Whittaker Communications on Its Own After Aerospace Consolidation

For Simi Valley’s Whittaker Corp., the communications segment of its business accounted for less than 10% of the company’s $126 million in sales in fiscal 1994, with the remaining revenues coming from the aerospace industry.

It was hardly a big slice of the financial pie. But, then, defense conversion still was a relatively new focus for the company. It was just two years earlier that Whittaker, reacting to the decline in the defense industry, began taking its government-oriented aerospace technology into the rapidly expanding world of commercial communications.

Now Whittaker is benefiting from the growth of the communications industry and the future looks even brighter, say company officials.

Communications is expected to bring in $33 million, or nearly 21%, of approximately $160 million in company sales anticipated for fiscal 1995. And in 1996, company officials anticipate that communications will top $80 million, or 40% of the company’s total sales.

To increase public awareness of this surge in commercial communications, and of its continued high aerospace profile, the 53-year-old Simi Valley company last week consolidated several of its divisions under a newly created Whittaker Aerospace Group.

By lumping all of their aerospace operations into one grouping, and leaving the communications unit to stand by itself, company officials hope to highlight Whittaker Corp.’s growth in both industries.

Under the consolidation, Whittaker Electronic Systems of Simi Valley, Whittaker Controls Inc. of North Hollywood and the Whittaker Safety Systems Division of Concord all report to the Whittaker Aerospace Group.

The aerospace and communications divisions’ financial and business reports, which used to be clumped together, will now be filed separately.

“If we expect the outside community to understand us and be able to evaluate us against our peer companies, they need to understand what we’re doing in given industries,” said Thomas Brancati, president and chief executive of Whittaker Corp.

“Up to this point, the communications people couldn’t tell what we were doing in the communications end of the business versus the aerospace, and the aerospace people couldn’t determine what we were doing versus communications, so it was a mystery and a certain amount of confusion,” he said. “These people will now be able to see how the company is performing and be able to measure us properly.”

Larry Forsman, branch manager of the AG Edwards & Son Inc. brokerage in Oxnard, said the consolidation of divisions will enable stockbrokers like himself to better monitor the company.

“Segregating the company’s main niches makes it easier to track their performances. We can see the value of the company more easily,” he said. “It’s much easier to track when you’re comparing apples with apples and oranges with oranges, instead of squeezing them all into the same box.”

In 1992, Whittaker Corp. began converting the aerospace technology it had developed to be used for additional communications applications. Specifically, the same technology used to create a device to protect combat aircraft by scrambling enemy radar was transferred to commercial computer applications known as ATMs (Asynchronous Transfer Mode communications systems).

ATMs allow for vast amounts of information to be transmitted through computer networks at extremely high speeds.

These days, Whittaker is busy marketing its communications networks in the United States and abroad, with much of its focus on developing networking systems for the health-care and financial fields. The company has set up systems in more than 350 hospitals in the United States.

In October, Whittaker Corp. installed networks at the St. John Mercy Medical Center in St. Louis and at the Houston Northwest Medical Center. The company also won contracts last month to create communications systems for the Detroit VA Medical Center and the Illinois-based Franciscan Sisters Health Care Corp.

On the aerospace side, Whittaker was awarded a contract last week to manufacture a dozen sets of communications devices to be used by Egyptian Air Force helicopter flight crews.