fields of Wales as a youth is clearly in evidence as the company's president and CEO describes business at Pelican Products Inc. "We are going through a period of unprecedented growth," he proclaims, noting that sales are approaching $400 million annually.
Pelican Products' recent growth spurt began in 2004, when private equity investment firm Behrman Capital purchased the Los Angeles-based manufacturer of protective cases and lighting products for $200 million. In August 2006, Behrman Capital brought in Faulkner, who had served as general manager of Microsoft's Americas Operations Group and launched the Xbox, to run the company.
In January 2009, Pelican Products announced the acquisition of rival Hardigg Industries, a manufacturer of roto-molded protective cases. "We were seeing the need to bring out bigger cases for our customer base," says Faulkner in explaining the move. "Hardigg already had a portfolio of 900 sizes that would complement our product lines and meet the needs of our marketplace. It was really a question of buy versus build."
The management teams of both companies had grown their companies organically and had virtually no experience with taking on a major acquisition. Faulkner recalls worrying that employees would not buy into his vision of increased scale and sophistication for the combined entity. Instead, he says, "My biggest challenge was holding the reins on everybody because everybody was wanting to do things and do things bigger."
Faulkner relished the enthusiasm but he insisted on the development of a comprehensive plan for the integration of the firms that encompassed 64 major projects. The plan helped bring together separate programs, such as in marketing and advertising, and align Hardigg's focus on the United States with Pelican's move into international markets. "We executed flawlessly on all 64 projects," says Faulkner, crediting the "can-do attitude" of both workforces for making the merger work.
|Pelican's remote area lighting systems are the company's fastest-growing product line.|
Changing the Equation
Pelican cases often are used in situations where wooden cases have traditionally been used to ship and protect products. Many times, says Faulkner, wooden cases are chosen because they are much cheaper to purchase than a Pelican case. But he argues that the Pelican cases, because they can be reused many times, offer both environmental and long-term pricing advantages. "That wooden case is thrown in the landfill every other shipment. Pelican's case is always reused," he says. "That Pelican case on a per-shipment basis can be as low as pennies.
While Pelican has long focused on an active new product pipeline, Faulkner says past practice was to develop products and then try to sell them to as many markets as possible. Now, he says, the company is targeting products to more specific applications. For example, the company is launching a series of cases for the transportation and logistics markets that allow small and large cases to interlock. As a result, the cases can stack without the danger of them falling off and having the products inside damaged.
Pelican's fastest-growing product line is its remote area lighting systems. Rather than run off a generator, which can pose a danger in certain hazardous areas, Pelican's line offers self-contained lighting systems using LEDs and running on nickel-metal hydride batteries. The company's 9440 RALS, for example, has 10 LEDs that can shine 1,200 lumens for up to six hours. The unit sets up in seconds, weighs 16 pounds and has a telescoping light tower that extends more than 7 feet. Faulkner says the company's lighting business also will benefit from stringent new safety standards for lighting products used in hazardous conditions and from the transition in the market to LED lights.
| Lyndon Faulkner: |
"We executed flawlessly on all 64 projects."
While Faulkner says Pelican has seen strong demand for its products in the United States, the company is seeking to expand internationally. It currently serves more than 20 countries, and international sales account for about 30% of the company's revenue. Pelican manufactures products in three facilities in the United States and one in Germany. The German factory provides products for the European market. Pelican's U.S. plants serve other markets, including China. Faulkner says Pelican can continue manufacturing products in the United States because it has highly automated and efficient manufacturing operations. "The real challenge comes around logistics. When you have large orders for a lot of electronic devices in Japan that are going to be shipped around the world, moving those products to Japan in a cost-effective way presents a lot of challenges," he notes.
Faulkner points out that Pelican products frequently are used in demanding environments such as firefighting and, accordingly, are built to stringent standards. "The great news is there is a thirst for our products in China. The first responder or firefighter in China demands equally professional products as the firefighter in the U.S."