Spokane based Itronix seeks new location

Company to consolidate headquarters and factory, will look early next year

By Linn Parish Spokane Journal of Business

Itronix Corp., the Spokane-based maker of rugged wireless computers, plans early next year to begin looking for a new location into which it can consolidate its operations here.

“We’re seeing pressure on our current space,” says CEO Tom Turner. “We could use some more soon.”

The company’s headquarters currently are located in the 30,000-square-foot former IBM complex, at 801 S. Stevens on Spokane’s South Hill. Its service and manufacturing operations are in a 52,000-square-foot structure at 1730 N. Madson, in Liberty Lake.

Turner says Itronix will consider either leasing space or developing its own facility to consolidate the two operations, and plans to do that in the Spokane area. The company likely will need a total of between 80,000 square feet and 100,000 square feet of floor space and would like to be in its new quarters within two years, he says.

In late 2001, prior to Turner’s arrival at Itronix, then-Itronix CEO David Dayton said the company was considering consolidating its facilities. It decided, however, to stay put at the time.

Dayton had cited the same main benefit of consolidation that Turner cites now: reducing the amount of time employees spend traveling between the two buildings. The two operations are about 15 miles apart, and depending on traffic, it takes 15 to 20 minutes to get from one to the other.

Turner says the company is better able to move forward with such plans now that Itronix’s change of ownership is complete.

An investment group led by Golden Gate Capital, of San Francisco, assumed Itronix’s liabilities and bought the company for $40 million from Acterna Corp., the Germantown, Md.-based company that had been Itronix’s parent. Earlier this year, Acterna filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code, and the Bankruptcy Court approved the sale of Itronix this fall.

Turner says Golden Gate Capital now is the majority shareholder in Itronix. The Spokane company’s current management staff, however, owns a 20 percent stake in Itronix.

Itronix currently is on pace for a slight decline in sales in fiscal year 2004, which ends next March 31, but expects improved profitability. The company posted $142 million in sales in fiscal 2003, down from $152 million in 2002.

Itronix, however, is seeing some “upside opportunities” come to fruition now, which should reap benefits in the coming years, he says.

This month, the company inked $11 million in contracts through which it will provide more than 2,200 Itronix GoBook II laptop computers to the U.S. Army. The company has landed a number of additional orders from the U.S. Department of Defense and U.S. Armed Forces this year, as well as several military contracts from other countries. Those include the United Kingdom Ministry of Defense, French Ministry of Defense, and Greek Army, the latter of which is gearing up to handle the 2004 Summer Olympics in Athens.

Military contracts currently make up about 60 percent of Itronix’s public-sector sales, and sales in that category have grown to about $40 million this year from about $1 million in 2000.

Another upside opportunity is a return of sales in the telecommunications sector, a market that had all but dried up for Itronix and other manufacturers over the last couple of years, Turner says.

“The bottom line is that we’re seeing the telecoms begin to spend again, which augers well not only for us, but the entire economy,” he says. “We’re well positioned for improved growth next year.”

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