Telex buys Turner; will move firm
CEDAR RAPIDS GAZETTE - August 16, 1979
By Bruce Fishwild
Gazette Financial Writer
Up for sale since June, the Turner microphone plant in Cedar Rapids has been sold to Telex Corp. of Tulsa, a manufacturer and marketer of computer peripheral equipment and a variety of communications items.
The Turner plant will become part of Telex Communications, Inc., a Minneapolis subsidiary of the Tulsa firm.
The sale, announced and effective Wednesday, was by Conrac Corp. of Stamford, Conn., which has owned the Turner plant and operated it as a division since 1967.
The sale was reported to be for cash, but no price was disclosed.
At a press conference this morning, Telex officials aid all Turner operations will be moved from Cedar Rapids, probably by Nov. 30. They said as many Turner employees as possible will be offered the chance to move to other Telex operations.
They said it is expected large umbers of Turner employees may wish to move with their jobs and that as many as possible will do so. They said "generous arrangements" would be made for the move.
In the meantime, Executive Vice President John A. Howe of Telex Communications will be in charge of the move and will be in the Cedar Rapids plant "almost daily" until the move is completed, they said.
The Turner Division has been on the market since June. The sale was announced and effective Wednesday, according to a joint announcement by Telex and by Conrac Corp., which has its headquarters in Stamford, Conn.
Founded in January 1931, the Turner plant had operated as a division of Conrac since 1967. Conrac had announced on June 5 that the Turner division had been incurring substantial losses for 18 months and that the board of directors had authorized its sale. It had been operated since that time as a discontinued division, which means that its operating figures no longer were included with the corporation's in financial reports.
Ansel Kleiman, Telex Communications president, said Thursday the closing of the Cedar Rapids plant "is a sad kind of thing. This is a good company, honored in the industry."
He said the change will be made as painless for the employees as the company can make it. "The people are the most important asset here. We are not unsympathetic."
Employees were told of the move Thursday morning at a meeting in the plant.
Kleiman said the employees will be interviewed individually and that schedules for the move will be set up for the best benefit of both the people and the company.
Turner, Kleiman continued, was a victim of the chaos in the citizens band radio market, and the kind of growth provided to meet the heavy growth is difficult to abandon.
"The trouble is that you have to wipe it out and start over, and that would be difficult to do here."
He said Telex believes that the Turner portion of the business can be restored in two or three years to where it was before the citizen band radio boom began, which he said was about 250 people and a volume of about $5 million a year.
There now are 170 employees, about 120 of them in the factory. There were 1,200 employees at the peak of the CB boom in1976.
In the process of restoring the Turner Product lines he said, the citizen band portion will be de-emphasized and other portions built up. In addition to CB antennas, the company makes microphones for professional use in recording and. public address systems, for use by police and fire departments, taxicabs and other fleet operators, and transducers for use in computer terminal/telephone interfaces.
Telex, he said, has the technology available in its present operations to do this job. "We would be unable to do it here."
The Turner product line, Kleiman concluded, is one his company always has wanted to enter, and Telex looked it over before the company was sold to Conrac. "But we were too small at the time, and didn't have the resources."
The combination, he said, should enhance both product lines. "We will get true economy of scale."
Participating in the Thursday morning press conference with Kleiman and Howe was Paul Graf of Conrac headquarters m Stamford.
Dollar figures on the Turner operation have never been publicly singled out from the Conrac reports, so no figures are available on the size of its operation.
Telex had revenues of $148,189,000 in the fiscal year ended March 31, 1979. Net income was $5,358,000, which figures out to 45 cents per share of common stock.
Revenues were higher than in the previous year, when the total was $140,460,000. Net income was higher - $8,454,000, or 78 cents a share.
However, the 1978 net income included an extraordinary credit of $4.7 million for tax loss carry-forward, more than off-setting the $3.1 million drop and giving the company an apparent increase in net income from operations for the year. Per-share earnings have steadily increased in recent years.
The company’s stock, traded on the New York, Midwest, Philadelphia, Boston, Cincinnati, and Pacific stock exchanges, has ranged from 87˝ cents a share 11 years ago to $31 in 1970. Present price is near $5. The company never paid a cash dividend but issued a stock dividend in 1964.
The Turner plant was begun as an offshoot of the John B Turner and Son funeral home, making sound systems for funeral homes. It got into the microphone business because it had difficulty buying satisfactory microphones.
The sound systems eventually were discontinued. The company also made embalming machines for many years.
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