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Changes imminent: Meade/Celestron merger

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  • Thad Floryan
    As Rod Mollise posted earlier today elsewhere: Yes, it appears, as many of us feared, that Celestron is just about down for the count. Meade isn t far behind
    Message 1 of 5 , Apr 3, 2005
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      As Rod Mollise posted earlier today elsewhere:

      Yes, it appears, as many of us feared, that Celestron is just about
      down for the count. Meade isn't far behind 'em either, apparently. IOW,
      what we were hearing a week ago or so appears all too true.

      For more information, please read this article in the _Orange County
      Register_:

      <http://www.ocregister.com/ocr/2005/04/02/sections/business/business/article_46\
      6106.php>

      You'll have to "register" to read it, but you can enter anything you
      like for the email/username.
    • John O'Neill
      The link goes no where. Can you check on it please. This is important. John
      Message 2 of 5 , Apr 3, 2005
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        The link goes no where. Can you check on it please. This is important.
        John
        On Apr 3, 2005, at 7:05 PM, Thad Floryan wrote:

        >
        >
        > As Rod Mollise posted earlier today elsewhere:
        >
        > Yes, it appears, as many of us feared, that Celestron is just about
        > down for the count. Meade isn't far behind 'em either, apparently.
        > IOW,
        > what we were hearing a week ago or so appears all too true.
        >
        > For more information, please read this article in the _Orange County
        > Register_:
        >
        >
        > <http://www.ocregister.com/ocr/2005/04/02/sections/business/business/
        > article_46\
        > 6106.php>
        >
        > You'll have to "register" to read it, but you can enter anything you
        > like for the email/username.
        >
        >
        >
        >
        >
        >
        >
        >
        >
        > Yahoo! Groups Links
        >
        > • To visit your group on the web, go to:
        > http://groups.yahoo.com/group/RCX400/
        >  
        > • To unsubscribe from this group, send an email to:
        > RCX400-unsubscribe@yahoogroups.com
        >  
        > • Your use of Yahoo! Groups is subject to the Yahoo! Terms of
        > Service.
        >
        >
      • John Gross
        Here s the article. John G Meade s horizon troubled Irvine telescope maker tries to reassure staff after FTC says it will fight merger. By TAMARA CHUANG The
        Message 3 of 5 , Apr 3, 2005
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          Here's the article.
          John G


          Meade's horizon troubled
          Irvine telescope maker tries to reassure staff after FTC says it will fight
          merger.

          By TAMARA CHUANG
          The Orange County Register

          Meade Instruments assured its 300 manufacturing workers Friday that it would
          do
          everything to keep those jobs in Irvine, even as overseas competition in the
          hobby telescope market intensifies.

          "We're committed to innovation and quality, and we believe that it's best
          done
          through maintaining our current situation," said Robert Davis, Meade's
          senior
          vice president of corporate development.

          But the business of making telescopes is changing. Overseas competitors are
          copying the technology at lower costs and charging lower prices. Meade and
          its
          closest U.S. competitor, Celestron, both manufacture telescopes in
          California.
          But Celestron hasn't been able to make the business succeed. The Torrance
          company is near bankruptcy and may be acquired by Taiwan competitor Synta
          any
          day now.

          Joseph Lupica, Celestron's chief executive, did not return calls Friday.

          "The reality is that we've got to look at competing with an Asian
          manufacturer
          that's not subject to the same regulations in the U.S. and here in
          California.
          And their labor is much less," Davis said.

          To survive, Meade and Celestron had formed an agreement to merge, which
          would
          save Meade $2 million to $3 million a year after eliminating duplicative
          expenses.

          But with the Federal Trade Commission protesting previous merger attempts,
          the
          two companies sought FTC approval ahead of time, this time using the
          "failing
          firm" doctrine, which could allow two rivals to merge if it otherwise meant
          one
          would completely exit the market.

          The FTC has not made a decision, and spokesman Barry Nigro declined to
          comment
          on the case. But Meade has been told by the FTC that if the two companies
          proceed with the merger, the FTC would fight it, Davis said.

          "It's just sad that those technologies and jobs are going to go to Asia
          because
          the federal government was unwilling to complete its analysis in a timely
          fashion," he said.

          Manufacturing jobs in Orange County are on the decline from the days when
          aerospace dominated the area, according to the Orange County Business
          Council.
          But local manufacturing jobs make up 13 percent of all county jobs, which is
          still a significant number, said Paul Garza, its vice president of economic
          and
          workforce development.

