Mr. ‘Can do'

18 April 2008

Bill Lampson says his company's business philosophy has been to grow the crane fleet in a cautious a

Bill Lampson says his company's business philosophy has been to grow the crane fleet in a cautious and controlled manner, trying to match fleet size and type with demand of the industry

Based in Kennewick, WA, Lampson International has long been a respected entity in the business of cranes and transport. Started by Neil F. Lampson in 1945, the company has grown from a small enterprise in western Washington state to a large company with an international reach, and with offices in Denver, CO; Houston, TX; Phoenix, AZ; Boise, ID; Calgary, BC and five offices in Australia.

Like many in the crane and transport business, William Lampson grew up in the business, going on business trips with his father by the age of 16. For many years, the younger Lampson and his father worked side by side, taking the company to new levels of success.

He took over the top spot at the company in the early 1980s.

Most often, the Lampson name is associated with the mammoth blue cranes known as the Lampson Transi-Lift crawler cranes. But the company does much more. Lampson International operates three divisions, including equipment rental, heavy rigging contract services and the manufacture of specialized heavy lift cranes and heavy transport equipment. The equipment rental operation offers some 400 major pieces of heavy lift and heavy transport equipment to the general construction trades, either as bare rental or fully operated and maintained. The heavy rigging contract services are provided on a full performance basis. The manufacturing entity is responsible for the design and manufacture of the company's patented Lampson Transi-Lift Mobile Crawler Crane System and the Lampson self-propelled crawler transporters.

We recently caught up with Lampson to talk about his company and other industry-related subjects.

Lampson International competes on a range of levels in several markets. What are Lampson's growth markets?

Lampson International competes on a range of levels in several markets and continues to grow in all aspects of our operations. For example, we have consistently grown and expanded our equipment rental fleet. The fleet consists primarily of Manitowoc crawler cranes, Grove hydraulic cranes and Lampson proprietary dynamic compaction machines and self-propelled crawler transporters. We also continue to expand our heavy rigging and heavy transport contract services throughout the US, Canada, Australia and other parts of the world.

Which sectors (highway/heavy, commercial, energy, etc.) have the highest demand for cranes (specifically, cranes in your fleet)? Geographic location(s)?

It seems the highest demand for our equipment and services presently is in the petrochemical industry, mining industry, heavy general construction and power industries. Geographically, we are operating in the US in approximately 35 different states each year, and throughout Canada and Australia. The heaviest concentrations would be where there are existing facilities that require improvements, or new facilities that require heavy infrastructure and permanent facility construction. We have also operated in approximately 30 foreign countries throughout the years.

What is the market for the Lampson Transi-Lift? What does the future hold for these cranes? In what ways will the markets change for these very large lifters and, if necessary, how will you adapt your equipment fleet to meet those needs?

The market for the patented Lampson Transi-Lift Mobile Crawler Crane System is presently the strongest that it has ever been.

We currently have approximately 30 machines, ranging in size from 350 ton capacity up through 2,600 ton capacity. Each model of the Transi-Lift crane has load moment capacity several times that of other more conventional cranes carrying the same nominal rated capacity. The Transi-Lift offers tremendous advantages for the very large lifts that require, or can take advantage of, the mobility of the Transi-Lift crane. The Transi-Lift crane, of course, can pick and carry any load which it has the capacity to lift. It is also capable of hoisting, booming and slewing simultaneously all with individually controlled function. This unique capability makes the Transi-Lift Mobile Crane System the most useful crane for performing the heaviest and most complicated lifts worldwide. We continued to upgrade our Transi-Lift fleet with the latest in technology. Since we are actually a hands-on user of the cranes ourselves, we have instant feedback on improvements to the system that make the crane even more attractive and useful to other end users.

What is your take on the economy, specifically as it relates to demand for cranes and other lifting and transport equipment? Has the market ever been better? When do you envisage the next softening of demand and how will Lampson respond?

