The Dream Team

Written by ProfitGuide

The Dream Team

1: Rutter Inc.

2: Workbrain Corp.

3: Fruit D’or Inc.

4: Peer 1 Network Enterprises Inc.

5: Imaging Dynamics Co. Ltd.

6: Selectcor

7: FundTrade Financial Corp.

8: ASP Inc.

9: Angiotech Pharmaceuticals Inc.

10: Vanguard Global Services Inc.

1 Rutter Inc.

St. John’s, Nfld.
Marine technology and engineering
2000 revenue: $223,800
2005 revenue: $70,939,704
Chairman & CEO: Donald Clarke



Ramming speed

Canada’s Fastest-Growing Company perfected a black box for ocean-going ships and grew a stunning 31,598% over five years. Now the first Atlantic-Canadian firm to top the PROFIT 100 plans to build a $500-million company that can rule the waves worldwide

By Rick Spence

When sailing ships held sway over the world, a navigator’s most treasured possession was his rutter, a diary containing detailed accounts of each voyage. Every page was gold, preserving the information needed to retrace past trips and beat the competition to the most lucrative ports.

The dog-eared rutter has long since been replaced by commercial charts and electronic equipment. But until recently, no single electronic device had emerged to record all the key data about a ship’s voyage—such as its position, speed and course—in one place.

Enter Rutter Inc., a St. John’s, Nfld.-based company that perfected the voyage data recorder (VDR), similar to the black boxes that record flight data on commercial aircraft. What makes the VDR golden is its nearly captive market. In December 2004, the International Maritime Organization (IMO), which governs ocean-going shipping, announced that VDRs would now be mandatory on all international cargo vessels over 3,000 tons. Although this isn’t Rutter’s only offering, it’s the company’s flagship product, a canny combination of homegrown hardware and software. And while its big payback may still lie ahead, the VDR has already put Rutter on the map as the first Atlantic-Canadian firm in the 18-year history of the PROFIT 100 to earn the top spot among Canada’s Fastest-Growing Companies.

Five years ago, Rutter had revenue of just $223,800. But with a strong focus on finance, distribution and acquisitions, it’s now a market leader, with revenue of $70.9 million in 2005. That’s five-year growth of 31,598%—ramming speed by any measure.

But chairman and CEO Donald Clarke wants to rule the waves. He’s out to make Rutter a $500-million company within four years, with market leadership in niches from high-tech electronics to VDRs, radar and other ocean-related innovations. Clarke, whose grandfather founded Montreal-based Clarke Steamship Co., a shipping leader on the St. Lawrence, sees the ocean as the world’s next business frontier. He believes increasing maritime commerce, the global push for offshore oil and gas, and rising concern for coastal security will create countless opportunities for leading-edge businesses that feel at home on the rolling deep. “The foundation of our growth strategy is innovation,” says Clarke. “We want to create new products and build up existing products. We need to keep the innovation hopper flowing.”

Despite its success, Rutter has met its share of headwinds, from regulatory delays to a costly customer dispute and leaky stock price. Those shifting fortunes provide useful lessons to other entrepreneurs: the need for focus, the power of leveraging other people’s expertise (including governments), the importance of deep pockets—and the truism that even sure things take longer than anyone expects.

Rutter was founded in 1998 by Byron Dawe, then a vice-president of the Canadian Centre for Marine Communications, a non-profit St. John’s institute that helps Canadian firms exploit opportunities in marine technology and communications. Seeing the IMO’s growing interest in VDRs, he quit his job and persuaded Gary Dinn and Joe Ryan, two local entrepreneurs with marine electronics companies, to pool their expertise and form Rutter to develop a better data recorder. Working within a business incubator at Memorial University, Dawe oversaw product development and testing. With the help of the Canadian Coast Guard and the Standards Council of Canada, he even joined the international group that set the standards for the new generation of VDRs, giving Rutter’s technology the inside track.