          "Manufacturing, especially what we have here in the county, it's all really
          high
          quality," Garza said. "What usually keeps companies here that have the
          potential
          to go overseas is they want that close relationship with research and
          development and manufacturing."

          Meade has diversified its product line since the 1990s, expanding into
          lower-priced telescopes, rifle scopes and binoculars with built-in digital
          cameras. The 550-employee company is working on new technology in each
          segment
          with the goal of sharing the high-end innovations with lower-priced product
          lines.

          That has encouraged Paul D. Sonkin, chief investment officer for Hummingbird
          Value Funds, to keep his money invested in Meade. The fund owns more than 8
          percent of Meade.

          "If they are selling a commodity, they have a problem. If they can
          effectively
          differentiate their product, it's no longer a commodity and they get better
          pricing power. That's why you buy Prada shoes instead of shoes from
          Payless,"
          Sonkin said.

          Meade's revenues for the fiscal year ending Feb. 28 are expected to be $112
          million, down from the prior year's $138 million. The company is also
          expecting
          a loss, compared to a profit of $2.45 million last year. Meade reports its
          2005
          financial results on April 21.

          Another reason for slower sales could be Meade's recent strategy to sell
          lower-priced � and lower-quality � telescopes in department stores to reach
          a
          wider audience, says Russell Sipe, past president of the Orange County
          Astronomical Association.

          "Celestron and Meade put out some crappy telescopes to sell in department
          stores. We (amateurs) felt like they sold out. They just weren't the quality
          that they could be and people were going to try it and not like it and get
          turned off of astronomy," Sipe said.



          >From: "John O'Neill" <John@...>
          >Reply-To: RCX400@yahoogroups.com
          >To: RCX400@yahoogroups.com
          >Subject: Re: [RCX400] Changes imminent: Meade/Celestron merger
          >Date: Sun, 3 Apr 2005 22:28:53 -0400
          >
          >The link goes no where. Can you check on it please. This is important.
          >John
          >On Apr 3, 2005, at 7:05 PM, Thad Floryan wrote:
          >
          >>
          >>
          >> As Rod Mollise posted earlier today elsewhere:
          >>
          >> Yes, it appears, as many of us feared, that Celestron is just about
          >> down for the count. Meade isn't far behind 'em either, apparently. IOW,
          >> what we were hearing a week ago or so appears all too true.
          >>
          >> For more information, please read this article in the _Orange County
          >> Register_:
          >>
          >> <http://www.ocregister.com/ocr/2005/04/02/sections/business/business/
          >>article_46\
          >> 6106.php>
          >>
          >> You'll have to "register" to read it, but you can enter anything you
          >> like for the email/username.
          >>
          >>
          >>
          >>
          >>
          >>
          >>
          >>
          >>
          >>Yahoo! Groups Links
          >>
          >> � To visit your group on the web, go to:
          >>http://groups.yahoo.com/group/RCX400/
          >>�
          >> � To unsubscribe from this group, send an email to:
          >>RCX400-unsubscribe@yahoogroups.com
          >>�
          >> � Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service.
          >>
          >>
        • Thad Floryan
          ... Odd; the link worked in several Groups and not in others. Since so many are apparently having difficulty accessing the OCR site, here s the article
          Message 4 of 5 , Apr 3, 2005
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            --- In RCX400@yahoogroups.com, "John O'Neill" <John@o...> wrote:
            > The link goes no where. Can you check on it please. This is important.
            > John

            Odd; the link worked in several Groups and not in others. Since so
            many are apparently having difficulty accessing the OCR site, here's
            the article copy'n'pasted (with original copyright at end):

            Saturday, April 2, 2005

            Meade's horizon troubled

            Irvine telescope maker tries to reassure staff
            after FTC says it will fight merger.

            By TAMARA CHUANG
            The Orange County Register

            *Meade Instruments *assured its 300 manufacturing
            workers Friday that it would do everything to keep
            those jobs in Irvine, even as overseas competition
            in the hobby telescope market intensifies.

            "We're committed to innovation and quality, and we
            believe that it's best done through maintaining
            our current situation," said Robert Davis, Meade's
            senior vice president of corporate development.

            But the business of making telescopes is
            changing. Overseas competitors are copying the
            technology at lower costs and charging lower
            prices. Meade and its closest U.S. competitor,
            *Celestron*, both manufacture telescopes in
            California. But Celestron hasn't been able to make
            the business succeed. The Torrance company is near
            bankruptcy and may be acquired by Taiwan
            competitor *Synta* any day now.

