Overhead Door Corporation
Overhead Door Corporation
1900 Crown Drive
Farmers Branch, Texas 75234-6028
Telephone: (972) 233-6611
Toll Free: (800) 275-3290
Fax: (972) 233-0367
Web site: http://www.overheaddoor.com
Wholly Owned Subsidiary of Sanwa USA Inc.
Sales: $675 million (2003)
NAIC: 332321 Metals Window and Door Manufacturing
A subsidiary of Japanese-owned Sanwa USA Inc., Overhead Door Corporation is primarily involved in the garage door business. The Farmers Branch, Texas-based company is comprised of three operating divisions: Access Systems, Horton Automatics, and TODCO. The largest division is Access Systems, operating out of Dallas, Texas. It offers the Overhead Door and Genie lines of garage doors and openers, as well as wet/dry vacuums. In addition to garage doors and openers, Hudson, New York-based subsidiary W.B. McGuire manufactures commercial sectional door systems, rolling steel door systems, high-speed traffic doors, and loading dock equipment. Horton Automatics, operating out of Corpus Christi, Texas, concentrates on the automatic entrance market, manufacturing such products as automatic doors, revolving doors, security access doors, and automatic sliding windows. Horton serves a number of commercial customers, including airports, casinos, convenience stores, government buildings, hospitals, hotels, nursing homes, office buildings, and supermarkets. TODCO, an acronym for the Overhead Door Corporation, is based in Marion, Ohio, and makes overhead and swinging truck and trailer doors.
Company Founded in 1920s
Overhead Door was founded in Detroit, Michigan, by C.G. Johnson, who early on in the history of the automobile recognized that the growing number of automobile owners would want to store their vehicles indoors and out of the elements. The obvious answer was to use or build a shed with swinging doors, but such doors tended to sag and were easily blocked. Some had tried a window blind approach to making an overhead door, but these attempts were bulky and prone to jamming. Johnson conceived of a sectional garage door that could be lifted straight up and over the vehicle. Moreover, by making it counter-balanced it would require little strength to use and be easy to operate. Johnson is credited with inventing the first upward-acting overhead garage door in 1921. His concept was both elegant and functional, and only required a simple demonstration to sell it. In 1921 Johnson and Detroit attorney Forest E. McKee formed a company to manufacture and market the invention, A year later, McKee's brother, Paul W. McKee, a bank cashier, joined the company as well.
At first the business hand built one door a day in a two-story barn located on Rohns Avenue in Detroit. The company began efforts to promote its product, first demonstrating it at the 1923 New York automobile show. Johnson then built a miniature garage with one of his upward acting doors, mounted it on the back of his Model T Ford, and along with his wife, visited county fairs throughout the Midwest to drum up sales. He was so successful that he was unable to build and install overhead doors for such a large area. Instead, he franchised the territorial rights to manufacture and sell the doors to independent operators across the country. It was at a demonstration in 1923 at the Indiana State Fair in Indianapolis that members of the Hartford City, Indiana, Chamber of Commerce saw Johnson's door and invited him to make an appearance at Hartford City's annual fall fair. When it was shown there, the people of Hartford City were so enthusiastic that they convinced Overhead Door, which was looking for a new home, to move its operation there. The town boosters lined up shareholders to provide the funding the company needed to build a manufacturing plant in the small town. It was an offer the young company could not refuse, and in 1923 the headquarters were moved to Hartford City and the business was incorporated in Indiana as the Overhead Door Corporation. In April 1924 the 1,000-square-foot facility was completed and Overhead Door relocated its primary manufacturing operation from Detroit to Hartford City.
