Dynamic Details builds on IPO with quick-turn mfg., prototype services
Dynamic Details builds on IPO with quick-turn mfg., prototype services
By Claire Serant, EBN
June 6, 2000 (2:42 p.m. EST)
URL: http://www.eetimes.com/story/OEG20000606S0063
Aiming to be a $1 billion company in three years, Dynamic Details Inc. [DDI] is determined to reach that benchmark by relying on its quick-turn manufacturing and prototype services. The Anaheim, Calif., contract electronics manufacturer is banking on increased visibility as a two-month-old publicly traded company, and is mapping out a global strategy -- including the possibility of acquisitions here and abroad -- to keep its 1,400 customers knocking at its doors. Blue-chip OEMs such as Intel, LM Ericsson, and Motorola are on DDI's repeat-play list. Strong design skills keep satisfied clients coming back knowing that their requests for short-run prototypes can be manufactured within 48 hours, according to DDI executives. The company also numbers among its customers major CEMs such as Celestica, Jabil, and Solectron. "Solectron's mission is volume production. We're not in competition with them," said Bruce D. McMaster, DDI's president and chie f executive. "We want to support our customers with design, prototype facilities, and quick-turn services." The fact that some CEMs are boosting their design and new-product-introduction services has not altered DDI's course. The company has moved full throttle into the quick-turn space occupied by competitors such as Tyco International's Printed Circuit Board Group, Hadco Corp., and Multilayer Technology Inc. DDI was established in 1978 as a printed-circuit-board maker. In 1991, the company, whose original name was Details Inc., brought on new management that beefed up its quick-turn offerings and made several U.S. acquisitions.The CEM was refinanced in 1997 by Bain Capital Inc., Celerity Partners LLC, and Chase Capital Partners for $62.4 million. The following year, DDI merged with Dynamic Circuits Inc., a Milpitas, Calif., quick-turn PCB company, to boost its manufacturing services on the West Coast. "CEMs have merged with competitors as a partial solution to alleviate their capacity shortage ," said Herve Francois, an analyst at Credit Suisse First Boston in New York. "CEMs that bought and continue to buy from Hadco will essentially be purchasing PCBs from a competitor [Sanmina, which is acquiring Hadco]. These CEMs might feel uncomfortable and could look to DDI or other players for supply." Quick-turn manufacturing accounts for about 60% of DDI's sales, with the rest coming from preproduction and full-production assembly. None of DDI's 1,400 customers represents more than 8% of its sales. The company's largest customer is European telecom giant Alcatel. "[DDI is] one of our preferred suppliers. They've been the only one to produce certain boards for us quickly," said Brad Perez, purchasing team leader at Alcatel USA in Dallas. For fiscal year 1999, DDI had sales of $292.5 million and added 160 clients. Telecom represented 55% of sales, with the remainder divided between medical, automotive, and industrial. In its first quarter ended March 31, DDI's sales totaled $75.3 million, a n increase of 27% over the year-ago quarter. However, the company suffered a net loss of $1.9 million, compared with a net loss of $5.3 million in the same quarter last year. In April, DDI went public during one of the biggest slides in Nasdaq history. Launched at $14 a share, the company's shares have fallen as low as $9.50 per share to a high of $16.25. Last week, the stock price hovered in the mid-$13 range. DDI's IPO of 12 million shares of common stock raised $170 million, most of which has been used to repay debt and help with the acquisition of MCM Electronics Ltd., a quick-turn PCB maker based in the United Kingdom. MCM's largest customers are Alcatel, Nokia, and Solectron.
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