Bar-Code Label Company Expands Scope by Merger

Building on a profitable 1995, Eltron International--a Simi Valley-based manufacturer of bar-code label printers, software and accessories--merged last week with RJS Inc. of Monrovia. In a transaction valued at about $12 million, Eltron exchanged 346,000 shares of common stock for 100% of RJS’ stock.

RJS produces bar-code systems, printers and related products.

The deal came on the heels of the release last week of Eltron’s year-end financial report, which showed the company with a net income of $6.4 million on sales of $42.4 million in 1995, an increase from income of $2.9 million on sales of $17.5 million in 1994.

Daniel Toomey, Eltron’s vice president and chief financial officer, said both companies will continue to operate under their current names, and no personnel changes are expected. He said the joining of forces should benefit both operations, with Eltron helping RJS establish itself in the international marketplace and RJS providing the Ventura County company with access to a higher-end clientele.

“RJS has established a solid reputation as the Cadillac of the industry,” Toomey said. “They have really defined the high-end niche. They will provide us with access to high-end industrial users like Caterpillar, Ford and GM.”

Eltron printers range in price from $295 to $1,795 and RJS printers range from $2,000 to $8,000.

Toomey credited Eltron’s success last year to an expanded market.

“We targeted primarily the shipping industry, the industrial market and the point-of-sale market,” Toomey said. “And this year we made inroads in the medical market, too. SmithKline Beecham [Clinical Laboratories] is now putting our bar code labels on specimen bottles.”

Bar code labels, Toomey said, are used to track specimens as they move from a clinic to a lab and through various tests.

At industrial sites, labels are used to track parts as they enter a warehouse, move through an assembly line and into a finished product. Labels are also used to monitor the shipment of packages, with United Parcel Service making up about 40% of Eltron’s sales, Toomey said.

Bar code label printers are hooked up to computers to print data supplied by the computers.

In 1995, Toomey said, the international market accounted for 25% of Eltron’s overall sales. He expects that figure to increase this year after the opening, last month, of a Singapore office. Eltron, with 156 employees locally and a total of 200 worldwide, also has offices in France and the United Kingdom.

“Europe is roughly three years behind the U.S. in development and use of bar code equipment,” Toomey said. “It’s a fertile market for what we do.”