Photography John Gaucher

When the big brains  at NASA’s Launch Control Centre decided to transform some unwanted office space into an operations nerve centre for Space Shuttle liftoff, they invited selected high-end furniture makers to suggest interior designs.  Then, using the patchwork of submissions as a guide, they built the room themselves.

Hey, building a highly-specialized custom-console control room isn’t exactly rocket science.  How tough could it be? Tough enough, as it happened.  NASA botched the job.

“NASA’s operations people came in and realized the designs weren’t functional,” recalls architect/project manager Sean Way, who subsequently led an emergency rescue mission on behalf of Calgary-based Evans Consoles Inc.

By 2006, when the refit was complete, the rocket scientists were so happy with their dazzling, $1.2-million Firing Room No. 4 that they presented Evans CEO Greg Smith with a NASA Supplier Award in gratitude.

A 30-year-old manufacturer of highly-sophisticated furniture, Evans Consoles provided NASA with the type of product it traditionally delivers to all its blue-chip clientele: nearly two dozen ergonomically correct consoles plus eight custom tables fashioned from sheet metal, aluminum and particle board, with high-pressure laminate finish exteriors and space-age curvilinear lines.
Believe it or not, rocket scientists can be pretty demanding clients.

“We needed to develop designs that not only had to accommodate new flat panel (screen) technology but also some of the older equipment NASA has.  It took a lot of time,” says Way, who studied architecture at the Southern Alberta Institute of Technology. “As a U.S. government agency, they have budget constraints.  Some of their equipment goes back to the Apollo days.  They’re still using rotary dial phones, for example.  Their mindset is, ‘if it ain’t broke, don’t fix it’.”

Clearly, the operational model at Evans Console Inc. isn’t broken. With 225 employees worldwide and annual revenues in excess of $36 million, the company’s sales have doubled since fiscal 2005, the year after CEO Smith came aboard.

Apart from its streamlined Calgary manufacturing plant, the company owns expensive showrooms in New York and Washington, D.C., and services its growing Asian customer base from an 18,000 square-foot-factory, situated about an hour from Shanghai.

“We occupy a weird little niche – very high end, very custom designed, very technical, and we build about 800 control rooms a year,” explains Richard Game, vice-president of business development. But if it’s a weird niche, it’s also a lucrative one.  Evans prides itself on quality, and quality costs big money. “We’re very expensive.  Every one of our competitors will submit cheaper bids for a contract than we will,” Game continues. “But they can’t match our engineering, design or technical expertise.”

In spite of the traditionally high price point, Evans Consoles wins more than 65 per cent of its tenders, supplying product to global heavyweights such as Exxon Mobil, Boeing and IBM it also lands prestigious contracts from U.S. government agencies, including the Pentagon and the National Counterterrorism Center (NCTC) in Virginia, which was officially opened by former president George. W. Bush in 2004.

“President Obama has also been photographed there, sitting on one of our consoles,” Game chips in.

This fascinating private company shifted into high gear after it began targeting Asia and the U.S. public sector as part of a reorganization led by Smith, who was hired by then-owner CM Equity Partners. A private equity firm based in New York, CM Equity had bought out founder Ross Evans, who eventually retired to Nova Scotia, in 1998.  Last year, Smith and CFO Bill Burkett purchased the company outright from CM Equity Partners and currently share a 50-50 ownership stake.

“I was invited out to become a shareholder and to direct the company back to the core competencies that Ross had originally laid as its foundation.  At the time I arrived, there were lots of overhead and fixed-cost issues and a need to restructure,” says Smith, a native of Trenton, Ont., who formerly managed GE Canada’s large motor division.

“I loved the product.  It had a uniqueness and brand recognition that was second to none. I was pretty sure we could grow this thing by concentrating on Asian and Middle-Eastern markets,” which now represent more than 40 per cent of the company’s business.

By the time Smith came along, Evans Consoles had already gained a foothold in the Middle East and China but he began pursuing Asian customers more aggressively, connecting with major institutional clients such as China Rail and ChinaBank.

“They only want to deal with world-class suppliers, so we needed an on-site manufacturing facility which allows us to reduce our lead and delivery times and to make the most cost-effective product possible.”

“We have a Chinese team in place now,” including a seven-member sales force that is slated to double by next year.

Only the Chinese military is off limits to the Evans group – unlike that of the U.S., it’s pretty much a closed shop.

Back on this side of the pond, Evans Consoles has put a lot of effort into building a technical and sales team able to gain top security clearance from Washington, which is understandably tense about such issues.

“Many of our people there are former employees of the U.S. military or NASA,” says Game.  “They do stuff they can’t even tell us about.”

Like most Canadian manufacturers, Evans Consoles ran into heavy weather in 2009, watching annual sales drop to $36,556,373 from $41,045,000 in 2008.
Not such a big deal, Smith explains.

“We’re not interested in simply growing our top end. We’re interested in controlled, profitable growth and EBITDA and are less concerned about the top line than we are about maintaining gross margins,” he says.

Meanwhile, back in the shop, Evans Consoles has been cited by the Canadian Manufacturers and Exporters (CME) as a company which employs best practices in so-called “lean” manufacturing and the company won an Alberta Export Award from CME in 2009.

“Evans Consoles occupies a niche market, which recognizes the company as a global leader,” enthuses Brian McCready, vice-president of CME Alberta.

“In that marketplace, price is important but quality of service, delivery, support and client relationships are even more important.”

Wild and rapid fluctuations in the valuation of the Canadian dollar are clearly vexing to a company which collects 95 per cent of its revenues in U.S. currency but the Evans team has been able to mitigate the negative effects by means of selective price increases on some of its more complex custom products, as well as an aggressive foreign exchange hedging program.

Meanwhile, the Evans Console leadership team has devised another strategic response to the need for protecting its fiscal backside. As Game points out, the company services customers representing 14 different “verticals” or sectors, including oil and gas, petrochemicals, public safety, the military, transmission and distribution, and so on.

“We carefully monitor each vertical, making sure none grows too dominant.  That could put the business at risk,” says Game.

“For example, our oil and gas business grew to represent about 15 per cent of our gross and we started to get concerned that if that particular industry went south – as it eventually did – we could be in trouble,” he continues.

“We’re now down to only six per cent oil and gas customers.  That makes us feel a lot better.”

OK, so they’re not rocket scientists.  But by spending $505,000 a year on R&D, investing that much more again in capital spending and by striving to meet the highest standards of service and quality control, the leadership group at Evans Consoles is aiming for the stars.

September 2010 Contents

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