FIRM ADJUSTMENTS.

ENTREPRENEUR FINDS A NICHE IN MEDICAL SUPPLY INDUSTRY AFTER DESIGNING FOLDABLE STROLLER AND TURNING IT INTO KIDS' WHEELCHAIR

WHEN Mervyn Watkins left his home in England at age 20, he knew he wanted to make a career designing something. Entrepreneurship was in his blood. His family ran businesses from racetracks to trucking companies to grocery stores.

He just didn't know what he wanted to design.

Then he met his wife, an occupational therapist who works with disabled children for the Regional Center at the Los Angeles County Department of Health and Human Services. She inspired him to design wheelchairs for kids.

"I said to my wife, 'Wouldn't kids enjoy sitting in an attractive stroller rather than an institutional wheelchair?'" he said.

So in 1976, Watkins incorporated Torrance-based Convaid inc., maker of foldable and stroller-like wheelchairs for disabled children. Last year the company, which has steadily grown since its founding, had $7.2 million in sales. It is projecting an 18 percent jump to $8.2 million this year. Its five-year projection is to reach at least $15 million in annual revenues, he said.

Watkins first designed a foldable stroller, then added some foot rests and put a bar along the back of the stroller to make it adjustable. Then he sold it as a medical stroller, rather than as a commercial stroller, to independent distributors like National Seating and Mobility, which also sold medical items including oxygen devices and hospital beds.

Now, Convaid sells four basic folding wheelchair structures, with variations that create 100 different wheelchairs. The company makes 10,000 wheelchairs a month, in six colors, for $500 to $2,500 apiece. It sells to 2,000 nationwide dealers, and one-third of its business is international, primarily from Japan.

But Watkins has not exactly coasted along the road to success.

Father-son team

He founded the company in his Rancho Palos Verdes home with only the help of his 10-year-old son, Nathan, who ran errands back then and now, at age 33, is in manufacturing and support at Convaid. After depleting his startup savings fund, Watkins turned to alternative financing, including contracting his services as a cost-reduction consultant to other companies. He also started another company, Convaid Specialties Inc., that performed contract labor for the aerospace industry.

Convaid Specialties peaked at $500,000 in annual sales and employed 15 at one time, but is no longer in business.

Then in the late 1980s, Convaid's primary competitors were bought by goliaths Sunrise Medical Inc. in the United States and Otto Bock Group of Cos. in Germany. They continue to be leaders in the pediatric wheelchair market, but Watkins said that Convaid still has the edge on innovation.

"It is a trend with the manufacturers (to make strollers) for little kids in the zero-to-3 age group," said Ginny Paleg, physical therapist at the Hospital for Sick Children in Washington, D.C. and contributing writer for Exceptional Parent magazine. "But none of the models out there begin to approach the light weight and foldability that Convaid has. It has the best known one out there that's serving the bigger kids."

Convaid's wheelchairs, which are largely sold to kids with Cerebal Palsy, include its original basic wheelchair; the CruisAire, a lightweight wheelchair; the EZ Rider, an upright wheelchair for kids with more upper-body control; and the Safari Tilt, a chair that tilts, reclines and folds.

Watkins -- who still hand-designs products at his drafting table in his office rather than on a computer program -- has some other new ideas around the corner, such as a foldable wheelchair with a more adjustable contour seating system.

He also has developed the Convertible wheelchair, which has big wheels that can be attached or removed, to accommodate transport. The big wheels, while not the norm for Convaid, increase the chances that buyers can get reimbursed by federal or state programs like Medicaid or Medi-Cal, or by their medical insurance.

Insurance coverage problems

Making wheelchairs that look like strollers has created problems among buyers of Convaid's products, whose insurance providers classify strollers as "non-medical" and there fore not covered as a reimbursable expense.

One way to solve the problem, he said, is to venture into the adult wheelchair business, which has done with a recent variation on the EZ Rider. More like a traditional wheelchair in look, but still easily foldable, Convaid's adult wheelchair faces overwhelming competition among manufacturers.

Each brand has a loyal following, said Aram Kadish, director of occupational therapy for United Cerebal Palsy of Los Angeles, Ventura and Santa Barbara counties.

"You'd have to come up with something pretty darn innovative to make most people want to switch (brands),"Kadish said.

Spotlight

Convaid Inc.

Year Founded: 1976

Core Business: Manufactures stroller-type wheelchairs, primarily for children

Revenues in 1999: $6.5 million

Revenues in 2000: $7.2 million

Revenues in 2001: $8.2 million (projected)

Employees in 1976: 2

Employees in 2001: 85

Goal: To grow annual revenues to $15 million within five years, and to branch into adult wheelchairs

Driving Force: The need for a conveniently foldable, easy-to-trasport and safe wheelchair