Since its founding, Columbia Paint & Coatings Inc., a Spokane-based manufacturer of architectural and industrial coatings, not once has seen its annual sales drop below the previous years figure.


Not bad for a 56-year-old company.


Now, Columbia Paint is poised to reach $47 million in sales this year, which would be almost a 10 percent gain over its sales for 2002. The company also will open its 35th retail store soon, is outgrowing a warehouse-and-distribution building it erected five years ago and is looking for a building site, and recently has taken its first steps into the Chinese market, says President and CEO Larry Larison.


A number of factors are driving Columbia Paints success, including the nations recent housing boom.


Low interest rates for the last three years have had a positive effect, Larison says. Thats probably the primary reason our sales have been as strong as they have been.


In September, Columbia Paint will open a retail store in Bend, Ore., its first outlet in that state. The company operates three stores each in Spokane, Boise, and Salt Lake City, and its 25 other outlets are spread throughout Washington, Idaho, Montana, Utah, North Dakota, and Alaska. About 100 other stores in the region carry Columbia Paint products.


Larison says the company sees opportunity for more growth in the Northwest, and he expects it to open about one or two more stores a year for the next several years choosing sites for those outlets in Western Washington, Western Oregon, as well as in Utah and Nevada.


Earlier this year, Columbia Paint landed its first contract in an Asian country. The $225,000 order, which involved shipping three 3,500-gallon containers of paint to a Chinese distributor, could lead to more business in that largely untapped market, Larison says.


We plan to pursue more of that, he says, adding that Columbia Paint expects to send six more containers to that same distributor later this year.


The company doesnt plan to paint itself into a corner by putting too much faith in the Asian market, though, despite the huge potential there, Larison says.


Asia is a big question mark with a dollar sign in the middle of it, he says. You never know when (business transactions) could just go away. We always make sure we have the money before we ship out the product.


Columbia Paint owns a manufacturing plant and a warehouse-and-distribution building, the two of which have a total of 60,000 square feet of floor space, at 112 N. Haven in East Spokane. It leases another 30,000 square feet of storage space near its facility and has a 40,000-square-foot manufacturing plant in Helena, Mont.


It built its 23,000-square-foot warehouse-and-distribution building on North Haven in 1998 and expected that building to meet its needs for a decade, but already the company is outgrowing that structure. Larison says its looking for land in the East Spokane area to build another 40,000-square-foot building within the next three to five years. It plans to move its warehouse operation there and expand its manufacturing operations into its warehouse building.


Growth and stability


Increased market share, the increasing value of the Canadian dollar, and other factors are driving Columbia Paints most recent growth, Larison says.


Were taking market share away from competitors in certain markets, and some of our new products are really gaining momentum, he says. The general slowdown in the U.S. economy has forced some national companies to make cuts, and that has weakened their ability to compete.


Columbia Paint manufactures more than 300 different interior and exterior paint and coating products, he says. That number is growing constantly, though, because the company always is developing products specific to particular clients needs. It makes special coatings, for example, for potato-harvesting machinery made by a Blackfoot, Idaho-based company called Spudnik Equipment Co.


That high-gloss, hard, durable finish is designed to go on equipment thats outside 24 hours a day, 365 days a year, and last beyond the working life of the equipment, Larison says.


The U.S. housing boom, driven by low mortgages rates, has helped boost sales at Columbia Paint, as projected for 2003, by 64 percent since 1997, he says. Of course, if interest rates were to reverse direction, and new residential construction were to freeze, that could hurt sales by 15 percent to 20 percent, Larison estimates.


He adds, though, that he thinks the likelihood of that happening is very slim.


The strengthening of the Canadian dollar against the U.S. greenback also has played a role in Columbia Paints healthy sales, Larison says. Non-Canadian companies, including the Chinese distributor that contracts with Columbia Paint, are less able to benefit from favorable exchange rates with Canada, which has caused them to look to the U.S. market, he says.


Its made U.S. manufacturers more competitive in Canadian markets, and its made Canadian manufacturers less competitive in U.S. markets, Larison says. It has helped us take some contracts away from Canadian paint companies.


Larison partly attributes the companys long-term stability to its corporate organization. Although Columbia Paints stock isnt traded on any public exchange, the company is managed more like a public corporation than a private one, he says.


It has 38 shareholders, and they derive income from their interests in Columbia Paint through dividends, but less than half of those shareholders work for the company, Larison says. Shareholders elect a board of directors, which chooses the companys corporate officers, and those officers regularly report results and strategies to the board, he says.


That quasi-public structure has created a disciplined management style, Larison says.


In the last 10 years, Columbia Paints shareholder equity has grown to $19.95 a share from $11.90, earnings per share have grown to $2.94 from $1.65, and annual dividends per share have grown to $1.47 from 58 cents.


Columbia Paint employs a total of 250 people here and in its retail stores, which is about 30 employees more than it had six years ago.


The company has its roots in a Helena, Mont., paint manufacturer of the same name started in 1947 by five men, including Larisons father. They chose the name Columbia because they envisioned Columbia Paint expanding toward the populous communities along the tributaries leading to the great river. It was acquired by Spokane-based Jones & Porter Paint Co. in 1971; the successor company kept the Columbia name.


Larison has been with Columbia Paint or its predecessor for 43 years. As a student at the University of Montana, he took a job as a clerk at one of Columbia Paints Missoula stores. His father was president and CEO at the time. Soon after, the company created a new position, director of marketing and advertising, and Larison slipped into that role.


I liked the company from the start, and I was given what I thought was a good opportunity at the time, Larison says.


From there, he worked his way up and has served as president and CEO since 1976.