Pioneer Power Solutions (PPSI) CEO Nathan Mazurek appeared on GeoInvesting Executive Casts to connect with investors on various aspects of the company. In the segments below, Mr. Mazurek talks about the company’s evolution and its competitive advantage.
The questions posed to Nathan Makurek:
- How did the company evolve in the past years?
- How is your company different from industry competitors? What is your competitive advantage?
Nathan Mazurek discusses how did PPSI evolve in the past years?
Pioneer was a business that I bought in 1995, when it was only manufacturing pole-mounted transformers. It did about 12 or 13 million dollars a year in those days. We had one product, and we basically had one customer that took up 85% of our capacity.
That system evolved into what we called the Pioneer System, and over the years I and my senior team leaders/managers realized that if we keep on moving what we call up the value chain, if we come up with a more sophisticated solution slowly, applying the same labor and overhead for that particular solution, we will improve our revenues and profit margin.
So in the case of the original business, we went from pole mounts, to pad mounted transformers, to more sophisticated pad mounted transformers, to substation transformers. Until the time we took the company public in December of 2009, what had been a 12 million dollar a year business making [net profit] of one hundred thousand dollars a year, was then close to a 50 million dollar a year business making [net profit] 8 million dollars a year of profit and close to zero debt at that time. And that’s because over the years we were able to prove ourselves; we were able to provide that special piece of transformer distribution equipment for these discriminating customers, providing them with great value, and in exchange, really, providing the company with better margins.
Nathan Mazurek discusses how is PPSI different from industry competitors, and the company’s competitive advantage?
Our competitive advantage we’d like to think is really the engineering solutions. Most of our customers are large, industrial, extremely sophisticated and discriminating users, larger oil and gas companies – mining, metal, electrical, utility – they have complex and critical applications, the ability to meet those requirements within the parameters, as best as we can, that they have already set forth. That is the mantra, that is the whole make up of Pioneer Power.