            Joseph Lupica, Celestron's chief executive, did
            not return calls Friday.

            "The reality is that we've got to look at
            competing with an Asian manufacturer that's not
            subject to the same regulations in the U.S. and
            here in California. And their labor is much less,"
            Davis said.

            To survive, Meade and Celestron had formed an
            agreement to merge, which would save Meade $2
            million to $3 million a year after eliminating
            duplicative expenses.

            But with the Federal Trade Commission protesting
            previous merger attempts, the two companies sought
            FTC approval ahead of time, this time using the
            "failing firm" doctrine, which could allow two
            rivals to merge if it otherwise meant one would
            completely exit the market.

            The FTC has not made a decision, and spokesman
            Barry Nigro declined to comment on the case. But
            Meade has been told by the FTC that if the two
            companies proceed with the merger, the FTC would
            fight it, Davis said.

            "It's just sad that those technologies and jobs
            are going to go to Asia because the federal
            government was unwilling to complete its analysis
            in a timely fashion," he said.

            Manufacturing jobs in Orange County are on the
            decline from the days when aerospace dominated the
            area, according to the Orange County Business
            Council. But local manufacturing jobs make up 13
            percent of all county jobs, which is still a
            significant number, said Paul Garza, its vice
            president of economic and workforce development.

            "Manufacturing, especially what we have here in
            the county, it's all really high quality," Garza
            said. "What usually keeps companies here that have
            the potential to go overseas is they want that
            close relationship with research and development
            and manufacturing."

            Meade has diversified its product line since the
            1990s, expanding into lower-priced telescopes,
            rifle scopes and binoculars with built-in digital
            cameras. The 550-employee company is working on
            new technology in each segment with the goal of
            sharing the high-end innovations with lower-priced
            product lines.

            That has encouraged Paul D. Sonkin, chief
            investment officer for Hummingbird Value Funds, to
            keep his money invested in Meade. The fund owns
            more than 8 percent of Meade.

            "If they are selling a commodity, they have a
            problem. If they can effectively differentiate
            their product, it's no longer a commodity and they
            get better pricing power. That's why you buy Prada
            shoes instead of shoes from Payless," Sonkin said.

            Meade's revenues for the fiscal year ending
            Feb. 28 are expected to be $112 million, down from
            the prior year's $138 million. The company is also
            expecting a loss, compared to a profit of $2.45
            million last year. Meade reports its 2005
            financial results on April 21.

            Another reason for slower sales could be Meade's
            recent strategy to sell lower-priced ? and
            lower-quality ? telescopes in department stores to
            reach a wider audience, says Russell Sipe, past
            president of the Orange County Astronomical
            Association.

            "Celestron and Meade put out some crappy
            telescopes to sell in department stores. We
            (amateurs) felt like they sold out. They just
            weren't the quality that they could be and people
            were going to try it and not like it and get
            turned off of astronomy," Sipe said.

            ------------------------------------------------------------------------
            **

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            <http://www.ocregister.com/privacy/> | User agreement
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          • Doug Carroll
            it wrapped around http://www.ocregister.com/ocr/2005/04/02/sections/business/business/article_466106.php See if this one is one Doug ... From: John O Neill To:
            Message 5 of 5 , Apr 3, 2005
            • 0 Attachment
              it wrapped around
              http://www.ocregister.com/ocr/2005/04/02/sections/business/business/article_466106.php

              See if this one is one
              Doug

              ----- Original Message -----
              From: John O'Neill
              To: RCX400@yahoogroups.com
              Sent: Sunday, April 03, 2005 10:28 PM
              Subject: Re: [RCX400] Changes imminent: Meade/Celestron merger


              The link goes no where. Can you check on it please. This is important.
              John
              On Apr 3, 2005, at 7:05 PM, Thad Floryan wrote:




              As Rod Mollise posted earlier today elsewhere:

              Yes, it appears, as many of us feared, that Celestron is just about
              down for the count. Meade isn't far behind 'em either, apparently. IOW,
              what we were hearing a week ago or so appears all too true.

              For more information, please read this article in the _Orange County
              Register_:

              <http://www.ocregister.com/ocr/2005/04/02/sections/business/business/article_46\
              6106.php>

              You'll have to "register" to read it, but you can enter anything you
              like for the email/username.









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