6708 Alexander Bell Drive
Columbia, Maryland 21046-2100
Telephone: (301) 939-7000
Toll Free: (800) 53-ESSEX
Fax: (301) 953-7880
Web site: http://www.essexcorp.com
Sales: $250 million (2006 est.)
Stock Exchanges: NASDAQ
Ticker Symbol: KEYW
NAIC: 334413 Semiconductor and Related Device Manufacturing; 334419 Other Electronic Component Manufacturing; 334510 Electromedical and Electrotherapeutic Apparatus Manufacturing; 334111 Electronic Computer Manufacturing; 334119 Other Computer Peripheral Equipment Manufacturing; 511210 Software Publishers; 541330 Engineering Services; 811211 Consumer Electronics Repair and Maintenance; 811212 Computer and Office Machine Repair and Maintenance; 811213 Communication Equipment Repair and Maintenance; 811219 Other Electronic and Precision Equipment Repair and Maintenance Essex Corporation develops optoelectronic technology, or devices incorporating both electronic and optical parts. Its equipment can be used to process 3-D radar, GIS, and other images; multiply available bandwidth in fiber-optic cables; or process large amounts of data in other applications. The National Security Agency (NSA) and other government entities use these tools to maintain "information superiority" in the fight against terrorism, and most of the Essex's employees have security clearances, however, it has made repeated attempts to establish a foothold in the commercial telecom market through a line of fiber-optic transponders.
Essex Corporation's business has evolved over the years. Incorporated in 1969, the company was a professional services firm before becoming a high tech imaging and signal processing specialist.
Essex thrived in the early 1980s on the strength of training programs for security and other personnel at government agencies such as NASA. It became a specialist in the emerging field of ergonomics, studying human factors in complicated settings such as Army tanks, Navy submarines, nuclear reactor control rooms, and spacecraft.
It was hired by the Nuclear Regulatory Commission to study human factors in the Three Mile Island incident in 1979. Its report shaped the design of nuclear plants for years to follow. It also studied the feasibility of the third brake light that has become standard in automobiles.
Essex became a public company in 1981. Based in Alexandria, Virginia, the company added more than a dozen field offices to keep it close to clients such as Alabama's Marshall Space Flight Center. Profits swelled to more than $600,000 in 1983, then a record.
Essex lost money in the mid-1980s on failed ventures into turnkey office automation systems, a placement agency, and a security guard training center. These were quickly sold and the company earned a profit of $102,000 in 1987, when revenues were about $26 million.
Local defense industry entrepreneur Harry Letaw, Jr., holder of a Ph.D. in physical chemistry, was hired to replace retiring Chairman Frank E. Manning in 1988. Revenues had been flat throughout the 1980s and cutbacks in military spending were making a planned transition to private sector work more urgent. Essex was aiming to leverage experience gained in working for the U.S. government on projects in foreign countries and private industry. All of Essex's $30 million in revenues came from the government.
1988 SEDC MERGER
Essex merged with System Engineering and Development Corporation (SEDC) in 1988. The stock swap was worth $1 million. SEDC had been formed by a group of former NSA employees led by Terry Turpin, who became Essex's chief technology officer. The combination with SEDC was a major turning point for Essex, which exited the human factors business to focus on SEDC's specialty of optical processing, or optoelectronics.
In the early 1990s Essex produced a high-speed processor called ImSyn that had potential applications in a number of areas, including medical imaging and manufacturing. However, the technology was originally developed to help the intelligence community monitor communications.
Essex failed to post an annual profit throughout the first half of the decade. The company moved out of its old headquarters in November 1993 to a smaller, less expensive facility. Revenues were down to $14 million by 1995, when the company lost more than $1 million as it spent heavily to develop the ImSyn processor.
In 1997, the company announced it was selling its varied technical services businesses to concentrate on optoelectronics and telecom satellite engineering. Programming for Motorola's Iridium cellular satellite phone system was a major source of revenues. The company continued to lose money, however, and was delisted from the NASDAQ for inadequate capital. Its losses were attributed to problems with a fixed-price contract to make aviation maintenance trainers at the Huntsville site.
NEW FOCUS IN 2000
After breaking even in 1999, Essex posted a more than $1 million loss in 2000 as it continued to bankroll development efforts while revenues slipped almost a third to $3.3 million. Essex had fewer than 50 employees. It was valued at about $20 million, but would experience a colossal growth spurt in a few short years.
