Binks Sames Corporation
Binks Sames Corporation
Binks Sames Corporation
Incorporated: 1890 as The Star Brass Works
Sales: $296.7 million (1996)
Stock Exchanges: American
SICs: 3563 Air & Gas Compressors; 3567 Industrial Furnaces & Ovens; 3564 Blowers & Fans
Binks Sames Corporation is a worldwide leader in the design, manufacture, and distribution of spray finishing and coating application equipment. The company serves most of the worldwide automotive markets as well as the general industrial market. With more than half of its sales generated by 13 international subsidiaries, Binks Sames formed a Global Strategy Board in 1996 to implement its worldwide strategic plan. As of the late 1990s, the company marketed and manufactured a complete line of standard equipment for spray finishing and coating application, from spray guns to pumps, tanks, and accessories. It also custom designed systems and equipment, including spray booths, ovens and drying systems, air supply and exhaust systems, automatic spray coating machines, robotic systems, paint circulating systems, electrostatic application equipment, electronic control systems, powder application equipment, electrocoating installations, industrial finishing systems, and plural component spray guns and equipment used to dispense polyurethane foams, polyester gel-coats, epoxies, elastomers, and other dual component materials.
Binks Sames’s comprehensive product line grew from the invention of one man, Joseph Binks, a maintenance supervisor at Marshall Field and Company in Chicago, Illinois. In 1887, Joseph Binks built the first cold-water paint spraying machine to handle the job of whitewashing the expansive subbasements of Marshall Field’s department store in Chicago. At the time, the job was handled by hand-brushing, but Binks was convinced there was a better way to complete the job. His invention led him to form The Star Brass Works in 1890, the forerunner of Binks Sames. It kept that name for two decades and was located on the northeast corner of LaSalle and Lake Streets in downtown Chicago.
In 1893 Binks got his big break with the Colombian Exposition, which was to be held in Chicago. Just before it was to open, 90 percent of the exhibit buildings stood unpainted. Paint crews could not keep up with the speedy construction of the exhibit buildings. Binks saved the day when he put his cold-water paint spraying machines to work. By opening day, every building was covered with a smooth, clean coat of whitewash. In fact, journalists called the Exposition “The White City.”
Binks’s work for the Exposition drew the attention of a London import firm exhibiting there, Wallach Brothers, Ltd. Seeing the potential of Binks’s invention, the London firm became a distribution partner for Europe and the United States. For many years, Wallach Brothers was the primary customer for the Binks spraying machine.
In the early 1900s, agriculture was one of the company’s important markets. New health legislation was passed that required better sanitation around the farm. As a result, Binks sprayers were purchased to whitewash barns and other buildings. They were also used to disinfect cattle.
In 1911 the company moved to a larger building and changed its name to Binks Spray Equipment Company. In the days before World War I, Binks expanded its production and sale of spray nozzles, which became widely used as companies incorporated water into their manufacturing process. The need to aerate and cool huge quantities of water before reuse created a sizable market for nozzles. In spite of intense competition from companies that copied the Binks design, Binks retained a large share of the market.
During this period the company began developing the first Binks hand spray gun. The product introduced a new type of nozzle, which used compressed air. Atomization occurred when the air and paint were mixed and ejected through the nozzle in a controlled pattern. The first model was sold to the Olson Rug Company of Chicago to spray dye on its rugs and carpeting.
Automobile Manufacturers an Important Market in the 1920s
During the 1920s automobile manufacturers based in Detroit rapidly emerged as the largest single consumer of paint spray equipment. When Binks spray guns were first introduced to the assembly line, finishing times were cut to just 8 days from the 27 to 30 days it took to hand-finish an automobile. Following the end of World War I, Du Pont developed nitrocellulose lacquer from surplus gun cotton. The lacquer proved virtually impossible to apply with a brush, but a Binks spray gun could transfer the lacquer smoothly and quickly. Together with the lacquer’s fast drying time, it only took three days to finish an automobile. Soon, Binks was working 24 hours a day, seven days a week, to meet the demand from Detroit.
The company experienced steady growth during the 1920s. Production was at peak capacity, and the company was in good financial condition. In 1928, Binks was purchased by John F. Roche through a holding company he and an associate had formed, the Chicago Utility Company. Roche assumed management responsibilities and on January 2,1929, reincorporated the company under the name of Binks Manufacturing Company.
