1212 North Hercules Avenue
Skilled craftsmen assemble each mechanism by hand to maintain the quality and reliability that has been our trademark for fifty years. Relentless quality inspections are conducted throughout the production cycle. The unique flexibility of our production system allows us to respond quickly to a customer's needs and specification changes. Finally, each instrument is subjected to a series of rigorous tests. The result is a solid, accurate instrument that keeps the pilot informed and helps to make aviation a safe means of travel.
Beyond today and into the future, Aerosonic's strategic vision is to partner with customers and employ its unique combination of abilities to develop total solutions that are both innovative and practical.
Aerosonic Corporation is a producer of aircraft instruments and precision machined components. The company makes a variety of instruments including altimeters, airspeed indicators, rate of climb indicators, angle of attack/stall warning systems, engine vibration monitoring systems, and Integrated Multifunction Probes. The latter, a space- and weight-saving combination of several air pressure-related instruments, has found favor among makers of advanced business aircraft and jet fighters.
The company has four divisions in three locations. Flight instruments and precision machined components are made in Clearwater, Florida. Another aircraft instrument maker, Avionics Specialties of Charlottesville, Virginia, was acquired in 1993. Aerosonic maintains a test facility in Wichita, Kansas. About 32 percent of the company's equity is held by former Chairman and CEO J. Mervyn Nabors.
Herb Frank founded the company in Cincinnati in 1953; the business moved to Clearwater, Florida, in 1956. Aero-Sonic Instrument Corporation, an Ohio corporation, was formed in 1956 and the next year merged into Aerosonic Corp., a recently registered Florida corporation. In 1970, Aerosonic Corp. of Florida merged with Instrument Technology Corporation (ITC), which had incorporated as a Delaware corporation on October 3, 1969. ITC was renamed Aerosonic Corporation in November 1970.
Frank was a graduate of the University of Cincinnati and Cal Tech. He suffered partial paralysis on his left side, and his efforts in employing disabled workers were recognized by President Lyndon Johnson.
Aerosonic produced mechanical flight instruments such as altimeters (altitude indicators). By the 1980s, sales were in the $10 million range. The company posted net income of $395,000 on sales of $10.5 million in the fiscal year ended January 1982, but lost $223,000 in fiscal 1983 as sales slipped to $6.8 million.
Late 1980s Ordnance Venture
The company would be profitable again by the late 1980s. Net income was $107,000 in fiscal 1987 on sales of $9.2 million. Net income rose to $166,000 in fiscal 1988 on sales of $11.1 million.
In August 1989, Aerosonic won an Army contract to produce 4,000 aircraft clocks. It was later revealed that Aerosonic had used some Swiss-made mechanisms in fulfilling the contract, which specified 100 percent U.S. content. Aerosonic agreed to a fine of $200,000 in 1992 to settle the case.
The market for military and civil aircraft slowed in the late 1980s. A new business producing components (base closure assemblies) for 155-mm artillery shells was launched in 1988. Some shareholders criticized the timing, as the Soviet threat was then being defused through perestroika. This unit, however, would be responsible for raising Aerosonic's revenue to $29 million in 1992, thanks to Operation Desert Storm. In February 1991, the company received an $8 million Army contract for artillery shell parts.
Net sales were $11.1 million in the fiscal year ended January 1990; net income, $75,000. Sales reached $29.5 million for the fiscal year ended January 1992. Earnings were $1.6 million. Aerosonic had 320 employees in the early 1990s.
Acquiring Avionics Specialties in 1993
Aerosonic acquired the avionics business of Teledyne Industries Inc. in January 1993. Teledyne Avionics, based in Virginia, had been in business since the 1940s and produced angle of attack and stall warning systems, among other equipment. It employed 120 people. One product, the integrated multifunction probe (IMFP), combined several instruments in one unit. The new unit continued to operate independently, under the name Avionics Specialties Inc. The acquisition brought Aerosonic further into the jet aircraft market.
Aerosonic shares moved from the NASDAQ to the American Stock Exchange in March 1993. A Newport, Arkansas plant was sold to a group led by its managers in 1993. After earning $869,000 in 1993, Aerosonic posted a $211,000 loss in 1994, even as sales edged up 2 percent to $24.4 million. Avionics Specialties was the strongest unit, thanks to sales of its turbine-engine power analyzer and recorder system.
From mid-1992 to mid-1995, the CEO position was held by David S. Goldman, Herb Frank's son-in-law, who had been with Aerosonic since 1969. Goldman stepped down as chief executive in April 1995, returning to his position as chief financial officer.
