17 Stepar Place
Huntington Station, New York 11746
Telephone: (631) 622-4700
Fax: (631) 622-4748
Incorporated: 1966 as Phase Industries Inc.
Sales: $61.2 million (2004)
Stock Exchanges: American
Ticker Symbol: AMK
NAIC: 334414 Electronic Capacitor Manufacturing
For over thirty-five years we have been "The Engineer's Choice."
1964: The company is founded.
1966: The company is incorporated as Phase Industries.
1982: A Jacksonville, Florida, facility opens.
1985: The company is taken public as American Technical Ceramics Corp.
1993: Thin film products are introduced.
2000: A Swedish subsidiary is launched.
American Technical Ceramics Corp. (ATC) produces multilayer capacitors, single-layer capacitors, resistor products, inductors, low temperature co-fired ceramics, and custom thin film products for use in a wide range of industries, including cell phones, broadcast satellites, fiber optics, radar and navigation systems, medical electronics, aerospace, defense, and semiconductors. Capacitors store electrical energy for temporary use and because they filter and condition electronic signals they are an important component in the architecture of electrical or electronic circuits. The company is based in Huntington Station, New York, where most of the manufacturing is done, but majority owner and CEO Victor Insetta works out of ATC's facility in Jacksonville, Florida. In addition, the company owns a subsidiary in Sweden to handle European sales, as well as offices in England and Germany. For the Asian market, ATC operates a technical support subsidiary located in China. Sales are conducted by ATC's own staff as well as independent representatives. The company is publicly traded on the American Stock Exchange.
Founding the Company in the 1960s
ATC was cofounded in 1964 by Victor Insetta in Brooklyn, New York, as Phase Industries Inc. (Phase). Insetta graduated from Brooklyn Technical High School, and followed with a degree at Brooklyn College. At the time, the use of transistors was in the early stages, as the electronics industry was still dependent on electron tubes. Insetta recognized the direction the industry was taking and Phase developed a capacitor for the solid-state radio-frequency power product markets. It was such a new field that Phase engineers often had to invent the tools needed to manufacture the capacitors. In 1966 Phase Industries was incorporated in New York and moved its operations to the Long Island community of Huntington Station. In that same year the company introduced its 100 Series high Q porcelain multilayer capacitors for microwave, RF/IF Applications. The next major product debuted in 1970--the 700 Series high self-resonance, porcelain and ceramic multilayer capacitors. A year later Phase opened a nearby facility for administration, production, sales, and engineering. Also in 1971 the company introduced its 200 Series BX ceramic multilayer capacitors.
Phase was successful enough that by the late 1970s Insetta was ready to open a research and development facility. He looked first in south Florida, but was eventually attracted to Jacksonville, which boasted a younger population and could offer a more consistent pool of employees. The Jacksonville Technology Center opened in 1982 and Insetta would ultimately move to the area and run the company from Jacksonville while continuing to maintain the official headquarters in New York.
Phase introduced another new product in 1980: millimeter wavelength single-layer capacitors for high-frequency applications. In June 1984 Phase changed its name to American Technical Ceramics Corp. The company, producing multiple-layer ceramic and porcelain capacitors, was reincorporated in Delaware in April 1985 in preparation of taking ATC public. The offering, underwritten by D.H. Blair Co., was completed in July of that year, and the stock began trading on an over-the-counter basis. In May 1986 ATC gained its listing on the American Stock Exchange. The year 1985 was also noteworthy for several other reasons. A 20,000-square-foot addition was made to its New York manufacturing facility; the company introduced its 900 Series multilayer capacitors; and in September of that year ATC enjoyed the first million dollar quarter in its history.