By 2001, the three founders had begun delivering VDRs to a few major cruise lines, but they lacked the muscle to develop and distribute a complex new product worldwide. That’s when Donald Clarke came in. He and two partners had grown St. John’s-based ConPro Group from a concrete supplier into a provider of construction, engineering and technology services to offshore oil and gas firms. Having built the concrete base for the Hibernia drilling platform and electronic controls for the Terra Nova rig, they were seeking another challenge. They had already developed a light-equipped life vest mandated by the IMO, so “we knew how to capitalize on this market,” says Clarke. In 2001, the ConPro team dissolved their company and bought 51% of Rutter.

As CEO of the new Rutter Inc. (whose founders stayed on, with Dawe running the VDR business), Clarke took the ship in new directions. Figuring that R&D and distribution were challenging enough, he outsourced production to St. John’s-based SEA Systems Ltd., an electronics company then controlled by telecom giant Aliant Inc. He also signed up local distributors covering 70 countries. “Nobody knew who Rutter was,” he says. By contrast, the distributors knew the players in the shipping industry, spending almost as much time on-board ships as their crews.

With sales climbing, Clarke took Rutter public in 2002, raising $2.6 million with an IPO (TSX: RUT) and $3.2 million via private placements. The firm needed growth capital, and also wanted to use shares to help finance acquisitions. The payoff came fast: in the year ended Aug. 30, 2003, sales leapt to $19.8 million, up from $2.9 million the year before.

With his changes clearly working, Clarke led a $16-million acquisition binge, buying up the VDR’s local manufacturer, SEA Systems; a sister electronics manufacturer from Aliant called NewTech Instruments; and Rutter co-founder Joe Ryan’s firm, Sigma Engineering, a maker of enhanced radar processes whose software powered Rutter’s VDR. Also on the shopping list was a minority interest in a French deep-sea engineering company that had previously worked with ConPro; another regional electronics manufacturer; and a provider of engineering services to the offshore industry. Clarke’s strategy: with distribution under control, Rutter could focus on building its own products. Plus, the firm would contend in numerous technology and engineering markets, lessening its dependence on VDRs, which generated one-third of total sales in 2005.

Amid this excitement, Rutter’s stock tripled to $2.50 in the first half of 2003. But it fell back to the $1 range (where it has since languished) as the IMO kept delaying its VDR decision for cargo ships, and Rutter failed to collect an $8-million bill for an engineering project in Singapore. With VDR sales slowing and a hole where the Singapore revenue should have been, Rutter ran afoul of its financial covenants, forcing it to raise $16 million more from two private placements. (Win or lose, Clarke expects the Singapore dispute to be settled soon through binding arbitration.)

The good news: by leveraging NewTech’s production-process experience, Rutter produced a second-generation VDR requiring just 10 man-hours of production time, down from Phase 1’s 100 hours. This made it easier to use and install, says Clarke, cut costs in half (VDRs now run $40,000 to $60,000, installed) and reduced the module “from the size of a bar fridge to the size of a Coleman cooler.”

Clarke says Rutter is ready to make some waves. He estimates the global market for VDRs at 25,000 ships. But only 12% have converted so far, because they have until 2010 to comply with the IMO requirement and a VDR can only be installed in dry dock. (Clarke says Rutter is working on a plug-and-play system.) With Rutter’s growing reputation, he hopes to boost its industry-leading market share from 20% to 50%.

Beyond 2010, Clarke sees two key opportunities for VDRs. First are the 75,000 ships plying domestic waters that aren’t under IMO jurisdiction. Clarke believes more domestic fleets will adopt VDRs voluntarily or due to regulation, noting that a black box could have helped BC Ferries probe the recent sinking of The Queen of the North. In April, Rutter and its Australian dealer won a contract to install VDRs on the 31 vessels of Sydney Ferries Corp. In time, says Clarke, “all those 75,000 ships will be a market for us.”

Rutter is also chasing many other opportunities, including the Sigma radar product, whose imaging technology filters out much of the visual “noise” on a radar screen. It’s now being used around the world to provide coastal security, track icebergs and even detect pirates. With clients such as the U.S. Navy and the Federal Aviation Administration, Clarke thinks Rutter’s radar line could become as big as its VDR business.

