After surviving the housing crash, CentraLite has ‘come full circle,’ says founder Jim Busby

CentraLite.jpgView full sizeCentraLite founder Jim Busby, left, his son, Jimmy Busby, the president and CEO of the company, and John Calagaz, CentraLite’s chief technology officer and vice president, right, talk Thursday about their new agreement with a major cable company to sell its home electronics controls.(Press-Register/G.M. Andrews)

MOBILE, Alabama — After surviving the housing crash through new business with commercial properties, Mobile-based CentraLite is back on the map in home automation, where new contracts with national and international cable companies promise significant returns.

Its founder, Jim Busby, a man who counts himself lucky to have had his business survive the market crash, now sees several large national and international firms among his customers and in the coming years plans a multi-million dollar expansion of CentraLite’s offices.

Names like Comcast, Time Warner, Cox Communications and Florida-based Bright House Networks are among resellers of CentraLite’s home automation products, systems that can regulate anything from home security to the thermostat to turning the lights out after you leave home.

“We’ve come full circle now,” Busby said of a return to the housing market after several years away. “That’s where we’re going with these cable companies. We’re back with home automation that can go into everyone’s house because we’re teamed up with somebody that knows where all the customers are — that’s already there.”

Busby became a household name in Mobile business circles after he founded and grew printer company Quality Micro Systems into 1,500 employees and a ticker symbol on the New York Stock Exchange.

QMS developed and sold leading-edge printers, and Busby sold the company before Minolta bought a controlling interest and took the company private.

Busby started CentraLite in 1997 and named his son, Jimmy Busby, president and chief executive in 2010.

Jim Busby remains chairman and took the title of executive vice president and chief operating officer.

CentraLite’s first product was a hard-wired system for controlling lighting and other electronic elements in residences, offering builders the kind of automation system in low- to mid-priced homes that was more commonly found in high-priced residences. As Jim Busby describes it, he was trying to create “a home automation for the masses.”

Company leaders made a bumpy transition to wireless seven years ago when, unsure if they would be able to create wireless products themselves, they commissioned another firm to do it for them.

Displeased with the outcome, Jimmy Busby proposed they try it on their own. Within three months, CentraLite had developed ZigBee Wireless, the basis for what the business would later sell to cable companies.

The new product allowed CentraLite to transition from home automation to energy management in multi-room facilities such as hotels and university dorms, starting in 2008, just before the housing bubble burst.

The system essentially does what many people forget to do before they leave home, turn the thermostat down and the lights off, relying on wireless, in-room thermostats and door and motion sensors.

“We had an opportunity to put our components into hotels and do energy savings,” Jimmy Busby said. “For the longest time we were doing that on the side. We never touted the energy savings because nobody cared. But about four years ago with energy prices going up, people really started noticing.”

CentraLite has put the product in hotels in Las Vegas, Boston, Chicago, Philadelphia, a resort hotel in Cabo San Lucas, and even local establishments like the Holiday Inn Downtown Mobile and dorms at the University of South Alabama.

Two years ago, CentraLite began working with iControl, a maker of security systems that broadband companies were beginning to install. The partnership gave CentraLite an in, and it quickly grabbed up multiple contracts and sales from large cable companies.

“We saw this really good opportunity to be able to sell our existing products and a few new products,” Jimmy Busby said.

New business with cable companies in the past year has brought CentraLite back to the housing market in a big way, with customers such as Rogers Cable Inc. in Canada, Swisscom in Switzerland, security system provider ipDatatel Inc. and Comporium Communications in South Carolina. Whereas CentraLite’s original business was just for new homes, about 98 percent of the company’s product now goes into existing structures.

“It’s not new houses so we’re not dependent on the construction,” Jimmy Busby said of CentraLite’s wireless system. “This stuff can be installed anywhere.”

Jonathan Collins, an analyst with New York-based ABI Research, a market intelligence company, said home automation has traditionally been either a high-end luxury or a DIY enthusiast product. But as a new range of big consumer players move into that marketplace, the automation is becoming more mainstream.

Companies such as cable providers and home security businesses “have begun to see home automation as an incremental service they can provide, bringing in new revenue streams and making their existing services more attractive,” Collins said. “There is a great deal of variety in the players that are coming to the home automation market and there are many ways of focusing or targeting their offerings. This will shape how suppliers are chosen.”

Collins said home automation is increasingly competitive, but a market that is expected to grow significantly in the next five years. Competition among companies such a CentraLite to partner with large providers such as Comcast and Time Warner is also strong, as the maturity of software amongst the home automation companies has increased.

Given its recent business with cable companies, CentraLite’s income has risen quickly. Busby expects the revenue from the first half of 2012 will match a 2011 total of $3 million and 2012 total revenue will between $10 million and $15 million.

To meet growing demand, the business has added more than 20 employees since March and is moving its manufacturing and assembly shop to a 20,000-square-foot facility, still in Mobile County, to accommodate the 20,000 to 25,000 units they’ll be making and shipping in both July and August. The increase is a stark contrast to the less than 200 units monthly CentraLite was shipping in December.

Now at 59 employees locally, the company estimates it will end 2012 with 65 or more employees and expects to push out 15 new products in the next year.

“We have quite a laundry list of new products that we’re going to develop that some of the cable companies have asked us to develop for them,” Jim Busby said. The company is looking at two different places for its new manufacturing and assembly shop, one in Mobile and one in Theodore, and expects to have 100 percent of its products made in Mobile within the next three months.

He also said the company hopes to start designing and building a 40,000- to 60,000-square-foot facility in the next six months to house the entire company, a complex Jim Busby thinks will mean an investment of $4 million to $5 million.

He said the main thing that has changed about the company’s thinking is its shrinking reliance on product from other companies.

“We have decided that we are as good or better at designing things with radios in them than anybody else in the country,” Jim said. “Everything we’re making has our own designs, our own products.”

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