During the first few years at Hartford City, Johnson made constant improvements to his overhead door: adding new hinges, rollers, a channel track and a patented wedge closure system to create a weather-tight seal. In 1926 the company introduced the first electric opener for commercial doors. The technology would be extended to residential doors in 1950. In addition to providing his mechanical skills Johnson also served as president of the company until 1935, when Forest McKee succeeded him. McKee saw the company through the remaining years of the Depression and World War II, during which Overhead Door installed many units for the Army and Navy and also made parts for Crosley Corporation, Sylvania, Packard Motor Car Company, and the Dodge division of Chrysler Corporation. Business was so strong during this period that in addition to its franchised manufacturing operations the company opened plants across the country, including in Dallas, Texas. Following the death of Forest McKee in 1951, his brother Paul assumed the presidency. In 1956 the company transferred its expertise in making upward-acting sectional garage doors to trucks and trailers, forming TODCO. Increasing demand for the new product line led to the unit relocating to a new plant in Marion, Ohio.
The 1960s–70s Bring Steady Growth
In the 1960s Overhead Door began to buy out the franchised operations that had served the company so well in the early years. It also remodeled existing facilities and opened new door manufacturing plants in Athens, Georgia, and Shelbyville, Indiana, and a hardware and electric operating plant in Covington, Kentucky. In 1964 the company, which at this point was generating more than $25 million in annual sales, was taken public and its stock began trading on the American Stock Exchange. Because of its new status, management felt that the company needed to establish its headquarters in a larger city. Thus, with the retirement of Paul McKee in 1965, the company relocated to Dallas, where Overhead Door continued its expansion program. In 1966 the company acquired a West Coast manufacturer that added rolling metal doors to its slate of products. This business was then supplemented by an expansion in the Dallas operation and the 1967 acquisition of New York-based Caltron Industries, a Flushing, New York, company that made rolling, fire doors, and counter doors, as well as decorative grills. Moreover, Caltron gave Overhead Door an East Coast manufacturing base. Also in 1967 Overhead Door opened a plant in Covington, Kentucky, to produce all of the company's hardware and electric door operators. The decade closed with the purchase of Philadelphia, Pennsylvania-based Snyder Doors Inc. and its subsidiary, New Hampshire Doors, Inc., and a Fort Worth, Texas, company, McLeland-Harris Door. Co. Also in 1968 Overhead Door added hydraulic lift gates for trucks and trailers by acquiring Watson-Atlas Co. In addition, Overhead Door expanded its core residential door business by making use of new materials: fiberglass, aluminum, and steel. Overhead Door closed the 1960s with sales growing well beyond the $50 million mark.
In 1970, Overhead Door moved into the automatic sliding door and sliding window markets by acquiring Horton Automatics. The company was founded in Corpus Christi, Texas, by Lew Hewitt and Dee Horton. They invented the automatic sliding door in 1954 and essentially started a new industry. Their inspiration was the gusty South Texas winds that had a tendency to cause conventional push-pull doors to fly open or slam shut, resulting in countless panes of shattered glass and sometime personal injury. The two men knew the problem firsthand because they worked for Horton Glass Company and spent a good deal of their time repairing damaged glass doors. They developed an automatic sliding door that initially relied on a mat actuator, a device that was not subject to the vagaries of the wind, and installed their first unit for free at the city's utilities department. They began to sell their automatic doors in 1960, installing the first one in a hotel restaurant in Corpus Christi. They patented the invention in 1964. Hewitt would also invent the automatic sliding window, and after Overhead Door bought the business he stayed on as general manager, later becoming president.
In the 1980s, Overhead Door launched an aggressive effort to diversify in answer to the cyclical nature of the garage door industry, due to its close ties to housing starts. The company completed a number of acquisitions in the early part of the 1980s to add other product lines, spending $37 million from 1980 to 1984 on capital expenditures. In 1984, for instance, it acquired Veach-May-Wilson Inc., a Tennessee company that manufactured hardwood flooring for trucks and trailers. At the same time, Overhead Door bought Insoport Industries Inc., a Williamsport, Pennsylvania-based maker of laminated foam panels. It also bought eight sawmills located in Virginia, West Virginia, and Kentucky. In addition, Overhead Door added such items to its product mix as sliding patio doors, revolving doors, aluminum windows, and fireplaces. Because of this expansion, the company posted record results in 1984, with revenues of $381 million and profits of $16.6 million. The goal was to become a Fortune 500 company by the end of 1985. To emphasize the changing nature of the business, management elected in January 1985 to change the name from Overhead Door, which was considered too limiting, to Dallas Corporation. The company was also reorganized into three divisions: the original Overhead Door business, vehicular equipment, and specialty products.
