The Infotonics Technology Center Inc. in Canandaigua has named Paul Tolley, a local optics industry veteran, as its new CEO.
Tolley, vice president and general manager of Syntec Optics Inc., is expected to start Monday. The Pittsford resident, whose expertise is developing new technologies, has a background in chemical and mechanical engineering.
The Infotonics Center has been without a permanent CEO since June, when David Smith announced he was retiring, citing concerns over the center’s plans to focus more on manufacturing and less on economic development.
Since its creation, the Infotonics Center has struggled financially, despite government funding. It has received nearly $1.8 million annually in operating revenue from New York and has received a total of some $45 million in state funds since its inception.
The center was projected to create up to 5,000 new jobs over a 10-year period, mainly through spinoff firms and related services. The center itself now has some 50 workers.
Tolley took over the Pavilion, Genesee County-based Syntec in January 2000. Backed by venture capital from private investors, he changed the company’s focus from more traditional manufacturing processes, including making precision plastic mechanical components, to polymer optics.
Syntec, which received the 2008 Frost & Sullivan Growth Excellence Award in the North American polymer optics market, is the largest independent manufacturer of custom plastic optics in North America, officials said.
In his nearly nine years at Syntec, Tolley helped triple Syntec’s sales, officials said.
Tolley told the Rochester Business Journal this week he did have some apprehension before agreeing to take the helm at the Infotonics Center, which has struggled financially since its inception, especially with Syntec doing so well. But Tolley said the center’s mission of creating local jobs through technology is something he believes in.
“You’d be insane not to have doubts when you look at the entire picture and normal people have said to me ‘What are you thinking?'” Tolley said. “But I’m passionate about marrying the private sector and government together to create good jobs for the region.”
Tolley said his experience is a good mix of technology and manufacturing. He added one of his continuing goals is innovation.
John Hart, chairman of the Infotonics Center board and president of Henrietta-based Lumetrics Inc., said Tolley also has experience going from concept to commercialization, which is the core mission of Infotonics.
There were nine viable candidates for the job and that number was reduced to three who were brought in for interviews, Hart said.
Tolley’s science background and business experience, as well as his local ties and ability to work with all levels of government make him a good fit.
“I’m pretty confident he’ll do a good job,” Hart said.
Tolley said his first priority will be to conduct a 14-day review of Infotonics, after which he will develop a one-year plan, as well as a long-term strategic vision.
Joining the Infotonics Center is a career highlight, he said. He plans to redouble the center’s efforts to increase its access to firms around the globe, noting it can facilitate development, packaging, pilot runs and debugging for firms.
The center has had its share of challenges.
It has suffered for several years from the inability to generate sufficient cash to support operational costs. It had operational cash shortfalls of $1.5 million in fiscal 2007, and a shortfall of $1.7 million is projected this year, a recent business assessment study of the facility showed.
The Infotonics Center’s board hired JC Jones and Associates LLC last summer to review the non-profit agency and offer suggestions on how to get the fledgling operation on track.
JC Jones recommended it focus more on making prototypes and low-volume manufacturing to generate more revenue. Other recommendations included cost-cutting measures.
The top three moves, estimated to boost earnings before interest and taxes by some $1.16 million, are discontinuing the operation of its innovation segment; eliminating support of the four spinout companies-SensiVida Medical Systems Inc., SpectralSite Inc., BioScopix Inc. and BiSen Technologies Inc.-and reducing operating costs by 15 percent.
The Infotonics Center had a $5.6 million operating loss in 2006, less than the 2005 operating loss of $7.5 million, an audit completed last year by Bonadio & Co. LLP shows. But operating revenue dropped from $9.2 million in 2005 to $6.7 million in 2006. Expenses fell also, from $16.7 million in 2005 to $12.3 million in 2006.
Hart said the startups were still running. He declined midweek to discuss the center’s finances, citing a board meeting at the end of the week that would have more up-to-date figures.
Former CEO Smith, a former Eastman Kodak Co. employee, served as the center’s chairman from 2002 to 2004. In 2006, he was named president and CEO, succeeding Duncan Moore, now the vice provost for entrepreneurship at the University of Rochester and director of its Center for Entrepreneurship.
John Bellardini, who works for JC Jones, was retained to serve as a chief restructuring officer at the Infotonics Center on an interim basis, after Smith’s departure.
Board members had said they wanted a local person for the job with background in micro-electromechanical technology. MEMS, also called micro-machines, is the integration of mechanical elements, sensors, activators and electronics on a common silicon substrate through microfabrication technology. MEMS is a $5 billion industry but is expected to increase to $10 billion in 2010, national estimates show.
Tolley does have some experience in MEMS, Infotonics Center chairman Hart said.
The Infotonics Center, one of New York’s five Centers of Excellence created to encourage rapid commercialization of scientific breakthroughs, was launched in 2001.
In fall 2006, the state Department of Budget issued a progress review of the centers, including the Canandaigua facility, which cast the center in a negative light.
Among its findings, the review showed the center continued to face challenges after changes in strategy by its corporate partners, Corning Inc., Kodak and Xerox Corp. Also, cash flow problems were identified.
Last May, however, Smith painted a different picture of the facility, saying it planned to add up to 30 workers over the next year, doubling its technical staff.
The center’s goal is to move toward being in the black without relying on government funds.
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12/12/2008 (C) Rochester Business Journal