Indeed, the key to Clarke’s $500-million plan is other products, such as personal locator lights for marine emergencies and instrument panels for light armoured vehicles used by the U.S. military in Iraq. As well, half the firm’s revenue comes from its engineering division, which supplies engineering, automation and project-management services to clients on five continents. Its Brazilian subsidiary, Unicontrol International Ltd., provides control systems to more than 60% of the offshore oil platforms in Brazil, a booming petro-producer.

Clarke’s plan requires both divisions to grow by balancing acquisition and organic expansion, and an in-house team is charged with stimulating innovation throughout Rutter. “We can’t be a me-too company,” says Clarke. “We have to come up with a mix of products and new solutions if we’re to stay ahead of everyone else.” Managers are also encouraged to watch for acquisition targets that could be ramped up with Rutter’s global engineering and client-service expertise.

Clarke believes such growth is essential. “It’s a pretty aggressive vision, but it’s necessary,” he says. “With the costs of being a public company today and all the rules and regulations, you have to grow big or go home.”

Others aren’t so sure. One Bay Street analyst who follows Rutter, but asked not to be named, likes the firm’s prospects in its main lines of business, especially as the VDR rollout picks up steam and oil and gas prices hit near-record levels. But he doesn’t think there’s anything wrong with sticking to your knitting: “If it becomes a $150-million business, that would be fine. I think investors would be very happy.”

2 Workbrain Corp.

Workforce management software
2000 revenue: US$383,000
2005 revenue: US$88,742,000
President & CEO: David Ossip



Supersize me

Workbrain didn’t have millions to market itself to Fortune 500 prospects. Here’s how it won them over anyway

By Camilla Cornell

In 2001, Workbrain Corp. was burning through $2 million a month, had just three customers and wasn’t expecting further sales for at least a year. Says David Ossip, president and CEO of the Toronto-based HR software developer: “Those were stressful times.”

What an understatement. But Ossip had faith. He’d already built and sold a successful startup, Business Machine Interface, that developed time-and-attendance software (a newfangled version of a punch clock, with lots of extras), before launching Workbrain in 1999. It, too, makes workforce management software, but in place of SMEs it targets supersized corporations (minimum staff count: 10,000), a group no one else was after. Multi-location enterprises can use Workbrain’s software to simplify the mind-numbing complexities of designing staff schedules, forecasting and budgeting for labour needs, tracking absences and ensuring working hours comply with labour laws.

They can also save big. Ossip cites a client that reduced labour costs by 10% in hundreds of locations, each with about 350 staff working six shifts. Using Workbrain’s centralized system, the client crafted schedules that avoided reams of inadvertent overstaffing.

Yet landing mega-clients wasn’t easy for the then unknown firm. With $1 million in startup capital, says Ossip, “building brand awareness was not an option.” He instead tried to partner with system integrators, such as IBM and Accenture, that had an in with his key prospects. If Ossip could convince them his software would make their clients more efficient, the integrators would recommend it, then handle the installation. That was no easy task, either, but he won them over by hiring experienced consultants who could tailor their presentations and Workbrain’s business model to integrators’ expectations.

For 18 months, Ossip tried not to think about Workbrain’s burn rate. Rather, he focused on its first three clients: British Airways; the Tennessee Valley Authority, a utility; and Russell Corp., a clothing maker. Ossip says they were more visionary than most firms because they saw the edge his software could provide. He figured if Workbrain could make them happy, they’d reassure more risk-averse prospects.

Workbrain (TSX: WB) grew a sector at a time, starting in manufacturing and transportation. Adding retail, financial services and government drove sales to US$88.7 million in 2005. Ossip says the firm will top US$100 million this year, and has set US$250 million as its next milestone—numbers likely to please investors.

Last year, Workbrain entered two vast markets with products for small business and health-care providers. And Ossip sees no end in sight: “The product has broad appeal for many industries, and our customers are out selling our system for us.”

