TVI finds its niche helping rescuers

Prince George's firm supplies portable shelters, breathing gear for first responders, military

August 15, 2006|By ALLISON CONNOLLY | ALLISON CONNOLLY,SUN REPORTER

GLENN DALE -- Whether a hurricane or a chemical cloud, Glenn Dale-based TVI Corp. wants to equip those responding to the scene.

The small company has been around for nearly three decades, trying to find its niche. It spent five years in bankruptcy, its stock sold for pennies and a former chief executive pleaded guilty to embezzlement.

Now it believes it's found its footing in the growing homeland defense market. Its rapidly deployable tents and shelters were used in regions devastated by Hurricane Katrina. Equipped with sinks, heat, beds and lighting, they can be used as decontamination rooms for victims of a chemical attack, or as remote hospitals for surgeries on the battlefield. TVI's patented frame can be erected or folded in minutes, like a portable captain's chair.

The company is awaiting government approval for a line of disposable-filter canisters that would allow first responders, hospital staff and the military to breathe safely during a chemical attack.

In a large room at its Glenn Dale headquarters in Prince George's County, past the tables where workers are busy sewing tents, stands a manufacturing line ready to churn out the filter canisters. If the company gets the nod, it says, "our new filter canister line ... will be the only high-capacity filter manufacturing operation in the U.S."

Earlier this month, chief executive Richard V. Priddy announced that the company cleared a critical hurdle at the National Institute for Occupational Safety and Health process, and hopes final approval is around the corner.

With the November acquisition of SafetyTech International Inc., a Frederick-based manufacturer of powered air-purifying respirators, to be used with TVI's filter canisters, Priddy believes the company is on the cusp of something big.

But winning contracts has been somewhat of a struggle for the company, which blamed a disappointing second quarter on government contract delays. Revenue slipped to $7.3 million, from $7.6 million for second quarter 2005, and net income was $228,000, or a penny per diluted share, compared with $1.1 million, or 3 cents a share, a year earlier.

Its stock price has skidded since the Aug. 4 earnings report, falling 37 percent to a 52-week low of $1.91 yesterday.

Analyst disappointed

During a conference call to discuss second-quarter earnings, analyst Alex Silverman of New York City-based Special Situations Fund III LP expressed his frustration.

"This is probably the third or fourth conference call I've listened to where I've heard you guys talk about pretty rosy pictures from a backlog standpoint, and that business is coming any day now," Silverman said. "It just doesn't flow into sales."

Because he works for a hedge fund that does not discuss its investments, Silverman declined further comment.

In an interview, Priddy said selling products like TVI's to the government is unpredictable, with orders often delayed until the money is available.

"We're not building toothbrushes which people use day in and day out," he said. "These kinds of purchases, by their nature, are lumpy."

Competition

Its competitors vary. For its patented folding shelters, TVI competes with another small company, Orangeburg, N.Y.-based DHS Systems LLC. For its respiratory systems, TVI vies with global giant 3M Co.

Contracts are coming in, albeit slower than TVI officials had hoped.

In June, TVI received a $600,000 order from the state of Florida for shelters and decontamination systems to be used in the event of hurricanes, pandemic illness or biological attack.

Two weeks ago, TVI announced a $450,000 contract from the Federal Emergency Management Administration for powered air purifying respirator systems made by SafetyTech in Frederick. And last week the U.S. National Guard Bureau placed a $450,000 order for TVI's Casualty Management Shelter for performing surgeries in the field.

With hurricane season stretching into the fall, and a possible flu epidemic later this year, company officials are hoping for a strong second half.

During the Aug. 4 conference call, TVI Executive Vice President Chad L. Sample said a flu pandemic could be more serious than a biological attack. Hospitals across the country could see a sudden influx of hundreds of flu patients, he said, and it wouldn't be concentrated in certain geographical areas as it would be in a biological attack. The "potential for disaster," Sample said, "looms very large."

As a result, Sample expects there to be increased demand for TVI's inflatable hospital shelters over the next year. "We're excited about the opportunity for us to mitigate this threat going forward."

Founded in 1977, TVI made canvas tank decoys used during the 1991 Persian Gulf War to fake out the Iraqi army. The company parlayed that into a line of mobile hospital tents that are light and easily transportable.

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