Leonard E. Moodispaw was named chief executive officer in September 2000. He had been a senior manager with the NSA before becoming a lawyer in the late 1970s. He then led Essex subsidiary SEDC for a few years before joining a unit of ManTech International Corporation. He had returned to Essex in 1998 as chief operating officer.
Essex provides advanced optoelectronic imaging and signal processing services and products for U.S. government intelligence and defense customers and communications customers with whom we have established and maintained longstanding and successful relationships. We provide optoelectronic 3D imaging and signal processing services to classified U.S. government customers under next generation research and development contracts. We deliver software for making intelligent decisions in complex environments, including web-enabled GIS systems to manage and secure U.S. Army physical assets. We support the intelligence community's mission critical voice and video systems infrastructure and provide systems engineering services to highly classified U.S. government customers. We build optical communications and networking system elements and components, as well as signal and image processing software products. While we have historically sold our products to the intelligence and defense markets, we believe our existing products and our patent portfolio position us well to benefit from spending on next generation technology that decreases the costs and increases the speed, performance and security of existing communications networks.
Moodispaw soon helped the company raise more than $4 million in venture capital to support its new focus on optical communications products. The company was not planning to manufacture the products itself, but to engineer them.
Within a couple of years Essex introduced its new "Hyperfine" wavelength-division multiplexing technology as a means to enter the commercial telecom market. This greatly increased the amount of data that could be moved over fiber-optic cables by dividing individual laser beams into many different channels. Hyperfine was an offshoot of the company's optoelectronic processing capabilities developed in working on military radar projects.
Essex Corporation's revenues were $16.3 million in 2003, and the company ended the year with 131 employees. It was about to grow quickly through a series of acquisitions, financed by a couple of public offerings. In the wake of the September 11, 2001, terrorist attacks on the United States, investors were interested in the company as an almost pure play on the intelligence side of the military industry, which was expected to receive more priority in the federal budget than other defense industries.
Essex made a couple of small purchases in 2004. Melbourne, Florida's Computer Sciences Innovation performed computing and data mining for intelligence agencies. Fredericksburg, Virginia's Performance Group, Inc. (PGI), specialized in geographical information services with military applications. PGI had about 40 employees and annual revenues of $4.5 million. Essex ended the year with sales of $70.5 million and net income of $2.3 million.
The Windermere Group LLC, an IT services company focusing on the military and intelligence markets, was acquired in early 2005. Windermere had 370 million employees and revenues of more than $64 million a year.
Also in 2005, Essex consolidated several Columbia, Maryland, offices into a new 39,000-square-foot headquarters. It also had a 50,000-square-foot plant nearby and other sites including the offices of its new Windermere unit.
Essex announced the formation of its Commercial Products Group in August 2005. The first projects of its Commercial Communication Products Division (CCPD) were 10 Gb/S fiber-optic transceivers and transponders. CCPD handled design and manufacturing from its Melbourne, Florida base. Revenues were up to $159.8 million by 2005, when the company had 761 employees.
In July 2006 the company introduced the first software configurable synthetic aperture radar, which allowed its U.S. military and intelligence customers to reprogram radars in real time to meet changing mission requirements.
Essex continued to grow by acquisition. It bought Adaptive Optics Associates (AOA) from Metrologic Instruments, Inc., for $40.25 million in October 2006.
An estimate for the full year 2006 had sales up to about $250 million; the company had 1,000 employees by the end of the year. It was expected to add up to another $100 million to sales in 2007.
- Essex Corporation is incorporated.
- Essex goes public.
- Company merges with System Engineering and Development Corporation (SEDC).
- Technical Services businesses is divested.
- Company begins developing an optical networking product for the telecom marketplace.
- Sensys Development Laboratories, Inc. (SDL), is acquired.
- Computer Science Innovations, Inc. (CSI), and Performance Group, Inc. (PGI), are acquired.
- IT services company the Windermere Group is acquired; Essex consolidates several Columbia, Maryland offices into a new headquarters.
- Essex buys Adaptive Optics Associates; Northrop Grumman agrees to buy Essex in a deal worth $580 million.
NORTHROP GRUMMAN ACQUISITION
In November 2006 Northrop Grumman agreed to buy Essex in a deal worth $580 million. Essex was being made a part of the Intelligence Systems division of Northrop Grumman's Mission Systems business based in Reston, Virginia. At the time, most of Essex's trade was with the NSA, and the link with the giant defense contractor was expected to better its prospects with the military.
