ORANGE — It was a sunny afternoon 12 years ago this week, when then-28-year-old Scott McCurdy and his brother, Bruce, 26, stood over the remains of their gutted factory in Anaheim.
Part of their dream died when the family-owned circuit board plant burned down, caused by an overheated chemical vat. Just weeks before, the McCurdys had spent their meager savings on installing new equipment in their company, McCurdy Circuits Inc., which they bought from their father six months earlier.
But all was not lost. The McCurdys got help from the unlikeliest people--their competitors, who had available space and idle equipment that they rented to the brothers to manufacture printed circuit boards at night.
With insurance proceeds and a Small Business Administration guaranteed loan for $450,000, the McCurdys bought the latest equipment available, built a plant in a new industrial site in Orange and "took a leap into the future with the latest technology," said Scott McCurdy.
The McCurdys got so good at custom-making circuit boards for clients, including Motorola Inc. and Sun Microsystems Inc., that company sales soared to $13.2 million last year, up 120% from $6 million in 1986. And the company work force grew from 95 to 164. Their innovation caught the attention of many, including the Small Business Administration's regional office in San Francisco.
The SBA honored McCurdy Circuits as regional subcontractor of the year, beating out 55 other contenders from California, Arizona, Hawaii, Nevada, Guam and American Samoa, which make up the SBA's Region IX division. The company was presented the SBA award Wednesday.
According to Oscar Wright, SBA regional administrator, McCurdy Circuits will go on to compete against winners in nine other regions during National Small Business Week, which starts May 5.
"They have shown a substantial growth in sales and employment in the last five years," Wright said in an interview. "Those factors gave us the impetus to select them over other contestants."
Wright said another factor that made the company stand out is its innovative approach to manufacturing by incorporating new and sometimes unproven technology into its production line on short notice. For this reason, McCurdy Circuits is considered a maverick in the manufacture of printed circuit boards--thin plastic boards on which electrical components, such as integrated chips, resistors and switches, are mounted.
As the industry moves toward more dense and complex designs, manufacturers face increased pressure to invest in additional equipment and processing technology to improve quality.
General Dynamics Corp., with about 3,400 suppliers, picked McCurdy Circuits as its 1990 supplier of the year and recommended the company to the SBA because of its consistent on-time delivery of trouble-free circuit boards. Since 1990, the giant aerospace company bought more than $2 million worth of McCurdy products.
"One of things that sets (McCurdy Circuits) apart is its understanding of the (industry's) needs and its willingness to invest in capital equipment to satisfy new customers' requirements," said Harvey Miller, president of Kirk-Miller Associates, a Palo Alto research firm.
McCurdy Circuits, a private company, invests at least $1 million a year, or about 8% of its annual sales, on new technology and equipment, Scott McCurdy said. "We look for the revolutionary machines that will help us maintain a competitive edge," he said.
Another major reason for the company's success lies in maintaining a strong core of loyal and reliable managers to run its large plants, he added.
Scott McCurdy, now 40, said a key to the company's profitability is its ability to minimize waste during production. One method is to get client and company engineers to work together closely, he said.
Despite its efficiency, McCurdy Circuits could not stave off the effects of the recession. Orders have slowed this year and the company eliminated its evening shift in March, laying off about 10% of its work force.
Based on sales, McCurdy Circuits ranks seventh among the 76 circuit board manufacturing concerns operating in Orange County, which accounted for $350 million in sales last year, or about 6% of the $5.7-billion U.S. market, said Miller of Kirk-Miller Associates.
Separately, the SBA announced other regional winners in several categories. Linda J. Pinson of Out of Your Mind . . . and Into the Marketplace, a publisher in Tustin, was picked winner of the regional women in business advocate of the year, while Thomas Knapp of Club Sportswear in Irvine was named regional young entrepreneur of the year.