Willenpart comes back to home security

Entrepreneur takes steps to re-create old magic

Small business

July 15, 2002|By TaNoah Morgan | TaNoah Morgan,SUN STAFF

Johannes "Joe" Willenpart is at it again.

Six years after Willenpart, founder of Austronic Security Services, sold the company to Republic Industries, he has formed a new home security company that he hopes will grow to compete in the industry now overwhelmingly dominated by ADT Security Services Inc.

Vintage Security Systems, with offices in Columbia and Herndon, Va., is entering the market offering fire and burglar alarms, structured wiring for so-called "smart homes" and a familiar feel to homeowners in the Baltimore-Washington metropolitan area.

Of the company's 35 employees, 31 were originally Austronic team members who just liked working together. But now they carry with them a wealth of experience from having been on the management team of national home security companies.

After just a year in business, Vintage is selling and installing more systems than at the peak of Austronic's business. Willenpart says that is because they offer both security and the latest in electrical technology.

"The builder wants a company that for them is one-stop shopping," he said. "We protect the builder from his customer. We do all the hand-holding."

Most of Vintage's business -- about 180 security systems a month -- comes from working with homebuilders. But between a quarter and a third comes from customers that want new service in an existing home, or those who want to convert from another provider, said Willenpart, a native of Austria.

In the past year, Vintage has won about 2,000 customers, and revenues were about $3 million, Willenpart said. About half of the revenue from new installations was from structured wiring contracts, he said. He expects revenue of between $4 million and $5 million next year, and wants soon to have Vintage set up its own central monitoring station.

Rick Brokaw, general manager and partner, said he hopes building the new company will feel familiar.

"We grew [Austronic] to 150 employees, and we had a wonderful time," he said. "We were all happy to work with Joe and we're all eager to do it again."

But one analyst warned tough times could lie ahead for a company relying so heavily on home construction.

"Anyone who gets into that market today must realize the inordinate strength may be difficult to maintain on an ongoing basis," said Barry B. Bannister, a managing director at Legg Mason Wood Walker.

"The worst mistake anyone can make is to assume things will always be good or always be bad, because that will always change. This is one of strongest cycles we've ever seen, and it's hard to imagine it can continue."

While the housing market has continued to thrive despite an economic downturn, home security also has continued to grow, analysts say. According to Security Distributing and Marketing magazine, an industry publication, electronic security products and services grew 6 percent last year, and dealers are anticipating growth this year.

Brokaw acknowledged that an abrupt end to new construction would be detrimental to Vintage because the business has relied so heavily on new construction installations in its first year. But, he said, the company would simply shift gears and focus on existing houses.

"In a bad economy, people become a little more crime-conscious and a little more nervous," he said. "Economic bad times don't necessarily downturn for us."

When Willenpart sold Austronic in 1996, the company had 15,000 customers in the Washington-Baltimore market, and about 140 employees. But telephone companies were gobbling up independent home security businesses like his.

Willenpart sold the company amid concerns that phone companies would bundle monitoring and telephone services at a price that practically would give away monitoring -- the bread-and-butter recurring revenue of the alarm business.

But that never happened, and after a few years of holding the businesses, many of the telephone companies sold the security businesses.

For Austronic and the employees who remained, that meant the company was bought and sold five times, eventually becoming a part of ADT, a division of Tyco International Ltd.

And those changes brought problems of their own, Brokaw said.

"The acquisitions mean there's a gap in the service of customers ... the average guy in a truck won't have the parts" to repair a wide variety of systems, he said. "Bigger is not better. They didn't necessarily have a better handle on things. They didn't give anything new to the customer."

Two years ago, on what would have been Austronic's 20th anniversary, Willenpart had a reunion for former employees. It was there that many of them started talking about starting a new company.

Several of the former Austronic managers had obtained key positions in the companies that purchased Austronic. One was national installation manager for SecurityLink, another was a regional operations manager, and yet another was the commercial installation manager in Columbia, who was ready to leave and start his own home security company.

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