In some ways, the "perfect storm" analogy could describe what hit E&S. While making a transition from proprietary to less-expensive, off-the-shelf components — a mean trick for any company — it was stung by troubles in the commercial and military sectors, the main markets for its aviation simulation business.

The company's early technology had to be proprietary — E&S was starting an entirely new industry, working from scratch — but an evolution to more-standard, PC-based components was needed for the company to confront competitors' lower-cost offerings.

Its Harmony product was the first, but getting it into production and getting the software to run on it proved difficult.

"Being the first to do that in the simulation business, we had a lot of challenges with it and, although we did get that product working, it took longer than we had thought it would and it was more expensive to do than we thought it would be," said Oyler, E&S's top executive since December 1994.

"We lost money during that period, and we were just coming out of that when 2001 came along and the environment changed again."

The year 2001 spelled trouble for E&S, resulting in what Oyler calls "the most severe downturn in all of our markets at the same time ever in the history of the company."

The commercial aviation business slumped, of course, in the aftermath of the Sept. 11, 2001, terrorist attacks. But military funding, long a source of steady business, was funneled into day-to-day operations, including the war in Iraq. That was a surprise for companies like E&S because it was occurring at a time of overall spending increases by the military.

"We were very profitable until the 1998 time frame, and then we had a situation where we introduced simultaneously new technology as, in our markets, a lot of changes were going on in how the purchasing or type of contracts were done," Oyler said. "We were introducing new technology into a new market environment, and we had a couple of years of problems with that. So we lost money during that time, but we were coming out of that when this whole 2001 situation started. So we've had kind of a double-whammy of economic conditions on top of that situation."

The move to standard, PC components is complete, with E&S applying them "in ways that make us different," Oyler said. "When you transition from a proprietary base to more standards-based technologies, most companies don't make it. It has been a tough transition, but we've made it."