Signs Of Progress After A Rocky Start, American Electronic Sign Is On Track To Grow

When you sit down to watch the Super Bowl this afternoon there won’t be an American Electronic Sign product in view inside QualComm Park.

But everyone in the San Diego stadium will know what they look like.

The Spokane company made all of the portable electronic signage that controlled incoming traffic. When the dejected or triumphant fans leave, those same signs will guide them home.

Not that American Electronic is always on the outside looking in. The company is courtside at all U.S. Tennis Association tournaments, and just a short wedge shot from the 18th green at three of the four major professional golf tournaments.

American Electronic has fabricated hundreds of signs since Spokane business legend Luke Williams Jr., founded the company in 1988.

“Closed” might have been one of them.

Sued for patent infringement six years ago, the company and Williams had to seek bankruptcy protection when they lost the case in court.

In 1994, they settled for $2 million. American Electronic emerged from Chapter 11 in 1996.

“The patent thing sucked a lot of wind out of this company,” said President Nathan Batson.

But, he added, American Electronic increased its sales throughout the ordeal. Last year, $7 million worth of product moved off the loading dock at the company’s Spokane Industrial Park headquarters.

Retail and transportation products made up 40 percent of the total, with sports signage the remainder.

Batson said all the other signs point to still better days ahead.

“It’s a real exciting time,” he said. “Our plate’s real full.”

American Electronic’s most recent coup was signing an agreement with Tru*Serve, a chain of hardware and home improvement stores with more than 11,000 outlets, the largest in the country.

Most of those stores face competition from warehouse outlets, Batson said, and Tru*Serv officials want owners to upgrade their premises and marketing in response.

As an incentive, the chain is allowing owners to pay for new signage with credits for stock that is otherwise not liquid.

“They don’t even have to write a check,” he said.

And testimonials like that from the most recent Store of the Year owner won’t hurt either, he added.

Batson said the Ohio owner reported a 24 percent increase in sales after installing American Electronic signage. “That’s not unusual,” he said.

Batson noted that, in a bow to heritage as well as practicality, the signs include time and temperature readings that were the hallmark of its corporate predecessor, American Sign & Indicator Co.

“It increases the awareness over 80 percent,” he said. “People are fascinated with it.”

Williams brought Batson into American Electronic in 1992. The West Valley High School graduate had put in 19 years at Key Tronic Corp., where he indulged his adolescent interest in plastics.

Starting as an apprentice toolmaker, he advanced until he supervised all of the keyboard maker’s engineering operations, despite lacking an engineering degree.

“It was all practical knowledge,” said Batson, who joked that “There comes a time in every project when you have to shoot the engineers and start production.”

Williams, who as American Electronic’s chairman mentors Batson, said the Key Tronic veteran was brought in because of his expertise in plastics.

Early company signs used pixels mounted on metal that wore out as messages changed thousands of times. Long-life plastic would provide the reliability Williams knew would be needed based on his experience at AS&I, which he founded in 1951 and sold in 1983.

But Batson had hardly settled in before the company got bogged down in litigation that Williams blames on poor advice from patent attorneys he is now suing.

“We’re free to build a company and that’s what we’re going to do,” he said, adding, “We really do have the finest technology.”

Batson said Key Tronic’s keyboards and American Electronic’s signs differ mostly in scale. The circuitry is much the same.

American Electronic’s units, for example, are modular. Depending on the size of the sign ordered, the company can add or remove panels of pixels.

“It’s kind of like putting Legos together,” he said.

The company sub-contracts most of the components, which Batson said costs more but reduces borrowing.

About 25 Spokane workers assemble the signs. Another 25 develop programming and software.

Batson said the company does most marketing itself. A partner who services most of the sports accounts sells to others.

Batson said he expects the Tru*Serv deal alone to produce $2.5 million in new revenues for American Electronic this year, and more in the future.

“It was more than a home run for us,” he said.

Batson said the company hopes to follow up with another smash, this one with the Professional Golfers’ Association. Officials are pitching a $1.5 million, multicolor sign that would be capable of doing live video now available only on stadium television-type displays.

The American Electronic sign would not only be portable, he said, the big 20-foot by 40-foot panel requires only 110 volts of current - the kind that comes out of a typical wall socket.

“We go after the sports where the venue moves,” Batson said.

Another contract will put two company signs on every one of the 40 courts at the U.S.T.A. complex in New York. One bearing the Citizens name gives the time. The other, labeled IBM, tracks the speed of the serve.

Batson said American Electronic has doubled its sports business in the five years he has been with the company, and he expects to redouble those revenues in the next three years.

The transportation side of the business, if less glamorous, is just as dynamic.

Last winter, Batson said, the company tried to fill what is usually a slow period by stockpiling signs like those in use in San Diego.

The signs sold as fast as they could be produced, he said, adding that the company will gear up again next month.

Batson said the transportation signs are unique for several reasons.

Trailer-mounted units are solar-powered, with back-up battery packs. In case of total power loss to either portable or fixed units, the controllers can be pre-programmed with a default message that, in the event of a lawsuit for negligence, can be used as a liability defense.

The message would be visible thanks to a coating on the pixels that reflects light day or night. They can also be illuminated with light-emitting diodes and fiber optics.

All use very little energy, Batson noted.

He said operators can program messages manually, or they can be controlled from miles away using a cellular phone modem.

In the case of the sign at the base of Lookout Pass, he said, sensors at the summit can change the message automatically according to weather and pavement conditions.

Batson said more states are adopting bid specifications tailored to the capabilities of American Electronic signs. As the company wins more of that business, he said, local jurisdictions will follow.

But, he added, bidding cycles can be lengthy, 18 months in the case of a recent contract with the Port Authority of New York for a sign at John F. Kennedy International Airport.

Batson said the reliability that first concerned Williams has become a major selling point. Most electronic signs are suspect, he said, but units sold to the Washington Department of Transportation performed so well the state did not renew the maintenance contract.

“I don’t know whether we shot ourselves in the foot,” he said.

Batson said American Electronic also made a recent breakthrough in air transportation. Northwest Airlines, after trying several other systems, installed the company’s signs on one Detroit concourse, where they fed ground crews the numbers on incoming flights, time left until arrival, amount of fuel to load and time to departure.

When efficiency immediately jumped 10 percent, the airline ordered a total 120 for all its Detroit and Minneapolis gates.

A deal with Northwest’s European partner, KLM, is in the works.

Batson said the potential applications for American Electronic products keep multiplying.

“It’s difficult to stay focused,” he said. “That’s one of the hardest things to do around here.

“I just see great growth ahead.”

, DataTimes ILLUSTRATION: 2 Photos (1 Color)

MEMO: This sidebar appeared with the story: SIGNED UP American Electronic Sign customers: Tru*Serv U.S. Tennis Association Professional Golf Association New York Port Authority California Department of Transportation Washington Department of Transportation Northwest Airlines Walgreens