From pharmacies to banks to computers to noodles, firms finds growth paths

The companies rounding out the top 10 of The Business Report’s Mercury 100 fastest-growing private companies in Boulder and Broomfield counties are proof that perseverance pays off during tough economic times.

Each logged more than 76 percent revenue growth in 2002, taking their skill at providing excellent products and services to both consumers and businesses to the bank.

Pharmaca Integrative Pharmacy, S.M. Stoller, Horizon Banks, Productive Computer Solutions and Noodles & Company demonstrate the Avis Rent A Car adage: They try harder.Pharmaca Integrative Pharmacy Inc. No. 6 Pharmaca saw its revenues grow by 116.4 percent, from $7.5 million in 2001 to $16 million in 2002. The Boulder-based company ranked No. 5 on the list last year.

Pharmaca, founded in June 2000 by Barry Perzow and Dale Schwartz, co-chief executive officers, operates pharmacies that combine prescription drug and over-the-counter products with natural/complementary and personal body-care products in 3,000- to 5,000-square-foot retail settings.

The stores are staffed by a team of pharmacists and complementary professionals including herbalists, nutritionists, naturopaths, homeopaths and estheticians.

The company has eight locations in four states: the original two in Boulder, one each in Denver, Seattle and Portland, Ore., and three in California ? Berkeley, Mill Valley and San Francisco, and is seeking more sites. ?We are looking to acquire properties in all our markets,? said Schwartz via cell phone from Newport Beach, Calif., where he was looking at properties.

In order to fund expansion, in March Pharmaca completed a $5 million Series C preferred stock financing agreement with Oracle Partners LP, a private investment firm focused on the health-care sector. The capital will be used to accelerate the company’s acquisition and re-positioning of independent pharmacies in its markets, Schwartz said.

Schwartz said he found it gratifying that each store is doing well, with an annualized sales basis of $25 million among them. ?The concept is being quite well received in each of the states and locales,? Schwartz said. ?It certainly is a concept and a retail concept that is not specific to Boulder.?

Right now Pharmaca makes most of its money fulfilling prescriptions, but the company’s goal is have close to an equal split between prescriptions and retail front end, where the margins are higher, Schwartz said. ?In some of the mature stores we’re achieving that targeting goal. By doing more business in the front end we are more in line with our strategic model ? to provide the best overall solutions to customers’ health.?

Pharmaca employs about 160 in the eight locations. Each store has about 15 part- and full-time employees, and the corporate group in Boulder has about 20, Schwartz said.S.M. Stoller Corp.No. 7 Stoller increased its revenue from $10.6 million in 2001 to $22 million in 2002, or 107.55 percent.

Stoller provides a variety of environmental, waste management, remediation and ecological services to the government and private-sector companies. Services include high-hazard site and groundwater remediation, facility decommissioning, radioactive and hazardous waste management, environmental surveillance, nuclear engineering, ecological studies, risk assessment and regulatory compliance.

Stoller serves customers from offices in Lafayette, Carlsbad and Los Alamos, N.M., Amarillo, Texas and Idaho Falls, Idaho.

The company was founded in 1959 in New York and bought by a group of Boulder-area investors in 1995, when President and Chairman Nick Lombardo came on board. Headquarters moved to Lafayette in 2001. The company employs about 100 in Lafayette and another 350 nationwide.

The new owners shifted the 40-year-old company’s business strategy to nuclear energy, Lombardo said. ?We focused Stoller onto its core competence, which was the nuclear arena, and it’s turned out to be a real good success.?

That strategy has led to some of Stoller’s largest projects including:

* Working on more than 100 projects at the Rocky Flats Environmental Technology Site, from feasibility studies to cleanup.

* Managing the U.S. Department of Energy’s Grand Junction Office missions, from environmental remediation to long-term surveillance.

* Consulting with the Japanese on nuclear energy.

* Examining the next generation ? known as Generation IV — of nuclear energy to ?see if it is a fit for the U.S.,? Lombardo said. ?Generation IV will be new technology. It’s safer, cleaner, more efficient.?

* Contracting at the Nevada Test Site near Las Vegas, Nev. The contract is for remediation of weapons detonation areas, and includes Nevada, western Colorado, and the Aleutian Islands. Horizon Banks No. 8 Horizon Banks increased revenues from $105.5 million to $212.8 between 2001 and 2002, equaling a revenue increase of 101.9 percent.

Horizon Banks and the First National Bank of Limon are wholly owned by the Big Sandy Holding Co. of Limon, formed in 1990. The First National Bank of Limon was organized in 1919 to serve the financial needs of the Limon community. In June 2001 80 private investors — including many from Boulder County ? raised about $13 million to merge into the existing $5.2 million capital of the Big Sandy Holding Co. in order to support branch expansion in more robust markets in Front Range. These new offices operate as Horizon Banks branches, a “dba” of the First National Bank of Limon.