In August 1988, ATC agreed to be acquired by a rival, South Carolina-based AVX Corporation. During the 1970s AVX had conducted in-depth market research that indicated the potential demand for multilayer ceramic capacitors (MLCs) in the fast-growing semiconductor market and focused all of its attention on this product. ATC, like other capacitor makers, recognized that MLCs were gaining more usage, but failed to anticipate the enormous growth of the market. As a result, AVX had a head start, was able to ramp up production, allowing it to cut prices, and staked out a dominant position in the marketplace. ATC and the rest of the industry were forced to play catch-up. Becoming part of AVX appeared to be a good deal for ATC shareholders, who were originally offered $5.50 per share by AVX, but the price was then lowered to $5.25 per share, or $22 million total. By the end of August 1988 AVX decided to scuttle the deal when the two sides failed to reach a final agreement. An AVX spokesperson maintained, "It wasn't a price consideration. Some things came up."
Whatever the actual reasons for the breakdown in negotiations with AVX, ATC continued on in the capacitor business as a much smaller player. By the end of the 1980s sales totaled $24.5 million, with net income of $791,000. Much of the company's business was defense related, and with the end of the Cold War that sector would soon be hard hit. As ATC entered a new decade it also faced another serious problem: a slowdown in the worldwide electronics market, which led to increased competition over prices. ATC lost ground in fiscal 1990 (which ended June 30, 1990), posting $21.5 million in sales, a 12 percent drop over the previous year. Net income totaled just $62,000, but it took a concerted effort on the part of management to cut overhead costs in order to retain profitability. Insetta and his management team remained optimistic about the future, as evidenced by the decision to institute a stock repurchase program to take advantage of a stock price that they felt was not a proper reflection of the company's underlying strength.
Early 1990s Bringing Difficult Times
With the economy in recession, continued cutbacks in defense and sluggish sales overseas, business was not about to improve for some time. Revenues dropped another 13 percent to $18.8 million in fiscal 1991, leading to a net loss of $841,000. To counterbalance the drop in sales, the company took steps to mechanize and improve the manufacturing process to reduce costs, and also made further overhead cuts, including the trimming of the workforce by nearly one-fifth. Management's hope was that with a leaner operation, ATC would be in a better competitive position when the economy eventually recovered, and indeed business began to pick up in fiscal 1992. Revenues improved to $19.4 million and the company returned to profitability, recording net income of nearly $400,000.
Business grew at a steady pace in the first half of the 1990s, as many industries began to spend money to modernize equipment after years of retrenchment. There was also a greater demand for ATC products from customers in the telecommunications and wireless communications industries, as well as an increasing demand for the company's high-reliability products, which commanded a higher profit margin. MLCs were either classified as commercial or "hi-rel." "Hi-rel" capacitors were subjected to more rigorous performance and environmental tests and were used primarily in applications such as satellites, high-performance military aircraft, spacecraft, and missiles, as well as radar and other electronic countermeasures. Commercial MLCs also were tested to make sure they met performance specifications but were not subjected to the kind of environmental tests required by "hi-rel" capacitors. In addition to an increase in domestic sales during this period, ATC benefited from rising demand for electronic products around the world. Revenues reached $20.6 million in 1993, $23.1 million in 1994, and more than $28.6 million in 1995. Net income during this period grew from $991,000 in 1993 to nearly $1.9 million in 1995. Sales also were helped by the 1993 launch of a new division in the Jacksonville facility to produce thin film products, which were used in circuit fabrication.
The second half of the 1990s started out strong. Not only was demand up, but ATC also benefited from the opening of a new chip element facility that increased the number of capacitors the company could produce, resulting in the ability to lower prices and gain a competitive advantage. Sales for the year reached $33.9 million, an 18 percent increase over the previous year, and net income topped the $2 million mark. Lower manufacturing overhead costs and improved processes that led to greater production yields helped ATC to maintain its growth in fiscal 1997, when revenues increased to $36.5 million and net income held steady at $2.1 million. The year was also noteworthy for producing the company's first $10 million quarter.
