Anaheim-based circuit board maker DDi Corp. is looking for a turnaround.
“We are off to the best start in 2008 since I’ve been here,” Chief Executive Mikel Williams said. “I’m going to keep pinching myself to make sure we aren’t misreading things, but we are pretty confident.”
After a six-month slide, DDi’s shares bottomed out and rebounded earlier this month, rising about 20% since the start of February.
The company had a market value of about $115 million last week.
DDi makes circuits boards that later are assembled with chips. The boards go inside equipment for aerospace, military, industrial, medical, networking and communication uses.
Competitors include Forest Grove, Ore.-based Merix Corp., Santa Ana’s TTM Technologies Inc., Toronto’s Coretec Inc. and San Jose’s Sanmina-SCI Corp., among other smaller players.
The company gets customers by quickly turning around boards, especially on prototypes.
Most of the company’s orders are completed in less than 10 days. Some are done in as little as 24 hours.
What’s called “quick turn” work brings higher profits for boards, which otherwise are a dime a dozen.
“As soon as our customers get their designs, they are a very impatient group,” Williams said. “The rate at which companies redesign and bring products to market is faster than it has ever been. That keeps us in the engineering departments of our customers as opposed to the commodity and purchasing side.”
DDi got out of the red last year for the first time in recent memory.
For 2007, the company posted $688,000 in profits, reversing its $7 million loss in 2006.
In 2005, the year Williams got the top post, DDi lost $70 million.
“Personally, I think it’s been a great turnaround,” he said.
Far from its Peak
But DDi still is far from its peak. In 2000, the company had a market value of $1.7 billion at the height of the technology boom.
By late 2002, the tech meltdown caught up to board makers and took a harsh toll on DDi. The company’s shares lost 99% of their value from 2000 to 2002.
Debt from a trio of acquisitions proved crushing. After heavy layoffs, office closures and other cuts, DDi filed for bankruptcy reorganization in 2003.
DDi has seen a series of ups and downs since. It is nearing the end of a reorganization that began when Williams, the company’s former chief financial officer, became chief executive after longtime leader Bruce McMaster stepped down in 2005.
Williams, a finance guy with an accounting background, took aggressive steps.
DDi ended its European operations and sold its assembly business, which had plants in Colorado and Northern California, to San Diego’s Veritek Manufacturing Services LLC for $12 million.
Williams cut costs, brought in new managers, invested in manufacturing technology and cut jobs.
“There were significant losses as we restructured the business and focused on high-end printed circuit boards,” Williams said. “Along the road we’ve repopulated the management team and taken the company out of debt.”
Last year, he doubled DDi’s sales staff.
“I’m really proud of that,” he said. “Our demand has been very strong and we are finally starting to see the benefits. I think it will be a big growth driver for us in 2008.”
In the fourth quarter, DDi’s sales rose 4% from a year earlier to $45 million.
Williams is honing in on a trend,making multilayered boards that are able to handle more tasks.
“There’s a lot of demand for higher technology services and products,” Williams said. “It ties back to the semiconductor industry, specifically, building smaller chips with more capabilities. The printed circuit board is the conduit between the chips and the rest of the device.”
Keeping costs down still is key.
“I’m always looking to try to find ways that allow us to use the good, talented people we have more efficiently,” Williams said. “You can no longer judge a manufacturer based on how many people they have. If we were just a labor-based manufacturer, then we should be in China.”
Williams said he plans to stay here.
“There’s plenty of room for us to grow our business, even in a tough market, if we do our job right,” he said.
