By Dan Zehr

AMERICAN-STATESMAN STAFF

Monday, February 7, 2005

Symtx Inc. doesn't build jet engines. It doesn't design pacemakers, either.

But the 24-year-old Austin company fills a critical need for pilots and heart patients alike: It develops testing equipment that makes sure an engine won't cut out at 20,000 feet, or a pacemaker won't fail a few months after it's implanted.

"Our customers are household names -- Symtx is not," says CEO Len Gilmore. "But we make sure their products work as they're supposed to work."

Symtx's customers include Boeing Co., Motorola Inc. and General Electric Co.'s medical division. It employs about 130 people, most of them engineers and most of them in Austin. They don't conduct tests. But they design, develop and build equipment that their customers use to test critical machines or devices.

The company fills an unusual niche in the equipment-testing market. Austin-based National Instruments Corp. produces software and equipment that uses standard personal computer technology. Symtx uses some of National Instruments' products, but it also relies heavily on custom equipment.

The price tag on Symtx products can range from $2,000 for a control board to $19 million for a simulator or highly sensitive testing device for the military.

The company's labs at a South Austin industrial park don't look like they'd be home to such expensive equipment. The concrete floors and pre-fab metal walls feel more like a warehouse than a top-of-the-line engineering lab. But a small corner of one room, sealed off by a chain-link fence covered in black plastic, hints at something much more sophisticated. That's where top-secret equipment, used mainly for government projects, is locked away.

Symtx engineers design and build a lot of complex equipment used by the military to test its systems, including radar and jet engines. Their latest project came in November from the U.S. Navy, which ordered 27 jet-engine test instrumentation (JETI) systems.

As part of that project, the Navy will send over a large section from the back of an aircraft carrier so Symtx's engineers can custom design equipment within one of its final homes. The piece, which Gilmore likened to a trailer from an 18-wheeler, will be an on-ship testing center for F-18 engines.

It will be just one more in a line of unusual projects that have been undertaken at Symtx's labs and headquarters near Interstate 35 and Ben White Boulevard. Symtx once tripped the circuit at the local electrical substation, knocking out power to the entire industrial park, while finishing up test equipment for a high-power satellite launch system.

"When we build something," Gilmore said, "we usually build one."

That can be good and bad, said Bill Conroy, a technology analyst for Sanders Morris Harris, a brokerage and investment bank in Houston. There aren't many customers who want or need to shell out millions of dollars for such high-level testing equipment.

But the equipment is so complex, there aren't many competitors, either. And there always are companies that will require it.

"Take jet engines," Conroy said. "The acceptable catastrophic failure rate is zero. You can't have a 99 percent success rate."

Government contracts, especially from the U.S. military, make up the bulk of Symtx's business. About 65 percent of its current $65 million in active contracts are defense or aerospace related, Gilmore said. They include equipment that simulates inbound missile threats.

But it's not all defense- or government-related.

The company was involved in testing head-up displays for fighter jets, which allow pilots to check their instruments while keeping their gaze forward. Symtx later tested the same technology for use in cars. Its products also have tested commercial communications satellites and medical devices.

Symtx is privately owned and doesn't disclose its financials. But the company "has been and continues to be profitable," Gilmore said, adding that it has considered the possibility of going public but doesn't have plans to do so in the immediate future. Its investors include Silicon Valley Bank and New York-based Eos Partners, the company's largest outside stakeholder, Gilmore said.

Its start was a little more humble. Paul Hiller, the company's chief technical officer, realized in the early 1980s that a growing number of companies were looking to outsource their testing. So he set up shop in his garage and mostly paid his own way.

Now Symtx is busy wrapping up work on a $20 million contract for the F-35 fighter jet, and it's just getting starting on the new systems to test F-18 fighters. The equipment for the most recent contract will "test aircraft, and test them wherever they are," Gilmore said. "Conservatively, this is about a $30 million contract."

And like much of Symtx's business, it's no ordinary deal.

"We are an engineering company," Gilmore said. "But where else can you go and in the same day work on a pacemaker and a weapons system?"

For more information please contact Dan Zerh dzehr@statesman.com

Austin American-Statesman