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Tecstar Inc.

Business: Solar Panels

Location: City of Industry

Revenue Growth: 260%

The explosive growth of cell phones, pagers and other gadgets that bounce signals off satellites has launched Tecstar Inc. into a steep growth trajectory, and is keeping it there.

Tecstar bills itself as one of only two companies that produce high-powered solar panels for satellites. Its business had been steady but far from spectacular until it started zeroing in on private-sector contracts in 1992.

“We were doing primarily government work at the time this satellite technology exploded this was before everyone had a pager and a cell phone,” said Chief Financial Officer Bill Baldauf. “The whole commercial side has mushroomed and become the overwhelming part of our business.”

Tecstar builds solar panels whose cells transform sunlight into power, which is then stored in satellite batteries. When it comes to satellites, the only realistic power source is the sun.

“It’s either solar power or nuclear reactors,” said Baldauf. “The Russians made some attempts at that (nuclear power) and it fell into social disfavor,” he said.

Tecstar’s roots extend back to 1954, when it operated under the name Hoffman Electronics Corp. and made solar cells for the Navy. Its cells powered the very first solar-powered satellite, the Vanguard I, in 1958, as well as toys, radios and other products. The road to success was a long, flat one. Even throughout the ’70s, few satellites were in use outside the government.

That began changing in 1992, when an investment group led by Westar Capital acquired Tecstar. Sensing the coming growth in commercial satellite applications, the new owners repositioned Tecstar away from government work and toward private-sector contracts.

Baldauf, who joined the company in 1993, laughingly acknowledges that the 1992 repositioning proves the owners were either very astute technologists or “very lucky gamblers.”

In 1992, 95 percent of the company’s business came from the Department of Defense; by 1997, that number plummeted to just 9 percent. But Tecstar still handles some high-profile government work.

“We designed and manufactured all of the gallium arsenide solar arrays that powered all elements of the Mars Pathfinder program,” Baldauf said. “We’ve just turned our attention to the commercial market, that’s where the focus is.”

In addition to solar panels, Tecstar manufactures components for commercial and military aircraft and for ground-support systems.

“Many of these same motors and drives can be used on satellites,” explained Baldauf. “This makes for a real synergy between our divisions.”

Another factor in Tecstar’s favor is that its main competitor is Hughes Electronics Corp., which builds satellites as well.

“Hughes is a very formidable competitor; they are very big and very good. But Lockheed and Loral are also selling satellites and they don’t want to be subsidizing their competitor, so they use us,” Baldauf said.

Karen Teitelman