Cable niche allows ADDvantage Technologies to dial up success

/> The company never had an initial public offering and so it sidestepped the lengthy and complicated process of going public under close state and federal scrutiny.

Brothers David and Ken Chymiak cofounded privately held Tulsat Corp. in 1985. In 1999, ADDvantage Technologies Group was created in a "reverse merger” between Tulsat and publicly traded but bankrupt ADDvantage Media Group. Tulsat became a wholly owned subsidiary of ADDvantage, a shell basically amounting to a corporate organizational structure. The newly formed ADDvantage Technologies Group first traded on the American Stock Exchange, in 2002, but moved to Nasdaq in 2007.

Nimbleness has given ADDvantage an advantage in the marketplace for cable equipment, Ken Chymiak said in an interview. The company's "On Hand On Demand” business model, he said, keeps inventory warehoused, sometimes for lengthy periods — but then ADDvantage can, say, respond today to orders placed today.

Having long-term, loyal employees with longtime connections across the cable TV business also lends stability to the company, he said.

"The key is having the right people and having the inventory when people need it,” he said.

Chymiak said ADDvantage had Motorola equipment on hand that even manufacturer Motorola didn't have in stock and so was able to respond to damage to cable systems in New Orleans and along the Gulf Coast after Hurricane Katrina in 2005. More recently, the company was able to immediately respond to widespread damage in Mississippi, he said.

Inventory turnaround is slow, he said, but margins are high, often higher even than equipment manufacturers', in an industry where other companies are unwilling to pay the expense of long-term warehousing.

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