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By Carlotta Mast
Camera Business Writer
The Daily Camera, Boulder Colorado, April 28, 2002
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When the wooden staircases outside his Longmont apartment building began falling apart, Richard Ehret decided to look into buying replacements made out of more durable aluminum from JOMY Safety Products Inc. in Boulder.
Upon learning more about the company and its products in March, Ehret decided to purchase two staircases -- and invest $50,000 in the self-underwritten initial public offering JOMY had under way to raise $1 million to expand its business. JOMY expects to close its IPO within the next 30 days, having raised approximately $1.3 million.
"I had no apprehension about investing because this company will be successful," said Ehret, who is retired and owns the apartment building at 528 Baker St. in Longmont. "JOMY is the only company I know of that builds this kind of product. Every apartment building in the country will need a staircase like the ones I purchased. I know of at least 10 in Longmont."
Along with staircases, JOMY manufactures fire escapes, balconies and ladders -- all from aluminum, which the company says has advantages over steel.
Says JOMY President and CEO Paul Enright: "Aluminum is maintenance-free, is lighter and lasts longer than steel, yet we're able to price our products competitively with steel."
And herein lies the success of 12-year-old JOMY. As the only American manufacturer of aluminum emergency escape and rescue systems, the company simply can't keep up with orders, Enright said.
JOMY posted a net loss of $24,000 on revenues of $1 million in 2001. Enright attributes the loss in part to $250,000 in orders that were canceled because JOMY couldn't deliver its products in time to meet customer timelines. "We were profitable until that happened," Enright said.
In addition, JOMY donated $58,000 in collapsible "stick" ladders to the city of New York to aid in rescue efforts after the events of Sept. 11, and Enright said this also contributed to the company's loss last year.
Thanks to growing demand and an expanded manufacturing facility, Enright forecasts JOMY's revenues will grow by 70 percent in 2002.
In January, JOMY moved its 14 employees from its 2,500-square-foot Gunbarrel manufacturing facility to a new 11,500-square-foot building at 4635 Nautilus Court South in Gunbarrel. JOMY maintains a licensing agreement with Belgium-based JOMY S.A., which started the business and manufactures JOMY's longer staircases and ladders.
Rather than pursue debt financing to fund JOMY's expansion, Enright opted to undergo a self-underwritten initial public offering, also known as a direct public offering, in Colorado.
After filing the necessary paperwork with the Colorado securities examiner and being approved to raise $1 million directly from the public, Enright began marketing his company to potential investors in late January.
He mailed letters to 10,000 Colorado residents, inviting them to attend one of nine "road show" meetings at JOMY's Gunbarrel facility. About 100 people attended.
JOMY's story was so compelling to Ehret and approximately 60 other Colorado residents that in five weeks the company was able to raise more than the $1 million approved for its IPO. "We are oversold," Enright said. "I have two checks sitting on my desk that take us over the limit."
Enright is requesting approval from the state securities examiner to take an additional $300,000 from investors before closing the JOMY offering. Once the IPO is closed, Enright will solicit approval from the National Association of Security Dealers to list JOMY's stock on the Nasdaq.
Mentor Capital Consultants in Boulder assisted JOMY with its IPO. "The offering went exceptionally well," said Gene Klawetter, an associate at Mentor Capital. A self-underwritten IPO "is a good way for an entrepreneur like Paul to raise $1 million or $2 million."
Boulder resident Ron Davis is one JOMY shareholder who was immediately sold on the company. In fact, he was the first investor to write JOMY a check -- but only after he researched the company's products and market potential.
"I was impressed with JOMY because the company is solving old problems in new ways," said Davis, who works in sales and marketing at Longmont-based DigitalGlobe.
Davis was also sold on the fact that JOMY fulfills a safety need by manufacturing products geared toward emergency escape from buildings and other structures. "I was looking for investments that ride the 9-11 wave," Davis said. "Right away, I saw that JOMY fit the bill."
Like Davis, Ehret is bullish on the future of JOMY -- so much so that he expects his $50,000 investment to double within a year. "It may not, but that is OK," Ehret said. "I'm in this for the long term."
Contact Carlotta Mast at (303) 473-1332 or mastc@dailycamera.com.
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