3 Fruit D’or Inc.

Notre-Dame-de-Lourdes, Que.
Cranberry and blueberry processor
2000 revenue: $100,508
2005 revenue: $19,700,696
President: Martin Le Moine



Happy in the red

How Fruit d’Or married organics with innovative processing methods to build Quebec’s cranberry king

By Danny Kucharsky

When pork producer Martin Le Moine started cranberry farming in 1993, he and his partners saw it as a mere pastime that would keep them busy in retirement. The ardent environmentalist also decided to go organic before it was in vogue, in the process becoming North America’s first large-scale organic cranberry producer. “I wanted to do something good,” says Le Moine, “not just grow cranberries for the sake of growing cranberries.”

His decisions have paid off big. Now the president of cranberry and blueberry processor Fruit d’Or is riding a cranberry wave powered by frequent media reports of the red berry’s health benefits. In fact, Le Moine’s hobby farm now sells to his own company, which is the continent’s largest processor of organic cranberry products. Organics make up 30% of sales at Fruit d’Or, whose heavy investment in a high-tech processing plant permits it to outproduce its rivals by far.

Fruit d’Or supplies dried and frozen cranberries and blueberries to food processors, which use them in everything from trail and drink mixes to cereals, granola and nutrition bars. It also supplies fresh fruit, concentrates and a full range of dried, sweetened products. Exports, half of them to the U.S., generated 76% of the firm’s 2005 revenue of $19.7 million.

It helps that 90% of sales come from cranberries, whose sales have more than doubled in the U.S. over the past 25 years, and that dried cranberries are easily exportable and last two years without losing quality.

But far more than luck explains Fruit d’Or’s spectacular growth of 19,501% over the past five years. From the outset, the company’s principals decided to set up shop close to home in Notre-Dame-de-Lourdes, a small town in the cranberry-growing region of central Quebec, where the climate is ideal for the cold-loving fruit. This, combined with moderate labour costs, thanks to highly mechanized harvests, makes cranberries one of the few Quebec-grown fruits able to compete globally.

Fruit d’Or added to these advantages by investing in research to develop energy-saving thermal pumps used in its all-natural, preservative-free drying process. It also spent $5 million to upgrade its processing facilities last year, which allowed Fruit d’Or not only to boost output, but also to offset the soaring loonie’s squeeze on exports. “It has given us really big gains in productivity,” says Le Moine. “If we had the same productivity that we had three years ago, we would have disappeared.”

Fruit d’Or aims to boost production a further 25% by 2008 as local farmers ramp up output. Le Moine says that will easily allow it to reach $35 million in sales and continue to operate in the black while sailing in a sea of red.

4 Peer 1 Network Enterprises Inc.

Internet infrastructure services
2000 revenue: $232,062
2005 revenue: $24,113,000
President & CEO: Lance Tracey



Succeed with caution

Find a lucrative niche, stick to it, and never get in over your head. By following that formula, Peer 1 stood tall as Internet giants fell

By Camilla Cornell

When Peer 1 Network Enterprises Inc. began offering its high-performance Internet service to businesses in 1999, bandwidth sold for $1,000 per megabyte. Today, it goes for less than $100. Which raises the question: how could Peer 1 possibly grow its revenue by more than 10,000% over the past five years as market pressures decimated the price of its core product? According to Peer 1 president and CEO Lance Tracey, the simple answer is “very carefully.”

Tracey and Mark Teolis, the company’s vice-president of network and co-location, launched Vancouver-based Peer 1 (TSXV: PIX) to pursue a lucrative gap in the market: namely, Web-centric organizations, such as online retailers and gaming sites, whose demands for high bandwidth and even higher reliability were unmet by the big telcos and smaller ISPs. But rather than observing the “build it and they will come” mantra that doomed other online players, Peer 1 expanded its facilities only as fast as it could secure new customers. At the same time, it developed “peering” relationships with other networks, allowing traffic to flow between them at no cost. The result was high speed and reliability for customers at less cost to Peer 1. “We were a lot more flexible, too,” says Teolis. “If you went to Telus, there were a lot of rules, regulations and paperwork, and sometimes it took two months to actually get up and running. We can do same-day.”

The firm’s frugality served it well when supersized ISPs such as WorldComm and Global Crossing crashed in the tech wreck and sold their assets at fire-sale prices. “We bought equipment from these companies where we could get them for 20 cents on the dollar,” says Tracey. “Or we rented facilities that were fully built out and just moved into them without having to invest the capital costs.”

