Business

<< Previous   of   Next >> Michael O'Leary / The Herald  (click to enlarge) Patrick Byrne, president and chief executive officer of Everett-based Intermec Inc., has seen the company's sales grow by double-digit percentages since he took over last summer.   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Monday, May 12, 2008 Intermec's back with a bang New CEO Patrick Byrne's recipe for growth "is to focus and execute" and not worry about its competition in handheld computers, scanners and printers. By Eric Fetters Herald Writer EVERETT -- Intermec Inc.'s sales have topped $200 million each of the past three quarters, and it just paid off $100 million in debt. The company also has released a number of new handheld computers and printers since last fall. Following a swoon in sales during 2006 and the first half of last year, layoffs and restructuring, Intermec seems again to be firing on all cylinders. It's enough to make Patrick Byrne smile. The 47-year-old former Agilent Inc. executive took over as the Everett-based company's chief executive officer and president last July. When Byrne arrived, taking the reins from retiring CEO Larry Brady, Intermec's sales had lost momentum after undergoing an overhaul that included selling off its industrial manufacturing business and consolidating the corporate offices in Everett. Byrne said the fundamental technology in Intermec's products has long been a strength. But that technology's value is limited if it's not reaching customers, so top managers have focused more on making sure the sales and technology teams are better coordinated. "We are concentrating a lot with how we launch products," Byrne said, adding that he doesn't want that focus to draw away from the importance of Intermec's engineering innovations. "It's important we maintain that." Intermec's inventory-tracking tools, from computers to bar-code scanners, compete primarily with products made by Symbol Technologies and Zebra Technologies. Motorola purchased Symbol last year, but so far the new parent company hasn't made many changes, Byrne said. He said instead of worrying about how to react to competition and its big new parent, "the most important thing we can do is to focus and execute." So far, the bottom-line numbers seem to show better execution in recent months. In 2006, Intermec made a profit of $35 million, thanks mostly to a strong first half of the year. Last year, earnings fell more than 30 percent to just more than $24 million. But last year ended strong, with fourth-quarter revenue rising to $253 million, 16 percent higher than the year-ago period. In that quarter, profit was up 200 percent from the fourth quarter of 2006. In first-quarter results released two weeks ago, Byrne reported Intermec's revenue rose 21 percent to $217 million. That led to a profit of $7.7 million, turning around from a $4.4 million loss in the year-ago period, when revenue was under $180 million. Also during the first quarter, Intermec retired $100 million in long-term debt. "The fact that we're debt free, it provides us with more alternatives," Byrne said. Tavis McCourt, a managing director with Morgan Keegan & Co., said Byrne's arrival didn't spark Intermec's financial about-face, a fact Byrne readily admits. "They were in the midst of a turnaround when he was coming in," said McCourt, who has a "market perform" rating on Intermec's stock. "To a certain degree, the results were going to get better no matter what. "But he's definitely shaken things up," added Byrne, crediting the new CEO for his focus on controlling costs and in his decision to sell more products through partners, instead of directly to customers. That has put Intermec's sales structure more in line with other technology companies. One statistic that popped out from the sales figures from the first quarter was the growth in Intermec's sales across North America, its largest market: 25 percent. Byrne said the new products fueled that growth. He added that Intermec's not automatically affected by slower economic times. When cost-cutting is on managers' minds, Intermec can market its technology's ability to improve supply-chain efficiency. Byrne mentioned that a bakery squeezed by the soaring cost of wheat has used Intermec's handheld computers to improve the efficiency of its delivery truck routes. "They're investing because this is one of the areas where they can save money," he said. Since taking Intermec's helm, Byrne said he's been traveling about one-third of his time, meeting with "hundreds" of customers to find out more about their needs and how Intermec can make products that fulfill them. Growth opportunities for Intermec, which has hit its goal of double-digit revenue growth two quarters in a row, include the emerging technology of radio-frequency identification. Byrne said industrial and transportation-related uses for RFID, which uses tiny radio transmitters and microchips to communicate and store data, seem to provide the biggest opportunities right now. "I really think the next few years will be very strong for RFID," he said. "We're focused on customers who, with our expertise, can do meaningful things with the technology." Growing Intermec's overseas markets for all of its products also holds great promise, he said. "We're making progress accelerating growth," he said, "but I'm not ready to declare victory." Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.

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