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Ophthalmic Distributor Prides Trust, Service, Tenure

A stroll through the Irvine Spectrum-area offices of Ophthalmic Instruments Inc. is a history lesson in more ways than one.

“There’s Dawn, who handles operations; she’s been with the company 30 years,” says Chief Executive Scott Shone, pointing to his right as the tour begins.

“There’s Jenny,”—Shone points to his left—“she does accounts and billing … been with us 15 years.”

Workers aren’t the only ones with long tenures at the ophthalmic products and supplies distributor. Shone’s father, Lou, 70, founded the company in 1977, retiring just two years ago.

Shone, 44, joined in 1997, the second generation to lead.

“We are run by family,” he says, “and I’d say we have a pretty ‘family atmosphere’ too.”

Ophthalmic Instruments has three regional offices—Northern California, Arizona and Colorado—and sales and field reps in eight states, including Nevada, Utah, Hawaii, New Mexico and Wyoming.

A cousin, Jeff Mapson, works in the Arizona operations, which Shone’s older sister Christy Shone-Mikesell, 46, leads. Jeff’s brothers Dusty and Jay are in NorCal.

Shone jokes it’s helpful they don’t all work in one office because “we’d kill each other.” On a serious note, he says it’s good to work with family since they are “people you trust.”

Full Service

Ophthalmic Instruments sells devices, equipment and other supplies—even chairs—for eye exam rooms. Customers include University of California-Irvine and other schools, businesses like Allergan PLC and Kaiser Permanente, as well as independent ophthalmologists and optometrists.

Products come from makers including Topcon Corp., Haag-Streit Group, Marco Ophthalmic Inc., Reichert Inc. and about two dozen others.

The company also repairs and maintains equipment.

Customers get “a comprehensive line of quality ophthalmic products [and] a personal touch,” Shone says.

For Urban Eyecare in Phoenix—a 2-year-old “comprehensive eyecare and optical boutique,” according to its website—the Shone family business consulted on exam room design, walked the construction site, and sold, then installed the equipment, which it also maintains.

A program Christy introduced for her region called Color Studio offers exam room chairs in a hundred colors.

“Our value is in our services,” Shone says. “We train our people … to be the best.”

Family Size

This keeps clients coming to them for their needs, he says, and helps thwart potential competitors or even the manufacturers themselves, and also forges long-term relationships like the ones Ophthalmic Instruments has with its 34 workers (see box, right).

The global ophthalmic diagnostic and monitoring devices industry was about $7.4 billion in 2017, according to data from business intelligence firm Global Market Insights Inc. in Delaware. The domestic distribution market for the diagnostic equipment alone is a small part of that.

Competition can be fierce.

Shone declines to name competitors or give his company’s revenue figures—noting only that its grown an average of 20% a year since 1997—but says Ophthalmic Instruments is one of the larger industry players, even with its focus on just eight western states.

Many distributors run in an annual revenue range of the low-to-mid eight figures.

Lombart Instrument in Virginia was founded in 1979, two years after Ophthalmic Instruments. It was bought in 2016 by lower-to-mid-market private equity investor Atlantic Street Capital in Connecticut, and claims that it’s the biggest player. After several follow-on acquisitions by Atlantic Street—including that of Florida-based Marco Ophthalmic Inc. in January, and forming a new holding company, Advancing Eyecare—estimates of its revenue slice hover around $100 million.

Cal Coast Ophthalmic Instruments in Torrance, bought in 2018 by what is now EssilorLuxottica SA in France—an optics giant with a $52 billion market cap and $11 billion in revenue—has annual revenue of about $12 million, according to a trade news outlet.

Grow Respect

When Shone joined the company in 1997, “it took me awhile to get people’s respect, because the perception is that you are the boss’s son and you come in and you get paid a lot of money and you don’t have to do anything.”

The truth is more commonplace: Lou Shone started his son out cleaning equipment.

“Very monotonous,” Shone reports.

Unsurprisingly for a younger generation coming to work, some of his biggest contributions lay in technology—as in bringing Ophthalmic Instruments up to speed at the end of the millennium and into today.

