Broadcasting Telecasting (Oct-Dec 1957)

MANUFACTURING GATES SOLD TO HARRIS-INTERTYPE • Broadcast equipment firm sold for undisclosed amount • Present organization will continue to operate company The long-pending sale of Gates Radio Co., pioneer electronics and broadcast equipment producer, to Harris-Intertype Corp., leading manufacturer of printing-publishing supplies, was consummated Tuesday [Closed Circuit, Oct. 28]. The Cleveland-based company announced it had acquired all Gates' common stock in a cash transaction for an undisclosed amount as part of a "diversification" and "growthindustry" buying program. The purchase was announced Wednesday by George S. Dively, chairman and president of the company, which claims annual running sales of approximately $60 million. Gates will continue to headquarter in Quincy, 111., with Parker S. Gates remaining as president, reportedly on a long-term-contract basis. It will operate "on a decentralized basis with the present organization," according to the announcement. Mr. Dively said the purchase of Gates, the fifth major transaction for Harris-Intertype since 1952, "fits into our long-range program, which includes some diversification into lighter products with strong growth potential, such as electronic equipment — particularly since the application of electronics is becoming more and more im portant in the printing equipment field. Also, radio as well as tv are companions to printed material in advertising and in communications generally." Harris-Intertype has been seeking an electronic arm or subsidiary because of its electronic control system and phototype-setting activities. The acquisition of Gates has been under consideration for more than a year, it was acknowledged, along with the possible purchase of "several other electronics firms." The company maintains a continuing list of 100-150 such growth prospects. At one time it owned Air Tronics Co., a research firm. "Gates is a well-established, high-quality electronics manufacturer, with a solid base in broadcasting equipment, which is showing a good growth trend," Mr. Dively explained. "The company will continue to specialize in equipment and services for the radio broadcasting industry, and in addition should provide Harris-Intertype with an operating base for broader developments in the rapidly expanding electronics field." One of Gates Radio Co.'s newest product developments, it's known, is a new 5-kw color transmitter (usable for black-andwhite), slated to be marketed next spring, with such claimed features as low-cost, new AFTER the signing, Parker S. Gates (I), president of Gates Radio Company, and George S. Dively, chairman and president of Harris-Intertype Corp., pause before starting discussions on the future of the newly joined firms. technical advancements, and compactness and simplicity of design. Last year it pioneered development of the Gates "AutoStation" for automatic programming. Sales and profit figures of Gates, pioneer broadcast equipment manufacturer now observing its 35th anniversary, have always been closely guarded. But, according to Harris-Intertype's announcement, Gates' sales run about $6 million annually, with net income after taxes of about $500,000. H-I also disclosed its own balance sheet as of June 30, 1957 (end of its fiscal year), showing sales of $59,078,826 and net income of $4,733,045. Formerly known as Harris-Seybold Co., the buyer changed its name last June after merging with the $16 million Intertype Corp., Brooklyn, N. Y. It is regarded as perhaps the world's leading manufacturer of printing and publishing equipment and supplies, including presses, typesetting machines, power paper cutters and lithographic chemicals and supplies. The company has 5,000 employes in the U. S. and abroad, with main plants in Cleveland, Dayton, Brooklyn, Westerly (R. I.) and Slough, England, smaller plants in a half-dozen other cities, and some 15 sales offices. The Gates Radio Co. was founded in 1922 by Henry and Cora Gates and pioneered in radio receiving equipment with an annually rising sales curve for am-fm-tv transmitters, along with automatic programming units, communications systems and various byproducts. Gates claims perhaps 60-70% saturation of U. S. am-fm stations now and an all-time mark of 90-95% in terms of its equipment. Taking military contracts into account, 85-90% of its business derives from broadcast equipment. Galvin Enumerates Factors In Upped Motorola Earnings An improved "price-to-cost relationship" in the tv receiver field and other factors are cited by Robert W. Galvin, president of Motorola Inc., Chicago, as reasons for the company's increased earnings the first nine months of 1957 over the same period last year. Mr. Galvin reported earnings of $5,350,422 ($2.76 per share) and sales of $166,023, I'm a patient man, Smidley. Lord knows how long I've waited for just one Cascade order across this desk. But I've had it. I won't sit here and let an exclusive billion dollar market be ignored. If you can't spot the West's biggest TV buy — one of the nation's top 75, then Smidley, in my book, you're no time buyer. And heaven knows I've tried. CASCADE BROADCASTING COMPANY NATIONAL REP.: WEED TELEVISION PACIFIC NORTHWEST: MOORE & ASSOCIATES Page 76 • November 11, 1957 Broadcasting