Unitech Readies Assault On Training Market

By Patrick Seitz, Senior Editor



Universal Systems & Technology Inc.'s turbo-charged growth slowed this year as executives made careful plans to blitz the burgeoning computer-based training market in 1999.

The privately held company, also known as Unitech, has grown 562 percent during the past five years, surging from $4.65 million in sales in 1993 to $30.8 million in 1997.

In 1998, the Fairfax, Va., company will take in about $30 million in revenue, said Earl Stafford, Unitech's president and chief executive officer.

"We called 1998 an efficiency year," he said. "Unfortunately, the public looks at that and thinks you are going backward."

But Unitech executives expect to hit $50 million in revenue next year through more sales of computer-based training and simulation systems. Such systems now account for about 60 percent of the company's sales; the rest comes from telecommunications and information technology systems integration projects primarily for the government, Stafford said.

About 90 percent of the company's business is with the federal government, Stafford said. Unitech provides telecommunications services for the Federal Aviation Administration, and training and IT systems integration for the Army, Navy, Marine Corps, National Guard and the Bureau of Alcohol, Tobacco and Firearms.

Company officials hope to gain more computer-based training business from the government and move into the commercial market. Unitech officials are in discussion with about 50 potential commercial clients about providing training systems.

"The training systems we do are at the heart of the company and are really explosive," Stafford said. "1998 was a proof-of-application year. You'll see '99 and 2000 really take off."

To bolster its government and commercial efforts, Unitech is negotiating with channel distributors and resellers to push its products and services.

In 1998, Unitech executives sought to improve the company's efficiencies and cost controls and move from low-yield hardware contracts toward more profitable services contracts, Stafford said.

"We passed last year's profitability in August, so we are much more profitable now," said Stafford, who declined to give any income figures.

In the last two months, Unitech officials reorganized the firm's divisions and brought in two new vice presidents to provide leadership. The 300-employee company has bulked up its production and sales staff for its training systems during the year.

"We had to have an infrastructure in place to support future growth," he said. "When you are a fast-growing business, often you tend to only focus on revenue growth."

Stafford said he is not interested in making acquisitions or in taking his company public at this point. "We will get a much better yield focusing on internal growth," he said.

And he is confident Unitech can carve a lucrative niche in the training market, noting that it already has beaten such competitors as Lockheed Martin Corp. and Computer Sciences Corp. on government contracts.

The training systems Unitech provides range from interactive CD-ROMs to high-end simulation systems. The company has created computer-based training systems that teach soldiers how to fire M-16 rifles and inspect Humvee military vehicles, and corporate managers how to motivate employees.

Many of these efforts involved transforming paper-based training materials into interactive, multimedia education systems, said Thomas Swindell, Unitech vice president. Unitech can add 3-D graphics, animation, video clips, testing and feedback functions to the text information.

The multimedia training systems Unitech develops also are much easier and cheaper to update than printed materials, he said. In addition, these systems can be Web enabled, further extending their availability.

Unitech got involved in training technologies through the Defense Advanced Research Projects Agency's Simitar program. That program was launched after the Gulf War as a way for military reservists and the National Guard to maintain a high level of readiness during peacetime, said Rick Eisiminger, Unitech's director of learning technologies.

With the PC-based training materials, soldiers can learn skills and procedures at their own pace and use weekends for certification, not instruction, Eisiminger said.

Multimedia training tools can make up for a shortage of physical resources available for instruction. Unitech's M-16 rifle training tool, for example, reduces the demand for time at firing ranges, Swindell said.

Bill Daitch, program manager for the Defense Threat Reduction Agency, said his agency hired Unitech in 1994 to upgrade the training tools at the Defense Nuclear Weapons School.

"In the four years or more since then, Unitech has been responsible for turning that place into a showcase," Daitch said. Unitech provides the computer-based training equipment and courseware for teaching personnel to handle nuclear accidents and other scenarios, he said.

Mitchell Rambler, Unitech's chief operating officer, said the company has developed a production philosophy for cranking out training systems on practically any subject, from nuclear weapons to sexual harassment policies.

"We are not recreating the wheel each time," he said. "Nobody wants a lot of non-recurring costs."