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DTx fills important niche as medical computer parts brokering company

by Kathy Hagood
Brevard Technical Journal

Co-founder and CEO Art Schmitt leads DTx. Photo by Mike Giannacco, © 2005.

Melbourne-based DTx Inc. designs, produces and maintains computer platforms to accompany medical diagnostic and imaging equipment manufactured by some of the world's top medical equipment companies.

The embedded computing solutions provided by DTx are used with blood analyzers as well as PET and CT scanners manufactured by companies like Beckman Coulter Inc., Johnson & Johnson, Abbott Labs, GE Medical and Siemens.

Thanks to the leadership of company founders Arthur Schmitt and Gene Garofalo as well as others on the executive team, DTx generated $20 million in sales during its past fiscal year, said Schmitt, who serves as the company's president and chief executive officer.

"We've got a fabulous team here and I'm fortunate to work with people who make my job easy," Schmitt said.

Schmitt projects the company, which has ramped up its sales force in key markets and has instituted other expansion and quality initiatives, will bring in $25 to $27 million this year.

The company expanded its Melbourne operations, which started with one suite in its current location 14 years ago, to 20,000 square feet in 2004. DTx currently employs 56 workers.

DTx got its start in 1991, after Schmitt and Gene Garofalo, now the company's vice president of business development, recog-nized equipment manufacturers desperately needed obsolete computer parts for the computer platforms that were paired with their sophisticated technology. Creating DTx to serve as a computer part brokering company seemed like a no brainer for the two enterprising men.

"This was just something we cooked up informally that took on a life of its own," Schmitt said.

Then one of the company's original customers gave Schmitt and Garofolo the idea for an expanded mission: Provide medical equipment manufacturers with a steady supply of computing platforms that didn't change with the commercial market and necessitate equipment recertification. Because of strict regulatory requirements by the Federal Drug Administration, medical equipment manufacturers needed a product not subject to upgrades.

So the two shifted DTx to focus on developing a comprehensive program to provide dependable computer solutions.

"Original equipment manufacturers were being distracted from their core competencies rather than just being able to rely on a steady supply of computer platforms that were maintained by the provider," Schmitt said.

DTx originally stood for Digital Technology Exchange, which is just what the two offered original equipment manufacturers. The company is now known as DTx. Company leaders are beginning to brand the company DTx Medical Computing Solutions.

"We fill an important niche in the medical industry, so we want to continue to build that market," Schmitt said.

The company went through a temporary period of expanding beyond the medical market after the mid-1990s. Company founders went looking for capital in 1996 to expand the growing company, and ended up selling it to Digicon Corp. of Bethesda, Md., a large systems integration company.

"They gave us too tempting an offer to refuse," Schmitt said.

DTx then operated as an independent subsidiary and kept its staff, including its founders. But the management team was directed by Digicon to broaden its focus to suppling various commercial and government organizations with systems integration and network implementation.

"The parent company wasn't interested in what really set us apart. We're not about the latest and greatest technology. What we offer is dependable, consistent systems that well serve medical equipment manufacturers,"Schmitt said.

Because of Digicon's directives, the company's growth became stagnant, Schmitt said. He and others on the executive management team wished to return to their former vertical business model of building the medical market. Schmitt orchestrated a management buy out with capital from management, employees and investors.

"We knew what worked for us and could see amazing growth potential for the company," Schmitt said.

So in 2002, DTx was again able to focus on the medical market, and added a display products line in order to provide a more complete solution for customers. Two groups were formed: DTx Medical Computing Solutions and DTx Advanced Display Solutions.

DTx products are custom-designed for each equipment manufacturer. They are based on customized Microsoft- and Intel-based products driven by off-the-shelf components.

Those changes and others brought a significant revenue surge to the reinvented company. Annual revenues jumped from $8 million to $14 million the first year.

The company continues to bank on its vertical market strategy but has also instituted numerous quality improvements, Schmitt said. The production process has become more automated and improved testing procedures instituted.

"Our goal is to manufacture and deliver a 100 percent perfect product. That is impossible of course, but it's our goal," Schmitt said.

For more information, visit www.dtx.com