Global Fastener News

March 1, 2011 FIN – 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  ©2011/2013 Fastener Industry News.
For information on permission to reuse or reprint this article please e-mail: FIN@GlobalFastenerNews.com

Atlantic Marking Multiple Milestones in 2011
February 14, 2011 FIN – Massachusetts-based commercial and aerospace supplier Atlantic Fasteners turns 30 this year, marking not only a key anniversary but a new chapter in the company’s 30-year transformation from small local company to national supplier.
“Once a tiny, unfocused business adrift in debt, Atlantic Fasteners was purchased in 1981 by an executive intent on using big-company strategies to breathe new life into small, entrepreneurial ventures.”
Today this “small venture” achieves $13 million in yearly sales and has an aerospace division that has been growing, despite recession, at an annual compounded rate of 27%.
President Tony Peterson attributes much of the company’s current strength and future potential to consistent adherence to strategies put in place by its founding partner so many years ago. Consequently, the company is marking several other important milestones that convey the company’s “coming of age” and promising future.
In 2011, the company reports:
• The retirement of Atlantic Fasteners founder Patrick O’Toole.
“Pat O’Toole’s Harvard MBA and high-powered career at Lestoil and Standex International prior to purchasing Atlantic Fasteners gave him a clear view of how to create a powerhouse supplier with a clear focus on quality and service for industrial markets. His early commitment to computerized inventory, barcode management and differentiated, guaranteed services sparked the creation of systems that still drive the company’s growth in commercial and aerospace industries.”
• The 25th anniversary of service guarantees. Atlantic Fasteners’ early service guarantees have truly distinguished the company in a segment where few such assurances exist, even today.  In 1986, Atlantic’s first guarantee of next-day delivery, backed by the promise of a $50 credit, demonstrated the company’s expertise in inventory management and efficient processing of orders the same day received. Later, Atlantic expanded to six guarantees and increased the promise to $100 in credit.
“The systems we put in place years ago still serve to keep our focus on exceptional service,” said Peterson, who as a minority partner was the primary architect of the company’s guarantee program.
• The 7th anniversary of Atlantic Fasteners’ Aerospace. Atlantic Fasteners’ competence in documenting every aspect of its service was instrumental in the creation of its aerospace division, which moved to new quarters in West Springfield in 2010 and also maintains sales offices in Maine and Missouri. Like the company overall, the division is distinguished by higher-than-average performance, which is tracked within the industry as Defense Logistics Agency (DLA) scores. Atlantic Fasteners Aerospace also has received service awards from defense industry and aerospace customers, including a prestigious Lockheed Martin STAR Supplier Award.
A recent new contract with a Chicago-based aerospace supplier also expanded the division’s offerings by bringing Atlantic’s trademark barcode-based vendor inventory management (VMI) program to the aerospace industry. This first contract gives Atlantic Fasteners Aerospace the responsibility for managing more than 680 aircraft parts.
• The 5-year anniversary of 100% employee ownership. As majority owner, O’Toole also had the foresight to help Peterson convert the company to employee ownership well in advance of his retirement. This was accomplished in late 2005 through an Employee Stock Ownership Plan (ESOP), an ownership structure with a good track record for increasing staff productivity and company stability.
“I watched a lot of my friends sell out to these ‘rollups’ and conglomerates,” O’Toole says today. “In every case, it decimated the business.”
He chose instead to preserve independent, local ownership, noted Peterson, who considers employee ownership to be one of his proudest collaborative achievements.
“Employees make good owners,” he said. “This has added to the stability and competitiveness of our company.
“I think many company owners feel this is something they can’t afford,” Peterson noted. “But we were pleasantly surprised at how smoothly we could accomplish it to everyone’s benefit.”
The ESOP structure has been good not only for business, but for employees, he said. Some have built up substantial ownership value, giving employees the same bright future prospects that Peterson sees on the horizon for Atlantic Fasteners. Sales for the anniversary year are already ahead of last year.
For more information on Atlantic Fasteners, contact Marc Dionne for aerospace and military at 800-313-1487 or John Kraus for commercial at 800-800-BOLT (2658). ©2011/2013 Fastener Industry News.
For information on permission to reuse or reprint this article please e-mail: FIN@GlobalFastenerNews.com

See also “2005 FIN – O’Toole Sells Atlantic to Employees” in the Fastener History section of GlobalFastenerNews.com

Related Links:

• Atlantic Fasteners