Horizon Banks moved its headquarters to Longmont from Boulder in April. The reason, explained Chief Executive Officer Dan Allen, was that the Boulder branch had outgrown its current site, the ground floor of a two-story office condo in the Steel Yards project on 30th Street, and needs to expand upstairs to where the corporate headquarters had been.

Horizon has five locations: Boulder, Longmont, lower downtown Denver, Denver Tech Center and Limon. A new branch will open in Westminster by Aug. 1, Allen said. Horizon also is looking at additional sites including Loveland, Fort Collins and Cherry Creek.

The bank is adding new services including investment and mortgage services. Its alliance with investment services provider Quick & Reilly will allow Horizon to employ an investment broker at each site. Each branch also will have a mortgage originator on site, Allen said.

Although the bank serves consumers ? particularly in its Longmont branch — Horizon focuses primarily on small business, construction companies and high net worth individuals, Allen said. ?We have a private client bank’s orientation,? he said.

Horizon’s secret to fast growth is ?hiring experienced lenders,? Allen said. ?We have a crossover business that we’ve been able to procure from portfolios of other banks. From these professional bankers we’ve recruited their portfolio and what kind of book of business they can bring with them. I believe people bank with individuals, not with banks.?

Although Allen believes Horizon’s greatest asset is its people, the bank has built an online presence as well.

Productive Computer SolutionsNo. 9 Productive Computer Solutions’ revenue grew 100 percent, from $720,000 in 2001 to $1.5 million in 2002.

Founded in 1993, Productive Computer Solutions has been building customized industrial systems for 10 years for clients ranging from the local government labs to Hollywood media companies. But most people have never heard of the company because ?We’ve been our own best kept secret,? said Co-owner Darrin LeBlanc.

LeBlanc, along with Co-owner Lloyd Brady, bought the Boulder company in March 1999. The two struggled for a couple of years as they changed the business model from one of keeping inventory around, ready for manufacture to a ?just in time? production method.

The turnaround came after Sep. 11, 2001, LeBlanc said. Steady customer, Electronics Line USA, asked if Productive Computer Solutions could build a machine for them to sell. In the wake of the World Trade Center disaster, Electronics Line, headquartered in Israel with offices in Boulder, had decided to focus on the security monitoring industry and needed digital video recording machines.

The recorder was the first of many original equipment manufacture contracts for Productive Computer Solutions. ?We struggled for three years to turn our first profit and in the past year and a half have really turned it around,? LeBlanc said.

Productive Computer Solutions is also an Intel Premier Provider, vendors identified by Intel as the preferred source for Intel products and technologies. ?That puts us in a select group of 350 across the U.S. and Canada and gives us a direct access to latest and greatest products that Intel is putting out and deliver them well before some of the other folks can do that,? LeBlanc said.

Productive Computer Solutions currently has six employees and has plans to hire more this year, LeBlanc said.Noodles & CompanyNo. 10 Noodles & Company’s 2002 revenues were $50 million, up from $28.4 million in 2001, a 76 percent increase.

According to the now legendary tale, founder Aaron Kennedy had an epiphany in 1993 while dining at an Asian noodle shop in Greenwich Village. Kennedy was struck by pasta’s cross-cultural significance ? noodles are eaten all over the world ? and decided to cash in on that concept with a new type of fast food restaurant.

Kennedy convinced 25 friends and family investors to support him, and founded Noodles & Company in 1995 in Boulder. The first restaurant opened in Cherry Creek North, and others quickly followed. The chain now has more than 60 stores in Colorado, Minnesota, Wisconsin, Illinois, Texas, and the greater Washington, D.C. area.

This summer Noodles is moving into new markets in Michigan and Utah, and will open about 25 new locations in existing markets by year end.

The company expects to open about 350 restaurants by the end of 2006, largely through a recently launched franchise program.

Chairman Kennedy now shares the chief executive spot with Ken Keymer who joined Noodles in February 2002 as president. Keymer has been instrumental in continuing the company’s aggressive growth and in developing the franchise model. Much of the growth is possible because ?the store economics are wonderful so the cash flow is wonderful,? Keymer said. ?The company has been profitable, which is unique when you have fast expansion.?

The company also funds its growth with a strong debt facility from Bank of America, and had a recent private placement, Keymer said. ?We are very comfortably situated with capital that will probably keep us going through 2004.?

Noodles is adding some new menu items, including a Chinese Chop Salad that will debut for the summer.

Noodles is also introducing a Crave Card, a stored-value card for frequent customers to put money on and then use for purchases over time. For now the card doesn’t have a discount function, like the Noodles punch card, but according to Keymer, once a continuity function is added to the card it will provide discounts and the punch card will be discontinued. ?We like it because of the cool factor,? Keymer said.

Noodles serves at least 25,000 bowls of noodles every day and employs more than 2,000 people. Keymer said the company has a stable management team and is busy adding field teams for the new locations. Contact Caron Schwartz Ellis at (303) 440-4950 or e-mail csellis@bcbr.com

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