HEADLINES
O’Toole: Bar Coding Key to 30 Years of Atlantic Fasteners Growth
Atlantic Fastener founding partners Tony Peterson, president, Carol Peters and Patrick O’Toole on the occasion of O’Toole’s retirement as chairman from the company in December 2010.
In 1981 Patrick O’Toole was looking for an investment. He ended up with a fastener career.
Over the next three decades he turned a small distributorship deep in debt into a successful business with $13 million in sales.
Atlantic Fasteners is marking 30 years being led by O’Toole and his retirement.
O’Toole was an executive with a Harvard MBA and conglomerate experience with Lestoil and Standex International seeking to use his big company experience to grow small companies.
In an interview with GlobalFastenerNews.com, O’Toole recalled his pre-fastener days running a division with six companies, including hiring and firing managers.
The transition from the conglomerate to fasteners started in the 1970s when his brother, Lawrence O’Toole, approached him about investing in a plumbing supply business.
O’Toole arranged financing and they transformed it from a bankrupt retail operation to a successful industrial supply.
O’Toole started looking for another industrial supply company so he could go into business for himself. Twice over an 18-month period Atlantic Fasteners was brought to his attention. It was a small Massachusetts company with $250,000 in sales at the time.
O’Toole decided to buy the distributorship in June 1981.
The manager O’Toole originally hired “was in over his head” and consequently O’Toole had to step in and learn the fastener business. He went to the library to learn about the mill supply business and regional players.
“I liked the concept of what I found,” O’Toole recalled. “The margins were good if we could get enough sales volume.”
Instead of a few months leading the business, O’Toole found himself busy for three years computerizing Atlantic Fasteners. That became an advantage with so many customers and every customer having different prices.
Atlantic developed its own software and was early to adopt bar coding.
“Bar coding put our error rate near zero. The key to this business became the computer. It gave us a strong advantage.”
It also led to Atlantic instituting a service guarantee 25 years ago. In 1986, Atlantic began a guarantee of next-day delivery, backed by the promise of a $50 credit. That succeeded in demonstrating the company’s inventory management and same day order processing to customers.
Atlantic subsequently has expanded to six guarantees and upped the promise to a $100 credit.
In addition to computerization, O’Toole recruited Carol Peters from Eckert & Finard where she had been in purchasing and inside sales for 14 years.
In 1984, O’Toole added Tony Peterson, who had held a purchasing position with a potential customer, to his team. Peterson is now president.
Another key was winning the Unbrako line of fasteners. “To this day we are one of the biggest Unbrako distributors in the U.S.,” O’Toole explained.
The sales volume rose to more than $3 million and O’Toole bought out his brother after six years.
One attempt to grow was postponed. O’Toole had heard about the National Fastener Distributors Association and applied. “I found out that at the time it was a ‘closed club.’ Even though Atlantic Fastener had been in existence before O’Toole acquired it, he was told he had to wait five years.
After those five years he was admitted and a few years later the NFDA’s lawyer advised them to open up membership.
NFDA became beneficial to Atlantic, providing events where O’Toole developed friendships. With distributors from throughout the country, he could meet with non-competitors from other regions and pick up ideas for Atlantic.
O’Toole went on to be elected the 1990-91 NFDA president.
Atlantic Fasteners has continued to expand. Seven years ago the company opened an aerospace division that has grown to include sales offices in Maine and Missouri.
As he approached retirement, O’Toole watched fellow distributors sell their businesses to “roll-ups” or conglomerates. He didn’t like the results he saw.
“Those businesses didn’t do well after selling,” O’Toole observed. “In almost every case, it decimated the business.”
“I looked at selling to employees a couple times, but I thought our company was too small.”
Then Congress changed some laws making an Employee Stock Ownership Plan easier. O’Toole and current president Peterson investigated further.
“We had put together a great group of people and since the ESOP staff productivity and company stability has only increased.”
As he leaves, O’Toole is delighted that the value of the business to employees has grown 50% since 2005.
And the numbers may be getting even better as the aerospace division has been growing at a 27% annual rate even during the recession.
O’Toole has one prediction for the future of the fastener industry that repeats what he found throughout his 30 years in the fastener industry: “It is going to be different.” E-mail: pjotoole@atlanticfasteners.com Web: atlanticfasteners.com ©2011 GlobalFastenerNews.com
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