Dallas Corporation introduced more than 20 new products in 1985, but the company appeared to have attempted to grow too quickly and was left vulnerable when housing starts declined and the truck and trailer industry fell into a slump. Moreover, the price of hardwood lumber dropped, causing problems for the company's sawmill operations, which became a particular drain on resources. Dallas Corporation quickly moved to sell the sawmills. It also cut back production at some of its plants, including the original operation at Hartford City.
Overhead Door Corporation and the Sanwa Group are committed to offering products and services that provide safety, security and convenience to further contribute to the prosperity of society.
Challenges in the Late 1980s
In the second half of the 1980s, Dallas Corporation struggled to find a new identity. It also suffered from some unforeseen problems. A Pennsylvania unit, Heritage Door Co., was partially damaged by a fire, which halted production. The plant was subsequently closed and adversely impacted the company's earnings. Dallas Corporation was also hit with an antitrust case concerning conduct that dated back to the early 1970s. A Florida company, Telectron Inc., manufacturer of radio-operated garage door openers, charged that Overhead Door tied the sale of its garage doors to its radio control units, thus making it difficult for Telectron to compete. The two companies reached a settlement in 1987, costing Dallas $5.9 million and cutting into earnings for the year.
Dallas completed one significant acquisition during this period, purchasing Hudson, New York-based W.B. McQuire Company in 1987, a move that added loading dock traffics doors and other loading dock equipment, including mechanical or hydraulic dock levelers, seals or shelters, and safety truck restraints. The move into loading dock products, however, was one of the few successes Dallas had in its diversification drive. In late 1988, the company decided to return its focus on the garage-door business and took steps to sell off four units that made hardwood flooring and other residential building products. In 1989, the company was taken private when a management team in concert with New York securities firm Bessemer Capital Partners engineered a $180 million leveraged buyout. As part of a succession plan, there was also a change in leadership. The company's CEO, Robert C. Haugh, who had held the post for 23 years, stepped aside in favor of Brian J. Bolton, who had worked for the company from 1973 to 1979, then left to become president and chief operating officer at Aircondex, Inc., involved in air conditioning and refrigeration. He returned to what had become Dallas Corporation as chief operating officer and director in 1987 and prepared to succeed Haugh. Under Bolton, the company discarded the Dallas name and reverted back to Overhead Door.
Buyout and Reorganizations: 1990s and Beyond
Overhead Door struggled during the recession years of the early 1990s, posting net losses in 1990 and 1991. Part of the problem was that the company had taken on too much debt during the diversification push a decade earlier. To reduce its debt load of some $120 million, Overhead Door proposed a $90 million bond offering in the fall of 1992. The company then took steps to make a stock offering in hopes of raising as much as $125 million by selling a 49.7 percent stake in the company. However, both offerings were put on hold. In the meantime, Overhead Door took on even more debt by acquiring rival garage door manufacturer GMI Holdings, better known as the Genie Company, from Brynwood Partners II LP for $184 million. The money was cobbled together from a $145 million loan and a $75 million revolving credit line provided by Chemical Bank. In addition, Bessemer helped to finance the deal by making an equity investment of $42.3 million. Although Overhead Door was already burdened by debt, it was an acquisition that all parties believed was necessary to remain competitive in a mature industry that had been undergoing consolidation in recent years. It was also a very good fit, given that Genie was the market leader in residential garage door openers and Overhead Door was the leading maker of residential and commercial garage doors. Genie also produced home and shop vacuums, which Overhead Door elected to retain, in keeping with its history of allowing acquisitions to operate as stand-alone businesses. Genie's management team also remained in place.
