Joe Frisby, Vice President of Samco Enterprises, talks about compressors, valves, pumps, and equipment and the effect this has on the Texas economy.
Please excuse any typos in this hasty transcript.
Matt Register: Welcome back to the show, Texas Business Radio. Texasbusinessradio.com is the website. 844-814-8144 is our 24 hour call in line. Get your calls in now. Get them in later. Get them in at 3:00 in the morning. I don’t really care. It’s a 24 hour line. Get your calls in. We’re going to get the experts on here to get those questions answered.
We are down here at the George R. Brown Convention Center, at the 46th Turbomachinery and 33rd Pump Symposium, brought to you by the Turbo Lab at Texas A&M University. Great show. We’re talking about anything that goes round and round. Turbines, gearboxes, pumps, all the above. We are bringing you the best of the show.
We’re going to jump right back into it. We are here with Joe Frisby, who is the Vice President of Samco Enterprises. Samco does compressors, valves, parts, equipment. Tell us about it. What do you do, who do you do it to?
Joe Frisby: Well, what we do, we started in 1972, right here in Houston, Texas, as a compressor valve repair company. We’ve grown to five locations now, across Texas and the entire country, actually, from here, based in Houston, to Tyler, Texas, to Oklahoma City, to Pittsburgh, Pennsylvania, and now in our latest venture in Odessa.
What we actually do, our primary focus is repair and sale of reciprocating compressor valves. This particular show is more on the processed side of things and all that, you know, the turbos and all that, but what we do … Everybody that runs equipment out here has a reciprocating compressor somewhere in their system, more than likely.
Matt Register: Sure.
Joe Frisby: So we thought it’d be a good chance to come out here and get a chance to showcase our products and kind of tell a little bit about our company, and how we can be of service to them.
Matt Register: Well, I want to talk, because your company has had some growth over the last five years. Talk to me about how you got so many locations. Was this growth through acquisition, was this … were you greenfielding it? Why did you decide to go into those different locations?
Joe Frisby: We have a lot of nationwide customers, and they requested us to be in locations that we currently weren’t in. We’ve always had three locations for a while, but we grew into Pennsylvania four years ago because a couple of our large customers requested our presence there and it kind of gave us a built in account base, so we did that.
That has grown nicely and there’s our recent thing, in the last couple of weeks, out in Odessa. We’ve had several accounts of ours really request our presence and we were doing that from Oklahoma City and Houston, but you can’t really be effective that far distant, so we went ahead and put a facility up.
Matt Register: Well, the vast majority of your work is oilfield related, right, between natural gas and oil, correct?
Joe Frisby: Yes. Yes and it’s, you know, specifically the gas gathering. When they drill oil wells, a lot of times a nasty byproduct is natural gas, so they have to do something with it.
Matt Register: Sure.
Joe Frisby: So you capture it, you compress it, you send it down the line. Obviously the areas where they’re really successful, out in the Permian and parts of the Central Oklahoma, where the gas has a lot of BTU content, a lot of liquids, and those things are become very valuable, so far as making a living with this, so …
Matt Register: Well, you know, when we were talking during the break, and I know your company has experienced some pretty nice growth, even in what everybody else in the oilfield market is a down year, right. I want to dig into that a little bit and figure out how in the world did you manage 30 plus percent growth in a down cycle of oil, when the vast majority of your client base is oilfield related?
Joe Frisby: It’s a testament to, really, our vision as a company, but so much of it is just … In our industry it’s all about service, having the parts on hand when the customer needs it, doing a good job out there. The other thing is, a big thing as far as doing your work correctly. So we have, over the years have stockpiled a lot of parts. We’ve bought a lot of excess inventory from people that were slow moving and things like that. Well, now not everything’s so slow moving, and things are moving faster. So, we have more inventory than anybody, when we have it in stock, we can sell it, and that’s what’s giving us the ability, because a lot of our competitors simply don’t have that inventory, they can’t draw from it.
Matt Register: Well, there had to be some foresight, though. I mean, because companies don’t survive downturns on accident. They don’t set themself up to be able to grow in a market where everybody else is contracting, without a significant amount of foresight and a significant amount of effort that goes into building the company that you want to be during the downturn and being able to take advantage of it.
Joe Frisby: Right.
Matt Register: You talk about the customer service aspect of it, but there’s a whole lot more to that. What drove the decision to increase your inventory and to set yourself up to be able to take advantage of the work that your competitors have fallen by the wayside, right?
Joe Frisby: Right. Well, you can look at it a couple of ways. Number one thing, we are a family-owned private company. A lot of people in our situation, you may say, may spend a lot of money on beach houses and crazy cars and trips and all this stuff.
Matt Register: Sure.
Joe Frisby: We tend to put our money back into the company and back into our employees’ pockets.
Matt Register: Sure.
Joe Frisby: When you have a motivated group of employees and, instead of wasting a lot of money on extras, you spend it on inventory, you spend it on equipment to be able to process the inventory, you just make the right decisions when to buy and when not to buy, and you come out ahead on it. You know, we’re fortunate, we have no debt. We just keep on rolling. We’re not as successful as Mr [Buc-ee’s 00:05:48] and all that, but it’s the same philosophy. Don’t take out loans, just work off your capital.
Matt Register: Sure. No, makes all the sense in the world. Samco Enterprises, Joe Frisby is Vice President, here. Thank you very much for joining us, Joe.
Joe Frisby: Thank you very much for having us.
Matt Register: Guys, we’ll be back right after this. You don’t even have time to go anywhere. We’ll be back really quickly, from here, down at the George R. Brown Convention Center at the 46th Turbomachinery and 33rd Pump Symposium, brought to you by Texas A&M Turbo Lab. We’ll be back.
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In addition to hosting "Texas Business Radio," Matt is an investment banker and serial entrepreneur from Montgomery, Texas. He is the owner of RREA Media and Register Real Estate Advisors and a Managing Director and Principal at Corporate Finance Associates. He has a BS from the United States Military Academy at West Point and an MBA from Rice University in Houston. You can read more about Matt HERE.