Through strategic equipment investments, CEO Marti McCurdy has expanded the decades-old electronics distributor into exciting new territory as a one-stop components shop for aerospace and defense primes and tier two players.
McCurdy discovered a talent for electronics while serving in the U.S. Air Force. “I did six years working on electronics there, jamming radar systems,” she recalls. She then spent 22 years in the “back-end test business for semiconductors” before making a transition into “a different piece of the food chain” with a 2017 acquisition of Spirit Electronics.
“I was attracted to Spirit because they had a product line of Xilinx, which I knew very well,” McCurdy says of the company that was then focused solely on distribution. “It was a good match, but the company wasn’t in as good of shape as I thought, so I had to immediately pack up and move [to Phoenix] with only a day or two to find a place to live.”
Since then, she has built the Spirit Electronics team into one that is “dynamic, incredibly dedicated,” and highly self-sufficient. “Their bandwidth is huge,” McCurdy continues. “They really run the business now with just some of my oversight.”
She has also expanded the company into more than just distribution in order to better serve a customer base comprised of aerospace and defense primes, tier two players, and — more recently — EV manufacturers.
“Because of all the commercial space that’s going on with the likes of SpaceX, Blue Origin, and Planet Labs,” McCurdy explains, “the industry has to come to market quicker, faster, and better. There’s a lot of pressure on the old standbys of Boeing, NASA, and JPL
that are launching large satellites, but it takes them five years to do it where these new space companies are getting a whole constellation of 100 satellites up in a matter of months. The idea of getting something into orbit quicker has kind of forced the entire marketplace to reevaluate how they go about production.”
Over the past several years, McCurdy has added testing, design, and PCB assembly and rework to Spirit Electronics services. “This turnkey system probably shaves a nine month cycle off of a two-year deliverable for them,” she says. “So, that’s attractive and basically one price point. They also don’t have to get three, four, or five POs out from different vendors and coordinate the work on parts in and out of their facilities. We’re truly a one-stop shop.”
A recent investment in the technology required to handle PCB reballing projects has contributed to the company’s dramatic growth and a near doubling of revenues year-over-year.
McCurdy says that though the electronics industry as a whole removed lead from the solder used for its components in 2014, the military and other aerospace entities still require lead solder to withstand corrosive environments.
“You now have to remove whatever solder is there and replace it with tin lead solder,” she explains. “We’ve invested heavily to be able to do that for our customer base, because there’s only one other supplier that does that. We’ve stepped into the gap, and the time, effort, and money savings for the customer is huge. For example, we may get 200 parts in here. If we had to send them to the other supplier, it could take six to 12 weeks or even longer [to do a solder exchange]. Then there’s a week of shipping there and a week of shipping back. But the customer, with the supply chain constraints, really needs a product as soon as they can get it.”
Thanks to Spirit Electronics’ equipment investment, customers can have their parts shipped to the facility and the team can complete the solder exchange in a mere two days. “It’s all about efficiency and time to market, basically,” says McCurdy. “That’s where we feel like our momentum is coming in so strongly.”
Challenges: McCurdy bought Spirit Electronics’ current building in 2019, and the company rapidly expanded to fill all three suites in the 16,000-square-foot space. “We’ve started looking for a new building,” she says. “We have a mezzanine that has a gym, but we’ve already decided to put cubicles up out there. We call these our ‘champagne problems,’ and I’ll take them any day.”
Hiring additional staff is also a challenge. “We’ve been trying to hire for a year and a half,” McCurdy says. “My poor HR guy does a fantastic job. He spends his entire day on phone interviews, virtual interviews. To get hired, you kind of have to run the gamut of interviewing with the entire team, kind of like speed dating. The team decides who gets the position. They vote on it. But by the time we make an offer, somebody else has made another offer for more money. We lose them. It’s absolutely a hurdle that we’re trying to overcome.”
Opportunities: “I think it’s a market expansion,” McCurdy says. “Like dipping into the EV market. We weren’t pursuing it, but it came to us. Looking a year out, I think we’ll start to further diversify our nest egg into more EV, commercial, and things like that. There’s always room for medical as well because it falls right in line with our high reliability products.”
Needs: Other than the aforementioned need for staffing and additional space, McCurdy says that Spirit Electronics is in a good position.
“We have a very strong relationship with MidFirst Bank,” she says, “and we have private bankers there with Jeff Lowe and Gary Naquin that are such an integral part of our support system from a cashflow standpoint. They see the big picture, and they’re not guided by the same kind of strict requirements of a B of A or Wells Fargo. They sit down with you and look at where your opportunities are, where your risks are, where the growth is, all of that. And they literally at the table can increase our credit lines if we need it. Without that support, it would be a little bit more difficult to navigate the waters of our cashflow, even though we do really well and are in the triple-digit millions as far as revenue.”