More recently, a pair of acquisitions added dedicated Web hosting to Peer 1’s service offerings. The firm now owns 13,000 Web servers, renting them out to customers who can’t or don’t want to invest in servers of their own. The so-called “server farms” allow Peer 1 to cross-sell hosting and bandwidth, thus generating more traffic, which in turn allows it to cut a better deal on bandwidth. Teolis adds that value-added services such as managed hosting offer higher margins and make Peer 1 less reliant on selling a commodity like bandwidth.

Greater profitability will be appreciated by shareholders of Peer 1, which lost $2.5 million in the year ended June 30, 2005. But they can find comfort in the firm’s rising gross margins and healthy earnings before interest, tax, depreciation and amortization, which topped $5.7 million on revenue of $26 million in the six months ended Dec. 31, 2005. Results like those explain Tracey’s confidence when he says, “The future for Peer 1 is just unlimited.”

5 Imaging Dynamics Co. Ltd.

Manufactures digital X-ray equipment
2000 revenue: $282,780
2005 revenue: $28,878,669
President & CEO: Darryl Stein



Imaging Dynamics wants to be the Intel of digital X-rays. Partnerships and unbeatable pricing might make it happen

By Andy Holloway

Darryl Stein has made sales calls in so many countries lately he’s probably racked up enough frequent-flyer points to travel around the world—again. Since January, the president and CEO of Imaging Dynamics Co. Ltd., a Calgary-based maker of digital X-ray equipment, has visited a dozen countries. Aside from deals for IDC’s Xplorer digital X-ray machine, Stein has signed agreements to supply digital cameras to makers of X-ray machines sold under 20 brand names. “I’m the Intel chip inside,” he says. “We have a game plan to be the de facto standard for going digital worldwide.”

It’s a lofty goal for a firm whose rivals include General Electric and Philips. But, by selling a lower-priced technology into emerging markets, IDC (TSX: IDL) has already achieved 2005 revenue of $28.9 million, up 10,112% over five years. Central to such huge growth is a huge cost advantage: IDC’s machines use charge-coupled device (CCD) imaging converters costing a third as much as the flat panels that its key competitors use—yet that customers deem just as good. “We have spoken to radiologists who are unable to tell the difference between IDC’s equipment and much more expensive offerings from GE, Philips and Siemens,” says Dushan Batrovic of Toronto-based analyst Canaccord Adams.

Another advantage: IDC is willing to partner with just about anyone, including manufacturers few Canadians have heard of, such as Wangdong Medical Systems in Beijing and Digix in Slovakia and Austria. Stein has also solidified relationships with regional distributors, including the largest X-ray equipment distributor in China and the largest medical imaging equipment distributor in the U.S., IDC’s top market.

Not bad for a firm that couldn’t give away its equipment when Stein joined in 1999. IDC’s founder, inventor Robin Winsor, had patented CCD-based digital X-ray technology in 1992, after a dinner chat with his veterinarian wife and her colleagues about the inefficiencies of film-based X-rays. Still, although digital is cheaper per image, easier to store and quicker to retrieve than film, radiology labs were slow to catch on. But they’re now switching en masse, just as consumers have done with digital cameras. X-ray rooms, which number 200,000 in North America alone, are also digitizing, and Batrovic says IDC’s lower prices will play well among smaller facilities.

IDC will probably never be as big as GE or Siemens, but it’s already a thorn in their sides and could become a buyout target if it keeps growing. Stein hopes to hit $100 million in sales by 2008. “We’re not going to buy our way there; we want to make money all the way,” he says. “We’re in the early innings of this game.” A game that will no doubt require a few more global treks in Stein’s near future.

6 Selectcor (1382285 Ontario Ltd.)

Amherstburg, Ont.
Distributes phone airtime cards
2000 revenue: $259,491
2005 revenue: $24,388,295
President: Ryan Deslippe



By Camilla Cornell

It could be a PROFIT 100 first: a firm that has cracked the top 10 by selling to customers other companies don’t want.