Within a year the American economy collapsed and the stock market crashed. Like many other companies, Binks was on the brink of disaster, but Roche felt it could survive if he could only obtain additional financing. When the usual sources of capital proved unresponsive, Roche turned to the company’s employees and suppliers for support. In a cooperative effort, the company’s suppliers and employees joined forces, and eventually Binks’s financial situation improved.
Following a policy of developing markets throughout the world, in 1934 the company established its first venture outside the United States: Binks Manufacturing Company of Canada, Ltd. Currently headquartered in Toronto, the Canadian subsidiary eventually opened four branch offices in major Canadian cities.
Continued Its Spray Painting Operations During World War II
Unlike many other companies, Binks did not have to convert to manufacturing some other type of product during World War II. In fact, demand for spray finishing equipment soared during this period. Ordnance plants as well as other industries producing war materials required large amounts of spray finishing equipment. The company was honored with the Army-Navy Production Award for its work in applying military coatings of olive green and battleship gray during the war. Following the end of the war, defense remained an important market for Binks.
In the late 1940s and early 1950s, Binks expanded its production facilities to meet the pent-up demand for equipment that was not available during World War II. The company built a new suburban plant in Franklin Park, Illinois. In 1949 Burke B. Roche succeeded his father as president of Binks. He would remain at the head of the company until his retirement in 1996.
Expansion Continued Throughout the 1950s and 1960s
In the early 1950s, Binks set up distribution agreements with Alfred Bullows & Sons, Ltd., a leading English manufacturer of spray painting equipment, to penetrate the British market. Bullows was eventually acquired by Binks and became a wholly owned subsidiary of the company in the 1960s. Two more international subsidiaries were established in the early 1960s: Binks de Mexico, S.A., in 1960, and Binks International, S.A., in Brussels, Belgium, in 1961. Through the latter subsidiary, Binks supplied the countries of Europe as well as South Africa and Japan.
At the end of the 1950s, Binks established the Binks Research and Development Corporation in Boulder, Colorado, a nationally recognized center for research activities. The company’s emphasis on research and development became one of its strengths and a source of new products.
Also in 1959 the company announced the formation of its Plastics and Resins Equipment Division (PRED). In PRED systems, chemically reactive components are atomized together. The plural components then solidify to form such diverse products as urethane foam insulation, fiberglass boats, and cultured marble. Serving the thermoset plastics industry, PRED went on to set sales records in this expanding market. Users would include fiberglass-reinforced plastic applicators as well as those involved in protective and decorative coating.
We are dedicated to continuing and advancing our market leadership in coating application equipment and finishing systems. Through our continued leading-edge innovations to promote a cleaner environment, we meet the cost, quality and service expectations of our worldwide automotive, general industry, refinish and contractor markets while furthering growth and profitability.
In 1969 Binks began production of its own electrostatic systems. Electrostatic technology adds high-voltage electricity to the application of liquid and powder coatings. The process is based on the attraction of opposites. Paint particles and the surface to be painted are given opposite electrical charges, creating an irresistible attraction between paint and surface and greatly reducing overspray. With improved transfer efficiency, less paint is used in electrostatic application. Materials can also contain a higher percentage of solids, so that less solvent is released into the environment.
In 1971 the company’s corporate offices were relocated to Franklin Park. The 1970s were an eventful decade for Binks. Sales tripled from $40 million in 1971 to $124.3 million in 1979, and the company ended the decade with net sales, net earnings, net worth, working capital, and book value per share at the highest levels in the company’s history. The company offered a comprehensive line of quality products, along with an excellent network of distributors, an aggressive marketing program, and competent and dedicated personnel. Its research and development program was more active than ever. Stressing budgetary and cost controls, the company saw its net income grow from $2.5 million in 1971 to $9.7 million in 1979 (later restated to $9.1 million). Binks was in excellent financial shape for the coming decades.
Acquired Poly-Glas Systems in 1979
In July 1979 Binks acquired Poly-Glas Systems, Inc., of Sun Valley, California. Established in 1974, Poly-Glas served the fiberglass reinforced plastics (FRP) market with equipment and replacement parts. It became Binks’s Poly-Craft Division and complemented Binks’ PRED (Plastics and Resins Equipment Division). All during the 1970s plural component equipment sales had increased steadily, and this acquisition was seen as an investment in a growth market. Within a year, the division was moved to a new, larger facility.
Like most small and large corporations, Binks felt the impact of the general business downturn of 1980. The industrial segment of the company performed well, due in part to multi-million dollar contracts completed in 1980, but the company posted lower net earnings than in 1979.