Frederick C. Ingram
Computer Science Innovations, Inc.; The Windermere Group, LLC.
Communications Systems; Engineering and Systems; Geographic Solutions; Intelligent Systems; Optical Products Development; Radar Systems; Technical Services.
Boeing Support Services; Lockheed Martin Corporation.
Abrahms, Doug, "Essex Corp. Sets New Pace with Computer-Imaging Technology," Washington Business Journal, January 20, 1992, p. 7.
——, "Essex Corp. Speeds Up Computers," Baltimore Business Journal, January 17, 1992, pp. 1+.
——, "Harry Letaw Jr.: Essex Corp. CEO Fuses Power of Technology with Psychology," Washington Business Journal, May 18, 1992, pp. 12+.
——, "High-Tech Firm Finds Its Niche in Catching Human Error," Baltimore Business Journal, May 15, 1992, p. 21.
Adams, Paul, "Optical Electronics Firm to Buy Maryland-Based Defense-Serving Company," Baltimore Sun, January 8, 2005.
Behr, Peter, and Kathleen Day, "Md. Defense Firm Gets Helping Hand to Go Commercial," Washington Post, April 10, 1996, p. F1.
Benhassain, Fayçal, "Essex Move to Optical Products Bearing Fruit," Potomac Tech Journal, July 2, 2001.
Biesecker, Calvin, "Essex Group Acquiring IT Services Company," C4I News, January 20, 2005.
——, "Northrop Grumman to Acquire Essex Corp.," C4I News, November 23, 2006.
"Company Interview: Len Moodispaw, Essex Corporation,"Wall Street Transcript, May 5, 2003.
"Company Interview: Leonard E. Moodispaw, Essex Corporation," Wall Street Transcript, January 28, 2002.
"Company Interview: Leonard E. Moodispaw, Essex Corporation," Wall Street Transcript, Suntrust Robinson Humphrey Conference, April 2005.
"Company Interview: Leonard E. Moodispaw, Terry Turpin, Essex Corporation," Wall Street Transcript, February 5, 2001.
Connolly, Allison, "Essex Corp. a Jewel for Potential Buyer,"Baltimore Sun, November 10, 2006.
Dembeck, Chet, "For Columbia Tech Firm, Defense Is Best Offense," Howard County Times, June 12, 2003.
"Essex Corporation Completes Adaptive Optics Associates Acquisition," Law & Health Weekly, November 4, 2006, p. 607.
Farley, Jennifer, "Essex Looks to Divest," Mergers and Acquisitions Report, August 25, 1997.
Gerin, Roseanne, "Another Deal Done, More on the Way for Essex," Newsbytes, June 9, 2004.
Hinden, Stan, "With Stock Price at Stake, Turnaround Is Fair Play," Washington Post, August 21, 1995, p. F23.
Keaveney, Bob, "Columbia-Based Fiber Optics Firm Nears New Product Line Release," Daily Record (Baltimore), March 26, 2001.
McGarvey, Joe, "Secret Science," Net Economy, April 15, 2002.
Rowland, Kara, "Essex Reports Spirited Growth," Washington Times, March 21, 2006.
Sugawara, Sandra, "Cost-Cutter Aims to Turn Essex Corp. Around; Defense Cutbacks May Hamper Effort," Washington Post, October 3, 1988, p. F17.
"System Engineering: Corporate Merger Completed with Essex in Stock Exchange," Washington Business Journal, June 12, 1989, p. 12.
Taylor, Gregg M., "Human Factors: Evolving into an Ongoing Process at U.S. Utilities," Nuclear News, June 1990, p. 56.
Tucker, Elizabeth, "Essex Corp. to Bring in New Chairman, CEO; Professional Services Firm Wants Local Entrepreneur to Keep Company on Track," Washington Post, May 2, 1988, p. F74.
Whiteman, Lou, "Northrop Enhances Intelligence Business with Essex," Daily Deal, November 10, 2006.
——, "Old Line Defense Contractor Goes for VC," Daily Deal (New York), September 8, 2000.
"Essex Corporation." International Directory of Company Histories, Volume 85. . Encyclopedia.com. (October 17, 2018). http://www.encyclopedia.com/reference/dictionaries-thesauruses-pictures-and-press-releases/essex-corporation
"Essex Corporation." International Directory of Company Histories, Volume 85. . Retrieved October 17, 2018 from Encyclopedia.com: http://www.encyclopedia.com/reference/dictionaries-thesauruses-pictures-and-press-releases/essex-corporation