Finding an upside to downsizing: former DEC executives turned out a profitable business by selling excess corporate assets.

Few former corporate professionals can say they benefited from downsizing. Grady Simmons, president of Asset Conversion Specialists in Chandler, Ariz., is an exception. Two years ago, Simmons was working at Digital Equipment Corp. in Tempe, Ariz., when he learned that the facility was going to be closed and all equipment liquidated.

Simmons and his co-worker, Craig Klepper, who was the operations manager at the time, were put in charge of the closure. Faced with the challenge of having to sell tons of excess equipment for Digital, the two men realized they could help other big companies deal with the problem of asset disposal. Thus, Asset Conversion Specialists was born.

Simmons, 45, owns 51% of the company and Klepper, 50, who serves as vice president and secretary, has a 49% stake. Another former Digital executive, Marcellus Stamps, was recently brought into the ACS fold. The former program and planning manager serves as ACS' eastern regional sales manager. The enterprising trio have made good from a bad situation. ACS had first year sales of $321,000. Last year's sales were $450,000.

"Downsizing made us what we are today. It gave us a new outlook and a new business," says Simmons, an M.B.A. graduate from Atlanta Uni-versity who joined Digital in 1977 as an accountant, later becoming a plant financial controller.

Essentially, ACS is a high-tech thrift shop. Companies give them their old computers, circuit boards, semi-conductor testing devices, etc., on a consignment basis. ACS takes a Cut on what they sell, generally at a far better price than clients could get on their own.

"We can get more revenue for excess assets because we have a large, nationwide network of retail and wholesale buyers, notes Klepper. "We partner with our clients to eliminate that first-levd equipment broker." In most cases, he adds, "ACS can increase the revenues from used asset sales by 50% to 200%. Whereas a lot of companies will scrap excess, ACS gives them a better chance to generate some income from material that is essentially worthless to them.

Since one company's trash may be another company's treasure, ACS also locates used equipment nationwide, from office supplies to environmental test chambers. This is referred to as sourcing, which begins with a shopping list from a buyer who is in need of big-ticket items but doesn't mind if they are used goods.

San Jose, Calif.-based HMT fits this bill. It buys testing and measurement devices from ACS for its film media manufacturing facility. "They are good at getting the product you want," says Ron Buschur, vice president of quality at HMT. "What's more, they assign a fair market value to the material they find you, taking no advantage of supply and demand."

Buschur further notes that if HMT had to find products on its own, it would be forced to buy new equipment at top-dollar and the lead times would be six to eight weeks on smaller items and five to six months on larder goods. "ACS can get us what we need quicker and at a better price, which gives us substantial savings," he adds.

Asset Conversion Specialists Inc., 281 Chilton Drive, Chandler, AZ 85225; 800-982-7728;-e-mail: surplus@ cnet.net