In 1999, Ryan Deslippe—who at just 15 started a successful weekly newspaper—spied an opportunity in the 30% of wireless-plan applicants rejected on those grounds. With these tens of thousands of “sub-prime” consumers in mind, he and business partner Robert Cikalo co-founded Amherstburg, Ont.-based SelectComm to sell prepaid cellphone cards through independent convenience stores in Windsor, Ont. and neighbouring Essex County.

What a difference seven years make. Today, Deslippe is a grizzled telecom veteran whose firm notched 2005 sales of $24.4 million, up 9,299% over five years. And he’s about to become president of a new firm, Selectcor, that will unite SelectComm with a pair of complementary businesses in the hopes of creating a dominant player in the sub-prime consumer market. Not bad for a guy who’s still only 28.

As a prepaid wireless company, SelectComm didn’t stay local for long. First, it hooked up with regional distributors that supply mom-and-pop corner shops, adding SelectComm’s phone cards to their wholesale catalogues. Then it serviced the heck out of retailers, ensuring that additional stock of any hot-selling cards was always at hand. By 2001, consumers could purchase SelectComm products in convenience stores, gas stations, grocery stores and drugstores across Canada.

But by then the national wireless carriers had launched their own prepaid services, backed by big marketing budgets and packaged with discounted phones. “We figured if you can’t beat ’em, join ’em,” says Deslippe. Reasoning that the carriers would rather not deal directly with thousands of independent retailers to manage distribution, fulfillment and retailer support, Deslippe and Cikalo offered to buy prepaid cellphone cards wholesale from multiple carriers and distribute them to the mom-and-pops. One by one, Rogers Wireless, Fido provider Microcell Solutions (now owned by Rogers) and Telus Mobility signed on, and in 2003 SelectComm expanded its offerings to include prepaid long-distance cards.

By early July, SelectComm, along with Windsor-based Local Fone Service Inc. and Integrated Brands Ltd. of Markham, Ont., plan to complete a reverse takeover of Vaughan, Ont.-based Ribbon Capital Corp., a public shell company operating under the auspices of the TSX Venture Exchange’s Capital Pool Company program. The deal will give the post-merger entity, Selectcor, a public listing and the shell’s assets— namely, $1.75 million in cash. But that’s not all. Local Fone’s product is prepaid home phone service, while Integrated Brands markets IBM PCs on low monthly payment plans; add prepaid wireless to the mix, and Selectcor will have a portfolio of products for credit-challenged consumers that it can cross-sell to existing customers.

Deslippe, who will be named Selectcor’s president, says the company will introduce more wireless and wireline services over the next six to 18 months to fill voids in the sub-prime marketplace. “In a way,” he says, “we’ve come full circle.”

7 FundTrade Financial Corp.

Oakville, Ont.
Mutual fund dealer
2000 revenue: $518,300
2005 revenue: $32,809,701
President: Glenn Butt
Executive Vice-President: Chris Enright



By Camilla Cornell

It’s a beautiful thing when your business model delivers hypergrowth while your rivals refuse to copy it. Partners Chris Enright and Glenn Butt have ridden that beautiful thing all the way to five-year growth of 6,230%. In so doing, FundTrade Financial Corp., their Oakville, Ont.-based mutual fund dealer, has achieved a rare feat: cracking the PROFIT 100’s top 10 two years in a row.

At the core of its model is flat-fee pricing that sees FundTrade give the independent financial advisors who are its clients every cent of the commissions they earn selling and servicing mutual funds. Rather than follow industry practice by taking a share of those commissions, FundTrade charges each of its 236 clients $15,000 a year to provide compliance, trade and back-office services. Enright, the firm’s managing director, says that’s a bargain for big producers, who could easily pay royalties of $70,000 a year to a traditional mutual fund dealer. It also eliminates this conflict of interest: dealers are supposed to ensure compliance with regulations against any trades not in the best interests of an advisor’s customer—at the cost of reducing their own commission revenue.

So, why is FundTrade almost alone in this model? “If you’re a publicly traded company, you don’t want to cap the upside of your revenue,” says Enright. “We don’t have to report to shareholders who are requesting more and more return on equity and shareholder value.” He and Butt are content with a profitable, self-sustaining firm that continues to add clients—16 so far this year.