Several factors contributed to another decline in net earnings for 1981. These included unusually high field installation expenses and labor costs experienced on some industrial contracts, which the company was investigating. Lower earnings by foreign subsidiaries and persistently high interest rates prevalent throughout the year also had an impact. At this time, domestic operations accounted for about 81 percent of total sales.
Sales and earnings declined again in 1983 as operating expenses remained stable. Net sales were down 22 percent to $117.2 million, the lowest of the decade, due to a drop in the company’s industrial business. Still, the company enjoyed significant growth in its industrial business from 1977 through 1982 as a result of the automotive industry’s plant revision and expansion programs.
Sales rebounded in the latter half of the 1980s, starting in 1984 with net sales of $149.3 million, then climbing to $237.4 million by 1989. Net income rose from a low of $5.2 million in 1982 to $9.6 million in 1989. These increases were due in part to two major acquisitions made in 1987, both outside the United States.
Made Two Major Acquisitions in 1987
On November 30, 1987, Binks completed its acquisition of Sames, S.A., of Grenoble, France, for approximately $6.265 million in cash and 39,600 common shares. The purchase also included an American company, Sames Electrostatic, Inc., of Stratford, Connecticut. Starting in 1988, both newly acquired companies operated separately as consolidated subsidiaries. Sames was a prominent manufacturer of electrostatic application equipment for liquids and powders. The acquisition gave Binks a modern manufacturing facility in France, together with a complementary state-of-the-art product line. It also gave Binks a global presence in electrostatic systems, which Binks had been manufacturing since 1969.
During 1990, Sames Electrostatic moved from its headquarters in Connecticut to Livonia, Michigan, (a suburb of Detroit) to be in a better position to serve the automotive industry. It sold and marketed the Sames line of electrostatic liquid and powder equipment in North America, with the products either manufactured by Sames, S.A., or produced locally by Sames-Livonia. By 1994 Sames Electrostatic had established itself as the dominant supplier of robot-mounted electrostatic guns to the American and Canadian automotive industry. Its other electrostatic products included waterborne canister guns, powder bell applications, and high-efficiency color valve systems. Recently introduced products include magnetic bearing turbines, micro valve color changers, and a new line of powder spray guns developed by Binks R&D Corp.
On December 1, 1987, Binks’s wholly owned Canadian subsidiary, Binks Manufacturing Company of Canada Ltd., acquired Sunkiss Thermoreactors of Montreal, Quebec. Sunkiss made a line of catalytic thermoreactor infrared units that were used primarily by autobody refinishing shops for curing paint applied to automobiles and other vehicles in spray booths. The Sunkiss units were widely used in Europe and just gaining acceptance in North American markets. Later in 1988, production was moved from the Sunkiss facility in Montreal to the Binks-Canada Toronto headquarters.
Similar in principle to microwave ovens, the Sunkiss units and systems offered an energy-saving process that quickly removed solvents and moisture from the paint before actual curing occurred. This process eliminated the solvent-popping, blushing, or fading that sometimes happened when hot air paint drying methods were used. Sunkiss units heated only the coating material but not the substrate. Through a process of inside-out baking, the solvents could evaporate without causing bubbling or skinning.
By 1990 the Sunkiss Thermoreactor line of ovens was being offered to the entire industrial market. Many units were sold to a variety of users, including metal and wooden furniture plants and manufacturers of hauling equipment, computer cabinetry, truck components, plastic parts, toys, and others. But the payoff came later in the 1990s, when the Sunkiss Division line of infrared thermometers entered the automotive OEM market in 1993 and was favorably accepted. Sunkiss products met the need of the automotive industry for improving the durability and appearance of finishes while reducing paint line costs. By 1996 a number of Sunkiss systems had been sold into North American automotive plants. Some auto manufacturers even retrofitted their existing curing installations by substituting Sunkiss.
Mass transit systems represented another promising market for the Sunkiss systems. In Pennsylvania, a major transit system used Sunkiss technology to cure transit buses; Sunkiss reduced its curing time from several days to just one hour. Several other major transit systems were reportedly interested in using Sun-kiss technology for the curing of commuter rail cars.
