North Smithfield manufacturer finds profit putting best foot forward

By Paul Lonardo

Charles Sipes moved to Rhode Island in 1992 to work for ATP Manufacturing, a company in North Smithfield that designs and produces molded polyurethane insole products. Charlie relocated from Maine, where he been in the shoe business and the polyurethane molding business since the early 1970’s.

“This is my game,” he says. “This is what my whole career has been, molding polyurethane.”

In the late 1990’s, ATP began Atlantic Footcare. It was not a separate company, but a division of ATP. They put together a group of products and established the Prothotics brand, pre-fabricated insoles designed for medical professionals and industrial, occupational health and safety markets.

In 2008, ATP lost their two biggest customers, who took their business overseas. Not a new story, but it decimated the company. Soon after, the company closed its facility in Rhode Island and moved the entire operation to Arkansas, hoping to consolidate resources, streamline the business and get back on track. It didn’t work out that way, however.

Charlie and a few other managers still left at ATP saw the writing on the wall, but they also saw the Atlantic Footcare division as a possible viable option for salvaging something out of the floundering company. Charlie thought so highly of Atlantic Footcare that he and his wife made a bid to purchase the division themselves as a separate stand-alone entity before it went down with the ATP ship.

“Ultimately,” Charlie says, “instead of us acquiring it personally, we formed an investor group, among them a number of former managers of the old ATP, and we did it that way.”

In 2009, the group officially bought Atlantic Footcare from ATP and established the company back in Rhode Island. They rented a small building in Burrillville and, with just seven full-time employees, began manufacturing and selling the Prothotics brand again. And not a moment too soon, because within a year, ATP went under, closing the doors on the operations in Arkansas.

“We went to the bank and made a deal to purchase the remaining capital assets out of Arkansas,” Charlie says, “and moved it all back to Rhode Island. We began contacting former customers of ATP and slowly we gained back almost all of them, and even attracted some new customers.”

Under new ownership and management, the resurrected Atlantic Footcare continued to grow the space they occupied, adding equipment and personnel. In 2012, they expanded, buying a new larger building, which conveniently was right across the street. At the same time, they got an unexpected and new piece of business that was outside of the shoe industry. It was a simple packing device, but it spurred growth for the company beyond anything that Charlie or anyone at Atlantic Footcare could have hoped to imagine.

Charlie describes that product as a little foam disc. “It’s sort of looks like a softball cut in half, so it’s flat on one side, domed on the other, and it’s application is to protect electronics, heavy electronic, during shipping. We’re still making that product today, and we’ve made and shipped over 70 million of those foam discs since we began manufacturing them.”

While Charlie credits luck for his company’s good fortune, it was ultimately the efforts made by him and his partners to bring the company back from the brink that allowed such an opportunity to even present itself.

“As often happens in business,” Charlie explains, “it was being in the right place at the right time. When we purchased the capital equipment out of Arkansas, one of the pieces of the equipment that was down there we actually made a deal to sell it back to the original manufacturer. In the course of those negotiations, a whole new opportunity presented itself. There was this other company, one of their customers, who had approached them about building a machine for them. When it came to our attention that they were also looking for a potential vendor to make these little foam balls for packing, we ended up working with them. We sold them the molds, licensed our molding technology to them, helped them get into the business themselves, and at the same time, partly because we helped them, they helped us. And they are continuing to give us significant orders for business.”

The approach Charlie took to operate Atlantic Footcare was very different from the approach that was taken by ATP, when they were still in operation.

“Being one of the investors in this company, and taking into consideration the investment I made, with my own personal finances, I think it changes your outlook. We had to make money to put food on the table. We allocate our resources very carefully, and try not to make unwise investments or spend money that we don’t need to spend. In today’s business environment, that is required if you want to survive. You have to be frugal.”

In 2015, Atlantic Footcare bought the building they are currently occupying in North Smithfield, and moved in last December. The 41,000 square foot facility maintains six production lines and currently employs more than 100 people.

“We’ve been really blessed,” Charlie says. “Business has been terrific, we’re making product for Walmart, we’re supplying CVS now. Manufacturing direct to the retailer, we see that as a real potential growth area. By cutting out the middleman, this has allowed us to remain competitive in the U.S. We don’t have to just be the manufacturer, but we’re the manufacturer and the marketer.”

That business model has proven successful for Charlie and Atlantic Footcare. In the process, the investment group has kept a much-needed manufacturing business prospering in the state and employing numerous Rhode Islanders. The future looks even brighter, with new plans on the horizon for Atlantic Footcare.

“We’re certainly enjoying this,” Charlie says. “We have sustained growth and the business outlook looks terrific, with our marketing focus remaining on direct to retail manufacturing. We also have some new business opportunities that are coming to fruition. Early on we started looking into electronics encapsulation. Today we are working with different companies on a number of projects in the development of various electronic devices that can be encapsulated, or embedded, directly into the insole of our products. Three of these projects are already commercialized, and are in early stages of initial sales.”

One of the projects, an insole with an embedded GPS, is geared toward keeping patients safe who are suffering with Alzheimer’s, severe autism, or any condition in which an individual might put themselves in danger due to wandering. Wearable technology is huge, Charlie says, with an enormous potential market. Other products under development feature applications for fitness, medical recovery, and limb replacements, including an insole that can measure how much weight you put on your foot during rehabilitation.

“Even as these lines are just beginning to become fully commercialized,” Charlie says, “we’re already seeing production levels increase. We’ve signed a number of exclusive manufacturing agreements and we’re exchanging our R&D (research and development) efforts to help them develop the products in exchange for the manufacturing agreements.”

As Atlantic Footcare continues to assist these companies through the research and development phase, they are ensuring themselves future business by manufacturing the product lines and selling the finished products to the companies. That’s good news not only for the company, but keeping manufacturing jobs in America is a big boost for the local, state and national economies.