The company at one point had one computer; salespeople waited in line to key in orders. Waiting took people away from selling and all work flowed from the single terminal.

Shone added computers, built a website and boosted accounting, billing and logistics to “streamline everything.”

In 2012, it moved from a 3,200-square-foot facility in Tustin to its current 10,000-square-foot headquarters at 1 Musick, for all administration and including showroom, warehouse, shipping and logistics, and repair and maintenance space.

Business Model

Ophthalmic Instruments has matured as it has grown—and as its industry has changed.

Private equity has begun buying competitors, like Lombart, as well as clients. Acquisitions and roll-ups of physician practices, for instance, have changed the equation for Ophthalmic Instruments. It has lost accounts as new owners focused on costs.

“They want to go with the cheapest option,” Shone says.

This lessened the influence of relationship-building but conversely offered an ability to scale, supplying multiple offices via one deal with a private equity owner instead of having to sell to each individual clinic. The family saved a big chunk of Arizona business that way.

“If we can take advantage of the opportunity, it will be good,” Shone says.

He often thinks about what the company needs to do to be different in a crowded field, be it bundled services or vamped up marketing. A still-insular industry of largely local optics shops plus new players makes client retention and referrals from physicians, hospitals and clinics—95% of Ophthalmic Instruments’ business—even more crucial.

Relationship-building isn’t dead.

Handshake Deals

Good news for people at it 42 years.

“My dad’s a handshake kinda guy,” Shone says, so, “‘if I give you my word that’s a contract.’”

Ophthalmic Instruments’ launch came partly from Lou feeling his prior job involved pushing pricier models to turn more profit.

“He told my mother he needed to either start his own business or get out,” Shone says.

A company promotional video has Lou archly noting he’d only recommend what clients need.

Shone followed suit, focusing on trust, when a prospective client asked about buying secondhand equipment from a doctor closing up shop. Typically, Shone wouldn’t recommend this, but he agreed to look at the equipment, and came away with a positive response.

“I told him to take [the deal],” Shone says, because “it was what he needed and he was getting a discount.”

The new customer noted that Ophthalmic Instruments wouldn’t make any money on it.

“That’s okay,” Shone told him. “You’ll think of us next time.”

Legacy Forward

Shone has 22 years of such work but almost didn’t get into the family business at all.

Once during college, he was having breakfast with his parents and said he wasn’t sure he wanted to do accounting—a bit of a career speed bump since he was majoring in it at Oregon State University.

“My dad was like, ‘Want to work for me?’ and I was like, ‘What do you do again?’”

He’s grown into the work since, partly via executive coaching and leadership groups under Vistage International, cultivating skills and professional friendships.

Shone isn’t sure his two sons, 14 and 15, will sign on; if they do, he plans to make them start not just at entry-level—but working for someone else. He got into the industry right out of school and “only knew one way” to do it.

His boys, he hopes, will get experience, acquire broader views—a head start, perhaps, on the next quarter century.

Old Eyes

OC’s relationship with eyecare is long and deep, including Allergan PLC’s roots in the business, Gavin Herbert family philanthropy to University of California-Irvine to back research and study, and Marshall B. Ketchum University in Fullerton, which began as an optometry school in Los Angeles more than a century ago.

Ophthalmic Instruments Inc. maintains a collection of equipment of the same venerability, including trial frames and lenses, lens measuring devices, and other items from the 1920s and 1930s.

Frames and lens makers of the early 20th century launched the domestic optical industry, with early efforts in the small attic workspace of William Beecher’s watch and jewelry business.

Extended Family

A quarter of Ophthalmic Instruments workers have been with the company more than a decade, including two with longer tenures than Chief Executive Scott Shone.

• Dawn Grier, operations manager, 30 years

• Jason La Bounty, national service manager, 28 years

• Scott Shone, chief executive, 22 years

• Jim Gunvordahl, field service technician, 18 years

• Mariel Chinelatto, service team, 17 years

• Patty Morales, service team, 17 years

• Jenny Chrzan, billing, 15 years

• Rose Pairis, office manager, Northern California, 13 years

• Dusty Mapson, division manager, Northern California, 11 years

Only founder Lou Shone served longer than those on this list: 40 years.

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