Health Care Manufacturing overcomes obstacles, thrives

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The success of a business is often out of its own hands.|ret||ret||tab|

Rodney Moulder, president of Health Care Manufacturing at 2146 E. Pythian, learned this in 1998 when his company's association with an out-of-state company began deteriorating.|ret||ret||tab|

Health Care Manufacturing entered into an agreement with a New York-based company for the production of an X-ray machine suitable for general radiographic applications, Moulder said.|ret||ret||tab|

"In 1998, I started seeing and experiencing problems: increasing delivery times, a 15 percent price increase with little notice, an 80 percent reduction in warranty. It became apparent we were not an important customer," Moulder said.|ret||ret||tab|

Immediately ending the agreement wasn't an option for Health Care Manufacturing.|ret||ret||tab|

"I had over 500 X-ray machines we had sold which we were responsible to maintain for warranty services and replacement parts," Moulder said. "I knew if I ended my relationship with them and moved on to another manufacturer, getting parts would be a challenge that would no doubt put us under."|ret||ret||tab|

Moulder also had to consider the possibility of the New York company going out of business. If that happened, Moulder would still be responsible for maintaining equipment sold under his label.|ret||ret||tab|

"We had a big problem. My solution in 1998 was to basically duplicate the product so we would have replacement parts for all machines already in the field and have a manufacturing line," Moulder said.|ret||ret||tab|

In summer 1998, Health Care Manufacturing brought in an X-ray-equipment designer. Before the company could get its first machine from its own manufacturing line, the New York business went under. Health Care Manufacturing shipped out its first machine from its own manufacturing line in January 2000.|ret||ret||tab|

"It was a huge challenge. There were cost projections we worked on in 1998. We exceeded those by about 300 percent. Before we got our machines in production, the associate company did, indeed, go out of business. For five months we had no product to sell, no support parts for machines in the field. So 70 percent of our dealers left us. Our business basically dwindled to nothing by the fall of 1999. |ret||ret||tab|

"We started off production in January 2000. Basically we had a new product with few customers in line to buy that product. We even had some mud on our face in the industry from being associated with a company that went out of business. It was a big negative situation in which we found ourselves."|ret||ret||tab|

Moulder adopted a "one-day-at-a-time attitude" to get through the tough times. He credits "a lot of hard work from everybody involved at the company (and) having the goal to be successful and sharing that goal with our customers" for the company's survival.|ret||ret||tab|

During 2000, Health Care Manufactur-ing met and exceeded projections by 10 percent, Moulder said. In 2001, business increased by 60 percent.|ret||ret||tab|

"That increase is actually an adversity in itself, creating a whole different set of problems: ordering challenges, inventory imbalances, increased inventory costs, increased accounts receivable balances," Moulder said.|ret||ret||tab|

Along the way, Moulder received help from the Small Business Administration.|ret||ret||tab|

John Flowers, vice president in charge of SBA lending with Union Planters Bank, is the person Moulder worked with. Flowers said one of the SBA's roles is "to help businesses stay in business. At times when businesses run into difficulties, SBA is one of the best vehicles to help them get over the hump. The longer loan term and ability to finance when there's not adequate collateral help.|ret||ret||tab|

"There's just so much risk you can take in business lending; we can only get so many at-risk loans in our portfolio. SBA loans enable us to do more lending to small businesses than we could under ordinary scenarios."|ret||ret||tab|

To qualify for an SBA loan, a business has to meet certain guidelines. It must be for-profit and there is a maximum dollar volume and maximum number of employees depending on the industry, Flowers said. Typically, SBA's primary focus is on businesses with less than 500 employees and $6 million annual volume.|ret||ret||tab|

Moulder's advice for a business considering partnering with another company is to make sure the contract is solid and written by a qualified attorney. |ret||ret||tab|

Overcoming adversity can make a company. |ret||ret||tab|

"We've gotten over the big hurdles. There are still hurdles weekly as far as a growing business is concerned," Moulder said. "As for our prospects for the future it's quite good, especially in the digital imaging arena. We are pursuing a line of digital imaging technology available for acquisition, and we will be implementing that technology into our X-ray equipment."|ret||ret||tab|

Moulder describes Health Care Manufacturing as a high-tech business. He said 95 percent of its products ship out-of-state. |ret||ret||tab|

"What I find amusing is that nobody knows we're here. We have 60 employees. There's only about four manufacturers of X-ray equipment of this configuration in the United States. We're a very unique business," Moulder said.|ret||ret||tab|

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