California Amplifier, a Camarillo manufacturer of components for satellite-dish antenna systems, is fighting battles endemic to young high-technology companies nowadays.
It is getting battered by offshore competition, so much so that the company has lost money in three of its past four quarters. Technology is changing so fast that the company must race to keep up, often having to dump old products. And firms that package the final product are pressuring suppliers such as California Amplifier to hold prices down so they can sell more systems.
In the meantime, there's no guarantee that backyard satellite dishes will ever really catch on. Many potential customers worry about the legality of tapping into satellite signals, and the issue still is being debated in Congress.
All this falls in the lap of the company's chairman, Donald W. Fuller, 54, a computer company refugee who has been at his post only since February and will become president at the end of this month. The man who founded the company--yes, in his garage--Jacob Inbar, 36, is about to leave the presidency to pursue other interests, he said.
Four-year-old California Amplifier's main product is a small component that magnifies the weak signal bounced off a satellite. The amplified signal is sent to other components, which process it so it can be shown on a television screen.
The company also makes switches for hooking a single dish to several television sets, and custom-made amplifiers for the military.
Taking the helm of California Amplifier will be a lot like running a computer company, Fuller said, explaining, "We have to grind out widgets cheap while keeping the technology ahead of offshore competitors."
Doron Kochavi, who follows the company for Wedbush Noble Cooke, a Los Angeles brokerage, called Inbar "a brilliant engineer" who "realized he had to let someone more experienced in business take over. He was very brave to recognize his limits."
Dishes Common Sights
Fuller comes from Tecstor, a $10-million-a-year disk-drive company based in Huntington Beach, where he has been chairman and chief executive officer and will remain on the board of directors. For 14 years, until 1983, he ran Microdata, a $160-million McDonnell Douglas subsidiary based in Irvine, which makes automated data-processing systems.
Although satellite dishes have become common sights most communities, Fuller is entering an industry that is barely a decade old.
From the start, the dish systems were popular in places such as the wheat fields of Kansas and the tundra of Alaska--or the canyons around Los Angeles. Starved for clear television reception and program selection in places where no cable company will go, people in remote areas have been willing to pay thousands of dollars for satellite hookups.
But, as with other new technologies, most people who don't need it--those who can get cable or are satisfied with their TV's rabbit ears--won't buy satellite systems until the price is right.
Competition has been bringing down the price. Five years ago, a home "Earth station" could cost as much as $25,000. A similar system costs $1,500 today, and simpler kits are now available for as little as $399, about the price of a videocassette recorder.
Component prices also have plummeted. An amplifier that cost a distributor $800 in 1981 goes for about $80 today. Naturally, that's hurt California Amplifier.
During its first quarter ended May 31, the company lost $246,000 on $2.9 million in sales. For the corresponding quarter a year earlier, the company reported net income of $1.1 million on $6.1 million in sales.
For its last fiscal year ended February 28, the company reported a loss of $634,000 on nearly $19 million in sales. During its previous fiscal year, California Amplifier reported net income of $2.4 million on sales of $15.1 million.
The number of amplifiers it produced skyrocketed over that period. In fiscal year 1984, the company sold 60,000 units. In its last fiscal year, it sold 120,000 units, and Inbar said he expects that number to double again for this fiscal year.
The company employs 260 at its plant and offices in a Camarillo industrial park, including 50 in the military division.
Inbar remains the largest shareholder, with 25.4% of the stock. Fuller owns no California Amplifier stock, although he said his contract calls for him eventually to get a 5% stake.
Inbar said the company made a profit for the quarter ended Aug. 31. Fuller won't make any predictions about the quarter before the accountants submit their report, but said the company should be on the "verge of profitability sometime soon."
California Amplifier began diversifying last year to help improve its performance. Its amplifiers for the military, also used for satellite communications systems, offer less pricing pressure, Fuller said.