Spokane Journal of Business

Some in high tech expect to ramp up sales, workforce

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Some Inland Northwest high-technology companies are expecting large gains in sales, along with some increases in employment, in 2013. Others expect to stay competitive in challenging markets.

Meanwhile, angel investment efforts gathered steam this year, a trend that's expected to result in additional capital for emerging tech companies next year.

Key Tronic Corp., the Spokane Valley-based electronic manufacturing services provider, said in an Oct. 30 press release that it had record quarterly revenue in its fiscal year 2013 first quarter ended Sept. 29, with $97.5 million in total sales. For its current quarter, the company said it's expecting revenue in that same range, $93 million to $99 million.

"We expect to continue to see our new programs ramp up, our market share increase, and our revenue base diversify," company President and CEO Craig Gates said in a press release.

Tod Byers, president of Spokane Valley-based contract manufacturer Servatron Inc., says the company hopes to increase sales by 10 percent in 2013, a goal he describes as realistic. Servatron currently employs about 180 people, and Byers says that if the company grows as it expects to grow, it will add 10 to 20 people this year, likely all skilled workers.

Most of the company's high-tech customers and its competitors, however, aren't projecting double-digit growth, Byers says.

"Most of them are saying they are happy with flat growth or slight growth," he says. "It definitely hasn't been significant."

Itron Inc., the Liberty Lake-based maker of automatic meter reading technology, said in a press release last month that its sales are down this year compared with 2011, and base revenues are flat. LeRoy Nosbaum, president and CEO of Itron, who's retiring at the end of this year, said in the release that while the climate is challenging in the near term, the company has landed some big contracts in recent months, including three in Southern California and one in South Africa. "All great projects and highly competitive wins for Itron," he said in the release.

One part of the technology market that's expected to continue to gather steam is cloud computing, which involves using remote servers hosted on the Internet to store data and email exchanges. This is viewed by some as an alternative to physical, on-site servers.

Jeff Aden, president of the Liberty Lake-based cloud-computing consulting firm 2nd Watch Inc., says that company, in its second year of business, is expecting triple-digit growth in sales this year with its launch of new initiatives that the company hasn't disclosed yet.

If 2nd Watch grows as it's projecting, the company plans to add about 100 employees next year. Currently, Aden says, the company employs just over 20 people.

The company, he says, is taking advantage of an industry shift in which he contends cloud computing is taking a larger percent of the market share from physical servers.

"We're extremely bullish on the market and our business," he says.

As some companies here expect to increase sales, angel investors have developed more ways for startups to gain access to capital locally.

Last month, Spokane entrepreneur and angel-investment fund organizer Tom Simpson disclosed plans to launch Kick-Start II, a fund family that has about $550,000 that's expected to be invested in young businesses in the next two to three years at an average investment of $50,000 per company.

Simpson is ramping up as Kick-Start I winds down, after having made investments in 11 companies, mostly in the Spokane area, since 2009.

Companies in which the first Kick-Start has invested include Green Cupboards Inc., an online retailer of sustainable products; Gravity Jack Inc., an augmented-reality software designer; and 2nd Watch.

—Linn Parish

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