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Federal Contractor Charts a Course for Rapid Growth

EPSILON SYSTEMS SOLUTIONS INC.

CEO: Bryan Min.

Revenue: $66 million in 2006.

No. of local employees: About 400 of total 875.

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Headquarters: Kearny Mesa.

Year founded: 1998.

Company description: Diversified contractor to federal agencies including departments of Defense, Energy, Interior and Homeland Security.

Perhaps Bryan Min can be excused for some hyperbole concerning the size of his business, Epsilon Systems Solutions Inc.

In a recent interview, Min said Epsilon “was probably the largest San Diego-based, privately owned government contractor.”

“SAIC was the biggest but they went public,” he said of the giant tech company formerly based in San Diego that moved its main office in 2009 to the Washington, D.C., area.

Min isn’t accurate. The biggest privately held defense contractor based in San Diego is General Atomics with more than 5,000 employees and annual revenue of more than $600 million.

But give Epsilon a bit more time, and it may very well get to No. 1. As of January, Min said the company had a total employment of 875, with about half working locally. It’s on track to increase its staff by nearly 100 by year-end.

“By the end of 2011 I would say we’re looking at between 950 and 1,000 people,” he said.

Trajectory Attracts Notice

As to its top line growth, Min requested the number not be disclosed, but a cursory look at its previously disclosed revenue going back to the mid-2000s clearly shows the type of fast-paced rise that helped land the company on several fastest growing lists.

That includes one by Inc. Magazine, which ranked Epsilon at No. 2,414 in 2007 based on 2006 revenue of $66 million, up 146 percent from its sales in 2003.

Over those three years, Epsilon increased its employment from 133 to 477, the company told Inc.

Suffice to say that its revenue continues to rise, and did so at a 10 percent rate last year, Min said.

The key to the firm’s growth is being in a space that’s absolutely necessary and becoming more important as the U.S. Navy extends the life of its ships, Min said.

“Epsilon has been fortunate to be well-positioned in certain areas,” he said. Despite all the talk about cutting various defense programs, and reducing the budget for the nation’s defense, “we still need to fix the ships,” he said.

Shipboard Services

A diversified government contractor that counts six areas of work, the biggest growth and main revenue generation comes from two segments: marine and industrial services, and fleet engineering services.

The latter area includes such services as system and equipment troubleshooting; operator and maintenance training; shipboard repair and installation of altered equipment; and ordnance handling repair, refurbishment and testing.

Combined, the two groups produce close to 75 percent of Epsilon’s total revenue, Min said. Other groups that contribute to the mix are information technology and communications; nuclear operations and environmental management; security technology; and products.

In addition to the Navy and other divisions of the Department of Defense, customers include the Department of Energy, Department of Homeland Security, and the Department of the Interior. The company operates from 23 locations in 11 states.

Organic Growth

Min, 46, was born in Seoul, South Korea, but immigrated to Los Angeles with his family when he was young. He earned a bachelor’s degree in engineering from the University of Southern California, and a master’s degree in systems engineering from Virginia Tech University. He also obtained a management certificate from Harvard University. He served six years as a naval officer aboard Trident submarines.

In 1998, a few years after relocating to San Diego, Min launched Epsilon with an initial $10,000 consulting agreement. He nearly acquired another business several years ago, but now says he is focused on growing the business without buying other businesses.

“What is especially noteworthy about Epsilon is that they’re doing it through organic growth,” said Tony Nufer, a director for the San Diego chapter of the National Defense Industrial Association, an industry trade group.

“They’ve hired a lot of ‘roll-up-your-sleeves’ people who are doers, and brought their experience in areas they are intent on pursuing.”

Ken Slaght, past president of NDIA and a vice president with General Dynamics here, is well acquainted with Epsilon and its success, a good deal of which he attributed to Min’s vision and leadership.

“When you talk to Epsilon folks, they know what their mission is, they’re focused, and they all seem to be happy campers,” he said.

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