Frank regained a seat on the board in March 1995, but died the next year. He was buried in the white smock he liked to wear around the factory, with one of the company's instruments in his hand. According to the St. Petersburg Times, he was remembered as a father figure to many in the company, including Merv Nabors, who came from a broken home and described Aerosonic as a second family.
Nabors became the company's CEO after Frank's death in April 1996. He also acquired the Frank family's shareholding for about $2 million. Nabors had been with the company since the 1960s when, according to the Tampa Tribune, he was recruited by Frank at age 16 to play third base on the company softball team. Nabors eventually became Aerosonic's largest shareholder, with 32 percent of shares, but he started, literally, in the mailroom, and worked a number of jobs in every department, from machining to accounting.
Going Digital in the Mid-1990s
In 1984, Nabors had launched American Instrument Co., a maker of electronic subassemblies, when Frank proved unwilling to enter the new digital realm. After the management shift, he was able to update the product line at Aerosonic.
Until then, the company's electromechanical instruments had used analog dials. Aerosonic began to produce digital instruments with digital displays--a much higher margin business, with units costing in the thousands, rather than hundreds, of dollars. They were also smaller, freeing up precious cockpit space. Aerosonic developed compact two-inch digital altimeters and airspeed indicators. Learjet Inc. and Beech Aircraft Corporation (later part of Raytheon Aircraft Company) were important early customers. There still remained something of a market for analog instruments, which were mandated as backups by the FAA.
Another important new technology was a probe capable of measuring speed, altitude, and angle of attack all in one unit. This was produced by Aerosonic subsidiary Avionics Specialties Inc. at its Charlottesville, Virginia plant. The integrated multifunction probe (IMFP) allowed for savings in cost as well as weight. It was chosen for inclusion in Honeywell Inc.'s new avionics system.
Nabors also streamlined the company after becoming CEO. The ordnance and automotive parts business was sold off in 1996. National Metalworking Corp., an affiliate of Lancaster, Pennsylvania-based Bulova Technologies LLC, bought the ordnance unit, which had lost $2 million on sales of $19 million in the prior year.
The administrative staff also was trimmed, while new talents in finance and marketing were brought in. Aerosonic had 300 employees before the divestment of the ordnance unit and other cuts, which brought the headcount down to 200.
Nabors succeeded in quickly steering the company to profitability. Aerosonic lost $1.8 million in 1995, but reported profits for the rest of the decade. By 1997, a recovery was well underway: The company posted income of $1.2 million on sales of $19.3 million. Revenues were $14.9 million in 1998, with net income of $389,000.
A rebound in the general aviation industry aided the recovery. Nevertheless, the company diversified somewhat, organizing its Precision Components division in August 1998. Most of its output of machined mechanical components would go to the optics industry.
More Military Work After 9/11
In the fiscal year ended January 2001, 71 percent of Aerosonic's $25 million in sales went to the private sector. The share of military work increased to about 50 percent within two years after the September 11, 2001 terrorist attacks on the United States.
According to the St. Petersburg Times, 80 percent of the parts for Aerosonic's products were being produced at the Clearwater site. The company had about 270 employees in all.
John Mervyn Nabors resigned as company president in November 2002 and as chairman six months later. His CFO, Eric McCracken, resigned in October 2002. David A. Baldini replaced Nabors as president, CEO, and chairman.
The Securities and Exchange Commission (SEC) subsequently investigated Nabors and McCracken for overstating earnings through use of accounting gimmicks. Nabors paid a fine of $260,000 to settle the case against him without admitting guilt. No charges were brought against the company. Aerosonic filed restated reports from 2000 to 2004.
The company continued to land contracts, building its backlog to $54 million by the end of 2002. It agreed to supply flight instrument probes for Lockheed-Martin Aeronautics Co.'s Joint Strike Fighter. Lockheed-Martin had used similar probes in its most advanced F-16s. In May 2002, Aerosonic got its largest contract to date, a $19.6 million deal to produce 4,500 altimeters for the Army. Another large contract was won from the U.S. Army in November 2003. It involved overhauling encoding altimeters and had a potential value of $4.3 million over three years.
Sales rose 21 percent to $31.1 million in 2004, though net income dropped 50 percent to $500,000. Domestic sales accounted for 87 percent of the total, with the defense sector taking a little more than half.
Principal Divisions: Clearwater Instruments; Kansas Instruments; Avionics Specialties, Inc.; Precision Components.
Principal Competitors: Honeywell International Inc.; Rockwell Automation; Safe Flight Instrument Corporation.