The history of Genie dated back to 1923 and the founding of Alliance Manufacturing Company, named after the city its was based in—Alliance, Ohio. The company possessed strong electrical engineering capabilities which it used to produce a wide variety of consumer, industrial, and military products. In 1954, to take advantage of the post-World War II housing boom, Alliance entered the garage door market by producing the first mass-produced, radio-controlled residential garage door opener. It called the product Genie. Within a year, Genie became the company's principal product line, although during the 1960s the company continued to make such items as electric toothbrushes, kitchen appliances, and rotating television antennas. Genie also continued to be an innovator in the garage door industry. In 1958, it introduced the first screw-drive opener, and later in the 1970s it produced a split rail garage door that could be shipped unassembled for the do-it-yourself market. Along the way, Genie also replaced chain drives with quieter screw mechanisms and developed security features. In 1983, the company diversified by adding home and shop vacuums and two years later introduced a trash compactor. The Genie assets were sold to GMA Holdings in 1990.
Overhead Door never completed its proposed stock offering. Instead, the company was sold to Sanwa Shutter Corporation, a Japanese company that paid $470 million for the business. The assets were then assigned to a newly formed subsidiary incorporated in Delaware, Sanwa USA Inc. Sanwa was founded in Hyogo, Japan, in 1956. Its relationship to Overhead Door dated back to 1974, when the two companies forged a technical alliance. Bolton stayed on to run Overhead Door for the new owners, serving as CEO and chairman.
- Overhead Door Corporation is founded.
- TODCO is formed.
- Horton Automatics is acquired.
- The company's name is changed to Dallas Corpora-tion.
- Dallas Corporation name reverts back to the Overhead Door Corporation moniker.
- Sanwa Shutter Corporation acquires the company.
- Novoferm group is acquired.
While Sanwa opted to pull out of the U.S. market on some fronts, closing down its investment banking unit, it appeared committed to growing Overhead Door. However, information about the health of the business was now hard to pry free from new ownership. In 2000 Overhead Door restructured its operations but did not explain the reasons behind the move. In any event, the company laid off nearly 400 employees. Plants in Salem, Oregon, and Muncie, Indiana, were closed as well as the facility in Hartford City. It was a difficult blow for the small town of Hartford City, where Overhead Door had made its home some 80 years earlier and where many residents had worked for 20 or 30 years. Overhead Door retained 17 other plants and was also in the process of building two dozen warehouses across the country. In addition, there were changes at the top at Overhead Door in 2000. Bolton announced his retirement. He was replaced as chief executive by director Masat Izu, whose tenure would be brief. He was replaced by Howard Simmons, and then in February 2001 Dennis Stone was hired as president of the Door Group and was subsequently named CEO. Stone had worked for 20 years at Intotek Corporation and during the previous five years served as president and led a successful turnaround of the distribution and service organization.
As Overhead Door entered the 2000s it clearly had global ambitions. Already holding a strong market share in the United States and Japan, it staked out a position in Europe in 2003 by acquiring Novoferm group, the second largest door and shutter manufacturer in Europe. Despite a scarcity of information, there was every reason to believe that Overhead Door was doing well under Japanese ownership and that it was ready to enjoy even greater growth in the years to come.
Access Systems Division; Horton; TODCO.
General American Door Company; Griffon Corporation; NCI Building Systems, Inc.
Bounds, Jeff, "About 300 Layoffs Set at Five Rea Companies," Dallas Business Journal, March 10, 2000, p. 24.
Campanella, Frank W., "Growth at Overhead Door Hinges on Aggressive Sales and Know-How," Barron's National Business and Financial Weekly, April 7, 1969, p. 40.
Simnacher, Joe, "Dallas Corp. Returning to Old Name," Dallas Morning News, March 16, 1990, p. 2D.
Zuckerman, Steve, "With a New Name, Dallas Corp. Begins to Diversify Operations," Dallas Business Journal, September 30, 1985, p. 8.