Remember when Innovex was the high flyer among US-based flex shops? Dial back to fiscal 2005, and the company had sales of $200 million, having rebounded nicely from the 2001-02 dip. But profits were hard to come by, despite being solidly planted in the higher-margin flex side of the bare board business, and in retrospect the warning signs were in place.

In 2004, the company missed a downturn in the hard-drive market, overbuilding and suffering through six months of inventory clearout. Over three consecutive years, it closed plants in Minnesota and Arizona, while putting all its eggs in its manufacturing facilities in Thailand. And while revenues were climbing, so were net losses, which reached $25 million in fiscal 2005.

In 2006, while the electronics industry was in the midst of a strong recovery, Innovex began to crater. Sales fell to $173 million, then plunged to $71 million by the end of fiscal 2008. And there’s no end in site: Through the first three quarters of fiscal 2009, sales are just $33 million.

Then-president and CEO Bill Murnane in 2007 gave way to former Seagate executive Terry Dauenhauer, who subsequently resigned last October and was officially replaced last month by CFO Randy Acres. Was experience a problem? The 2003 edition of Innovex had one officer over the age of 45 – and he was 47. In an industry known for its ups and downs, it’s possible a lack of “local knowledge” played a role.

Now compare Innovex’s performance to that of M-Flex, another US-based flex company. M-Flex has seen sales rise to $764 million for the year ended last September, up from $508 million in 2006. Remember where Innovex was in 2003? M-Flex was smaller – $146 million. Best of all, it’s been consistently profitable.

Unlike Innovex, which placed all its bets on Thailand and HDDs, M-Flex focused on China (it has two plants there, plus one in Malaysia and one in Southern California) and handheld devices. Between the rapid growth of cellphones and now digital readers – Amazon predicts the Kindle will be its best-selling device in 2010 – M-Flex had the right strategy and appears to have more room to grow. CEO Reza Meshgin, who was named to the top spot in March 2008, has been with the company since 1989. CTO Bill Beckenbaugh has three decades of experience in PCBs, going back to his Motorola days, plus stints as CTO of Hadco and Sanmina-SCI. It’s an extraordinarily seasoned team.

Meanwhile, Acres, who spent more than a decade in Asia as an executive with IBM and later, Symbol Technologies, has been with Innovex barely a year. He would be smart to surround himself with veterans of PWB manufacturing, including at least one or two who have sold to markets other than computing. Else, it’s hard to believe Innovex will break its downward spiral.