High and day: our small business of the year's products seal tight, but it excels at hanging loose.

• Author: Otterbourg, Ken

Show up at the headquarters of Dry Corp LLC in Wilmington and you might think you've gone to the wrong place. The outside of the drab gray, boxy (read: remarkably ugly) building, once a Progress Energy truck-maintenance shop, is nearly bereft of ornamentation. No need to knock. The garage doors are wide open. Just walk right in. The interior decor is tiki bar meets frat house, with some ratty sofas and potted plants and a mannequin acting as sentry. It's like you've stumbled into your favorite joint on the coast, the dive with a sketchy sanitation rating but killer shrimp and ice-cold beer. Everybody is dressed as if they're headed to the beach, only a couple miles away. Shorts and sandals are the norm.

Don't let the laid-back vibe fool you. The Dry Corp team plays hard--Friday cookouts, canoe and bike outings--but works harder. Over the past few years they've transformed the company from a one-product medical manufacturer into a diversified outfit that is booming as it caters to protecting from moisture what matters most: our injured body parts, our medical equipment and, yes, our electronic gadgets. All this while having a good time. That's part of the reason Dry Corp is BUSINESS NORTH CAROLINA'S Small Business of the Year.

"I am impressed with their creativity in product design and employee culture," says David Johnson, one of the judges and president of Johnson Nursery Corp., the Willard company that was last year's winner. "This is an extremely diverse product with lots of applications. It appears they have done an excellent job of marketing, and their potential for growth is huge." The other judges were N.C. Small Business Commissioner Scott Daugherty and BNC Publisher Ben Kinney. Winston-Salem-based BB&T sponsored the competition, as it has since 2000. After the magazine's editors selected eight finalists from the 60 entries, the judges picked the winner and three runners-up.

"We are serious and passionate," says Corey Heim, Dry Corp's chief operating officer, dressed in shorts and trail boots. "We want an atmosphere that is espresso and beer, both excited and loose." It's working. Dry Corp's annual revenue of $2.5 million is more than double what it was just four years ago. And the company, which employs 24 at the Wilmington office and warehouse complex, now has two divisions: DryPro, the medical line, and DryCase, focused on outdoor, consumer-lifestyle products.

When Dry Corp started in 1998, its first offering was a waterproof cast protector. If you've ever broken your arm or leg and tried to keep the cast...