Ever have one of those times when you were confident a contract was a shoo-in for your business? Only to watch the deal crumble inexplicably?
Lebanon-based E&E Metal Fabrication Inc. knows exactly how that scenario goes.
The company was supposed to produce biomass burners for Florida-based Starlight Energy. The companies penned the agreement two years ago for E&E to design and build the machines that burn organic material as an added energy source for factories and other companies to supply energy, thereby reducing their dependence on the grid.
Biomass, with less reliance on fossil fuels, has been hailed as a green energy source.
"We were really close to firing it up," said E&E CEO Willie Erb, "and then they closed it up."
Apparently there was a disagreement between Starlight partners over production of the biomass burners, so they called last year and said the project wasn't going to happen, Erb said.
E&E folks were disappointed, but the consolation was that they "weren't stuck for a dime," Erb said. Starlight had paid for everything with the biomass burners, including materials and prototype production, he said. And E&E was allowed to sell off anything sitting around the shop when the deal was called off.
"We showed him that we could deliver, it didn't happen, and now we're moving on," Erb said.
Best year ever
Loss of a major contract could spell doom for some companies. That wasn't the case for E&E. In fact, 2012 ended up being its best year on record, with revenue of $4 million, Erb said. The company is on pace to beat that benchmark this year, too.
"We go day by day," he said. "We don't depend on any one contract."
Several other contracts have replaced Starlight. E&E is making stainless steel desks for a pharmaceutical company, the steel structure for an aquatic exercise equipment company, and an industrial strength mulch spreader that fits to the back of a truck and blows mulch over large areas.
"Where the next business is coming from is anyone's guess," President Steve Erb, Willie's nephew, said.
The Erbs started and grew their business through good vision and hard work, so there's no doubt the future holds more good things, said Larry Bowman, president of the Lebanon Valley Chamber of Commerce.
"E&E is a great example of entrepreneurship in action," he said.
The company has always been proactive in seeking new customers from a variety of industries, he said.
E&E has to do that, because it doesn't make its own line of products as a constant revenue source, Steve Erb said. In 2011, it looked at the natural-gas industry as work potential, considering the amount of steel equipment and the need for parts and repairs. Then drilling slowed down with the glut of gas and dropping prices. That meant less work for companies like metal fabricators, he said.
"Really, it was a timing thing with that," Willie Erb said.
Energy-sector work is less reliable compared to making and modifying parts for transportation, water treatment and manufacturing, Steve Erb said. Energy can provide substantial work, but E&E is not going after a lot of it at this time, he said.
If gas drilling expands with improved end markets or other energy-sector work becomes available, it's definitely something E&E would go after, Steve Erb said. And they will be Willie's responsibility going forward.
"That would be the future of the company, where he's getting more repetitive work," Steve said.
That's because E&E is undergoing a leadership change, with Willie Erb retiring in October and leaving the day-to-day decisions to Willie's daughter Liane Erb, who is the company's secretary and treasurer, and Steve. Willie will take on the role of the primary outside sales representative to find new clients, they said.
"Everyone else will pretty much stay in the same roles," Liane Erb said.
Although business is changing, the Erbs' commitment to the community around them hasn't changed, Bowman said. They back up the chamber in its work with other businesses and constantly donate their time, money, effort and skill to the broader Lebanon-area community, he said.
Last year, they started a charity golf tournament and raised $8,000 for the Leukemia & Lymphoma Society. The second incarnation of the tournament on May 25 will benefit 17 local charities, Willie Erb said. Next year they would like to have it benefit local first responders, such as volunteer fire departments.
"They're not afraid to go out and raise money and help causes here in the community," Bowman said.