Pen Steel Inc. was on track to have a great year.
With orders racking up, the manufacturer specializing in robotic welding added employees — there were eight in April and 11 by the end of the year — and made the move in December from leased spaces at 89th and J Streets to a new, 19,000-square-foot building near Nebraska Highway 370 and Interstate 80.
That was 2008. And then the effects of the recession slammed the company. Sales dropped in half and, by April 2009, the 11-person crew downsized to six. Remaining employees saw wages cut. The company faced massive payments on a new building and recently purchased robot.
“The survival was a terrible unknown for us,” said Penny Rosso, owner and president of Pen Steel.
Fast forward to today, four years later, and Rosso's company has moved past those volatile times with the perspective that without partners like the Nebraska Investment Finance Authority, or NIFA, the federal Small Business Administration and First National Bank of Omaha, her business wouldn't have made it through.
NIFA is an independent, quasi-governmental agency that encourages the investment of private capital in Nebraska to stimulate economic growth. Most of its resources come from the sale of tax-exempt revenue bonds, which are used to purchase first-time home buyer loans.
It was NIFA's $1.5 million Nebraska Asset Modernization Initiative designed in 2011 that helped Rosso and other small manufacturers across the state invest in modern assets following the recession — a time they most needed a shot in the arm.
The one-time initiative available through the end of next month offers eligible businesses a grant of up to $30,000 based on $500,000 total investment in eligible machinery and equipment. The initiative has awarded or reserved nearly $1.3 million, leaving $224,482 to allocate before the incentive expires June 30.
NIFA Executive Director Tim Kenny said the initiative, which was offered solely from resources within the NIFA general fund and not with federal or state tax dollars, spurred investment for Nebraska's smaller manufacturers.
Through the initiative, Rosso bought an $80,000 vertical machining center called the Haas and a $700,000 laser called the Trumpf Trulaser 3030. The initiative contributed about $36,000 to the two purchases.
NIFA's assistance helped to lower Rosso's payments and gave her the extra nudge to make purchases she knew would help her company grow in the long term. And so far, it's paying off. Both the machining center and the laser have brought production in-house for parts they'd previously been subtracting out.
“We bought (the Haas) for one job only,” she said. “Now it's busy 10 hours a day. We've gotten more work from existing customers because of what we do and how we do it.”
Pen Steel fabricates and welds components for manufacturers that make equipment like side dump, grain and construction trailers.
More orders from customers have meant adding more employees to run the machines and keep up. Pen Steel today has 16 full-time employees counting Rosso, plus two part-time workers. They include welders, fabricators, laser operators and an office staff.
The laser even required a 6,000-square-foot expansion to Rosso's existing facility. The addition broke ground in October last year and was completed in March.
“That is a big deal for us,” Rosso said. “That piece of equipment and adding on to the building did many things because we had to hire contractors, local contractors in Omaha or in the surrounding area in Bennington. We gave them work, job opportunities. We are still in a growing direction with that equipment.”
Last year's $3.2 million in sales was Pen Steel's best year and the company is expecting an even better one this year with an expected $3.7 million in sales.
The company is looking to add more employees, particularly someone to run the new laser. But Pen Steel is facing the challenge of selecting from a small pool of skilled laborers.
Five of the company's newest employees didn't have experience in welding or fabrication when they were hired. They came from culinary, construction, mechanic and landscaping backgrounds.
“We had asked our existing employees, 'Who do you know?'” she said. “We didn't care if they had a background in this industry or not. If they were a viable, hard working individual, (Ted Evans, Pen Steel vice president of operations) and I felt that it'd be worth training them.”
After all, Pen Steel, which has clients across the region and one on the East Coast, has orders to keep up with. Sales the first four months of this year were up 25 percent compared to the same time last year. The additional business has encouraged Rosso this year to buy without NIFA's help a third robot and an automated saw to keep up with the machining center.
“Our forward track with Pen Steel,” she said, “is a great forward track at least for another five years.”
And Rosso said it all goes back to partnerships.
In addition to NIFA, Rosso calls First National Bank of Omaha and the Small Business Administration her partners because, during the recession, the bank assisted the company's new building through the SBA's permanent 504 loan refinancing program. That enabled Rosso to lock in a low interest rate and helped with cash flow, said Scott Bestmann, vice president — SBA program manager at First National.
“It really allowed us to help her and other companies like hers,” he said, adding that First National also helped Pen Steel finance its recent expansion through a different SBA program.
Rosso, 51, is grateful for the assistance that's helped her continue to a pursue a nearly 30-year career in the industry. After earning a fashion merchandising degree from a business college in Sioux Falls, S.D., and working as an assistant manager at a jewelry store, Rosso switched to her current industry, working for companies as a steel sales and purchasing agent. Later, she transitioned into a manufacturer's representative and broker.
In 1998, she crafted the beginnings of Pen Steel from inside her Lincoln apartment and a year later moved to Omaha. In 2005, she purchased her first robot. She's spent the years since nurturing robotic welding, Pen Steel's core focus.
A woman in a still predominantly male industry, Rosso didn't follow in family footsteps to get where she is.
“My father wasn't in it. My grandfather wasn't in it,” she said. Rosso grew up on a farm in Anthon, Iowa, a community of about 560 people east of Sioux City.
Pen Steel for the last couple of years also has financially assisted two robotics teams from private schools in the metro area with whatever they need, from equipment to travel. She chooses to help the robotics teams because she sees how their competitions engage students and can spark them to pursue a career in the field.
And, Rosso said, it's a nice way to give back in return for the boost she's gotten from others.
“We are recipients,” she said, “and we pass that on.”
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