50 Colorado companies to watch: emerging enterprises inspire confidence in state's future.

Author:Ryckman, Lisa

THEY'RE PAST THEIR infancy, but they've still got some growing to do.

Consider this year's 50 Colorado Companies to Watch teen-agers along the business spectrum, energetic second-stagers that have come a long way already and have the potential to go the distance.

"Colorado Companies to Watch recognizes and celebrates the businesses that form the backbone of the state's economy," said David Tolson, chairman of the board for Colorado Companies to Watch and managing director of Platinum Sponsor Capital-Value Advisors. "The 50 winners selected each year epitomize the hallmarks of a growth-oriented, second-stage company."

With this year's class--CCTW's sixth--the program has honored 300 companies with the spark to fuel the state's economic fire. It's a group with knock-your-socks-off economic numbers: In the years in which they won, the companies generated:

* $2.4 billion in annual revenue

* 43 percent growth

* 10,536 full-time equivalent (FTE) employees

* 2,735 net new jobs

In the four years leading up to winning their awards, companies such as Otterbox, Oskar Blues Brewery, Confio Software and Moots Cycles generated $6.4 billion in revenue--a 140 percent increase over those years--and posted a 133 percent rise in fulltime equivalent jobs to 6,005.

The 2014 winners--representing industries including technology, manufacturing, financial services, wellness and bioscience, among others--accounted for $413 million in total annual revenue in 2013, a 34 percent increase compared with 2012. They had 1,459 FTE employees in Colorado, with 448 net new jobs projected for this year.

From 2010 through 2013, the 2014 class of CCTW businesses generated $1.1 billion in revenue and added 1,005 employees (both in Colorado and out of state), reflecting a 141 percent increase in revenue and 131 percent increase in jobs for the four-year period. That translates into 34 percent annual revenue growth and 32 percent annual growth in employees.

To be considered, companies must be Colorado-based, privately held, employ six to 99 FTE employees and have $750,000 to $50 million in annual sales of a similar range of working capital. They are judged on past performance to demonstrate growth in hiring and revenue generation, and there are expectations for future growth based on product innovation and market penetration, Tolson said.

But that's not all.

"It's not enough to be a well-run business," said Stephanie Steffens, CCTW founding program director and Colorado adviser and director for the Colorado Workforce Development Council. "These companies are integral to the communities in which they operate, and they are judged also for their community involvement, philanthropy and corporate culture."

Winners become part of an elite group of companies recognized for their innovation, economic impact and community service, and receive individual recognition throughout the year, said Sam Bailey, board adviser and Colorado Office of Economic Development and International Trade representative.

"This is their time to shine and to celebrate as their employees and customers are cheered on by sponsors and community partners," he said. "This 'stamp of approval' is a differentiator when prospecting for new clients, contracts or attracting talent."

Company leaders benefit from gathering with peers through the Alumni Network, led by past winners under the auspices of CCTW.

"Being an entrepreneur can be a very lonely enterprise," says Joy Kitamori, Companies to Watch national adviser for the Edward Lowe Foundation, which created the program. "Second-stage entrepreners, especially, experience unique challenges in this phase of growth. These business leaders connect and find camaraderie with others who are going through similar challenges."

The Companies to Watch program sprang directly from the experience of Edward Lowe, creator of Kitty Litter, and his wife, Darlene. "Ed remarked late in his career about the isolation he experienced as an entrepreneur," Kitamori says. "Second-stage leaders tell us that they experience greater fulfillment and make better business decisions as a result of interacting with their peers.

"Bringing these entrepreneurs together is a reward that keeps on giving."



Diversified Machine Systems (DMS)


Colorado Springs

PORTRAIT Founded in 2003, Diversified Machine Systems (DMS) is a designer and manufacturer of three- and five-axis computer controlled cutting machines, known as CNC routers, and custom-engineered machining centers. The original equipment manufacturer (OEM) primarily supplies the aerospace, automotive and consumer goods industries.

DIFFERENTIATOR: DMS attributes some of its growth to its market-by-design strategy: Machinery is developed only when a specific market need is determined. This approach has allowed the manufacturer to flexibly design its tools and foster uniquely collaborative client relationships. Moreover, the machines are designed for repeated disassembly to fit in shipping containers for international transport and are easily put back together.