Obviously, the economy in almost any geographic area you want to choose is very strong. The demand for cranes and heavy lift and heavy transport of all types is as good, if not better, than it has ever been before. I expect the heavy demand will continue for the foreseeable future. Lampson, like other responsible industry players, will continue to increase our fleet capacities to meet demand to the best of our abilities. We will attempt to do this in a manner that is responsible and prudent, and that will preclude us from over extending our core managerial or financial capabilities.

Is the Manitowoc brand still dominant in Lampson's fleet? How many new cranes has Lampson bought over the last year and what models are they?

Yes, the Manitowoc brand of conventional cranes is still very dominant in the Lampson fleet. We continue to rebuild and remanufacture the conventional models on a regular basis to keep them current and with new specifications. In addition, we have remanufactured many of the Manitowoc Model 4100 Series II into our Millennium series cranes that maintain all the structure integrity and operational reliability of the conventional Manitowoc 4100, while also incorporating some of the newer operator friendly control systems. The Millennium is a proprietary model of Lampson and has proven to be one of the most popular units in our entire fleet. Additionally, we have purchased in recent years, either new from the factory or current model used equipment on the open market, approximately 55 of Manitowoc's latest model cranes and attachments. These include such models as the Model 777, Model 888, Model 999, Model 2250 and the Model 18000, all with both Maxer or Luffer attachments where applicable.

In terms of transport, Lampson has among the world's largest fleets of crawler transports. What is the market for this type of machine? What drives demand for this type of specialized transport?

Lampson clearly maintains the largest and most capable fleet of self-propelled crawler type transporters, as well as approximately 350 lines of self-propelled rubber-tired transport trailers. The self-propelled crawler type transporters range in size from 600 tons per unit up to as much as 4,000 tons per unit. These machines are used throughout the petro-chemical, mining, modularization and heavy construction industries. They are most popular for relocating the world's largest draglines, shovels, mobile crushing and conveying equipment in the mining industry, and refinery vessels, and large modular constructed process equipment of all types. The demand for this type of equipment continues to be strong and we continue to build additional units to support this demand.

What is your take on the top end of the sector, where you are, with regard to the fact that Maxim, Essex and other large entities are for sale or looking for investors. Is it time to sell Lampson?

Lampson International is celebrating our 60th year of operation this year. I believe we have been able to grow to the top end of the crane and rigging sector through the basic core values and principles that were established by my parents, Neil and Billie Jane Lampson, in the very early days of our existence. We continue to operate by those core values and principles which are based on customer performance, reliability, honest and fair dealing and an innovative ‘can do' spirit. This year we were rated Number One in the world in terms of heavy lift fleet as determined by the International Cranes & Specialized Transport magazine's, IC50 league. This was determined partially because of the number of cranes that we have, but more importantly, the tremendous load moment capacities of the combination of our heavy lift fleet. The Transi-Lift cranes have essentially unmatched load moment capabilities.

Our philosophy has been to grow our fleet in a cautious and controlled manner, trying to match our fleet size and type with demand of the industry. We have principally attempted to do this without assuming an inordinate amount of debt relative to the value of our fleet. Others in the industry have chosen to expand their fleet through tremendous amounts of external debt. The fact that we have purposely avoided assuming large debt allows us to be much more responsive to customer needs when it comes to acquiring additional equipment and much more competitive with the services we provide.

Any time you are saddled with a heavy debt service, other resources seem to suffer. Of course, like others in the industry, we receive many opportunities from merger and acquisition companies to merge, be acquired or even consider a public offering. However, we are financially strong, have a tremendous management team in place, have one of the largest, well maintained and modern fleet of equipment in the world and a group of operating personnel that are second to none. We are very fortunate to have those resources already in place. I believe our strongest advantage and best opportunity is to continue what we have done for the last 60 years. In doing so, we hope to avoid some of the pitfalls that have, to some degree, consumed other organizations that have elected to go the sell, merger or acquisition route. I firmly believe we are one of the strongest and most well positioned crane and rigging operations to prosper in the years ahead.


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