Down to earth: it's the "started-in-a-garage" success story of Fort Wayne's WaterFurnace International, a pioneer and leader in geothermal heating and cooling systems.

• Author: Held, Shari
• Position: Cover story - Company overview

THE COMPANY'S beginning was both modest and magical. In the late 1970s, two geothermal pioneers, Dan Ellis in Fort Wayne and Dave Hatherton in Toronto, Canada, were independently creating geothermal systems by altering existing HVAC products. Then a mutual supplier suggested they combine forces.

It seemed like a good idea, and they approached Jim Shields to borrow $70,000 in capital to begin the venture. In 1980, WaterFurnace International Inc., a manufacturer of geothermal products for the residential market, began operation in a Fort Wayne garage owned by Shields.

By 1990, the company was coming into its own. It went public that year, and it moved to its current Fort Wayne headquarters, a 115,000-square-foot facility designed with Plexiglas plates in parts of the ceiling and the equipment room to showcase the company's products. It operates on less than half the utility cost of typical buildings its size heated and cooled by conventional equipment.

HEAT PUMP INNOVATION

1990 was also the year the company enjoyed its first big breakthrough. It premiered the first variable-speed, two-stage compressor unit and the most efficient water source heat pump on the market at that time. WFI was the first company in the HVAC industry to use the variable-speed motor--a product developed by General Electric in Fort Wayne. Today the variable-speed motor is standard for all high-end products industry wide.

"With the introduction of that product, the company just exploded," says CEO Bruce Ritchey. "It went from about $5 million in sales a year to $25 million in a five-year period, taking the company from a regional company to an industry-wide phenomenon."

In 2001 the company introduced the first water source unit to use non-ozone-depleting refrigerant. It was a "big green breakthrough," recalls Ritchey, who joined the company in 1998 as CEO. "The next competitor didn't accomplish that until three years later, giving us a big head start on everybody. It was very well accepted, and our sales increased 39 percent."

In 2006 the company's second-generation non-ozone-depleting refrigerant unit debuted. Called Envision, it represented another leap forward in efficiencies. That same year, the product was named one of the "Top Ten Green Building Products" by the editors of Sustainable Industries Journal.

Ritchey believes the key to the company's success is its focus on geothermal products. "Our company is much smaller than our competitors, but all we do is...