David Owens, the computer equipment entrepreuner who recently agreed to sell his interest in Terminals Unlimited Inc. of Falls Church for about $21 million, doesn't know what he's in for.
In fact, there are few people outside the top management of Duke of Energy Inc., the aggressive Oklahoma computer and energy company that announced plans to buy the company two weeks ago, who know what's ahead for Owens and Terminals Unlimited.
Rockie Smith, the entrepreneur who runs Duke of Energy, has visions of building a $1 billion company within a few years, creating from almost nothing a leader in the computer industry. Smith is trying to create a microcomputer peripherals company with major manufacturing capability. In the go-go world of the computer business, he might just do it.
"It may be that a billion dollars is impossible and I'm a maniac for thinking it can be done, but if you don't try for something sizable you don't accomplish anything," Smith said last week.
While there is considerable skepticism on Wall Street about Smith's aspirations, no one seems willing to pan the show he put on for analysts on Dec. 14, the day the Duke of Energy signed a letter of intent to buy TU. "Mr. Smith and his company are deadly serious about assembling somewhat of a total computer company," said Dick Clark, a stock watcher with Fahnestock & Co.
"He's not a huckster or a showman," said another source present at the meeting. "It was low key and professional."
"Clearly there is something there," said another attendee, who requested anonymity. "What he has in mind is to build capability in the personal computer area and we all know there is tremendous potential there."
But another computer industry specialist said Smith's plans remind him of the "speculative hype" of years past when the computer industry was just getting started. "He is trying to build a real company with paper," said Jonathan Art, a financial analyst with The Gartner Group, a leading computer research firm.
The market is taking a wait-and-see attitude. For starters, analysts want to see a Duke of Energy summary of the potential impact of a series of acquisitions announced by the company in recent weeks. That's been promised early next year.
Some of the pieces of Smith's billion-dollar business seem to be in place. Through subsidiaries, Duke of Energy manufactures printed circuit boards for microcomputers, produces software for similar systems and runs a remote computer time sharing service. Smith also recently spent about $9.6 million to buy a disc manufacturing firm, and more acquisitions are on the way.
Smith argues the time is right to enter businesses affiliated with microcomputers, a premise that's difficult to challenge. "As a friend once said the time to sell peanuts is when the circus is in town," Smith said. "Microcomputers are in town."
Both sides expect the purchase contract to be signed shortly.
Like Rockie Smith, Owens is no stranger to grand dreams. He's kept TU growing at a compounded rate of 200 percent a year over a six-year period and the company's growth in 1982 made it the second fastest growing private concern in the nation, according to Inc. magazine. It was the magazine's coverage of TU that brought the company to Smith's attention.
TU was two years after Owens went into business on his own as D. Owens Associates. A national sales manager with Addressograph-Multigraph Corp. (now AM International Inc.) for 13 years, Owens became dissatisfied with that company's strategic direction and quit in 1976.
"I really did not know where I was going," he recalled. "I had no interest in starting a business." Armed with a small loan, he started selling computer-related products and by 1978 had a small firm with four employes.
As the Washington area grew as a computer industry center, so did TU, becoming what Owens calls the area's "dominant firm in terminal distribution." By 1979, the company had sales of $3.2 million and 21 employes, Owens said.
Sales doubled in 1980 and spurted to $10.8 million in 1981. This year the company will do about $21.5 million in business with a staff of about 225.
Next year, Owens hopes TU will show revenues of $50 million and grow by the end of the year to 500 employes, with substantial leasing operations, computer service branches in 40 cities and laboratories in Springfield, Va., and Sunnyvale, Calif.
Owens is the supremely dedicated salesman. TU has been his life, seven days a week, 15 hours a day, he says. "Commitment. I don't know what else to call it. You've got to know where you want to go," Owens said.
In the beginning, TU was essentially a distributor of data and word processing supplies, such as ribbons and computer tape--a major business itself in a community dominated by the federal government's paperwork.
Now, those basic supplies make up about 20 percent of TU's business. The bulk of today's sales come from printers, terminals, microcomputers and related systems.
Again like Smith, Owens wants more. The software business needs to be developed and he is interested in starting training centers for potential employes. "We're looking at that very seriously," Owens said. Owens also sees TU "becoming a major factor in third-party computer servicing."
Like Owens, Smith started his business from scratch. He had declared bankruptcy a few years earlier but says the bankruptcy was simply for tax purposes.
With other investments, he formed Duke of Energy in November 1980 with nine investors. Initially, Duke of Energy was a shell company holding mineral leases in Utah.
The company went public almost two years ago and last September, Smith picked up three computer companies that today are the heart of Duke of Energy. The stock now sells for between $5 and $6 a share, up from 70 cents a share in October. Smith owns 6.3 million shares, worth on paper about $30 million. Another $21 million in Duke of Energy shares are now in Owens' hands, as a result of the purchase.
Owens built a lean $20 million company. Smith has created a paper computer empire. The parallel tales of David Owens and Rockie Smith now enter a new chapter. CAPTION: Picture, David Owens of Terminals Unlimited hopes 1983 revenues will hit $50 million. Photo by Ray Lustig -- The Washington Post