Little Wonders: Southwest Electronics

Owners: Allen and Ellen Penn

Founded: 1982

Address: 2235 W. Sunset St., Springfield, MO 65807

Phone: (417) 799-1402

Fax: (417) 799-1404

Web: www.southwest-electronics.com

Products/services: contract assembly of printed circuit board assemblies; manufacturing of self-service car wash controls; engineering design and services

Employees: 9

2006 Revenues: $500,000

A small, discreet shop in southwest Springfield is quietly churning out some high-tech components for global companies.

From 6,000 square feet at 2235 W. Sunset St., Southwest Electronics Inc. creates the electronic circuit boards used in Fortune 500 company Leggett & Platt’s “smart beds” and in German-based DeLaval’s automated dairy milking machines.

Company executives say more big business is in the pipeline that could double or triple revenue and employment in the next five years.

And owner and founder Allen Penn says it all started with … a toy chicken?

In the mid-1970s, Penn was teaching at what was then Southwest Missouri State University, where he first started working on commercial applications of electronics.

“I’d bring kids home from college, and we’d put together PC boards in a shed behind my house,” Penn says during a tour of his company’s product testing area. “One of the things we were building then was a board that made the sound of a chicken cackling for a company that made a Fun Chicken that dispensed a plastic egg with a toy in it.”

The teacher moved from dabbling with toy chickens to a full-time gig building flight simulators for a Tulsa, Okla., company.

It was there Penn had a realization: “After working there for a while, I made the comment that I could mismanage a company as well as they can,” he says with a laugh, “so I came back to Springfield and started this business.”

Twenty-five years later, Penn’s company employs nine – including his wife, Ellen, who handles the finances – and is coming off a year of $500,000 in revenues.

The company’s revenues are broken into four segments: contract assembly work, which comprises about 40 percent; sales of company-made products, which constitute another 40 percent; service and repair, which comprises about 15 percent; and design and engineering, which makes up about 5 percent.

Contract clients

Southwest Electronics’ clientele is diverse.

Buyers of the electronic circuit boards and components assembled by the company include Eaton Rapids, Mich.-based Fasco Industries, Marshfield-based Country Flame, St. Louis-based Emerson Electric and Mountain Home, Ark.-based BassCat Boats.

Those longtime customers reflect Southwest Electronics’ original line of business, contract assembly work.

Southwest Electronics has been supplying circuit boards for several years to Fasco, for its brushless direct-current motors, which are used in incubators, blood machines and electronic cooling equipment. Cheryl Cole, Fasco’s senior mill spec material analyst in Cassville, says the fact that Southwest Electronics is a small, local company is a plus.

“In a big company like this, often, we’re controlled by our corporate purchasing department,” Cole says. “But this is a small enough department that I can order from them and stay local. It works great for both of us.”

Clean sweep

The other side of Southwest Electronics involves building timers for self-service car washes. That work also started as a contract job, for St. Louis-based D&S Car Wash Systems in the mid-1980s.

That job, Penn says, was a private-label agreement, meaning that Southwest Electronics made components with the D&S label. And when D&S came under new ownership near the end of 2004, and those owners decided to focus on fully automated car washes, Southwest Electronics suddenly had a lot of extra product on its hands.

A change in focus was necessary, says General Manager PJ Hord, who joined Southwest Electronics about a year ago. Hord is lining up new distribution channels for its products, which Hord says are currently in two catalogs, with more in discussion.

But the real growth potential is in the company’s fledgling distributor network. Hord says there are distributors in 10 states – all added in the last year – and the five-year plan is to have distributors in all 50 states plus Canada and the Virgin Islands, because the company’s products, most labeled as D&S, are in all of those areas.

“We’re a new name for a decades-old product, and the employment possibilities are endless,” Hord says.

“Look at how many self-service car washes there are – in California there are nearly 1,600. If each of those buys just one of our products, it’s a tremendous amount of money for the distributor and for us as well.”

End Products

Here’s a small list of products containing Southwest Electronics’ components:

• Brushless direct-current motors built by Fasco Industries

• High-efficiency motor controls built by Emerson Electric;

• Digital dashboards on boats built by BassCat;

• Automated milking machines used by DeLaval;

• Cable harnesses for B-52 bombers;

• Dashboards and other electronics for Cessna Citation aircraft; and

• Smart Beds built by Leggett & Platt