FundTrade’s flat fees yield predictable revenue, and save sales training and other educational costs because the advisors most attracted to flat fees are big producers who don’t need much assistance. Still, this isn’t a low-service model. Butt, the company’s chief compliance officer, and Enright personally monitor most of their advisors’ operations biannually, twice as often as regulations require. And both of them coach clients on compliance, passing along tips about new regulations in the works garnered through their senior roles in industry bodies.

Although FundTrade’s only marketing is word of mouth, its revenue has grown explosively, from $518,300 in 2000 to $32.8 million in 2005. (That includes commissions collected from fund companies and turned over to advisors.) While the partners had long planned to max out at 300 clients, the number they figure they can oversee personally, they’ve just invested six figures in a higher-capacity back-office system. As the regulatory environment grows more complex and costs rise, says Enright, “we may need to be bigger.” It seems a lot more growth is still to come from their beautiful business model.


Burlington, Ont.
Security guard services
2000 revenue: $131,243
2005 revenue: $7,876,610
CEO: Dean Lovric



By Andy Holloway

When an Air France jet skidded off a runway at Toronto’s Pearson International Airport last August, most of the attention was on the safety of the 309 passengers and how the myriad fire and ambulance personnel on the scene were handling the near-disaster. But if you’d looked closely through the flames and smoke pouring from the plane’s tail, you might have seen 50 security guards from ASP Inc. moving with impressive speed to secure the perimeter. Yet, what could have been a defining public moment for the Burlington, Ont.-based company went unreported in the media.

But then publicity wouldn’t have fit a firm and a CEO, Dean Lovric, who are downright bashful when it comes to self-promotion—even after growing revenue by 5,902% over the past five years to $7.9 million in 2005. ASP doesn’t even have a sales department, and only recently booked newspaper ads to recruit the staff it needs to sustain its growth. This challenge is made even more acute by ASP’s fussiness about who it picks as employees and customers. “We’re not necessarily looking to expand to some phenomenal size,” says Lovric. “We’re looking to keep a close-knit clientele and give our clients much more personalized service.”

Still, ASP does aim to go national one day. Among its brand-name clients are General Electric and Honeywell, the Greater Toronto Airport Authority, and airlines Skyservice and Air India. A customer who wished to remain anonymous praises ASP as a “higher-end security company” that’s happy to accede to special requests, such as dressing its guards in suits for a facility opening.

How has a 360-employee firm grown so fast when it’s up against scores of players in a sector employing 215,000 in Canada? In part by bending over backwards to satisfy clients, such as swallowing the bill if an emergency leads to overtime. In the security trade, says Lovric, it all comes down to speedy response. ASP delivers this through advanced scheduling software and a staff willing to respond quickly if off-duty and work overtime. To encourage loyalty, ASP offers rewards such as movie passes, dinners, annual barbecues and above-average pay.

Then there are the extras money can’t buy. “Once I was on the way to the airport, and found out a supervisor needed additional funds to close his mortgage or he would lose his house,” recalls Lovric. “I turned my car around and cleared the funds for him.” That’s the kind of gesture employees remember. Now ASP just needs a few more good people so it can take on a few more customers.

9 Angiotech Pharmaceuticals Inc.

Specialized medical devices
2000 revenue: US$3,336,000
2005 revenue: US$199,648,000
President & CEO: William Hunter



By Camilla Cornell

From the time it hit the market in 2004, the Taxus stent—Angiotech Pharmaceuticals Inc.’s debut medical device—was a heart-thumping success. While doctors had long been inserting stents into patients’ arteries to keep the passages open, too often scar tissue clogged the device, forcing a quarter of all patients to undergo a second surgery. But because the Taxus stent incorporates a thin coating of a scar-inhibiting drug, its failure rate is only 3%.

The Taxus is the product of 12 years of toil by the trio who founded the company in 1992, including William Hunter, an MD and Angiotech’s president and CEO. Their mission: to add drugs to medical devices, making the hardware more effective with fewer side effects. Not only did the Taxus become the best-selling medical device in the world, it legitimized this new approach to medicine. In 2005, Angiotech’s revenue reached US$199.6 million, up 5,885% from five years earlier.

