List of Deals
- 1975 secondary offering of 500,000 common shares
- 1975 offering of $35,000,000 8 7/8% notes due May 15, 1983
- 1980 offering of $75,000,000 11% notes due July 15, 1990
Tektronix, Inc., was founded in 1946 by three U.S. Coast Guard veterans and an electronics expert from the U.S. Army Signal Corps. Melvin Jack Murdock, Glenn Leland, Miles Tippery, and Charles Howard Vollum wanted to create a company that would manufacture, sell, install, repair, and handle electronic equipment. Originally named Tekrad, the company's name was changed to its present incarnation a month after its incorporation.
The company began without a specific product or purpose in mind, but Vollum decided to build an oscilloscope from spare electronics parts being stockpiled by his partners from postwar government surplus sales. At the time, the Du Mont Company was the leading manufacturer of oscilloscopes, but Vollum believed he could build a better, cheaper product. In 1947 Tektronix sold the first "portable" oscilloscope. The model 511, which became known as the Vollumscope, weighed fifty pounds. The company had sales of $27,000 that year, and its sales jumped to $257,000 the following year. Tektronix's customer list included most of the major electronics research firms in the United States, including Hewlett-Packard, Philco Radio Corporation, RCA Laboratories Division, Westinghouse Electric Company, and AT&T Bell Laboratories. In 1948 Tektronix also sold its first oscilloscope overseas, to the L. M. Ericcson Telephone Company of Sweden.
By 1950 the company's annual sales surpassed $1 million. Tektronix began manufacturing its own cathode ray tubes when it could not get the quality Vollum wanted for his oscilloscopes. Vollum also conceived the idea of a basic oscilloscope that could be adapted with "plug-in" devices, rather than special oscilloscopes for different applications. The plug-in oscilloscopes, introduced in 1954, were an instant success. In 1956 Tektronix passed Du Mont for leadership in the market. Tektronix's revenues grew 4,000 percent during that decade, rising to $43 million in sales by 1960. It was also during the 1950s that "Tek culture" began to take shape. Before the company was founded, Murdock had insisted that future employees would be treated with respect, everyone would be on a first-name basis, and there would be no perks for executives. Murdock even discussed the ideal size for a company to maintain a casual, family atmosphere, which was no more than a few dozen people. The company provided medical coverage, profit sharing, and other benefits to its employees.
Tektronix went public in 1963 and was listed on the New York Stock Exchange the following year. The company continued to introduce more advanced testing equipment, and by 1969 Tektronix controlled 75 percent of the world's market for oscilloscopes. By that time, the company's sales had reached $148 million. In the latter portion of the decade, Tektronix was not a favorite among financial experts. There were growing indications that Tektronix's dependence on basically one product was a dangerous strategy. Equally troubling was that the company had little marketing experience, since its principal product, the oscilloscope, had practically sold itself for twenty-five years by being better and cheaper than the competition. Earnings fell for the first time in 1971, by 34.7 percent. At that time, Tektronix was beginning to have success with graphic display terminals, which would become the company's second-largest revenue producer. In 1964 Tektronix developed a way to retain an image on a cathode ray tube (CRT) for up to fifteen minutes, instead of the split second that images normally lasted before they needed to be regenerated. This was a tremendous advance for oscilloscopes, and for several years Tektronix used its discovery only in its own products. In 1969 Tektronix decided to sell CRT terminals for other applications. Unfortunately, the first terminals, introduced in 1970, were over-engineered and costly. The company redesigned the terminals, and when the product reappeared a year later, the price had been cut by 60 percent.
By 1975 Tektronix controlled 50 percent of the market, and the $50 million a year in terminal sales represented about 15 percent of the company's total business. Tektronix also took a successful step into diversification in 1974 when it acquired the Grass Valley Group, a California company that made electronic systems to provide special effects for television. By 1978 Tektronix was selling more than 700 products customized to various market segments, including government, education, broadcast television, and computer industries, in addition to electronics and electrical equipment markets.