During fiscal 1998 ATC introduced power capacitor assemblies and a new broadband microwave surface-mount ceramic capacitor series, aimed at the wireless and satellite communications systems markets. For the year, revenues increased 11 percent to $40.4 million, and net income doubled, totaling $4.2 million, but sales began to slow down in the fourth quarter due to weakening foreign business. A sluggish global economy caused many customers to delay projects until conditions improved, resulting in a significant drop in demand for ATC projects. The company responded by eliminating some jobs and by moving some manufacturing from Jacksonville to the New York facility, allowing Jacksonville, the center of ATC research and development efforts, to concentrate on new products. In fiscal 1999 ATC experienced a 7 percent drop in sales to $37.6 million, all in the company's core capacitor products. Thin film products continued to enjoy strong growth, with sales increasing 88 percent, from $2.4 million in fiscal 1998 to more than $4.5 million. Net income for the year fell to $2.1 million. During the second half of the year, however, business began to improve, leading to a record year for ATC.
Record Results in the New Century
The main driver for ATC's business in fiscal 2000 was the rapidly growing wireless communications industry, but demand was strong across the board for the company's products. As a result of posting record quarterly profits, ATC, despite being little known, saw its stock price rise rapidly. It would peak at $52.75 per share in May 2000. To take advantage of its momen- tum, ATC established a Swedish subsidiary in fiscal 2000 to grow European sales, which also were aided by expanding the company's direct sales operation in Germany. In addition, ATC beefed up its e-commerce capabilities by offering design kits for sale, thus permitting engineers to work ATC products into their original designs. Unable to make as many products as the market would buy, ATC also began taking steps to build a new facility in Jacksonville to house its thin film manufacturing. When the year came to a close, ATC smashed all records for sales and profits. Revenues for fiscal 2000 increased by 77 percent to $66.5 million and net income soared to more than $9 million. The good times continued into fiscal 2001, resulting in another record year. The company recorded a 27 percent increase in sales to $84.6 million and net income improved to $10.3 million. However, the boom times quickly came to an end.
In the early months of 2001, during ATC's fourth quarter, the electronics and telecommunications industries suffered a sudden collapse in business at a time when the worldwide economy was beginning to struggle, leading to canceled projects and orders for ATC products. As the fiscal year came to a close, ATC cut costs to protect profits, but there was little that could be done to offset steadily declining orders other than to retrench and wait for better times. The company was strong enough, however, that it could take advantage of the slowdown to concentrate on new product development to put ATC in a better position when conditions improved. For instance, the company took steps to introduce a new category of product, low-temperature co-fired ceramics (LTCC), suitable for aerospace and military applications. The company also tested new high-power resistive products during this period. During fiscal 2002 ATC added thin film resistor manufacturing capability to this product line.
Revenues fell to $49.6 million in fiscal 2002, a 41 percent decrease over the previous year, leading to a net loss of $4.2 million. Sales continued to slip slightly in fiscal 2003, totaling $49 million, but the company cut its loss on the year to $501,000. It was not until fiscal 2004 that ATC was able to rebound, as sales improved to $61.2 million, and the company returned to profitability posting net income of nearly $2.2 million. ATC had weathered the storm and was now ready to resume the steady pattern of growth it had exhibited over 40 years.
Principal Subsidiaries: American Technical Ceramics, Inc.; Phase Components, Ltd.; American Technical Ceramics Europe Aktiebolag (Sweden); American Technical Ceramics (China) Ltd.; American Technical Ceramics Costa Rica, S.A.
Principal Competitors: AVX Corporation; KEMET Corporation; Vishay Intertechnology, Inc.
- Alexander, Kobi, "Entrepreneur of the Year Finalists," Long Island Business News, June 15, 2001, p. 6C.
- Basch, Mark, "A Closer Look; Demand Growing for Tiny High-Tech Capacitors, Film Products," Florida Times Union, May 3, 2000, p. F1.
- ------, "Huntington Station, N.Y.-Based High-Tech Manufacturer Cuts Jobs," Florida Times Union, May 4, 2001.
- ------, "Slow Sales Force Plant to Cut Jobs," Florida Union Times, September 23, 1998, p. D1.
Source: International Directory of Company Histories, Vol.67. St. James Press, 2005.