Quakes Jolt Company’s Profits on Plastic Locks : Devices: Sales have soared for Fastening Solutions, which makes latch to secure equipment during temblors.

Combine a simple idea with low-cost labor, then throw in a few acts of God. What you get is Fastening Solutions Inc., a small Van Nuys company whose sales jumped almost 1,000% in 1994.

Four-year-old Fastening Solutions has several patents pending on a plastic latch called a thumb lock, which secures computers and other office devices in place so that they don’t tumble to the floor during earthquakes. The company’s sales soared to nearly $3 million in 1994 from about $300,000 the previous year, said Chief Executive Officer Chris McManus.

But it’s taken more than simplicity to get this product off the ground. Fastening Solutions has kept costs low by using a couple dozen disabled veterans in a Westwood Veterans Administration Hospital, many who for less than minimum wage assemble and package thumb locks on their way to gaining skills they need for real-world jobs. The program “really gives you an all-American-made product,” said McManus.

This assembly deal also saves Fastening Solutions a bundle in Social Security taxes and health and workers’ compensation benefits.

Then there was last year’s Northridge earthquake, which gave thumb locks a momentum that continues to this day. “It was just incredible,” said McManus, describing the weeks following the quake. “The phones went dead every hour because there were so many calls, it would overload the circuits.”

Thumb locks consist of two plastic latches with adhesive stickers connected by a flexible strap. One latch sticks to a computer, the other sticks to a table or desk. The strap holds the computer in place. If you want to move the computer, you flip one latch with your thumb to release the strap. The company also has a line of vibration-proof shelf coverings and glassware holders.

The company claims the Northridge quake proved that the thumb locks keep computers, fax machines, printers and other objects from sliding around or crashing to the floor when the ground shakes. “It worked as intended,” said Ed Pagenkopp, an emergency-preparedness consultant who was working at Pacific Bell in Sherman Oaks before the quake. Pagenkopp said that although the office was in complete disarray after the quake, all equipment strapped down with thumb locks stayed in place.

Thumb locks drew so much attention after the quake that Fastening Solutions began opening its offices to the public on Saturdays. People would line up in the parking lot to buy the devices, said McManus. The demand helped propel thumb locks into retail outlets. The company now sells more than half of its merchandise to Home Base, Office Depot and other hardware stores.

These are not the only quake-resistant furniture devices for sale. There are Velcro fastening products now on the market, which are also used to lash down equipment.

But Fastening Solutions’ thumb lock is the best-selling item among a host of products in the earthquake display at Home Base in Canoga Park--selling even better than the sticky wax fastening products that the store also carries, said store sales manager John Walker. Thumb locks “are still selling well--especially with the Japanese earthquake. People have a new urgency about it,” he said.

Fastening Solutions had signed a contract to sell its products in Japan, just before the Kobe quake this month. The first shipment of thumb locks were en route to a Japanese supplier of hardware stores when the quake hit. The supplier instantly tripled the order and asked that it be sent air freight, McManus said.

The company has also sold thumb locks to the U.S. Navy and the U.S. Coast Guard, to secure valuable equipment on rocky seas, and to Ringling Bros. and Barnum & Bailey Circus for use on circus trains. The latches are used in everything from bomb shelters in Saudi Arabia to mobile medical clinics in South America, the company said.

McManus, a U.S. Navy veteran, said he heard about the veterans’ work-therapy program after first contracting with Goodwill Industries for his firm’s assembly and packaging work. The veterans’ program allows Fastening Solutions to pay a set fee for every thumb lock assembled, which in turn is mostly paid back to the veterans on a piecework basis. The pay is based on a rate about 30 below the minimum wage of $4.25 an hour, although some who work fast can earn more than the minimum wage, said Jonathan Hayes, vocational therapist at the VA Hospital.

Money for veterans is not the main point: “We want to get veterans back into the routine and the daily grind of a job, so they are not out on street corner,” said Hayes, adding that many of those in the program are recovering from alcohol and drug dependency.

For Fastening Solutions, the program means that labor costs are no more than a few cents per thumb lock, which sell in stores for about $9.95 per pair and more. McManus would not disclose the company’s profit margin on thumb locks, but he said some of the materials used to make the devices are expensive.

Thumb locks were developed by Bill Hopkins, one of the partners in Fastening Solutions. Hopkins entered into a partnership with McManus--who owns a second company that makes anti-theft devices for office equipment--and another investor, Barry Schulman.

The partners invested about $100,000 in start-up costs, and lost money for the first two years, Hopkins said. But by keeping their costs low, the company could grow with minimal borrowing once sales took off. The company was granted a $60,000 line of credit from a local bank immediately following the Northridge quake, McManus said, in part because the sample thumb locks he’d given the bank worked in the quake.

Today, Fastening Solutions says it has about $100,000 in cash on hand. The VA Hospital has scrambled to keep up with increased production needs; and since the company’s Japanese contract was signed, thumb-lock production now accounts for a majority of the work-therapy jobs available at the hospital.

Hopkins acknowledges that residential demand may taper off a little as the Northridge and Kobe quakes fade into memory, but he expects sales to keep climbing as more government and corporate clients sign up. “Every time there’s an earthquake there is publicity, and it refocuses people to problem,” he said.

The company’s growth has not been without its strains, however.

Schulman, the former vice president of sales and one-third owner, quit last week, citing disagreements with the other two partners. When the company got started “we didn’t really know each other. It was like getting married after a weekend date,” said Schulman.

As business demands grew more intense, Schulman said he found himself at odds with Hopkins and McManus over how much time the job took away from his wife and 5-year-old child. He still believes the company will keep growing, but “you can do well and not be happy,” he said.