The acquisition of Sames, S.A., and Sunkiss changed the balance of Binks’s domestic and international sales. Previously, domestic sales had accounted for approximately 80 percent of total sales. In 1989 international sales represented 43 percent of consolidated net sales, up from 41 percent the previous year. In 1990 the combined sales of foreign subsidiaries exceeded revenues in the United States for the first time in the company’s history. International sales in 1990 accounted for 55 percent of total consolidated sales. Sales by international subsidiaries, notably in Canada, France, and England, were up 53 percent, due largely to billings of large industrial contracts. For the next several years, international sales would account for 51 to 60 percent of Binks’s total consolidated sales.
In 1990 Binks celebrated its 100th anniversary. A two-day open house was held at the company’s world headquarters in Franklin Park, Illinois. The open house included guided plant tours, photo exhibits, displays, and product demonstrations. A full-color brochure, “The Binks Story: One Hundred Years of Spray Finishing,” was produced. The theme of the anniversary celebration was, “A century invested in tomorrow.”
Major Restructuring Began in 1996
During 1996 the company made several major changes. It announced that it would change its name to Binks Sames at the April 1997 annual meeting. The new name reflected the global nature of the company and recognized the contributions and achievements of the company’s French subsidiary, Sames, S.A.
A worldwide strategic plan was developed by senior management and the board of directors. The company and its 13 subsidiaries reorganized sales and marketing functions into three geographic groups—the Americas, Europe, and the Pacific Rim—and one Global Automotive Group. Product management was organized worldwide into three groups: standard products, engineered (industrial) systems, and automotive paint systems. Standard products consisted of the many components used in the spray finishing process, including spray guns, fluid handling equipment, and accessories. Engineered systems consisted of specialty products together with standard components to compose finishing systems. Automotive paint systems included automatic electrostatic paint application machines as well as paint circulation equipment. Research and development, product manufacturing, and distribution were restructured into coordinated worldwide activities.
Significant management changes included the election of a new chairman of the board, John J. Schornack, and a new president and CEO, Doran J. Unschuld. Burke B. Roche, former president and CEO, was named Chairman Emeritus. Terence P. Roche, newly named executive vice president, was put in charge of leading the new management team to implement the worldwide strategic plan. He had ten years’ experience with the company, most recently as sales executive for the Industrial Equipment Division.
Binks also completed its product rationalization program, in which the board and management thoroughly reviewed each product offering. Begun in 1993, the program was designed to improve production efficiency, speed deliveries, reduce inventories, and alleviate product shortages. Phase I of the program consisted of a series of product rationalization meetings to determine the obsolescence of a number of items. Phase II, completed in 1994, identified nearly 400 items to be eliminated, including 39 different models of spray guns. After identifying slow-moving and unprofitable items, the company dropped 60 percent of its engineered products and 45 percent of its standard spray equipment by the end of the first quarter of 1997. These products had contributed $16 million in annual sales.
After completing product rationalization and integrating its worldwide manufacturing capacity, it was decided to close the 615,000-square-foot Franklin Park plant in Illinois. Production was shifted to smaller, more profitable plants, most notably to the JIT (Just-In-Time) facility in Longmont, Colorado. The change resulted in the elimination of more than 490 positions. The remaining corporate staff was relocated to leased office space in the Chicago area. During the year, a total reduction of 567 employees occurred in the United States and Europe.
As a result of these activities, the company’s 1996 earnings were negatively affected by a one-time after-tax charge of $12.6 million, or $4.07 per share, for restructuring. This resulted in a net loss of $11.1 million for 1996, or $3.60 per share. Earnings were expected to improve in 1997, and cost savings trends were expected to continue throughout 1998. Sales for 1997 were expected to be about 10 percent less than 1996’s record sales level of $296.7 million, reflecting discontinued products and fewer orders for automatic painting systems from automobile and truck manufacturers.
Binks Manufacturing Company of Canada, Ltd.; BinksBullows, Ltd. (U.K.); Binks Research and Development Corporation; Sames Electrostatic Inc.; Sames S.A. (France); Binks de Mexico, S.A.; Binks International, S.A. (Belgium); Binks Deutschland GmbH (Germany); Binks Ltd. (Japan); Binks International S.r.l. (Italy).
“The Binks Story: One Hundred Years of Spray Finishing,” Franklin Park, 111.: Binks Manufacturing Company, 1990.
“A Century Invested in Tomorrow,” Franklin Park, 111.: Binks Manufacturing Company Training Division, 1993.
Merrion, Paul R., “Why Binks Is Blinking After 47-Year Snooze,” Grain’s Chicago Business, December 9, 1996, p. 1.