MAJOR MOMENT: When DMS returned to Colorado from Texas in 2007, it built the Black Max--a large-format CNC machine used to produce steel-fabricated machinery bases. This event brought the entire production process in-house, reducing lead times by three weeks and improving product accuracy dramatically. COMMUNITY: DMS recently hosted a group of high school students from Arnold, Neb., a town with a population of less than 600. The group was involved in a program called School House Graphic Products (SHGP), a student-run graphics company that operates as a real-world business. The implementation of a FMT Patriot 3 Axis CNC router resulted in a substantial profit increase for the student design business.

EFI Polymers



PORTRAIT: EFI Polymers fabricates formulated resin systems for electrical insulation, adhesives and specialty coating applications While the bulk of the business has developed domestically, roughly one-third of EFI's products are exported to more than 20 countries. The 33-person team is focusing on rapidly growing market: including: smart grid, solar power management and electric motors.

DIFFERENTIATOR: Rapid product development defines EFI's approach to growth.

MAJOR MOMENT: On March 17, 2003, a severe storm struck Denver, dumping three feet of snow on the city and destroying EFI's Steele Street manufacturing facility. The staff worked 12-hour days to bring production back online and within five days made its first product run in a makeshift warehouse. Both suppliers and customers rallied around the EFI team, so that all orders for the month went out as anticipated. More than a year later, EFI Polymers moved into a remodeled facility--three times larger than the original--which provided for rapid growth. The challenge resulted in an opportunity EFI could not have re-created. INNOVATION: As EFI responded to identifiable market needs, the team rose to the occasion and developed UV coatings to protect concrete railroad ties. This reduced the curing process from 30-45 minutes to less than two seconds, allowing worn tracks to be quickly repaired and improving performance through reduced defects.

eGauge Systems LLC



PORTRAIT: eGauge Systems, established in 2008, manufactures energy-smart meters that record and save real-time energy consumption and production data. Notable customers include: Namaste Solar, Pecan Street Inc., the City of Boulder and others.

DIFFERENTIATOR: Few metering companies have discovered a method for combining multiple tools in one, as eGauge has. With its proprietary software and firmware --a meter, data logger and Web server allow a single device to measure currents across 12 different inputs. Another distinguishing feature of eGauge is its mass on-board storage.

MAJOR MOMENT: After two years in the works, eGauge acquired a revenue-grade accuracy compliance certification at the end of 2013. The certification is like the "gold standard" sought after by any metering company that makes a state-of-the-art product, according to Alex Czernik, operations manager at eGauge. This required a series of stringent tests to verify that meters remain accurate to a half-percentage point in various conditions, but was a worthwhile investment for the business, as it puts eGauge on the table for projects where revenue-grade metering is required.

COMMUNITY: Proof of the company's commitment to help reduce energy consumption and associated costs is in its donation and installation of equipment at Front Range schools in the ReNew Our Schools energy education and conservation competition, administered by the Center for Resource Conservation (CRC). The program allowed student participants to experience real-time energy consumption. Thereafter, a white paper published by the CRC stated: "The data from the eGauges was used by the energy management personnel to investigate no-cost operational changes that are projected to save the district $50,000 to $200,000 annually."

Eldon James Corp.



PORTRAIT: For nearly 30 years, Eldon James has manufactured plastic tubing and connectors for the medical, pharmaceutical, food and beverage, industrial and automotive industries. The business opened its new headquarters in Denver last year. Moreover, EJ was recently awarded a grant to develop its lean manufacturing procedures, intended to further streamline processes and individual roles and responsibilities.

DIFFERENTIATOR: Rather than create custom molds, Eldon James opted to build its own proprietary products right from the start. Since, the manufacturer has created more than 6,000 different tubing and fitting components, required in all equipment that transfers air or fluid.

MAJOR MOMENT: After 20 years in the business, Eldon James went "clean and green," building a 10,000-square-foot cleanroom and creating a new product line of PVC- and BPA-free tubing. This...

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