Cornerstone, a Miami Twp.-based aerospace and defense firm, announced a new spin-off venture last week — Lectratek LLC, which will focus on electric aviation technologies, also known as “eAviation.”
The new company has already been able to take advantage of three new Agility Prime contracts, contracts that are part of the Air Force’s exploration of flying cars.
Creating new businesses and divisions is all in a day’s work for Cornerstone. Lectratek will take advantage of CRG-developed technologies, including engineering services and aircraft parts related to electric propulsion, advanced composites and safe energy storage, the company said.
“It’s borne out of the development side, the R&D side of things, where CRG gets most of its revenue,” Patrick Hood, Cornerstone chief executive, said in an interview. “We don’t make product; our product is a service of creating things that can, when commercialized, relieve the pain of our customers.”
The roster of companies CRG has created should include some familiar names. Cornerstone created Spintech in 2010 to develop and refine a “shape memory polymer,” a technology that has proven of interest of composite material manufacturers, as well as SpaceX.
Advantic, Nona Composites, which became Kineticure, and now Lectratek have joined that roster, among others, including some ventures that were launched and shut down relatively quickly. But others are going strong: Advantic was No. 120 in a recent Inc. magazine 5000 list.
COVID-19 has hit everyone hard, including Cornerstone, but some defense industry companies would love to have the year Cornerstone is seeing.
Hood put the company’s expected annual revenue at about $24 million this year. That represents growth of 25% in 2020 over 2019. To put that in perspective, however, Hood noted that last year CRG saw growth of about 85%.
In the first 11 years of its history, CRG grew at an average of 40%.
“It pushed our sales out to the right probably six months,” Hood said of the pandemic. “We were looking at a very strong growth year on top of last year’s, which was a strong year.”
CRG saw about $8 million in notified contract awards “vaporize” due to COVID. “That’s a sizable hit for us,” Hood said.
Fortunately, the company’s backlog is also sizable, so CRG and its 100-plus local employees are staying busy.
“We kind of hunkered down and executed,” the CEO said.
Lectratek is the first new company coming out of CRG’s recently formed Venture Studio to gain critical mass, said Andrew Cothrel, CRG’s chief venture officer.
CRG hired Cothrel earlier this year precisely to manage CRG’s venture start-up portfolio.
“We are really pleased with how quickly customer demand is becoming tangible for Lectratek, particularly for our highly unique propulsion solutions,” Cothrel said. “While it is still early days in eAviation, this is a market forecasted to be worth $178 billion by 2040, and we think Lectratek has something to offer that can lead to enduring success.”
What does the future hold? Hood said CRG is modifying a Byers Road facility for a pilot production line for “next-generation, high-performance” lithium ion, lithium metal batteries.
“We have a substantial portfolio of battery development programs,” Hood said. “Most of these are focused on reducing the weight, increasing the safety, broadening the operating temperature range and increasing the energy storage capacity of next-generation batteries.”
Several of CRG’s battery designs are moving toward being viable products, he added. The company has invested in $2 million in equipment at its Washington Church Road facility to set up the line.
Founded in 1997, CRG has made the Inc. 5000 for the seventh time in 2020.
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