Lee Rudow moved to Rochester just 15 months ago, but the Upstate New York weather already may be getting to him.
"It was hailing on my windshield the other morning, and it’s mid-April," he says. "I’m originally from the Mid-Atlantic region, so it would be nice to have a little more sunshine every once and a while."
He will have to get used to weather here, Rudow says. Transcat Inc. announced this month that Rudow will succeed Charles Hadeed as CEO, effective July 1. Hadeed, who has been CEO since 2007, will become executive chairman.
Rudow, 48, was hired in November 2011 as chief operating officer of Transcat, an Ogden-based distributor and service provider for calibration and measurement instruments, and was named president of the company last September.
In his new post, he will lead a company that has hit significant financial benchmarks in recent years. The most notable occasion was in 2011 when Transcat surpassed $100 million in annual revenue for the first time. The company has more than 330 employees worldwide with roughly 130 in the Rochester area.
"We’re doing several things well," Rudow says. "In this industry we’ve developed a reputation from a quality perspective. That’s been the foundation of our growth in the service segment, along with acquisitions."
Transcat’s revenue increased in the second and third quarters of the fiscal year that just ended March 30, while net income remained comparable with the same periods of the previous year. During the fiscal third quarter, which ended Dec. 28, revenue was up 3 percent to $29.3 million. Net income was $800,000, or 10 cents a diluted share, compared with $1 million, or 13 cents a diluted share, a year earlier.
Transcat’s revenue growth can be traced back to a turnaround that began more than 10 years ago. Carl Sassano, the former second-in-command at Bausch & Lomb Inc., took over as CEO of Transcat in 2002, the same year the company posted a net loss of $6.6 million.
Sassano and colleagues took measures that included selling off non-core divisions and consolidating operations, while reasserting a focus on sales and services. Transcat returned to profitability in 2004 with net income of $400,000.
Transcat continued to expand its service segment and product distribution business under Hadeed through strategic acquisitions.
Hadeed says Rudow is the perfect person to continue that growth and take the company to the next level.
"Our company is entering the next phase of its development," he says. "Lee has many years of experience in both segments of our business, including acquisitions, which are an important element of our growth model.
"His strong commercial background combined with his creativity, vision and passion for success made him an excellent choice to lead our company."
Rudow has been in the industry for more than 25 years. A native of Baltimore County, Md., he earned his bachelor’s degree in business administration from Loyola University Maryland in 1986.
Rudow planned to go into sales after college but had no specific industry in mind. He wound up taking a sales job at Baltimore-based Davis Instruments Manufacturing Co. Inc.
"It was an opportunity," he recalls, "sort of a first job that you kind of fall in love with. Once I joined, I liked being in the B2B sector. I like the companies that this space deals with. You’re dealing with Fortune 500 companies every day. The selling you do is challenging, but you tend to grow as your clients grow."
When Rudow joined Davis, the company had seven employees and was doing some $500,000 in sales annually, he says. Still, Rudow was a natural in sales, working his way up to president, establishing the company as a national player in the distribution of measurement and control equipment, and creating its calibration services segment.
In early 2000, Davis was acquired by Maryland-based private equity firm JPB Enterprises Inc., which pushed for accelerated growth. From 1999 to 2008, Davis acquired 12 companies in the calibration instruments and services industry.
"JPB had some pretty dynamic expectations with what they wanted to do with our company," says Rudow, who served as CEO of Davis after the acquisition. "They wanted to grow the value of the company and its wealth over time."
Rudow stayed with Davis for nearly a decade. Then, in 2007, JPB sold Davis to Oregon-based Tektronix Inc., a subsidiary of Danaher Corp.
At the time of that deal, Rudow says, Davis had $80 million in annual sales. It was part of a series of 12 acquisitions for Tektronix, which remains one of Transcat’s biggest competitors in the calibration industry.
Rudow left Davis in 2008 to pursue his next challenge, as executive vice president for Simco Electronics, a Silicon Valley-based provider of calibration repair and software solutions. Rudow was given the job of restructuring Simco’s sales strategy.
The position, however, was not a good fit, he says. After more than 20 years at Davis, Rudow spent just three years at Simco.
"I really felt like that company wasn’t in sync with where I wanted to go or where I thought I could take it," he says. "It wasn’t a perfect match for me. It wasn’t enough of a challenge."
Rudow began looking for a new opportunity. He reached out to a friend and former co-worker at Davis who was employed at Transcat.
The friend set up a dinner meeting between Rudow and Hadeed, bringing together two men with different backgrounds in an industry where they had spent the past decade competing against each other. It was a perfect match.
"Our personalities complemented each other," Rudow says. "Charlie comes from an operations background, which involves establishing a high-quality level of service. My background is in sales and marketing, which involves using that level of service as a backbone in establishing a brand people recognize at the top of the industry."
"In Charlie I saw the type of leader that I could work very well with. In me he saw someone who could succeed with him."
Transcat created the position of chief operating officer for Rudow, who joined the company in November 2011. Since then, Transcat has made strong progress on its growth plans and acquisition strategy.
In July 2012, the company acquired Anacor Compliance Services Inc. of Pennsylvania, a provider of specialized analytical, calibration, compliance and validation services to the life sciences sector. With the acquisition, Transcat added more than 20 employees.
In January 2013, Transcat acquired Cal-Matrix Inc., a Canadian provider of calibrations and coordinate inspection services. Rudow says the acquisition expands Transcat’s presence in Canada’s "Golden Horseshoe" area, which includes Burlington, Hamilton and Toronto, and gives the company a lab in Montreal.
Transcat now aims for organic growth alongside its successful acquisitions, Rudow says.
"Our biggest challenge in the future will be executing a strategy to drive organic growth," he says. "In the past several years we have been very active acquiring companies that fit strategically with our growth and profitability goals. We aim to blend that strategy with meaningful organic growth."
Rudow says he will be busy as he prepares to become CEO in July, though he expects it will be a smooth transition as he continues to work daily with Hadeed.
He also is getting used to the weather, especially as it gets warmer. One of his favorite pastimes is reading outside.
Rudow’s other hobbies include hanging out with his three sons, who either are attending college or will be soon, and traveling to Maryland on weekends to satisfy his passion for sports.
"I’m a huge Baltimore Ravens and Orioles fan," Rudow says. "I think I’ve missed maybe one Ravens home game in the last few years. I still have two homes down in Maryland. Now that I’m in Rochester, I should probably sell one of those this year."
Title: President, Transcat Inc.
Education: B.A., business administration, Loyola University Maryland, 1986
Family: Girlfriend, Wanda Curtis; sons Simon, 20; Austin, 20; and Sam, 18
Leisure pursuits: Spending time with family, reading, watching sports
Quote: "The key with acquisitions is finding the right culture. There are a lot of companies you can buy, but when you buy a company, you’re looking for a strategic fit. The company we acquire has to be able to understand what we are trying to do from a quality standpoint."
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