It might have been higher, but 95% of the Vancouver-based company’s revenue comes from sales of the Taxus—of which Angiotech receives only a small fraction. Like many drug startups, Angiotech focused primarily on R&D, then licensed its technology to a bigger firm that could take the product to market—in its case, medical supplies heavyweight Boston Scientific. “We figured out how to put different coatings on the devices to make them work better,” says Hunter, “but we were still reliant on someone else for execution because we couldn’t make the device ourselves.”

That will be less of a problem in the future. Angiotech announced in February that it was acquiring Lake Forest, Ill.-based American Medical Instruments Holdings Inc. for US$785 million. The deal gives Angiotech a sales force with operations in six countries, manufacturing capability and a suite of some 5,000 products used in applications as diverse as ophthalmic surgery and facelifts. Angiotech, says Hunter, will now be able to take a product “from discovery through to sales.”

Investors reacted positively to the announcement, bidding up shares in Angiotech (TSX: ANP) from $15.90 to $18.18 the next day. Since then, slowing stent sales and a reduction in Boston Scientific’s royalty payment from 11% of Taxus sales to 9% have pushed shares back to pre-acquisitions levels—all of which makes Angiotech’s vertical integration efforts appear even more timely. As an end-to-end operation, says Hunter, Angiotech can become “a company that would not just be big by Canadian standards, but would be recognized far afield.”

10 Vanguard Global Services Ltd.

Transportation and logistics
Mississauga, Ont.
2000 revenue: $212,894
2005 revenue: $12,506,377
CEO: Richard Court



By Camilla Cornell

Twice a year, Vanguard Global Services Inc. conducts a formal review of each of its customers’ logistics processes in a search for greater efficiencies. And chances are the review will save clients time or money. “We’re in a dynamic environment,” says Richard Court, CEO of the cross-border logistics firm based in Mississauga, Ont. “Our capabilities and resources change, our customers’ needs change, and the marketplace changes.” To wit: by harnessing economies of scale created by one client’s fast-growing shipment volume, Vanguard was able to offer a $300,000 price reduction. While some might say Vanguard left money on the table, Court says, “The customer was thrilled.”

Such initiative has won Vanguard the hearts and wallets of such customers as Sony, Hitachi and Psion Teklogix, helping Vanguard’s sales climb from $212,894 in 2000 to $12.5 million in 2005—an increase of 5,774% in the face of trade-stifling events such as 9/11 and the rise of the Canadian dollar.

Court and his two partners, Mark Bates and Edward Ayranto—who together have more than 50 years in the shipping business—launched Vanguard in 1999 to provide customized cross-border transportation services. Their focus is high-volume shippers in the automotive and electronics sectors. And their timing has been perfect: as trade between Canada and the U.S. gets more complicated, companies are becoming more likely to outsource shipping. Those same companies can hardly ignore Vanguard’s promise of customized service for 10% to 50% less than its rivals charge.

Such savings result partly from Vanguard’s preference for long-term relationships with clients. It gives Vanguard the option of performing a complex analysis of a customer’s supply chain, which leads to a formal report that explains how the movement of goods can be streamlined and that quantifies the benefits.

Court says learning the ins and outs of a customer’s operation typically takes three months to a year, but the effort seems to be worth it. Vanguard recently applied its magic to a handheld electronics manufacturer that had no control over shipping costs or when parts would arrive, due to its dependence on a multitude of suppliers that controlled their own shipping. Vanguard cut the firm’s transportation costs by 30% by assuming responsibility for all shipments, leveraging economies of scale and even providing preprinted labels and waybills to the suppliers.

Not content to rest on its laurels, Vanguard is accelerating growth. The firm recently moved from a 40,000-sq.-ft. warehouse to a state-of-the-art 65,000-sq.-ft. facility, and is investing in warehousing systems and technology that will improve the visibility and control of shipments. “We are expanding our capabilities and increasing our capacity,” says Court. “It’s all part of moving to provide the whole product for our customer.”

Originally appeared on