Keith: Specifically, what do you see the implementation of Oracle, across the Mackie divisions, doing to benefit customers and Mackie as a whole?

Jamie: It does a number of positive things. We’re a far more complicated company than we should be for our size; most similarly scaled operations don’t have multinational facilities, each playing such vital roles, and further, most also don’t have nearly as many companies in their organizational chart.
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Oracle is a powerful information management system, a fully integrated one that will fully integrate our companies. Prior to implementing Oracle, we had difficulty in quickly acquiring the key information we needed to make good decisions on a timely basis. Someone would have to do a consolidation of data from numerous companies across the world, dealing with foreign exchange rates, and so on.

You could look at the surface of things and say “we’re selling a lot of product so things are going pretty good” but somebody didn’t realize that the old inventory that we had in, say, Germany, was actually being sold at a loss because of exchange rates, and this was hurting the bottom line.

So from a financial point of view, it will give us instantly recallable numbers. Once Oracle is up and running fully, and we’re closing in on that as we speak, we’ll have the ability to say accurately look at sales, almost on a minute-by-minute basis, let alone day-to-day and month-to-month.

Also, we build a lot of our products at multiple plants. For example, the plastic enclosures and transducers for an SRM-450 speaker are made and assembled in Italy, and then they’re put in boxes and shipped to Woodinville. They’re then taken out of the box, the power amp installed, they’re tested and then put back in boxes and shipped out to customers.

So in terms of planning and coordination, having the right number of components ready, having the right amount of staffing at each facility, and so on, becomes very clear when you look at it with a tool like Oracle. It also addresses a number of other business operations with efficiency. For example, we now have the ability to do all of our invoicing via e-mail or fax, so a piece of paper doesn’t have to be created. This is faster, more efficient and more cost-effective in terms of saving on postage and materials.

The information that is generated, and available, is incredible. How much product you have, where it’s at, what it costs, how quickly it can be delivered to the customer – all of this and more can be ascertained easily, and from anywhere in the world.

Information is powerful, so ultimately what we’re talking about is a competitive advantage. But this process has been expensive and a bit painful to go through. It’s been a challenge for our people. But you look at it in the longer term, and the advantages for our customers and the company are too big to be ignored. The bottom line is that it provides a host of tools that make us easier to do business with.

Keith: In general, how does Mackie handle the pressure of expectation? And, perhaps touch on this in light of the fact that Mackie is a publicly traded company, which is somewhat rare for the pro audio industry…

Jamie: There are several pro audio companies, and maybe Mackie included, that push the envelop in terms of expectation. We grew 45 percent a year for three straight years, and received a lot of awards for how quickly we grew. Personally, I believe the opportunities in the pro audio market are still huge, maybe bigger than ever. We could likely continue to grow at rates of 40 percent if we so wished, and there are some other companies that could probably do this as well. But you have to manage growth responsibly as well as the expectations.

As a publicly traded company, there is more expectation, but that’s reasonable. There is risk associated with stock investment, and there must be more return than you’d get with a bond, or a CD account or anything along those lines. So it’s logical and reasonable that there be expectation for us to continue to grow aggressively.

And in fact, we’re in an overall market that has grown remarkably and continues to do so. It keeps pace with inflation, and is likely better than that. One of the biggest contributors to this growth is that quality of audio has become increasingly important in our society, and now that this has started, it’s not going away. The awareness of this quality will continue to drive our industry.

So it’s up to us to manage all types of expectation. The leaders in our industry must help guide this process. I think the bigger issue is that there has been some poorly managed pro audio manufacturers, for whatever reason. So as an industry, we’re not a darling of anyone in the investment community, and this makes it more difficult, especially for public companies, to go to places like equity markets and to do the things that may be easier in other industries. The pro audio industry is not shrinking at all, but there have not been a lot of very good performing audio companies, especially at the public level.

One other factor is that there’s so much competition relative to the scale of the market. Normally, in an industry that performs very well, the companies that do the best tend to consolidate the smaller competitors, and thus you have fewer companies and less overall competition, and the fewer players are usually able to perform better. But pro audio can be kind of a Catch-22 – until the industry does better as a whole, there won’t be access to the equity markets, which means that it won’t be as easy for the industry to do better as a whole.

The fact is that a huge lure of this industry is that so many people aren’t in it for the money. They truly love the business. You don’t have to look far to find a company that was founded by someone who wanted a specific piece of audio equipment and created a company to build it, and then the company grows from there.

Many companies in this industry weren’t founded to make millions of dollars; they exist due to a passion and love of product and sound, -first, - and that’s the reason there are so many smaller companies. It’s what makes pro audio truly fun and different from any other industry in the world. We’re all in this because we enjoy our jobs. We love what we do, it’s a challenge, and that’s as it should be because nothing worthwhile is easy.

Keith: How do Mackie’s growth prospects look over the next year or two or three? How about the industry as a whole?

Jamie: In the “macro” view of the economy, I don’t think the economy is going to get better real fast, but then again, I listened to a Nobel Prize winning economist speak last night at dinner, and he said there’s going to be a turnaround relatively quickly. Who am I to argue with that? (laughs)

In the Mackie view, which I’m much more equipped to answer for, we’ll see significant growth over the next year and the next three years. And the industry will continue to grow as well, much for the reasons stated before.

Keith: Any specific areas of growth you’d like to discuss?

Jamie: The synergies we anticipated at the outset of the EAW acquisition will come into play more and more, and this is a big opportunity. Digital recording products will be another big area. And as far as speakers, Mackie hasn’t remotely attained its maturity. We’ve had great success and our plans are to continue to leverage that.

We also see tremendous opportunities in new markets and existing ones. Look at what’s happened in the home recording market over the past 10 years and it’s simply amazing, and that growth will continue strongly.

Also, Mackie Industrial, for example, has the Dx10e (digital DSP/mixer), and it’s a great product, one to be followed by others. However, we’ve learned that it takes a tremendous amount of time to grow and gain acceptance in the contracting industry. These customers, the contractors and consultants, are very discriminating about what they specify, and it takes time to earn their business and their trust. However, once you prove yourself, and we’re on the way to doing that, they lock in and it’s quite powerful.

One thing I’ve been thinking about recently - with what’s recently happened in terms of world events, I think there’s going to be a desire to keep things home a bit more, and we’ll see people wanting to make their home environments more comfortable. This could lead to more, and more extensive, distributed sound systems in our houses.

Really, right now, this is the domain of consumer electronics, but I would argue that it’s much more of a contractor market, because that’s who’s really addressing it. I’m talking about the CEDIA-type contractor who could certainly benefit from better products and support, and professional audio companies are well equipped to supply this.

There are tremendous opportunities; the reality is that there simply isn’t enough hours in the day to address the opportunities we see in the future, for Mackie and the industry.