Phazar Corp. (ANTP)
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Corp. is refocusing on their core antenna products business because of its record
of strong historical profits
Mr. Havener serves as chairman and CEO of Phazar Corp., a NASDAQ-listed company, and its subsidiaries, Antenna Products Corp. and Phazar Aerocorp, Inc. The company presently has 130 employees, over 200,000 square feet of hangar, manufacturing, engineering and administrative office space, $2 million in capital equipment, and 50 acres of test range facilities at Fort Worth Meacham Airport and Mineral Wells. He is responsible for over-all performance with $15 million annual sales volume. In 1986, Mr. Havener, acting as one of the secured creditors, brought this company out of bankruptcy and returned it to a profitable operation. The company is now operated by the management team trained by Mr. Havener.
He is president of Sinan Corp., a private investment company, which along with its three affiliates, Armet Corporation, Havener Management Corporation and Black Adder Corporation, invests primarily in light industrial income-producing real estate.
He is president of Cidema Corp., the general partner of Cidema II Limited Partnership, a real estate investment and rental property entity owned jointly with his former wife and their children.
He is chairman of National Depository Corporation, a finance company specializing in purchasing, restructuring and collecting former bank and FDIC loans.
He is president of Lake Hollow Corp., a residential subdivision developer in Azle, Burleson, Fort Worth, Springtown, Watauga, Weatherford and White Settlement.
2002 -- Present
He is an advisory director to Fort Worth National Bank.
Mr. Havener and two partners purchased Southwest School Book Depository, Inc., a distributor of textbooks which was licensed by the Texas Education Agency to distribute textbooks to the 1,100 independent school districts throughout the state. Mr. Havener was majority owner and was chairman of the board and president. In 1992, he opened Albuquerque Book Depository, Inc. Within two years, this company became the major distributor of textbooks in New Mexico. In 1996, he opened Oklahoma Textbook Depository, Inc., to distribute textbooks in Oklahoma. He sold all operations to a public company in 1999.
As one of the three principal owners of Trinity Meadows, Inc., Mr. Havener prepared the application and business plan for pari-mutuel Class 2 horse racing license for the Texas Racing Commission. Trinity Meadows, through Mr. Haveners efforts, was granted the first unconditional license issued by the Texas Racing Commission.
In 1978, Mr. Havener assumed control of the near-bankrupt Jokari/US, Inc., a Dallas-based importer and distributor of games, toys and housewares. The company was reorganized and converted from a negative net worth to a profitable, stable operation. In 1988, the operation was sold to the employees and an outside purchaser.
He was one of the three founders and president of DHV, Inc., parent company of Antenna Products Corp., prior to the sale of Antenna Products Corp. to a private investment group.
He was marketing engineer, marketing vice president and executive vice president of APC Industries, Inc., Mineral Wells and Austin, Texas.
University of Missouri-Rolla (1958-1962)
· Bachelor of Science degree in Applied Mathematics
· Minors in Physics and Electrical Engineering
· Distinguished military graduate in ROTC
· Regular Army commission in the Corps of Engineers
· Service Schools: Airborne, Ranger, Communications, Chemical Biological Radiation (CBR), and Atomic Demolition
CEOCFOinterviews: Mr. Havener, please tell us about Phazar Corp., including a brief history.
Mr. Havener: We have two operating divisions presently; one is Antenna Products Corp., which has been around in one form or another since 1950, and it is engaged primarily in the business of designing and manufacturing antenna systems for instrument landing systems at airports, various types of military communications, Voice of America Broadcast Antenna Systems, and other related hardware. We also, have Phazar Aerocorp, which is a group that refurbishes the interiors of executive aircraft. However, this operation has been in a money-losing situation since 9/11, and the board made a decision on May 21st (2003), to sell this off to the manager and myself, as the principal shareholder and get it out of the corporation. The principal reason was, that it has lost so much money that it is threatening our NASD listing, and the board thought it was the prudent thing to do because it is not at all predictable when this business may turn around, even though we think that long-term it is a good business. This divestiture has now been made."
CEOCFOinterviews: Will you elaborate a bit on the Antenna products?
Mr. Havener: The major product line year-in-and-year-out has been the instrument landing systems for airports, with the FAA being the ultimate end-customer. We manufacture the Glide Scopes and the Localizer antenna systems. We sometimes do the Market Beacon antennas and we have done VORs and some of the other related items that go into airports. We also design and manufacture the communications antennas in the UHF and VHF frequency ranges which are used for the ground to air communications for the controllers to be able to talk to the pilots.
CEOCFOinterviews: Are you building for the contractors or airports?
Mr. Havener: At one time the FAA procured most of the equipment directly on major contracts. However, in the last few years, the market has more or less evolved to where equipment is purchased in lesser quantities. The contracts are smaller now, and much of the FAAs work is out sourced to systems companies that put the whole instrument landing system together and then deliver it to specific airports.
CEOCFOinterviews: You announced a contract with BAE Systems; will you tell us about that?
Mr. Havener: That is a current system for which we have a large contract with BAE Systems. It is a project, kind of like the Star Wars program in a matter of speaking. It is for missile detection and to interfere with missile guidance systems on any missiles that may be coming our direction. It is installed in Alaska. We built the first phase of this about five or six years ago and this is a major expansion of that system.
