When Randall Wagner designed weather satellite equipment for a living, he never imagined his future would be in diamonds.

But through a contact that Wagner made at a Rotary Club meeting, the Mequon entrepreneur developed a worldwide diamond business that was named to the list of the 50 fastest-growing young companies in the Milwaukee area.

It is the first time that GemEx Systems Inc. has made the Future 50 list, compiled by the Metropolitan Milwaukee Association of Commerce and the Council of Small Business Executives. For the third time in four years, half of the companies on the list are from surrounding Waukesha, Ozaukee, Washington and Racine counties.

Future 50 companies must meet four criteria: They must have headquarters in the metropolitan area, be less than 10 years old, be independently and privately owned, and growing in sales and employment.

GemEx has only 11 employees, but its annual revenue increased to $1.1 million last year from $150,000 in 1998. The company's product is a machine that measures the reflected light from a diamond and rates its brilliance and sparkle.

GemEx machines are used by some of the world's largest diamond dealers, which are in the United States, Israel and Europe. Diamond retailers including Zales and Kay's use GemEx, and the number of retail stores employing the technology has grown to about 2,000 from 50 a year ago.

Still, GemEx hasn't hit its full market potential - something that Matt Morse, president of Ryco Industries in Delafield, can relate to.

Ryco Industries' products, made from recycled plastics, range from golf course tee markers and boundary stakes to park benches and trash containers. The company made the Future 50 list this year for its growth, which soared to $2.4 million last year from $145,000 in sales in 1997.

The company is aiming for $3.5 million in sales this year, Morse said.

"The greatest growth will come in the market outside of golf courses," he said. That includes marinas, zoos, cemeteries, schools and dozens of other places.

The recession slowed Ryco Industries' sales last year and affected other companies on the Future 50 list as well. Several technology companies on previous years' lists went out of business in 2001, said Julie Granger, communications director for the Metropolitan Milwaukee Association of Commerce.

When they applied to be included on the Future 50 list, 140 companies were asked to name the most significant issue facing growing companies in the Milwaukee area.

Answers included: difficulties collecting past-due accounts, a lack of venture capital, pricing pressures in a soft economy where companies try to undermine each other, projects shelved because of inadequate funding, rising health insurance premiums and problems keeping highly skilled employees.

"There is still a strong sense of loss of talent as skilled people leave Milwaukee and Wisconsin, particularly for jobs based in technology," wrote The Gecko Group, a Milwaukee technology company on the Future 50 list.

The number of manufacturing companies that applied for this year's list was down from previous years, a reflection of the weakened economy, Granger said.

The economy also might have affected the chances of construction companies to be included on the list, as only four companies were named this year compared with seven in 2001. And the number of technology companies on the list was down to 11 this year from 15 in 2001.

But, in all, 30 companies made the Future 50 list for the first time this year - a higher number than in some previous years.

"The field opened up a little more this year, partly because some established companies didn't do so well," Granger said.

Cathedral Builders of Colgate made the list for the first time this year and is expanding its business as bidding for construction projects picks up. It's difficult to balance the need to increase the size of a company and not be overwhelmed with debt, President Jodene Giacomini said.

"Handling the growth. . .That's where you get some gray hairs," she said.

GemEx has emphasized patience in its business strategy, said Wagner, whose company had less than $200,000 in annual sales for its first three years and struggled to win the confidence of diamond retailers.

"You can't hurry the big retail stores. They will come to you only when they're ready," he said. "And we brought high-technology to one of the lowest-tech industries in the world. People are still cutting and selling diamonds the same way they did hundreds of years ago."

Morse, with Ryco Industries, said he made 300 sales calls in his first three months of business and built a computer database of thousands of golf courses that might buy his products.

It was six months before Ryco Industries hired its first employee, Morse said. The company now has about 25 employees and, this year, doubled the size of its sales department.

Since 1997, Ryco Industries has made and sold products to more than 3,200 golf courses. The company's goal is to do business with about 3,600 of the nation's 18,000 golf courses every year.

But growth aside, Morse said the ultimate compliment his business has received came from a Minnesota golf course superintendent who, mistakenly, thought his $10,000 order of golf course products was made from wood rather than recycled plastic.

"He said it was the best-looking wood he had ever seen," Morse said.