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Interview conducted by: Lynn
Fosse, Senior Editor, CEOCFOinterviews.com, To be published – September 3,
2010
CEOCFO: Mr. Mahdi, what was your vision
when you founded Probe Manufacturing and what is the focus today?
Mr. Mahdi:
I am co-founder and previous CEO of Probe Manufacturing. I de-partnered from
the company in 2005 and returned in September of 2009. The original vision
was to be an electronics manufacturing service provider catering to local
electronics original equipment manufacturers with low to medium volume and
high mix type of products. I returned with a three-pronged strategy first to
be a global electronics design, manufacturing, and services company catering
to domestic technology customers. Secondly to provide our domestic customers
with agile and flexible customer centric program management teams that can
manage their high technology products from womb to tomb and speed their time
to market. Finally, to establish strategic partnerships with start-ups and
innovators in order to assist with the launch of their products in return
for exclusive manufacturing rights and equity. This was the motivation and
challenge that brought me back to Probe Manufacturing.
CEOCFO:
Where are you in implementing this new strategy and business model?
Mr. Mahdi:
I had departed for approximately five years because the co-founder, my
ex-partner and I had two different philosophies. Unfortunately during these
5 years because of some corporate disruptions, lack of focus, and also shift
of manufacturing to lower cost regions we lost a lot of revenue and clients.
So I came back to a very difficult situation where the company was facing
bankruptcy. Upon my return we immediately started to refocus on our core
competency leveraging global opportunities. In addition, we expanded our
services to beyond electronics assembly offering a wider range of
manufacturing capabilities including plastics, sheet metal, cable and
offering our customers low-risk, low-cost, flexible and highest quality
services. As a result the company has grown from roughly $250,000 of revenue
in the 3rd Quarter of 2009 to about $300,000 in the 4th
Quarter to about half a million in the 1st Quarter of 2010 to
$750,000 in the 2nd Quarter of 2010. And we have become
profitable since the 1st Quarter of this year.
CEOCFO: You
mentioned being customer-focused; would you give us an example of how that
plays out; what are you providing is not found at other companies?
Mr. Mahdi:
Our customer centric program management teams proactively get involved with
clients at an early stage or conceptual part of their design. By having an
early supplier involvement we can assist in manufacturability of the
products, speed time to market and provide a better return on investment.
This includes manufacturability, testability, sourcing, and process control.
They’re the single point of contact and in charge of managing the entire
customer management team. They ensure that Probe aligns itself with
customer’s objectives and integrates with their processes. They have full
ownership of customer satisfaction surveys including on-time delivery,
quality, communication, and technology. So this is how we can create value
for our clients.
CEOCFO: How
do you reach new clients?
Mr. Mahdi:
We are at the early stages of marketing our new vision however currently we
have direct sales servicing Southern California and other strategic regions.
We’re also trying to win back some of the lost clients and have been
successful winning some of them back. We’re also identifying start-ups and
innovators through VC markets and considering potential roll ups in
strategic regions.
CEOCFO: Is
the fact that you are US based the reason people are gravitating to Probe
Manufacturing?
Mr. Mahdi:
Yes, this is truer specifically in the markets such as defense, aerospace,
avionics, medical, industrial, automotive and instrumentation. First and
foremost when you look at defense, aerospace, and avionics, or medical, 90%
of those industries are always concerned with intellectual property
infringement issues. At the same time, their volumes don’t lend themselves
to building products offshore in the lower cost regions. The same thing goes
for industrial and instrumentation products. Most of the US based customers
would prefer to maintain their business domestically with domestic
manufacturers, so we do have an advantage. In addition we have separated
ourselves from our competition by providing global electronics design and
manufacturing capabilities, where not only we can be the new product
introduction facility and low volume provider or disaster recovery center,
we can also manage their high volume productions in lower cost regions. Most
mid level OEM’s that allocated their business to lower cost regions are
returning realizing that they’re spending 10-15% more than their cost
managing these relationships. Also with recent cost increases in labor,
currency, and fuel the ability to provide on shore manufacturing is expected
to grow interest. We have created an advantage and major differentiating
factors against our domestic competition offering our customers the best of
both worlds.
CEOCFO:
Probe offers a wide range of services!
Mr. Mahdi:
Yes, as mentioned earlier womb to tomb, from concept to fulfillment and post
sales services. We’re also an ISO Company and support medical, aerospace,
and military industries with very stringent specifications.
CEOCFO:
Probe is also very speedy, as you can provide quick service for your
customers!
Mr. Mahdi:
Yes, we have put in place systems and tools reducing material acquisition
time and cost. In addition we have quick quotation and production processes
promoting agility and flexibility. We can deliver Proto-Types in 24 hours or
same day and full turn key products in 4-6 weeks.
CEOCFO: How
do you decide what types of products are worthy of your attention and your
additional resources?
Mr. Mahdi:
Our primary focus is on defense, medical, industrial, automotive and
instrumentation clients. We are also looking at alternative energy products
as well, but there is a lot of uncertainty in the alternative energy areas
today. We also target mid tier OEMs ranging from 10 million to 200 million
in revenue.
CEOCFO: Why
should potential investors take a look at Probe Manufacturing?
Mr. Mahdi:
Investors should look at Probe Manufacturing because it is a valuable stock.
Probe is not a speculative type of stock. We are brick and mortar. I think
investors are done with speculation and are looking for companies that can
sustain profitability and growth. We started from scratch and have proven
over the last three quarters that we have turned this company around. We
have retired over $1 million in debt and have become profitable in 1st
and 2nd quarter of this year. I think based on what our employees
and management have demonstrated over the last three quarters, the health of
our balance sheet, and our current market cap Probe is a great investment.
CEOCFO: So
lots of opportunity!
Mr. Mahdi:
Lots of opportunity, moving forward we believe that we have the right
business and operating model to deliver revenue and earning growth over the
long term.
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Kam
Mahdi