CEOCFOinterviews: What is involved in producing these systems, and please tell us about your manufacturing facilities?
Mr. Havener: All basic designs are electrical in nature. The end-product ends up being very much a mechanical type item. We manufacture towers, wire assemblies, and transformers that go between the antenna system, and the transmitting radios. We do all the heavy manufacturing; a lot of it is machine shop work, and other parts are metal fabrication where we buy structural shapes and cut, roll, bend and weld them into the assemblies that are necessary.
CEOCFOinterviews: Please tell us about some of the other people that are using your product and the growth opportunities there.
Mr. Havener: The growing area seems to be more in the tactical type of communication items, which are small items. At one time most equipment that we manufactured was for large communication sites; today we manufacture much more mobile types of equipment that goes into the mobile army that you see today, or ship board equipment. We build quite a few items and have one significant contract right now for equipment that goes onto aircraft carriers.
CEOCFOinterviews: Do have an inventory or do you build the products to order?
Mr. Havener: Mostly we build to order. The small communications antennas that go into the airports; we build and stock those, but for the most part, we are a build-to-order operation.
CEOCFOinterviews: Is there much competition in your industry?
Mr. Havener: There is a surprising amount!
CEOCFOinterviews: How do you reach your potential customers?
Mr. Havener: We have long-term relationships with most of our customers. We occasionally meet people at the trade-shows like the Armed Forces Communications and Electronic Association trade shows. Because we have been around for a long time, we have relationships with lots of the larger companies that are in the defense electronic business.
CEOCFOinterviews: Do companies come to you and ask you to design a product, and how do you know what they need?
Mr. Havener: We are involved in the designing. Customers usually come to us with their requirements and we design a specific product for the customers. In many cases, because we have been in the business for a long time, we are able to take and adapt designs that we already have in place, but we also start from scratch on quite a few designs as well.
CEOCFOinterviews: Is wireless a growing area for you?
Mr. Havener: Wireless has been an area that we have struggled with. We have not done as well in the wireless business as we would like to. We have some customers that prefer our products but we did not get into he market early. There are many companies in that business; it seemed like because it was such a growing industry, that there were a lot of companies that sprung up and in the last three years about half of them have disappeared. There must have been two or three-dozen companies that were competing in that area at one time and it is probably down now to about twelve to fifteen.
CEOCFOinterviews: Is that an area where you would like to be focused?
Mr. Havener: We would like to have more business in that area to diversify away from some of the government procurement cycles. But year-in-and-year-out, our government business has been good for us and it is our strongest suite.
CEOCFOinterviews: What do you need to do in R&D to move the company forward?
Mr. Havener: We are continually looking at new areas. We are in the process of developing some of the antennas that go up into the higher frequency ranges for the wireless areas and this seems to be an area that is growing. You may have heard the term Wi-Fi. Hence, we do some antennas in that area and are working on some new designs in that area right now. We are on contract to design and manufacture a new generation of antennas that go with the cellular systems that are used for the 911 type programs, and the cellular users, within a short range, can locate where a customer may be phoning from to assist if they end up with a distressed situation.
CEOCFOinterviews: What else sets you apart from the competition?
Mr. Havener: What sets us apart from our competition is that we have produced reliable products over the years. We probably have one of the best manufacturing facilities for our type of equipment in the U.S. We are an economical producer. We have all the quality systems in-place that the customers require for military type applications or high-performance equipment.
CEOCFOinterviews: What is the financial condition of the company?
Mr. Havener: The antenna group has done fine, year-in-and year-out. It has always done well and over fifty years there has only been four loss years. The thing that has really hurt the company in recent years is that we did have an operation, which we discontinued approximately a year ago, that was working on wireless communication and it was based in Long Island. It just simply was not coming close to paying its way. When we set it up, wireless communications looked like it was going to have a strong future, but very shortly thereafter, it took a serious plunge, and many of the major end-users have had financial troubles and this has had a major affect on their procurement of additional equipment. We moved that operation a year ago to the Antenna Products in Mineral Wells Texas. We have been experiencing the same type of problems with the Aerocorp, so the companies decided to terminate their interest in that operation also. These few things have seriously damaged the financial performance of the company over the last three years, but the company still has a relatively strong balance sheet and certainly has had a record of strong historical profits in its core business, which is the antenna products business. We are turning back to that.
CEOCFOinterviews: Do acquisitions or joint ventures, play a part for you?
Mr. Havener: We are currently involved in a joint venture. Earlier I mentioned the contract with the Navy to build ship equipment. That is a joint venture with Titan Corporation. We do this on occasion .We have not had very good luck with acquisitions; I dont think the board has a very good taste in their mouth about acquisitions; I do not anticipate doing any significant acquisitions in the near future.
CEOCFOinterviews: What else should we know about your plans for the future?
Mr. Havener: We are just going to focus on profit for shareholders and increase the shareholder value going forward.
CEOCFOinterviews: In closing, what would you like to say to shareholders and potential investors?
Mr. Havener: I would like investors to know that Phazar Corp., has a solid operation that can be relied on as a good conservative operation going forward. We will be producing profits going forward. I would say that the size of our company is such that it doesnt have a large shareholder following. As we continue to move forward from this point with strong profits, I think we will be better recognized in the future.
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