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Posted 02.03.2010

Baxa Sees Boom Times Ahead for Medical Device and Software Business

Association for Corporate Growth Special Section

By David Lewis

Greg Baldwin, CEO and chairman of Baxa Corp., doesn’t shy from a challenge.

“We’re probably going to try to raise our profitability, our EBITDA, about 50 percent (this) year,” he says without the trace of a boast.

Baxa is a Douglas County-based medical device and software firm with annual sales of about $145 million that has been growing steadily in the annual 11 percent to 14 percent range.
Baldwin gratefully acknowledges the 2009 ACG Corporate Growth Award “celebrating a leading company with steady growth and annual sales exceeding $100 million,” a description that fits Baxa like a glove.

Indeed, “steady” is one of Baldwin’s bywords, as in “steady ownership” and “steady earnings.” But Baldwin says Baxa’s performance the past few years wasn’t good enough.

That’s why another of Greg Baldwin’s favorite phrases is “double down,” as in “our company can rest on its laurels – or double down and try new things.”

By which Baldwin means he aims in five years to double the company’s employee count – to 1,000 or more – and revenue – to $300 million or more. Baxa is a family business that changed with the 2006 sale of 27 percent of ownership to Goldman Sachs without losing the Baldwin stamp. Baxa founder, chairman emeritus and vice chairman Brian Baldwin, 78, started the business in 1975 with the invention of the oral syringe that still makes up about one-quarter of company sales.

Son Jeff Baldwin, 43, joined Baxa in 1991; in 1993 Greg Baldwin, 48, stepped in after a decade in telecommunications. Annual sales at that time tallied about $11 million. In 1997 sales reached $25 million. Brian Baldwin retired in 1997 with about 30 patents to his credit. In 2003, Jeff Baldwin was named president and chief operating officer, while Greg Baldwin became chairman and CEO.
“Jeff and I are almost total opposites on the Myers-Briggs scale,” Greg Baldwin says. “We really complement each other perfectly. It has been a real joy for me to have a partner who you know and love and who always has your backside.”

Baxa’s 2009 revenue will reach $146 million with earnings, or EBITDA (earnings before interest, taxes, depreciation and amortization), of $21 million. Greg Baldwin forecasts annual revenue by 2010 of $170 million with $20 million of EBITDA. Despite these stellar numbers, Baldwin and the board detect a flaw they plan to correct through dramatic growth in 2010.

“If you notice what’s happening there, sales are growing a little bit stronger than EBITDA is growing. One of the big challenges for us as a company is getting that operating leverage,” Baldwin says.

David Lewis is a freelance writer based in Denver.

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